Does China Pose a Threat to Global Rare Earth Supply Chains?

From ChinaPower

As China’s economy has developed over the last several decades, its leaders have sought to transform the country into a key player in strategically important industries. Toward this end, Beijing has established China as the dominant global supplier of rare earths, a collection of 17 minerals that are indispensable to the manufacturing of smartphones, electric vehicles, military weapon systems, and countless other advanced technologies.

Beijing has demonstrated a willingness to leverage its weight in the global rare earth industry in pursuit of its political objectives, raising alarm bells in several major countries. However, China’s influence within the industry is likely to be eroded in the coming years as changing market dynamics empower new actors to compete.

The Global Marketplace for Rare Earths

The global rare earths trade is relatively small compared to other commodities. In 2019, the value of worldwide rare earth imports stood at just $1.15 billion – a fraction of the more than $1 trillion in global crude oil imports. The total value of goods produced using rare earths, however, is immense. Each Apple iPhone, for example, relies on multiple rare earth elements. Neodymium is used to make tiny, yet powerful, magnets that allow iPhone speakers to function. Europium is used in trace amounts to produce red colors on screens, and cerium is used to polish the phones during the manufacturing process. During the 2019 fiscal year, Apple sold $142.4 billion worth of iPhones.

Despite their name, most rare earth elements are relatively abundant. The process of mining rare earths and transforming them into usable materials is, however, expensive and damaging to the environment. For years, Beijing exploited its relatively low-cost labor force and lax environmental laws to gain a competitive edge in the global market and become the leading supplier of rare earths. From 2008 to 2018, China exported nearly 408,000 metric tons of rare earths, which amounted to 42.3 percent of all rare earth exports over the period. The United States was the second-largest exporter, supplying roughly 9.3 percent of the global total. Malaysia (9.1 percent), Austria (9.0 percent), and Japan (7.1 percent) rounded out the top five.

According to China’s General Administration of Customs, China exported 45,552 metric tons of rare earths worth $398.8 million in 2019. The vast majority of these exports went to the world’s major economic and technological powerhouses. About 36 percent (by volume) went to Japan, making it the top destination of Chinese rare earths. The US was a close second, taking in 33.4 percent of Chinese exports. Alongside the Netherlands (9.6 percent), South Korea (5.4 percent), and Italy (3.5 percent), these five countries imported a combined 87.8 percent of China’s rare earth exports.

Breakdown of Global Rare Earth Exports (2008-2018)
CountryExport Volume
(metric tons)
Share (%)Export Value
(millions of US$)
Share (%)
China407,886.642.38,112.246.3
USA89,467.19.3953.65.4
Malaysia87,696.19.1942.45.4
Austria87,055.19.0867.85.0
Japan68,412.97.12,172.612.4
Rest of World223,172.723.24,467.725.5
Source: UN Comtrade Database

At 42.6 percent of total exports by volume, lanthanum was China’s top rare earth export by a wide margin. Lanthanum is used in significant quantities in hybrid vehicle batteries. Each Toyota Prius, for instance, contains some 10-15 kilograms (kg) of the substance. Terbium, which is significantly more expensive, was China’s top export by value, accounting for roughly 14.5 percent ($57.9 million) of the country’s total exports in 2019. Terbium is primarily used in solid-state electronic devices but is also used in sonar systems and television screens.

China’s Push to Dominate the Rare Earth Industry

China’s dominance in the rare earth industry is the result of decades of targeted industrial policies aimed at leapfrogging other nations. In recent years, Beijing has also looked to reform China’s rare earth industry to enhance efficiency, better protect the environment, and crack down on illegal mining.

The Chinese government took major steps to support its nascent rare earth industry by issuing export tax rebates in the mid-1980s. The rebates lowered costs for Chinese mining companies, which allowed them to gain a foothold in the global market. From 1985 to 1995, China’s rare earth mining production exploded from just 8,500 metric tons to roughly 48,000 metric tons, and its share of global mining output widened from 21.4 percent to 60.1 percent.

The original article contains well made interactive graphs.

Read the full article here.

