What's the big deal with rare earth elements? – DW – 06/13/2025
What do EVs, fighter jets and digital cameras have in common? Rare earth elements that are wanted everywhere but only sourced in some places.
Rare earth elements are a group of 17 chemical elements that play an often small but irreplaceable role in many essential modern technological products.
Smartphones, flat-screen TVs, digital cameras and LEDs all rely on them but arguably one of their most important uses is in the making of what are known as permanent magnets.
These components can retain their magnetic properties for decades, and because they are so strong, they can be much smaller and lighter than any non-rare-earth alternatives currently available. As a result, they are critical to the construction of electric vehicles and wind turbines.
But the uses for rare earth elements, also known as REEs, do not stop there. They are also key to a huge range of defense technologies — from fighter jets to submarines and laser range finders.
This strategic importance, both for commerce and defense, is part of what makes them so valuable. Neodymium and praseodymium, the most important REEs for permanent magnets, currently go for around €55 ($62) per kilogram. Terbium can sell for a kilo price of up to €850.
Neodymium: The metal driving the energy transition
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Where do they come from?
The 17 elements are not as 'rare' as their collective name might imply. In fact, they're very common, with trace amounts being found all over the world.
The challenge comes in finding areas with high enough concentrations to make extraction financially viable. Right now, according to US Geological Survey data, 70% of the world's rare earth elements are mined in China, the vast majority coming from the Bayan Obi mine in the country's north.
This single source is orders of magnitude larger than the next biggest deposits on the planet — such as Mount Weld in Australia and Kvanefjeld in Greenland — and contains large quantities of all the rare earth elements used to make magnets.
Once they're out of the ground, they undergo a highly specialized process of separation and refinement to turn them into usable compounds. This too, largely takes place in China, meaning the country doesn't only provide most of the world's rare earth metals, but most of its magnets too.
Rare earth elements are shipped in containers of soil such as here at Lianyungang port in China's Jiangsu province Image: REUTERS
This monopoly becomes even more powerful with certain types of the 17 REEs, which are split into three groups: light, medium and heavy, roughly based on their atomic value.
The lighter elements are typically less valuable and easier to source, with the magnet ingredients Neodymium and Praseodymium being the exceptions. Between 80-100% of the EU's supply of elements from this group come from China.
And for the heavier elements, which are much less abundant and require an even more specialized separation process, Europe sources 100% from China.
What happens if China cuts off access?
China's monopoly has many Western nations concerned about future access. So in recent years, the US and EU have responded by starting the process of building internal supplies of rare earth elements and other critical materials.
In 2024, the EU signed the Critical Raw Materials Act, which sets non-binding targets for the volume of critical materials the EU should produce itself by 2030. It also allows the bloc to designate 'strategic projects,' both within the EU and with close allies such as Norway, as a way of to ensure access to funding, boost public acceptance and fast track approvals and permits.
Meanwhile, the US defense department has been investing heavily in domestic companies since 2020 and has set a goal of creating an internal 'mine-to-magnet' supply chain by 2027.
The US and EU have both expressed interest in untapped sources of rare earth elements.
Ukraine and Greenland have become areas of key interest for US President Donald Trump. Both have very large potential deposits that are currently hard to get to, leaving the future of access to rare earth elements for Western countries uncertain.
Edited by: Tamsin Walker
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