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29/02/2024
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China strengthens grip on rare earth industry amid declining production market share

In an era when rare earths are required for major green technologies, China consolidated its rare earth industry, as the dominant provider saw its rare earth production share drop to 70% from nearly 97% a decade ago.

Chinese media Xincaifu reported that the entire 100% equity of Guangdong Rare Earth Group was transferred to China Rare Earth Group on January 1. After the transfer, the number of China’s rare earth champions would be reduced from four to three, underscoring an industrial consolidation amid the rising demands for and global competition in rare earth resources.

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According to the US Geological Survey, China enjoyed more than 90% share of global rare earth production until the number dropped to 70% in 2022. The primary reason for the falling share is increased production from other producers. Countries other than China produced an accumulative rare earths of 86,000 metric tons between 2011 and 2016, which rose to 477,000 metric tons over the next seven years. China produced 610,000 metric tons of rare earths between 2011 and 2016 and supplied 875,000 metric tons for the next seven years.

According to Xincaifu, the rising production from producers beyond China came from Australia, Myanmar, and particularly Vietnam, which increased its rare earth production by ten times in 2022 from a year ago.

Despite a falling share in rare earth production, China still enjoys dominance in rare earth processing with a 90% market share, reported Xincaifu, citing data from Central China Securities. The data makes sense for China to impose export restrictions on rare earth processing technologies on December 21, as other countries would have to find ways to reduce their dependence on China’s rare earth processing technology.

With the global shift toward electric vehicles and renewable energy as a solution against global warming, the importance of this rare earth competition becomes increasingly evident. Over 100 governments committed to working together to triple the world installed renewable energy generation capacity to at least 11,000GW by 2030 during COP28, a move requiring rare earths.

 

Source: DigiTimes Asia

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