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SAMURAI
January 10, 2021 12:29 am

As usuall,, US over regulations make it extremely difficult to mine and process rare earth metals in the US so we’re forced to depend on foreign suppliers (especially China) to provide our needs…

Under Harris/Biden, all US regulations will skyrocket and further decrease our industrial competitiveness and increase our dependence on China’s goods and raw material, which China will leverage against the US for various economic, political, financial and military concessions.

isn’t Leftism great?

saveenergy
Reply to  SAMURAI
January 10, 2021 1:59 am

“regulations make it extremely difficult to mine and process rare earth metals in the US”

That’s fine, ‘Keep it in the ground‘ …it’s your backup stockroom, only use it when necessary

Walter Sobchak
Reply to  saveenergy
January 10, 2021 1:15 pm

Idiotic. It takes years to stand up mining and milling. The Chinese are perfectly willing to use their dominant market position to cripple the US economy when it suits their purposes.

We need to reverse the process whereby we shipped all of our mininbg and manuafacturing to China so that the environmentalists will be happy and American working men will be poor, out of work, and demoralized.

Eric Elsam
Reply to  Walter Sobchak
January 10, 2021 1:49 pm

Won’t happen now.

Enginer01
Reply to  SAMURAI
January 10, 2021 4:54 am

Just like Richard Nixon’s extremely expensive and totally lost drug war, and the current incredibly ridiculous projected expenses to fight the climate hoax, the Rare Earth “shortage” is founded on poor science, bad politics and greed. Most desirable US RE deposits contain Thorium, which, like Marijuana is not a major problem, Because of this, and the old-fashioned hydrochloric acid-chloride extraction methods, and no place to legally put the thorium, we ship raw ore to China, pay them to process it, and buy the finished RE back at high cost.
Smart?
The phosphate industry in Florida (See FIPR, Bartow) can meet many of our Rare Earth needs, but like the stupid ban on using phosphogypsum, has not be thought thru very well.
Not smart!

MikeH
Reply to  SAMURAI
January 10, 2021 8:36 am

The Harris/Biden new theme is “Making China Great Again”, in an attempt to undo the current/prior administration policies ..

SAMURAI
Reply to  MikeH
January 11, 2021 12:58 am

MikeH-san:

Yes, Biden (through Hunter) has already received $millions of Chinese bribes and will stay bought..

The Chinese government will be free to do pretty much anything to anyone with impunity under the Harris/Biden administration..

Once all the Harris/Biden tax increases, massive amounts of new government regulations, Green New Deal spending, etc., kick in, there will be a huge wave of US manufacturing that will move to China…

Patrick MJD
January 10, 2021 1:34 am

Only if anyone else wants to buy. China is buying up all resources it can find a seller of.

TheMightyQuinn
January 10, 2021 2:00 am

Hellooo…China is a threat to nearly all global supply chains.

Felix
Reply to  TheMightyQuinn
January 10, 2021 6:10 am

Explain, please. Raw assertions are just propaganda.

Eric Elsam
Reply to  Felix
January 10, 2021 1:53 pm

True, but that share has a tremendous influence on price.

Eric Elsam
Reply to  Eric Elsam
January 10, 2021 1:54 pm

Sorry, bad placement.

DMacKenzie
Reply to  TheMightyQuinn
January 11, 2021 10:06 am

Consider that Canada’s steel exports to the US were declared a security threat to the US, then a 30% tariff added….it’s obvious that Chinese rare earth metals have gotta be in the same category….just a note to sheeple who might catch the drift….

saveenergy
January 10, 2021 2:02 am

Does China Pose a Threat to Global Rare Earth Supply Chains?
Yes; Anyone with a monopoly is a threat !

Felix
Reply to  saveenergy
January 10, 2021 6:10 am

40+% market share is not a monopoly.

Eric Elsam
Reply to  Felix
January 10, 2021 2:07 pm

True, but that share has tremendous influence on price.

Rare Earths Investor
Reply to  Felix
January 11, 2021 4:45 am

Not really about the raw feedstock materials. Much more so about the processing and magnet making which China really dominates and where the real value to both the involved companies and their shareholders lies.

Ron Long
January 10, 2021 2:18 am

Mineral Exploration Geologists can discover new sources of rare earths anytime there is A. a reasonable guarantee of sustained price support, and B. a friendly development and production legal framework. Please note this means license to pollute for China but adhering to strict environmental safeguards for the rest of us. In my 50 years exploring for minerals I have several times been surprised by rare earth analytical results, but examining the setting explains why, especially where geological processes concentrate from an initial uncommon, but anomalous, source. Next 4 years in USA? Forget about it.

