Rare earth elements comprise 17 chemical elements that are widely used in high-tech goods and low carbon technologies.
Although the majority are relatively plentiful in the Earth’s crust, REES are rarely found in concentrated and economically exploitable forms.
Products dependent on REEs include wind turbines, batteries for hybrid vehicles, lasers and optical fibres, polishing compounds for lenses, and many other military and clean-energy applications. Global industrialisation and population growth are placing an increased pressure on raw material availability. REEs have therefore become in demand commodities for high technology and low carbon industries.
China currently dominates the market, accounting for 95% of supply. Other notable production countries include India and South Africa.
The price of several REEs has multiplied to five or six times the price levels seen in 2010 after China announced export restrictions on the 17 REEs, in particular cerium oxide. The global impact of these restrictions is greatest in countries with large high-tech manufacturing sectors, such as Japan, the USA and Germany.
Production is expected to increase, with several new REE projects entering operation by 2020. However, the complexity of separating rare earths means that not all projects are expected to succeed. Accordingly, REE prices may experience a long-term rise, offset by occasional market volatility.
Rare Earths Market Prices (ETF, US$)