Rare Earth Metals Market to Reach USD 33,464.1 Million, Globally, by 2032 at a CAGR of 10.4%

Introduction

The Rare Earth Metals Market is poised for substantial growth, forecasted to escalate from USD 14,080.2 Million in 2023 to an impressive USD 33,464.1 Million by 2032, with a robust CAGR of 10.4%. This expansion is largely fueled by burgeoning demands in key sectors such as electronics, automotive, and renewable energy, particularly for their crucial role in manufacturing permanent magnets used in electric vehicles and wind turbines.

Asia Pacific leads the consumption, significantly influenced by China’s dominant production and consumption rates. The region is not only the largest consumer but also the main supplier of these metals, making the global market highly sensitive to its economic dynamics. North America and Europe are also key players, with their market growth driven by the rising adoption of green technologies and advanced automotive manufacturing that relies on rare earth metals for components like batteries and motors.

Emerging trends in the market include a heightened focus on securing stable supplies outside China, driven by geopolitical risks and trade dynamics, which underscore the strategic importance of these metals. Additionally, environmental regulations are increasing the demand for rare earth metals used in catalysts for emission control systems, reflecting a global shift towards sustainability.

Key Takeaways

• Market Size: It is expected that the global rare earth metals market size will expand at a (CAGR) of 10.4% between 2024-2033.
• Type Analysis: Neodymium was identified as one of seventeen rare earth metals to lead the pack with respect to 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, accounting for 24.4%.
• Regional Analysis: The APAC region clearly demonstrated its dominance of this market by holding onto a 57.1 % market share and showing an estimated compound annual growth rate of 11.5% over an anticipated five-year forecast period.

Rare Earth Metals Statistics

• Unless they are mined with another commodity, such as zirconium, uranium, or iron, which permits profitable recovery of ore bodies with concentrations as low as 0.5 % by weight, an economically viable source should include more than 5 % rare earths.
• About 80 % of the rare earths extracted worldwide in 2017 (105,000 tons of rare-earth oxide) came from mines in China.
• Bastnasite deposits account for over 94% of China’s rare earth mining output.
• Although 130,000 metric tons of REO equivalent were officially mined in 2017, an extra 25% of that quantity was reportedly produced on the rare earths black market.
• Only four minerals are currently mined for their rare earths out of the 160 or so known to possess them.
• To be processed further, all rare-earth ores that contain less than 10% REO must be improved to roughly 60%.
• To dissolve the calcite (CaCO3), 10% HCl is added to the 60% REO concentrate. To oxidize the Ce3+ to the Ce4+ state, the insoluble residue—which is now 70% REO—is roasted.
• The rare-earth metals’ electrical resistivities range between 25 and 131 microohms-cm (μΩ-cm), which is in the middle of the metallic elements’ electrical resistance values.
• Scandium, yttrium, and the lanthanides make up the comparatively abundant group of 17 elements known as the rare earths.
• The elements’ crustal abundances range from thulium and lutetium, the least abundant rare-earth elements at roughly 0.5 parts per million, to cerium, the 25th most plentiful of the 78 common elements in the Earth’s crust at 60 parts per million.
• Currently, more than 74% of the rare earth oxides (REOs) that the US buys come directly from China, with some of the remaining REOs coming indirectly through other nations.
• 97% of the production of rare-earth oxides and a significant portion of the processing industry that converts them into rare earth metals, alloys, and goods like magnets came from Chinese companies.
• The inclusion of scandium and REE on the US Government’s 2018 list of 35 essential minerals demonstrated their growing strategic significance.

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Emerging Trends

• Demand from Clean Energy Technologies: There’s an increasing use of rare earth metals in manufacturing renewable energy technologies such as wind turbines and electric vehicles (EVs). This is largely due to their essential role in producing high-performance permanent magnets used in these technologies.
• Recycling Innovations: Efforts to develop more efficient recycling processes for rare earth elements are gaining traction. This not only addresses supply shortages but also mitigates the environmental impact associated with primary mining and processing of these metals.
• Geopolitical and Supply Chain Dynamics: The market is influenced by geopolitical tensions and supply chain vulnerabilities, particularly concerning China’s dominant position in the global supply. Diversification of supply sources and development of new mining projects outside China are key strategic responses by several countries and companies.
• Technological Advancements in Mining and Processing: Technological improvements in the mining and processing stages of rare earth metals production are crucial. Innovations aim at reducing costs, increasing efficiency, and minimizing environmental impacts, which are critical for sustaining the growth of this market.
• Regulatory Impacts: Stricter environmental regulations are influencing market dynamics by increasing demand for rare earth elements used in pollution control technologies like catalysts for vehicle emissions and wastewater treatments.