John Tillman
Reply to  Ron Long
January 10, 2021 5:26 am

Neodymium is more common in Earth’s crust than copper.

Clyde Spencer
Reply to  John Tillman
January 10, 2021 8:57 am

It isn’t just a question of the crustal abundance. There have to be geologic processes that frequently concentrate the element well above the average in order to allow an economical extraction. It is the same old story that it has been known for a long time that gold is dissolved in sea water, but no one has found a way to extract it profitably because of its very low concentration.

DMacKenzie
Reply to  Clyde Spencer
January 11, 2021 10:17 am

There isn’t really an shortage of “ore”. Rare earths are most everywhere. You could likely mine a few spoonfuls of them in your back yard. You probably wouldn’t like the vats of hydrochloric acid, froth flotation tanks, settling ponds, heavy metal residuals, and hazmat suits.

Clyde Spencer
Reply to  DMacKenzie
January 11, 2021 10:35 am

If you think that you could economically recover REEs from my backyard, you are delusional. Your vocabulary suggests that you may have more than a passing acquaintance with mining and mineral benificiation; however, your assessment of what is involved to bring REEs to market sounds more like a ‘woke’ progressive.

Geoff Sherrington
January 10, 2021 2:43 am

Has somebody confused Austria with Australia as a supplier?
Geoff S

fred250
Reply to  Geoff Sherrington
January 10, 2021 3:39 am

Looks like it

comment image

Burma/Myanmar and Australia are 3 and 4

Can’t find Japan mentioned in rare earth production, either.

Last edited 16 days ago by fred250
Enginer01
Reply to  fred250
January 10, 2021 6:12 am

I believe China also gets credit for the Mountain Pass production.
https://en.wikipedia.org/wiki/Mountain_Pass_mine

Smart Rock
Reply to  fred250
January 10, 2021 9:20 am

I’ve been wrong before, but I suspect most of the current rare-earth production from Australia is lanthanum. Japan may have got some credit for reprocessing, as lanthanum is used in Prius batteries.

LdB
Reply to  Smart Rock
January 11, 2021 3:41 am
fred250
Reply to  Geoff Sherrington
January 10, 2021 3:47 am

ps.. Australia has large deposits of rare earths.

Dubbo in central NSW is already producing small test quantities of neodymium and other rare earths in conjunction with a Korean company

https://www.forbes.com/sites/timtreadgold/2020/11/09/joint-koreanaustralian-project-targets-chinas-rare-earth-control/?sh=4cf17dff224c

Last edited 16 days ago by fred250
Geoff Sherrington
Reply to  fred250
January 10, 2021 3:32 pm

fred250,
I can claim to be the discoverer of the Dubbo deposits, by analysing rocks that colleagues collected while I was Chief Geochemist. So I have kept abreast with what others are doing in my retirement.
BTW, I did not make any extra money from this discovery.

fred250
Reply to  Geoff Sherrington
January 10, 2021 3:52 pm

Well Done 🙂

Geoff Sherrington
Reply to  fred250
January 10, 2021 6:56 pm

Fred250,
Thank you.
That was in the mid 1980s, so you can see that patience is a required attribute in the mineral resources business. Geoff S

Waza
January 10, 2021 3:52 am

China export $400m of rare earth metals a year.
BUT import $400m of oil a day.

Yes China could disrupt global supply of rare earth metals or many other commodities or products.
But other countries can play the same Game with other products.
It is really said that leaders try b…s… Game theory stuff. Tit-for-tat tradewars only impacts their own citizens.

nyolci
Reply to  Waza
January 10, 2021 7:59 am

But other countries can play the same Game with other products.

That’s one of the reasons why China has built up the “One Belt One Road” (OBOR, or New Silk Road), that is basically an extensive Eurasian (and later African) transport infrastructure. ‘Cos the real danger for China is not other countries cutting their exports to China but the US led block cutting trade routes. No wonder the US has been raging for years because of OBOR.

David Kamakaris
January 10, 2021 4:15 am

Does anyone have data on the REE requirements if the new administration goes through with its pledge to phase out hydrocarbons and replace them with EV’s?

Gary Pearse
Reply to  David Kamakaris
January 13, 2021 10:51 am

David, there are huge resources of Rare Earths (RE) in Canada – I worked as a consultant on one in Quebec that has more than 200 million tonnes of ~1.5% RE an intrusive rock-type known as ferro-carbonatite (carbonatites are derived from carbonate magmas – largely limestone composition).

