On November 19th, the website of Singapore’s Asia News Channel published an article titled: China is the king of these key metals. The supply war has dragged Southeast Asia into it. Who can break China’s dominance in the key metals needed to drive global high-tech applications? As some countries search for these resources outside of China, the Malaysian government announced last month that it will allow a rare earth factory near Kuantan in the state of Pahang to continue processing rare earths. The factory is operated by Linus, the largest rare earth processing company outside of China and an Australian mining company. But people are worried about history repeating itself. In 1994, a rare earth processing plant located 5 hours away from Kuantan was shut down because it was considered the culprit of birth defects and leukemia in the local community. The factory is operated by a Japanese company and lacks long-term waste treatment facilities, resulting in radiation leakage and pollution of the area.
The recent geopolitical tensions, especially between the United States and China, mean that the competition for key metal resources is heating up. Vina Sahawala, Director of the Center for Sustainable Materials Research and Technology at the University of New South Wales, said, “The reason why (rare earths) are so ‘rare’ is because extraction is very complex. Despite rare earth projects covering the world, China stands out, accounting for 70% of global production last year, with the United States accounting for 14%, followed by countries such as Australia and Myanmar.”. But even the United States needs to export rare earth raw materials to China for processing. Associate Professor Zhang Yue from the Australia China Relations Research Institute at the University of Science and Technology Sydney said, “There are enough mineral reserves worldwide to supply rare earths. But the key lies in who controls the processing technology. China is the only country in the world with the ability to cover the entire value chain of 17 rare earth elements… not only in technology, but also in waste management, it has formed advantages.”
Lakaze, the head of Linus Company, stated in 2018 that there are approximately 100 PhDs in the field of rare earth applications in China. In Western countries, there is no one. This is not only about talent, but also about manpower. Zhang Yue said, “China has hired thousands of engineers in research institutions related to rare earth processing. In this regard, no other country can compete with China.” The process of separating rare earths is labor-intensive and can also be harmful to the environment and human health. However, China has decades of experience in these areas and is doing them cheaper than other countries. If Western countries want to establish processing plants for separating rare earths domestically, it will require time, money, and effort to build infrastructure and take safety measures.
China’s dominant position in the rare earth supply chain is not only in the processing stage, but also in the downstream stage. It is estimated that high-strength rare earth magnets produced by Chinese factories account for over 90% of global usage. Because of this ready-made supply, many electronic product manufacturers, whether foreign or domestic brands, have set up factories in Guangdong and other places. What leaves China are finished products made in China, from smartphones to earplugs, and so on.
Post time: Nov-27-2023