Deutsche Bank Research Team: Report on Global Rare Earth Metal Production

Key Chapter Title List

1. Introduction to Rare Earth Metals: The "Vitamins" of High-Tech Industries
2. Escalating US-China Semiconductor Tensions and Rare Earth Competition
3. Latest Policy Developments in the EU and the US
4. China's Dominance in the Rare Earth Supply Chain and Recent Control Measures
5. Geographic Concentration and Diversification Challenges of Global Rare Earth Supply
6. Major Rare Earth Companies Outside China: MP Materials and Lynas
7. Sustained Drive for Rare Earth Demand from the Global Clean Energy Transition
8. Price Trends Influenced by Geopolitical Volatility
9. US Domestic Industrial Policy and Development Prospects for Rare Earth Processing and Recycling
10. Historical Event Timeline of Global Rare Earth Metal Production

Document Introduction

As tensions between the US and China in the semiconductor chip sector persist, competition over rare earth metals is intensifying, and supply chain risks are accelerating. Rare earth metals are regarded as the "vitamins" of contemporary high-tech industries. These 17 minerals exist in trace amounts in over 200 commercial, high-tech, and military defense products, serving as indispensable core materials for emerging technologies. Former US President Trump even referred to the demand for rare earths as the "21st-century gold rush," highlighting their strategic importance. Against this backdrop, rare earths and critical minerals have become a central focus in the escalating technology and trade war between Washington and Beijing.

This report systematically outlines the key actions recently taken by the European Union and the United States to reduce dependence on China. On March 25, the EU announced 47 new mineral projects, including 5 rare earth metal projects, aiming to achieve the 2030 targets set by its Critical Raw Materials Act: namely, reaching 10% extraction, 40% processing (separating rare earths from other minerals), and 25% recycling rates. The US also issued an executive order on March 20 aimed at boosting its critical and rare earth metal production capacity to enhance national security. The report also mentions developments during the Trump administration regarding accessing Greenland's mineral resources and exploring rare earth investment cooperation with Ukraine, indicating that resource competition has extended into the geopolitical strategic arena.

China has monopolized the rare earth supply chain since the early 21st century, processing 85%-90% of the world's rare earth metals and 100% of heavy rare earths. Recently, Beijing has taken further steps to protect its domestic rare earth industry, explicitly designating rare earths as "state property" and drafting regulations to strengthen control over the sector. This has heightened concerns among major consumer nations about supply chain security. Currently, the US and the EU rely on China for 70% and 39% of their rare earth imports, respectively.

Despite efforts by the US and Europe to promote supply chain diversification, they still face numerous challenges: the highly concentrated geographic distribution of rare earth resources (with just two countries holding over 70% of global reserves), high production and mining costs, and the environmental toll of processing. The report points out that the two largest rare earth companies outside China—MP Materials in the US and Lynas in Australia—remain years behind China in terms of progress. However, current US policies promoting critical mineral production are favorable for MP Materials.

Looking ahead, the global clean energy transition will continue to support rare earth demand. However, geopolitical volatility is expected to keep prices stagnant. In the US, although support from the Inflation Reduction Act for electric vehicles, batteries, and the recycling industry may wane, the Trump administration's renewed focus on establishing US dominance in rare earths and critical minerals is expected to inject development momentum into the processing and recycling sectors.

The report concludes with a historical event timeline of global rare earth metal production, detailing key milestones from China's implementation of rare earth export tax rebates in 1985, the suspension of foreign-invested rare earth exploration and mining permits in China in 1991, the closure of the US Mountain Pass mine in 2002 due to toxic waste leakage, China's production quota implementation in 2006, Lynas commencing operations at Mount Weld in Australia in 2007, China's removal of export quotas and tariffs in 2014, to the US reopening the Mountain Pass mine in 2018. This provides a clear historical context for understanding the evolution of the global rare earth production landscape. This analysis, based on data and insights from Deutsche Bank Research and the US Geological Survey (USGS), aims to provide policymakers, industry analysts, and geopolitical observers with an authoritative assessment of the risks and opportunities in the rare earth supply chain.