There is a long chain of these intrusions across southern Quebec and adjacent eastern-central Ontario. The City of Montreal (English- Mount Royal) is underlain by one of these deposits! They are amenable to large open pit mining ops and are also huge resources of phosphate and iron ore.

Such deposits were well within economic reach until China chopped prices for the most expensive RE by around 75% foreclosing on numerous projects. They have ‘secondary’ deposits – essentially in clays- formed by erosion. They were being produced by digging large pits, dumping sulphuric acid in them and then pumping the liquor from the pits, precipitating RE- OH by neutralizing with lime and dumping the sludge downslope which soon began destroying farming and making people sick. Very competitive!!

bluecat57
January 10, 2021 4:15 am

Yes and no. Anti-mining enviro whackos pose a greater threat. If they would work with miners in the free world, the miners would be persuaded to spend money on safety instead of litigation.

Geoff Sherrington
Reply to  bluecat57
January 10, 2021 3:34 pm

The miners need no persuasion to spend money on safety. They are mostly ordinary family folk with no interest in needless hurt to others. Unlike your conventional green, who would be unheard without preaching harm and hurt. Geoff S

bluecat57
Reply to  Geoff Sherrington
January 11, 2021 6:15 am

Have you seen Poldark?

You are right. When a restaurant wants to open, government treats them like they want to kill their diners by over regulation meaning it often takes months longer than anticipated to open putting the owners far into debt.

Poldark, despite good intentions, sometimes makes bad decisions.

dodgy geezer
January 10, 2021 5:06 am

China is not only dominating the small ‘Rare Earths’ supply chain, but most other technology supply chains as well. It has hugely increased its industrial capacity – rather like America during WW2 – and so looks set fair to dominate world politics in the 21st century, as America did during the last half of the 20th.

Perhaps America should start learning how to decline gracefully like the British Empire?

Enginer01
Reply to  dodgy geezer
January 10, 2021 12:59 pm

China has managed to avoid most if the Socialist bug-a-boos to giving things away free by making their people WORK for them. On one of my trips to China I was told (by young, professional-grade Chinese) that as long as the CCP continued to relax restrictions on the middle class, an uprising could e avoided. We will see how far that goes.

Useful https://pubs.usgs.gov/pp/1802/o/pp1802o.pdf

Gary Pearse
Reply to  dodgy geezer
January 13, 2021 10:54 am

Dodgy – you make Chinese ascendancy sound so benign!

very old white guy
January 10, 2021 5:26 am

China poses a threat to life as we know it .

Enginer01
Reply to  very old white guy
January 10, 2021 12:27 pm

see https://www.defenseone.com/ideas/2020/08/rare-earths-pentagon-making-same-mistake-twice/167585/ Is it a plot?
Incidentally, notice no mention of Thorium. If the molten salt reactors ever get started, they can breed U233 from Thorium, but in the meantime removing the restrictions on TENORM would make many other deposits of RE viable.

Latitude
January 10, 2021 5:53 am

name something China is not a threat to?…..that’s a better game

Dmacleo
Reply to  Latitude
January 10, 2021 10:58 am

democrat party politicians in the US

Reply to  Dmacleo
January 10, 2021 5:03 pm

The demrats are just useful idiots to the CCP. Ultimately, the CCP would say to demrats – what do you mean “we” when they take over the world.

J P Kalishek
January 10, 2021 6:13 am

They’ve pulled things before with supply (2009? 2010?), which has me living where I am due to a corporation’s attempt to keep a supply chain linked.
They stopped certain REs shipping for a while to drive the price up. (much like OPEC when they needed additional cash, or to punish) and in the interim what was out there was slowly being consumed, until suddenly places like Clariant were unable to make certain things, oddly enough. A raw used in my job came from them. My company found a supplier who was willing to sell, but we needed to buy over a one year supply or it wasn’t worth their time, and the then owner was fine with that, because we would use it and buying 10x more than wanted at the time was far better than going out of business.
One of the companies we once supplied had used a competitor (long story, involves lawsuits etc) asked if we’d sell to them again (gov’t contracts needed to be filled) as the competitor could not get the raw (not willing or not able), and this led the Corporate Boss Lady to decide to buy the supplier that was able to keep supplying (us), then promptly tried to undo why we we able to supply when no one else was able (because corporate stupidity).

