Rare Earth Elements
Despite the name, rare earths aren't actually rare—they're just difficult and environmentally challenging to process. China controls 70% of mining and 90% of processing, creating the most concentrated supply chain of any critical material. The green energy transition depends on these elements.
Geopolitical Risk: China has previously restricted rare earth exports during trade disputes. The US and EU are actively investing in alternative supply chains, but progress is slow. Current supply concentration represents both risk and opportunity.
Key Elements
Not all rare earths are created equal. The "magnet metals" (Nd, Pr, Dy, Tb) command premium prices due to their critical role in permanent magnets.
Neodymium
Permanent magnets (EVs, wind)
Praseodymium
Magnets, glass coloring
Dysprosium
High-temp magnets
Terbium
Magnets, phosphors
Lanthanum
Batteries, catalysts
Cerium
Glass polishing, catalysts
Demand Drivers
The energy transition is a rare earth story. EVs, wind, and grid storage all require permanent magnets made from neodymium and praseodymium.
Electric Vehicles
Each EV motor uses ~1-2kg of rare earth magnets. Global EV sales growing 25%+ annually.
+35% demand by 2030Wind Turbines
Direct-drive offshore turbines use 600kg+ of rare earths per MW of capacity.
+28% demand by 2030Electronics
Smartphones, computers, and data centers rely on rare earth components.
+15% demand by 2030Defense
Guided missiles, jet engines, and advanced weapons systems.
Strategic priorityThe China Chokehold
China's dominance in rare earths isn't accidental. Over decades, they've built integrated supply chains while Western competitors couldn't compete on cost or environmental regulations.
Today, even when rare earths are mined elsewhere (Australia, US), they often ship to China for processing. The US has exactly one operating rare earth mine (MP Materials in California) and zero magnet manufacturing capacity.
This is changing—slowly. The US, EU, and allies are investing billions in supply chain diversification. But building processing capacity takes 5-10 years. In the meantime, China holds the cards.
China's Market Share
How to Invest
Rare earth investing is complex due to the diversity of elements. We offer multiple approaches depending on your goals.
Physical Oxides
Purchase separated rare earth oxides (NdPr, Dy, Tb) stored in bonded warehouses. Direct exposure to commodity prices.
REE ETFs
Exchange-traded funds holding rare earth miners and processors. Liquid, diversified, but with equity risk.
Mining Equities
Direct investment in rare earth producers and developers. Higher risk/reward, requires company-level due diligence.