Dysprosium

Why Rare Earth Deposits Don't Need High Grades

Information only, not investment advice. This guide explains how the rare earth industry works; it does not recommend any company or security.

By REE Stocks. Sources checked Oct 23, 2026.

Rare earth deposits don't need high grades to be worth mining. A clay deposit grading a few tenths of a percent rare earth oxide can compete with a hard-rock mine grading 6%. What decides it is which rare earths the deposit holds, how cheaply they can be extracted, and where the deposit is.

That doesn't make grade irrelevant. A richer ore still puts more metal in every tonne you dig. But in gold or copper, investors often treat grade as the first number to check. In rare earths, the headline grade can mislead you if you read it on its own.

What grades do rare earth mines actually have?

Grades vary more by deposit type than by anything else. The biggest hard-rock mines are carbonatites, with reserves of about 6% total rare earth oxide (TREO). Ionic clays, the main source of the world's heavy rare earths, are mined at a small fraction of that.

Deposit	Type	Grade (% TREO)
Mt Weld, Australia (reserve, 2024)	Carbonatite	6.44
Mountain Pass, US (reserve, 2025)	Carbonatite	5.89
Bayan Obo, China (estimate)	Carbonatite	About 6
Median of 58 carbonatites	Carbonatite	0.61
Caldeira, Brazil (reserve, 2026)	Ionic clay	0.35
Southern China clays	Ionic clay	About 0.05 to 0.2

Sources: Lynas 2024 Mineral Resource and Ore Reserve update; MP Materials Form 10-K for 2025; USGS Professional Paper 1802-O; Meteoric Resources June 2026 quarterly report.

Notice the median carbonatite. Most carbonatites grade well under 1%, according to USGS Professional Paper 1802, so the 6% mines are the exceptions. Our guide Rare Earth Deposit Types describes each type in more detail.

Why can a low-grade clay compete with a high-grade mine?

Because the cost of getting the rare earths out is so different. In a hard-rock mine like Mountain Pass, the ore is crushed and ground into a slurry, then floated to separate out the rare earth mineral, according to MP Materials' annual report. The concentrate then needs strong acid or other harsh chemistry to break it down.

In an ionic clay, the rare earths aren't locked inside a mineral at all. They sit loosely on the surface of the clay. Meteoric Resources, which is developing the Caldeira clay project in Brazil, describes recovering them by washing the clay in a weak ammonium sulfate solution at room temperature and pressure. Researchers writing in Scientific Reports in 2025 list the knock-on benefits: low-cost open-pit mining, no complex beneficiation, minimal radioactivity and little to no tailings, which offset the lower grade.

The USGS gives four reasons that southern China's clays pay despite modest concentrations. The rare earths come out easily with weak acids. The clays are often rich in high-value heavy rare earths. Labour costs are low. And there has been a local lack of environmental protection. Those last two reasons matter for investors: a clay project outside China will face stricter rules, and a 2018 review by British Geological Survey researchers warned it may need tighter environmental controls and possibly different chemicals.

How much less metal does a clay deposit hold?

A lot less, and it's worth being honest about it. Using each company's own reserve tables, Mt Weld ore holds about 14,980 parts per million (ppm) of NdPr oxide, while Caldeira's reserve holds about 815 ppm. That makes Mt Weld roughly 18 times richer in NdPr per tonne, and roughly 14 times richer in dysprosium and terbium.

Yet the two baskets look alike in one way. The magnet rare earths make up about 24% of the rare earth oxide in both: 24.3% of Caldeira's reserve, according to Meteoric, and about 24% of Mt Weld's, by our calculation from the Lynas reserve table. So the case for a clay project rests on much cheaper mining and processing per tonne, not on richer ore. The right question isn't "what's the grade?" but "what will each kilogram of NdPr cost to produce?"

Figures are our calculation from the Lynas 2024 reserve (Table 7) and the Caldeira probable ore reserve in Meteoric's June 2026 quarterly report. Both are company estimates.

Why does it matter which rare earths a deposit contains?

Because the 17 rare earths are priced very differently. These are the 2025 average prices the USGS reports:

Oxide	2025 average (US$/kg)
Lanthanum oxide	1.00
Cerium oxide	1.71
NdPr oxide	69
Dysprosium oxide	239
Terbium oxide	1,010

Source: USGS Mineral Commodity Summaries 2026, Rare Earths and Rare Earths (Heavy).

At those prices a kilogram of terbium oxide is worth about 590 kilograms of cerium oxide. Most hard-rock ores are dominated by the cheap ones. In the Mountain Pass bastnaesite data the USGS compiled, lanthanum and cerium make up about 83% of the rare earths. Researchers call this the balance problem: mining a typical carbonatite for one kilogram of neodymium produces large amounts of lanthanum and cerium, which are already oversupplied, and only small amounts of dysprosium.

So two deposits with the same TREO grade can be worth very different amounts. Look for the magnet rare earth share in a company's resource table, often labelled MREO. Our guides What Is NdPr Oxide? and How to Read a Rare Earth Resource Estimate explain how.

Why does the extraction method matter so much?

