The Global Race for Rare Earths: Strategic Implications

In the heart of our digital and green revolution lies a hidden, yet critical, resource: rare earth elements.

These unassuming metals power everything from electric vehicles to wind turbines, shaping the future of global energy and security.

Their importance cannot be overstated, as they underpin modern advancements in technology and sustainability.

This article explores the strategic race for rare earths, offering insights into their geology, supply chains, and the urgent need for global cooperation.

What Are Rare Earths and Why Do They Matter?

Rare earth elements (REEs) are 17 metals, including the 15 lanthanides plus scandium and yttrium.

They are often split into light and heavy groups, each with unique properties and applications.

• Light REEs (LREEs): Examples include lanthanum, cerium, praseodymium, and neodymium.
• Heavy REEs (HREEs): Examples include dysprosium and terbium, which are scarcer and more geopolitically sensitive.

These elements are essential for a wide range of technologies.

• Rare earth permanent magnets (REPMs) are used in electric vehicle motors, wind turbine generators, and defense systems.
• Other applications include catalysts for petroleum refining, glass polishing, and batteries.

The value versus volume split is a key strategic point.

In 2022, cerium and lanthanum accounted for 60% of REE demand by volume.

However, magnet materials like neodymium and praseodymium represented 96% of the market by value.

This highlights the economic focus on high performance applications.

Global Reserves and Geological Distribution

Rare earth reserves are spread across the globe, but not all deposits are economically viable.

Heavy REEs are particularly concentrated, adding to geopolitical tensions.

• China holds approximately 31% of global REE reserves.
• Vietnam follows with about 16%, and Brazil with 15%.
• Other significant reserves are in Russia, Canada, and Australia.

Exploration efforts are increasing worldwide to tap into these resources.

Australia leads in global REE exploration, accounting for 42.9% of spending.

There is growing interest in countries like Brazil, South Africa, and Saudi Arabia.

This diversification aims to reduce reliance on any single source.

Production and China's Dominance

Global REE production is small in tonnage but immense in strategic value.

In 2022, total mine production was around 280,000 tonnes of rare earth oxides.

China dominates this sector, accounting for about 60% of global mine production.

The United States is the second largest producer, with 15% of the share.

Australia is expected to triple its output by 2027, signaling a shift in the landscape.

Processing is where China's nearly total control becomes evident.

China handles about 90% of global REE processing and refining.

For heavy REEs, this control reaches 99%, creating a critical dependency.

By 2030, China is still expected to control 51% of production and 76% of refining.

This concentration poses significant risks for other nations.

Demand Drivers and Future Projections

Demand for rare earths is driven primarily by clean energy and digital technologies.

In 2022, total REE demand was slightly below 250,000 tonnes.

It is forecast to grow at 4% per year, reaching nearly 300,000 tonnes by 2033.

The booming EV and wind sectors are major contributors to this growth.

• Electric vehicle traction motors require high performance magnets.
• Offshore and onshore wind turbines depend on rare earths for efficiency.
• Industrial motors, robotics, and data centers also fuel demand.

By 2033, REPM applications are expected to represent 43% of REE volume.

They will account for about 90% of the market value, emphasizing their strategic importance.

This shift underscores the need for secure supply chains.

Supply Chain Vulnerabilities

The rare earth supply chain is complex and highly concentrated.

It involves multiple stages, from mining to final product integration.

• Mining and concentration: Extracting ore and producing concentrate.
• Chemical processing and separation: Turning concentrate into separated oxides.
• Metal and alloy production: Creating usable materials.
• Magnet manufacturing: Producing NdFeB and SmCo magnets.
• Component integration: Using magnets in motors, generators, and systems.

Many non Chinese mines ship concentrate to China for processing.

This locks in dependence at the midstream, creating a strategic chokepoint.

The greatest leverage lies in separation, refining, and magnet manufacturing.

This makes the supply chain vulnerable to geopolitical disruptions.

Mitigation Strategies for a Secure Future

To address these vulnerabilities, nations are pursuing various mitigation strategies.

Diversification of supply sources is a top priority.

Investing in new mining projects outside China can reduce reliance.

Recycling rare earths from end of life products offers a sustainable solution.

Substitution with alternative materials is being explored for less critical uses.

Forming new geopolitical alliances can enhance collective security.

• Increase exploration in countries like Canada and Brazil.
• Develop recycling technologies to recover REEs from waste.
• Research substitutes for non essential applications.
• Strengthen international partnerships for shared resources.

These efforts require collaboration and innovation across sectors.

By embracing these strategies, the world can build a more resilient future.

The race for rare earths is not just about resources; it is about shaping a sustainable and secure global economy.

Let this knowledge inspire action towards responsible stewardship and technological advancement.