The rare earth metals market is projected to generate $15,473.3 million revenue in 2030, advancing at a CAGR of around 9.1% during 2021–2030. This can be attributed to the rising consumption of these metals in consumer and industrial electronics applications, automobiles, and the aerospace industry.
These materials are also used in catalysts, ceramics, phosphors, glass polishing, metallurgy, and magnets.
The major metals used in permanent magnets are neodymium, dysprosium, praseodymium, terbium, and yttrium. They have specific properties, such as high coercivity, efficiency, and magnetic strength, which keep them magnetic for a long period. Therefore, advanced equipment, such as solar panels, drones, 3D printers, and smartphones, have such magnets. Furthermore, the market is growing due to the large investments in the extraction and processing of these minerals by the major players. The players are also investing in technological innovations to widen the usage of neodymium, dysprosium, praseodymium, and terbium in electric vehicle (EV) motors, wind turbine generators, and other electrical equipment.
In regard to wind energy and e-mobility, these minerals are used for the manufacturing of the magnets of wind turbine generators and traction motors for EVs, respectively. In May 2022, Ather Energy (an electric scooter maker) raised $128 million via an Indian government sovereign fund in order to expand its manufacturing capabilities and build the charging infrastructure in the country, which will increase the demand for rare earth elements in the country.
The automobile industry is searching for new compositions for permanent magnets, to minimize production costs and cater better to the rising need for electric mobility. With the growing demand for EVs across the globe, neodymium and terbium are being increasingly used in their manufacturing.
In 2021, the neodymium category held the largest market share, around 40%. It is used with iron and boron to produce powerful permanent magnets, also known as NIB magnets. These magnets are extensively used in headphones, microphones, computers and hard disks, cell phones, medical equipment, toys, motors, and audio systems, which, in turn, strengthens the demand for and production of neodymium.
Another key usage of neodymium is wind turbines, which are witnessing rampant installation, with a greater focus on using renewable sources of energy. For instance, the U.S. installed 17 GW of wind energy capacity in 2020, with further growth expected in the coming years because of the technological innovations in this field.
Further, neodymium, erbium, and holmium are being progressively used in the manufacturing of high-efficiency fibers, called active fibers, because of these metals’ high electrical conductivity, magnetism, and heat resistance.
APAC dominated the market in 2021, and it is expected to continue its dominance in the coming years. This is attributed to the mounting production and consumption of these materials in China. The substantial usage of permanent magnets provides a massive impetus to these advanced materials across the region. Moreover, the government support and rising investment directed at the automotive and electronics industries drive the production of these metals.
Moreover, government initiatives in developing countries, such as India and China, are pushing digitization, thus resulting in an increasing requirement for the internet, which would, ultimately, drive the demand for fiber optics. In addition, the surging need for smartphones and high-bandwidth facilities is likely to fuel the demand for optical fiber cables and their constituent metals, such as ytterbium and erbium.
The major players operating in the rare earth metals market include American Rare Earths Limited, Ucore Rare Elements Inc., Mitsubishi Corporation Rtm Japan Ltd., Energy Fuels Inc., Shin-Etsu Chemical Co. Ltd., Lynas Rare Earths Ltd., Medallion Resources Ltd., Australian Strategic Materials Ltd., Neo Performance Materials Inc., and Iluka Resources Limited.