Rare Earths: As Global Demand Surges, Investors Turn To Australian Miners

• Rare earth prices rose in 2025 on China supply controls

• IEA sees global demand doubling by 2040

• Lynas leads ASX rare earth miners by market value

• Governments boost funding to secure non-China supply chains

Rare earth metal prices and demand rose sharply in 2025 as supply risks linked to China’s export restrictions pushed governments and investors to secure alternative sources, reinforcing a bullish long-term outlook for the sector.

The International Energy Agency has warned that global demand for rare earth elements could double by 2040 as electric vehicles, wind turbines, defence systems and advanced electronics drive consumption. With China controlling the bulk of global mining and almost all processing capacity, Western nations have intensified efforts to diversify supply chains, a shift that has lifted interest in Australia’s rare earth producers.

“Rare earths are essential for the energy transition, but supply remains highly concentrated,” the IEA said in its latest Critical Minerals Outlook, noting that China accounts for more than 60% of global mine output and nearly 90% of refining.

China tightened export controls on several strategic minerals in 2024 and again in 2025 in response to U.S. and European trade measures, triggering price volatility and renewed concerns over supply security. Analysts say those moves accelerated investment flows into Australian-listed rare earth companies, which are seen as among the most credible alternatives outside China.

Top 5 Rare Earth Companies

According to TradingView data compiled on January 5, 2026, Lynas Rare Earths remains the largest rare earth stock on the Australian Securities Exchange by market capitalisation, followed by Iluka Resources, Arafura Rare Earths, Brazilian Rare Earths and St George Mining.

Lynas Rare Earths, valued at about AU$12.3 billion, is the only major producer of separated rare earth materials outside China. The company said in its first-quarter fiscal 2026 update that neodymium and praseodymium (NdPr) production reached 2,003 tonnes, while total rare earth oxide output rose to 3,993 tonnes.

Chief executive Amanda Lacaze said last year that Lynas was “well positioned to support customers seeking secure, non-Chinese supply chains,” after the company began producing heavy rare earths dysprosium and terbium at its Malaysia facility. Lynas has also signed a memorandum of understanding with U.S.-based Noveon Magnetics to help build a domestic American supply chain for permanent magnets.

Iluka Resources, with a market value of about AU$2.5 billion, is developing Australia’s first fully integrated rare earth refinery at Eneabba in Western Australia. The company said commissioning is expected in 2027 and the plant will be capable of producing both light and heavy separated rare earth oxides.

“We see Eneabba as a nationally strategic asset,” Iluka managing director Tom O’Leary said previously, noting the project has backing from the Australian government to strengthen critical mineral supply chains.

Arafura Rare Earths is advancing its Nolans project in the Northern Territory, which it says could supply around 4% of global NdPr oxide demand once fully operational. The project has attracted strong government support, including a AU$200 million commitment from Australia’s National Reconstruction Fund and potential financing of up to US$400 million from U.S. export agencies under the Australia–US Critical Minerals Framework.

Brazilian Rare Earths and St George Mining are also drawing attention for their high-grade deposits in Brazil, where governments are promoting the development of integrated rare earth and magnet supply chains.

Market analysts say the investment case remains underpinned by strong structural demand. Permanent magnets made from neodymium, praseodymium, dysprosium and terbium are essential for electric vehicle motors and wind turbines, sectors expected to expand rapidly over the next two decades.

USGS Survey ranks Australia 3rd

The U.S. Geological Survey estimates China holds about 44 million tonnes of rare earth reserves, followed by Brazil with 21 million tonnes and Australia with 4.2 million tonnes. But while reserves are widespread, processing capacity remains heavily concentrated in China, a vulnerability policymakers are increasingly keen to address.

“Rare earths are not geologically rare, but economically and geopolitically scarce,” the USGS said in its latest minerals summary.

For investors, the combination of rising prices, strong government backing and accelerating demand suggests the sector’s momentum may continue. As one Sydney-based fund manager put it, “If the energy transition plays out as expected, rare earths will remain one of the most strategically important commodities of the next two decades.”

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