Rare Earths 101

The following tables show the different rare earth elements used in each application, their approximate global volumes, and prices.

China’s Rare Earth Monopoly and Geopolitical Leverage

China’s dominance in the rare earth market is the result of decades of strategic investment, low-cost production, and a willingness to absorb environmental damage. Since the 1980s, China has captured the majority of global rare earth mining, processing, and magnet manufacturing—accounting today for around 70% of mining and over 85% of refining. Even ore mined in the U.S. or Australia is often shipped to China for processing. This centralization creates serious supply chain vulnerabilities. In 2010, China halted rare earth exports to Japan during a maritime dispute, triggering global panic and price spikes. More recently, China introduced export controls on heavy rare earths (HREEs) like dysprosium and terbium, further underscoring its grip on high-tech supply chains and willingness to use REEs as a geopolitical tool. For many nations, especially in the West, this dependence has become a strategic liability.

Global Push to Diversify and Growing Demand Pressures

In response, the U.S., EU, Japan, and others are racing to diversify supply and build refining capabilities. Projects like MP Materials’ Mountain Pass mine and Lynas Rare Earths’ Malaysian separation plant are key milestones. New processing plants are underway in the U.S. and Europe, with government funding accelerating progress. However, breaking China’s near-monopoly won’t happen overnight—especially in refining and magnet production, where China maintains an overwhelming lead. Meanwhile, demand is booming, particularly for NdFeB magnets used in electric vehicles, wind turbines, and military tech. Light REEs like cerium are abundant and often oversupplied, but key magnet metals face tight supply and pricing volatility. For investors and policymakers alike, the rare earth sector presents both strategic opportunity and risk—where understanding geopolitical currents is just as important as tracking new mining ventures.

Emerging Trends Shaping the Rare Earth Future

The rare earth sector is evolving, with innovations and policy shifts reshaping its landscape. Recycling is gaining traction as a way to reduce reliance on mining, particularly as large-scale products like EV motors and wind turbines reach end of life. Startups and major players (like Solvay and Japanese firms) are investing in extracting rare earths from used magnets and industrial waste. Meanwhile, global regulations are tightening: the U.S. and EU are offering incentives for non-Chinese supply, while China is imposing stricter environmental rules and export controls, affecting global supply. New refining methods like membrane separation and green chemistry are in development, aiming to reduce costs and environmental impact. Projects are also exploring unconventional sources such as coal ash and red mud. While substitutes for rare earth magnets are being researched, widespread use is still years away—meaning demand for key elements like Nd, Pr, Dy, and Tb is expected to remain strong in the near term.

Strategic Outlook and Investor Implications

The rare earth industry is set to grow significantly, fueled by the electrification of transport, renewable energy expansion, and geopolitical urgency to diversify supply chains. By 2030, the market may see more regional players, but China will remain dominant due to its head start. Investors should monitor not just company performance, but also technological innovation, regulatory trends, and global trade policies—all of which impact pricing and project viability. Strategic partnerships, vertical integration (from mine to magnet), and ESG-friendly approaches could differentiate winners from overhyped prospects. Ultimately, rare earths are more than obscure metals—they are foundational to modern life and defense, making this a sector where understanding the science and politics is as critical as the balance sheet.