China’s rare earth reserves could be much larger than reported: leading geologist

But potential resources at massive Bayan Obo mine in Inner Mongolia do not automatically translate into economically recoverable reserves.

The world’s largest known rare earth deposit in northern China could contain far more resources underground than currently reported, according to a leading Chinese geologist.

Containing 100 million tonnes of rare earth reserves, the Bayan Obo mine in the Inner Mongolia autonomous region has served as the backbone of China’s rare earth industry for decades.

According to Yang Li, a Peking University geologist, “Bayan Obo’s rare earth resources have been the dominant source of global rare earth production since the 1990s.”

Even so, scientists now believe the currently reported figure of reserves may not represent the full geological potential of the region.

A 2025 study led by Yang found that Bayan Obo was not formed through a single geological event but through multiple stages of carbonatite activity – when volcanoes erupt runny, cool-burning lava made mostly of carbonate minerals – including a younger mineralisation event that played a vital role in forming the deposit.

“Our most important finding is that Bayan Obo not only contains 1,300 million-year-old igneous carbonatite but also 430 million-year-old carbonatite, and the second phase was key to mineralisation,” Yang said of the study published in the journal Science Advances.

Unlike conventional shallow deposits, Bayan Obo is associated with large carbonatite bodies extending deep underground, Yang said, adding: “Carbonatite bodies are highly likely to exist at depth, accompanied by mineralisation.”

The latest geological model suggests that deeper parts of the deposit may contain additional mineralisation, opening new possibilities for resources that could be several times bigger than present estimates.

As of now, the potential resources of shallow rare earths in Bayan Obo, at depths of 500 to 1,000 metres (1,640 to 3,280 feet), amount to 333 million metric tons.

But potential resources do not automatically translate into economically recoverable reserves.

“The deeper the deposit goes, mining difficulty and production costs increase rapidly,” Yang said. “Potential resources at great depths may not have the same value as shallow resources.”

Extracting ore from hundreds or thousands of metres underground would require higher investment, more advanced mining technologies and economically viable rare earth prices.

Despite the potential larger underground resources, the global rare earth competition is not simply a race to discover the largest deposits, observers have cautioned.

“The problem of rare earths is not about quantity. Even 100 million tonnes could supply the world for hundreds of years,” Yang said.

“The real challenge is mining, separation, refining, processing and high-end manufacturing.”

China’s dominance in rare earth production has pushed the United States, Japan and Europe to seek alternative sources of supply.

The urgency stems from rare earth elements becoming increasingly important for electric vehicles, wind turbines, electronics and defence technologies.

In the US, Las Vegas-headquartered MP Materials restarted production at California’s Mountain Pass mine in 2017.

Once the world’s leading rare earth operation, Mountain Pass mine declined in its productivity after competition from China and environmental challenges, before efforts began to rebuild America’s domestic supply.

Meanwhile, Japan since 2013 has explored deep-sea rare earth resources near Minamitorishima Island in the northwestern Pacific Ocean, where researchers identified large deposits of rare earth-rich mud on the seabed.

However, developing alternative supplies remains technically challenging. Deep-sea mining requires operations thousands of metres below the ocean surface, and offshore extraction costs remain high.

While countries are racing to secure new sources, developing rare earth supplies outside China remains expensive and technologically challenging.

As for Bayan Obo, the mine is more than a rare earth deposit, as it is one of the world’s major resources for niobium. Niobium is a critical metal used mainly in high-strength steel alloys, aerospace materials and advanced engineering applications.

China is highly dependent on imports for niobium, despite having significant geological resources.

The challenge is not simply the amount of niobium underground but the difficulty of extracting it. Many Chinese niobium deposits are low grade and occur alongside other minerals, making separation and processing expensive.

“This is still fundamentally a cost issue,” Yang said.

“Baogang [Group] has been working on niobium processing and has made progress, but becoming a world-class niobium base may still require further efforts,” he added, referring to the Chinese state-owned enterprise that operates the Bayan Obo mine.