Resilience evaluation of the rare earth supply chain in countries (regions) outside China: A case study of NdFeB permanent magnet

Abstract

[Objective] Rare earths are widely used in strategic industries such as national defense and military industry, and clean energy technology. The Sino-US economic and trade frictions and the outbreak of the Covid-19 pandemic have accelerated the restructuring of the global rare earth supply chain, which has challenged the status of China’s rare earth industry in the global supply chain. In this context, based on the perspective of supply chain resilience, this study aimed to explore the evolutionary process of rare earth supply chain resilience in overseas countries (regions), and put forward China’s countermeasures accordingly. [Methods] This study constructed an evaluation indicator system of rare earth supply chain resilience, including three dimensions of agility, robustness, and dependence. Taking NdFeB permanent magnet as an example, the resilience of rare earth supply chain in overseas countries (regions) was evaluated by using event sequence analysis, semi-structured interviews, and network simulation. [Results] (1) After the “rare earth crisis”, the agility of rare earth supply chain in overseas countries (regions) has been greatly improved, including the increase of new rare earth mining, the improvement of recovery rate, the increase of replacement amount, and the reduced use of heavy rare earth elements. (2) The resilience of the rare earth supply chain in overseas countries (regions) has declined on the whole. The import dependence of overseas countries (regions) on China’s rare earth products showed a trend of transferring from the upstream to the downstream. (3) In general, although China’s exports are still the key factor that affects the resilience of rare earth supply chain in overseas countries (regions), its influence tends to decline. [Conclusion] On the basis of continuing to promote independent innovation in rare earth technology, China should participate in global rare earth supply chain governance by deeply embedding in the global rare earth supply chain network. At the same time, China should simulate the possible scenario of overseas countries (regions) decoupling from China’s rare earth supply chain, and prepare international game and cooperation plan as soon as possible.

Keywords

• |supply chain resilience|rare earth|ndfeb permanent magnet|china