Over the past few decades, China has steadily monopolized the global rare earth element industry. It controls roughly 90% of global rare earth element production, refining around 85% of the world’s cobalt and producing nearly 100% of global graphite supplies.
China is also responsible for 100% of the global production of high-temperature magnets, which are critical in developing weapons systems.
Several developed nations are keen on breaking China’s monopoly of the rare earth element segment. Canada, which has one of the largest deposits of rare earth elements on the planet, is looking to position itself as a major competitor to China. According to estimates by the Canadian government, the country has more than 15.1 million tonnes of rare earth oxide.
Rare earth elements are in reality quite abundant in deposits across several countries. However, their scarcity is due to the fact that they require extremely complex and expensive separation and refining processes as they are quite difficult to separate.
China is one of the few countries that have built up the technical know-how and capability to mine, separate, and refine rare earth elements.
However, nations such as the United States, Canada and European Union countries are looking to reduce their reliance on China for these critical metals because it grants China an unprecedented level of leverage on the geopolitical scale. Russia, for instance, was able to use its monopoly in the energy sector to cripple the EU’s energy supply chain and plunge the world into a severe energy crisis.
Last December, Canada announced a plan to accelerate the production of rare earth elements and position itself as an alternative supplier to Europe in place of China. The EU currently sources around 98% of its rare earth elements from China, and leaders are keen on reducing the regional bloc’s reliance on China.
However, doing so will take time because it can take mining projects five to 25 years to become operational. As such, authorities in Canada are working to accelerate the approval process for new mines so they can begin mining and producing rare earth elements as soon as possible.
Canada International trade minister Mary Ng said that Canada is currently the second largest player in the global battery ecosystem space after China. She said that Canada wants to be the solution for countries looking for an alternative to Chinese rare earth element exports and has already partnered with other players in the critical minerals field to help build a resilient supply chain.
As more entities such as Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) establish themselves in North America, the dominance of China in the rare earths industry is likely to be broken gradually.
NOTE TO INVESTORS: The latest news and updates relating to Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) are available in the company’s newsroom at http://ibn.fm/UURAF
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