Market
Rare earth elements are fundamental to life in the 21st century. Due to their unique electrical and magnetic properties, these elements allow for miniaturisation and much lighter, stronger, resilient, and efficient components.
The four REE that represent the majority of the value in the REE market are Nd, Pr, Dy and Tb (the “Magnet REE”) due to their function in rare earth permanent magnets (“REPM”). REPM are inputs in many of the goods that underpin society, including consumer electronics, the traditional automotive industry, white goods, elevators and heating, ventilation and air conditioning (HVAC).
REPM are also critical to more advanced manufacturing sectors, including EVs, wind turbines, modern defence, robotics and many other new technologies. These applications anchor durable, growing demand for rare earths, underpinned by decarbonisation and automation trends.
REE are strategically important as their unique qualities allow for vital functionality, with high barriers to substitution. Often called the “vitamins” of modern industry, REE may only make up a tiny fraction of an end-product by mass and cost, yet they are essential for that product to function. This outsized importance‑to‑cost ratio underscores why REE sustain such strategic focus.
Currently China controls ca. 70% of rare earth mining, but over 90% of the downstream rare earth processing and manufacturing. This reliance on one country creates supply chain vulnerability and there is a drive from western governments to develop supply chain independence, particularly since rare earths are vital to defence applications, as well as other exciting and strategic new markets such as robotics and advanced air mobility.
Western and aligned governments are expected to continue to engage and collaborate in order to break China’s dominance of the sector and put in place the foundations to bring onstream both new sources of supply, as well as mid-stream refining, metallisation and magnet manufacturing capabilities. This provides an opportunity for Rainbow, as the Phalaborwa project in South Africa can offer a strategic, near-term and low-cost source of responsible new supply outside of China.
Read more about the supply and demand fundamentals in our 2025 Market Review.