Rare earth metals (REMs) are a group of 17 elements that occur naturally in dispersed form and rarely form highly concentrated deposits. The role of these exotically named substances is extremely practical: without them, the modern economy cannot function.
REMs are essential for the production of high-performance magnets, batteries, lasers, microchips, and military electronics. Each electric vehicle contains up to several kilograms of rare earth magnets, each wind turbine contains tens of kilograms, and smartphones and laptops cannot be assembled without neodymium, praseodymium, erbium, and other similar elements.
Amid accelerated electrification, the development of renewable energy sources, and growing defense budgets, global demand for REMs is growing faster than supply. The market remains highly concentrated: China controls over 70% of production and approximately 90% of processing. Therefore, any changes in global supply chains – from US technology policy to the expansion of Australian production capacity – immediately impact the prices and availability of these metals.
Over the past two decades, the global rare earth metals market has experienced several structural waves, from a sharp decline in supply in the early 2010s to explosive growth in 2018-2023. While global rare earth metal production was only 101,500 toes in 2004, as of 2024 it had reached 379,900 tons, an increase of 3.7-fold.
By country, rare earth metal production in 2024 was as follows: China – 270,000 tons, the United States – 45,000 tons, Australia and Thailand – 13,000 tons each, India – 2,900 tons, Russia – 2,500 tons, Madagascar – 2,000 tons, Brazil – only 20 tons, and other countries combined – 31,400 tons.
Thanks to its massive production volume and developed processing chain, China is in a privileged position and is able to use rare earth metals as a tool for foreign economic and geopolitical policy. The United States, with much smaller production volumes, is forced to reduce its dependence on China.
In recent months, China has imposed new restrictions on rare earth metal exports, expanding the list of controlled elements and tightening licensing. The United States, through its legislature, has accused China of interfering in the market for key minerals, claiming that it is using economic pressure. At a recent meeting between the two countries’ leaders, a temporary agreement was reached: China agreed to postpone some restrictions, while the US agreed to reduce some tariffs, thereby easing tensions.
China’s share of global rare earth metal production has fluctuated as follows: in 2014, it reached 85.7%, decreased to 79.4% as of 2016, and then to 72.6% as of 2017. The largest decline occurred between 2018 and 2020, when China’s share fell to 57.3%. In 2021, there was a slight recovery to 58.7%, and since 2022, China’s share has steadily increased, reaching 71.1% in 2024.
These data show that China maintains a dominant position in the rare earth metals market, despite efforts by other countries to increase production and reduce dependence on Chinese supplies. In recent years, China has been strengthening its control over key elements, making it a strategic player in the global supply chain.
Regarding global rare earth metal reserves, they were estimated at approximately 91 million tons in 2024, according to the Energy Institute, and approximately 90 million tons according to the U.S. Geological Survey. China retained its leading position with 44 million tons, followed by Brazil (21 million tons), India (6.9 million tons), Australia (5.7 million tons), and Russia (3.8 million tons). According to the Energy Institute, the United States’ reserves are estimated at 1.9 million tons, Madagascar at 160,000 tons, and Thailand at 5,000 tons. The combined reserves of other countries range from 2.6 million to 7.6 million tons, depending on the data source.
China holds almost half of the world’s total reserves, according to both sources, cementing its strategic advantage in the rare earth metal market.
Kazakhstan, in turn, could become a major player in the rare earth metals market. The country has seen a significant increase in estimated rare earth metal reserves: according to the State Geology Committee of the Republic of Kazakhstan, they are estimated at approximately 28.2 million tons, making it the second-largest in the world. Equally important is the production of rare earth metals. China, for example, has the most efficient technology for processing and producing rare earth metals, the export of which it has restricted. With the world’s largest reserves, China produces over 70% of all rare earth metals. On the other hand, Brazil, with reserves of 21 million tons (second-largest in the world), has meager production: only 20 tons. Given these global trends, Kazakh President Kassym-Jomart Tokayev has ordered the launch of at least three rare earth metal production and deep processing plants within three years.
Kazakhstan also signed a Memorandum of Understanding on Critical Minerals with the United States, which was seen as a step toward diversifying REE supply chains away from China. (EnergyProm)