Despite the fact that China now controls about 95% of global supply of rare earth elements, the country may need to import the minerals to meet rising domestic demand, Bloomberg reports:
“China may eventually need to import the materials,” Liu, the deputy secretary for Baotou Rare Earth High-Tech Industrial Development Zone Committee said today in an interview after speaking at the International Rare Earth Summit in Pittsburgh, Pennsylvania. There’s a “strong possibility of importing heavy rare earths” in the next three to four years, he said through an interpreter.
Domestic Chinese demand for rare earths has increased as much as 200 percent in the last 12 months, with almost half of that increase coming since the start of the year, Liu said.
Rare earths are a group of 17 elements; the mines in the Baotou region produce so-called light rare-earths including lanthanum, cerium and samarium. Heavy rare-earth production, concentrated in the south of China, includes the elements dysprosium, gadolinium and terbium.
The Chinese government slashed export quotas by 72 percent in the second half of last year for the elements that have uses ranging from high-end magnets in U.S. weapons to catalysts in petroleum refining. The country has committed to a 35 percent cut in the first half of 2011 from the level a year earlier. Export quotas for the second half of 2011 may be announced only in July, Liu said.
Reuters reports that the global price for rare earth elements may drop due to a sudden drop-off in demand in Japan:
Business in parts of Japan is at a standstill as authorities cope with aftermath of the quake and people worry about the release of radiation from nuclear reactors at the quake-affected Fukushima Daiichi power station.
That has meant a pause in demand for rare earths at one of the world’s largest users, the Asian Metal International Rare Earth Summit in Pittsburgh heard on Tuesday.
“We cannot call our customers right now and say, ‘Do you want to buy something?’ No one is in the mood … So if 50 percent of the consumption of the world is in Japan and this 50 percent stops for a couple of weeks, or a couple of months, this will be a huge impact on the consumption side or the demand site,” said Furkhat Faizulla, marketing manager from Advanced Material Japan Corp. “We will have to see the real situation in Japan in one week, two weeks, but maybe the prices will come down in the coming months.”
Meanwhile, two Democratic senators in the U.S. have called for sanctions against Chinese mining projects until China “plays fair” with the export of rare earth elements.