Rare earth elements are a group of 17 metals crucial for modern technology and green energy solutions. Despite their name, these elements are relatively abundant in the Earth’s crust but often challenging to extract economically.
At Natural Resource Stocks, we’re often asked: What are rare earths used for? From smartphones to electric vehicles, rare earths play a vital role in countless applications that shape our daily lives and future technologies.
What Are Rare Earth Elements?
Definition and Composition
Rare earth elements (REEs) are a set of 17 nearly indistinguishable lustrous silvery-white soft heavy metals. Despite their name, these elements are not particularly scarce in terms of abundance. However, they often occur in dispersed forms rather than concentrated deposits, which makes their extraction economically challenging and costly.
The 17 Rare Earth Elements
The rare earth elements include the 15 lanthanides, plus scandium and yttrium. This group consists of:
- Lanthanum
- Cerium
- Praseodymium
- Neodymium
- Promethium
- Samarium
- Europium
- Gadolinium
- Terbium
- Dysprosium
- Holmium
- Erbium
- Thulium
- Ytterbium
- Lutetium
- Scandium
- Yttrium
Each of these elements possesses unique properties that make them valuable for various industrial and technological applications.
Global Distribution and Production
China dominates the global rare earth element market, accounting for 69.2 percent of the world’s total REE mine production in 2024. According to the U.S. Geological Survey, China produced about 140,000 metric tons of rare earth oxides in 2020, followed by the United States with 38,000 metric tons.
Other significant producers include Australia, Myanmar, and Madagascar. Concerns about China’s market dominance have spurred increased exploration and production efforts in other countries. For instance, the Mountain Pass mine in California (operated by MP Materials) has become a significant non-Chinese source of rare earth elements.
Characteristics and Extraction Challenges
Rare earth elements share similar chemical properties, which makes their separation technically challenging and expensive. This complexity in processing contributes to their high value and strategic importance.
The extraction and processing of rare earth elements often involve environmental concerns. The mining and refining processes can generate toxic and radioactive waste, which necessitates careful management and regulation.
As we move forward to explore the applications of these elements, it becomes clear why rare earths play such a pivotal role in modern technology and green energy solutions. Their unique properties enable advancements in various fields, from consumer electronics to renewable energy systems.
How Rare Earths Power Modern Technology
Rare earth elements act as the unsung heroes of modern technology, powering everything from smartphones to electric vehicles. These elements have become indispensable in various industries.
Magnets: The Core of Electronics and Green Energy
Neodymium, one of the most sought-after rare earth elements, forms a key component in powerful permanent magnets. These magnets play an essential role in electric motors, wind turbines, and hard disk drives. Demand for rare earth elements (REEs) – primarily for EV motors and wind turbines – is projected to grow threefold in the STEPS and more than sevenfold in the SDS by 2040, according to the International Energy Agency.
In consumer electronics, these magnets enable device miniaturization. Your smartphone’s speakers, vibration motors, and camera autofocus mechanisms all depend on rare earth magnets. The permanent magnet industry is projected to grow from USD 58.87 billion in 2025, with a compound annual growth rate (CAGR) of 8.5% during the forecast period.
Catalysts: Enhancing Efficiency in Oil Refining and Automotive Industries
Lanthanum and cerium serve as critical catalysts in oil refining and automotive industries. In oil refineries, these elements help break down larger, heavier hydrocarbons into smaller, more useful molecules, which increases the yield of gasoline and other valuable products.
The automotive sector uses cerium oxide in catalytic converters to reduce harmful emissions. The global automotive catalyst market (largely driven by rare earth elements) will likely reach $16.9 billion by 2026, with a CAGR of 4.2% from 2021 to 2026 (according to an Allied Market Research report).
Phosphors: Brightening Our World
Europium, terbium, and yttrium play a vital role in producing phosphors for lighting and display technologies. These elements enable the creation of energy-efficient LED lights and vibrant displays in televisions, computer monitors, and smartphones.
