Highlights

• Chinese research reveals environmental regulations, not export quotas, are primary constraints on terbium production.
• Terbium production has dropped 90% since 2007, with potential five-fold supply shortages predicted by 2060.
• Unregistered production and minimal recycling complicate the rare earth supply chain, particularly for critical technology applications.

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A recent study and corresponding paper led by Wei Chen and colleagues from Key Lab of Urban Environment and Health, Institute of Urban Environment, Chinese Academy of Sciences, the Chinese Academy of Sciences, and other global institutions, examines China’s rare earth supply chain, focusing on terbium. The research challenges prevailing assumptions about China’s production limits, arguing that environmental regulations, not export quotas, are the primary constraint on heavy rare earth elements (HREs) supply.

Hypothesis & Methodology

The study, published in Fundamental Research (opens in a new tab), uses Material Flow Analysis (MFA) to trace terbium stocks and flows in China from 1990 to 2018, combined with scenario modeling to predict future demand and supply shortages through 2060. The analysis reveals that China’s officially registered terbium production has dropped by 90% since 2007, not because of government-imposed quotas but due to strict environmental policies that have shuttered many mines. The researchers argue that without breakthroughs in green mining technologies, terbium shortages could increase up to fivefold by 2060, threatening global clean energy goals.

Findings & Potential Bias

The study claims that China’s supply challenges are largely self-imposed due to its aggressive environmental policies rather than geopolitical maneuvering. This contrasts with Western narratives that frame China’s dominance in rare earths as an economic weapon. While the research is supported by extensive data, its Chinese institutional backing raises questions of bias, as it portrays China as an environmental steward rather than a strategic resource controller.  Of course its well-known as to the destructive aspects of some of the rare earth mining complex in China, Myanmar and elsewhere.

According to the authors, the rare earth supply chain faces multiple bottlenecks, primarily due to China’s stringent environmental regulations. These regulations have led to the closure of many HRE mines, significantly impacting terbium production. Traditional mining methods, such as heap leaching and in-situ leaching, have caused severe environmental damage, prompting government crackdowns.

As a result, only 25% of China’s allocated terbium production quota was utilized by 2018, not due to export restrictions but rather because of these environmental constraints. This restriction on domestic supply has led to increased reliance on imports and unregistered mining activities, further complicating the market.

At the same time, demand for terbium has skyrocketed, driven by its critical role in electric vehicles, wind turbines, and high-efficiency appliances. Projections indicate that by 2060, terbium shortages could increase up to fivefold, far exceeding China’s estimated reserves. Recycling from end-of-life products remains minimal, while alternative global sources in Greenland, Turkey, and the U.S. are largely undeveloped due to geopolitical and environmental barriers.  Rare Earth Exchanges has consulted with investors and investment analysts who validate substantial growth curves.               

Moreover, China’s terbium supply has increasingly relied on unregistered production and imports, with an estimated 5,000 tons of terbium from unregulated sources entering the supply chain between 2006 and 2018. This unregulated market creates sustainability concerns, lacks transparency, and increases the risk of further environmental damage.

Regardless, the study provides valuable insight into the real bottlenecks in rare earth supply, suggesting that global efforts should shift from geopolitical concerns to advancing sustainable mining technologies.