KUALA LUMPUR: Malaysia’s entry into the rare earth industry has disrupted China’s decades-long monopoly and helped stabilise global prices of the much in-demand product.
Previously, China fixed the price of rare earth at US$60 (RM245) per kg if a company brought its operations into the country, but for export, the figure balloons to US$308 per kg, records show.
However, after the Lynas Advanced Material Plant came on stream, it has taken a 22 per cent market share in the industry. With the monopoly ended, according to reports, the price has dropped to US$19 per kg.
Rare earth metals are crucial to modern technology in supplying power, from satellites and MRI machines to cars and wind turbines, as well as for military use.
Industry observers said whoever had control or monopoly of rare earth could dictate to others the price of rare earth and its products, and this could potentially deprive other countries of supply and affect their industries.
One geopolitical scenario in an escalating United States-China trade war, for example, could see Beijing stopping America’s supply of rare earth metals, which is essential to the production of a range of equipment and products, such as smartphones, military radar, missiles, brain scans, electric cars, refineries and computer hard drives.
Industries in Japan and the European Union, which depended on rare earth metals, could also be affected by supply disruptions, they said.