Because rare earths are notoriously hard to get out of most minerals. There are over 100 possible rare earth ore minerals, but only very few have ever been processed successfully, the 2018 review notes. The USGS goes further: no two rare earth ores are truly alike, so there's no standard process, and every new deposit has to be tested to find a sequence of steps that works.

Some minerals have a proven route and some don't. Bastnaesite, the main mineral at Mountain Pass and Bayan Obo, has a well-established process. Eudialyte, found in several alkaline deposits, has a useful mix of neodymium, praseodymium and dysprosium and little uranium or thorium, but it hasn't been processed commercially. The USGS also says deposits with the rare earths in a single mineral have a competitive advantage, because each extra mineral can need its own extraction method.

That's why the USGS says some mines have failed because their metallurgical processes didn't work as planned. For a rare earth explorer, metallurgical test work and recovery rates can tell you more than a few high-grade drill holes. Our guide How Rare Earths Are Processed walks through the steps.

Why is location so important?

Location shapes a rare earth project in three ways: the geology that formed it, the rules it has to follow and the plants it can reach.

Geology. Ionic clays form where warm, wet subtropical weathering breaks down igneous rocks such as granite, so they're found in places like southern China and Brazil. A deposit type that depends on that climate can't simply be found anywhere.
Rules on radioactivity. Many rare earth minerals carry thorium or uranium. The USGS says tighter rules on radioactive minerals drove many monazite sources out of the market in the 1980s, and Australia has not produced monazite from its mineral sands since the 1990s. In Greenland, a 2021 law bans developing deposits above 100 ppm uranium. The government refused a licence for Kvanefjeld under it, even though the deposit grades about 1.1% TREO, according to Energy Transition Minerals.
Access to separation. China accounted for about 90% of refined rare earth production in 2024, according to Natural Resources Canada. A mine that can only sell a mixed concentrate depends on a separation plant somewhere, and outside China there are few.

Ordinary mining factors count too: roads, power, water and permits. The USGS notes that obtaining a mining permit in the United States has taken as long as 17 years.

Can a very high grade still fall short?

Yes. The USGS lists South Africa's Steenkampskraal, a vein of monazite, with measured resources grading 19.5% TREO, more than three times the grade of Mt Weld's reserve. Its ore mineral is monazite, which can carry up to 20% thorium oxide by weight, the USGS says. The 2018 review called such deposits potentially interesting, with high grades and easily processed minerals, but warned the thorium could raise concerns for processing.

The same review makes the reverse point about China's Bayan Obo. Judged on its mix of individual rare earths alone, it is one of the least promising rare earth ores. It stays important because it's huge, it has established processing, and its rare earths were first mined as a by-product of iron ore.

What should you check instead of grade?

Deposit type. Is it a carbonatite, an alkaline rock, an ionic clay or mineral sands?
The basket. What share of the TREO is NdPr, dysprosium and terbium?
Recoveries. Has metallurgical test work shown how much of each rare earth can be extracted? For clays, how much comes off in a simple salt wash? In early Caldeira tests, for example, 58% of the neodymium and praseodymium was recovered.
Thorium and uranium. How much is there, and what do local rules allow?
Location. Is there infrastructure, a clear permitting path and a plan for separation?

A project that scores well on these can have a low grade and still be a serious contender. One that scores badly may struggle however high its grade. For how these disclosures are regulated in Canada, see What Is an NI 43-101 Technical Report?, and for the companies themselves, our rare earth stocks list.

Why Rare Earth Deposits Don't Need High Grades: frequently asked questions

What is a good grade for a rare earth deposit?

There is no single answer, because it depends on the deposit type. Hard-rock carbonatite mines such as Mountain Pass and Mt Weld have reserves of about 6% rare earth oxide, while ionic clay deposits are mined at about 0.05% to 0.35%. A clay grade that would be far too low for hard rock can still be economic, because clays are much cheaper to mine and process.

Why can ionic clay deposits be mined at such low grades?

In ionic clays the rare earths sit loosely on the surface of clay minerals, so a salt solution such as ammonium sulfate can wash them off. There is no complex processing step such as flotation, radioactivity is usually very low and there are few tailings. The USGS also notes that low labour costs and weak environmental rules helped make southern China's clays pay.

Does grade matter at all for rare earths?

Yes. A higher grade still means more rare earths in every tonne you dig and process. But grade alone does not tell you what a deposit is worth. Which rare earths it holds, how easily they can be extracted and where the deposit is all change the cost of each kilogram produced.

Why are some rare earths worth more than others?

Prices differ enormously. In 2025, the USGS reports, lanthanum oxide averaged about US$1 a kilogram and cerium oxide about US$1.71, while NdPr oxide averaged US$69, dysprosium oxide US$239 and terbium oxide US$1,010. A deposit rich in the magnet rare earths is worth far more per tonne of rare earth oxide than one made up mostly of lanthanum and cerium.

Why does location matter for a rare earth project?

Location affects geology, rules and logistics. Ionic clays form where warm, wet weathering has broken down granite. Laws on radioactive material can stop a project outright, as Greenland's uranium law did at Kvanefjeld. And with about 90% of rare earth refining in China, a project needs a realistic route to a separation plant.