The world is racing to break China’s rare earth dominance

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Going through AG Metal Miner

The November Rare Earth MMI (Monthly MetalMiner Index) broke its short-term downtrend and traded sideways on a month-to-month basis. In total, the index fell a modest 0.97%. Rare earths managed to maintain their steady trend for most of 2022. This was due to strong demand for electric vehicles, electronics and rare earth magnets. Indeed, the global market for all of these products continues to grow rapidly.

Another factor contributing to the slight uptrend was tighter global supply. With fewer exports from China, many countries are looking for alternative sources. For years, China has managed to dominate the world supply of materials for rare earth magnets. Now, some want to completely break their dependence on Chinese rare earths.

World Seeks to Break Addiction to Chinese Rare Earths

Over the past two months, MetalMiner has frequently published articles about the world’s reliance on China for the raw materials used to make rare earth magnets. Apart from the United States, countries such as Japan, South Korea, Italy and the Netherlands are highly dependent on Chinese imports of rare earths.

It’s clear why. China has vast reserves of rare earths. As the world increases its demand for these products, China has managed to develop a powerful monopoly in the world market. Thus, to prevent China from exerting too much geopolitical power in the trade of rare earths, it becomes crucial to find alternative sources.

It is true that most of the processing of rare earths in the world takes place in china. However, many rare earth raw materials are actually mined from other parts of the globe. Common sources include Myanmar (Burma), United States, Canada and Australia. And with demand for rare-earth magnets set to double by 2030, tapping into those supplies has become more important than ever.

Other countries are catching up with Chinese rare earth production

Fortunately, many countries continue to increase their own production of rare earths. In Japan, miners have made impressive efforts to compete with China in the global rare-earth magnet market. In reality, researchers recently explored under the Pacific Ocean (just outside the Ogasawara Islands) to a depth of 6,000 meters to extract materials for rare earth magnets. The Japanese government plans to start mining these rare earth raw materials as early as April 2023.

Japan is not alone. Australia, another country abundant in raw materials for rare earth magnets, continues to step up its rare earth mining game. Arafura, a mining project located in Central Australia, recently announced plans to increase investment in its mining operations. Many of them take place in the hottest and driest regions of the country. But according to Arafura, it is worth it. Apparently, the company sees a huge opportunity due to the large amounts of neodymium and praseodymium located in the region. These elements are frequently used in the production of rare earth magnets. Currently, the company says its mines could meet up to 5% of global demand.

By Jennifer Kary

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