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Every time you scroll through your phone, work on your laptop or watch your favorite streaming series on a flatscreen TV, you’re harnessing the power of rare earth minerals. These naturally occurring minerals contain significant concentrations of rare earth elements. The most important rare earth ores include bastnäsite, monazite and xenotime, according to Worcester Polytechnic Institute (WPI).
These natural ores are composed of oxides, phosphates, carbonates or fluorocarbonates that contain the metals. To obtain the pure metals, the minerals must be concentrated, refined and chemically reduced. The process is complex, expensive and often environmentally challenging. Currently, China holds the world’s largest reserves and dominates the global production and refining of rare earths.
While rare earth minerals aren’t exactly “rare” in abundance, economically viable deposits are uncommon. And the extraction and separation processes are costly and environmentally intensive. “Typical rare earth ores contain only 0.5–6% rare earth metals,” WPI says, “compared to 25–65% metal content in more common ores like aluminum or iron.”
Combine that reality with the growing demand for electronics, artificial intelligence (AI) and other advanced solutions, and it’s easy to see how rare earth minerals are becoming a pressure point for companies that mine, process and/or use them in their products. A new report from the International Energy Association (IEA) shines a spotlight on the critical role that rare earths play in everything from energy technologies to mobile devices to defense systems.
“Though relatively plentiful in the Earth’s crust, this set of 17 elements have garnered the label ‘rare’ because economically viable concentrations are uncommon and they are seldom found in pure form,” IEA explains. “Their chemical similarities make them hard to separate during the extraction process, but their different physical and magnetic properties give individual rare earth elements distinct value for various technological applications.”
Twice the Demand
According to IEA, demand for magnet rare earth elements (neodymium, praseodymium, dysprosium and terbium) has doubled since 2015 and is set to expand further by a third by 2030. It says growing electrification and the rapid deployment of new energy technologies such as electric vehicles (EVs) and wind turbines are driving much of the demand.
Growth in automation, robotics and digital technologies is also driving demand beyond 2030, it says, “as permanent magnets enable precision motion control, miniaturization and energy efficiency improvement for these applications.”
Today, China accounts for around 60% of globally-mined production of magnet rare earths, while its share of refining is above 90%. Its dominance is even more evident in downstream segments, where it controls almost 95% of permanent magnet production. According to IEA, China represented only around half of global permanent magnet output in 2006.
“Rare earth elements are indispensable to many of the technologies shaping the Age of Electricity and our increasingly digitalized economies, yet their supply chains remain among the most concentrated of all critical minerals,” said IEA’s Fatih Birol in the report. “Recent disruptions have underlined how quickly these vulnerabilities can translate into real economic risks. Addressing them will require sustained investment, stronger resilience measures and deeper international cooperation.”
Closing the Gap The
IEA report also highlights a notable imbalance in current supply chain development efforts, with the pipeline of magnet production projects substantially smaller than that of upstream projects. Existing and planned magnet projects outside China account for only around a third of mining capacity.
“Closing this gap would require substantial growth across the entire value chain, particularly in refining and magnet manufacturing, which remain key bottlenecks,” says IEA, which estimates that around $60 billion of investment will be needed over the next decade to develop diversified supply chains. “While significant, this investment is modest compared with the scale of potential economic losses associated with supply disruptions.”
Recycling and innovation offer important complementary pathways, according to IEA, with recycling alone having the potential to reduce the need for primary supply by up to 35% by 2050, while “advances in innovative production and substitution technologies could ease pressure on the most constrained elements.”
