Critical Minerals & Rare Earth Elements

Securing Future Rare Earth Elements

The term ‘rare earth’ element is actually a misnomer, as REEs are relatively abundant in the earth’s crust, with deposits found in almost all countries around the world. However, REEs are not often found in large, concentrated quantities that can be extracted easily or economically, making mining difficult. They are also found together – no single deposit of one REE without the others is known. Additionally, due to their chemical similarity, REEs are very hard to separate from one another, meaning that costs are high for separating and refining REE ores into the pure metals or compounds needed for manufacturing processes.

Worldwide there was an estimated 110 million tons of REE reserves, with China possessing the largest proportion of any country at approximately 40%. China is even farther ahead in terms of total production, at nearly 70% of global mining production in 2023 as shown in the figure top right. However, reserves and mining are only part of the story – China is even more dominant, at 80-90% or more of global capacity, when it comes to processing REEs into pure metals and compounds and into manufactured products such as rare earth magnets.

This one-sided dependency on China by the US and other countries translates to leverage. Since 2006, decisions by the Chinese government to restrict REE exports have resulted in REE price volatility and political influence over other countries like that of Japan in 2010. Suffice to say, rare earths have become an object of geopolitical contention because of how key they are to countries’ technological ambitions and now also to climate change goals. Countries are now taking steps to reduce their reliance on China for REEs, including:

• Developing new REE resources. For example, the U.S. Department of Energy (DOE) is working on developing secondary or unconventional REE resources, such as industrial wastes, that will reduce the need for new mining and allow for economic remediation of waste materials, limiting their environmental impacts.
• Developing advanced separation and refining technologies. REE refining has historically been an environmentally damaging process, but new technologies are being developed and commercialized that are more environmentally sound, more efficient, and less expensive.
• Exploring alternatives. Companies are looking for technologies to replace REEs or use fewer of them. For example, Tesla has announced plans to use rare earths-free magnets in next-generation motors.
• Creating new policies to spur domestic production. For example, the Bipartisan Infrastructure Law and the Inflation Reduction Act contain numerous programs targeting increasing the security of domestic supply chains of CMs.