Abstract
The supply of rare earths in China has been the focus of significant attention in recent years. Due to changes in regulatory policies and the development of strategic emerging industries, it is critical to investigate the scenario of rare earth supplies in 2025. To address this question, this paper constructed a dynamic computable equilibrium (DCGE) model to forecast the production, domestic supply, and export of China’s rare earths in 2025. Based on our analysis, production will increase by 10.8%–12.6% and achieve 116,335–118,260 tons of rare-earth oxide (REO) in 2025, based on recent extraction control during 2011–2016. Moreover, domestic supply and export will be 75,081–76,800 tons REO and 38,797–39,400 tons REO, respectively. The technological improvements on substitution and recycling will significantly decrease the supply and mining activities of rare earths. From a policy perspective, we found that the elimination of export regulations, including export quotas and export taxes, does have a negative impact on China’s future domestic supply of rare earths. The policy conflicts between the increase in investment in strategic emerging industries, and the increase in resource and environmental taxes on rare earths will also affect China’s rare earths supply in the future.
Highlights
Rare earths have a unique place among mineral resources
The model is a model is a system of equations describing the behavior of economic agents (including enterprises, system of equations describing the behavior of economic agents and the equilibrium conditions and constraints of the economyand for government) and the equilibrium conditions and and constraints for factors, commodities, factors, commodities, savings and investment, the restofofthe theeconomy world
The largest increase is found in production, domestic supply and export under S11
Summary
Rare earths have a unique place among mineral resources. They have special chemical, catalytic, electrical, magnetic, and optical properties and are, widely used in traditional sectors, including agriculture, petrochemicals, metallurgy, and textiles, as well as in strategic emerging industries such as hybrid cars and wind turbines [1,2,3]. Most studies have predicted that China’s share of the world’s rare earths supply will be reduced [14,15], while production will either increase [7,16,17] or remain at current levels [14] These production analyses and forecasts are mainly based on the current and predicted production capacities of rare earth mines or projects worldwide. We construct a dynamic computable general equilibrium (DCGE) model to forecast China’s production, domestic supply, and export of rare earths in 2025, which considers the regulatory changes, the development of strategic emerging industries, and the potential of rare earths substitution and recycling. The forecast results under the scenarios of strategic emerging industries and changing regulatory
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