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Technical Announcement:
The Facts of China’s Rare Earth Industry

Released: 3/1/2011 3:11:52 PM

Contact Information:
U.S. Department of the Interior, U.S. Geological Survey
Office of Communication
119 National Center
Reston, VA 20192
W. David  Menzie 1-click interview
Phone: 703-648-7732

Alex Demas 1-click interview
Phone: 703-648-4421

In light of recent attention and international developments, the U.S. Geological Survey (USGS) has completed its first review of China’s rare-earth industry.  This report provides information about the production, consumption, and reserves of China’s rare earth elements (REEs) and China’s policies and regulations regarding the production and trade of rare earths, including export quotas recently announced by the Chinese government.

China produces 95 percent of the world output of REEs and is also an increasing consumer of REEs owing to the emergence of new clean-energy and defense-related technologies. China’s reserves currently total 55 million metric tons.

During the past 20 years, China’s REE output has increased dramatically.  Since 1990, China’s share of global REE production has increased from 27 percent to its current level of 95 percent. 

China’s consumption of REEs has only recently begun to increase.  Since 2000, China’s consumption of REEs has nearly quadrupled, from 19,000 metric tons in 2000 to 73,000 metric tons in 2009.  China’s primary use for REEs is in the magnet industry, which accounted for 30 percent of total Chinese rare earth usage in 2009.

In 1990, China declared REEs protected and strategic minerals.  As such, China maintains production and export quotas.  The export quota has been declining in recent years due to increased domestic demand.  In 2010, the REE export quota was 37 percent lower than that of 2009, and a further reduction of 35 percent has been designated for 2011.

The REEs are the lanthanide elements, scandium, and yttrium.  Although industrial demand for these elements is relatively small in tonnage terms, they are essential for a diverse and expanding array of high-technology applications, including the magnets, metal alloys, and batteries for key defense systems, as well as many current and emerging alternative energy technologies.

The new study, China’s Rare-Earth Industry, by Pui-Kwan Tse, is available online. To learn more about rare earths, please visit the USGS National Minerals Information Center’s rare earth webpage.

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