Rare Earth Metals Market Size to Reach USD 33,464.1 Mn by 2032

Introduction

The global Rare Earth Metals Market is experiencing rapid growth, with its market value expected to reach USD 33,464.1 million by 2032, up from USD 12,753.8 million in 2022, at a compound annual growth rate (CAGR) of 10.4% during the forecast period. These metals, comprising 17 elements like Neodymium, Lanthanum, and Cerium, play a crucial role in various industries, including electronics, renewable energy, medical equipment, and defense. Their unique properties, such as magnetism, luminescence, and high heat resistance, make them indispensable in modern technology. For instance, neodymium is vital in producing strong magnets used in electric vehicle motors and wind turbines, while europium and yttrium are essential for vibrant display technologies in smartphones and televisions.

One of the key drivers of growth in the rare earth metals market is the increasing demand for electric vehicles (EVs) and renewable energy systems, particularly wind turbines. As the world transitions towards cleaner energy and transportation solutions, the need for rare earth metals, particularly for creating high-performance magnets, has surged. Furthermore, the growing adoption of advanced medical tools and lasers in the healthcare sector has also boosted demand. Governments worldwide are also incentivizing the adoption of green technologies, which further fuels the demand for these metals.

China dominates the rare earth metals market, accounting for around 70% of the global production, which has significant implications for the supply chain. While other countries, including the U.S., Brazil, Vietnam, and Australia, possess significant reserves, China’s dominance presents a challenge to the diversification of supply sources. In response, countries are increasingly exploring options to reduce dependency on Chinese exports by investing in local mining and processing capabilities. The U.S., for instance, has identified rare earth metals as critical to national security and is pushing for increased domestic production.

However, the rare earth metals market also faces challenges. Environmental concerns related to mining and processing these metals are significant, as rare earth extraction often results in hazardous waste. The complex geopolitical landscape surrounding the supply of rare earth metals further complicates the market. Trade tensions and export restrictions can create supply chain disruptions, impacting industries reliant on these metals. Moreover, the development of recycling technologies and substitutes for rare earth metals in some applications could impact future demand.

Recent developments in the rare earth metals market include efforts by governments and companies to establish more sustainable and resilient supply chains. For example, in 2022, Lynas Rare Earths Ltd., a major Australian supplier, announced plans to expand its U.S. operations to reduce the reliance on Chinese imports. Additionally, technological advancements in the recycling of rare earth metals from electronic waste have shown promise in meeting future demand sustainably.

In 2023, Iluka continued to make significant progress with its Eneabba Rare Earths Refinery in Western Australia. Supported by an AUD 1.25 billion loan from the Australian government, the refinery will have the capacity to process 23,000 tonnes of rare earth oxides annually. This facility is one of the few globally capable of processing both light and heavy rare earth oxides, essential for producing high-performance magnets used in electric vehicles and renewable energy technologies. Neo Performance Materials Inc.: Neo has been active in creating a sustainable supply chain for rare earth elements. In 2023, the company announced a collaboration with Energy Fuels to process rare earth elements sourced from U.S. monazite sands. This initiative aims to bolster the U.S.-European supply of critical materials used in electric vehicle motors and renewable energy systems, reducing dependence on China for rare earth processing.

Lynas continues its organic growth strategy with major investments in processing facilities in Australia, Malaysia, and the U.S. In 2024, Lynas confirmed talks with MP Materials about a potential transaction, although these discussions have now ended. The company remains the largest producer of rare earths outside China and is focusing on expanding its operations to strengthen supply chains for critical minerals​. MP Materials, which operates the Mountain Pass mine in California, has been working to develop its rare earth refining capabilities to reduce dependence on Chinese processing facilities. In 2024, the company explored merger talks with Lynas to consolidate supply chains, reflecting its ongoing efforts to strengthen its position in the global rare earth market​.

