European manufacturers will need to keep an eye on China’s “near-monopoly” on the extraction and supply of rare earth minerals as they move toward electric power, experts have told CNBC.
Rare earths hit the headlines over the past week as China hinted at stopping the export of rare earths to the U.S., after Washington increased tariffs on $200 billion worth of Chinese goods. The group of 17 minerals aren’t actually rare, but are produced in fairly scarce quantities compared with abundantly mined metals like copper. They have grown in prominence in recent years due to their use in high-tech equipment, defense manufacturing and electric vehicles.
Martin Eales, CEO of London-listed Rainbow Rare Earths, which runs an ongoing mining project in Burundi, told CNBC that China may not opt for an outright export ban but rather a reduction in its production quota, which “by definition would reduce the amount of rare earths material available for export and potentially create supply problems for rest-of-the-world users.”
Rainbow Rare Earths Ltd (LON:RBW) is a mining company focussed on production from, and expansion of, the high grade Gakara Rare Earth Project in Burundi, East Africa. With in-situ grades in the range of 47-67% Total Rare Earth Oxide (TREO), Gakara is one of the world’s richest rare earth deposits.