The shift towards energy-efficient lighting has significantly boosted the demand for rare earth phosphors. The global phosphor market size reached $2.5 billion in 2020 and will likely hit $3.5 billion by 2028, with a CAGR of 4.2% from 2021 to 2028 (as reported by Grand View Research).
Glass Polishing and Ceramics: Enhancing Material Properties
Rare earth elements also find applications in glass polishing and ceramics manufacturing. Cerium oxide, for instance, serves as an excellent polishing agent for glass surfaces, including lenses and mirrors. In ceramics, rare earths (such as yttrium and lanthanum) improve the strength, durability, and thermal properties of various materials.
As technology continues to advance, the applications for rare earth elements will likely expand. This expansion opens up new possibilities in green technologies and defense applications, which we will explore in the next section.
How Rare Earths Drive Green Tech and Defense
Rare earth elements play a pivotal role in shaping the future of green technologies and bolstering defense capabilities. The demand for these elements has surged across various sectors, particularly in clean energy and military applications.
Electric Vehicle Revolution
Electric vehicles (EVs) rely heavily on rare earth elements, especially in their motors and batteries. Neodymium and dysprosium are essential components in the powerful magnets used in EV motors. A recent study investigated the co-movements between the Solactive Electric Vehicle and Future Mobility Index (EVFMI) and multiple rare earth elements (REEs).
Tesla, a leader in the EV market, works on reducing its dependence on rare earth elements. However, most EV manufacturers still heavily rely on these materials. This growing demand presents opportunities for investors in companies involved in rare earth mining and processing.
Wind Energy Advancements
Wind turbines, another cornerstone of green technology, also depend on rare earth magnets. A single large wind turbine can contain up to 2 tons of rare earth elements (primarily neodymium and dysprosium). The Global Wind Energy Council projects that the global wind power capacity will reach 1,000 GW by 2030, further driving demand for these elements.
Energy-Efficient Lighting
Rare earth phosphors have revolutionized lighting technology, enabling the production of energy-efficient LED lights. Europium, terbium, and yttrium are key elements in this application. The U.S. Department of Energy estimates that energy savings from LED lighting could top 569 TWh annually by 2035, with the majority of lighting installations anticipated to use LED technology by that time.
Defense Systems Enhancement
The defense sector heavily relies on rare earth elements for various applications. Night vision goggles, precision-guided weapons, and communications equipment all incorporate these materials. The U.S. Department of Defense has recognized the strategic importance of rare earths, investing in domestic production capabilities to reduce reliance on foreign sources.
Lockheed Martin, a major defense contractor, uses rare earth elements in its F-35 fighter jets. Each F-35 requires approximately 920 pounds of rare earth materials, highlighting the sector’s dependence on these elements.
Aerospace and Satellite Technologies
In the aerospace industry, rare earth elements contribute to the development of lighter, stronger materials and more efficient propulsion systems. Satellites benefit from rare earth components in their solar panels and communication systems.
SpaceX utilizes rare earth elements in its rocket engines and satellite components. As the commercial space industry expands, the demand for these materials will likely grow.
The increasing applications of rare earth elements in green technologies and defense underscore their strategic importance. Investors looking to capitalize on this trend may find interesting opportunities in companies involved in rare earth production and processing, as well as those developing technologies to reduce reliance on these elements.
Final Thoughts
Rare earth elements power modern technologies across various sectors. From smartphones to electric vehicles, these 17 elements enable advancements in electronics, green energy, and military applications. The rare earth market faces challenges, including geopolitical risks and environmental concerns, but also presents significant opportunities for growth and innovation.
The future of rare earths looks promising as emerging technologies continue to rely on their unique properties. Quantum computing, advanced robotics, and next-generation energy storage systems will likely increase the demand for these elements. Countries and companies invest in developing alternative sources and more efficient extraction methods to address supply chain vulnerabilities and sustainability concerns.
Investors interested in the rare earth market can find valuable insights on Natural Resource Stocks. Our platform offers expert analysis on market trends, geopolitical factors, and investment opportunities in the rare earth sector. As the importance of rare earths grows, understanding their applications and market dynamics becomes essential for investors and technology enthusiasts alike.
