China's Dominance Puts the World on Alert for a Rare Earth Crisis
Goldman Sachs warns that the world faces serious risks to the rare earth supply chain, primarily due to China's overwhelming dominance in mining and refining. Minerals such as samarium, lutetium, and terbium are crucial for high-tech applications, from batteries and chips to artificial intelligence and defense equipment. However, China is now expanding export restrictions, tightening control over these critical elements, and complicating global access.
China is said to control much of the production chain, from mining to magnet manufacturing, making it a key player in global supply. Western countries are striving to build self-sufficient supply chains, but significant challenges lie ahead, ranging from geological scarcity and high technology to environmental impacts. Goldman notes that developing new mines can take up to a decade, while building refining facilities is also challenging.
Furthermore, many rare earths, such as cerium and lanthanum, are predicted to be the next targets for restrictions. Companies like Lynas and Solvay can help reduce dependence, but their production scale is far from sufficient to fully replace China. On the other hand, magnet production outside China remains constrained by the need for raw materials, which are still controlled by China.
For investors, Goldman Sachs recommends stocks in this sector as a way to anticipate potential disruptions. Companies such as Iluka Resources, Lynas Rare Earths, and MP Materials are considered key players that could benefit from the surge in demand. Goldman also warns that other commodities, such as cobalt, oil, and gas, are also increasingly vulnerable to disruptions due to global geopolitical tensions. (asd)
Source: Newsmaker.id
