VINACHEM

Both light and heavy rare earth metals are versatile and play a vital role in manufacturing electronics.The 17 elements that make up the group of rare earth metals are diverse in their applications and market dynamics. They are often broken up into two categories according to their atomic weight: light and heavy. Only scandium falls outside this categorization system.

Overall, the different rare earth metals play a huge role in the development of various technologies. They are often used in electronics like laptops and smartphones, as well as spacecraft and missile weaponry. Growing demand for batteries and green technology is adding to their importance and versatility as well.

Light rare earth metals

All rare earth metals are part of a chemical group called lanthanides, and light rare earths represent the lanthanides with the lowest atomic numbers. The light rare earths are cerium, lanthanum, praseodymium, neodymium, promethium, europium, gadolinium and samarium.

Of the light rare earth metals, neodymium is considered one of the most critical. It is used in everything from mobile phones and electric cars to medical equipment. Neodymium is also the main light rare earth used in the creation of permanent magnets, which are heavily used in data storage systems and wind turbines.

Praseodymium is another significant light rare earth metal. It is used in alloys with magnesium to form aircraft engines, and it also finds use in the film industry for studio lighting and other projects. Like many rare earth metals, praseodymium plays a role in creating permanent magnets.

Heavy rare earth metals

Heavy rare earth metals are defined by their higher atomic weights relative to light rare earths. They are less common, and some elements within the group are facing shortages as demand outpaces supply. That typically makes them more valuable than light rare earths, though they also have smaller markets. The full list of heavy rare earths is dysprosium, yttrium, terbium, holmium, erbium, thulium, ytterbium, yttrium and lutetium.

Dysprosium, yttrium and terbium are considered critical in the heavy rare earth metals group as they face low supply and increasing importance in the development of clean energy technologies. Like the light rare earths, heavy rare earths also play a key role in other technology, including hybrid cars, fiber optics and medical devices.

Dysprosium is used in tandem with neodymium in magnets that are vital to modern tech and renewable energy. In addition, dysprosium oxide is used in nuclear reactors to help cool fuel rods to keep reactions under control.

Terbium is used in TV screens and solid-state hard drives for data storage. Solid-state drives are heavily favored over conventional hard drives as they are faster and more reliable than conventional hard drives. Solid-state drives are now the default storage format for many laptops and personal electronics. For its part, yttrium has a variety of applications. It is used in TV screens, as an alloying agent and in the polymerization of ethylene.

The rare earth metals market

Chinese influence

The light and heavy rare earths markets are both dominated by China. In 2020, China produced the most rare earth metals at 140,000 metric tonnes (MT). The second largest producer was the US with only 38,000 MT.

This level of control by Chinese suppliers has made it extremely difficult for other producers to viably mine and sell rare earths. Rare earths supply in the US currently comes only from the Mountain Pass mine in California, which went back into production in Q1 2018 after being put on care and maintenance in Q4 2015.

High production, low labor costs and relaxed environmental regulations have allowed China to control the pricing and market viability of rare earth metals. Chinese producers must adhere to a quota system for rare earths production, which is a response to China’s longstanding problems with illegal rare earths mining.

The half-year quota for rare earth mining in 2021 was set at 84,000 MT (up 27.2 percent from the previous year), while the quota for smelting and separation was 81,000 MT (up 27.6 percent from the previous year). This system actually led China to become the world’s top importer of rare earths in 2018.

Investment landscape

Investing in rare earth metals is a challenge due to China’s dominance. That said, global demand for rare earths is expected to rise as the clean energy, electric vehicle and consumer electronics industries gain importance.

Even as regulations and demand create a more favorable environment for rare earths, investors should be specific about their research into the metals — treating the rare earths category as a single group or even as lights and heavies does not provide enough context about an element’s investment potential.  - INN -