Rare Earth Metals: Unveiling Opportunities for Investors

Modern technology relies heavily on rare-earth metals for its functioning. A car, for instance, contains many electric motors and sensors using permanent magnets made up of neodymium-iron-boron (NIB).

But mining and processing rare earths is a difficult business, with volatile bubble markets having formed around rare earth stocks before (such as Molycorp's disastrous 2011 IPO that ultimately resulted in its bankruptcy), as new sources of supply take time to develop.

1. Neodymium

Neodymium and praseodymium are rare earth metals used extensively in high-powered magnets that power electric vehicles and many clean energy technologies like wind turbines. Neodymium holds 14% of the global market for rare earths; investors can gain exposure through an exchange-traded fund like VanEck Vectors Rare Earth/Strategic Metals ETF (REMX), or by supporting companies developing REE projects such as Australian Lynas Corporation Limited's (ASX:LYC / OTC US:LYSCF), who produces its own neodymium/praseodymium at their plant in Malaysia.

NdFeB (neodymium-iron-boron) magnets, the mainstays of modern electric motors and generators, require many rare earths for production. Furthermore, these magnets can also be found in solid state YAG lasers, mobile phone loudspeakers and microphones, car windshield wipers, computer hard drives, wind turbines and electric guitars - among many other applications.

Adamas Intelligence predicts REE demand will see an annual compound annual growth rate of 9% by 2030.

Investors should target REE mining corporations with proven profitability records and strong prospects of creating new deposits. MP Materials Corp (NYSE:MP) is the largest producer in the Western Hemisphere, specializing in producing high-purity neodymium and praseodymium oxide, heavy rare earth concentrate and lanthanum and cerium oxides and carbonates. Molycorp acquired Molycorp's assets for US$1.47 billion in 2020. At present, its focus is mainly on producing in China but plans include building facilities both there and in Australia. For best results when purchasing rare earth oxides this way experts advise purchasing them in conventional batch sizes in their original packaging for ease of transportation and processing.

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2. Praseodymium

Praseodymium (Pr) is one of the rare earth elements with the highest melting point, boasting a simple hexagonal crystal structure and can be found throughout space, on meteorites, Earth's crust, oceans and surface water, alongside other rare earth elements neodymium and cerium. First discovered by C. A. von Welsbach in Austria in 1885 - its name derives from Greek "praseios didymos," meaning green twin.

Praseodymium is an indispensable ingredient of permanent magnets used in motors and wind turbines, as well as being an alloy component in lighter flint carbon electrodes. Furthermore, Praseodymium serves as a catalyst and to polish glass. Furthermore, Praseodymium's soft silvery texture, malleability, ductility and very high magnetic field makes it more resistant to air corrosion than europium, lanthanum, neodymium and cerium; however all rare earth elements should be stored either under mineral oil or sealed plastic covers for best performance.

As mobile phone technology worldwide becomes increasingly essential, rare earths have become a sought-after investment option. Composed of four main metals - neodymium, samarium, scandium and yttrium - rare earths play key roles in smartphones, digital TVs, hybrid cars and fiber-optic internet cables which carry long distance calls as well as streaming video globally.

Roskill's commodity consultancy reports that non-Chinese rare earth production is predicted to surge significantly over the coming years as existing producers expand capacity and new projects in Australia, Russia, and Africa receive approval. This could decrease China's market dominance or allow other producers to balance out rising industrial demand more evenly. American Elements offers short and long term storage of Praseodymium bars as well as coins for funds, currency reserves, ETFs and private investors who wish to gain exposure to commodity demand fluctuations through global praseodymium prices.

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3. Lanthanum

The global lanthanum market is driven by growing demand for nickel-metal hydride batteries found in hybrid cars, fluidic catalytic cracking (FCC) catalysts, hydrogen storage solutions and battery & non-battery alloy applications as well as electrical & electronics applications. Unfortunately, due to an absence of universal directives regarding application of lanthanum it may restrain growth during this forecast period.

