Rare earth metals (REMs), also called rare earth elements (REEs) or rare earths, are currently at the peak of popularity. This is explained by a wide range of their applications, especially in high-tech industries, as well as the restricted supply of REMs to the world market, where China is essentially a monopolist.
REMs are actively used in the production of catalysts (lanthanum is used in catalysts for petrochemistry, and cerium in automotive catalysts), as well as polishing powders, special alloys, glass and ceramics, battery anodes, luminophors, and pigments. But the main application of REMs at present is in the manufacturing of permanent magnets. According to Statista, in 2022, magnet manufacturing accounted for 44% of the global REM consumption. The most common magnets are made of neodymium, iron, and boron (NdFeB) alloys, as well as samarium and cobalt (SmCo) alloys. Rare earth magnets are used in the manufacturing of wind turbines, electric and hybrid vehicles, elevators, unmanned aerial vehicles (UAVs), as well as in robotic engineering and other high-tech areas. According to a research company Adamas Intelligence, the global market for rare earth magnets is expected to grow by over 5 times in the next 15 years - from US$7.8 bn in 2024 to US$44.1 bn in 2040.
In this regard, the desire of the United States, the European Union, Russia and a number of other countries to have technological sovereignty in rare earth metals is completely justified.
Global production chain and China’s monopoly
The REM production cycle generally includes the following stages:
• mining and concentration of rare earth ores, production of REM concentrates;
• separation of REM oxides;
• rare earth metal refining;
• REM products manufacturing.
Fig. 1 shows that all these stages are ‘scattered’ across different countries of the world, with an important exception, China. Due to a rich raw material base, active development of the facilities for the separating of rare earth metals, manufacturing of end products from rare earth metals, state regulation and predatory pricing, China has established a de-facto hegemony on the global REM market.
China demonstrates the highest production volumes in the world even taking into account the quotas (270 thousand tons in terms of rare earth oxides in 2024, according to USGS) and has the largest raw material base of REMs (reserves of 44 mn tons of rare earth oxides), with the unique Bayan Obo deposit as its basis. At the same time, the country is the world’s largest importer of rare earth compounds. According to the International Trade Center, China purchased almost 77 thousand tons of rare earth compounds in 2024. More than half (57%) of the supplies were provided by Myanmar, the country ranking third in the world in the production of REMs (see Fig. 1).
In Myanmar, heavy-group REM compounds (Y, Gd, Tb, Dy, Ho, Er, Tm, Yb, Lu) are recovered from ion-adsorption clays, the extraction and concentration of which are relatively low-cost, especially considering the cheap labor force and low environmental protection requirements.
Figure 1. Structure of rare earth ore mining and concentration, separation of rare earth oxides, metal refining, and manufacturing rare earth products (permanent magnets) by countries, %
Добыча - Mining. Разделение оксидов - Separation of oxides. Производство металлов - Metal refining. Производство продукции - Manufacturing.
Sources - USGS, U.S. Department of Energy
China’s strategy: Nationalization and exportscontrol
Speaking about China, it is worth noting that in October 2024, the country’s government nationalized all its rare earth metal reserves by introducing a legislative ban on “illegal access to rare earth resources.” The new legislation implies strict control throughout the value chain, including control over mining, processing, separation, and exports.
In early April 2025, China announced placing export restrictions on seven out of 17 rare earth metals: samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium in the latest round in the trade war with the United States that has been gaining momentum since Donald Trump’s accession to the presidency.
USA: Building own capacities and the projects abroad
Until recently, the United States had a critical dependence on the REM supplies from China. The country mines rare earth ores at a single deposit, Mountain Pass, in California, the concentrates from which were previously shipped to China for further processing. In 2022, to achieve sovereignty in REMs, MP Materials that operates the Mountain Pass deposit laid the foundation for the construction of Independence plant to produce refined rare earth metals and manufacture permanent magnets. In 2023, the company launched the independent production of separate rare earth oxides and metals, and in 2024, it reached the commercial production of metals (neodymium and praseodymium) and began the test manufacturing of magnets. In 2024, MP Materials also signed contracts with a major global automaker and the U.S. Department of Defense for the supply of neodymium and praseodymium. In April 2025, the company announced complete ceasing its rare earth concentrate shipments to China in response to tariffs announced and export restrictions.
Another American company, USA Rare Earth, is implementing a project to explore Round Top, a unique rare earth deposit in Texas, and a project to set up a plant for the manufacturing of sintered permanent magnets in Oklahoma. The launch of commercial manufacturing the magnets at the plant is scheduled for the first half of 2026. The initial capacity is expected to be 1.2 thousand tons of permanent magnets per year, and after reaching its full capacity operation - about 5 thousand tons. In January 2025, USA Rare Earth announced the successful manufacturing of the first batch of sintered rare earth magnets in its laboratory in Oklahoma. In the future, the company plans to use rare earth metals recovered from the Round Top deposit’s ores as raw material for manufacturing the magnets, but USA Rare Earth does not indicate the dates of its commissioning, because the Prefeasibility Study stage has not yet begun at the site. It is only known that 15 of 17 rare earth metals, including all heavy REMs, have been identified in the deposit’s ores.
