Why Rare Earth Materials & Minerals Matter
Image Details: Stock Image of Rare Earth Mines, from Squarespace
Overview: On October 20th, the US and Australia signed an important agreement which outlined a framework to secure the supply chain of rare earth materials between the two countries. According to Reuters, both governments invested roughly $2B to expand mining and processing capabilities in both countries (Source: Reuters). This trade agreement comes at a direct aim at breaking China’s near-monopoly on the rare earth supply chain.
In this article, we’ll be exploring the specifics behind rare earth materials and minerals, why they matter so much, and how in 2025, they’ve caused such a frenzy in international policy.
Rare Earths Deal Visualized by MacroBytes (Information Sourced From: Reuters)
U.S.–Australia Rare Earths Framework
A strategic $2B partnership to secure critical-mineral supply chains and lessen reliance on China.
💰 Headline
- $~2B joint funding for mining and processing projects
- Focus on mine-to-magnet capacity and allied offtakes
🎯 Goals
- Reduce dependence on Chinese refining
- Streamline permits & project execution
- Support new ventures via price guarantees
⏱️ Reality Check
- China still dominates refining and magnets
- High costs & environmental hurdles
- Multi-year build-out for true independence
🔗 Why It Matters
- Inputs for EVs, wind, electronics, defense
- Enhances supply-chain resilience & security
- Allied strategy for future tech materials
Demistifying Rare Earths: Rare earth elements are a group of 17 elements on the periodic table. The interesting thing about rare earths is that they’re like the “spices” of technology, while you only need a small amount, they’re critical to help hardware function.
Among the 17 rare earth materials, the ones that are particularly of interest in these international policy agreeements at the moment are:
Neodymium (Nd) & Praseodymium: these elements are used together as “permanent magnets” in high-performance energy products such as electric vehicles and wind turbines.
Dysprosium (Dy): used as “durable” magnets for high-temperature environments (gearboxes, military equipment, etc.).
Cerium (Ce): used as catalysts for converters in automotive, defense, and refinery equipment.
The demand for rare earth minerals are expected to rise dramatically over the upcoming years as demands surge for EV, sustainable energy, technology hardware, and military equipment.
Why the name “rare” earth: Even though rare earths are relatively abundant in the Earth’s crust, they are incredibly challenging in practicality to mine, process, and refine.
For one, they are found in immensely low concentrations and dispersal density, making truly economically viable deposits rare. This is why countries such as China and Australia tend to have chokeholds over the supply chains of these minerals. Additionally, for these minerals to truly be viable for industry use cases, they must be separated, processed, and refined into usable concentrates. This is technologically challenging, chemically dangerous, and financially costly, adding to the challenges of their supply chain.
Visualizing the Rare Earth Supply Chain by MacroBytes
Rare Earths → From Rock to Hardware
A simple pipeline for four critical elements powering EVs, wind, electronics, and defense.
Neodymium (Nd)
🗺️ Found
Light REE in ores like bastnäsite. Major sources: Mountain Pass (CA, USA), Mt Weld (AU), China.
⚗️ Process → Refine
Crush & concentrate → chemical leach → solvent extraction to separate → Nd oxide → metal → NdFeB alloy.
🚚 Ship
Oxide/metal → U.S. magnet plants (e.g., Fort Worth, TX) or allied plants → finished magnets to OEMs.
🏭 U.S. Buyers & Uses
- Automakers/EV: traction motor magnets (e.g., GM supply via U.S. magnet lines).
- Defense/Electronics: actuators, guidance, HDDs.
Praseodymium (Pr)
🗺️ Found
Often produced with Nd as NdPr from bastnäsite deposits (U.S., AU, CN).
⚗️ Process → Refine
Same separation train as Nd; co-separated to NdPr oxide → reduced to metal → alloyed for magnets.
🚚 Ship
NdPr oxide/metal → U.S. magnet manufacturing (TX) → motor/generator suppliers.
🏭 U.S. Buyers & Uses
- EV & Wind: permanent magnets in motors/generators.
- Industrial motors: automation drives.
Dysprosium (Dy)
🗺️ Found
Heavy REE, often from ion-adsorption clays and select deposits (CN; AU/US projects emerging).
⚗️ Process → Refine
More complex separation (multiple extraction stages) → Dy oxide → small % added to NdFeB for high-temp stability.
🚚 Ship
Dy oxide/metal → alloying at magnet plants → shipped in finished magnets to OEMs/defense primes.
🏭 U.S. Buyers & Uses
- Defense: high-temp motors, actuators, guidance.
- Wind/EV: magnets that must hold strength at heat.
Cerium (Ce)
🗺️ Found
Most abundant REE; occurs with other light REEs (U.S., AU, CN).
⚗️ Process → Refine
Concentrate → chemical treatment → solvent extraction → Ce oxide/chemicals for catalysts & polishing.
🚚 Ship
Shipped as chemicals/oxides to catalyst makers, glass & polishing suppliers.
🏭 U.S. Buyers & Uses
- Auto & Refining: catalytic converters, FCC catalysts.
- Glass/Optics: glass polishing powders.
🇺🇸 U.S. Mine → Magnet
MP Materials mines & separates at Mountain Pass (CA), and is building an integrated NdFeB magnet facility in Fort Worth, TX, with an offtake to GM for EV motors.
🇺🇸 U.S. Magnet Maker
Noveon Magnetics (San Marcos, TX) manufactures rare-earth magnets, including via recycling; recent supply deals into industrial & defense motor markets.
🤝 Ally Processing
Lynas Rare Earths (AU) is developing U.S. processing capacity in Texas to expand heavy/light REE separation for U.S. supply chains.
Key Takeaways: In short, rare earth minerals provide significant use cases to a variety of industries. Additionally, due to their dynamic molecular structures and use cases in extreme environments, they have increasingly become central to high-tech sectors of defense, making control over their supply chain crucial to national security.
Sources:
US-Australia Rare Earths Deal Explained: https://www.reuters.com/world/china/us-australia-rare-earths-deal-is-start-wont-shake-china-dominance-any-time-soon-2025-10-21/
What are rare earth metals and why are they in demand: https://www.reuters.com/markets/commodities/what-are-rare-earth-metals-why-are-they-demand-2025-02-26/?
US Government Info On Rare Earths: https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-rare-earths.pdf?
Rare Earths Statistics and Information: https://www.usgs.gov/centers/national-minerals-information-center/rare-earths-statistics-and-information USGS
Mineral Commodity Summaries: https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-rare-earths.pdf U.S. Geological Survey
U.S. Department of Energy: https://www.energy.gov/eere/amo/articles/critical-materials-supply-chain-white-paper-april-2020 energy.gov
Rare-Earth Element Sources, End-Use Demand Trends: https://www.usgs.gov/publications/rare-earth-element-sources-end-use-demand-trends-and-hydrometallurgical-separations USGS
Conventional Rare Earth Element Mineral Deposits: https://pubs.usgs.gov/publication/70240773 U.S. Geological Survey
* All visualizations were created by MacroBytes itself - data is sourced as needed when collected from external sources but visualized by MacroBytes
