Rare minerals, encompassing rare earth elements (REEs) and other critical minerals such as lithium, cobalt, nickel, graphite, and copper, are indispensable to modern technology, clean energy transitions, and advanced manufacturing.
17 REEs – including neodymium, praseodymium, dysprosium, and terbium – along with battery metals, underpin electric vehicles (EVs), wind turbines, semiconductors, and defense systems. In 2025, the market is characterized by robust demand growth amid persistent supply concentration, geopolitical tensions, and efforts toward diversification.
The global rare earth elements market demonstrates varied growth projections across sources, reflecting differences in scope (e.g., oxides vs. metals) and methodologies. Estimates for 2025 range from approximately 196 kilotons in volume (valued implicitly in the billions) to revenue figures of USD 4-12 billion, with CAGRs projected at 5-12% through 2030-2033.
For instance, one analysis pegs the market at USD 12.44 billion in 2024, growing to USD 37 billion by 2033 at 12.83% CAGR, driven by clean energy and electronics. Broader critical minerals markets, including battery raw materials, reached USD 328 billion in 2024, projected to USD 587 billion by 2032 at 7.5% CAGR.
Demand is propelled by EVs (accounting for ~90% of lithium growth), renewable energy, and high-tech applications. Permanent magnets, using neodymium and dysprosium, represent 30-40% of REE demand, growing fastest at 8% CAGR. Clean energy technologies claim 35% of volumes.
China overwhelmingly dominates the REE supply chain, controlling 60-70% of mining and 85-90% of refining/processing. Major Chinese players include:
China Northern Rare Earth Group High-Tech Co. Ltd.: Operates the Bayan Obo mine, the world’s largest REE deposit.
Shenghe Resources Holding Co. Ltd.: Involved in mining and international stakes (e.g., in MP Materials).
Other state-linked entities like Baotou HEFA and China Rare Earth Holdings.
Outside China, diversification efforts highlight:
Lynas Rare Earths Ltd. (Australia): Largest non-Chinese producer, with operations in Australia and Malaysia.
MP Materials (USA): Owner of Mountain Pass mine, expanding into magnet production with a Texas facility targeting commercial output in late 2025.
Iluka Resources (Australia): Developing refining capacity.
Emerging players: Arafura Rare Earths (Australia), Northern Minerals (Australia), Ucore Rare Metals (Canada/USA), and Energy Fuels (USA/Brazil).
For broader critical minerals:
Lithium: Australia, Chile, China.
Cobalt: Democratic Republic of Congo (DRC, ~70%).
Graphite: China (~80% refined).
Nickel: Indonesia (rapid growth).
Consolidation is evident, with top players holding 65-70% share in REEs.
2025 has seen escalated trade restrictions. China imposed controls on heavy REEs (e.g., samarium, terbium, dysprosium) and technologies, disrupting global chains and spiking prices outside China. The DRC suspended cobalt exports temporarily. Over half of energy-related minerals face export controls, heightening vulnerability.
Concentration risks are acute: Top three producers hold 77% of mining share (up from 73% in 2020). Refining is even more concentrated in China/Indonesia.
After 2023-2024 declines (e.g., neodymium-praseodymium down significantly), 2025 shows stabilization or surges due to restrictions. Neodymium prices rose ~48% year-on-year by late 2025, trading around 737,500 CNY/T. Analysts forecast inventory drawdowns leading to increases in mid-2025/2026, though weak ex-China demand tempers gains.
Lithium and cobalt prices rebounded amid cuts; graphite stabilized post-trade agreements.
Investment slowed (5% growth in 2024 vs. prior years), with exploration plateauing. Climate risks (e.g., droughts affecting 7% of copper) and long lead times exacerbate issues. Recycling and substitution (e.g., rare-earth-free magnets) gain traction but remain nascent.
Demand will surge: Lithium fivefold by 2040; REEs 50-60% growth. EVs and energy storage drive this, with magnets and batteries leading.
Diversification accelerates via Western investments (e.g., US DoD funding MP Materials) and new projects in Africa/Latin America. Sustainability focus rises: Traceability, responsible mining, and recycling to mitigate environmental impacts.
Policy interventions (tariffs, subsidies) and innovations will shape resilience. Risks persist from volatility and concentration, potentially slowing clean energy transitions if unaddressed.
In summary, the rare minerals market in 2025 balances explosive demand against entrenched supply risks, with diversification and policy as pivotal forces for stability ahead. Stakeholders must navigate this landscape proactively to secure technological and energy futures.
By Derek Taylor