RARE EARTH ELEMENTS

What Are REEs And Where Do I Use Them?

The Rare Earth Elements (REEs) are a group of 17 elements, comprising the elements scandium (Sc), yttrium (Y) and the 15 lanthanides (elements no. 57-71), as defined by the International Union of Pure and Applied Chemistry (IUPAC, 2005).

The REE are split into two groups, the Light Rare Earth Elements (LREE - La, Ce, Pr, Nd, Sm) and Heavy Rare Earth Elements (HREE - Eu, Gd, Tb, Dy, Ho, Er, Tm, Yb, Lu, Y), both for physico-chemical and commercial reasons

The definition of a LREE and HREE is based on the electron configuration of each rare-earth element. LREE have in common increasing unpaired electrons while HREE have paired electrons (a clockwise and counter-clockwise spinning electron). LREE include the atomic number 57 through 64. HREE include the atomic number 65 through 71 plus number 39. Scandium (Sc number 21) forms a group in itself as its properties cannot be classified as either a LREE or HREE.
These differences in electronic configuration are critical to the individual properties the REE exhibit and how they interact with other elements and compounds.
REEs permit an extraordinary wide range of enabling technologies and as such are widely distributed through most consumer and industrial products in the automotive, aerospace, consumer electronics and electrical engineering fields.
The most important sector by value is that of REE-bearing permanent magnets, which are used extensively in applications such as motors, couplings and sensors. REE magnets are critical to the efficient operation of large wind turbines and hybrid cars.
They are also widely consumed in lighting products, as catalysts and in the production of glass.

Where are REEs Produced?

The global producers of REEs are China 68%, Australia 10%, USA 9%, Myanmar 8% and Russia 2%.

Chinese practices for production of rare earths are poorly regulated, such that production of REE’s has a significant impact on the environment compared to their relatively small market value.

Global mine production is estimated at 280,000 tonnes of REO equivalent in 2021, significantly increased in comparison to 2020 (240,000 tonnes). Production of REO in China was estimated to be 168,000 tonnes (USGS, 2022). China provided around 62% of the world’s primary production of REEs in 2020.

Global Market

The EU imports 100% of its REEs. In the EU, a few players are found at different stages of the REE value chain. Some have the ability to separate individual REOs (in Estonia and France), and to manufacture REE-based products for various industries (phosphors, catalysts, polishing powders, etc.).

There are also alloys makers and magnet manufacturers (in Germany and Slovenia) operating from imported processed materials. Just outside of the EU there is metal and alloy-making capability in the UK.

In 2021, China merged three major state-owned REE companies. The newly established megafirm is expected to have increased pricing power of key REEs, such as dysprosium and terbium and will most likely result in changes to the whole supply chain. It is expected that with this merger, the Chinese government ultimately seeks for REE prices to be rationalized (Zhou & Brooke, 2022).

It is forecasted that, from 2022 through 2035, the global demand for NdFeB magnets will increase at a compound annual growth rate (CAGR) of 8.6%, boosted by the growth of the EV and wind-power sectors, which translates to comparable demand growth for magnet REEs.

Over the same period, the global production of magnet REEs is expected to collectively increase at a slower CAGR of just 5.4% as the supply side of the market increasingly struggles to keep up with rapidly growing demand (Adamas Intelligence, 2022)

Specific Issues

In most of their applications, REE are not substitutable without losses of performance. However, for economic reasons, many R&D strategies have focused on reducing the amount of REE used in their different applications.

REEs are not yet commodities, rather they are customer-specific chemical compounds, produced to precise chemical and physical specifications. The REE market is a specialty market, characterized by business-to- business trade rather than exchanges on metal markets (European Commission, 2020). It is therefore a volatile market with high uncertainty and opacity. In addition, several participants have often cited market manipulation and a lack of transparency in the supply chain (U.S. Department of Energy, 2020).