Introduction: When raw materials become strategy

A few commodities in modern economic history share a common denominator. In the 1970s, it was oil that could halt production, trigger inflation, and reshape the political map of the world. Today, the role of the key resource is shifting toward elements we do not encounter as visibly as oil—or, more precisely, fuels—namely, rare metals.

You won’t see them at petrol stations or smell them in the air, and yet they stand behind most of what makes our lives modern: electric motors, chips, batteries, data centres, wind turbines, medical equipment, or defence systems.

That is why restrictions on their export have revealed how fragile supply chains truly are—the same supply chains on which local economies and geopolitical decisions depend.

What happens when the flow of a material is interrupted, without which we cannot manufacture a magnet, a chip, or a battery? We experienced a glimpse of this during the Covid-19 pandemic, when chip shortages affected the world nearly everywhere and quite strongly.

And how might prices change for things we consider obvious and readily available?

What makes rare metals so important

The term “rare metals” refers to a group of roughly 17 elements, known as rare earth elements. They are not “rare” because the Earth lacks them—the Earth’s crust contains plenty. They are rare because it is extremely difficult to find them in sufficiently high concentrations, to separate them from rock, and to process them ecologically and clean them to the required industrial purity. That is also why most world refining—more than 70%—takes place in China.

Among the most important are neodymium, dysprosium, and terbium. Thanks to these elements, electric motors and wind turbines can have strong and lightweight magnets, without which their weight and cost would be significantly higher, with lower efficiency. One missing element can negatively affect an entire industrial chain.

We encounter these elements every day. We hold them in our hands:

– in headphones, in the form of small but extremely strong magnets;

– in smartphones, enabling vivid colours, vibration, and photography;

– in electric cars, powering motors and supporting battery capacity;

– in data centres, where they help maintain system stability and cooling;

– in hospitals, enabling precise diagnostics (e.g. MRI technology).

One electric vehicle can contain up to one kilogram of these elements in total. The production of a single wind turbine requires 200–600 kg of magnetic materials. For context—opening a new mine takes 8–12 years, from geological surveys and permitting to construction and the start of mining and refining. This illustrates how demanding the entire process is, and how strongly it influences today’s technologies.

This is why rare metals are often compared to the “new oil” of the modern era—with strategic significance impacting the economy, security, and everyday life. They are not the type of commodity that can be easily substituted. Mining takes years, and the expertise is concentrated in only a handful of countries. Even a short-term restriction can affect entire industrial chains—from electromobility to renewable energy.

This raises important questions:

Where does economics end and security begin?

And what is the value of certainty in a world that is accelerating?

European facts to consider

Europe imports more than 90% of its rare earth supply from China. Automotive manufacturing, electronics, and the energy sector therefore depend on materials upon which we are almost entirely reliant. Brussels advocates three directions:

• diversification of partners,

• investment in domestic capacity,

• a focus on recycling.

Some European companies can recover up to 95% of rare elements from retired batteries—a technology that may become crucial in the future.

Building alternatives almost always means years of work. In the short term, Europe remains vulnerable, especially in sectors where companies lack strong pricing power or long-term contracts.

However, today’s situation can also be viewed as an impulse—toward innovation, self-sufficiency, and industrial modernization, not merely as a potential threat.

History shows: pressure often creates progress.

Conclusion: When technology needs solid foundations

Rare metals show how interconnected the world has become. One element can affect transportation, energy, healthcare, and security. Countries are trying to diversify supply and build domestic capacity to become more resilient in an uncertain and increasingly dynamic era.

This topic reminds us that self-sufficiency does not emerge overnight. It grows slowly—through technology, recycling, smart consumption, and cooperation between states and companies. Much like renewable energy, it is not about instant substitution but about gradually depositing stability into the future.

At Melior Invest, we monitor these developments with respect and composure. We see them as part of a broader evolution that may shape markets and industrial chains in the years ahead. That is why we help investors build portfolios without impulsive reactions—portfolios that can endure even when the essential ingredients of modern technology begin to change.