China, a virtual monopoly on rare earth production
Posted on 24 January 2018 by Pierre Thouverez
If the rare metals are thirty, the "rare earth" group 17 of the most strategic for new technologies. China provides 95% of the production of these coveted lands. A quasi-monopoly that greatly benefits the Middle Kingdom.
Rare metals are a big family. They contain 17 rare earths, graphite, cobalt, antimony, tungsten, tantalum, platinum, iridium, ruthenium, niobium and some others. They are not necessarily rare around the globe. However, their deposits large enough for exploitation to be commercially profitable with current technologies are.
A well thought out Chinese strategy
For six years, journalist Guillaume Pitron has conducted the survey of rare earths and metals in a dozen countries on four continents. He gives a poignant testimony in his book The War of Rare Metals. His report is clear: China now dominates that of rare metals. It is the virtually unique supplier of the most strategic of them, the rare earths. If their annual production limited to 130.000 tons, against 2 billion tons of iron, may seem anecdotal, it is capital and indispensable to many new technologies. LEDs, flat screens, electric cars, permanent magnet wind turbines, mobile phones, computers demand their weight of rare earths.
In the early 1990 years, China began selling rare-price rare earths. The Californian mines that provided the majority of the market, had to close their doors in the 2000 years, the miners had to put away their picks. Other countries that have resources, including Russia, Greenland, Canada, Vietnam, the United States, and even France have abandoned or neglected the exploitation. Only master on board, China is now its law on the market. As a result, it now concentrates 95% of the world's rare earth production, whereas it would only hold 36% of the reserves. The situation could change in a decade, because China could decide to reserve all of its rare earth production to its own companies, as the demand of its industry is important. Mines from other countries could reopen.
Major environmental impacts
During his investigation, Guillaume Pitron discovered that the extraction of these rare metals generates important environmental impacts. Extraction and separation processes require a lot of energy, chemicals and water. In China, sulfuric and hydrochloric acids pollute rivers in the vicinity of mines. The media echoed the pollution of various rivers and the formation of mountains of waste. These extractions have been accompanied by a rise in considerable diseases and cancers among residents. Despite the ban on wild activities under the impetus of Chinese public opinion, the black export market would remain thriving. Some ten thousand mines would be scattered throughout the Chinese territory.
The question to Guillaume Pitron: The world is becoming Western. With its barriers to mineral exports, what is China looking for?
For the past fifteen years, China has implemented a policy in which it restricts its exports of raw minerals to keep added value. She does not want any more of the colonialist line where Westerners would seek only matter and transform it at home. China puts export quotas, but gives unlimited access to companies that come to settle in the country. It covets the downstream of the sector, that is to say the high-tech industries using rare earths. It asks these companies to provide industrial structures, jobs, know-how, research and development laboratories. And she uses that knowledge for her development. While at the end of the 1990 decade, Japan, the United States and Europe accounted for 90% of the magnets market, China now controls three-quarters of global production! The Chinese have the intention to win the battle on the downstream of all the technologies of the future and it works. The country is already the leader of green technologies in the world. It is the world's largest producer of green energy, the largest manufacturer of photovoltaic equipment, the largest hydroelectric power plant, the largest investor in wind power, and the world's leading new-energy car market.
This rare earth situation in China is replicated in other countries with majority positions. In Asia, Africa, Latin America, a powerful phenomenon of nationalism of mineral resources increasingly weakens Western positions. Locally exploited resources must fuel domestic consumption rather than satisfy the appetite of a client country.
