Gracelin Baskaran
With China recently imposing export restrictions on rare earth elements—leading to U.S. automakers to halt production due to supply shortages—one of the most urgent issues is how to establish reliable Western supplies of essential critical minerals. A major challenge to achieving mineral security is China’s manipulation of global markets, whereby Chinese companies flood the market with excess supply, driving prices down to levels that force mining operations in countries like the United States and Australia to shut down. This approach has not only exposed the United States and its allies to heightened supply vulnerabilities but also made it difficult for them to compete with China under current market conditions:Between May 2022 and May 2025, cobalt prices fell 59.5 percent from $82,000 per ton to $33,250 per ton. In 2023, Jervois opened the United States’ only cobalt mine in Idaho but was forced to close it within the same year due to collapsing prices.
Nickel prices experienced a dramatic decline of 73.1 percent, from $48,241 per ton in March 2022 to $13,847 per ton in May 2025. During this period, BHP closed its Nickel West operations and West Musgrave project in Australia, and Glencore shuttered its Koniambo Nickel SAS facility in New Caledonia, citing unprofitability. Today, Chinese firms in Indonesia hold a de facto monopoly.
Global lithium prices have fallen from 86.8 percent from $68,114 in December 2022 to below $10,000 by June 2025.
Prices for neodymium-praseodymium oxide—the principal rare earth component in neodymium-iron-boron magnets—have fallen below $60 per kilogram. If prices stay below $60 per kilogram through 2030, approximately half of the projected supply originating outside of China is expected to become economically unviable. In fact, at this price point, only eight rare earth projects beyond China are expected to break even on direct production costs.
There is no sign that China will end its market manipulation. It is expected to continue leveraging its dominance to influence prices, restrict supply, and squeeze competitors, all of which undermine initiatives to diversify supply chains and ensure access to critical minerals. Adding to this challenge, projects outside China often need to promise higher investment returns to attract financing, whereas large Chinese state-owned companies can sustain operations at much lower—or even negative—profit margins.
No comments:
Post a Comment