Rare earths – will new supply ease availability concerns?

Roskill Information Services: Rare Earths and Yttrium: Market outlook to 2015 (14th edition)

The rare earths industry is at a turning point, new sources of supply from mines outside China are coming on stream, the industry in China is coming under more effective control with increased corporate consolidation led by state controlled enterprises, and a re-evaluation of the way in which rare earths are used is taking place, following a year of unprecedented high prices.

In 2011, China is estimated to account for 94% of world supply, with most of the remainder coming from Russia and the USA. By 2015, the rest of the world will account for just over a quarter of world supply and this proportion is likely to increase further over the five years to 2020. Since 2006, Chinese government controls on output, such as mining licences and quotas, have become more effective.

In 2011, further controls were introduced and all companies mining rare earths will now be required to show that they have mandatory production plans, appropriate planning permission, environmental certification and safety licences. In addition, companies exceeding the production quota can have their licence to operate revoked. In 2011, the Chinese government also introduced tighter controls on emissions from processing plants, which came into force on 1st October. In order to ensure that measures to control output and reduce emissions are realised, a process of consolidation of control of production has taken place since 2007. Baotou Rare Earth controls the flow of concentrates from the Baiyun Obo mine in Inner Mongolia and will control most of the cracking and separation capacity by the end of 2011. In the south of China, the location of key heavy rare earth deposits, a number of companies have been involved in the consolidation process including China Minmetals, Chinalco, and Guangdong Rising Nonferrous Metals.

These and other topics are includes in the new Roskill report. It forecasts , that overall demand for rare earths will grow at 7-9%py to 2015. Predicted growth rates might have been stronger but for the fall in global GDP from 3.9% in 2010 to an expected 3.1% in 2011 and the impact of high prices on some applications in 2010/2011. Growth in the demand for neodymium and dysprosium in the manufacture of magnets will continue to be strong and could result in a supply deficit in 2015. Questions about the availability of REEs for magnets, and any prolonged period of high prices could limit the use of NdFeB magnets in permanent magnet motors in HEVs, EVs and wind turbines

Rare Earths and Yttrium: Market outlook to 2015, 14th edition is available at £4500 / US$7500 / €5900 from Roskill Information Services Ltd, 54 Russell, London SW19 1QL, England. Tel: +44 20 8417 0087. Fax +44 20 8417 1308 Email: info@roskill.co.uk Web: www.roskill.com/rare-earths