We sense that China’s Rare Earth advantage has been made vulnerable due to massive overexploitation over the last 30 years and the ONLY remedy is to cut back exports and start stockpiling material before the country becomes as dependent upon fickle outside forces in REEs as it is in Cobalt. This potentially sets the scene for a supply crunch outside China and no amount of WTO whining and appeals will stop the Chinese halting exports if it is deemed to be in the national interest.
We have previously called the Great Dysprosium Crisis of 2020, and now we add the Great Erbium Dilemma of 2021-24. These linked supply crunches will come as a “surprise” to the powers that be, both in China and outside. And yet the warning signs are there for everyone to see. The Adamas report on Dysprosium was a red flag, and now the more sotto voce alarm bells of Erbium are largely going unheeded as well. For those countries wanting to be players, or at least control their destiny, in 5G the hunt for Erbium must now be powered up.
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It is reasonable, at least in my view to argue that China was able to export large quantities of rare earth metals when it was technologically backward but will have to consume more of its own supply as the technological capability of its economy improves. At a minimum it suggests the demand for rare earth elements is likely to remain on a growth trajectory.