Rare Earth Recycling Market Size, Share & Trends Analysis Report By Type (Light Rare Earth Recycling, Medium and Heavy Rare Earth Recycling), By Applications (Permanent Magnets, Catalyst, Glass, Ceramics, Phosphor, Alloy Manufacturing, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global rare earth recycling market size was valued at USD 480 million in 2022. It is estimated to reach USD 882 million by 2031, growing at a CAGR of 7.0% during the forecast period (2023–2031).

Permanent magnets, electric vehicles, cellphones, and wind turbines depend on rare earth metals like the lanthanide series, scandium, and yttrium. The elements must be refined before use since they are found naturally in ores as mixes. However, mining and separating the mineral ore is difficult and expensive in terms of energy and waste. These substances now place a heavy load on the environment. Despite having the potential for reuse, the great majority are thrown away after just one usage. Recycling rare earth-containing items provide producers with a reliable domestic source of rare earth resources while lowering waste. The integration of recovered materials should decrease environmental harm and energy costs associated with their initial mining and separation.

Market Dynamics

Global rare earth recycling market drivers

Environmental impact of mining rare earth metals

Mining is the method used to obtain rare earth metals. However, mining has several drawbacks, including being expensive and inefficient because removing even a tiny amount of rare earth metals takes a lot of lands. The extraction process creates a significant amount of radioactive and hazardous waste, negatively influencing the environment. This results from the radioactive metals thorium and uranium being extracted together. Additionally, wastewater storage areas found in mines may spill into nearby rivers. In addition, soil that cannot sustain agriculture has been developed due to rare-earth mining contamination, and water supplies have been affected.

The mined rare earth ores need to be processed because they are not pure. This refining process introduces another set of environmental concerns, usually around releasing metal byproducts into the environment. The presence of metals in an environment can be fatal to species. In order to remove the metals from the ore, treating it with different chemicals like ammonium sulfate and ammonium chloride is necessary. However, these chemicals can pollute the air, induce erosion, and leak into groundwater. Thus, the mining and splitting the mineral ore are challenging and energy- and waste-intensive. An exciting alternative to mining is to recycle elements that have been processed into materials; thus, the demand for recycling these elements is expected to increase during the forecast period.

Volatility in prices of rare earth metals

Most mining for rare earth metals occurs in China, producing more than 80% of the global supply raising concerns about long-term availability due to the trade war and geopolitical issues. However, the mined rare-earth metals are refined at some other place, increasing the transportation cost from the mining site to the refining site, further increasing the prices. In 2014, around a 2000% price increase was witnessed for some rare earth metals. Moreover, the dominance of China in total rare earth metals production makes it legally difficult for other countries to extract the materials, which has spiked prices to a certain extent.

In addition, China had such a monopoly on the sector that rare earth elements prices spiked in 2010 and 2011 when exports were cut. As a result, rare earth companies and mining endeavors experienced a boom as they sought to establish a consistent supply of rare earth outside China. Many rare earth mining projects outside China failed to thrive when rare earth element prices fell again. High production, low labor costs, and relaxed environmental regulations have allowed China to control rare earth metals' pricing and market viability. Thus, the volatility in the price of rare earth metals and China's control over costs results in the recycling of end-of-life products to meet the demand for rare earth metals.

Global rare earth recycling market restraint

Difficulties in extracting rare earth metals from end-of-life products

Recovery of rare earth metals from electric vehicle batteries is made by traditional hydrometallurgical (corrosive media treatment) and pyrometallurgical (heat treatment) processes, which have several drawbacks. Pyrometallurgy is energy-intensive and involves multiple stages requiring high working temperatures of around 1,000℃. Additionally, it emits pollutants such as carbon dioxide, dioxins, and furans into the atmosphere.

Hydrometallurgy generates considerable quantities of acidic waste, such as sodium hydroxide and sulfuric acid, which are very alkaline or acidic. The recycling of rare earth elements from cell phones also poses particular challenges. Cellphones consist of smaller parts, which makes the extraction difficult. Cellphones are typically recycled by smashing, shredding, and grinding into powder. The powder can then be separated into component materials for disposal or recycling, restraining the market growth.

Global rare earth recycling market opportunities

Rising adoption of electric vehicles and wind energy

The demand for electric vehicles has increased in recent years, attributed to consumers' and manufacturers' growing sentiments in favor of environmental concerns. This demand is expected to boost the need for and production of electric vehicles soon. International conventions and conferences such as the Kyoto Protocol, the Montreal Protocol, and the Paris Agreement are laying down binding regulations to limit global pollution and are likely to boost the demand for ultracapacitors and rechargeable batteries, and thus rare earth metals soon.

Additionally, the emphasis on renewable energy sources such as wind, solar, and hydropower for power generation to eliminate carbon emissions has resulted in the high demand for rare earth metals. The global market for rare earth metals for permanent magnets in wind turbines stood at 7,000 tonnes in 2020. In 2020, the global wind industry witnessed 93 GW of new capacity installed, a 53% year-on-year increase. However, more is needed to ensure the world achieves net zero by 2050. In order to stay on a net-zero path and escape the worst effects of climate change, the world must build wind energy three times quicker during the next decade. This is expected to drive the demand for rare earth metals and their recycling.

Regional Analysis

Based on region, the global rare earth recycling market is divided into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Europe dominates the global market

Europe is the most significant shareholder in the global rare earth recycling market and is expected to grow at a CAGR of 5.06% during the forecast period. The growth in the European market is due to the growing demand for rare earth materials and recycling materials for producing high-tech products such as smartphones or wind turbines. The need for rare earth in Europe is anticipated to increase due to their expanding uses in magnets, metallurgy, catalysts, glass, and ceramics. In addition, the major end-user of rare earth in Europe is the automobile sector. The Organization for International Cooperation on Automobiles (OICA) estimates that in 2021, with a production share of 22.3%. Europe overtook North America as the second-largest car producer in the world, thereby propelling the market growth. Further, the European market imports more than 90% of rare earth metals from China.

