It goes without saying that the rare earths sector has seen better times. Prices have struggled as result of oversupply, and many experts believe that 2017 will be another slow year for the space.
Even so, it’s worth looking at which countries have the highest rare earths reserves. While in many cases the world’s major rare earths producers hold large amounts of reserves, some countries have low rare earths production and high reserves. Case in point: the US did not produce any rare earths in 2016, but its reserves are the seventh-highest in the world. It’s possible that countries like this could become bigger players in the space in the future.
On that note, here’s an overview of rare earths reserves by country, with a focus on the seven countries whose reserves are over 1 million MT. Rare earths by country data is taken from the US Geological Survey’s most recent report.
Reserves: 44 million MT
Unsurprisingly, China has the highest rare earths reserves at 44 million MT. The country was also the biggest producer of rare earths in 2016 by a long shot, putting out 105,000 MT.
Back in 2012, China declared that its rare earth reserves were declining, but last year the country announced it was “boosting” domestic reserves. In April 2016, six of China’s major suppliers started building commercial reserves. That said, Industrial Minerals notes that the Chinese government is keeping its rare earths production quotas unchanged for 2017 at 52,500 tonnes. It will be interesting to see if that move impacts the country’s plan to increase its reserves.
Reserves: 22 million MT
While Brazil was the fifth-largest producer of rare earths in 2016, putting out 1,100 MT, it holds the second-largest reserves in the world at 22 million MT. An $8.4-billion rare earths deposit was discovered in 2012 in Brazil, although not much has come out of the discovery. That said, it’s easy to see why the country’s reserves are so high.
Reserves: 18 million MT
Russia was the third-largest rare earths producer in 2016 and it also holds the third-highest reserves in the world. Last year, the country ramped up its rare earths production to 3,000 MT; its reserves currently stand at 18 million MT. The country’s consumption of rare earths is expected to exceed 180,000 tonnes annually by 2020, and the Russian government is thus allegedly “unhappy” with its current level of rare earths supply.
Reserves: 6.9 million MT
India’s rare earths reserves sit at 6.9 million MT, significantly less than China, Brazil and Russia. The country produced 1,700 MT of rare earths in 2016, but an October 2016 article in the Economic Times suggests that the country is “not realising [the] potential of [its] rare earth industry.” The publication states that India has nearly 35 percent of the world’s beach and sand mineral deposits, which are significant sources of rare earths.
Rare Earth Market Outlook 2016
A look at rare earths in 2015 and the rare earth market outlook for 2016.
Reserves: 3.4 million MT
While Australia was the second-largest rare earths producer in 2016 at 14,000 MT, it has only the fifth-largest reserves in the world. Currently its reserves stand at 3.4 million MT.
Rare earths have only been mined in Australia since 2007, according to Geoscience Australia, and output is expected to increase moving forward. Lynas (ASX:LYC) is currently operating the Mount Weld mine and concentration plant in the country; it also operates a rare earths refining and processing plant in Malaysia
Reserves: 1.5 million MT
Like the US, Greenland did not produce any rare earths in 2016, or even in 2015. Even so, its rare earths reserves are the sixth-highest in the world at 1.5 million MT. Plans are in the works for a massive uranium mine in the country, and it would also be the world’s second-largest rare earths operation.
7. United States
Reserves: 1.4 million MT
As mentioned, the US didn’t mine rare earths in 2016. The lack of the production was reportedly the result of mine suspensions in 2015. Even so, rare earths reserves in the country are high, and stand at 1.4 million MT.
Interestingly, Russian billionaire Vladimir Iorich has turned his attention to rare earths mining in the US. Iorich has reportedly put a bid on the Mountain Pass mine, which was run by Molycorp (OTCMKTS:MCPIQ) before the company went bankrupt. It will be interesting to see if his bid will bring rare earths mining back to the US once again.
More rare earths reserves by country
The countries listed above are of course not the only ones that hold large reserves of rare earths. Here’s a quick look at other countries that host the metals:
8. South Africa — 860,000 MT
9. Canada — 830,000 MT
10. Malawi — 136,000 MT
11. Malaysia — 30,000 MT
In total, global rare earths reserves amount to 120 million MT. While times are currently tough in the rare earths space, it will be interesting to see how the above countries contribute to supply in the future.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.