China capped its production of rare earth elements (REEs) at 93,800 tons for 2013, the Ministry of Industry and Information Technology announced Friday. This is the same level that was set in 2011. This is a problem because China controls 90 percent of the world’s REE, and because demand for these minerals is growing.
REEs are used in magnets, catalysts, metallurgy, ceramics, phosphors, and glass and polishing industries. They are key ingredients in refrigerators, audio speakers and headphones, fluorescent lights, as well as many other commercial and military components. Of the 17 minerals classified as rare earth,cerium, lanthanum and neodymium are the most widely used, accounting for 82.9% of the total volumes consumed in 2011. That year, magnets and metallurgy accounted for 40.9% of the total REE consumption.
The global market for rare early elements is predicted to grow at a compounded annual growth rate of 13 percent between 2 012 and 2018, according to the report, “Rare Earth Metals (Lanthanum, Cerium, Neodymium, Europium, Yttrium, Scandium, Terbium & Other Key Elements) Market – Global Industry Analysis, Applications (Magnets, Catalysts, Metallurgy, Phosphors, Ceramics & Others), Size, Share, Growth, Trends and Forecast, 2012 – 2018,” released Friday by Transparency Market Research. That report says global rare earth metals demand is expected to cross the 290 kilo ton mark by 2018.
Currently, rare earth mines are located in the U.S., India, Brazil, South Africa and other countries, but China controls 90 percent of the global market. Because of China’s stated policy to cut production and exports, nations are actively looking for additional sources in the form of undiscovered deposits as well as new sources such as mine tailings.
China claims the crackdown is an attempt to halt illegal production of these critical minerals and ostensibly reduce production and conserve resources. However, this is also perceived as a ploy to support Chinese companies. By weakening global supplies, foreign users must buy Chinese components made from REEs rather than the elements themselves. China’s ongoing production caps are a cause of continuing friction at the World Trade Organization, where the U.S., E.U., and Japan have filed complaints.