China has a monopoly on rare earth metals

Math­ieu Xemard. Rare-earth met­als are a fam­i­ly of 17 metal­lic ele­ments with sim­i­lar physic­o­chem­i­cal prop­er­ties. They are rare only in name since they are rel­a­tive­ly wide­spread on the plan­et. For exam­ple, the most abun­dant (ceri­um) is more com­mon in the Earth­’s crust than cop­per. On the oth­er hand, they are high­ly dilut­ed in deposits where they are not the main met­al, and large quan­ti­ties of ore must be mined to meet demand.

One of the char­ac­ter­is­tics of these met­als is their high­ly spe­cif­ic trade bal­ance. Sep­a­ra­tion process­es require the iso­la­tion of each rare earth from ores where they are all sys­tem­at­i­cal­ly mixed togeth­er. The pro­duc­tion of each rare earth is there­fore not dic­tat­ed by its own mar­ket, but by demand for the most sought-after ones. This is why the more abun­dant rare earths are strug­gling to find a mar­ket, while oth­ers are in high demand. Added to this is Chi­na’s near-exclu­sive monop­oly, despite the fact that the world needs more and more of cer­tain rare earths.

The most abun­dant (ceri­um and lan­thanum) are main­ly used in cat­a­lysts for cat­alyt­ic con­vert­ers or for the cat­alyt­ic crack­ing of oil into petrol¹. The grad­ual dis­ap­pear­ance of inter­nal com­bus­tion vehi­cles in favour of elec­tric vehi­cles can explain why the mar­ket is decreas­ing. Volt­age rare earths are those used to man­u­fac­ture mag­nets: neodymi­um, dys­pro­sium, ter­bium and praseodymi­um. Their mar­ket is boom­ing. Neodymi­um-iron-boron mag­nets are the most pow­er­ful mag­nets man­u­fac­tured today and are wide­ly used to man­u­fac­ture pow­er­ful minia­turised motors, in elec­tric cars in par­tic­u­lar. Because of their remark­able mag­net­ic prop­er­ties, these mag­nets are also used in off­shore wind tur­bines – from 80 kg/MW to 200 kg/MW of rare earths in 2015, depend­ing on the tech­nol­o­gy used² – and in robotics.

Once again, they are used in the form of mag­net­ic alloys in motors of all sizes or in hard disks. Because of their opti­cal and elec­tron­ic prop­er­ties, they are also used in many optron­ic appli­ca­tions (obser­va­tion, guid­ance, com­mu­ni­ca­tion, etc.). They are present almost every­where in weapons sys­tems: for exam­ple, an Amer­i­can F35 fight­er plane con­tains more than 400 kg of var­i­ous mate­ri­als con­tain­ing at least one rare earth³. Even if the quan­ti­ties involved in arma­ments remain small com­pared with civil­ian mar­kets, this rais­es real ques­tions of sov­er­eign­ty because of Chi­na’s monopoly.

Chi­na account­ed for around 69% of the world’s pro­duc­tion of rare earth ores in 2023⁴. Far behind are the Unit­ed States (12%), Bur­ma (11%) and Aus­tralia (5%). Once these ores have been extract­ed, they need to be processed to sep­a­rate, puri­fy and refine each of the rare earths. How­ev­er, Chi­na is the only coun­try that car­ries out all these stages, with Aus­tralia and the Unit­ed States sell­ing some of their semi-processed ores back to Chi­na to com­plete the refin­ing! Chi­na thus pro­duces 85% of the puri­fied light rare earths used world­wide, and 100% of the heavy rare earths.

Yes, today Chi­na dom­i­nates the entire val­ue chain. The coun­try has pro­gres­sive­ly moved from extrac­tion to sep­a­ra­tion, via refin­ing and met­al­lur­gy, to the man­u­fac­ture of mag­nets. In the 1990s, Japan and the Unit­ed States were the main mag­net man­u­fac­tur­ers. Their know-how was based on strong exper­tise in met­al­lur­gy and pre­cise con­trol of the com­po­si­tion of the mag­net­ic alloys they pro­duced. But in the Unit­ed States, Mag­nequench – the Gen­er­al Motors sub­sidiary respon­si­ble for mag­net pro­duc­tion – was bought out by two Chi­nese groups in 1997. In Japan, Chi­na first estab­lished itself as a sup­pli­er of puri­fied rare earths, then pushed Japan­ese com­pa­nies to relo­cate part of their mag­net pro­duc­tion to gain access to Chi­nese mar­kets, there­by gain­ing access to the last miss­ing tech­nolo­gies in the ear­ly 2010s⁵.