Lanthanum is one of the more cost-effective rare earth elements and a soft silvery-white metal with malleability that allows it to be cut with a knife. However, its highly reactive properties make it one of the more reactive lanthanides, oxidizing quickly in air while dissolving quickly in dilute acids; with hydrofluoric acid producing a protective layer of lanthanum fluoride (LaF3) on its surface.

Even in light of global economic slowdown caused by COVID-19 pandemic, growth of the lanthanum market should remain robust due to rising consumption for hybrid vehicle production. FCC catalysts segment is projected to comprise more than 35% of total revenues by 2026.

Furthermore, efforts to reduce greenhouse gas emissions will drive demand for rare earth minerals used in electric motors with neodymium and dysprosium magnets, while solar energy could drive increased use of terbium and cerium wind turbine magnets. Gholz notes that while national security industries cannot go without these resources, other large industries may find ways to use them less frequently or find alternatives; such innovations could help mitigate any future shortages of rare earth minerals.

4. Cerium

Cerium (Ce) is an element with symbol C and atomic number 58. It is a soft, silvery metal which readily oxidizes in air, named for the Roman goddess Ceres (itself named after Ceres). Cerium makes up around 0.0046% by weight of Earth's crust by weight and can be found in various minerals; allanite contains Ce, La, Th, Nd, Y)2(Al, Fe)3(SiO4)3(OH); monazite contains Ce, La, Th, Nd Y)PO4 while bastnasite contains Ce La Th Nd YCO3F while zircons (ZrSiO4) have greater concentrations.

Cerium finds widespread commercial application as a gas mantle material for arc welding applications, dopant in yttrium aluminum garnet phosphors used in CRT TV screens, fluorescent lamps, and white light-emitting diodes, ferrocerium lighters for its pyrophoric properties, as well as various applications in CRT television screens and fluorescent lamps.

Companies and the US Department of Energy's Critical Materials Institute are exploring new ways of using cerium. One idea involves using cerium and palladium together to catalyze the conversion of cyclohexanone into an ingredient used for nylon manufacturing.

This report on the global Cerium Oxide market provides a detailed examination, with key insights into regional trends and forecasts. It equips stakeholders with reliable market information that allows them to identify opportunities, formulate effective business strategies, and stay ahead of competition. In addition to offering insights into growth rates and profitability analysis of the Cerium Oxide industry, this report features SWOT analyses as well as competitive landscape data that profiles key players with their strategies; market growth rates; as well as an in-depth SWOT analysis for all of its major segments.

5. Gadolinium

Gadolinium (Gd) is an eighth member of Row 6 in the Periodic Table and sits between europium and terbium as well as above curium in terms of location in Row 6. It is a malleable and ductile rare-earth metal with the highest valence electron concentration among all of the lanthanides, making it highly reactive while simultaneously being highly magnetic above its Curie point; furthermore it ferromagnetically magnetizable which boasts the largest magnetic moment among rare-earth metals.

Gadolinium, like its fellow lanthanides, does not occur naturally as free atoms; rather it always exists as complexes with other elements. Gadolinium can be extracted from minerals like monazite and bastnasite through ion exchange and solvent extraction techniques; production can also occur by reacting anhydrous gadolinium fluoride with metallic calcium to produce this element.

Major applications of Gadolinium D2 include acting as a host for green phosphors in color television picture tubes and scintillators used for X-ray tomography, scintillator material used in microwave applications and magnetic contrast agents in magnetic resonance imaging (MRI). Furthermore, its isotope, 157Gd has the largest thermal neutron capture cross section among all known stable isotopes, making it useful in shielding and control rods used with nuclear reactors.

Gadolinium does not pose any health issues at the levels found naturally in both the environment and human bodies, such as excreting urine through excretory systems into wastewater-treatment plants without being affected, before finally passing into aquatic ecosystems through wastewater-treatment plants unaffected. Toxicity for gadolinium salts ranges from low-moderate, and pose no threat to plants or animals in aquatic environments; no reports exist of occupational exposure leading to any other than pneumoconiosis as an adverse health consequence.