Rare minerals, particularly rare earth elements (REEs) and other critical minerals like lithium, cobalt, and nickel, are pivotal to modern technology and the global transition to clean energy. These materials are essential for manufacturing high-performance magnets, batteries, electronics, and renewable energy infrastructure, such as electric vehicles (EVs), wind turbines, and solar panels.
The global rare minerals industry is experiencing unprecedented demand, driven by technological advancements, geopolitical dynamics, and the urgent need for sustainable energy solutions. However, the industry faces challenges, including concentrated supply chains, environmental concerns, and price volatility
The global rare minerals industry, particularly for REEs, has seen significant growth in market size and is projected to continue expanding rapidly. According to industry reports, the global rare earth elements market was valued at USD 3.95 billion in 2024 and is expected to reach USD 6.28 billion by 2030, growing at a compound annual growth rate (CAGR) of 8.6%. Another estimate places the market at USD 12.44 billion in 2024, with a projected CAGR of 12.83%, reaching USD 37.06 billion by 2033.
These projections reflect the increasing demand for REEs in clean energy and high-tech applications. Similarly, the broader critical minerals market, including lithium, cobalt, and nickel, reached USD 320 billion in 2022, driven by a tripling in lithium demand, a 70% increase in cobalt demand, and a 40% rise in nickel demand from 2017 to 2022.
Experts from the International Energy Agency (IEA) project that demand for rare earth elements could increase three to seven times by 2040, while lithium demand may rise 40-fold under climate-driven scenarios like the Net Zero Emissions by 2050 (NZE) Scenario.
Several factors are fueling the demand for rare minerals.
The global push for net-zero emissions has accelerated the adoption of EVs, wind turbines, and energy storage systems, all of which rely heavily on rare minerals. For instance, neodymium and praseodymium (NdPr) are critical for high-strength magnets used in EV motors and wind turbines, with neodymium alone accounting for 30.3% of the REE market revenue in 2024. Lithium, cobalt, and nickel are indispensable for lithium-ion batteries, with EV battery demand driving a 56% share of lithium consumption in 2022.
Rare minerals are integral to smartphones, laptops, medical devices, and defense applications, such as missile guidance systems and fighter jets. The rising demand for consumer electronics in developing economies is a significant growth driver.
Countries are prioritizing secure supply chains for rare minerals due to their strategic importance. For example, the U.S. and its allies are investing in domestic production and international partnerships to reduce reliance on China, which dominates global REE production and refining.
Rapid industrialization in countries like India, combined with population growth and rising disposable incomes, is increasing the consumption of rare minerals in automotive, construction, and electronics sectors.
The rare minerals industry is characterized by a highly concentrated supply chain, with China dominating both production and refining. In 2023, China accounted for 70% of global REE mine production (approximately 240,000 metric tons) and 87% of refined REE production. The Bayan Obo mine in Inner Mongolia remains the world’s largest REE deposit.
United States produced 45,000 metric tons of REEs in 2024, primarily from the Mountain Pass mine in California, owned by MP Materials. The U.S. is investing heavily to expand domestic production, with USD 58.5 million allocated in 2024 for a rare earth magnet manufacturing facility in Texas.
Australia produced approximately 18,000 metric tons in 2024, with companies like Lynas Rare Earths and Arafura Resources leading the charge. The Nolans Project in the Northern Territory is a key development for future supply.
Myanmar contributed 31,000 metric tons in 2024, but its production is controversial due to unregulated mining and environmental damage. It supplies 70% of China’s medium to heavy REE feedstock, including dysprosium and terbium.
Nigeria and Thailand, each contributing 13,000 metric tons in 2024, are gaining attention, though their industries are still developing.
The refining segment is even more concentrated, with China controlling 85% of global REE processing and 65–100% of other critical minerals like lithium, cobalt, and graphite. This dominance gives China significant pricing power and supply control, posing risks to global supply chains.