Key Takeaways

• Market Size: It is expected that the global rare earth metals market size will expand at a compound annual growth rate (CAGR) of 10.4% between 2023-2032.
• Market Trend: Rare earth metals have seen increasing demand due to their vital role in various technologies – specifically electric vehicle production and renewable energy systems.
• Type Analysis: Neodymium was identified as one of seventeen rare earth metals to lead the pack concerning profit in 2022, holding a 26.2% market share with an anticipated compound annual compound annual growth rate from 2023-2032 of 10.9%.
• Application Analysis: Magnet applications dominated the market share for total revenues generated between 2017-2022, accounting for 24.4%.

Rare Earth Metals Statistics

• An economically viable source should contain more than 5 percent rare earths unless they are mined with another product—e.g., zirconium, uranium, or iron—which allows economic recovery of ore bodies with concentrations of as little as 0.5 percent by weight.
• Of the 83 naturally occurring elements, the 16 naturally occurring rare-earth elements fall into the 50th percentile of the elemental abundances.
• Promethium, which is radioactive, with the most stable isotope having a half-life of 17.7 years, is not considered to be naturally occurring, although trace amounts have been found in some radioactive ores.
• Chinese deposits accounted for about 80 percent of the rare earth mine in the world in 2017 (105,000 tons of rare-earth oxide).
• About 94 percent of the rare earths mined in China are from bastnasite deposits.
• Officially, 130,000 metric tons of REO equivalent was mined in 2017, but a black market in rare earths was said to produce an additional 25 percent of that amount.
• As of 2017, known world reserves of rare-earth minerals amounted to some 120 million metric tons of contained REO. China has the largest fraction (37 percent), followed by Brazil and Vietnam (18 percent each), Russia (15 percent), and the remaining countries (12 percent).
• Rare earths are essential to green technologies, but China supplies 98% of them. Some have risen in price 200-fold – by 20 000% –in a year.
• Cerium rose 13 060% to its peak, lanthanum 16 390%, and dysprosium 19 690%.
• The rare earths are 17 metallic elements, located in the middle of the periodic table (atomic numbers 21, 39, and 57–71).
• Between 1978 and 1995 China’s annual production of rare earth elements increased by an average of 40% per year.
• Geological Survey, Mineral Commodity Summaries, February 2014, REE reserves worldwide total 140 million tonnes. They are distributed mainly in China (55 million tonnes), the United States (13 million tonnes), India (3.1 million tonnes), Australia (2.1 million tonnes), Brazil (2.2 million tonnes), Malaysia (30,000 tonnes), Russia, Egypt, Canada, South Africa and other countries.
• The reserves of rare earths in China are particularly abundant, accounting for 23% of the total reserves in the world.
• It is estimated that if 87 large rare earth mines were restarted, their production could meet the total commercial demand in the world for 280 years.
• In May 2013, it was reported that Russia was going to develop the Tomtor Rare Earth Mine in its Far Eastern region, in which the rare earth reserves may reach around 150 million tonnes, including yttrium and niobium oxide, scandium and terbium. It was claimed the reserves at Tomtor may form up to 12% of the total world resources with the proven reserves numbering approximately 154 million tonnes.

Emerging Trends

• Geopolitical Diversification: As countries aim to reduce reliance on China, the dominant producer of rare earth metals, new mining and processing projects are emerging in the U.S., Australia, and Europe. This is crucial for supply chain resilience.
• Growth in Green Technologies: The increasing demand for electric vehicles (EVs) and renewable energy systems, particularly wind turbines, is boosting the need for rare earth metals like neodymium and praseodymium.
• Recycling Initiatives: With sustainability as a focus, the recycling of rare earth elements from electronic waste is gaining traction, offering a way to meet growing demand while reducing environmental impact.
• Technological Innovation: Advancements in refining technologies, particularly outside China, are being developed to handle rare earth elements, ensuring a stable supply for critical industries.

Use Cases

• Electric Vehicles (EVs): Rare earth elements like neodymium and praseodymium are critical in the production of strong magnets used in electric motors. With the global push for electric mobility, demand for these metals is skyrocketing. For instance, neodymium-iron-boron magnets are essential for over 90% of EV motors.
• Renewable Energy: Rare earths are integral in wind turbines. Strong permanent magnets made from dysprosium and neodymium improve the efficiency of turbines, driving demand in the green energy sector.
• Electronics: Metals like europium and yttrium are used in smartphone displays, lighting, and TV screens due to their luminescence properties, offering bright colors and high efficiency.
• Defense Applications: Rare earth metals are vital in military technologies like precision-guided missiles, lasers, and advanced communication systems. Elements like samarium and terbium enhance performance in defense equipment.

