3 Secrets of Rare Earth Success in China

Posted by admin at 2:23 PM on Jul 28, 2009


By Clint Cox

1. Rare Earth Elements (REE) come as a by-product from Bayan Obo iron ore operations. The rare earths are so plentiful at Bayan Obo, that until recently, they only recovered a fraction of the REEs. This makes mining the REEs relatively cheap — as long as they mine iron ore, they will have REEs. Approximately 50% of the world’s total rare earth production comes from Bayan Obo. Also key is that bastnaesite is a rare earth mineral with a high theoretical 75% REO.


Bayan Obo Bastnaesite

2. The South China Clays are unique. These clays have fantastic rare earth distributions that are intensely skewed toward the heavy rare earths (HREEs), and are the main supplier of HREEs to the world market. They have a very low REO% but they are able to be processed very cheaply with a relatively low degree of technology. They are, however, faced with the challenge of preserving these resources while providing needed material to the marketplace — these are not limitless resources by any means.

3. The Chinese are focused. Baotou alone has over 20,000 workers dedicated to the rare earth industry in one form or another. Regional government agencies, as well as Beijing, are well aware of REEs as a strategic resource. Research takes place in a methodical manner, and rare earth resources are managed on multiple levels. The Chinese have specific, long-range plans to develop their rare earth sector, and there is a system of licenses, tariffs and export quotas in place to help protect the Chinese REE industry. They have implemented a number of incentives to attract foreign investment. In addition, the Chinese are very aware of developments outside China and have proven willing to participate beyond their borders.


Small portion of scale model of Rare Earth Development Zone in Baotou