China’s rare earth supply chain: Illegal production, and response to new cerium demand

Journal Article · Tue Mar 29 00:00:00 EDT 2016 · JOM. Journal of the Minerals, Metals & Materials Society

DOI:https://doi.org/10.1007/s11837-016-1894-1· OSTI ID:1249217

Nguyen, Ruby Thuy ^[1]; Imholte, D. Devin  ^[1]

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1. Idaho National Lab. (INL), Idaho Falls, ID (United States)

As the demand for personal electronic devices, wind turbines, and electric vehicles increases, the world becomes more dependent on rare earth elements. Given the volatile, Chinese-concentrated supply chain, global attempts have been made to diversify supply of these materials. However, the overall effect of supply diversification on the entire supply chain, including increasing low-value rare earth demand, is not fully understood. This paper is the first attempt to shed some light on China’s supply chain from both demand and supply perspectives, taking into account different Chinese policies such as mining quotas, separation quotas, export quotas, and resource taxes. We constructed a simulation model using Powersim Studio that analyzes production (both legal and illegal), production costs, Chinese and rest-of-world demand, and market dynamics. We also simulated new demand of an automotive aluminum-cerium alloy in the U.S. market starting from 2018. Results showed that market share of the illegal sector has grown since 2007 to 2015, ranging between 22% and 25% of China’s rare earth supply, translating into 59–65% illegal heavy rare earths and 14–16% illegal light rare earths. There would be a shortage in certain light and heavy rare earths given three production quota scenarios and constant demand growth rate from 2015 to 2030. The new simulated Ce demand would require supply beyond that produced in China. Lastly, we illustrated revenue streams for different ore compositions in China in 2015.

• Research Organization: Idaho National Laboratory (INL), Idaho Falls, ID (United States)
• Sponsoring Organization: USDOE Office of Energy Efficiency and Renewable Energy (EERE)
• Grant/Contract Number: AC07-05ID14517
• OSTI ID: 1249217
• Report Number(s): INL/JOU-16-37609; PII: 1894
• Journal Information: JOM. Journal of the Minerals, Metals & Materials Society, Journal Name: JOM. Journal of the Minerals, Metals & Materials Society; ISSN 1047-4838
• Publisher: Springer
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
China’s supply chain
rare earth
illegal production
system dynamics
simulation model