In addition, Lynas USA LLC, the American division of Austarlia’s Lynas Rare Earths Ltd, is building a plant in Texas for the separation of REM oxides. REM concentrates for this plant will come from the Mount Weld mine, Australia. The plant, with a capacity of 5,000 tons of separated REM oxides per year, is expected to be launched between July 2025 and June 2026.
The USA is also implementing projects to explore and develop REM deposits outside the country. In particular, the US Critical Metals Corp. acquired the rights in the summer of 2024 to develop the Killavaat Alannguat deposit, better known as Tanbreez, where geological exploration is currently underway.
Australia: Strategic advantage and new projects
Australia-based Lynas Rare Earths operating the Mount Weld rare earth deposit in Western Australia, currently ships the concentrates it produces to the separation facilities in Kalgoorlie (Australia) and Lynas Malaysia (Malaysia). Thus, Australia is among those few countries that do not depend on China for REM separation facilities.
In addition, Australia’s plans are to increase REM mining and refining in the future, and a number of projects are under construction in the country. The largest of them are Nolans and Yangibana.
The Nolans project in the Northern Territory of Australia is implemented by Arafura Rare Earths. The ores from the Nolans deposit have a rare earth-phosphate-uranium-thorium composition, their measured, indicated and inferred resources are estimated at 56 mn tons, with an average rare earth oxide grade of 2.6%. These resources allow mining for 38 years and producing about 340 thousand tons of concentrate from the ores annually. The plans are to process and separate the resulting concentrates on site, and a hydrometallurgical and separation plants will be built at the mine. The end products will be neodymium-praseodymium oxide (4.4 thousand tons per year) and mixed oxide of medium-heavy rare earths (470 tons per year), as well as 144 thousand tons of phosphoric acid per year for the production of fertilizers as by-products. Investments in the project are estimated at US$1.22 bn. The Arafura Rare Earths company is ready to start construction after receiving the final permit. As of the end of 2024, the company spent over US$40 mn on preliminary works (shift camp, access roads, and water supply system).
The Yangibana project is located in the Western Australia and is under implementation by Hastings Technology Metals. The ores of the Yangibana deposit contain REMs (37% of which are neodymium and praseodymium) and niobium. Measured, indicated and inferred resources of the deposit are estimated at 29.9 mn tons of ore with an average REM oxide grade of 0.93%, Nd oxide and Pd oxide grades of 0.32%. The project is expected to be implemented in two stages: the first stage will involve open-pit mining of ores and concentrating them at a processing plant with a capacity of 27 thousand tons of concentrate per year; the second stage will involve the hydrometallurgical processing of rare earth concentrate to produce an intermediate product (mixed rare earth carbonate containing 59% rare earth oxides). The capacity of the plant for the production of mixed rare earth carbonate will be 15 thousand tons per year. Then, the commercial products will be shipped to consumers for the production of specified rare earth oxides. The plans are to annually produce about 3.4 thousand tons of neodymium and praseodymium over 17 years. The plant is expected to be launched in the second quarter of 2025.
European approach: Transition from absence of raw materials to a full value chain
The European Union, where rare earths are currently not mined, also takes steps to reduce dependence on China. LKAB, a Swedish mining company, is implementing a project to produce rare earth metals from the wastes at the Malmberget iron ore mine in Gällivare in northern Sweden. The company’s plans are to build a plant at the mine to process apatite that is currently stored as mining waste.
The resulting apatite concentrate will be sent to an industrial park - to be built in Luleå - to produce rare earth concentrate, phosphoric acid for producing fertilizers, and gypsum as a by-product. In January 2025, construction of a pilot plant estimated at SEK 800 mn (approx. US$ 73 mn) for the production of rare earth metal concentrate and phosphoric acid began in Luleå, and it will be put into operation by late 2026. The full-scale plant is scheduled to be commissioned in 2030. During the first phase of operation, the plant using raw materials from the existing Malmberget mine, is expected to satisfy 2.5% of the EU’s needs in REMs and 6% of its needs in phosphoric acid (which will also reduce its dependence on imported phosphate fertilizers from Russia).
