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What’s Driving the Rare Earths Market Today? Trends and Insights.

“Rare earths” are a group of 17 elements that are fairly abundant in the Earth’s crust, but they are hard to separate from the ore during mining and processing.


These elements are widely used in consumer electronics, green technologies, and defense applications, which explains their high demand.


Historically, China has dominated the rare earths market as it has exclusive control of over 90% of the world’s processing capacity and the largest known reserves of rare earths. However, as mining and processing technologies advance, new trends emerge and the market evolves.


What are rare earths used for?

One of the main uses for rare earth elements (REEs) is the production of magnets.


These 17 elements are also essential in the manufacture of electric vehicles, cell phones, batteries, fuel cells, glass, lighting (fluorescent, LED) and other products, all of which make rare earths highly valued, and the market for them continues to register impressive growth.


Quantitative data regarding estimates of the REEs market size varies due to different definitions and methodologies and ranges from US$3.7 billion to $15.3 billion.


However, market experts agree that there will be substantial annual growth of 10% until 2033, and the fastest-growing and largest market will be the Asia Pacific region.

Top trends in the rare earths industry worth following

While China dominates, other nations are seeking mining and processing alternatives, so what trends can be expected in the near future?


Trend #1: China will continue to dominate the REE supply chain

There is currently no rival to China in terms of rare earth production, and there are several reasons for this, including the fact that it boasts a well-established mining infrastructure.

The U.S. Geology Survey states that in 2023 China produced 240,000 tons of REEs and Beijing also declared a ban on the export of rare earth extraction and separation technologies at the end of that year.


In terms of the Asia Pacific region, in 2023 the value of the REEs market was $2.9 billion, with experts predicting an annual growth of over 10% and a value of $8.7 billion by 2034, according to Precedence Research.


Asia Pacific REEs market size 2023-2034 (in US$ bn)

What about Japan, Europe, and the U.S.?

Since the Chinese government has made significant investments in the rare earths industry, it has established a strong supply chain from mining to processing. Not only does it have cost-effective production but also powerful technological capabilities.


In the meantime, Japan, Europe, and the U.S. decided to invest in alternative supply chains. Projects to increase domestic refining capacity have been financed by the U.S. Department of Defense. Meanwhile, the EU's Critical Raw Materials Act seeks to locally extract at least 10% of rare earth needs by the end of this decade.


And the REEs in developing countries?

Rare earths are expected to increase in value in developing nations due to rising demand which is the result of their wider use in various sectors.


Rare earth elements are widely used in these economic sectors:

  • Industrial development

  • Building and construction projects

  • Numerous digitalization initiatives launched by national governments (for instance, more than 300 government departments in India have adopted cloud services, which boosts the development of the nation’s digital public infrastructure).


Trend #2. Increasing demand for electric vehicles and green energy

Since EV motors and wind turbine generators need powerful permanent magnets, the growth in the popularity of electric vehicles and the shift from fossil fuels to renewable energyhave boosted the demand for rare earths.


Experts comment that green technologies account for more than 40% of the total demand for REEs and copper.

Trend #3. More rare earths recycling programs

Since different REEs are found combined and in very low concentrations in ore, their extraction and processing require considerable investments in technology, a great deal of energy, and water.


Furthermore, a lot of waste is produced (including of a radioactive nature), which means that the whole process is anything but environmentally friendly.


Although a mere one percent of rare earths are now recovered from electronic waste, programs in the U.S., EU, and Japan aim to facilitate more effective recycling techniques, and China has demanded that producers introduce sustainable standards and has also imposed more stringent rules.


Top five rare earths companies by market capitalization

Because of their huge production and reserves of rare earth minerals, China, Australia, and the United States have the biggest rare earth mining companies.

The China Northern Rare Earth Group High-Tech Co. Ltd. is by far the largest rare earth company by market capitalization. The company operates the Bayan Obo Mining District, which is considered to be the largest known deposit of REEs in the world, with reserves of about 100 million metric tons.


What does the future hold for the rare earths industry?

As previously mentioned, the major drivers of the industry are technology breakthroughs, sustainability initiatives, and defense applications.


The market is expected to experience high demand across various industries.


  • The magnet segment held the largest share of the REE market, as magnets are essential for medical devices, motors, sensors, speakers, and more.

  • The battery segment is also expected to show considerable growth, fueled by the EV boom.

  • Rising demand is expected for alloyed metals in the automotive and aerospace sectors.

  • The demand for Cerium will increase due to its use in polishing display panels, LCDs, magnetic memory disks, and camera lenses.

  • Lanthanum, Samarium, Europium will also show rising demand since these are used in batteries, optical electronics, lasers, and display technologies.

  • Across regions, sector experts anticipate certain trends as well:

  • Asia-Pacific still holds a strong position, and other regions are attempting to make their own moves.

  • North America will continue to advance REE substitutes and mining exploration in view of an increasing demand for EV adoption and with Tesla, Ford, and BMW driving demand.

  • Central and South American REEs market has considerable potential for REE production. The region is expected to draw investments in mining and exploration.

The rare earth elements industry is also poised to attract expert networks as the need for research and competition both increase.


To ensure steady, sustainable, and varied rare earth supplies in the future, investors, business executives, and legislators must be aware of the shifts in the market, and the best way to do this is to obtain valuable insights from established experts in the industry.


Companies can get in touch with these experts using expert networks. RightAngle works together with various stakeholders from healthcare, automotive, energy, financial, retail tourism, and a myriad of other industries, connecting them with some of the best professionals in a specific field.


Final word

Rare earth elements are essential to a wide range of vital industries, particularly those driving technological advances, which is why market players are investing heavily in the mining and processing of these elements.


Global demand for REEs is expected to continue growing, with China maintaining its dominant position in the market, while the United States and several European nations are actively seeking ways to reduce their dependence on China.

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