Of the 17 rare earth metals, the fastest price rises
have been seen in the magnet metals neodymium, praseodymium,
terbium and dysprosium. Rare earth magnets are key ingredients
in two of the fastest growing markets in the world –
wind power and electric vehicles. Using a rare earth magnet in
an electric motor makes a lighter, cheaper, longer range
vehicle, and only rare earth magnets have the strength and heat
resistance needed for application in wind turbines.
According to Lynas Rare Earths, a major producer, the
average price of NdPr, the main rare earth component of magnets
in China, was $69.90 per kg in the second quarter of 2021,
compared with $40.80 per kg a year earlier.
The potential shortage of such a key element of
new-energy technology is spurring governments to support new
sources of supply. Lynas, an Australian company, has been
selling rare earth oxide from its plant in Malaysia since 2012.
It is one of the only non-Chinese companies with significant
refining experience and it has agreements with the US
government in order to bring light and heavy rare earth
capacity to the United States.
In another development, new legislation has been
introduced in the US to provide tax credits for rare earth
magnet production in the country. The bill, introduced in the
US House of Representatives on August 10, will provide a $20
per kg tax rebate for neodymium-iron-boron magnet production in
the US. The tax rebate will rise to $30 per kg for magnets
produced from US-mined rare earths. Representative Eric
Swalwell, who introduced the bill, said that the measure would
support the supply chains for US electric vehicle
"As the administration [under US President Joe Biden]
makes a strong commitment to vehicle electrification,
it’s more important than ever that the United
States secures all of the necessary components of the supply
chain," Swalwell said.
Wind turbines are one of numerous green-energy
applications dependent on rare earths for their
EU support too
The EU has also proposed new funding for the sector.
On September 30, 2021, the European Raw Materials Alliance, set
up by the EU in 2020, called for a mixture of government
support and sales quotas to unlock around €1.7 billion of
total investment in the rare earth sector.
"The commission’s in-depth review of
critical supply chains and key technologies has highlighted the
EU’s high level of foreign dependency on inputs
required for our green and digital transition," Thierry Breton,
EU commissioner for the internal market, said. "The EU depends
on others – mainly China – for the import of
permanent magnets, as well as the rare earth elements they are
The report called for both the construction of rare
earth refining and recycling capacity in the EU, as well as
with resource-rich countries.
The growth in the rare earth market is opening up
miners to new sources of the material. There is increased
interest in the monazite fraction of rare earth deposits in
particular. Monazite is found in abundance in the heavy sand
deposits mined for titanium ores, but its natural radioactivity
has historically made it too expensive to handle. As rare earth
prices rise, however, the cost calculation has
Iluka, one of the largest titanium ore producers, has
already started to exploit monazite tailings, and has unveiled
plans to expand further in the rare earth sector. In May 2021,
the Australian government announced that it will back a new
rare earths processing facility to be built by
The plant is planned to be located at
Iluka’s existing mineral sand facility in Eneabba,
"The Morrison government is focused on growing
Australia’s critical minerals sector, capturing
more value from our resources by moving into downstream
processing, and diversifying global supply chains," the
government said in a letter to the Australian stock exchange.
"This includes supporting Australian projects with broader
benefits across the industry," trade minister Dan Tehan and
resources minister Keith Pitt said in the letter.
Meanwhile, Energy Fuels, a long-standing uranium
refiner, which has made a swift entry into the rare earths
sector by purchasing monazite and processing it at its uranium
facilities in the US, is planning to increase production