China to Go From Seller to Buyer of Rare Earth Metals?

The “Rare Earth Metal Scare, as we dared to call it a couple weeks back (and have reported over the past 18 months), may take a turn in a completely different direction.

As a follow-up to the story we ran a couple of weeks ago involving Japanese OEMs meeting with Canadian rare earth mining firms to shore up long term supply of critical raw materials, we received a tip yesterday that a new conference hosted by Cambridge House entitled Critical Metals Investment Symposium will feature two speakers from China: Lin Donglu, Secretary General of Chinese Society of Rare Earths and Dr. Chen Zhanleng, PhD Director of Academic Department of Chinese Society of Rare Earths, who will deliver a presentation entitled China to Join Buy Side.

Unfortunately, we don’t have any additional information about what the pair will speak on, but if indeed their presentation title suggests a new working hypothesis — that China will at some point flip from a net exporter/seller of rare earths to a buyer of rare earths — then we would want to know the following:

  1. When do they believe Chinese “rare earths will run out/when will shortages ensue?
  2. What is the magnitude of any potential shortfall?
  3. The Chinese authorities have consistently given two reasons supporting the tight control of rare earth exports environmental concerns and growing internal demand. Does this render the American-led WTO clean tech case (which also includes rare earth metals) invalid?
  4. For fear of lumping all metals together: which specific metals do the experts refer to? And will they all become subject to the same rate of change from a China supply perspective or will some metals move into deficit faster than others? (For example, we understand metals such as permanent magnets and luminescent rare earths face no current export restrictions – will this change?)
  5. Which companies have the best near-term opportunities to fill the gap?
  6. What is China’s long-term strategy around rare-earth metals should the country become a net importer?

Clearly, Japan as a nation and many of its leading companies have, for quite some time, begun to identify alternative supply sources. Whether China has cut its rare-earth exports due to internal demand, environmental concerns or an impending shortage makes no difference. As we have long argued on these virtual pages, OEMs and their supply chains will need to continue to mitigate supply risk by identifying alternative sources of supply.

And for those of you interested in hearing the specifics of what these two individuals have to say about the longer-term China supply situation, you can register to attend the event in person via this link.

–Lisa Reisman

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