Rare earth quake

Katie Martin (0:00)

You can join me, Katie Martin, with Chris Giles and Claire Jones, my colleagues from the FT, but also with former Fed Vice Chair, Lyle Brainard and Fidelity International's Salman Ahmed, on October the 23rd for a subscriber event. All the details for you to register and ask questions in advance are available on ft.com/edge. Pushkin. Rob Armstrong, first sea lord of the Unhedged newsletter, and Hakyung Kim, Rob's glamorous and able assistant. Are you ready to play a game?

Hakyung Kim (0:45)

Sure.

Rob Armstrong (0:46)

Heck yeah, what game is this?

Katie Martin (0:48)

Rare Earth, I just learnt about on the internet, or Word, I just made up.

Hakyung Kim (0:53)

Let's do this.

Rob Armstrong (0:53)

I love this, let's begin.

Katie Martin (0:55)

Okay. Number one, Prasiedemium, rare earth or thing I just made up.

Rob Armstrong (1:02)

Say that for us one more time.

Katie Martin (1:05)

Prasiedemium.

Rob Armstrong (1:06)

See, I know that's not a rare earth because it's a character in the second Lord of the Rings movie. So I'm going to say that's not a rare earth. Hakyung, what's your view on Prasiedemium?

Hakyung Kim (1:17)

I'm also going to say not a rare earth.

Katie Martin (1:20)

Well, you're both wrong. It is a rare earth and it's used in strong magnets. Bleodemium.

Hakyung Kim (1:28)

That has to be fake.

Rob Armstrong (1:29)

Yeah, golly. It has the word golly in it, Katie. You can't trick us with that.

Katie Martin (1:33)

Okay, you're both right. I made that up. Turbium.

Hakyung Kim (1:38)

I think that sounds legitimate.

Rob Armstrong (1:40)

Yeah, Turbium sounds real.

Hakyung Kim (1:42)

It sounds like a scientist came up with this.

Rob Armstrong (1:44)

Yeah, okay.

Katie Martin (1:45)

You're both right. It is a rare earth.

Rob Armstrong (1:49)

So we went two out of three. We're basically metallurgists, Hakyung and I.

Katie Martin (1:57)

The rare earth used in lighting and display screens. So there you go. Okay, last one. You ready? Lutetium.

Rob Armstrong (2:06)

Eh, not real.

Hakyung Kim (2:08)

I'm going to go the other way.

Rob Armstrong (2:09)

You're going to go, oh, so this determines who the winner is. Lutetium, real or made up?

Katie Martin (2:15)

So Hakyung is saying real.

Rob Armstrong (2:17)

Yes, she is.

Katie Martin (2:17)

Hakyung is correct. It's one of my personal favorites. It's used in cancer treatment, petroleum refining, and electronics and high-performance optics. This is a very versatile science thing.

Hakyung Kim (2:32)

What's it called again?

Katie Martin (2:34)

Lutetium. I'll be taking no questions about rare earths. It doesn't matter. But all of these things are like, you know, super important in a super wide range of different electronics and all the rest of it. Anyway, the other day, China said it would impose export controls on these magic elements. And your man Donald Trump did not respond well. Stock markets, as a result, also did not respond well. Yes, we're doing this whole thing again. So today on the show, we're going to tell you just enough about rare earths to blag your way through a conversation about them. And ask if this is the new front in Trump's trade war. This is Unhedged, the Markets and Finance podcast and the Financial Times. I'm Pushkin, I'm Katie Martin, a markets columnist at the FT in London. And I'm joined down the line from New York City by the dynamic duo from the Unhedged newsletter, Rob Armstrong, refreshed from a short break. And his trusty sidekick and podcast newbie, Hakyung Kim. Hakyung, welcome to the show.

Hakyung Kim (3:41)

Thank you so much, Katie.

Rob Armstrong (3:42)

This is exciting. It's like, I went away on for a few days of break, Hakyung did all the work on the newsletter, and now she's going to do all the work on the podcast. It's all working out exactly according to plan.

Katie Martin (3:55)

Okay, so Hakyung, Rare Earths, big in the news at the moment. None of us know what any of these funny rocks are. So tell us what's going on here and what these things do.

Hakyung Kim (4:08)

Yeah, so I have taken a crash course basically in the past few days on these Rare Earths that it turns out are not very rare at all. You can pretty much just drill a hole anywhere in the world and get these Rare Earths. But the thing is, China has this incredible advantage in not only mining these Rare Earths, but also processing them, because basically, as the West bolstered up their environmental regulations, China took a more relaxed approach, say, and they really went in on processing.