China is home to 70 per cent of rare earths mining and 90 per cent of processing capacity. Tackling this dominance has become one of Washington’s strategic priorities.
Already a subscriber?A site close to Kruger National Park in South Africa is becoming a testing ground for US attempts to fight China’s global dominance in critical minerals.extract rare earths
“The question is, given the basket price for rare earths, does it make sense to move ahead?” says Stifel analyst Andrew Breichmanas. Yet recent price slumps in lithium, cobalt, nickel and graphite – all ingredients in electric vehicle batteries – have prompted Western producers to shut mines, cut production and reduce expansion plans. Among major miners, BHP is considering closing Nickel West in Western Australia; Albemarle, the world’s largest lithium producer, has cut back spending plans; and Glencore is reducing cobalt output.
“My concern is that the worst of the 20th-century energy architecture will be repeated in the 21st century,” he says. “It would maybe be worse because, instead of a group of countries that control the supply, there’ll be a single point of failure or a single point of ability to manipulate global supply and prices.”
Such pricing “seriously jeopardises non-Chinese producers and exploration projects”, says Ellie Saklatvala, head of non-ferrous pricing at Argus.
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