Skip to main content

Reshaping the rare earths supply chain amid soaring demand and strategic risks

Published by , Editor
Global Mining Review,


The rare earths market poses both challenges and opportunities. Ramon Barua, Aclara Resources, outlines how, in 2025, investors and industry leaders need to consider the complex interplay of demand growth, geopolitical possibilities, and technological advancements.

The rare earth elements (REE) supply chain is entering a new phase of development, shaped by volatile market dynamics, surging global demand and significant geopolitical shifts. For the first time, the market is seeing signs of price decoupling from China, which has historically dominated REE supply chains. This new price dynamics signal a structural shift, especially for heavy rare earth elements (HREEs) such as dysprosium (Dy), critical to technologies, such as high-performance magnets, underpinning the clean energy transition.

Rising demand and price forecasts

Argus Media’s latest market projections highlight a stark reality for the REE industry. It forecasts that by 2034, Dysprosium prices could surge to US$1100/kg of rare earth oxide (REO), representing a 340% increase from today’s rates. Under a scenario factoring in an ‘incentivised price’ premium – in which pricing moves independently from the Chinese reference – dysprosium could reach US$1400/kg, a 450% jump over current levels. This outlook underscores the escalating demand and constrained supply, with a projected shortfall of 2823 t of dysprosium by 2034.

The market forces driving these price projections are grounded in the rapid expansion of the electric vehicle (EV) sector and the emergence of new markets, such as passenger drones and humanoid robotics. EV sales alone are expected to increase by more than 220% by 2034.

High performance permanent magnets and their growing significance

High performance permanent magnets, which depend heavily on REEs like dysprosium, play an essential role in modern, clean technologies due to their unique properties. Their high strength, compact size, and energy efficiency make them indispensable for applications that require performance in high-temperature settings, such as electric motors. These properties not only improve operational efficiency, but also contribute to longer lifespans in devices ranging from EVs to robotics.

The increasing reliance on permanent magnets highlights the strategic necessity of a stable and diversified dysprosium supply, particularly as demand for green technologies expands.

Supply chain risks and geopolitical realities

The rare earth supply chain is currently facing a dual challenge: increasing demand and heightened supply chain vulnerability. China, which holds a significant share of both REE mining and processing capabilities, has shown a willingness to leverage its control over these resources. Recent export controls on critical elements like antimony, germanium, and gallium have demonstrated how quickly prices can spike when supply is restricted. A similar scenario for dysprosium has already impacted industries across the globe, leading to price volatility and supply disruptions.

The US Department of Energy (DOE) recently underscored dysprosium’s criticality in its Critical Materials Assessment, emphasising its importance for energy security and clean energy goals. The report highlighted dysprosium as the element with the highest supply risk, making it crucial to diversify sourcing from multiple countries.

The role of new projects and technologies in mitigating risk

Projects in regions like South America, including Chile and Brazil, are gaining attention for their potential to supply critical rare earth materials while reducing environmental impact. Technological advancements in mining and extraction are also enabling more sustainable and efficient REE production.

For instance, Aclara Resources, a rare earths company with projects in Brazil and Chile, has developed a patented extraction process designed to minimise environmental impact. This innovative approach reduces water usage by recirculating 95% of the water involved and eliminates the need for a tailings dam. In Chile, Aclara has also partnered with the regional water utility to purchase treated wastewater that would otherwise be discharged into the sea. This carefully managed water source enables the company to operate without relying on natural freshwater supplies – a critical advantage in a country grappling with water scarcity.

Outlook for investors and industry leaders

Looking towards 2025, the rare earths market poses both challenges and opportunities. Investors and industry leaders need to consider the complex interplay of demand growth, geopolitical possibilities, and technological advancements.

The outlook for dysprosium and other HREEs suggests a critical need for a resilient, diversified supply chain that can withstand potential disruptions. By investing in new REE projects, exploring sustainable mining technologies, and supporting a geopolitically balanced supply chain, stakeholders can play a key role in shaping the future of the clean energy transition.

As industries and nations alike push toward cleaner energy, the rare earth market must respond with innovative solutions and diversified supply chains to meet these demands sustainably. The future of clean energy technology – and the broader green economy – depends on securing the rare earth materials that make these innovations possible.

Read the article online at: https://www.globalminingreview.com/mining/15012025/reshaping-the-rare-earths-supply-chain-amid-soaring-demand-and-strategic-risks/

You might also like

 
 

Embed article link: (copy the HTML code below):