According to a new IHS Chemical global market research report, a growing global dependence on rare earth containing technologies has left manufacturers and countries vulnerable to the availability and uninterrupted supply (largely from China) of these materials.
According to the IHS Chemical CEH Rare Earth Minerals and Products Report, production and consumption of these industrial materials was more than 100 000 t in 2012. The IHS estimates that this figure will grow by 7.6% annually between 2012 and 2017, eventually reaching 150 000 t of consumption.
The production and consumption of rare earths is dominated by China, and it is believed that China will lead consumption growth, at 8.3% annually. In 2012, China accounted for more than 85% of world rare earth production, and consumed approximately 70%.
The world’s second largest consumer is Japan, at 15% of world production. However, the country has no domestic rare reserves. The report shows that this imbalance creates an uncomfortable dependence on China for Japan and other countries.
Samantha Weitlisbach, principal analyst of speciality chemicals at IHS chemical, has highlighted how supply disruptions over the last few years have interrupted Japanese automative and electronics industry production, sending shockwaves through the global manufacturing industries that rely on rare earths. These supply shortages also resulted in unprecedented price spikes, impacting global consumers. Hence, other governments have now realised that their national security interests and industrial sectors are vulnerable.
To address concerns of market dependence, industry and governments are now looking for ways to substitute rare earths with less costly alternatives that have a lower supply risk. Additionally, the elements: neodymium, dysprosium, and samarium; found in rare earth permanent magnets, have been placed on a list of critical elements by the European Commission and the US government. Prior to this, there was practically no recycling of end of life magnets, however post 2012 this has become a high priority issue.
The Japanese government has invested in rare earth projects in Vietnam and Kazakhstan to try and secure supply. The country also announced a special budget in 2011, to reduce consumption and develop alternative materials.
Finally, the US has reopened the Mountain Pass, California, rare earth mine. Prior to this 2012 reopening of the mine, which holds one of the major world reserves of rare earths, it had been closed for 10 years.
Adapted from press release by Emma McAleavey
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/04062013/demand_and_supply_fears_in_rare_earth_industry_413/