China has the largest critical materials reserves worldwide. The country’s rare earth mining sector is enjoying a vigorous resurgence. Further buoying their bottom lines, major state-owned miners in the country have described a return to profitability. Beijing’s recent export restrictions have skyrocketed prices for these strategic minerals. Perpendicular to that, here’s what some would dub a manufacturing miracle.
Since then, Beijing has used onerous measures as a way to enforce export limits. This action has caused a reactionary wave across the international marketplace, increasing the prices of rare earth elements. These materials are critical for multiple advanced manufacturing sectors, from electronics to the renewable energy and defense sectors. Indeed, China dominates production of rare earths. Particularly as its policies have a huge influence on the supply chain across the globe.
A new rare-earth mine in China’s Inner Mongolia Autonomous Region played a large role in this recovery. Its extreme production capabilities have already made a revolutionary impact in the industry. The importance of the mine in helping the world meet the rapidly increasing demand for these materials cannot be understated. With international tensions rising, nations are increasingly trying to protect their own supply chains.
As a result of these export curbs, China’s major listed state-owned miners have handily profited from this opportunity. Over the past few years, news reports have told of how these companies have rebounded back to profitability. They’ve seen huge growth in their revenues. This shift reflects a broader trend within the industry, as other nations look to reduce their dependency on Chinese rare earth supplies.
Analysts believe this boom in profitability will encourage greater investment and development of E&P capabilities in China. The international appetite for rare earth elements is increasing, largely in response to the transition to green technologies. This trend creates for China enormous leverage in the international marketplace because of its stranglehold on these dangerously scarce and valuable resources.