TELF AG analyzes China’s role in the global rare earth scenario
The increase in global production
The centrality of rare earths in today’s economic and geopolitical scenario is not only demonstrated by the multiplicity of their industrial applications, some of which are also involved in the energy transition, but also by the evident increase in their production levels at a global level.
According to Rystad Energy, in just ten years, the global production of these precious resources has more than tripled, going from 142,000 tons in 2013 to approximately 359,000 in 2023. One of the most interesting data, from this point of view, is the fact that this production no longer concerns only China, which remains by far the largest global producer, but also other international players such as Australia and the United States, whose respective governments are concretely supporting the development of these resources, which are so important for a wide variety of sectors, including renewable energy.
Over the years, as reported in a recent analysis published in a major economic newspaper, China’s role on the international rare earth scene has undergone a sort of evolution, also linked to the fluctuations related to the supply and demand of these materials. As reported in the analysis, in recent months, the global dynamics of rare earths have also been influenced by the slowdown of the Chinese economy and the performance of the automotive sector: one of the main industrial applications of rare earths concerns the powerful magnets that are mounted on board new-generation electric vehicles, which require the use of 3 or 4 times more rare earths than traditional vehicles, according to the Rare Earth Industry Association. Magnets made with rare earths are also used in another very important sector, namely the one related to the production of wind turbines in the renewable energy sector.
Beijing’s centrality
At the moment, Beijing remains the largest global producer of rare earths and the nation responsible for the largest share of the sourcing of these precious resources, which is around 67%. Within the rare earth sector itself, the area in which China has managed to develop a clear superiority is that of refining these elements, which is nowadays almost wholly concentrated in the Asian nation. Several international players, including the United States, also continue to turn to Chinese partners for the complex procedures of processing and separation of rare earth elements.
China’s vitality in the rare earths sector is also well demonstrated by export levels, which in the first seven months of the year increased by 7.5%, totaling 34,000 tons, despite recording declines in value on an annual basis. In August, China assigned a further sourcing quota of 135,000 tons, reaching 270,000 tons in 2024 (a slight increase compared to the 2023 figures).
Among the most sought-after rare earths, especially for the singular nature of their industrial applications, there are elements such as neodymium, praseodymium, samarium, and dysprosium, all used in various ways in the production of permanent magnets and other important technological devices. The group of rare earths includes 17 elements that, although not difficult to find within the Earth’s crust, are characterized by the complexity of the procedures with which their separation for industrial purposes is obtained.
