Rare Earth Elements (REE) are a group of 17 elements in the periodic table. They are categorised as light rare earth elements (LREE) and heavy rare earth elements (HREE). While REEs are relatively abundant in Earth’s crust (cerium is the 25th most abundant element at 68 parts per million, as abundant as copper), they are typically not often found in concentrations high enough to be extracted economically due to their geochemical properties. The relative dispersion of these elements throughout the crust is what led to their name.

Their unique fluorescent, conductive, and magnetic properties have made them crucial to the development of modern technologies, and they play a vital role in various industries ranging from electronics to renewable energy. Their specialised applications in aerospace and defence technologies also makes rare earth elements important for national security.

As the demand for REEs continues to grow, so does the geopolitical significance surrounding these elements. This article delves into the complex world of the geopolitics of rare earth elements, examining the global dynamics, strategic implications, and potential challenges faced by nations in securing and leveraging these valuable resources.

Environmental concerns about mining for rare earth elements

The extraction and processing of rare earth elements often come with significant environmental and social challenges. Some mining practices have led to pollution, ecosystem degradation, and human health concerns. Increasing awareness of the environmental impacts has prompted countries to adopt more stringent regulations and pursue sustainable mining practices. The sustainable extraction and responsible management of REEs are crucial for the long-term viability of these resources.

Geopolitics and history of rare earth element production

The US supplied the vast majority of the world’s REEs until the late 1980s. Increasing environmental regulation of REE mining in the US, as well as increasing Chinese production, led to the US capitulating production to China as it could not compete with lower labour costs and the lack of environmental regulation that characterised Chinese rare earth mining.

Since then, China has dominated the global production of REEs, accounting for up to 90% until 2010 and decreasing to around 60 to 80% of the world's supply today. Estimates vary due to illegal and undocumented mining. China also accounts for the world’s largest reserves of REE, with 44Mt recorded as of 2022, comprising ~38% of total global reserves. In addition, the majority of global REE production occurs in China, which has more than 85% of the world’s processing capacity and more than 90% of permanent magnet production. 

This concentration of the rare earth supply chain in China has allowed China the ability to exert both geopolitical and economic influence. One instance was in 2010, when China cut exports of REEs to the world by 40%, which sent prices skyrocketing temporarily.

To mitigate the risks of relying on only a handful of countries with the majority of the world’s REE reserves and processing capabilities, countries have made efforts in the last decade to diversify supply chains by establishing local REE refining capability, exploring for domestic reserves and considering alternative supply through partnerships with other countries.

Australia has emerged as a key player in the emerging supply chain for rare earths, with companies such as Lynas Rare Earths Ltd (ASX:LYC) commencing operations at Mount Weld, Western Australia, and constructing one of the world’s largest single rare earths processing plants in Malaysia.

Ark Mines Ltd

Ark Mines Ltd (ASX:AHK) is a multi-commodity near-term project developer in Australia. The Company's focus is on projects with low start-up costs, near-term development potential, and exploration opportunities, primarily in critical minerals like rare earths, nickel, and copper.

Ark Mines has recently acquired the 'Sandy Mitchell' rare earths project in North Queensland. With an advanced status, the project spans a significant exploration area and exhibits all eight critical Light Rare Earths elements and eight of the nine Heavy Rare Earths. Ongoing activities involve a comprehensive review, drill program, and application for a Mining License, highlighting the project's potential in the rare earths market.