Market Outlook

China dominates the global rare earth element market, controlling over 95 %. These elements are not widely known, but they play a crucial role in numerous high-tech applications that define our modern way of life. Without rare earth elements, our world would be drastically different, with many technologies simply not possible.

One significant impact of rare earth elements is their contribution to the miniaturization of technology. Due to these elements, we enjoy the convenience of compact devices like cell phones and laptops. Additionally, rare earth elements are indispensable in the defense industry, where they are found in cruise missiles, precision-guided munitions, radar systems, and reactive armor.

Moreover, rare earth elements are driving the development of green technology. They are vital components in the new generation of wind-powered turbines and plug-in hybrid vehicles. Furthermore, they serve as catalysts in oil refineries, contributing to the production of cleaner energy.

In summary, rare earth elements are hidden heroes that enable smaller, more advanced technology, play a crucial role in defense systems, and are driving the shift towards greener energy sources. China's control of the rare earth element market underscores its significance in shaping our modern world.

The global market for rare earth elements reached a value of USD 2.80 billion in 2018 and is projected to grow at a compound annual growth rate (CAGR) of 10.4% from 2020 to 2025. The most commonly utilized rare earth elements include cerium, neodymium, lanthanum, dysprosium, yttrium, and praseodymium. The demand for these elements is primarily driven by their use in the production of magnets and catalysts for the automotive industry. Cerium, in particular, is extensively used as a catalyst in the catalytic converters of motor vehicles, while neodymium, dysprosium, and lanthanum are employed in the manufacturing of batteries for electric cars.

The growing demand for electric vehicles, driven by the aim to reduce CO2 emissions, is expected to boost the utilization of permanent magnets in battery production. Neodymium and dysprosium-based rare earth permanent magnets are predominantly employed in battery manufacturing.

Worldwide Supply and Demand for Rare-Earth Elements

The rare earth industry remains significant for both the advancement and production of advanced technologies, as well as a geopolitical instrument in an ever more unstable and unpredictable global market. The introduction of tariffs, sourcing limitations for certain products, and uncertainty surrounding major producers have led to a renewed emphasis on diversifying the origin of rare earth products, especially beyond China. At the same time, China is implementing measures to improve its domestic rare earth industry, addressing the environmental, social, and governmental consequences of past production.

The content highlights the significance of Rare Earth Elements (REEs) in various clean technologies, such as wind turbines, electric cars, energy-efficient lighting, and rechargeable batteries. As the global energy system moves towards sustainability and renewable sources, these clean technologies are expected to experience substantial growth in the coming decades. However, since the development of these technologies varies, the demand for individual REEs also differs across sectors. Additionally, the uneven distribution of REEs in natural resources adds to the urgency of projecting the future demand for these technologies and different REEs in each sector.

The demand for rare earths is wide-ranging, as they are used in various applications that may only require a few specific rare earth compounds or products. Our forecast predicts that rare earth demand will increase by more than 5% in the upcoming period. This growth is driven by the growing use of rare earth permanent magnets in automotive and renewable energy applications, along with the increasing demand for catalysts, ceramics, and polishing powders. By 2025, rare earth magnets are projected to surpass a third of total demand, leading to a shift in focus for rare earth producers and processors. This shift towards raw materials for rare earth magnets is anticipated to impact the pricing mechanisms for rare earths, as operations become more economically reliant on a small number of specific rare earths.

REE distribution is crucial for determining the economic value of an REE deposit, alongside identifying the deposit mineralogy. Several parameters, including tonnage (in million metric tons), ore grade (in %), individual REE distribution (in %), ore value (in US$/t), and basket price (in US$/t), are used to assess the potential feasibility of a rare earth project. Tonnage is the most significant parameter in evaluating the economic viability of an REE deposit. A tonnage above 0.1 million metric tons of REO is considered a medium-size deposit, which can sustain over 20 years of continuous operations at a rate of 5000 metric tons per annum REO. Deposits exceeding 1 megaton (Mt) REO are categorized as large-size deposits, and almost all current operation deposits have rare earth resources exceeding 1 Mt REO.