China's Inner Mongolia region – with the world’s biggest rare earth element (REE) mine – is looking to develop its second-largest city, Baotou, into a world-leading hub for critical minerals. Analysts say the effort could further shore up China’s leading position in the supply chain. In a 10-year development plan, which includes goals to build a “solid ecological security barrier”, the Inner Mongolia Autonomous Region said it will make comprehensive progress on the protection and integrated use of critical minerals, launch a new round of strategic mine-exploration work, and accelerate the development of high-end rare earth functional materials. Inner Mongolia is home to the Bayan Obo mine, which accounts for more than 40% of the world’s known rare earth reserves, and for nearly half of the global rare earth production, according to NS Energy Business, a news and analysis platform for the energy industry.
Rajiv Biswas, CEO of research firm Asia-Pacific Economics, said: “The strategic initiative to develop Baotou into an integrated rare earths supply-chain hub will further strengthen China’s position as the world’s REE producer. Large-scale new investment of magnets using REE materials at Baotou will strengthen China’s global leadership in the production of magnets for new electric vehicles (NEVs) and wind turbines”.
In July, Xinhua reported that Chinese geologists had identified a large deposit in Inner Mongolia of a previously unknown rare earth mineral – a new carbonate mineral dominated by neodymium. The so-called magnet metal is used to build electric-vehicle motors and offshore wind turbines. Along the rare earth value chain, China holds 69% of the global share in terms of mine production, according to recent figures from Morgan Stanley. In terms of magnet supply, China controls 90% of the global market share.
As many of the world’s largest developing countries transition to electric vehicles and renewable energy, Biswas said the integrated rare earth element supply-chain hub at Baotou will “play a key role” in supplying processed materials. “While global REE supply chains will gradually become more diversified over the next five years, China will continue to play a dominant role in global REE supply chains over the medium-term outlook to 2030,” he added, as reported by the South China Morning Post.
