Europe struggles to compete with China in rare earths

A consultant stated on Tuesday that Europe is likely to be able only to produce a small amount of the rare earths needed for electric vehicles and turbines in 2030. This is mainly because China, as a dominant producer, will offer cheap prices.

In recent years, Europe and the U.S. struggled to increase domestic production and processing to reduce dependence on China. China accounts for 90% of all processed rare earths worldwide.

Laurent Migom, a consultant at Bain, said that there is a 20%-40% cost difference between a Chinese value chain and a European value chain.

Migom said that the chemical group Solvay had expanded its rare earth processing facility in La Rochelle in France.

A source from the industry told the audience that in some cases, the Chinese products were 60% to 70% cheaper.

Migom reported that the European demand for rare-earth oxides, which are used to make super-strong magnets, will grow up to 50% by 2030 to 30,000 tons, which is worth as much at 1.5 billion euros.

Bain estimates that Europe will be able produce less than 5 000 tons of coal by this date.

Although China is the source of 65% of rare earth ore, large deposits are found elsewhere. Many of these are currently being developed.

Migom stated that only 2-5 of the 50 mining projects outside China aiming to begin production by 2030 will be economically feasible to launch, due in large part to the low prices of rare earths.

Migom stated that these projects would produce 20,000 to 25,000 tons of rare Earths annually, but only 6,000 tonnes of the type required for magnet manufacturing.

He added that recycling could be used to supply rare earths for Europe after 2035, when there will be enough magnets. Reporting by Eric Onstad, Editing by Peter Graff

(source: Reuters)