International prices of rare-earth elements have plunged 20% over the past year as overproduction in China has caused a supply glut. This is despite China's attempts to exert tighter controls over the industry by putting out a list of regulations in June to protect supplies of these economically important metals. The regulations, issued by the State Council and taking effect on Oct. 1, say rare-earth resources belong to the state.
The strategic importance of rare earths to China's leaders is nothing new. The late Deng Xiaoping, China's erstwhile paramount leader, designated rare earths a strategic resource.
"The Middle East has oil; China has rare earths," Deng once said.
In 2010, prices of rare earths spiked after China imposed new export controls. The ramp-up in output appears to be aimed at using rare earths as a diplomatic bargaining chip, but the landscape has shifted.
For one, the U.S. has expanded domestic production of rare earths to reduce dependence on Chinese supplies. Other countries are taking similar steps. While U.S. Geological Survey data showed that China accounted for 80% of 90% of global rare-earth production in the early 2010s, by 2023, this had declined to roughly 70%.
Read more here
Click the image to download this infographic on rare earth elements
Comments