In the closing decades of the last century China emerged as the major producer of rare earth elements ( REE ) raw materials, accounting for more than 95% of the world’s production. Most of this production is from the Bayan Obo polymetallic deposit in Inner Mongolia.

Set against a history of volatile export quotas, future supplies from China will be fundamentally driven by China’s growing domestic demand. Industry sources report a surge in prices, especially for neodymium and praseodymium , despite an increase of Chinese export quotas for 2010. Moreover, the Chinese government plans to create a strategic stockpile for rare earth materials including those used to produce electronic and sustainable energy products.

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The trend is for a continued increase in the use of REE in many fast developing technologies and applications, especially automotive catalytic converters, permanent magnets, and rechargeable batteries by a forecast average growth rate for REE of 8-11% per annum. However, selective demand requires consideration.

While increased usage of heavy rare earth elements ( HREE ) such as dysprosium and terbium , along with light rare earth elements ( LREE ) europium and neodymium , is expected owing to increasing demand for electromagnets driven by wind turbines, e-mobility and flat screen applications, an increasing oversupply of other REE such as cerium will occur. This is because the REE content of the three main ore minerals not only differs from each other but also differs from individual REE demand. Nature’s given distribution of REE in the ore minerals and deposits is always dominated by the group of LREE . If China chooses to go ahead with its wind energy program then this will require that China increases its current production levels just to meet their own additional demand for HREE .