Last weekend I posted an article on the issue of China becoming a net importer of rare earths by 2015 (in a nutshell: it’s possible that this might occur for heavy rare earths). I mentioned some numbers being used by Dr. Zhanheng Chen, Director of the Academic Department of the Chinese Society of Rare Earths (CSRE), in a presentation made on his behalf in Vancouver in January.
In the presentation, Dr. Chen forecast a total supply in 2013 of 87 kt from China, out of a total 134 kt of global supply. He also forecast a total global supply target after 2015, of 278 kt of rare earths, with the target for China’s production set at 100 kt of rare earths and 178 kt from other sources. In some quarters, this figure of 278 kt appears to have been misinterpreted as being a demand forecast from Dr. Chen, but this is not the case.
In January 2011, The Journal of Rare Earths published a paper by Dr. Chen , in which he details the origin of his projected supply targets for 2015 and beyond, for producers and potential producers outside of China (my thanks to Eamon Keane for making me aware of the paper). Here is a breakdown of his numbers:
|Kamasurt||RUS||Lovozersky Mining||3 – 4.4||15|
|Orissa / Tamil Nadu / Kerala||IND||Indian Rare Earths||0.1||10|
|VNM||Toyota / Sojitz / Govt. Vietnam||1.8 – 2||> 2|
|Buena Norte||BRA||Indústrias Nucleares do Brasil||1.5||> 1.5|
|TOTAL||9.5 – 11||> 68.5|
|Mount Weld||AUS||Lynas Corp||10.5||21|
|Steenkampskraal||ZAF||Great Western Minerals Group / Rareco||3||5|
|KAZ||Sumitomo / Kazatamprom||3||15|
|Dong Pao||VNM||Toyota / Sojitz / Govt. Vietnam||0.3||5|
|Orissa||IND||Toyota / Indian Rare Earths||5||10|
|Pitinga||BRA||Mitsubishi / Neo Material Technologies||0.5||1|
|Nechalacho||CAN||Avalon Rare Metals||0||5|
|Strange Lake||CAN||Quest Rare Minerals||3||5|
|Bokan-Dotson||USA||Ucore Rare Metals||0||0|
|Nolans Bore||AUS||Arafura Resources||10||20|
|Hoidas Lake||CAN||Great Western Minerals Group||3||5|
|Bear Lodge||USA||Rare Element Resources||0||0|
|Kutessay II||KGZ||Stans Energy||0||0|
|Kvanefjeld||CAN||Greenland Minerals & Energy||0||10|
for 2015 & beyond
|Current non-Chinese sources||9.5 – 11||> 68.5|
|Non-Chinese sources preparing to come on-stream||24.9||63|
|Other potential non-Chinese sources||13||40|
|TOTAL||47.4 – 48.9||> 171.5|
We can see here then, that Dr. Chen is projecting a non-Chinese supply target of > 171.5 kt for 2015 and beyond – effectively a “steady-state” rate of supply. This is in line with the 178 kt projection for target supply from outside of China, in his Vancouver presentation. We can also see that it does not include sources of supply, listed in Table 3 above, that would add to this number once they come on-stream.
Dr. Chen goes on to say that at present, around 50 kt of rare earths are required to meet demand outside of China, and that with a growth rate of 15% in demand, the total demand from outside of China will be at least 80 kt by 2015 (assuming continued global economic growth). In his December 2010 presentation to the Hague Center for Strategic Studies, Dudley Kingsnorth projected total demand numbers for 2015 of 185,000 t ± 15% total rare earths. Mr. Kingsnorth’s numbers were further broken down to show a forecast 74 kt ± 15% of demand from outside of China in 2015 – numbers very much in line with Dr. Chen’s own forecast in his Vancouver presentation, and the numbers in his Journal of Rare Earths article.
We can certainly debate and question the specific projections that Dr. Chen used in his paper; what’s pretty clear though is that when he uses the figure of 278 kt for total rare earths in 2015 and beyond, he is referring to projected supply, not demand.
1. Z Chen, ‘Global rare earth resources and scenarios of future rare earth industry’, Journal of Rare Earths, Vol. 29, No.1, Jan 2011, p1.
Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to any of the companies listed above, or any other publicly traded junior-mining company.