Chi­na now hard­ly ever sells raw mate­ri­als: it uses them to man­u­fac­ture prod­ucts with high­er added val­ue, such as mag­nets and elec­tric motors. In 2019, Chi­na account­ed for 92% of the world’s pro­duc­tion of rare earth per­ma­nent mag­nets⁶. And the coun­try is now estab­lish­ing itself as a man­u­fac­tur­er of elec­tric cars – the final stage in this val­ue chain – by pen­e­trat­ing the Euro­pean market.

A few decades ago, France was a major play­er in sep­a­ra­tion, thanks to Rhône-Poulenc (now Solvay). In 1992, for eco­nom­ic and reg­u­la­to­ry rea­sons, its plant at La Rochelle had to restrict itself to cer­tain very spe­cif­ic uses for rare earths. How­ev­er, at the end of 2022, Solvay announced its inten­tion to relaunch its activ­i­ties in the sep­a­ra­tion and purifi­ca­tion of rare earth oxides for mag­nets⁷.

The main dif­fi­cul­ty remains Chi­na’s posi­tion: if nec­es­sary, it can arti­fi­cial­ly increase price volatil­i­ty. The eco­nom­ic via­bil­i­ty of this type of indus­tri­al project is dif­fi­cult to ensure, and it is now vir­tu­al­ly impos­si­ble to find pri­vate play­ers pre­pared to make the heavy invest­ments required to open new plants. The Unit­ed States has decid­ed to get round this prob­lem by plac­ing large orders through the Depart­ment of Ener­gy and the Depart­ment of Defense to build up strate­gic stocks. This has already made it pos­si­ble to relaunch the his­toric Moun­tain Pass mine in Cal­i­for­nia and to finance the future open­ing of a sep­a­ra­tion plant⁸.

The first thing to do – and the most effec­tive and quick­est – is to reduce con­sump­tion. The less we con­sume, the more we reduce our depen­dence. One pos­si­ble approach is eco-design: it is pos­si­ble to dis­pense with mag­nets and rare earths for cer­tain appli­ca­tions, while accept­ing the asso­ci­at­ed loss of per­for­mance. Sec­ond­ly, we need to devel­op com­pa­nies at every stage of the val­ue chain. This cre­ates com­pe­ti­tion and helps to break a monop­oly sit­u­a­tion. If Chi­na moves far enough down the val­ue chain, the mar­kets will be less con­trolled by that state, which is the pur­pose of the Euro­pean Union’s Crit­i­cal Raw Mate­r­i­al Act, adopt­ed in 2024.

Yes, of course, as Japan chose to do, for exam­ple, fol­low­ing the export quo­tas imposed by Chi­na in 2010. How­ev­er, recy­cling remains a cost­ly activ­i­ty both in terms of ener­gy and eco­nom­ics if we are aim­ing for rare earth puri­ty lev­els sim­i­lar to those obtained from mines.

At Ecole Poly­tech­nique (IP Paris), we are work­ing on the devel­op­ment of prod­ucts that use recy­cled mate­ri­als with­out nec­es­sar­i­ly involv­ing the high lev­els of puri­ty need­ed to man­u­fac­ture mag­nets. For exam­ple, we are study­ing the influ­ence of sub­sti­tu­tions or impu­ri­ties on the mag­net­ic prop­er­ties of rare earth alloys⁹. It is also pos­si­ble to find high­er val­ue-added out­lets for rare earths whose mar­kets are shrink­ing (ceri­um and lan­thanum in par­tic­u­lar), which would make it pos­si­ble to increase the added val­ue of rare earth sep­a­ra­tion activ­i­ties. The use of arti­fi­cial intel­li­gence is also envis­aged as an accel­er­a­tor for this type of appli­ca­tion. How­ev­er, this work is not yet at the indus­tri­al stage.

Interview by Anaïs Marechal