Anyhow, this is not an unknown tactic of the CCP and at that time, affected everything from printer ink, plating, electronics, to fire fighting, and to a lesser extent, house paint, epoxies, soldering flux . . .
Unlike Fracking, that cut the power of OPEC and Russia, there is no easy way to suddenly get RE refining going quickly enough the CCP could try a rehash of the 70’s oil embargo. Our only saving grace is, like OPEC, they need the money too much to stop it completely.

rocdoctom
January 10, 2021 6:23 am

USA and Canada have considerable RE resources already identified. Turning those identified resources into reserves is nearly impossible in the current regulatory and anti-mining environment. If you have driven I-15 between Las Vegas and LA you have passed by one of the largest and highest grade RE deposits in the world at Mtn Pass, CA. Look it up and read the history.
Mining RE ore is the easy part–processing the RE ore into saleable products is a nasty business and therein lies the major issue. The voices of the anti-mining and environmental activist groups have won the battle to ensure that the U.S. will not produce from domestic resources and will continue to be held hostage to China.

Robert Brown Jr
Reply to  rocdoctom
January 10, 2021 7:20 am
CD in Wisconsin
January 10, 2021 7:42 am

https://www.metaltechnews.com/story/2020/05/13/mining-tech/ree-tech-arises-from-the-ashes-of-coal/226.html

“..Enormous domestic reserves of the 17 rare earths are found in the coal that has been mined in America for decades. While natural coal deposits may not make a very good REE mine, the burning of this power plant fuel works like a concentrator that leaves behind higher grades of these technology metals in the ash…”

https://pubs.er.usgs.gov/publication/fs20193048

“..Research into how to utilize coal and coal fly ash as sources of REEs is ongo­ing. Viable recovery of REEs from coal and coal ash requires identification of coals and ashes with the highest REE concentrations and development of workable methods for REE extraction and recovery. Understanding how REEs occur within fly ash, described in this fact sheet, is one of the keys to developing possible methods for their recovery..”

The question in my mind right now is whether the Biden Administration will put an end to projects seeking to develop ways to extract RE elements from coal ash in commercially viable ways. It would not surprise me if he does do so given his opposition to fossil fuels because of the climate alarmist narrative.

Clyde Spencer
January 10, 2021 9:15 am

The process of mining rare earths and transforming them into usable materials is, however, expensive and damaging to the environment.

The Chinese have chosen to trade off environmental damage with lowering the cost of extraction. Other than some low-level radiation from the typically-associated thorium, there is nothing inherently different about processing REE ores than there is from many other complex ores. The issue is one of a tradeoff of social priorities and processing costs. If thorium breeder reactors were to become common throughout the world, processing REE ores for the thorium also, would just create another profit line.

Last edited 15 days ago by Clyde Spencer
Paul S
January 10, 2021 9:39 am

Hey, no scantily clad clickbait links. Did that issue get resolved?

ResourceGuy
January 10, 2021 4:25 pm

You know it’s bad when the DoD has to get its domestic resources processed in China because of EPA and cost.

Tom Abbott
January 10, 2021 6:12 pm

I’ve learned of a new cottage industry concerning rare earth materials in the U.S.

Thieves are apparently going around cutting the catalytic converters off of parked cars and trucks and getting the rare earth materials out of them and selling them. A battery-operated metal saw makes short work of it.

The article I read said each catalytic converter was worth about $150 to the thief. Of course, you have to know a fence (buyer) to be successful (for all those amateur thieves out there).

I see where the new 2021 Ford F-150 Hybrid-Electric pickup can power your whole home if the electric service goes down. I believe the deluxe model can produce about 7.4kW.

I guess I’ll have to buy one of those things.

I ought to write to Biden and see if he will increase the subsidy for electric vehicles. Or maybe I should write to AOC. Or both. I think they ought to double it. 🙂 I’m just kidding in case anyone is wondering.

Clyde Spencer
Reply to  Tom Abbott
January 11, 2021 10:40 am

Tom
You are confusing Rare Earth Elements (REE) with the Platinum Group Elements (PGE). Theft of catalytic converters has been going on for as long as they have been used in vehicles!

Tom Abbott
Reply to  Tom Abbott
January 11, 2021 11:08 am

I bet the Ford 150 hybrid will sell real well in California. 🙂

Even the economy model will run a couple of appliances in your house, if your electricity gets cut off.

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