China's control over the rare earth metals supply chain is near total. With over 80% of US imports coming from China alone, this market represents a distinct vulnerability for the US amidst ongoing trade tensions with China.
Historically, China has been one of the only countries willing to take on the expensive and environmentally destructive process of refining rare earth elements into usable forms such as lithium batteries, magnets, military defense technology, and wind turbines. Today, China wields a powerful trade weapon - should they choose to execute on it - which could fundamentally disrupt the automotive, defense, renewable energy, and technology industries among others.
Steady industry consolidation by China's six major suppliers and mounting provocations from the Trump administration could push China to pull this lever. However, many believe that a rare earths embargo would cause only short-term disruption and that the threat is more valuable to Xi Jinping as a coercive device.
SumZero's Avery Pagan sat down with five managers from our Cap Intro community to share their thoughts and expertise on the subject. These managers were selected for their unique perspectives on the Chinese investing landscape and related metals & mining industries. The featured funds/managers are:
- Will Thomson, Massif Capital
- Joshua Hall, True Vine Investments
- Hugh Dyus, Navis Capital Partners
- Jian Chen, Tangram Capital Advisors
- Brian Laks, CFA, Old West Opportunity Fund
Please download the PDF below to read the full discussion or contact the SumZero Cap Intro team for warm introductions to any of these managers.