Global installed capacity of wind power has nearly quadrupled over the past decade, spurred by falling costs, which have declined over 30% on average between 2010 - 2020 (IRENA: Power Generation Costs, 2020). Off-shore wind power generation is well suited to meet the required need for capacity additions as it can be deployed on a large scale with annual wind installations expected to grow at a CAGR of 12% between 2020 and 2030.

Wind turbine sizes have grown relative to installed capacity, stemming from larger rotors and lighter drivetrains. By utilizing permanent magnets, wind turbines are able to operate more efficiently at slower wind speeds, and with fewer mechanical parts, improving their economic viability. As a result, total metal requirements for next generation direct drive wind turbines is expected to increase the demand for REE.

As a result of the expected growth in EVs and wind energy, CRU is forecasting the price for Dy and other critical REE to rise. The price of Dy used in permanent magnets will increase above historical levels, while Argus estimates prices for Nd, Pr and Tb to rise at similar rates.

Price forecasts for REE (La, Ce, Pr, Nd, Sm, Eu, Gd, Tb, Ho, Er, Tm, Yb, Lu, and Y), excluding Dy, have been sourced from Argus.

The extraction and production of REE has been dominated by China since the 1990s. Abundant ion-adsorption clay deposits and low cost of extraction owing to less stringent regulatory and environmental standards have historically been a competitive advantage. Today, according to USGS, China is estimated to account for approximately 58% of mining supply, with Myanmar representing approximately 13%, followed by Australia and the U.S. at a combined estimate of 23%. Furthermore, China imports 100% of Myanmar ionic clay production, increasing their supply control on Dy and Tb to approximately 90% and Nd and Pr to approximately 70%. China's refining capabilities has correspondingly increased to account for a disproportionately large share of the market at 85% for LREE and at 100% for HREE.

Beyond supply and refining, China has expanded its downstream operations to include metal and alloy production as well as magnets, effectively controlling the entire value chain. According to Yang, Y., Walton, A., Sheridan, R. et al.'s "REE Recovery from End-of-Life NdFeB Permanent Magnet Scrap: A Critical Review," China is the leading producer of NdFeB magnets, with Japan as the only other country producing NdFeB magnets at scale, primarily through Hitachi. The United States does not presently produce permanent magnets.

China's historical attempts to limit REE exports in 2010 prompted many Western countries, and their allies, to seek new mine extraction sites and create domestic processing capabilities. In the U.S., former President Donald Trump signed Executive Order 13817 (A Federal Strategy to Ensure Secured and Reliable Supplies of Critical Minerals) in 2017 and deemed 35 minerals critical to domestic security, including all REE. In addition to mineral extraction, the Pentagon announced in 2021 the Defense Production Act Title III, and invested in MP's Mountain Pass LREE processing plant in California along with the largest REE mining and processing company outside of China, Australia's Lynas, to fund construction of a LREE processing plant in Hondo, Texas. The Australian government announced a similar program, the Modern Manufacturing Initiative, with a mandate to award up to A$1.3 billion, from 2021 through 2024, to stimulate growth across several industries that consume REE, including resource technology for critical mineral processing, as well as recycling and clean energy. In Canada, the government has designated 31 minerals as critical. The list is part of Canada's commitment to develop a critical minerals strategy and improve domestic supply chains. The program's goal will be to identify ways to bolster the countries critical mineral supply, develop the supply chain, target mineral development policies, coordinate international engagement, and support research and development. Additionally, the U.S., Europe and Russia have identified REE as critical minerals where a diversified supply is required. Specifically, the following is USGS' classification of critical, non-critical and near-critical supply risk of REE and other elements, as well as importance of REE and other elements to clean energy: