There are 17 rare earth elements (REEs) in all — 15 lanthanides plus yttrium and scandium. It’s a fairly diverse group, with each rare earth mineral having different applications, pricing and available supply.
However, REEs are often placed in the same basket because they do not occur separately from each other in nature. Aside from that, separation is tricky — before modern methods were available, the process was too difficult and expensive to pursue.
Despite the market’s complexity, it’s worth taking a closer look at the different rare earths and their uses. As global governments take steps to meet energy transition goals, demand is expected to grow immensely, creating opportunities for investors with knowledge of the sector. Read on to learn more about this important group of critical metals.
Are rare earth elements really rare?
Many rare earth investors will be familiar with the adage that rare earth minerals are not that rare — in fact, according to the US Geological Survey, most rare earths are more plentiful in the Earth’s crust than gold, silver and platinum.
As of 2024, there were more than 90 million metric tons of rare earth reserves. Rare earths can be found in carbonatite deposits, alkaline igneous systems, ion-adsorption clay deposits and monazite-xenotime-bearing placer deposits.
The key point to note is that even though REEs are relatively abundant in the Earth’s crust worldwide, “minable concentrations are less common than for most other mineral commodities,” as per the US Geological Survey.
In terms of the availability of specific elements, lanthanum and cerium are relatively abundant in rare earths mineral deposits, while neodymium and praseodymium are much less so; meanwhile, erbium, ytterbium and lutetium are rare. Yttrium is as common as lanthanum and cerium in some types of deposits, but scandium is also very rare.
Rare earth minerals are usually divided into ‘heavy’ and ‘light’ varieties based on their atomic weight. While the concentration of different REEs varies within each given deposit, every deposit is usually dominated by either heavy or light rare earths, with some elements being much more abundant.
What is the difference between rare earth minerals, rare earth elements and rare metals?
Rare earth elements and rare earth metals refer to the specific category of 17 elements on the periodic table, and rare earth minerals refers to the minerals, such as monazite, that contain these metals.
While some use the phrase rare earth minerals to refer to the metals themselves, rare earths are not minerals in the strict sense of the term. Due to their chemical properties, the 17 rare earth elements are classified as metals on the periodic table. However, rare earth elements are not found as pure metals in nature, but are rather locked up in minerals that are mined and refined to obtain the metals.
The term rare metals instead refers to a loosely defined group of resources, including tantalum, niobium, indium, zirconium and gallium. These metals are genuinely rare and valuable, but they are not members of the REE category. However, their important use in technologies such as microtechnologies, superconducting magnets, touch screens and new energy technologies can often lead them to be confused with rare earth elements.
How are rare earths used in manufacturing and industry?
As mentioned, although REEs are grouped together in the ground, their applications vary widely.
In the light rare earth category, cerium is used as a polishing agent for different types of glass, including LCD screens. Cerium is the most abundant rare earth, and is about as common in the Earth’s crust as copper.
Lanthanum is used as a catalyst for refining petroleum and to improve the alkali resistance of glass, especially in camera lenses. This light REE is also used to make the carbon arc lights used by the motion picture industry.
Europium is used in chemical formulations for LEDs, CRT displays and florescent bulbs.
As for heavy rare earths, yttrium is also used in LEDs and florescent bulbs. While erbium has several uses, it’s most commonly used to make glass optical fibers as it can amplify network signals.
As mentioned earlier, one of the REEs that is rare in terms of mine supply is scandium, a critical metal that is as strong as titanium, as light as aluminum and as hard as ceramic. There are a number of new applications emerging for scandium, including alloys for high-end sports equipment, as well as for automotive and airplane parts.
Rare earths are also critical to modern defense systems and military equipment such as radar, guidance systems, precision-guided munitions, lasers, satellites and night vision goggles.
Several rare earth metals are essential to rare earth magnets, which you can learn more about below.
What are rare earth magnets and how are they used?
Rare earth magnets are stronger in terms of weight or volume than any other magnet type. The REEs praseodymium, neodymium, samarium and dysprosium are often used in rare earth magnets, which are finding increasing uses, especially when space is limited.
Magnets made from neodymium, boron and iron, called neodymium magnets, are the strongest available, and these magnets can be found in the motors of wind turbines, as well as electric vehicles. Fellow rare earth elements dysprosium or terbium are sometimes added to neodymium magnets to improve their ability to operate at high temperatures.
Samarium-cobalt magnets are favored in military applications such as jet engines and missile systems because these magnets can operate at extremely high temperatures.
Praseodymium and dysprosium are also commonly used in industrial magnets in order to improve coercivity and resistance to corrosion.
One of the most promising markets for rare earth magnets is electric vehicle motors. However, it’s important to note that permanent neodymium magnets are not strictly necessary to the construction of any electric vehicle. In fact, Tesla’s (NASDAQ:TSLA) Model S main motor does not contain any type of magnet.
How will rare earth elements be used in the future?
Applications for rare earth magnets are rapidly growing as new technologies evolve. However, lack of secure supply has driven some industries to seek out alternative technologies that don’t require REE magnets.
Still, rare earth magnets are not going away anytime soon. REEs are an important part of the technology that drives modern life. They can be found in smartphones, computers and televisions, and are an important component in green energy technologies such as wind turbines and many electric vehicle motors. Plus, their role in defense technology makes rare earth sources critical.
Understanding the different types of rare earths is the first step toward making an investment in this space. It’s also useful to understand rare earth supply and demand dynamics, from the top-producing countries to the nations with the top rare earth reserves. Being aware of the outlook for the rare earth industry can also help investors make the right moves.
For investors who decide they are interested in the longer-term potential for the rare earth metals sector, there are plenty of ways to invest in rare earths, including the biggest rare earth companies and the top rare earth stocks.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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