Global rare earth metals market is estimated to be valued at USD 5,648.83 Million in 2024, exhibiting a CAGR of 6.2% over the forecast period 2024-2031. Furthermore, rapid growth of clean energy technologies such as electric vehicles, wind turbines, and others is augmenting the market growth.
Market Dynamics:
Global rare earth metals market growth is primarily driven by increasing demand for rare earth metals from clean energy technologies and growing requirement of rare earth permanent magnets. Rare earth elements find wide applications in clean energy technologies such as batteries for EVs, wind turbines and energy efficient lighting due to their unique magnetic and luminescence properties. For instance, neodymium is used to produce powerful magnets that are used in wind turbines for energy generation. Furthermore, rare earth metals such as lanthanum, cerium and neodymium are used in manufacturing of rechargeable batteries that power electric vehicles and other electronic devices. Rare earth permanent magnets made using neodymium, samarium and praseodymium find widespread usage in electronics, automotive and defense industries. Rare earth permanent magnets offer advantages such as high coercivity, high electrical resistance and high mechanical strength. These are extensively used in manufacturing of sensors, hard disks and hybrid/electric vehicle motors
Increasing demand for electronic devices
One of the drivers for market growth is ever-increasing demand for electronic devices such as smartphones, laptops, tablets and other consumer electronics. Rare earth metals like neodymium, cerium, lanthanum and praseodymium are critical components in the manufacturing of devices and components like cameras, displays, batteries and magnets. As the world's population continues to adopt more electronic devices and upgrades occur more frequently, this demand is expected to keep rising significantly for the foreseeable future. Between 2020 and 2025, smartphone sales alone are projected to grow by over 10% each year. This strong and sustained appetite for electronics will help boost rare earth metal consumption.
Growth of green technologies
another key driver is rising popularity of green technologies that utilize rare earth metals. Products like electric vehicles, wind turbines and solar panels all require rare earth elements in their production. With global efforts to cut carbon emissions intensifying, investment and uptake of green solutions is picking up pace rapidly. For instance, worldwide EV sales have been doubling every few years and are estimated to surge over tenfold between 2020 and 2030. As green technologies proliferate to fight climate change, rare earth metals critical to their manufacturing will be in huge demand. This secular driver around sustainability and clean energy transition makes the long-term outlook very promising for the rare earth industry.
China's dominance creates supply chain risks
One major restraint for the rare earth metals market is the risk created by China's dominance over global supply. China accounts for approximately 80% of worldwide rare earth production. Any changes in export quotas or policies by China have significant impacts on pricing and supply security for other nations. Developing alternatives to Chinese supplies remains a challenge due to technical and cost barriers. Over-reliance on one country leaves the market vulnerable to geo-political risks. While efforts are ongoing to develop new supply sources, this dominance by China remains a constraint on the stability and resilience of rare earth supply chains.
Environmental impacts limit mining and processing
Another restraint is environmental pollution issues related to rare earth mining and processing. Extracting and refining these metals generates large amounts of toxic and radioactive waste that is difficult and costly to handle properly. Growing scrutiny from regulators and local communities has led to several expensive clean-ups and temporary mine closures globally. This has deterred some investments into expanding rare earth production capacity due to worries around long-term viability and regulatory approvals. Managing the environmental impacts is an obstacle that needs ongoing focus, else it could slow down efforts to improve supply reliability.
Market entry by new producers presents opportunities
A major opportunity lies in the potential for new producers to enter the rare earth market and help address the current supply risks. Projects are progressing in countries such as the U.S., Australia and India to establish alternative mining and processing facilities outside China. However, the barriers to commercial success remain substantial including securing financing for capital-intensive operations, finding experienced talent, developing supply chains and achieving competitive production costs. As long as such projects can overcome technical and financial challenges, their emergence would reduce geopolitical vulnerabilities and enhance market resilience over the long run.
Advanced manufacturing boosts demand for rare earth metals
Another promising opportunity area is the emergence of cutting-edge advanced manufacturing industries that utilize rare earth metals in innovative new ways. Application areas being targeted include energy storage solutions, aerospace components, medical devices and more. Technologies like 3D printing also open up rare earth use in offerings like engineered magnets. While these are still nascent trends, their growth potential is immense and they represent completely new extensions of rare earth demand in future. Successful innovation could drive strong expanded consumption and support higher ore and metal prices in the Near future.
Link - https://www.coherentmarketinsights.com/market-insight/rare-earth-metals-market-293
Key Development
- In July 2021, researchers at the Department of Energy's Lawrence Berkeley National Laboratory achieved a breakthrough by producing an ultrathin 2D magnet that exhibits exceptional chemical stability even in ambient environments. This innovative material holds promise for integration into high-density, compact spintronic memory devices, paving the way for advanced data storage technologies.
- During June 2021, Arafura Resources Ltd. successfully secured US$ 40 million through a Share Purchase Plan (SPP) specifically designated for its Nolan NdPr Project. This funding initiative underscores the company's unwavering dedication to sustainable Neodymium extraction, highlighting their commitment to environmentally conscious practices in the mining sector.
- In August 2020, Lynas Corporation, Ltd. unveiled a significant enhancement at its Mt. Weld mine with the introduction of a state-of-the-art industrial-scale dryer. This advanced dryer marks a pivotal shift in operational efficiency by automating the drying process of concentrates, replacing manual labor. The implementation of this technology not only accelerates production but also drives cost-effectiveness, underscoring Lynas Corporation's commitment to innovation and optimization in their mining operations.
Key Players: China Northern Rare Earth (Group) High-Tech Co., Ltd, Rising Nonferrous Metals Co., Ltd, China Minmetals Rare Earth Co., Ltd, Aluminum Corporation of China Limited, Lynas Corporation, Ltd., Beijing Zhongke Sanhuan High-tech Co. Ltd., Jiangxi Tungsten Industry Group Co. Ltd., Arafura Resources Ltd., and Alkane Resources Ltd.
