Processing Capacity Overview
- China: China processes nearly 90% of the world’s rare earth elements, holding the majority of global refining capacity. This dominance is a result of decades of investment in refining technology, lower labor costs, government subsidies, and less stringent environmental regulations.
- Other Countries: Outside of China, countries like the U.S. and Australia are striving to develop their own processing capabilities. Companies such as MP Materials and Lynas are expanding their refining capacities but face challenges due to the complex and energy-intensive nature of REE processing. These companies rely heavily on government support to compete with China’s advanced technology and cost model.
Key Factors for China’s Dominance
- Technological Expertise: China has mastered the complex process of separating rare earth elements, which are chemically similar and difficult to isolate.
- Vertical Integration: China’s dominance spans from mining to refining and magnet production, making its supply chain more integrated and efficient.
- Economic and Regulatory Advantages: Low labor costs and favorable government policies allow China to maintain a price advantage over foreign competitors.
Challenges and Developments
- Environmental and Cost Challenges: The traditional chemical-based processing methods used by China are often environmentally hazardous. In response, research is ongoing into new technologies like microbial processing, which could offer sustainable alternatives to current methods but are still in early stages.
- Government Initiatives: In response to China’s dominance, countries such as the U.S. are investing in indigenous supply chains and promoting research into more sustainable processing methods.
Overall, China’s significant lead in rare earth processing capacity remains a strategic advantage, while other countries focus on developing alternative methods and building their own capabilities to reduce dependence on Chinese processing.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-processing-capacity-of-rare-earth-elements-differ-between-china-and-other-countries/
