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Rare earth metals - what’s the big story?

The term rare earth metals or simply ‘rare earths’ is applied to a group of seventeen elements, some of which are critical in enabling our energy transition away from fossil fuels. Their names are unfamiliar and largely unpronounceable. They are in fact fairly common in the Earth’s crust, although typically found in low concentrations. And sometimes alongside highly polluting elements such as uranium, so that extraction carries the risk of nuclear waste. We dig deeper to uncover their strategic value.

Rare earths are classed as strategic resources, essential in manufacturing products ranging from mobile handsets and laptops to military equipment. Some have magnetic properties, giving them a key role in green technology, such as wind turbines and EVs. Elements such as neodymium and praseodymium, the combination known as NdPr, are used in magnets for wind turbines. And demand for this technology is forecast to rise five fold by 2030.

So where can these vital elements be found? China currently dominates the world market, with 90% of all production. But Chinese supply has proved unreliable. Annual exports have historically suffered deep cuts, sometimes based on political whim. And this could be exacerbated by China’s focus on its own future energy transition. Unreliability of supply recently prompted US Congress to ban the use of Chinese rare earths for defence applications from 2026.

So what’s the alternative to this Chinese production? It seems a good source of supply could be magnet recycling. Fewer than 3% of magnets from end-of-life products, including cars, mobile handsets and loudspeakers, are currently recycled. Recycling requires only 12% of the energy used for mining and processing rare earths. And a recycled magnet is typically only 2% less powerful, meaning this option has huge potential.

China’s former leader Deng Xiaoping once said ‘the Middle East has oil, China has rare earth’. This was three decades ago, when global energy transition was only a pipedream. Recent geopolitical events demonstrate the risk to world markets when the supply of a critical resource is overly concentrated in one geographical area. Particularly when a key supplier adopts a rogue agenda. For rare earth metals as well as oil and gas, diversification of supply will prove crucial.