In the future, up to 18% of the EU’s needs in REMs could be satisfied thanks to the upcoming commissioning of the new Per Geijer mine in Kiruna. The Malmberget mine, Per Geijer project and Luleå industrial park are included in the list of strategic projects in accordance with the EU Critical Raw Materials Act (CRMA). The REM concentrate produced in Luleå will be sent to Norway, to the REEtec rare earths separation plant scheduled to be commissioned as early as 2025. The annual capacity of the NdPd oxide production plant will be 720 tons.
Of course, this is not a great quantity, but the EU also implements the projects to create separation facilities based on imported raw materials (not from China), as well as to manufacture permanent magnets, including from secondary raw materials.
For example, in Poland, the British-Canadian company Mkango Resources Ltd. has the plans to build a plant in Pulawy for the separation of rare earth elements, with a capacity of 2,000 tons per year of neodymium and praseodymium oxides and 50 tons per year of dysprosium and terbium. The raw materials will be supplied from Malawi, where Mkango’s Songwe Hill deposit development project is located. Work is currently underway under the project to conduct a Definitive Feasibility Study.
In France, Caremag SAS, jointly with Japanese partners, is implementing a project to build a plant to annually process 2,000 tons of spent magnets and 5,000 tons of rare earth concentrates from unnamed sources (probably, from Australia’s or Vietnam’s mines, taking into account the participation of Japan). The plant is expected to be launched in late 2026 and will produce 800 tons of neodymium and praseodymium oxides and 590 tons of dysprosium and terbium oxides annually.
In Estonia, the Silmet plant in Sillamäe has been operating since Soviet times where rare earth metal oxides are separated, among other things. At present, the enterprise is owned by Canada’s Neo Performance Materials Inc. This plant was and still is the main buyer of Russian-origin raw materials - unseparated rare earth compounds produced at the Solikamsk Magnesium Plant located in the Perm Territory. According to the Neo Performance report for 2024, Estonia’s plant continued to receive the bulk of raw materials from Russia, without a significant impact of sanctions on this process. This is confirmed by trade statistics: according to ITC, Estonia imported from 4.4 thousand to 4.9 thousand tons of REM compounds from Russia from 2021 to 2023 annually, and slightly less, 3.7 thousand tons, in 2024, with the Russian Federation accounting for 92% to 100% of Estonia’s total imports.
At the same time, the above-mentioned report notes that Neo Performance is concerned about diversifying the supplies. In particular, the company signed a non-binding Memorandum of Understanding in May 2024 that could be the basis for an agreement on the supply of rare earth raw materials from Meteoric’s Caldeira project in Brazil. The Caldeira project involves developing an ion-adsorption clay deposit for 20 years; work is currently underway at the Pre-Feasibility Study stage at the project site.
In addition, Neo Performance commissioned a new permanent magnet facility in Narva, Estonia, in 2025. The initial capacity of the enterprise is expected to be 2 thousand tons of magnets per year with the possibility of scaling up to 5 thousand tons.
Plants for recycling the REMs from spent magnets and for the manufacturing of permanent magnets are also under construction in Germany, Italy, and Spain.
Among other European countries, the United Kingdom makes active efforts to set up its own REM production. In particular, Pensana Plc received all the necessary permits for the construction of a separation plant estimated at US$250 mn - with an annual capacity of 4.4 thousand tons of neodymium and praseodymium oxides - in the Saltend Chemical Park (Yorkshire, United Kingdom). REM concentrate for the plant will be supplied from the Longonjo mine that is under construction in Angola, this mine also belongs to Pensana. The oxides separated at the Saltend plant will be shipped to an upcoming facility, located within the Yorkshire Energy Park, to be processed into metals for manufacturing permanent magnets, which, in turn, will be supplied to the magnet manufacturing plants in the UK, Europe, and Japan.
Russia’s potential and challenges
In fact, over 100 thousand tons of REMs - expressed in the quantity of trioxides - are mined annually from Russia’s subsoil, but the bulk of rare earth metals is not extracted from ores and remains in the wastes obtained during the production of phosphate fertilizers from apatite-nepheline ores. Only REMs recovered from the loparite ores of the Lovozero deposit are extracted to produce commercial products; the loparite ores are mined by the Lovozersky Mining and Processing Plant (part of the State Atomic Energy Corporation “Rosatom”) and is 2.2 thousand to 2.9 thousand tons per year expressed in the quantity of REMs trioxides (∑TR2O3). According to the Federal State Budgetary Institution VIMS (All-Russian Scientific-Research Institute of Mineral Resources named after N. M. Fedorovsky), the reserves of the two areas of the Lovozero deposit that are under development now will last for over 100 years at the current rate of output. The loparite concentrate produced at the Mining and Processing Plant is shipped to the Solikamsk Magnesium Plant also owned by Rosatom since 2023, where it is used to produce unseparated rare earth metal carbonates. The annual capacity of the plant for the production of rare earth metal oxides is 3,600 tons; in 2023, 1,964 tons of rare earth metal carbonates were produced. Almost the entire volume of the Solikamsk Magnesium Plant’s rare earth metal products is exported, mainly, to Estonia, as mentioned above. In 2024, amid a slight reduction in supplies to Estonia (by 8.7% compared to 2023), Russia increased its supplies to China by 3.7 times, to 898 tons, compared to 2023 (according to ITC).
