Chinese Rare Earth Production to Exceed 130,000 Tons
In the 1990s, China began a large-scale exploitation and export of rare earths. With low exploitation cost (ignoring the environment cost), China’s cheap rare earth materials dominate the world market. As a result, most other countries terminated the exploitation of rare earths.
Though China is a large rare earth-producing country, the development of the Chinese rare earth industry lags behind developed countries. Chinese rare earth enterprises mainly produce upstream and midstream products of low added value, high pollution and high energy consumption. They fall far behind developed countries in the production of downstream expensive rare earth devices and terminal application products.
Due to the extensive management of rare earth resource exploitation and scattered distribution of the rare earth industry, many foreign importers take this opportunity to force down the price. When the global demand for rare earth materials increases year by year, China exported 6100 tons of medium-end and low-end rare earth products in 1990; the average price was $13,600/ton. In 2009, China exported 36,100 tons of rare earth smelting and separation products, rising by 16.67% year over year. The export value amounted to $310 million and the average price was only $8,959/ton.
China has practiced the quota license administration on the export of rare earth products since 1998. In recent years, the Chinese government has reduced the volume of export enterprises, export quotas and annual exploitation volume of rare earth ores. China’s Ministry of Commerce declared that the total export quota of rare earth products of domestic-funded enterprises was 50,000 tons in 2005 and 34,000 tons in 2008. In 2009, it set the total export quota of 50,145.1 tons for domestic-funded and foreign-funded enterprises. In 2010, it cut down the export quota to 30,258 tons, including 22,512 tons for domestic-funded enterprises and 7746 tons for foreign-funded enterprises. The reduction of the export quota led to the rise of China’s rare earth smuggling.
Presently, the rare earth smelting and separation capacity of China is over 200,000 ton/year. In 2009, China’s rare earth production came to 129,400 tons and the global rare earth consumption was about 90,000 tons. It is forecast that the production will be over 130,000 tons in 2010. It remains difficult to change the situation of oversupply. Though foreign countries have recently enhanced their rare earth exploration, it will not produce substantive influence on the supply in the rare earth market at present.
Rare earths are widely applied in traditional sectors, such as metallurgy, petro chemistry and textiles, and high-tech sectors including magnetic material, luminescent material, and hydrogen storage material. With the advent of the low-carbon economy era, rare earths will encounter new development opportunities.
With the rapid development of high-tech industries, global rare earth consumption will maintain continuous growth. It is predicted that the consumption will reach about 100,000 tons in 2010 and 200,000 tons in 2015. In the short term, the Chinese rare earths industry will be faced with oversupply. Nonetheless, considering the strengthening of China’s control over the exploitation and export quotas of rare earths, as well as the fast demand growth in the downstream application industries, the Chinese rare earths industry shows positive prospects.
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