2020 ended on a positive note for the rare earths-mining sector. Expectations for higher demand and shorter supply have combined to create an optimistic outlook for the future of rare earths.
Rare earth metals neodymium and praseodymium were bright spots as interest in high-tech products like electric vehicles boosted attention from companies and investors.
With supply chain worries rising in the rare earth elements space, it’s worth looking at which countries have the highest reserves. While in many cases the world’s major rare earths-mining countries hold large amounts of reserves, some countries have low rare earths production and high reserves.
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Case in point — mines in Vietnam produced only 1,000 metric tons (MT) of rare earth elements in 2020, but the nation’s reserves are the second highest in the world. It’s possible that countries like this could become bigger players in the space in the future.
On that note, here’s an overview of rare earth reserves by country, with a focus on the seven countries whose reserves are over 1 million MT. Rare earth reserves by country data is taken from the US Geological Survey’s 2021 report on rare earths.
1. China
Reserves: 44 million MT
Unsurprisingly, China has the highest reserves of rare earth minerals at 44 million MT. The country was also the world’s leading rare earths producer in 2020 by a long shot, putting out 140,000 MT.
Despite its top position, China remains focused on ensuring that its reserves remain elevated. Back in 2012, the Asian nation declared that its rare earths reserves were declining; it then announced in 2016 that it would raise domestic reserves by establishing both commercial and national stockpiles.
The last decade has also seen the country hone in on illegal rare earths mining, taking steps such as shutting illegal or environmentally non-compliant rare earth mines and limiting production and exports. China’s stern and effective measures have cleaned up its supply chain significantly, although it continues to improve regulation and supervision.
It’s worth noting that China’s dominance in both rare earth elements production and reserves has caused problems in the past. Prices surged when the country cut exports in 2010, resulting in a rush to secure supply of the minerals elsewhere. While that situation has since been resolved, the recent trade war between the US and China has reignited worries about the country’s position.
2. Vietnam
Reserves: 22 million MT
Vietnam’s rare earth mineral reserves are large and stand at 22 million MT. The country reportedly hosts several rare earth materials deposits with concentrations against its northwestern border with China and along its eastern coastline. The majority of rare earths in the country can be found in primary ore deposits with a smaller amount located in coastal placer deposits.
Vietnam’s rare earths production was small in 2020 at 1,000 MT, but that’s up by 66 percent over its 2018 output of 400 MT. Vietnam is interested building its clean energy capacity, and is said to be looking to produce more rare earths for that reason.
3. Brazil
Reserves: 21 million MT
Brazil was not a major producer of rare earths in 2020, with production clocking in at just 1,000 MT. However, with reserves of 21 million MT, the country takes third place globally. A rare earths deposit worth US$8.4 billion was discovered in 2012 in Brazil, although not much has come out of the discovery. With that said, it’s easy to see why the country’s reserves are so high.
4. Russia
Reserves: 12 million MT
Russia produced 2,700 MT of rare earths in 2020, more than Brazil and Vietnam, but its reserves are lower at 12 million MT. The Russian government recently announced plans to invest US$1.5 billion in order to compete with China in the rare earths market.
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5. India
Reserves: 6.9 million MT
India’s rare earths reserves sit at 6.9 million MT, and it produced 3,000 MT of rare earths in 2020. However, there are reasons to believe the country’s rare earths industry has potential. India has nearly 35 percent of the world’s beach and sand mineral deposits, which are significant sources of rare earths.
6. Australia
Reserves: 4.1 million MT
While Australia was the fourth largest rare earths-mining country in 2020 at 27,000 MT of production, it has only the sixth largest reserves in the world. Currently its reserves stand at 4.1 million MT.
Rare earths have only been mined in Australia since 2007, but extraction is expected to increase moving forward. Lynas (ASX:LYC,OTC Pink:LYSCF) is currently operating the Mount Weld mine and concentration plant in the country; it also operates a rare earths refining and processing plant in Malaysia. The company is considered the world’s largest non-Chinese rare earths supplier.
7. United States and Greenland
Reserves: 1.5 million MT
The US and Greenland tied for seventh top rare earths reserves. But while the US reported the second highest output of rare earths in 2020 at 38,000 MT, Greenland reported no production for the year.
Rare earths mining in the US now happens only at California’s Mountain Pass mine. In February 2021, President Joe Biden signed an executive order aimed at reviewing shortcomings in America’s domestic supply chains for rare earths, medical devices, computer chips and other critical resources. The next month, the US Department of Energy announced a US$30 million initiative to research and secure domestic supply chains for rare earths and battery metals such as cobalt and lithium.
In a tale of two rare earth reserves, Greenland’s newly elected government ran on a platform that included canceling the island nation’s only (and highly controversial) rare earths-mining project.
Global rare earths reserves
In total, global rare earths reserves amount to 120 million MT. With demand for rare earth minerals ramping up as hype about electric vehicles and other high-tech products continues in the mining sector, it will be interesting to see how the above countries contribute to supply in the future.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Should you invest in the rare earth market?
Read our outlook report this 2020!
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