Major Challenges

• Supply Chain Dependence on China: China controls about 70% of global rare earth production and nearly 87% of refining capacity. This monopoly creates supply chain vulnerabilities for countries heavily reliant on imports. Trade tensions and export restrictions further exacerbate this issue​.
• Environmental Concerns: The extraction and processing of rare earth metals generate significant environmental damage, including toxic waste and pollution. Addressing these concerns through cleaner mining technologies remains a challenge.
• High Production Costs: Extracting and refining rare earths outside of China is often expensive, especially in regions with strict environmental regulations. This makes it difficult for other countries to compete with China on cost-effectiveness.

Market Growth Opportunities

• Electric Vehicle (EV) Demand: With the global shift towards clean energy, the demand for electric vehicles is surging. Rare earth metals like neodymium and praseodymium are essential for the high-performance magnets used in EV motors, creating a substantial opportunity for market expansion.
• Expansion of Renewable Energy: Rare earth elements are critical for wind turbines and other green technologies. As countries aim to increase their renewable energy capacities, especially in Europe and the U.S., demand for these metals will grow significantly.
• Geopolitical Shifts: Countries are seeking to reduce reliance on China for rare earth production, opening opportunities for new mining and refining projects in regions like Australia, the U.S., and Europe. This diversification will drive investment in local supply chains​.
• Technological Innovations and Recycling: Advancements in rare earth metal recycling from electronic waste offer a sustainable way to meet growing demand while reducing environmental impact. This trend is expected to open new avenues for growth.

Key Player Analysis

In 2023, Iluka Resources Ltd. advanced its position in the rare earth metals sector by progressing its Eneabba Rare Earths Refinery in Western Australia. This refinery is designed to process both light and heavy rare earth elements, with a production capacity of up to 23,000 tonnes annually. The project, supported by a AUD 1.25 billion loan from the Australian government, plays a critical role in diversifying global rare earth supply chains. Iluka plans to begin full operations by 2024, strengthening non-Chinese rare earth production.

In 2023, Neo Performance Materials Inc. focused on strengthening its rare earth metals sector by advancing an integrated supply chain between the U.S. and Europe. This effort includes collaboration with Energy Fuels to process monazite sands in the U.S., creating a sustainable supply of neodymium and praseodymium, essential for magnets used in electric vehicles and renewable energy systems. Neo’s global operations continue to expand as demand for rare earth materials increases in advanced technologies.

In 2023, Lynas Rare Earths Ltd. continued to lead the rare earth metals sector as the largest producer outside China. The company focused on expanding its processing capabilities, with major investments in its Western Australia and U.S. facilities, including the construction of a rare earths processing plant in Texas. Supported by the U.S. Department of Defense, Lynas is strengthening supply chains for neodymium and praseodymium, which are essential for electric vehicles and renewable energy systems. These expansions are part of Lynas’ long-term growth strategy​​.

In 2023, MP Materials continued to expand its rare earth metals operations, focusing on increasing production at its Mountain Pass mine in California, the only active rare earth mine in the U.S. The company is working to develop its refining capacity to reduce dependence on China for processing rare earth elements like neodymium and praseodymium, crucial for electric vehicles and renewable energy systems. MP Materials also explored strategic partnerships to strengthen its position in the global rare earth market​​.

In 2024, Canada Rare Earth Corporation secured a pivotal agreement with SAKIMA SA, a state-owned mining company in the Democratic Republic of Congo (DRC), to establish a reliable supply of high-quality rare earth minerals. Through this partnership, the company plans to increase its rare earth concentrate supply from 100 to 500 tons per month by mid-2024. This deal strengthens Canada Rare Earth’s supply chain while promoting responsible sourcing from artisanal mining cooperatives. Additionally, the company is exploring further acquisitions to boost its supply capacity and reduce costs, positioning itself as a key player in the global rare earth market​.

