Is China running out of rare earths?
"China's rare earth reserves fell 37% between 1996 and 2009, leaving only 27 million tons. According to the current output, China's medium and heavy rare earth reserves can only be maintained for 15 to 20 years, and must be imported from abroad before 2040-2050 to meet domestic demand."
Since May 1, 2015, an ad valorem resource tax applies to rare earth concentrate produced domestically in China:
- Light rare earth concentrate (incl. NdPr): 11.5% (Inner Mongolia), 9.5% (Sichuan), 7.5% (Shandong)
- Medium/heavy rare earth concentrate: 27%
This tax does not apply to imported rare earth concentrate, which is a strong motivator for importing to China.
Currently, non-Chinese rare earth junior miners have no other market to sell to than China, which still has ample idle capacity for separation of rare earth elements.
Investment in own downstream prodcessing is prohibitely expensive for junior miners. So those with realistic planning resign themselves to stop the value creation at producing concentrate, sell off to China and hope to break-even one fine day.