China kicks off national survey of rare earth resources amid threats of supply curbs
China, the world’s top producer of rare earth elements, has launched a wide-ranging survey of local production in seven regions, including Inner Mongolia and Jiangxi province, amid Beijing’s threats to curb global supplies in retaliation for tariffs imposed on imports to the United States.
According to China Securities Journal, the nation’s state planner, industry ministry and the natural resources ministry began site visits and meetings across the country on Monday to assess the “general upstream, midstream and downstream situation of rare earths and other strategic mineral resources.”
China has for years been the world’s biggest exporter of rare earths, a group of 17 minerals used in everything from high-tech consumer electronics to military equipment.
Despite their name, rare earths are not rare. According to the United States Geological Survey (USGS), they are roughly as common as copper. But, because rare earth ores oxidize quickly, extracting them is both difficult and extremely polluting.
China currently accounts for 70% of global production, but has lately reduced domestic production as the government cracks down on illegal mining and pollution.
That explains why speculation of supply cuts to the US, a major buyer, has sent the stock prices of rare earth companies, including Australia’s Lynas (the only major rare earth producer outside China) skyrocketing over the last few days.
Last week, after President Xi Jinping visited a rare earths processing facility, China’s National Development and Reform Commission — Beijing’s guiding economic agency — quoted an unnamed official questioning whether the trade of the critical materials could be China’s “counter-weapon” against President Donald Trump’s escalating trade war.
The only rare earths mine in the US, Molycorp’s Mountain Pass, went bankrupt in 2015 – though it is making a comeback, having been purchased by a US-led consortium. Along with new output from countries such as Australia and Myanmar, the mine helped cut China’s share of global production to around 70% last year from more than 97%, according to the USGS.
Last year, China produced about 120,000 tonnes, while the totals of the next two leading producers — Australia and the United States — were 20,000 and 15,000 respectively.