Most of the world is dependent on China to supply rare earths as key raw materials used in many of the latest technologies from military hardware to electric cars, but China’s Ministry of Commerce is warning that its massive supply of rare earths could be exhausted in just 15 – 20 years.
The current rate of production and global consumption is just too large for China.
China, controller of more than 90 per cent of production of the materials used in cell phones and radar, cut its export quotas by 72 per cent for the second half and reduced output, spurring a trade dispute with the U.S. The country may not be able to meet growing global demand as the government continues to curb output, Lynas Corp. said in March.
“We cannot rule out the possibility that China may need to rely on imports sometime in the future for these minerals, instead of supplying the world,” Chao said.
“China cannot afford to continue to carry the burden of supplying the world, from a strategic, environment and economic point of view,” Chao said.
This latest claim sounds like it will make a great excuse for any future export restrictions China implements, or any price hikes.
It should be read by nations such as the U.S. and Japan as a reason to redouble their efforts at developing alternative rare earth sources. Reliance on China’s current near-monopoly is getting riskier by the day. Problem is, as shown by the (slightly dated) chart below, even efforts to develop rare earths mines elsewhere will take a long time to pan out. The world will be dependent on China for many years to come.