Use Cases

• Electronics: REMs are crucial in manufacturing high-tech devices due to their magnetic, electrochemical, and luminescent properties. For instance, neodymium is used in creating strong permanent magnets for hard disk drives and headphones, while cerium is utilized in precision glass polishing and as a catalyst in catalytic converters.
• Clean Energy: Neodymium, dysprosium, and praseodymium are essential for making high-performance magnets used in wind turbines and electric vehicles (EVs). The demand for these metals is expected to grow significantly as the production of EVs increases, particularly in the U.S. where major automotive manufacturers are ramping up their EV production.
• Defense and Aerospace: REMs are used in various defense applications, including guidance systems, jet engines, and space equipment. Samarium cobalt magnets (SmCo), for instance, are valued in these sectors for their ability to withstand high temperatures and their magnetic stability.
• Medical Technologies: REMs are employed in medical devices as well. Gadolinium is used as a contrast agent in magnetic resonance imaging (MRI) scans, while other rare earth elements are utilized in manufacturing surgical supplies and implants.
• Catalysis and Manufacturing: Lanthanum and cerium are widely used in petroleum refining and automotive catalytic converters to help reduce harmful emissions. Additionally, cerium oxides are used in glass additives and polishing agents due to their chemical properties.

Recent Development

Iluka Resources Ltd., a prominent Australian mineral sands company, is advancing in the rare earth metals sector through its construction of the Eneabba Refinery, the first fully integrated rare earths refinery in Australia. Supported by a $1.25 billion loan from the Australian government, this facility will process both light and heavy rare earth oxides, with completion expected by 2025. This strategic project aims to supply critical materials for renewable energy and electric vehicles, supporting global supply chains beyond China. Eneabba’s production capacity is projected to include 4,000 metric tons annually of neodymium and praseodymium oxides.

Neo Performance Materials Inc. specializes in producing advanced materials derived from rare earth elements, crucial for various high-tech and green applications. Operating through divisions like Magnequench, Chemicals & Oxides, and Rare Metals, Neo is a leading provider of rare-earth magnetic powders used in electric motors, essential in electric vehicles and industrial equipment. With facilities worldwide, including in Estonia, Neo also supplies materials for pollution control, LED lighting, and water treatment technologies, supporting a sustainable, low-carbon economy through its diverse product range and innovative processing methods.

Lynas Rare Earths Ltd., based in Australia, is one of the world’s leading producers of separated rare earth materials outside China, operating major facilities in both Australia and Malaysia. Its Mt Weld mine in Western Australia is known for its high-grade deposits, while its advanced processing plant in Malaysia supplies high-quality rare earth oxides globally, especially for electronics, electric vehicles, and wind turbines. Recently, Lynas expanded into the U.S. market, partnering with the Department of Defense to develop a rare earth separation facility in Texas, strengthening domestic supply chains for critical industries.

MP Materials Corp., based in the U.S., is a major player in the rare earth metals market, operating the Mountain Pass mine in California—North America’s only active and scaled rare earth production site. The company produces high-purity Neodymium-Praseodymium (NdPr) oxide, a critical component in powerful magnets used in electric vehicles, wind turbines, and defense systems. MP Materials aims to establish a complete domestic supply chain by integrating mining, processing, and magnet manufacturing, reducing U.S. dependence on imports and enhancing national security through sustainable practices.

Canada Rare Earth Corporation, headquartered in Vancouver, focuses on building an integrated supply chain for rare earth metals, especially in Asia. The company provides high-purity rare earth oxides, fluorides, and nano-particles, used across various industries, including electronics, glass, and atomic energy. By securing partnerships and developing processing facilities, Canada Rare Earth aims to establish a stable and sustainable supply chain alternative to China’s dominance in the rare earth sector. Established in 1987, the company is expanding its global presence through strategic acquisitions and resource development initiatives.

