China is likely to dominate processing for the foreseeable future as well, according to Goldman Sachs.
Realigning supply chains for critical minerals is possible, but processing them remains a challenge. This is the view of Jared Cohen, President of Global Affairs at the investment bank Goldman Sachs. While China had a 97 percent share of rare earths mining and processing ten years ago, this has now fallen to 63 percent and less than 90 percent respectively. In addition, new deposits of this group of raw materials are constantly being discovered, for example in Sweden. Nevertheless, there is a lack of capacity for further processing; only five refineries outside China are in operation, under construction or will resume their service (Nevada, Malaysia, France, Estonia and Western Australia).
According to Goldman Sachs Research, there are more than 20 projects in the planning stages globally, but only two or three would realistically come online by 2030. In Cohen’s view, there is too little investment in the processing sector in particular; rather, the focus is on mining and the manufacture of end products. In principle, he says, the construction of processing plants is less costly than that of a mine, but requires a lot of expertise and state-of-the-art machinery. In addition, there are environmental issues, such as water consumption, and radioactive residues, some of which are generated and require proper handling.
Cohen believes that the public sector, but also the private sector, has a duty to invest along the entire value chain. This applies to industrial processes as well as to the training of skilled workers. It should be borne in mind that no country can be self-sufficient from mining to the end product, because both China and the USA import large quantities of raw materials, despite having considerable mineral resources. Instead, global strategies and partnerships are needed.