Mainland China recently announced that it will restrict the export of two key metal materials, gallium and germanium, used in semiconductors and new energy vehicles, starting from August this year. Western countries are concerned that China may also restrict rare earth exports in the future, leading to severe supply chain issues. Goldman Sachs predicts that Western nations will need to invest $25 billion to ensure their rare earth supply is on par with mainland China.
According to a report released by Goldman Sachs analysts on Thursday (6th), mainland China accounts for 70% of global production and 90% of refining of neodymium and praseodymium rare earth metals, which are mixed together. Furthermore, mainland China’s production continues to increase, with an estimated output of 50,000 metric tons expected this year. If Western countries aim to produce the same amount, they would need to invest between $15 billion and $30 billion, with the baseline assumption being $25 billion.
Goldman Sachs disclosed that there are over 20 rare earth development projects being carried out by mining companies outside mainland China, with a combined estimated output of around 20,000 metric tons. However, only 2 to 3 projects are expected to be completed within the next 10 years.