Highlights
- China transformed from a net rare earth element (REE) exporter to a net importer between 2015 and 2022, with significant increases in raw concentrate and early-stage product imports.
- The rare earth value chain centers on magnet production, generating $123 billion in sales, with over 95% of costs tied to materials and system expenses.
- Less than 1% of rare earth products are currently recycled, highlighting major challenges in developing a circular economy for critical minerals.
A new accepted manuscript in Environmental Research Communications provides the most comprehensive accounting yet of how rare earth elements (REEs) move—and gain value—across China’s supply chain. Lead author Zewen Ge, School of Accounting and Finance, Xiamen University, Tan Kah Kee College, with co-authors, integrates Material Flow Analysis with Material Flow Cost Accounting to trace material, cost, and monetary value flows from 2015 to 2022.
What the Numbers Say—And Why It Matters
China took in a massive 1.238 million tons of rare-earth concentrates during 2015–2022, mostly from its own mines. But here’s the twist: over that period, China flipped from being a net exporter to a net importer of rare earths. Imports of raw concentrates and early-stage products didn’t just creep up—they jumped more than threefold and eightfold, respectively.
Most of the money isn’t made at the mine. It’s made later, when rare earths are turned into “functional materials,” especially magnets used in EVs, wind turbines, and electronics. That’s where the value piles up—about $117 billion in costs and $123 billion in sales across the period. Among intermediate products, rare-earth compounds generated the most added value, roughly $7.6 billion.
Costs are the gravity well of this industry. More than 95% of total spending comes from materials and the overall system costs (labor, overhead, equipment). And producing heavy rare-earth oxides like dysprosium and terbium is brutally expensive—around $45,000 per ton—compared to roughly $3,900 per ton for light rare-earth oxides. That cost gap is a built-in pressure point for supply chains that depend on heavy elements.
Finally, the end-of-life picture is sobering. China’s stock of rare-earths locked inside products keeps growing, but when those products are discarded, more than 99% go to landfill. Less than 1% is recycled. For anyone banking on a “circular economy” to ease supply risks, today’s reality shows a long road ahead.
Strategic Implications for Investors & Policymakers
The middle of the supply chain—where rare earths are separated and processed—remains the pressure point. Costs are high, especially for heavy rare-earth oxides, and that gap ensures prices for NdFeB magnets will stay volatile. With demand rising fast from electric vehicles and wind turbines, buyers should expect more turbulence, not less.
China continues to sit at the center of the value chain, taking in raw concentrates, processing them, and exporting finished materials. That “import–process–export” model cements its role as the world’s refining hub. But it also means China is more dependent than ever on imports from places like Myanmar, the U.S., and Malaysia—dependencies that could easily become choke points.
Magnets are where the money is. The bulk of the value generated in the rare-earth sector comes from magnet-grade oxides and the magnets themselves, which power everything from smartphones to submarines. For nations trying to reduce reliance on China, building out magnet manufacturing outside its borders is now the critical battleground.
The wild card is recycling. Today, less than 1% of the rare-earth content in discarded products is recovered. If urban mining, smarter product design, and take-back programs can be scaled, they could reshape supply flexibility in the next cycle. For now, though, that potential remains untapped.
Read the Fine Print—Study Limitations
- Scope & Time: China-only, 2015–2022 window; results may not capture post-2022 policy and market shocks.
- Data & Assumptions: Reliant on yearbooks, customs data, and industrial surveys; nominal prices used (with sensitivity checks). Some parameters are modeled with uncertainty bounds.
- Pre-Publication Status: Accepted manuscript (in press)—minor edits possible before the version of record.
Bottom Line
This analysis quantifies what markets have felt: China’s REE midstream concentrates value and risk in equal measure. For non-China strategies, the path to resilience runs through cost-competitive heavy REO supply, magnet manufacturing, and real recycling, not rhetoric.
The Authors
| Author | Institution |
|---|---|
| Zewen Ge (opens in a new tab) | School of Accounting and Finance, Xiamen University Tan Kah Kee College, Zhangzhou |
| Jiamin Jiang (opens in a new tab) | School of Accounting and Finance, Xiamen University Tan Kah Kee College, Zhangzhou |
| Mufan Zhuang (opens in a new tab) | Institute of Ecology and Sustainable Development, Shanghai Academy of Social Sciences |
| Yanlan Guo | School of Accounting and Finance, Xiamen University Tan Kah Kee College, Zhangzhou |
Citation: Ge, Z., Jiang, J., Zhuang, M., Guo, Y. “_Revealing the material, cost, and monetary value flows of rare earth elements in China (opens in a new tab)_.” Environmental Research Communications, in press (2025). Lead author affiliation: Xiamen University Tan Kah Kee College. DOI: 10.1088/2515-7620/ae0300 (accepted manuscript).
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