Rare Earth Elements
Why the future depends on them
Seven chapters about 17 elements that power electric vehicles, wind turbines, and guided missiles — and the country that controls them almost exclusively.
David Navrátil · Money, Rates & Prosperity · Chief Economist at Česká spořitelna
What are rare earths?
A group of 17 metallic elements — the lanthanides plus scandium and yttrium. Paradoxically, they are not geologically rare. Cerium is more abundant in the Earth's crust than copper.
What is "rare" is the ability to economically mine, chemically separate, and process them into industrially usable materials.
Neodymium
Electric vehicle motor
Dysprosium
Magnet heat resistance
Terbium
Guidance systems
Samarium
Satellites in orbit
Geologically common, strategically critical.
The problem is not finding the ore — the problem is turning it into a magnet.
One country,
total control
China doesn't just dominate mining — its dominance grows with each processing step. From ore to finished magnet, its share rises from 69% to over 90%.
Mining
Refining
Magnets
Terbium
The real dependency is not in the mines, but in the refineries and magnet factories.
The gap is widening
Electromobility and wind energy are driving demand for magnetic rare earths up at a pace of 7–13% per year. But supply outside China cannot keep up.
Supply vs. demand for magnetic rare earths (NdPr equiv.)
Source: IEA, USGS 2025, proprietary estimates · Analysis: David Navrátil / PPP
A structural deficit is expected from 2026. New non-Chinese projects will take 5–10 years to reach full capacity.
China needs
more for itself
China is not just the largest producer — it is also the largest consumer. Its domestic demand is growing so fast that the volume available for export is declining. Fewer rare earths for the rest of the world, even without any export restrictions.
China's rare earth balance
Source: USGS 2025, MII China, proprietary estimates · Analysis: David Navrátil / PPP
Not price.
Availability.
Even a threefold price increase adds less than 1% to the price of an electric vehicle.
| Product | Rare earth share | Impact of 3× price increase |
|---|---|---|
| BEV sedan | 0.2–0.4% | +$150–300 (+0.5%) |
| BEV SUV dual | 0.3–0.5% | +$300–600 (+0.7%) |
| Offshore turbine 12MW | 0.5–0.8% | +$150k–250k (+1.2%) |
| Industrial robot | 0.1–0.3% | +$200–400 |
| F-35 fighter jet | <1% | Irrelevant |
The real risk is that supplies simply stop flowing — due to export controls, geopolitical tensions, or a natural disaster in a single province.
There is a way out
There is no quick fix. Building an alternative supply chain will take at least a decade. But steps are being taken:
New mines and refineries
Australia, Canada, Sweden, and the US are building capacity. But most projects won't reach full production before 2030.
Recycling
Neodymium and dysprosium can be recovered from magnets in electronics and scrapped vehicles. Currently covers under 1% of demand, but growing.
Substitution
Ferrite magnets or magnet-free motors can reduce dependency, but at the cost of lower performance and higher weight.
EU Critical Raw Materials Act
Europe has set targets: 10% mining, 40% processing, and 25% recycling from domestic consumption by 2030.
Want to know more?
Explore detailed data and analyses in the interactive dashboard.
David Navrátil · Česká spořitelna · Strategic Research & Insight · 2025