China is likely to turn into an importer of rare earth metals, instead of being the world's biggest producer, by as early as 2014, as domestic consumption rises in its high-tech industries, according to industry watchers.
In a report Wednesday, Reuters noted that the country's appetite for the material has been growing fast. While it currently produces more than 90 percent of the world's supply, it is now consuming 65 percent of output versus 25 percent a decade ago, it said.
Mark Smith, CEO of Colorado-based miner Molycorp, said in the article that China would by 2014 or 2015, "probably be in a net import situation for certain rare earths".
"When the demand is there, that's where the supply has to go. Over 80 percent of the magnets produced in the world come from China and that is growing just tremendously every year," Smith told the newswire.
The industry appears to following the path of China's coking coal sector, where the country decided to feed the material to its own steel mills instead of shipping the material abroad, turning from being the world's biggest exporter to becoming one of the biggest importers, analysts noted.
This follows reports last week that China has begun stockpiling rare earths amid weak prices, tightening its grip on the resource used in high-tech equipment such as advanced electronics, personal devices such as iPods, and automobiles.
Its recent moves to tighten the export of the material has led to an international outcry led by the European Union, Japan and the United States. The three countries have asked the World Trade Organization to establish a dispute settlement panel to rule on U.S. claims over China's "unfair" limit on exports of rare earth materials.