When most people think about rare earth mining, they think miners extract a chunk of lanthanum or cerium, send it to Apple, and they put it in their newest iGadget. However, few know that there are two different types of rare earths with wide ranging uses and prices. In addition, raw minerals must be processed using a complicated (and often dangerous) process to extract the individual elements.

Rare earths are typically mined using a technique called surface mining where miners use explosives to blow off chunks of rocks. They collect these rocks using massive, industrial dump trucks that carry the rubble away to refineries where rare earth metals will be extracted using acid and other chemicals. These concentrates are then shipped and sold to a processing company that converts them into refined oxides. The processing companies build relationships with Toyota and Canon and sell the oxides for use in their electric cars and high-tech lenses. The biggest surprise to most will be that the processors are the ones that make most of the money. To illustrate this, processors can purchase concentrate from China for roughly $4 per KG, however they will sell their processed material for roughly $20 per KG.

In the world of rare earths, there are two members: light earths and heavy earths. Although their uses overlap, heavy earths have a relatively higher atomic number and are also more valuable. Regardless of the weight, prices of rare earths have soared this year due to demand outstripping supply for the first time as China limits its rare earths exports.

China’s current quota system restricts the total amount of rare earth exports rather than specific metals. This has caused most companies to only export the high value, heavy metals and less of the light metals which have now soared in price. Rare earth miners Molycorp and Lynas have a large supply of light metals which have made their business plans extremely attractive to investors.

Heavy earths such as terbium and dysprosium have the highest demand right now because of their use in hybrid vehicles, lasers and nuclear reactors. This has led some governments, such as the United States, to deem rare earths a national security priority. As such, they have fast tracked legislation that makes it easier to mine and process rare earths.

Although there are a few processing plants in Germany and Japan, many countries lack the infrastructure for processing and transporting rare earths and experts are suggesting that it will take roughly 15 years to build the necessary infrastructure. The potential for a short-term monopoly has fueled companies to invest in projects outside of China. One company, Japanese chemical company Showa Denko, has taken the leap and opened a processing plant in northern Vietnam.

Only time will tell if these new business ventures will be worth their weight in Terbium (currently worth $625/KG) or dirt (currently worth very little). However, everyone agrees the demand for these metals are in high demand and will continue to be in the future.

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