Neodymium-praseodymium is a highly important rare-earth metal used in the manufacturing of electric vehicles (EV). It has recently hit its highest price-to-earnings ratios since 2023. China continues to impose export restrictions on various rare-earth minerals as part of the ongoing trade war. The U.S. already is prioritizing the security of its own supply. At the same time, demand for these materials is surging through the roof, upending the market.
One additional factor makes this situation special, involve the Mountain Pass mine in California, the only operating U.S. It is the only rare-earth mine currently in operation in the United States. Currently run by the company MP Materials, this facility extracts neodymium-praseodymium, an element essential to the manufacturing of powerful magnets needed in electric vehicles. As automakers scale up their production of EVs, the importance of reliable, sustainable sources of neodymium-praseodymium is ever-more urgent.
In the last few weeks, prices for neodymium-praseodymium have skyrocketed. This dramatic surge is in no small measure driven by the U.S. approach to aggressively stockpile these critical supplies. A backdrop of increasing trade barriers between the U.S. and China intensifies both the incentive and the ability to go this route. Meanwhile, export restrictions on these rare-earth minerals have closed in drastically. These kinds of restrictions have driven U.S. companies to find other sources of supply or deepen domestic production options.
Escalating prices aren’t confined to neodymium-praseodymium. The increase is carrying over to other rare-earth minerals too, including those not directly affected by China’s export restrictions. Analysts point to a record jump that indicates growing concern over supply chain vulnerabilities. They understand that companies are in a competitive sprint to tap into the raw materials needed for cutting-edge technologies.
As the demand for electric vehicles blows up, so does the criticality of neodymium-praseodymium. Future advances in renewable and clean energy technology hinge on the availability of many of these materials. As a result, the U.S. is undertaking unprecedented steps to increase its domestic production while trying to steer a course through the turbulent waters of international trade.