In 2023, Australian Strategic Materials Ltd. (ASM) made substantial progress in the rare earth metals sector with its Dubbo Project in New South Wales, Australia, and the ramp-up of production at its Korean Metals Plant (KMP). The KMP focuses on producing critical metals like neodymium-praseodymium (NdPr) and neodymium iron boron (NdFeB) alloys, essential for high-performance magnets used in electric vehicles, renewable energy, and advanced technologies. In August 2023, ASM signed a multi-year supply agreement with USA Rare Earth, ensuring a steady supply of rare earth metals for the U.S. market. This agreement supports ASM’s goal of creating a non-Chinese supply chain for critical metals, which are key to global technological advancements​​.

In 2023, Arafura Rare Earths Ltd. made significant progress with its Nolans Project in Australia’s Northern Territory, which is positioned to supply 10% of the global demand for neodymium and praseodymium (NdPr), crucial for producing magnets used in electric vehicles and wind turbines. Arafura secured substantial financing, including A$840 million from the Australian government and up to $300 million from Export Development Canada. Additionally, the company signed offtake agreements with major firms like Hyundai and Siemens Gamesa Renewable Energy to supply NdPr, reinforcing its position in the growing renewable energy and e-mobility sectors​​​.

In 2023, Avalon Advanced Materials Inc. made significant strides in its rare earth metals sector, particularly through the Nechalacho Rare Earth Elements Project located in the Northwest Territories, Canada. This project, known for its high-grade neodymium and praseodymium resources, is a key asset for Avalon. In collaboration with Cheetah Resources, Avalon focuses on the near-surface light rare earth resources in the T-Zone, targeting critical minerals used in electric vehicle motors and renewable energy technologies. Avalon has also expanded its operations with a joint venture at the Separation Rapids Lithium Project and partnerships, such as one with Metso Corp. in July 2023, to advance mineral processing capabilities. This focus on rare earth elements, along with lithium and other critical minerals, positions Avalon to play a crucial role in the growing demand for sustainable and advanced technologies in North America​​.

In 2023, Energy Fuels expanded its rare earth metals operations through key acquisitions and advancements at its White Mesa Mill in Utah, the only facility in the U.S. capable of processing monazite sands into mixed rare earth carbonates. The company acquired the Bahia heavy mineral sands project in Brazil for $21.9 million, securing a reliable feedstock of monazite, rich in neodymium, praseodymium, dysprosium, and terbium—essential elements for EV motors and renewable energy technologies. Energy Fuels is also ramping up its rare earth separation capabilities, with plans to produce neodymium-praseodymium oxide by late 2023 or early 2024, making it a critical player in the U.S. rare earth supply chain​.

In 2024, Aclara Resources made significant strides in the rare earth metals sector, with a strong focus on sustainable extraction through their innovative Circular Mineral Harvesting (CMH) technology. This method is environmentally friendly, avoiding traditional processes like blasting and milling, and eliminating the need for tailings storage. Aclara’s flagship projects include the Penco Module in Chile and the Carina Module in Brazil, both of which are key to extracting heavy rare earth elements. In August 2024, Aclara signed a Memorandum of Understanding (MoU) with the State of Goiás, Brazil, to accelerate the development of the Carina Module, which is expected to create over 3,200 jobs and see an investment of $582.3 million. This strategic project aligns with Brazil’s efforts to become a major player in the sustainable supply of critical minerals​​​.

Conclusion

In conclusion, the Rare Earth Metals Market is set to experience significant growth in the coming years, driven by increasing demand across critical sectors such as electric vehicles, renewable energy, and advanced electronics. The unique properties of rare earth elements, such as magnetism and heat resistance, make them essential in modern technology, particularly for the development of strong magnets in electric motors and wind turbines.

However, challenges such as geopolitical dependence on China, environmental concerns, and high extraction costs must be addressed to ensure sustainable growth. Companies around the world, including those in Australia, the U.S., and South America, are actively working to diversify supply chains and innovate in rare earth extraction methods, with a focus on sustainability and reducing environmental impact.

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