Just as the United States is reviewing the rare earth supply chains, the Chinese government is also considering increasing the competitiveness of rare earth resources, and giving information on raising prices.
Xiao Yaqing, Minister of Industry and Information Technology of China, points out today that rare earths did not sell at a "rare" price, but sold at an "earth" price. Due to vicious competition and price reductions, this precious resource was wasted.
Xiao says that China’s rare earths production enterprises have many environmental problems, and the efficiency is very poor in comprehensively utilizing resources. He also shows that we need to to jointly deal with various demands on resources, energy, and products in the process of development of economy and market. Xiao thinks it’s mainly aimed at some of our current problems, proposing to promote it a further, healthy and sustainable development.
According to the latest report of the Global Market Research Institute, China accounted for more than 80% of the global output of rare earth metals and compounds in 2017, while China’s rare earth exports to the United States accounted for 78% of the United States’ rare earth imports.
Other US rare earth suppliers like Estonia, France and Japan only accounted for 14%. Obviously, the United States still relies heavily on Chinese minerals to produce consumer electronics, military equipment and many other products.
In the background that the Biden government’s reviewing the security of the rare earth supply chains, the reserves, production and supply of rare earths in countries other than China deserve attention.
According to data from the US Geological Survey in 2015, the world’s rare earth reserves is approximately 130 million tons (in terms of rare earth oxide REO), of which China is 55 million tons, Brazil is 22 million tons, the United States is 13 million tons, and Australia is 2.1 million. Tons, 3.1 million tons in India, 30,000 tons in Malaysia, and 41 million tons in other countries.
Even though other countries also have huge rare earth reserves, it will take some time to get rid of China’s supply chain. Some analysts believe that it will take at least 10 years. At present, there is only 1 rare earth mine in operation in the United States, and the others still need 10 years into production, and the rare earths mined are sent to China for processing. In contrast, China has dozens of mines and hundreds of smelting and separation facilities.
The few rare earth companies in the United States have gradually been favored by capital.
Mountain Pass Materials, Inc., which operates the only active rare earth mine on American land, has more than doubled its share price since it went public in November last year. USA Rare Earth, a company that exploits rare earth minerals in Texas, recently announced that it will be listed on the New York Stock Exchange this year. But its mines have not yet officially operated.
In addition, the U.S. Pentagon earlier this month provided Australia’s Lynas Corporation, Ltd. with $30 million to build a light (neodymium, praseodymium) rare earths processing plant in Texas. If it’s successful, the project is expected to produce 1/4 of the world’s rare earth oxides.