There are currently no industrial facilities for separating REM oxides in Russia, but the Skygrad Group’s companies carry out experimental production of specified REM oxides at their plants in the Moscow Region, with a capacity range of 150 to 180 tons per year. Unseparated REM carbonates from the Solikamsk Magnesium Plant (a small - not exported - part of them) and phosphogypsum, a waste product from the production of phosphorus fertilizers by the Voskresensk Mineral Fertilizers company, are used as raw materials. In addition to specified REM oxides, the Skygrad Group’s enterprises produce polishing powders, and are ready to produce metallic neodymium and praseodymium in the future, as well as other REM products. Yuri Sobol, one of the founders of the Skygrad Group, noted at the Rare and Rare Earth Metals Conference held in March 2025 that low demand was the main reason preventing the scaling up of the production. In Russia, REMs are used mainly as catalysts in petrochemistry, as well as in the glass and ceramics making industries. There is no large-scale commercial production of permanent rare earth magnets in the country; only a few companies (POZ Progress, Valtar, etc.) produce NdFeB magnets in very small quantities using China’s semi-finished products.
Prospects for the Russian REM industry
However, the situation should change in the future due to Russia’s joining the global competition for rare earth elements (REE) - “REE rush”. In the long term, it is planned to implement a number of projects before 2030 that will create a complete production chain - from mining to manufacturing magnets.
At the same time, some links in this production chain, probably, will not be ready in the next five years. The talk is about the projects for the development of the new Tomtorskoye rare earth element deposit in Yakutia and the Zashikhinskoye one in the Irkutsk Region. The Buranny section of the Tomtorskoye deposit, according to the Federal State Budgetary Institution VIMS, contains 11.3% of Russia’s REM reserves (3.2 mn tons of ∑TR2O3) and features a unique average REM grade in ores (11.99% ∑TR2O3). The deposit, the license for using the subsoil of which is currently owned by ThreeArc Mining, is scheduled to be put into operation in 2029 after the latest in a series of postponements, but most likely this date is not final. Due to the fact that the owner is not in a hurry to implement the project, the placing of the deposit under the management of Rosneftegaz is under consideration.
The development of the Zashikhinsky deposit, owned by Technoinvest Alliance, has been constantly postponed since 2014, including due to the lack of a concentration technology. In March 2025, it was reported that the deposit’s commissioning date would be rescheduled again, from 2023 to the 2030s.
Rosatom State Corporation, the owner of Lovozersky MPP and the Solikamsk Magnesium Plant, is responsible for the implementation of large-scale projects in the REM downstream segment. In February 2025, the beginning of designing the REM separation plant at the Solikamsk Magnesium Plant was announced. It is expected that the plant, estimated at over RUB7 bn, will produce 2.5 thousand tons of rare earth products annually (separated La, Ce, Nd, Pd oxides and medium-heavy REM concentrates). This will make it possible to do without exporting raw materials to Estonia. In addition, the construction of the plant for the manufacturing of permanent magnets with a capacity of 1,000 tons has already begun in Glazov (the Republic of Udmurtia). The plant is scheduled to be commissioned in 2028, and its capacity is expected to increase to 3 thousand tons after 2030.
According to ITC’s trade statistics, the exports of permanent magnets from China to Russia from 2020 to 2024 was from 2.5 to 3.1 thousand tons per year. Accordingly, the launching of Russia’s own plant for manufacturing the magnets will allow the country to replace these imports. It is important to take into account that the cost of domestic magnets for consumers within the country must be competitive compared to Chinese magnets, otherwise they may remain in no demand.
Conclusion
In general, the main obstacle for the European Union in ensuring the technological sovereignty in the rare earth metals is the lack of access to raw materials, while limited separation capacities are the main obstacle for the USA and Australia, and a low level of consumption of REM-based products - for Russia.
To overcome these challenges, Russia needs to focus on developing high-tech industries, as well as implementing the projects related to the separation of rare earth metals and the manufacture of rare earth products.
As for the development of new deposits, rescheduling their development dates does not pose a critical problem, given the significant reserves of the Lovozero deposit and the accumulated phosphogypsum stacks.
In the future, Russia has every chance of becoming a major exporter of commercial rare earth products, for example, to the United States, taking into account the interest of countries in the cooperation in this area, announced in February 2025.
Anastasia Smolnikova for Rough&Polished
