Which Industries Rely on Rare Earths, and Why?

Why It Matters

The concentration of rare‑earth demand in AI, defense and clean‑energy sectors makes supply security a strategic priority, influencing investment decisions and geopolitical risk assessments.

Key Takeaways

• AI, defense, and energy transition drive rare‑earth demand surge
• Rare‑earth usage in F‑35 jets totals 900 pounds per aircraft
• AI data centers and humanoid robots rely on irreplaceable magnets
• EVs and wind turbines need rare‑earth magnets for power generation
• Investment in these three sectors grew ~70% since 2020, $5 trillion

Summary

The video outlines the sectors most dependent on rare‑earth elements, highlighting artificial intelligence, defense, and the energy transition as the primary demand drivers.

It notes that rare‑earths are irreplaceable across these industries, with investment in the three sectors rising roughly 70 % since 2020, representing over $5 trillion of global spending. This structural demand reflects both strategic and commercial pressures.

Concrete examples include the F‑35 fighter jet, which contains about 900 pounds of rare‑earth material, AI data centers and emerging humanoid robots that require high‑performance magnets, and electric vehicles and wind turbines whose generators depend on the same elements.

The reliance on non‑substitutable rare‑earths raises supply‑chain vulnerabilities and underscores the need for diversified sourcing, recycling initiatives, and policy support, making the metals a focal point for investors and governments alike.

Original Description

Today, the rare earth metals market sits at roughly $14 billion. It's on track to more than double by the mid 2030s. Sprott Asset Management Head of ETFs Steve Schoffstall discusses what rare earths elements are and why they're so important to today's economy.

In this episode of Metals in Motion, Thalia Hayden @etfguide chats with Steve Schoffstall, Managing Partner, Sprott Inc. and Head of ETFs at Sprott Asset Management about trends in rare earths metals markets, and how investors can take advantage of the trends.

#rareearthminerals #mining #etf

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