Rare Earths

Rare Earth Elements (REE) are a group of 17 chemical elements having some characteristics in common, but also having each its own properties, its uses, and its own price.

REE are usually found together, i.e. in the same mineral deposits, but in widely varying proportions, hence the concept of “basket” describing the mix of REE for a given deposit, and of “basket price” being the REE mix an average price weighted by their individual grade.

REE are used in a wide array of high-tech and everyday products, such as electric vehicles (EV), wind turbines, mobile phone and laptop screens, alloys, ceramics, and weapon systems including aircrafts and missiles.

Some of the most sought after REE are Neodymium, Praseodymium, Terbium and Dysprosium, collectively known as the “Magnet Metals”. These elements are used to manufacture heat-resistant permanent magnets, which are indispensable components of electric vehicles and wind turbines. They are therefore essential to the on-going decarbonisation of the World’s energy sources.

REE are not presently used in the manufacturing of batteries and must therefore not be confused with Battery Minerals. Due to their criticality to energy decarbonisation and their long-term supply deficit, as well as strategic considerations, REE are considered as Critical Minerals in many jurisdictions.

The main REE producers is presently China (70% of the World’s production). The downstream value chain, however, is even more concentrated in China.

The extraction of REE is a complex process, and each deposit has its own characteristics.

Ree 01 — Main REE producing countries. Source: USGS Mineral Commodity Summaries 2023 (2022 data)

Some definitions:

Light REE: Lanthanum (La), Cerium (Ce), Neodymium (Nd), Praseodymium (Pr)

Heavy REE: Gadolinium (Gd), Terbium (Tb), Dysprosium (Dy), Holmium (Ho), Erbium (Er), Thulium (Tm), Ytterbium (Yb), Lutetium (Lu), and Yttrium (Y). Scandium (Sc) is sometimes included in the Heavy REE.

Critical Metals or Critical Minerals: non-fuel minerals or metals essential to economic development and national security, of which the supply chain is vulnerable to disruption.

Battery Minerals: minerals used in the production of rechargeable batteries: Lithium (Li), graphite, Cobalt (Co), Nickel, (Ni), Manganese (Mn), Tin (Sn), Tantalum (Ta), Magnesium (Mg), Vanadium (V)

Magnet Metals: REE which are typically used in the production of permanent magnets: Nd, Pr, Tb and Dy.

TREO – Total Rare Earth Oxide – is the sum of the individual grades of each individual REE contained in a sample, or in a mineral deposit, expressed as oxide. TREO is usually expressed in % for high-grade deposits such as carbonatite, and in ppm for low-grade deposits such as ionic clays. 1% is equivalent to 10,000ppm.

Rare Earths

Rare Earth Elements (REEs) are a group of 17 chemical elements found at low concentrations in the Earth’s crust. Each has its own characteristics and its own uses. Their importance stems from their unique properties that make them indispensable in a wide array of modern technologies. From electronics and renewable energy systems to defence, Rare Earths play a vital role in enhancing the performance, efficiency, and functionality of these applications. They are also critical to the world’s transition to Green Energy.

Rare Earths are crucial components in various industries and technologies. They are primarily used in electronics and high-tech applications. Neodymium and Praseodymium are the most important Rare Earths by volume and value. They are essential for high-performance permanent magnets, which are used in the manufacture of wind turbines and electrical vehicle motors. They are also used as catalysts for chemical processes and can be found in consumer electronics, defence technologies, medical imaging equipment, speciality glass & ceramics, rechargeable batteries and more.

Rare Earths are not typically considered primary Battery Minerals like lithium, cobalt or nickel but they can be used in certain types of re-chargeable batteries. Neodymium and Praseodymium, through permanent magnet applications, are used to generate electricity (wind turbines) and to turn electricity into motion (motors), whilst Battery Minerals are used to store the electricity being produced.

An Electric Vehicle manufacturer will need a constant supply of both Battery Minerals and Rare Earths to maintain its long-term position in the market.

The Rare Earths market is predominantly controlled by China who holds a significant influence over both the production and supply chain of these essential elements. In 2022 China accounted for 70% of the world’s mine production of Rare Earths, 34% of the world’s reserves and over 90% of the downstream value chain.

Various mining, refining and magnet production projects are currently under development in Africa, the UK, the USA, Canada, Australia, Japan and Europe, which is anticipated to ultimately reduce the Chinese dominance in the Rare Earths market.

Western countries have steadily increased their support to boost domestic production of Rare Earths in order to overcome China’s stronghold on the industry. Australia, Canada, the European Union and the United States, amongst others, have in recent years set out policies and support packages for their critical minerals sector.
These include:

– Diversification of supply chains: many countries are actively trying to identify alternative suppliers of Rare Earths outside of China.
– Exploration and Mining: Countries are seeking to develop domestic Rare Earths deposit sites such as those in Australia and Canada, others are looking to projects in nations outside of China such as Altona’s Monte Muambe project in Mozambique.
– International cooperation: Countries are beginning to collaborate with each other to establish joint ventures in Rare Earths production.
– Trade agreements and policies: Some countries are engaging in trade agreements and policies to secure stable access to Rare Earths, such as the United Kingdom’s 2022 policy paper, UK Critical Minerals Strategy, which aims to improve the security of the supply of critical minerals.

Rare Earth analysts forecast a steady increase in the current deficit in Neodymium-Praseodymium Oxide over the next 15 years and an increase in prices, despite ongoing mining and refining projects. The fundamentals for Neodymium and Praseodymium, the most important Rare Earths by consumption and value, buoyed by the Green Energy transition, are strong.