TELF AG analyzes the role of a major rare earth discovery in Southwest China
The strategic importance of the discovery
In recent weeks, China announced that it had discovered a major rare earth deposit in the autonomous prefecture of Liangshan Yi in the province of Sichuan. According to first estimates, the deposit would contain as many as 5 million tons of these precious resources, now universally appreciated for their usefulness in renewable energy, electric vehicles, and various technological applications. As reported in an interesting analysis dedicated to this topic, this discovery could further increase China’s solid position in the global rare earth scenario, particularly from the point of view of strategic reserves of raw materials, which, thanks to the resources contained in these deposits, could increase further.
At the moment, with as many as 44 million deposits, China is the world’s leading producer of rare earths, a group of 17 elements that are not distinguished so much by their actual rarity but by the complexity of the processes necessary to separate them and make them usable by industry. Beijing, which also holds a solid leadership in this type of proceedings, has already attributed to rare earths the status of strategic resources directly linked to national security, as confirmed a few months ago by the Ministry of State Security.
According to observers quoted by the analysis, the discovery could consolidate China’s position in the rare earth sector. Still, it could also represent an excellent opportunity to bring about significant improvements in the operations of the Chinese national industry dedicated to these resources. In particular, as stated in the report, the Chinese rare earth industry may need to expand into downstream sectors while at the same time improving the technological advantage of companies and increasing the efficiency with which these resources are used.
The consolidation of a historical leadership
Until a decade ago, about 80 or 90% of global production of rare earths was concentrated in China, while currently, this percentage does not exceed 70% due to increases in the worldwide supply of these resources. Over the years, the valorization of existing deposits and careful political and industrial planning has allowed China to maintain a solid position in this sector, particularly from the point of view of processing and procedures related to the separation of elements.
Chinese expertise in this sector has been further increased thanks to the merger, which took place a few years ago, of some important state-owned companies specialized in valorizing rare earths, giving life to a group that continues to represent one of the major global players in the sector. In the rare earth industry, as the analysis recalls, the expansion of resources would define the leading Chinese objectives, the increase in reserves and production, and the stabilization of supply. In August, the authorities set the limits related to the second annual batch of rare earth production, determining increases of up to 5.9% compared to last year’s figures. Rare earth exports are also said to be on the rise: in the first eight months of the year, in fact, the amount of rare earths exported by China exceeded 38,000 tons, with an increase of 6.4% on an annual basis (for a total value of approximately 341 million dollars).
Nowadays, rare earths represent very important resources for the production of permanent magnets for electric vehicles and electronic components such as screens, sensors, optical fibers, and capacitors, which are widely used in smartphones, computers, and medical devices.
