The story of rare earths began in Europe more than two centuries ago, in 1787 to be precise, when the Swedish lieutenant and chemist Carl Axel Arrhenius discovered a black mineral in Ytterby, a village located twenty kilometres north-east of Stockholm. What followed was a remarkable series of scientific discoveries and industrial developments based on what would come to be identified as a group of 17 chemical elements, known as rare earths, and the way this story unfolded would gradually lead to the current situation: an industry overwhelmingly dominated by China.
Today, rare earths are a key geopolitical tool. They have become a matter of national sovereignty, since they are essential to any developed economy, particularly in relation to the energy transition. For instance, these elements are used in the production of wind turbines, electric vehicles and consumer electronics. Within this context, it is therefore perfectly legitimate to ask the question: can Europe still position itself in the rare-earths sector?
Today, Europe is once again harnessing its expertise to develop a rare-earths industry that would allow it to break free, at least partially, from the Chinese monopoly, in the event of a geopolitical crisis.
A brief history of rare earths
Before they became essential to modern technologies, rare earths had many different uses. Initially employed for very specific purposes and in small quantities, their use has gradually been extended to more general, everyday products and on a larger scale.
Following the discovery of the "Ytterby mineral" in 1787, many European scientists contributed to identifying and progressively separating the various rare-earth elements. The first was Professor Johan Gadolin, who named the mineral "ytterbia" in 1794; the name was subsequently changed to "yttria", then "yttrium", as we now know it in the Periodic Table.
Other rare-earth elements were then gradually identified.
Alongside these discoveries, new industrial applications also began to emerge, again starting in Europe. For example, the Austrian Carl Auer von Welsbach separated neodymium and praseodymium in 1885 using fractional crystallisation, and also noted the strong luminescence of certain rare-earth elements.
Consequently, he went on to develop the "Auer" gas lamps, with mantles impregnated with cerium and thorium oxides, which revolutionised urban lighting in Europe in the first half of the 20th century. Applications also emerged in the field of medicine.
The discovery of the Mountain Pass deposit in the United States in 1949 was a major milestone. Mining operations at Mountain Pass began in 1952, initially on a small scale. However, the operations grew rapidly, eventually accounting for 70% of global rare-earth production in the early 1980s. This boom was driven by growing demand for rare earths, particularly europium, which, at the time, was used in cathode-ray tubes for television screens.
The development of the Chinese monopoly
This success did not go unnoticed in China, which, in the 1980s, also recognised rare earths as a strategic sector capable of driving the country's industrial development and national power. Consequently, Beijing implemented a proactive policy, based on public investment, state planning and few environmental restrictions.
Drawing on vast deposits, particularly around Bayan Obo in Inner Mongolia, China rapidly increased its production and flooded world markets with low-priced rare earths in the 1990s. This strategy resulted in the gradual decline of rival producers, who were unable to stand up to this low-price competition.
By the early 2000s, China already accounted for the majority of global extraction operations, and went on to extend its dominance to refining and processing, which are key stages in the value chain.
The value chain, from mining to the production of permanent magnets.
© BRGM
How can European stakeholders be persuaded to rebuild the rare-earth industry at home?
There is genuine geological potential for rare earths in Europe and Greenland. However, two major obstacles remain: the deposits are most often located in environmental hotspots and have a complex mineralogy (meaning that they are not necessarily easy to mine using conventional technologies).
These factors could undermine the economic viability of European projects, at least given the current state of extraction technologies. And even if Europe were to eventually open a mine, this would not resolve all the associated issues, since putting in place the requisite conditions for developing a structured value chain for permanent magnets is far from simple. Indeed, the real problem today is that China sells its magnets for less than the value of the rare-earth elements they contain. This is the key issue that needs to be resolved in order to establish a sovereign industrial sector, going from the extraction of rare earths to the production of permanent magnets.
Europe needs to be able to establish a genuine value chain for permanent magnets, from the mining (extraction) to the magnet (end use), involving European and French industrial players, in order to reduce the inherent risks of dependence on Chinese imports. Notably, if we want to establish a rare-earth value chain in Europe, we will need to mitigate the excessive risk of price volatility. Currently, this aspect is firmly controlled by China and this creates difficulties for European players. Therefore, to achieve greater independence from China, the real challenge does not involve being able to meet all magnet requirements, but simply being able to ensure a minimum level of production capacity at every stage of the value chain.
This means European stakeholders need to make firm commitments; in other words, they must agree to produce and purchase magnets at a higher unit-price cost, and consider this new, home-based production capacity as a shared safeguard in the event of a total disruption to the supply chain. And this is where the argument for sovereignty comes in.
The French national resilience plan "Terres rares et aimants permanents" (Rare Earths and Permanent Magnets) addresses these challenges by combining demand-side initiatives, supply-side support and international cooperation.
