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The Scramble to Secure Rare Earth Elements.

Seeking a shift from China’s dominance to a more diversified global market.

A whopping 80% of global rare earth supplies are produced in China — depending on the source you consult, and whether you are talking about refined metals or concentrates.

This is by no means a new phenomenon. Already in 2010 the US Government Accountability Office (GAO) compiled a report, admonishing the strategic importance of secure rare earth supply chains for the US defense industry and military. A shift to resource sovereignty, the report estimated, would take about 15 years.

The Seeds of Technology.

Rare earth metals is an overarching name for 17 chemical elements that are often found in compounds. As a matter of fact, they are not actually rare. If you dig up a shovel full of dirt in your backyard, depending on where in the world you are, it’s not unlikely that you are holding rare earth elements in your hands.

The US: From Riches to Rags.

For most of the second half of the 20th century, the United States was the world’s leading producer of rare earth metals and its manufacturing industry their biggest consumer. In the 1940s, the United States relied almost entirely on India for the supply of monazite, one of the REEs. After India started to interrupt shipments to build its own industry, the United States began to foster domestic production through government funding, private sector investment, and extensive research.

Why is production concentrated in China? A brief historical recap.

The pivot of the industry to China was the result of decades of development. China gained its prominent position as a global REE hub not only as a consequence of geological endowments — but more so due to strategic planning.

“The Middle East has oil. China has rare earths.”

In the 1990s, China increased their output by more than 450% and sold their produce on an international market where nobody could compete with the low prices Chinese companies offered — and if other producers tried, they were routinely outbid.

And the others…?

Other regions of the world are addressing this situation as well. The European Union ranks RREs highly on their list of critical raw materials but, as with most natural resources, they are struggling with their lack of deposits. At the same time, the EU’s tech based industry cannot operate without them. The EU’s approach to this dilemma has traditionally been resource diplomacy, where they deploy diplomats to ensure continued access.

The Investor Perspective.

This brief overview of mining and processing projects portrays an intricate scenario. Yes, Chinese exports are dominating the world market, and yes, Chinese reserves are huge. The examples listed above illustrate that governments and companies elsewhere are poised to increase their output, as the demand keeps growing.

Looking ahead: A shift in global REE strategies.

From wind turbines to watching Netflix, from aircrafts to smartphones — many people’s everyday life is shaped by devices that rely on rare earth elements.



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