Critical Minerals vs Rare Earths: Understanding the Difference

The terms "critical minerals" and "rare earths" are frequently used interchangeably in media coverage and public discourse, but they refer to very different concepts. Conflating them leads to confusion about the scope of supply chain risks, the range of technologies affected, and the policy responses required. Understanding the precise relationship between these two categories is essential for anyone working in mineral policy, technology strategy, or resource investment.

What Are Rare Earth Elements?

Rare earth elements (REEs) are a specific group of 17 chemically similar metallic elements: the 15 lanthanides (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium) plus scandium and yttrium, which are grouped with lanthanides because of their similar chemical properties and geological co-occurrence.

Despite their name, rare earths are not particularly rare in geological terms. Cerium, the most abundant rare earth, is more common in the Earth's crust than copper. The "rare" designation dates to the 18th century, when these elements were first isolated from uncommon mineral specimens. What makes rare earths genuinely challenging is not their crustal abundance but the difficulty of separating individual elements from each other due to their chemical similarity, the concentration of mining and processing in China, and the environmental challenges associated with extraction and refining.

Rare earths are typically divided into two sub-groups:

• Light rare earth elements (LREEs): Lanthanum, cerium, praseodymium, neodymium, and samarium. These are more abundant and generally less valuable, though neodymium and praseodymium are exceptions due to their critical role in permanent magnets.
• Heavy rare earth elements (HREEs): Europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, and yttrium. These are less abundant, harder to extract, and often more valuable, with dysprosium and terbium commanding premium prices for their use in high-temperature permanent magnets.

What Are Critical Minerals?

Critical minerals are a much broader category. They encompass any mineral that meets the criteria for criticality as defined by a given nation's assessment framework. These criteria typically include supply risk, economic importance, lack of substitutes, and concentration of production or processing.

The U.S. critical minerals list (2022) contains 50 minerals and mineral groups. The EU's 2023 list contains 34 critical raw materials. These lists include rare earths but also encompass dozens of other materials such as lithium, cobalt, nickel, graphite, manganese, vanadium, tungsten, antimony, gallium, germanium, indium, platinum group metals, titanium, magnesium, and others.

The Key Distinction

The essential distinction is one of scope: rare earths are a subset of critical minerals, not a synonym for them. All rare earths are classified as critical minerals by virtually every major national assessment, but the vast majority of critical minerals are not rare earths.

This matters for several reasons:

• Policy breadth: Critical minerals policy must address supply chains for 30-50+ materials, each with unique geology, processing requirements, market structures, and geopolitical dynamics. Reducing the conversation to rare earths alone ignores the criticality challenges posed by lithium, cobalt, gallium, PGMs, and many other materials.
• Technology diversity: Different technologies depend on different critical minerals. Electric vehicle batteries rely on lithium, cobalt, nickel, and graphite, not rare earths (except in the motor). Semiconductors depend on gallium and germanium. Catalytic converters need PGMs. A narrow focus on rare earths misses the breadth of technological vulnerability.
• Investment implications: Investors seeking exposure to critical minerals must look beyond rare earth mining companies. The critical minerals investment landscape includes lithium producers, nickel miners, cobalt refiners, graphite processors, and specialty chemical companies, in addition to rare earth enterprises.
• Supply chain solutions: The strategies for securing rare earth supply (developing non-Chinese processing capacity, recycling magnets, developing alternative motor designs) are distinct from those for other critical minerals. Lithium supply security requires different mines, different processing technology, and different recycling approaches than rare earth supply security.

Why the Confusion Persists

Several factors explain why rare earths and critical minerals are so often conflated. Rare earths were the first group of minerals to generate widespread public attention as a supply security issue, beginning with China's 2010 export restrictions during a dispute with Japan. This event brought the concept of mineral criticality into mainstream media for the first time, and "rare earths" became shorthand for the broader problem of mineral supply vulnerability.

Additionally, rare earths have an evocative name that captures public imagination. "Critical minerals" is a more abstract, bureaucratic term that does not have the same narrative appeal. Media coverage naturally gravitates toward the more distinctive label, even when the story is actually about critical minerals more broadly.

The Chinese government's dominance of both rare earth and broader mineral processing further blurs the distinction, as policy discussions about Chinese mineral supply leverage often encompass both categories simultaneously.

Areas of Overlap

While the distinction is important, there are genuine areas of overlap. Rare earths are among the most critical of all critical minerals, consistently scoring at the extreme high end of criticality assessments due to their concentrated supply chain, low substitutability in permanent magnet applications, negligible recycling rates, and rapidly growing demand from the energy transition. Many of the same policy tools, including supply diversification, allied-nation partnerships, strategic stockpiling, and recycling investment, apply to both rare earths and other critical minerals.

For this reason, rare earths often serve as a useful case study for understanding critical minerals challenges more broadly. The supply chain concentration, processing bottleneck, geopolitical leverage, and technology dependence patterns that characterize rare earths are mirrored, to varying degrees, across the full spectrum of critical minerals.