The US Department of Energy calls them“technology metals.”  The Japanese call them “the seeds of technology”.  They make possible the high tech world we live in today – everything from the miniaturisation of electronics, to the enabling of green energy and medical technologies, to supporting a myriad of essential telecommunications and defence systems.  They are the elements that have become irreplaceable to our world of technology owing to their unique magnetic, phosphorescent, and catalytic properties.

The term Rare Earths covers a group of 15 elements with similar characteristics (the Lanthanides) often with the addition of yttrium (Y) and scandium (Sc).

hastings periodic chart

While named rare earths, they are in fact not that rare and are relatively abundant in the Earth's crust.  What is unusual is to find them in quantities significant enough to support economic mineral development. 

The rare earths are often described as being a "light-group rare-earth element" (LREE) or "heavy-group rare-earth element" (HREE). The definition of a LREE and HREE is based on the electron configuration of each rare-earth element. The LREE are defined as lanthanum, atomic number 57 through to samarium, atomic number 62. The HREE are defined as europium, atomic number 63 through to lutetium, atomic number 71, and also yttrium, atomic number 39. Yttrium is included in the HREE group based on its similar ionic radius and similar chemical properties. Scandium is also trivalent; however, its other properties are not similar enough to classify it as either a LREE or HREE.

Another grouping of rare earths which was classified by the US Department of Energy in 2011 to be critical short supply in the foreseeable future is the Critical Rare Earths. They overlap the LREE & the HREE group. These are neodymium (Nd), europium (Eu); terbium (Tb); dysprosium (Dy); and yttrium (Y).

In summary the rare earths is typically classified into 3 groups:-

  • Light Rare Earths (lanthanum (La); cerium (Ce); praseodymium (Pr); neodymium (Nd)); and samarium (Sm))
  • Heavy Rare Earths (europium (Eu); gadolinium (Gd); terbium (Tb); dysprosium (Dy); erbium (Er); holmium (Ho); thulium (Tm); ytterbium (Yt); lutetium (Lu); and yttrium(Y)).
  • Critical Rare Earths (neodymium (Nd); europium (Eu); terbium (Tb); dysprosium (Dy) and yttrium (Y)).

Different characteristics between these groups and then between the individual elements, lead to differing end uses. Simplistically, the light rare earths are more common than the others and tend to be of lower value. However, the main driver for commodity prices is their end uses and their supply and demand ratios.

Rare Earths Production

The figure below shows the global trends of rare earths oxides with the early history comprising production from monazite-placers, followed by the production from the hard rock deposit at Mountain Pass, California in the USA and from 1985, the growing domination of Chinese rare earth production.

hastings rare earths graph

Before 1965 there was relatively little demand for rare earth elements. At that time, most of the world's supply was being produced from placer deposits in India and Brazil. In the 1950s, South Africa became the leading producer from rare earth bearing monazite deposits. At that time, the Mountain Pass Mine in California was producing minor amounts of rare earth oxides from a Precambrian carbonatite. The demand for rare earth elements saw its first explosion in the mid-1960s, as the first colour television sets were entering the market. Europium was the essential material for producing the colour images. The Mountain Pass Mine began producing europium from bastnaesite, which contained about 0.1% europium. This effort made the Mountain Pass Mine the largest rare earth producer in the world and placed the United States as the leading producer. China began producing notable amounts of rare earth oxides in the early 1980s and became the world's leading producer in the early 1990s.

Through the 1990s and early 2000s, China steadily strengthened its hold on the world's rare earth oxide market as more and more production by non-Chinese mines were transferred to China. They were selling rare earths at such low prices that the Mountain Pass Mine and many others throughout the world were unable to compete and eventually stopped operation. At the same time, world demand was skyrocketing as rare earth metals were designed into a wide variety of automotive, aviation, industrial, consumer electronics and defence products. China capitalised on its dominant position and began restricting exports thereby causing rare earth oxide prices to rise to historic levels. In addition to being the world's largest producer of rare earth materials, China is also the dominant consumer. They use rare earths mainly in manufacturing electronics products for domestic and export markets. Japan and the United States are the second and third largest consumers of rare earth materials. It is possible that China's reluctance to sell rare earths is a defence of their value-added manufacturing sector. The Chinese dominance may have peaked in 2010 when they then controlled about 95% of the world's rare earth production and prices for many rare earth oxides had risen over 500% in just a few years.

That was an awakening for rare earth consumers and miners throughout the world. Mining companies in the United States, Australia, Canada and other countries began to re-evaluate old rare earth prospects and explore for new ones. High prices also caused manufacturers to do three things: 1) seek ways to reduce the amount of rare earth elements needed to produce each of their products; 2) seek alternative materials to use in place of rare earth elements; and, 3) develop alternative products that do not require rare earth elements.

This effort has resulted in a decline in the amounts of rare earth materials used in some types of magnets and a shift from rare earth lighting products to light-emitting diode technology. In the United States, the average consumption of rare earths per unit of manufactured product has decreased but the demand for more products manufactured with rare earth elements has increased. The result has been higher consumption.

Mines in Australia primarily Mount Weld belonging to Lynas Corporation began producing rare earth oxides in 2011. In 2012 and 2013 they were supplying about 2% to 3% of world production. In 2012, the Mountain Pass Mine came back into production and the United States produced about 4% of the world's rare earth elements in 2013. India has been producing about 3% of the world's supply for the past decade. Indonesia, Russia, Nigeria, North Korea, Malaysia, and Vietnam are minor producers.

As of 2013 rare earth assessments were underway in Australia, Brazil, Canada, China, Finland, Greenland, India, Kyrgyzstan, Madagascar, Malawi, Mozambique, South Africa, Sweden, Tanzania, Turkey, and Vietnam. Some of these might result in additional production. The United States Geological Survey estimates that although China is the world-leader in rare earth production they only control about 50% of the world's reserves. This provides an opportunity for other countries to become important producers now that China is not selling rare earth materials below the cost of production.

In 2013 China produced 95% of current world output, with REO output with 100,000 tonnes compared to 4,000 tonnes from the USA (Molycorp’s Mountain Pass operation); 2,900 tonnes from India; 2,400 tonnes from Russia and 2,000 tonnes from Australia.

China hosts 36 million tonnes of the world’s 99 million tonnes of defined reserves.

Adamas Intelligence extracted from, “Rare Earths Market Outlook”:

1. Supply, Demand and Pricing from 2014-2020 – 1st October 2014; and

2. Supply, Demand and Pricing Update from 2014-2020 – 30th June 2015