North America is anticipated to grow at a CAGR of 5.84% over the forecast period. The growing automobile sector in the region is increasing the demand for rare earth elements. For instance, Tesla, a well-known American manufacturer of electric vehicles, said in 2021 that neodymium would be used in its Model 3 Long Range vehicles. This action is anticipated to increase demand for neodymium throughout the predicted period. In 2020, the US light vehicle sales will be around 14.5 million units. Since rare earth elements are used in vehicle exhaust systems to control air pollution, the North American market is fueling the global market growth during the review period. In addition, consumer electronics and nuclear power are anticipated to drive the demand for rare earth. With more than 30% of the world's power coming from nuclear energy, the United States leads the globe. Further, according to the World Nuclear Association, the government is constructing two nuclear reactors. The increasing need for nuclear reactors is projected to support market expansion.

Asia-Pacific is expected to emerge as the fastest-growing regional market due to various factors, such as the expansion of end-use industries and shifting manufacturers from western countries to Asia-Pacific. China plays a crucial role in rare earth recycling materials. In addition, Rare Earth Elements, including neodymium, yttrium, and terbium, are essential components in electric vehicles, cell phones, and wind turbines in the Asia-Pacific region. China is expected to dominate the Asia-Pacific and global markets during the forecast period, as 80% of the rare earth elements produced today come from China. The region is the biggest user of rare earth elements due to China's fast-expanding demand, which accounts for most occasional earth metal consumption globally. In addition, the presence of several key players in the region, such as Shenghe Resources Holdings Co., Ltd., Jiangsu Huahong Technology Co., Ltd, Lynas, GanZhou QianDong Rare Earths Group Co., Ltd, Hitachi Metals, Mitsubishi Chemical Corporation, Nissan Motor Co Ltd. is also fueling the regional market growth.

The demand for rare earth recycling in Latin America is also high. Latin America is further bifurcated into Brazil, Argentina, Mexico, and the rest of Latin America. Brazil accounts for the most significant portion of the market share in the area, and it is anticipated that it will maintain its leadership during the projected period. In addition, Brazil has extensive reserves of rare-earth minerals. Araxá, Serra Verde, Catalão, and Morro dos Seis Lagos contain rare earth metals in large quantities. Despite having large reserves of rare-earth metals, the region focuses on recycling instead of mining these rare-earth metals owing to the environmental issues associated with the mining process. Thus, the factors mentioned earlier drive regional market growth. Furthermore, the demand for rare earth recycling products is high in the Middle East and Africa. It is likely to register significant growth in the upcoming years due to the increasing electric vehicle demand in GCC countries, which is expected to boost market growth.

Segmental Analysis

The global rare earth recycling market is segmented into type and application.

Based on type, the global rare earth recycling market is divided into light rare earth recycling and medium and heavy rare earth recycling.

The light rare earth recycling segment is the highest contributor to the market and is expected to grow at a CAGR of 7.15% during the forecast period. Light rare earth recycling elements include lanthanum, cerium, praseodymium, neodymium, promethium, and samarium. Super magnets, catalytic converters, UV shields, carbon arc lamps, CAT scan scintillators, batteries for hybrid cars, computers, electrical gadgets, and glass surface polishing all make extensive use of light rare earth recycling materials. The increasing demand for light rare earth recycling in various industries, such as automotive and electronics in vehicles and electronic products, is expected to fuel the global market growth over the forecast period.

Medium and heavy rare earth recycling elements include europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, and yttrium. These elements improve workability and raise resistance to high-temperature oxidization. Medium and heavy rare earth recycling materials are used as a magnet in drive motors, compressors and motors, hard disk drives, and fluorescence used in electronic product displays. Therefore, the growing application of medium and heavy rare earth recycling segments is expected to grow significantly over the forthcoming years.

Based on application, the global rare earth recycling market is segmented into glass, permanent magnets, catalysts, ceramics, phosphor, alloy manufacturing, and others.

The permanent magnets segment owns the highest market share and is expected to grow at a CAGR of 8.09% over the forecast period. Neodymium, boron, and iron are the main components of permanent magnets. Mobile phones, speakers, wind turbine generators, hybrid electric cars, hard drives, televisions, and transducers are a few products that utilize them. Due to their geochemical characteristics, rare earth elements are in higher demand in the automotive sector for use in hybrid electric cars. This demand is anticipated to fuel demand for rare earth recycling components during the projected period.

In the ceramic and glass industry, rare earth element-containing compounds are used for high-temperature materials, coatings, polishing, coloring, decoloring, and glass additives. Functional ceramic is a new type of ceramic material for meeting the developing needs of computer science, automatic control, sensing technology, bioengineering, environmental science, and other fields. Using rare earth minerals in their raw materials will significantly enhance functional ceramics' agglutinating capability, density, intensity, and other distinctive properties. Therefore, the ceramics segment is expected to create an optimistic opportunity for the global market.

Recent Developments

• September 2022- Solvay announced intentions to develop its rare earth facilities in La Rochelle, France, to enter the rare earth permanent magnets value chain in Europe. Solvay is already active in separating and recycling rare earth for captive use. With this investment, the group is ambitious to create a powerful rare earth hub in Europe in the coming years.
• January 2023- Solvay will extend and modify the current rare earth processing operation in La Rochelle, France, by adding the manufacture of separated rare earth oxides for permanent magnets. The company is investing "tens of millions of euros," and this processing unit will supply material to magnet makers for EVs and wind turbines.