China replaced UnoCal - MolyCorp's Mountain Pass mine in California as the largest supplier of Rare Earths after Mountian Pass was shut down by Diane Fienstein's Desert Protection Act, and some questionable 'environmental' decisions.
Many observers though something odd went on, not just the black helicopter crowd, but sober mining analysts. I am assuming some minning analysts are sober. There's a segment of the defense community which is VERY sensitive to this issue.
I would have to look at all the press releases and news reports, but it appears that CNOOC's first bids initially wanted to keep MolyCorp.
Since MolyCorp is not oil, this may have cause alarms, and the belief that this was primarily a strategic resource acquisition. Since China has become a low cost producer of rare earths, what's the economic value ?
The fact that CNOOC has dropped MolyCorp NOW won't buy CNOOC a pass with most of these objectors.
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It's like the way old redneck felt after his neighbor asked if he could use his wife and his hunting dog. The redneck was very upset and said no.
Later, the neighbor asked if he could just use his wife for a while. The redneck still said no, since the neighbor had shown an unhealthy interest in his hunting dog....
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The MolyCorp Mountain Pass is publically known to be a sensitive issue in the US, so maybe the bid is a test, as you have written.
But as a test, it was a bit like a political "push poll".
Those are the polls where someone calls up voters, and says "If you found out that John McCain had fathered an illegitamate child, would that make more likely or less likely to vote for him on Tuesday ?"
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I sense that most people in US policy see China as somewhere on a "strategic partner - strategic competitor" continium, rather than "strategic threat".
More than the P-3 / jet collision incident in early 2001, I think this is moving many policy people toward the "strategic competitor" side of that continium.
I don't see this a being good for US China relations.
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So how to we make money ? Maybe China looks other places for hydrocarbons....like PetroKazakstan.
Maybe the US government tries to increase ties with other Asian nations, possibly with some FDI to follow.
Phillipines would be most sensitve to this, especially since they are tanking because of election issues. Indonesia, Thailand, Malaysia, etc. might benefit also. |
