Rare Earths in China

China is effectively the monopoly supplier of rare earth elements in the world today. It became the dominant supplier by producing and supplying rare earths in the 1990s and early 2000s at a price western producers could not compete. As a result China anticipated Chinese production in 2012 is 96,000 tonnes according to a November 2012 presentation by industry consultants Industrial Minerals Corporation of Australia (IMCOA).

Chinese demand for rare earths has also continued to rise with organic growth for current applications and new applications have been found for many of the elements and in 2012 this is estimated to be 69% of global demand, or 79,000 tonnes. This is expected to rise to 107,000 tonnes by 2016. At the same time, China’s supply of rare earths is expected to fall as China tightens up environmental controls and curb illegal mining.

                  

The Chinese government is actively trying to consolidate the rare earth industry into major mining groups to assert state control over the supply of rare earths which it views as a strategic asset. These groups will centre on the 3 main rare earth production areas in China:

BaoTou Hi-Tech representing the Inner Mongolia government is taking the lead in the BaoTou area which predominantly produces light rare earths

JiangXi Copper Corp is taking the lead in consolidation in the Sichuan area which produces mainly light rare earths

In the Ionic clay region in the south of China it is expected that consolidation will result in 3 producing groups, China Minmetals, Chinalco and China Mining. This is where most of China’s heavy rare earths will be produced

As a consequence of the rising demand and limited supply China has introduced export quotas which have limited the supply of rare earths to the rest of the world. The Chinese export quota has been reduced substantially since 2005, from 65,580 tonnes to 30,996 tonnes in 2012.


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