Rare earth elements, also known as rare earth metals, are a group of 17 chemical elements that play a crucial role in various modern technologies and industries. This group includes elements such as cerium, neodymium, and dysprosium, each possessing unique properties essential for the production of smartphones, electric cars, renewable energy sources, and many other high-tech devices. Despite their name, rare earths are not rare in terms of their abundance in the earth’s crust. However, they are typically found in low concentrations and are difficult and expensive to extract, making them valuable and highly sought after. The challenge lies in finding deposits with concentrations high enough to be commercially viable to mine.
Rare earths have unique properties that make them indispensable for modern technologies. Neodymium, for example, is used in powerful magnets crucial for wind turbines and electric motors in vehicles. Dysprosium is used in high-strength magnets for electric cars. Rare earths also play a vital role in the production of smartphones, computers, medical equipment, and various everyday devices. Their key advantage lies in enhancing the effectiveness and reducing the weight of these technologies. Additionally, rare earths are essential for renewable energy sources such as solar panels. Europium is used in phosphors for energy-efficient lighting, and terbium is used in batteries for hybrid cars. The wide range of applications for rare earths underscores their importance in daily life. Without these elements, many of the technologies we rely on would not be possible.
Rare earths are primarily found in two types of deposits: bastnaesite, which contains high concentrations of light rare earths, and monazite, which contains heavy rare earths. These minerals are usually found in igneous rocks and carbonatites, formed by molten rock and carbonatite magma, respectively. China holds about 37% of the global reserves and is the world’s largest producer of rare earths. Other countries with significant reserves include Brazil, Vietnam, Canada, Australia, and Russia. While the United States has substantial reserves, it currently relies heavily on imports to meet its demand. The Covid-19 pandemic highlighted the need to develop more global resources, leading to initiatives like the US Inflation Reduction Act, which finances the global development of the sector with the ultimate application of the minerals intended for use in the USA.
The economics of rare earth production are influenced by supply and demand dynamics. China currently produces the majority of the world’s rare earths, and its 2010 export quotas caused a surge in prices, emphasising their global importance. Recently, other countries have increased production to reduce dependence on China, with new projects emerging in Brazil and Australia, some of which have ties to Project RH. Discussions are also ongoing with projects in Southern Africa and Colombia. This diversification has led to a decrease in prices and a more competitive market. The capital-intensive nature of rare earth production underscores the importance of a stable and secure supply chain for profitability.
Developing rare earths is primarily the domain of the mining industry. The process involves several stages, including exploration, resource proving, independent source reporting, bankable feasibility studies, environmental approvals, agreements with local communities, site preparation, mining, processing, and refining. Exploration identifies potential deposits, and once a deposit is confirmed, the mining process extracts the ore. The ore then undergoes chemical and mechanical processes at a processing facility to extract the desired elements. The final step is refining, where the rare earth elements are isolated and purified before being sold to manufacturers and industries. This stage often occurs in specialised, remote facilities.
The demand for rare earths is increasing due to their application in new energy technologies and computing. As this demand grows, more companies are entering the market to meet it. Leaders in rare earth production include Lynas Corporation in Australia, the second-largest producer globally, and MP Materials in the United States, which operates the largest rare earth mine outside China. Other significant players include Iluka Resources in Australia and JLL in Japan. However, China remains the dominant market player, with many Chinese companies leading in production and application.
Rare earth elements play a crucial role in modern technologies and industries, and their importance is expected to grow. While China remains the dominant player, other countries are increasing production to reduce import dependence. As technology advances, the rare earths sector will continue to evolve, making it an exciting space to watch. The strategic nature of rare earths is now a significant part of the development cycle, as seen with Northern Minerals in Australia.
At Projects RH, we have the privilege of working with companies seeking to explore, define resources, and commercialise rare earth deposits. Some believe that rare earth elements originated from space debris, raising the question of whether future space missions will aim to discover additional “rare earth” resources and their potential commercial implications.
On a Final Note, rare earth elements are fundamental to the advancement of modern technology and industry, and their strategic importance continues to grow. Exploring and developing these resources remains a critical endeavour for the future.
Pensana plc (LON:PRE) explores and mines neodymium, praseodymium, and rare earth minerals. The Company’s flagship assets are the Saltend rare earth refinery project in the United Kingdom and Longonjo neodymium and praseodymium (NdPr) Project in Angola.
