At the end of 2013, some were wondering whether 2014 might be the year China would start to loosen its grip on the rare earths market. But although there are signs its monopoly is slipping, the country still definitely produces the lion's share of the world's rare earths. In the wake of a World Trade Organization (WTO) ruling against Chinese rare earth export quotas, China Minmetals has said that China's share of the rare earths market could drop to 65 percent. Meanwhile, the two rare earths producers outside of China have made good progress this year — Australia's Lynas (ASX:LYC) has been ramping up production at its controversial Lynas Advanced Materials Plant in Malaysia, and in the United States, Molycorp (NYSE:MCP) has expanded operations at its California Mountain Pass project. However, shares of both Molycorp and Lynas are still down about 85 percent year-to-date, suggesting that there's still a ways to go before rare earths companies outside of China start to make a meaningful dent in the space. WTO ruling implications After nearly two years, the WTO ruled in March that China wasn't meeting its obligations as a WTO member by implementing quotas on rare earth exports. While the ruling was no doubt significant, some analysts have cautioned that the results of the decision may be unexpected. Jon Hykawy, president and director of Stormcrow Capital, told Rare Earth Investing News in a previous interview that it would be "borderline delusional" to believe that the ruling will have any effect. This fall, China suggested that 40 percent of its magnetic rare earths supply comes from illegal production, and while the country has said it will crack down on illegal operations, Hykawy believes there's no way it will be able to stop the large amount of small-scale pilot rare earths mining projects in China's south. 
At the end of 2013, some were wondering whether 2014 might be the year China would start to loosen its grip on the rare earths market. But although there are signs its monopoly is slipping, the country still definitely produces the lion's share of the world's rare earths. In the wake of a World Trade Organization (WTO) ruling against Chinese rare earth export quotas, China Minmetals has said that China's share of the rare earths market could drop to 65 percent. Meanwhile, the two rare earths producers outside of China have made good progress this year — Australia's Lynas (ASX:LYC) has been ramping up production at its controversial Lynas Advanced Materials Plant in Malaysia, and in the United States, Molycorp (NYSE:MCP) has expanded operations at its California Mountain Pass project. However, shares of both Molycorp and Lynas are still down about 85 percent year-to-date, suggesting that there's still a ways to go before rare earths companies outside of China start to make a meaningful dent in the space. WTO ruling implications After nearly two years, the WTO ruled in March that China wasn't meeting its obligations as a WTO member by implementing quotas on rare earth exports. While the ruling was no doubt significant, some analysts have cautioned that the results of the decision may be unexpected. Jon Hykawy, president and director of Stormcrow Capital, told Rare Earth Investing News in a previous interview that it would be "borderline delusional" to believe that the ruling will have any effect. This fall, China suggested that 40 percent of its magnetic rare earths supply comes from illegal production, and while the country has said it will crack down on illegal operations, Hykawy believes there's no way it will be able to stop the large amount of small-scale pilot rare earths mining projects in China's south.