The mood was sombre at the China Rare Earth Association's
sixth market seminar, held last week in Beijing, as the ravages
of another tough year in the sector were revealed, the most
concerning of which was a 15% decline in the average price of
rare earths in 2015.
Overall, China's rare earths industry had a deficit of
nearly Chinese renimbi (Rmb) 800m ($123.6m*) last year, with
most companies facing having to either halt production
temporarily or shut down completely. Few businesses remain
According to one industry source, five of the biggest six
rare earth companies in China recorded a deficit last year. The
sixth company only made a slight profit, attributed to the fact
it processed its waste materials, which were exempt from a
government-levied resource tax.
According to Zhongshan Wang, technical advisor of the alloy
branch in the China Rare Earth Association, the biggest issues
facing suppliers are the bearish market and overcapacity.
China's rare earth production of 110,000 tpa can satisfy
both domestic and export demand outright, but in recent years,
production has outstripped demand, leaving a "huge" inventory
surplus, delegates at the Beijing meeting were told.
Smaller companies and rare earths traders have exited the
industry altogether, by choice or force.
However, there is still some hope of a recovery in rare
earths, according to Anwen Zhang, the association's vice
secretary, who cited a boom in manufacturing of next generation
energy applications and new materials, which could offer rare
earths producers a chance to tap higher revenues, providing
they can upgrade their operations and transition to new
He added that he believed rare earths were often
irreplaceable in applications and named a number of markets in
which rare earths consumption is expected to grow in the
future. These include exhaust gas purification and waste
treatment in energy saving industries, as well as in high speed
The developing robotics industry also has a rising need for
rare earths, especially in welding and carrier robots. By the
end of the 13th Five Year Plan, which runs from 2016-2020,
industrial production of Chinese robots is expected to
be valued at Rmb 10 trillion ($1.53 trillion).
Rare earths constitute the 15 lanthanide elements in the
periodic table, plus yttrium, a naturally associated
|Wind turbines are a source of renewable
energy which use rare earths, but the applications are
expected to grow (source: Lawrence Murray, Via
These are relatively abundant in the Earth’s
crust, but do not often occur in minable concentrations.
World resources are contained primarily in bastnaesite and
monazite ores. Bastnaesite deposits in China and the US make up
the largest percentage of the world’s rare earth
economic resources, while monazite deposits constitute the
second largest segment.
Apatite, cheralite, eudialyte, loparite, phosphorites,
rare-earth-bearing (ion adsorption) clays, secondary monazite,
spent uranium solutions and xenotime make up most of the
*Conversions made March 2016