Mubasher: World’s rare earth materials market is projected to reach $5.62 billion by 2025, according to a business data platform.

With the growing use of permanent magnets for manufacturing neodymium and dysprosium-based batteries for electric vehicles (EVs), demand for elements such as neodymium, praseodymium and gadolinium would pick up in the coming six years, industry analysis provider Researchandmarkets.com said.

Neodymium is expected to see compound annual growth rate (CAGR) of 8.3%, as permanent magnets will be in high demand.

This would be accompanied with the growing EV demand, with governments pushing to cut the Co2 emissions.

On the supply side, China holds the biggest amount of rare earths reserves with 44 million tonnes, while the US is holding $6.2 trillion worth of mineral reserves, according to US Geological Survey’s figures.

However, in the US, companies are prompted to import the raw materials from China due to tough regulatory policies on mining.

“The major players are adopting strategies like capacity expansion and agreements with the end-use industries to cater to growing demand for rare earth elements,” Researchandmarkets.com said.

For example, Australian rare-earths miner Lynas entered into an agreement with German auto component manufacturer Bosch, which aims to secure steady supply of rare earth materials.

The report also highlighted the emergence of rare earths recycling amid surging prices of the elements and high investments to open new mines.

For instance, Japan’s Hitachi developed a new technology for seprating rare-earth magnets from air conditioners and hard disk drives approximately eight times more efficiently than traditional methods.