Chinese influenceThe light and heavy rare earths markets are both dominated by China. In 2020, China produced the most rare earth metals at 140,000 metric tonnes (MT). The second largest producer was the US with only 38,000 MT. This level of control by Chinese suppliers has made it extremely difficult for other producers to viably mine and sell rare earths. Rare earths supply in the US currently comes only from the Mountain Pass mine in California, which went back into production in Q1 2018 after being put on care and maintenance in Q4 2015.High production, low labor costs and relaxed environmental regulations have allowed China to control the pricing and market viability of rare earth metals. Chinese producers must adhere to a quota system for rare earths production, which is a response to China’s longstanding problems with illegal rare earths mining. The half-year quota for rare earth mining in 2021 was set at 84,000 MT (up 27.2 percent from the previous year), while the quota for smelting and separation was 81,000 MT (up 27.6 percent from the previous year). This system actually led China to become the world’s top importer of rare earths in 2018.Investment landscapeInvesting in rare earth metals is a challenge due to China’s dominance. That said, global demand for rare earths is expected to rise as the clean energy, electric vehicle and consumer electronics industries gain importance.Even as regulations and demand create a more favorable environment for rare earths, investors should be specific about their research into the metals — treating the rare earths category as a single group or even as lights and heavies does not provide enough context about an element’s investment potential. Click here to learn more about the investment landscape for rare earth metals, including information on where to find prices and which companies are operating in the space.