Rare earths
Rare Earth Elements (REEs) are a group of 17 metals known for their unique magnetic, optical, and conductive properties. These elements are essential to modern technologies, from electric vehicles and wind turbines to smartphones and advanced defense systems. The 2023 U.S. Department of Energy (DOE)’s Final Critical Materials List, highlighting materials crucial for energy technologies with significant supply chain risks, features 4 rare earths as the most critical: Dysprosium (Dy), Neodymium (Nd), Praseodymium (Pr), and Terbium (Tb). Meanwhile the European Union's Critical Raw Materials Act, effective May 23, 2024, designates all 17 rare earth elements as critical, emphasizing their importance for technological and industrial applications.
Heavy and light rare earths
Rare earth elements are divided into two categories:
Light Rare Earth Elements (“LREEs”): Despite the name, “light” refers to their atomic structure—not their weight. LREEs are more abundant in nature and typically found in hard rock deposits. Their relative availability contributes to lower market prices compared to heavy rare earths.
Heavy Rare Earth Elements (“HREEs”): ️ HREEs such as Dysprosium and Terbium are vital for high-performance magnets used in electric vehicles, wind turbines, and advanced defense systems. These elements are considered among the most critical materials due to their role in clean energy and national security technologies.
Most of the world’s supply of heavy rare earths has historically come from ionic clay deposits, which are geologically rare. This scarcity, combined with the strategic importance of HREEs, makes them significantly more valuable than their light counterparts.
Why are permanent magnets so powerful?
Supply risk and market dynamics
Heavy rare earth elements face greater supply risks due to their scarcity and limited production, with China currently leading the global supply. This scarcity drives higher prices and increases the importance of developing new, sustainable sources.The U.S. Department of Energy’s 2023 Critical Materials Assessment evaluates the importance of various materials to the energy sector and their associated supply risks in the short and medium term. The report identified dysprosium as the most critical material with the highest supply risk. Other rare earth elements, such as neodymium and terbium, are also classified as critical in the short and medium term due to their essential roles in technology, renewable energy, defense, and other key industries.
*Source: U.S. Department of Energy Report 2023
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