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The development of the market for rare earth elements: Insights from economic theory

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  • Schlinkert, Dominik
  • van den Boogaart, Karl Gerald

Abstract

In this paper, a clear and structured economic model is introduced to illustrate complex past and future developments of the market for rare earth elements (REE). The model consists of a sequence of four supply and demand models that give explanations how the mining and separation step of the REE value chain could concentrate in China. Furthermore, the sequence allows giving a coherent scenario for the future developments of the REE market. According to this scenario, the market could transform into an at least oligopoly due to a growing market demand. The validity of this scenario is discussed and evaluated from the perspective of western countries, investors and China. Additionally, a scenario, based on the models, of a propagating monopoly along the value chain is discussed. Finally, suggestions are made for western governments to promote the transformation and lead it to a positive outcome.

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  • Schlinkert, Dominik & van den Boogaart, Karl Gerald, 2015. "The development of the market for rare earth elements: Insights from economic theory," Resources Policy, Elsevier, vol. 46(P2), pages 272-280.
    • Handle: RePEc:eee:jrpoli:v:46:y:2015:i:p2:p:272-280
    DOI: 10.1016/j.resourpol.2015.10.010
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    1. Wang, Xibo & Lei, Yalin & Ge, Jianping & Wu, Sanmang, 2015. "Production forecast of China׳s rare earths based on the Generalized Weng model and policy recommendations," Resources Policy, Elsevier, vol. 43(C), pages 11-18.
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    Cited by:

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    4. Paulick, Holger & Machacek, Erika, 2017. "The global rare earth element exploration boom: An analysis of resources outside of China and discussion of development perspectives," Resources Policy, Elsevier, vol. 52(C), pages 134-153.
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    6. Behnaz Minooei Fard & Willi Semmler & Giovanni Di Bartolomeo, 2023. "Rare Earth Elements: A game between China and the rest of the world," Working Papers in Public Economics 235, University of Rome La Sapienza, Department of Economics and Law.
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    9. Yufeng Chen & Biao Zheng, 2019. "What Happens after the Rare Earth Crisis: A Systematic Literature Review," Sustainability, MDPI, vol. 11(5), pages 1-26, March.
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    12. Luisito Bertinelli & Stéphane Poncin & Benteng Zou, 2019. "The War of Rare Earth Elements: A Dynamic Game Approach," DEM Discussion Paper Series 19-11, Department of Economics at the University of Luxembourg.
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