“In a manner of speaking, yes.”
“You are a miner and a petty thief, Bolcke. What are you saying?”
Bolcke peered at the general with narrowed eyes. “Yes, I am a miner. I know the value of important minerals, such as gold and silver . . . and rare earths.”
“We understand the value of rare earth elements,” Tao said. “That is why we manipulate the price by using you as a broker to make acquisitions on the open market.”
“It’s no secret that China holds a near monopoly on the production of rare earth elements,” Bolcke said. “But that monopoly has been put at risk by activity at two large mines outside your country. The Americans recently reopened their Mountain Pass Mine, while Australia’s Mount Weld operations are undergoing expansion.”
Jintai puffed out his chest. “We will always be dominant.”
“Perhaps. But you will no longer control the market.”
Bolcke removed a large photo from his attaché case. It showed an aerial view of some smoldering buildings in a desert setting next to an open-pit mine.
“This is the remains of the American facility at Mountain Pass,” Bolcke said. “Their processing operations were destroyed by a fire last week. They will be unable to produce an ounce of rare earth elements for the next two years.”
“You know something about the fire?” Tao asked.
Bolcke stared at him in silence, his lips upturned in a smug grin. He placed a second photo on the table. It showed another open-pit mine in a desert setting.
“This is the Mount Weld Mine in western Australia. It’s owned by the Hobart Mining Company, in which I have recently become a minority shareholder.”
“I understand the Australians have temporarily halted production while they modernize the facility,” Tao said.
“You are correct.”
“That is all very interesting,” Jintai said, “but what does this have to do with us?”
Bolcke took a deep breath and looked down his nose at the general. “It has to do with two actions that you are about to undertake. First, you will underwrite five hundred million dollars so I may purchase outright the Australian mine at Mount Weld. Second, you will institute an immediate ban on Chinese exports of rare earths.”
The room fell silent a moment before Jintai chuckled. “Anything else you desire?” he said, rising to fetch himself more whiskey. “Chief Executive of Hong Kong, perhaps?”
Tao stared at Bolcke, intrigued. “Tell us why we will do these two things.”
“Economics and security,” Bolcke said. “Together, we can control the entire market in rare earth elements. As you know, I broker much of the remaining world output—from places like India, Brazil, and South Africa—which I sell to you, bolstering prices. I can easily contract for long-term delivery from these sources before you announce a halt in exports, locking in those supplies. As for Mount Weld, if you fund my purchase, I will repay you in ore, which you can quietly resell to select trading partners at exorbitant profits, if you so desire. With the Americans out of commission, China will control virtually the entire global output of rare earth.”
“We already control the bulk of the market,” Jintai said.
“True, but you can control it all. The fire at Mountain Pass didn’t happen by accident. Mount Weld didn’t suddenly suspend operations of their own volition. It was all due to my influence.”
“You have been a valued trading partner for both minerals and American defense technology,” Tao said. “So—prices are driven up, and we ultimately profit from the sale of the minerals . . .”
“No,” Bolcke said, “you can do better than that. With full control of the market, you can force every global company that uses rare earth elements to consign their manufacturing and technology to China. Every smartphone and laptop, every wind turbine, every space satellite, will be yours. And technology’s the key. Nearl
y every cutting-edge technology today makes use of rare earth elements, and that will place you in a dominant position for tomorrow’s advances in consumer products and, more importantly, defense weaponry.”
He stared at Jintai. “Wouldn’t you rather introduce the most advanced attack helicopter yourself rather than copy somebody else’s?”
The general simply nodded.
“Instead of playing catch-up with Western technology, China will lead the way. By totally controlling the supply of rare earths, you put an immediate halt to a multitude of Western military advances. New generations of American missiles, lasers, radars—even ship propulsion systems—rely on rare earth elements. By shutting off the supply, you can erase the technology gap. Rather than China copying Western defense technologies, they will be copying you.” Bolcke casually collected the photos and returned them to his briefcase. “As I said, it’s a matter of economics and security. They go hand in hand—and you can dominate the world in both arenas.”
The comments struck a nerve with Jintai, who constantly decried the inferior weapons the People’s Liberation Army fielded. “Perhaps it would be an appropriate time to act,” he said to Tao.
“Perhaps,” Tao said, “but wouldn’t it create havoc with our Western trading partners?”
“It’s possible,” Bolcke said, “but what can they really do? To maintain their own shaky economies, they will have no choice but to partner with you and share in their developments.”