Australian Strategic Materials Ltd. (ASM) is a key player in the rare earth metals market, utilizing its “mine to metals” strategy to establish an independent supply of critical materials outside of China. The company’s cornerstone Dubbo Project in New South Wales, Australia, contains valuable resources such as rare earth elements, zirconium, niobium, and hafnium, set to support industries in clean energy, defense, and advanced manufacturing. Additionally, ASM operates a metals plant in South Korea, focusing on refining high-purity metals essential for global technology supply chains and aiming to reduce environmental impacts through sustainable practices.

Arafura Resources Ltd., based in Australia, is a prominent player in the rare earth metals sector, primarily focused on the production of neodymium-praseodymium (NdPr) oxide through its Nolans Project in the Northern Territory. This project is designed to support the growing global demand for NdFeB magnets, which are critical in electric vehicles and wind turbines. The Nolans Project is positioned to supply approximately 4% of the world’s NdPr oxide demand, capitalizing on strategic end-user markets in renewable energy and automotive industries across Europe, Japan, Korea, and the USA.

Avalon Advanced Materials Inc., a Canadian company, focuses on developing critical minerals essential for green technologies, with a significant emphasis on rare earth elements. Their Nechalacho Project in the Northwest Territories contains valuable light rare earths, particularly neodymium and praseodymium, essential for producing magnets used in electric vehicles and renewable energy applications. Avalon is committed to sustainable practices and is working on establishing a North American supply chain to meet the growing demand for rare earths in defense and communication sectors, thus reducing reliance on overseas sources.

Energy Fuels Inc. has positioned itself as a key player in the U.S. rare earth metals sector, especially through operations at its White Mesa Mill in Utah. The company has developed a unique domestic supply chain, producing rare earth carbonate from monazite sands, a byproduct of mining. This carbonate is essential for high-strength magnets used in electric vehicles and wind turbines. Energy Fuels has also commenced commercial-scale production of neodymium-praseodymium (NdPr) oxides, crucial for clean energy and defense applications, aiming to reduce U.S. reliance on foreign supply chains.

Aclara Resources Inc. is an emerging leader in sustainable rare earth metal extraction, primarily focused on heavy rare earth elements (HREEs) through its flagship project, the Penco Module in Chile. The company has pioneered the “Circular Mineral Harvesting” process, a proprietary extraction method that eliminates tailings dams and recycles up to 95% of water and 99% of reagents, significantly minimizing environmental impact. Additionally, Aclara aims to create a vertically integrated supply chain for rare earths, catering to growing global demand from sectors like clean energy and electronics.

Ucore Rare Metals Inc. is advancing its position in the rare earth elements (REE) sector with a focus on establishing a secure North American supply chain. Its flagship Strategic Metals Complex (SMC) in Louisiana is set to process 2,000 tonnes of rare earth oxides annually by 2025, with planned expansions to 7,500 tonnes by 2027. Using its innovative RapidSX™ separation technology, Ucore aims to decrease dependency on Chinese REE processing. Additionally, the company has received government funding from both the U.S. and Canada to accelerate these efforts and bolster regional REE supply resilience.

Conclusion

In conclusion, the rare earth metals market is witnessing significant growth, driven by its critical role in advanced technologies and green energy solutions. The global demand for these metals is escalating due to their essential use in producing high-performance permanent magnets for electric vehicles and wind turbines, which are central to the transition to cleaner energy. Moreover, advancements in recycling technologies for rare earth elements are addressing some of the supply chain vulnerabilities, especially those stemming from the heavy concentration of these materials’ production and processing in China.

However, the market faces challenges such as environmental concerns related to mining and processing activities, which may restrict growth in certain regions. Despite these challenges, the strategic importance of rare earth metals continues to drive technological and supply chain innovations, ensuring their pivotal role in modern and future technologies. As countries and companies strive to secure stable and sustainable supplies, the rare earth metals market is poised for continued expansion and innovation.

Sources:

• https://www.britannica.com/science/rare-earth-element
• https://www.usgs.gov/centers/national-minerals-information-center/rare-earths-statistics-and-information
• https://www.netl.doe.gov/resource-sustainability/critical-minerals-and-materials/rare-earth-elements
• https://www.cfr.org/sites/default/files/pdf/2014/10/Energy%20Report_Gholz.pdf
• https://www.ga.gov.au/scientific-topics/minerals/mineral-resources-and-advice/australian-resource-reviews/rare-earth-elements