Rare Earth Elements

Rare earth elements are used to produce batteries, magnets and other electronics, and often cannot be easily substituted, making them critical for the clean energy transition.

Rare Earth Elements

Rare earth elements (REEs), also known as rare earth metals, are a set of seventeen chemically similar metallic elements, which can generally be classified as light (LREEs) or heavy rare earth elements (HREEs).

REEs are relatively abundant in the Earth’s crust, at 9.2 parts per million on average. However, they are sparsely distributed and mainly occur in low concentrations in minerals ores.i Obtaining rare earths at high purity therefore requires processing very large amounts of ore at great expense.

Although REEs are widespread, some of the minerals from which REEs were first mined were very rare, which is how “rare” earths get their name. When refined, REEs are lustrous, with a grey to silver sheen, and are soft, malleable and typically reactive. As REEs share many properties, they are often found together in geological deposits.ii

REEs are increasingly in demand as they are functionally critical for components such as batteries, magnets and hard drives, which are used in many applications including solar panels, wind turbines, smartphones and laptops. Typically, REEs are extracted as a by-product of other materials and, as by far the world’s most significant supplier of REEs, China exerts great leverage of the REE supply chain.

The most severe ESG risks associated with rare earth elements are environmental, particularly water and air pollution and the release of radiation.

Main uses and applications

The REEs have several shared chemical and mechanical characteristics, including properties for magnetism, chemical catalysis, and luminescence. Each individual REE exhibits these common properties to different degrees. Even though the weight and volume of REEs in manufactured products is generally tiny relative to other metals, their unique properties often mean they have no commercially viable substitutes, making them critical to many industries.

REEs (in particular the subset of “heavy” REEs) are essential in many electronic applications, such as smartphone touchscreens; magnets in electric motors; and speakers and hard drives in computers.iv ,v They are also used in the production of wind turbines, medical MRI machines and batteries, as well as in defence applications such as electronic displays and sonar systems.vi