World demand for rare earths at present is about 110,000 tonnes a year, with China accounting for about 75% of total demand with the remainder split between Japan, the USA and Europe, in descending order. Despite the recent global financial crisis rare earths demand has proven resilient, with demand having returned to same levels prior to the global financial crisis.

Due to the wide range of applications of rare earths the range of demand drivers are equally wide.  Generally rare earths demand growth has implications across a number of energy efficiency, environmental improvement and hi-tech applications that largely drive the demand for rare earths.

Below is a summary of rare earths applications demonstrating the wide range of industry applications of rare earths.

Catalysts		petroleum cracking catalysts and autocatalysts, which use lanthanum and cerium
Glass		cerium is the major constituent of this sector where it is used in ultra-violet light filtering
Polishing		a rapidly growing sector that is based on the unique chemical and mechanical properties of cerium in the polishing of glass, including multi-level electronic components
Metal Alloys		lanthanum nickel hydride batteries is the key driver of demand and could put pressure on lanthanum supply
Magnets		currently, the most dynamic market for rare earths with growth in demand increasing at >15% for the past 5-10 years, which have driven the prices for neodymium and terbium to increase by more than 40% over the past 12 months
Phosphors		necessary for the production of phosphors for TV's and energy efficient lamps this the smallest sector by volume (only 6-8%), but the largest sector by value (30-40%) as europium and terbium are among the rare earths with the lowest abundance
Ceramics		yttrium stabilised zirconia is used throughout the resources industry where a material with high wear resistance is required
Other		many applications from RE use in the agriculture and textile industries in China to diagnostic equipment for the health industry

Looking forward to 2014, actual consumption is forecast to be 180,000 tonnes REO. However, the consumption of the individual rare earths that make up the total spectrum of demand is not in the same ratio as the mix in which they occur in the various deposits around the world. Accordingly, to meet this the demand in 2014 it is forecast that supply will have to be in the range of 200-210,000 tonnes REO. This latter is termed the ‘Adjusted Global Demand’ in the graph below.

China currently supplies about 95 per cent of the world’s rare earths. However Chinese Government policies are directed at conserving its rare earth resources to meet its growing domestic demand. Consequently, non-Chinese consumers of rare earths are looking to secure their future supply needs from outside of China.  This can been seen in the latest Chinese rare earths export quotas announced by the China Ministry of Commerce on July 7th 2010.  The 2010 second half export quotas represent a 70% reduction for foreign entities compared to the first half of 2010. 

China's future commitment to supplying rare earth products outside of China is questionable, likely to supply only 160-170,000 tonnes REO; sufficient to supply its own needs (approx. 120,000 tonnes REO) plus some exports, but insufficient to meet the growing demand in the Rest of the World. On this basis non-Chinese supply will need to be 40-50,000 tonnes if total demand is to be satisfied; hence the Nolans Project is now viewed as an essential part of the supply matrix early next decade. Arafura is expected to produce 20,000 tonnes of rare earth oxides a year from its Nolans Project with initial production scheduled for 2013.