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Rare earths and automation technology - part 2

Supply and demand to rare earths

Production of rare earths in China.

Supply and demand until 2016 - specific excess and shortage of demand

The following projection of supply and demand of selected rare earths comes from Dudely Kingsnorth, managing director of the Australian consulting firm Industrial of Mineral Company of Australia Pty Ltd. IMCOA, which is specialized in consultation to rare earths. Kingsnorth is newly appointed professor at the Centre for Research in Energy and of Minerals Economics at Curtin University, Perth, Australia. The New York Times calls the market analyzes by Kingsnorth about rare earths „the bench mark for the industry“1.


Kingsnorth`s projection goes up to the year 2016. It contains with Neodymium, Dysprosium, Europium and Cerium important items for the automation technolo

Supply and demand to rare earths until 2016

First of all this projection shows in regard to the seven selected elements that no general bottleneck of supply is to be expected. Rather the result of this projection is: At the same time there will be excesses and shortages in regard to the demand.


For Cerium, Lanthanum (for nickel metal hydride batteries)2 and for Neodymium the supply will exceed the demand, however, for Terbium, Dysprosium, Europium and Yttrium it will turn out that the demand is larger than the supply.


In the automation technology it often occurs the combined use of various items as outlined. So the servo motor requires Neodymium and Dysprosium but the supply of the latter cover the demand only to 88%. Therefore Dysprosium represents „the most critical item in the future use of rare earths for permanent magnets“, according to the Deutsche Rohstoffagentur DERA.3


Dysprosium belongs as stated to the heavy rare earths. „All heavy rare earths, which are currently produced, originate from China“4. This hundred percent dependency on deliveries from one country further tensions are arising we will discuss later in thesis 6.


Of course, Kingsnorth’s projection is subject to substantial fluctuations due to the extremely difficult data situation in the market for rare earths and the current uncertainties in the world economics. So in March 2011 Kingsnorth had clamped noticeable shortages in the supply of Neodymium with 87% that transformed one year later into a slight excess.

Supply and demand to all rare earths until 2015

The world-wide supply and demand situation to all rare earths can only be estimated. That applies not only to the future, but also to the actual market situation and periods, which are one or two years ago.

In the previous year rare earths were only produced in four countries5:

China produced 2009 about 120,000 t and further 35,000 t from not official production sum up to 95% of the world-wide supply.

So all countries outside China contributed only 5% to the supply of rare earths.

Russia produced about 2,000 t; India about 70 t and from the USA came about 1,700 t from processed arrears of earlier productions.


For the year 2015 Kingsnorth estimates the global supply of rare earths to 195.000 - 210,000 t. This supply will exceed the expected demand at a value of 175.000 - 190,000 in 2015.


So according to this projection rare earths are not in general too scarce rather individual rare earths elements and their combination in applications are the crucial point (see thesis 2).


In regard to the global demand China dominates with a proportion of 60%. The remaining 40% are allotted to the half to other Asia countries and the other half to the USA, Europe and all other countries. So 80% of the demand to rare earths originates from Asia.


The proportions of the global demand will remain nearly unchanged until 2015.

Oversupply and undersupply of rare earths until 2016

According to this projection the demand will grow by 48% until 2015, that is 60,000 t. The fitting supply is to come from stores outside of China.


So the exploitation of new deposits is required. To such larger future projects are belonging in the USA Mountain Pass (resumption of production 2012, target 19,000 t p.a.), in Australia Mt Weld (start 2011, target 21,000 t. p.a.) and Nolans (start 2014, target 20,000 t p.a.), in Viet Nam Dong Pao (start 2013, target 5,000 t. p.a.)6


The forced exploitation of deposits outside of China will slightly reduce the dependency on this country, however, is not able to eliminate the excess and shortages of the demand influenced by structural problems of the production and the combined application of different elements of the rare earths (see theses 1 and 2). Open remains also at which extent the new production will consider the environmental and the industrial safety against high-poisonous arrears.


Therefore the most important alternative is to strongly extend the substitution possibilities for rare earths. That is again to be taken up in the completing thesis 7.



Part 1: Rare earths: Extraction and structural problems

Part 2: Supply and demand until 2016

Part 3: Price problems with rare earths

Part 4: The role of China with rare earths

[1] Bradsher, Keith: China Tightens Grip on Rare Minerals. In: New York Times, 1. September 2009
[2] Elsner, Harald: Kritische Versorgungslage mit schweren Seltenen Erden – Entwicklung “Gründer Technologien” gefährdet? In: Commodity Top News, Nr. 36, p. 3, hrsg. Deutsche Rohstoffagentur (DERA) in der Bundesanstalt für Geowisschenschaften und Rohstoffe (BGR)
[3] Commodity Top News, No. 36, p. 1
[4] Commodity Top News, No. 36, p. 3
D.J. Kingsnorth: Meeting the Challenges of Rare Earths Supply in the Next Decade, The Hague Centre for Strategic Studies, 1. December 2010, p. 13
[6] Kingsnorth, D.J.: Meeting the Challenges of Supply this Decade. Washington, March 2011, p. 18


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4 parts and 2 interviews