Chart of the Day: China's Rare Earth Dominance
“The Middle East has oil, and China has rare earths,” Deng Xiaoping, the country’s former leader, once said during a visit to the eastern province of Jiangsu in 1992.
If anything, the oil comparison understates China’s dominant position in rare-earth production. The country produces the vast majority of the world’s supply of the 17 materials, which are usually found in ores that can be smelted and processed into alloys, fluorescent materials or other substances often used in the batteries of electric vehicles and robotics components.
Their role in relatively advanced materials makes rare earths a potentially significant tool for China in the country’s ongoing trade tensions with the U.S., with the latter highly dependent on imports. While China says it has not tightened the flow of rare earth exports, many observers worry that it might in future.
The extra prominence given to rare earths in recent months has benefited the stocks of producing companies. A visit by inspectors from the Ministry of Industry and Information Technology to production sites in East China’s Jiangxi province caused a spike, as did President Xi Jinping’s well-publicized trip to companies in neighboring Jiangsu province on May 20. A third spike occurred when state planner the National Development and Reform Commission held several meetings with industry experts to assess the “general upstream, midstream and downstream situation of rare earths and other strategic mineral resources.”
As the world’s top producer, China has rarely needed to import rare earths. Yet the situation has changed since 2016, when the government took actions to upgrade and consolidate the industry. China consumes more than 60% of the world’s rare earths, with Sun Jingjing of the Jiangxi University of Science and Technology predicting that consumption might outstrip production as soon as next year.
Contact reporter David Kirton (email@example.com)
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