The rare minerals industry is deeply intertwined with geopolitical tensions, particularly between China and Western nations. China’s export restrictions, such as those imposed on seven REEs and permanent magnets in April 2025, highlight its ability to weaponize its dominance. Historical actions, like the 2010 export ban to Japan during a maritime dispute, underscore this leverage.
The U.S. has responded with tariffs on Chinese REE imports (25% starting in 2026) and investments in domestic production through the Defense Production Act and Inflation Reduction Act. However, experts note that building a complete supply chain—from mining to refining to magnet production—requires significant capital and time, with the U.S. still lagging behind China’s established infrastructure.
Other countries are also diversifying supply chains.
With 6.9 million tonnes of REE reserves (third globally), India is collaborating with Brazil and Australia to expand its supply chain and reduce reliance on China. Recent government initiatives include auctioning lithium and REE deposits.
Holding 20% of global REE reserves, Vietnam is attracting foreign investment to develop its processing capabilities.
Canada has 15.2 million tonnes of REE reserves and is advancing projects like the Saskatchewan Research Council’s processing facility, though commercial production remains limited.
Despite these efforts, supply chain risks persist.
Mining and refining rare minerals are environmentally intensive, with risks like water pollution and high carbon emissions. Myanmar’s unregulated mining, for instance, has caused significant ecological damage.
Disruptions in Myanmar’s Kachin state in late 2024 affected China’s REE feedstock supply, highlighting vulnerabilities in concentrated supply chains.
Rare earth oxide prices are volatile due to low volume shares and China’s pricing power, impacting industries like automotive and electronics.
Experts provide varied but optimistic projections for the rare minerals industry.
According to International Energy Agency (IEA), demand for copper, nickel, cobalt, and REEs could double by 2040, with graphite demand potentially quadrupling. Recycling could reduce new mining needs by 25–40% by 2050, but USD 590 billion in new capital investments is required by 2040 to meet demand.
Global data analysts emphasize the need for substantial investment in processing technologies to diversify supply chains. Vietnam’s potential as a major REE supplier is noted, provided it develops refining capacity.
The discovery of a 2.3 billion metric ton REE deposit in Wyoming by American Rare Earths Limited could position the U.S. as a global leader, though development faces environmental and regulatory hurdles.
The market’s growth to USD 37.06 billion by 2033 is driven by renewable energy and defense applications, with recycling technologies gaining traction to mitigate supply risks.
Challenges to growth include China’s continued dominance, high production costs outside China, and environmental regulations that complicate new mining projects. Innovations in recycling, such as those by REEcycle and Cyclic Materials, and alternative materials could reduce dependence on primary extraction.
For instance, Noveon Magnetics is pioneering the recovery of REEs from electronic waste, while biochemical separation technologies are being developed to minimize environmental impact.
Asia-Pacific region dominates with an 86% revenue share in 2024, driven by China’s production and refining capabilities. India and Vietnam are emerging as key players.
The U.S. and Canada are investing in domestic production, with the U.S. focusing on mine-to-magnet supply chains and Canada leveraging its 15.2 million tonnes of reserves.
Europe is the second-largest market, driven by automotive demand (22.3% of global automobile production in 2024). Europe is exploring Greenland and Africa for new REE sources.
Nigeria’s entry into the top 10 producers and Latin America’s copper and lithium reserves (e.g., Chile and Bolivia) are attracting Chinese and Western investments.
The global rare minerals industry is at a critical juncture, driven by soaring demand for clean energy and high-tech applications. While China’s dominance poses challenges, efforts by the U.S., Australia, India, and others to diversify supply chains are gaining momentum.
Expert estimates highlight robust market growth, with the REE market potentially reaching USD 37.06 billion by 2033 and critical minerals requiring significant investment to meet future demand.
However, environmental concerns, geopolitical risks, and price volatility remain significant hurdles. Strategic investments in recycling, processing technologies, and international partnerships will be crucial to building resilient supply chains and ensuring the industry’s sustainable growth.