Did China Control Global Rare Earth or Not?

From 2007, China began to carry out perspective planning on production of rare earth and reduced export. That caused strong response from western countries. They required China to abolish limitation on rare earth export.

However, recently, a report in the U.S. showed that accusation on China controlling global rare earth is fictitious. In fact, Chinese rare earth made up only one-third of global reserves. The U.S. and Europe also had large amounts of rare earth, but they hided those rare earth.

n recent years, every import country of rare earth was always advocating speeches that reserves, production and export of Chinese rare earth were the first, all of rare earth in China and China monopolized supply of rare earth around the world. They regarded China as a state which had storage of rare earth and encouraged China to continue or increase the present tendency of low price export.

China began to limit export of rare earth. Those states which bought Chinese rare earth at low price for a long time show their protest to China through various channels. Because their own profits were decreased and some schemes were even broke down.

According to report from Japan’s Kyodo News Agency, Sankei Shinbun and other Japanese medium, the third ministerial Japan-China high-level economic dialogue will be held in Beijing on July 28. Japan will require China to relax restrictions on rare earth export. Before that, the U.S. and Europe had already raised the same claim.

In March, Mike Kaufman, congressman in the U.S. claimed that China had the ability to kidnap the U.S. market. He appealed government for protesting against China and buying 5 years’ rare earth reserves from China before the price soaring. In June, EU published a report that raw materials like rare earth had great significance for economy development in EU. Pressure on related industries was continuing to increase for reduction in Chinese rare earth export. The U.S. and Europe also lodges a complaint with WTO that China restricted export of rare earth which used for manufacturing steel or other products.

Were Chinese rare earth reserves really dominant as other states claimed? Did China really want to control international market by restricting rare earth export? Chinese data had already given the answer. But it was not accepted by other states. The U.S. report which published last month gave contradiction against those protests.

Marc Humphries, an analyst of energy policy in the U.S., submit a report named as Rare Earth Elements: Global Supply Chain to Congress. The report analyzed the usage of rare earth, global supply chain of rare earth and legislation to rare earth in the U.S. in detail. China appeared frequently. There were two chapters which headlines were Role of China and Challenge of China on Export Policy. The report also listed related data on Chinese rare earth in 2009 particularly.

Chart on Global Rare Earth Production and Export on page 6 of report showed clearly. In 2009, Chinese rare earth reserves were 36 million tons, accounting for 36% in the world. Production was 1200 thousand tons, accounting for 97% in the world. Compared with China, American rare earth reserves were 13 million tons, accounting for 13% in the world. Production is zero. Russian rare earth reserves were 19 million tons, accounting for 19% in the world. Production was zero. Australian reserves were 5.4 million tons. Production was zero too. Indian reserves were 3.1 million tons, making up 3% in the world. Production was 2700 tons, making up 2% in the world.

The report also referred to the mine at Mountain Pass, California. Production of mine used to be 20 thousand tons. The mine had already been closed for low price rare earth from China. It is said that Chinese rare earth export was decreased from 50 thousand tons in 2009 to 30 thousand tons in 2010, by reducing mining quantity, striking illegal mining activity, and using quota and export tax to restrict export. A huge gap of rare earth supply and demand would appear around the world. Every state was in urgent need of seeking other import channels for rare earth to answer Chinese measures.

Form the data, we can see that both the U.S. and Russia are higher than China. China produced 97% of global rare earth by utilizing its reserves which are only one-third of the world. The relationship between reserves and production is unequal. While the U.S. has 13% of global rare earth resources, it depends on import absolutely. So the version that Chinese restrictions on rare earth export causing rare earth short supply in some states is fictitious. Truly, they are not shortage of rare earth. They are shortage of low price rare earth from China.

Rare earth can bring a sharp increase to military technique. In one sense, the U.S. army controls overwhelmingly and strikes at enemy without hesitation in several wars after Cold War, for its high technique in rare earth.



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