Introduction
Rare earth elements (REEs) refer to a group of 17 metals that have unique magnetic, catalytic, and luminescent properties. Despite their name, most rare earths are relatively abundant in the earth‘s crust. However, they rarely occur in concentrated forms that can be economically mined. REEs have become essential across a wide range of technologies including phones, computers, batteries, catalysts, magnets and more. Global demand for rare earths is projected to grow rapidly in the coming years, especially with the expansion of electric vehicles and renewable energy.
The rare earth industry has been dominated by China for decades, which produces over 60% of the global supply. However, in recent years, other major players have emerged across Australia, North America and Europe. Vertical integration, proprietary technology, geographic diversification and strategic partnerships are key factors that have enabled the largest companies outside China to gain market share. This article profiles the 5 biggest non-Chinese rare earth companies leading the industry today.
Overview of the Rare Earth Industry
Before analyzing the major players, it helps to understand the current rare earth industry landscape:
- The global rare earth market was estimated to be around $5 billion in 2021 and is forecast to grow at 9% CAGR to reach $15.5 billion by 2030.
- Demand is surging from electric vehicles, wind turbines, consumer electronics as well as defense applications like jets, missiles and radars which rely on rare earth magnets and alloys.
- China has dominated production over the past 40 years and still controls 60-70% of global output. However China‘s export restrictions and focus on growing domestic consumption is creating supply uncertainties.
- Very few non-Chinese companies have achieved integrated operations from mining to separation/processing to producing refined rare earth oxides, metals and magnets. This is starting to change.
- Key customer markets are in East Asia, Europe and North America which aim to secure supplies from outside China through major investments in rare earth projects.
Now let‘s analyze the 5 non-Chinese firms leading the charge to challenge China‘s monopoly over the rare earth supply chain…
1. Lynas Rare Earths
Headquartered in Australia, Lynas Rare Earths (Lynas) is the second largest global producer of refined rare earth materials outside China.
Some key facts about Lynas:
- Revenue in FY 2022 was AUD 730 million with net profit of AUD 273 million
- Operates the Mount Weld mine in Australia, considered one of the world‘s highest grade rare earth deposits
- Processes rare earth concentrates from Mount Weld at its Lynas Advanced Materials Plant (LAMP) in Malaysia
- Produces ~10-15% of global rare earth output, specializing in NdPr oxides used widely in magnets
- Recently signed deals with U.S. and Japanese partners to construct new separation plants in America and Australia to diversify its supply chains
Lynas aims to grow its capacity to meet rising demand in major markets like Japan, Europe and the U.S. It is collaborating closely with partners and governments for capital funding required for expansion projects. Lynas is well positioned thanks to its high grade upstream resource coupled with technically advanced midstream separation capabilities.
2. MP Materials
MP Materials (MP) operates the Western Hemisphere‘s largest rare earth mining and processing facility in California.
Key facts on MP Materials:
- 2021 revenue was $331 million with 2021 net income at $135 million
- Its Mountain Pass mine is estimated to hold 36% of known U.S. rare earth reserves
- Supplies ~15% of global rare earth content; specializes in cerium, lanthanum and neodymium
- Partnering with GM to boost capacity for supplying magnet-grade REOs used in EVs by 2023
- Plans to invest $700M by 2025 into scaling its fully integrated operations from mining to separated REOs
Backed by major institutional shareholders, MP Materials is executing an ambitious strategy focused on technology/process upgrades and downstream supply chain expansion. With strong bipartisan political support in the U.S., MP is positioned to reduce foreign reliance for domestic rare earth requirements in coming years.
3. Neo Performance Materials
Neo Performance Materials (Neo) is a leading processor and supply chain manager of rare earth specialty materials outside China.
Details on Neo‘s rare earth business:
- 2021 revenue was $604 million with net income of $29 million
- Operates advanced separation facility in Sillamae, Estonia along with multiple magnesium alloy production plants
- Specializes in magnetic powders, rare earth phosphors and fuel cell materials using all major rare earths
- Supplies high value rare earth alloys and magnets to automotive, electronics, lighting industries
- Has long-term supply agreements with key customers across Europe, China, South Korea, U.S.
Under seasoned leadership, Neo has adopted an asset light model focused on midstream separation of rare earths coupled with production of specialized alloys and magnets. By catering to diverse industries globally, Neo has emerged as one of the most profitable rare earth players outside China.
4. Iluka Resources
Iluka Resources (Iluka) is Australia‘s prominent mineral sands miner and producer of zircon, titanium and rare earth oxides.
Iluka‘s place in rare earths:
- 2021 revenue was $1.3 billion with net profit of AUD 190 million
- Leading producer of the heavy rare earths used in specialty alloys and catalysts
- Mines rare earth mineral monazite from its Eneabba operation in western Australia
- possesses technical expertise across the entire REE processing value chain
- Produced ~5k tons of rare earth oxides in 2021; plans to boost to 10k tons per year
Although not a pure play rare earth company, Iluka is an important player thanks to its production scale and technical capabilities around processing and refining monazite. Iluka provides a secure source of heavy rare earth feedstock from Australia to key customers globally.
5. Energy Fuels
Energy Fuels (Energy Fuels) is making a foray into rare earths leveraging its existing uranium production infrastructure and mineral properties.
Energy Fuels‘ rare earth expansion:
- 2021 revenue was $7.7 million; net loss of $30 million
- Operates the only fully-licensed and operating conventional uranium mill in the U.S.
- Leveraging existing White Mesa mill in Utah to process rare earth ores
- Exploration across various mineral properties and collaborations to source rare earth feedstock
- Plans to start commercial separated rare earth production within 12-18 months
Although not yet a commercial producer, Energy Fuels is considered a future player in U.S. rare earth supply leveraging its existing licenses, assets and expertise. Energy Fuels aims to provide a fully integrated, low cost domestic supply chain for magnet rare earth oxides within 2-3 years. Its expansion will be partly funded through government grants and strategic partnerships.
Competitive Landscape
The global push to secure reliable rare earth supply chains and reduce dependence on China is reshaping market dynamics. Governments are partnering with domestic companies via funding and favorable policies. End-users in auto, electronics, defense sectors are signing long-term contracts with suppliers. While China will retain dominance due to lower costs, these major non-Chinese players are slated to grow share.
However, expansion plans for most companies are multi-year efforts contingent on building infrastructure, raising capital and mastering technical complexity around extraction, separation and processing. Mid-tier players also face competitive risks relative to China and even emerging suppliers across Africa, Canada and Vietnam. Ultimately, strategic vision, operational excellence and end-market connections will separate winners from the rest.
Future Outlook
By 2025-2030, the rare earth industry could look quite different than the landscape today. While China may still supply ~60% of raw materials, they will likely have reduced shares downstream in certain refined rare earths and magnets. The major players profiled here will control a reasonably larger proportion of the non-Chinese market across mining, separation and high-value magnet/alloy output.
Consolidation is also probable with the potential for mergers or acquisitions among smaller miners by larger corporates or investment groups. Vertical integration will continue from upstream concentrate production through to intermediate refined oxides to downstream permanent magnets used for EVs, wind power and defense systems. This is essential for improved margins, supply security and further technology advancements around recycling and processing.
In summary, while China will retain dominant position, the rare earth supply paradigm is undergoing a structural shift with these non-Chinese companies at the forefront supporting regional supply chains for key global industries.
