- The West’s race to reduce reliance on Chinese rare earths is facing headwinds.
- Europe’s ongoing energy crisis has forced smelters and producers to shut down.
- Ionic Rare Earths has just inked a deal with the UN to join the world’s largest corporate sustainability initiative.
The Rare Earths MMI (Monthly MetalMiner Index) fell an additional 4.04% between September and October, less than half the decline seen the previous months. However, it does indicate that rare earth producers are still under pressure.
Rare Earth Supplies Rush in West Hindered by Energy Crisis
The West’s race to curb reliance on Chinese rare earth metals continues to hit energy-related snags. Europe’s power woes only seem to be getting worse as Russian troops retreat from Ukraine and Putin doubles down on gas restrictions. Not only do European citizens stand to suffer, but multiple smelters and metal producers have had to shutter their doors.
To make matters worse, China itself has not been immune to energy-related problems. Its property crisis and limited industrial output continue to strain its production capabilities. Meanwhile, supply chain problems make it harder for buyers to get what the country does manage to produce. Though the UK and US are diversifying, the process remains slow and only serves to incur China’s wrath.
Whatever happens in the short-term, many experts feel the results will turn out quite ugly, as this recent Financial Times article makes quite clear. We’ve already seen how weaning a country or region off a supply over-dependence can end in disaster. Now, we must consider whether China will play the same games as Putin.
United Nations Inks Partnership with Ionic Rare Earths
But all is not lost. Just yesterday, news broke that Ionic Rare Earths will join the UN’s Global Compact, the world’s largest corporate sustainability initiative. IRE already has a subsidiary in Belfast, UK, where it focuses on magnet recycling. However, the company is also dedicated to preserving human rights amid the “rare earth blitz,” along with utilizing innovation to solve complex sustainability challenges.
According to the IRE’s Managing Director, Tim Henderson, “The circular economy of rare earths will become increasingly more important over years to come. Demonstrating sustainable business practices…will create value for our stakeholders, positively impact the social development in Uganda, and empower industries to become carbon neutral.”
The company’s main project is in Makuutu, Uganda, which it describes as “similar to clay-type deposits” found in Southern China. This clay is a cheap and easily accessible source of heavy rare earth oxides. Also, the Makuutu continues to demonstrate increased viability.
China-Myanmar Situation Provides Insight into Chinese Tactics
Last month, MetalMiner reported how China’s rare earth mines in Myanmar were causing major problems for locals. These sites employ a chemical injection strategy that continues to contaminate water supplies and cause extensive pollution. The highly illegal mines sit adjacent to the Mali Hka and N’Mai Hka river systems. These rivers and their tributaries provide drinking water for millions. If tainted, the results could be catastrophic.
This should provide at least some insight into how China might play its cards when the West attempts to cut ties with rare earth suppliers. Many of the country’s mining conglomerates continue to show little concern for how their operations might affect the environment and local populations. As the scramble for rare earths intensifies, so too will the potential repercussions.