Explainer: Why the world is fighting over rare earths
With global supplies and costs of rare earths becoming a serious concern among various industries, here's a lowdown on what makes these elements so special
Most REEs are not as rare as the name suggests.
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What are rare earths?
Rare earth elements (REEs) are a set of 17 metallic elements that include the 15 lanthanides on the periodic table, plus scandium and yttrium. REEs are varyingly abundant in the earth’s crust. For instance, cerium is the 25th most abundant element of the 78 common elements (60 parts per million), while thulium and lutetium are the least abundant (about 0.5 part per million). REEs are iron gray to silvery lustrous metals, are typically soft, malleable, and ductile and usually reactive, especially at higher temperatures or when finely divided.
Most REEs are not as rare as the name suggests. These elements were named ‘rare-earth elements’ because most were identified during the 18th and 19th centuries as “earths”, which originally meant they are materials that could not be changed further by increasing their temperature. In comparison to other “earths”, such as lime or magnesia, they are relatively rare. Except promethium, all REEs are more abundant in the earth’s crust than silver, gold, or platinum. However, concentrated and mineable deposits of REEs are unusual.
Which industries are they used in?
REEs have a wide range of uses, and form important components of more than 200 products, especially high-tech consumer products, such as mobile phones, computer hard drives, electric and hybrid vehicles, and flatscreen monitors and televisions. Defence applications—like electronic displays, guidance systems, lasers, and radar and sonar systems—also use REEs.
Although a very small amount of REEs may be used in any of these products, it can be critical for its functioning. For instance, REE magnets (which are permanently magnetised) are stronger per unit weight and volume than any other magnet type. Each magnet can be made of multiple kinds of REEs. REEs are used in the small magnets that make it possible for spindle motors and voice coils of desktops and laptops to function.
It is estimated that there are global REE resources amounting to 110 million metric tonnes of rare-earth oxides. The countries in which they primarily occur (in descending order) are China, Russia, the US, India, and Australia.
Which countries are mining rare earths?
In 1993, 38 percent of global production of REEs was in China, 33 percent in the US, 12 percent in Australia, and 5 percent each in Malaysia and India. Countries, including Brazil, Canada, South Africa, Sri Lanka, and Thailand, made up the remainder. However, by 2008, China accounted for more than 90 percent of global production, and, by 2011, it went up to 97 percent.
With state support, Chinese companies also undercut global rivals in the US and other nations by 2010. From that year, China began highlighting domestic need for their limited REE resources and concerns about the environmental effects of mining. It began to change the amount of the REEs it produced and exported, and started imposing limits on Chinese and Sino-foreign joint-venture companies that could export REEs. In 1995, China and the US produced similar quantities of REEs, but, as a result of these concerted efforts, it produced about six times more REEs than the US by 2024. In comparison, India’s capacity has grown by a mere 16 percent in the last 30 years.
What are the challenges of extracting them?
There are many known REE deposits around the world, but their supply remains limited by the cost and complexity of exploring REE deposits and developing REE mines, including REE extraction and separation facilities.
Mining REEs is expensive and complex because these elements occur in minerals as a group of similar elements; often REEs are hosted within multiple minerals. Not only do REE-rich minerals need to be physically concentrated, but the actual elements must be separated from each other, usually as oxide compounds (for example, lanthanum oxide).
REE mining: An environmental & health hazard
There are two methods of extracting REEs: Creating leaching ponds or drilling holes and pumping chemicals into the earth. Both methods produce enormous toxic waste, with a high risk of environmental and health hazards.
For every tonne of RRE, 2,000 tonnes of toxic waste are produced. For mining 1 tonne of REE, the generated waste includes 13kg of dust, 9,600-12,000 cubic metres of waste gas, 75 cubic metres of wastewater, and 1 tonne of radioactive residue. This is because REEs ores have metals that, when mixed with leaching pond chemicals, contaminate air, water, and soil. Most worrying is that REEs are often laced with radioactive thorium and uranium, which are harmful to health.
What is the volume/value of global trade?
In 2023, the global trade of rare earth metal compounds reached $3.52 billion, an increase of 3.49 percent from 2022. Over the past five years, trade in this category has grown at an annualised rate of 22.5 percent. The market size is projected to grow from $3.74 billion in 2024 to $8.14 billion by 2032, at a CAGR of 10.2 percent.
Among the 1,217 products traded in 2023, rare earth metal compounds ranked 631 in global trade value, accounting for 0.016 percent of world trade. According to the Product Complexity Index (PCI), it was the 341st most complex product out of 1,044, with a PCI value of 0.58.
In 2023, the market was dominated by the Asia-Pacific region, with a share of 86.14 percent. The leading exporters of rare earth metal compounds were Myanmar ($1.44 billion), Malaysia ($531 million), and China ($513 million). The top importers were China ($1.98 billion), Japan ($478 million), and Vietnam ($183 million).
Sources: Observatory of Economic Complexity; Fortune Business Insights; United States Geological Survey; Harvard International Review