The China Factor

In the closing decades of the last century China emerged as the major producer of rare earth elements (REE) raw materials, accounting for more than 95% of the world’s production. Most of this production is from the Bayan Obo polymetallic deposit in Inner Mongolia.

Set against a history of volatile export quotas, future supplies from China will be fundamentally driven by China’s growing domestic demand. Industry sources report a surge in prices, especially for neodymium and praseodymium, despite an increase of Chinese export quotas for 2010. Moreover, the Chinese government plans to create a strategic stockpile for rare earth materials including those used to produce electronic and sustainable energy products.