Rare earth elements (REE) are a set of 17 elements that are an essential part of many modern-day processes and industries. Some of the most common applications of REEs can be found in electric vehicles, wind turbines and military applications. However, many other industries also use REEs, including medical diagnostics and pharmaceutical and agricultural fields.
With many countries looking to move toward more green-powered solutions to fight climate change and pollution, this will require a larger shift toward technologies like electric vehicles. To create the permanent magnetic motor in an EV, a mixture of the rare earth elements neodymium and praseodymium is needed. Combining these two elements creates the strongest magnet known to man and is critical if we are to replace internal combustion engines.
Also, REEs are needed to power wind turbines essential for the net-zero emission transition we’re hoping to achieve.
One use of REEs that gets much attention is military applications, mainly because military programs are government-funded, meaning there is funding support to support these elements. However, although these military applications are important, particularly with rising worldwide socio-political concerns, REEs are used in more than 200 technological products. Without them, not only would we have to surrender our smart devices and technologies but we would also be unable to hit our environmental targets such as eliminating the internal combustion engine vehicle.
China has some of the most significant deposits of REE, with 38 percent of the world’s reserves. For example, China was responsible for 90 percent of all global exports of REE in 2019. Not only this, but it is also the main country to process and refine these materials so they can be used. Consequently, countries such as the United States have come to rely on China as a producer and refiner of precious REEs — even if that’s not necessarily the most practical solution.
In recent years, North America has realized that the dependency on Chinese REEs needs to be curtailed by our production of these elements. However, it takes many years to identify a mineral resource, complete metallurgy analyses, build infrastructure, and create an operating mine. The United States currently has no capability of refining the rare earths it mines, so even if it finds more resources, it would still need to be sent over to China for processing.
Unfortunately, this means North America, particularly the United States, will still need to rely on China for REEs in the coming years.
At the same time, many efforts are being made to try to ease the dependence on China, including the Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022, which forces military contractors to stop buying rare earths from China by 2026. Although we have already seen a significant decrease in reliance on China, with only about 60 percent of the world’s total REE production coming from China in 2022 compared to 85 percent in 2012, North America still faces massive demands and limited support.
According to the United States Geological Survey, the supply of REE has more than doubled in the last 10 years, and demand pressures continue to build with all these eco-initiatives that North America is looking to implement. For example, the world needs an additional 200,000 tons of REEs in the next 10 years for EV application alone — this does not include other emerging applications such as wind turbines. Another statistic reports that the United States would need more than 10 times its current rare earth supplies to reach President Biden’s goal of having 50 percent of cars sold in 2030 to be zero-emission EVs.
With such statistics looming, it becomes apparent why we need domestic solutions to this problem. But, with only one REE mine in the United States, the MP mine that supplied 15.8 percent of the world’s REE production in 2020, it’s not enough to keep up with rising demands. Currently, Defense Metals is the only deposit in North America similar to the MP mine, but emerging producers need continuing support to be successful in the long term.
Ultimately, North America’s dependence on Chinese REEs will probably never fully go away but is expected to wane as North America identifies and integrates domestic solutions to this growing demand.
