The European Union misses the point of trade once again

The EU is working on proposals to jump-start home output of a type of specialist magnet vital in electric car motors by offering support to local producers so they can compete with Chinese rivals, sources close to the situation said.

Ooooh, that’s exciting. We do know our way around the rare earths world here so we welcome that as very good news. So, the EU is going to reduce the start up costs of mines for rare earths, is it? Possibly lighten the regulatory load to do so? Also, actually allow people to set up rare earth separation plants? Sort out the Reach and thorium disposal regulations that make those cost so much? Generally stop doing the things that stop people mining and producing the necessary metals?

Making the magnets is a trivial task once that’s sorted out.

Ah, no, as you were, that’s not what they’re going to do at all:

The proposals being considered by the EU include both cheap financing and compensation for higher raw material costs, said two sources who have seen the plans but were not authorised to speak publicly about them.

They’re going to throw taxpayer money at the costs they themselves create.

A viable magnet industry in Europe would also need the support of customers, such as automakers, who must agree to pay a slight premium

Oh, consumers are going to get whacked as well. They are doing well, aren’t they?

Here’s the thing. Rare earths aren’t difficult they’re just tricky. The trick being to be able to navigate through the regulation that surrounds their mining and separation. Make that less of a problem and more of it would be done.

Or, of course, we could turn to trade:

"Chinese permanent magnet producers get raw materials at 25% below the price I can get them," said Bernd Schleede, head of permanent magnets at VAC.

"To reach a level playing field either the EU should compensate for this gap, or should consider penalties on the import of magnets. I personally would prefer the first option."

Why not, you know, just buy them from those foreigners? That is the purpose of trade after all, to get our hands on those things that J Foreigner makes better or cheaper than we do.

One of us did, at one point, do serious work on a rare earths separation plant - even if it wasn’t for these magnet materials. A true story from that little adventure. The EU environmental paperwork process took longer than the entire drawing board to production process in China. Amazingly, and we’re sure this will shock, the EU plant never got built and several Chinese did.

Funny that, isn’t it?