War with Iran and REE Supply Chain – What Threatens Neodymium Magnets in 2026?

REE Deposits in Iran: Monazite, Lithium, and Their Geopolitical Significance

Iran possesses estimated 8.5 million tons of REE and lithium deposits, mainly monazite in Yazd province (source of neodymium, dysprosium, and terbium) and lithium in Hamadan. Production is limited, but in 2025, a monazite processing plant in Abbas Abad was launched, based on domestic technology. This is part of 'Resistance Economy' – a self-sufficiency strategy that links Iran with China (importer of Iranian oil) and Russia in the Eurasian supply chain. Iran exports minor amounts of strontium and DRI, but its deposits make it a potential hub for EV batteries and REE. Sanctions limit development, but alliances with Beijing allow bypassing the West – China processes 90% of global REE, and Iran supplies raw materials.

According to USGS (2023), Iran ranks 2nd in strontium production and has potential in lithium hectorite. Geopolitically, this is a 'weapon' – the 2023 lithium discovery in Hamadan (8.5 million tons) positioned Iran as a rival to 'Lithium Triangle' in South America. The war disrupts exports, increasing prices by 10-20%. For neodymium magnets, dependent on neodymium, this is a risk of shortages in electronics and defense.

Strait of Hormuz Blockade: Effects on Global REE Transport

The Strait of Hormuz is a chokepoint for 20% of global oil and 30% LNG, but it also affects REE freight – 90% of exports from China to Europe go by sea. The blockade (from February 2026) increases insurance costs and rerouting via Africa by 20-50%, adding 1-2 month delays. This paralyzes supplies of neodymium and dysprosium, key for NdFeB. Short conflict (1-4 weeks): +5-10% REE prices due to temporary shortages; longer (>4 weeks): structural cut-offs, defense demand increase by 30%. Historically (2020 crisis), methanol and neon (from Iran) rose by 20%, affecting PV and semiconductors.

For dhit.pl, this is a challenge – freight increase from Asia by 10-20% means longer lead times. We recommend reserves: our custom neodymium magnets with delivery guarantee help mitigate risks.

REE and Neodymium Magnets Price Forecasts in 2026

Based on USGS and IEA, the Hormuz blockade may increase neodymium prices to 120-140 USD/kg in Q2 2026 (+15%), dysprosium to 450-500 USD/kg. Neodymium becomes 'strategic gold' in guidance systems and EV (1-2 kg per motor). Forecast: REE demand increase by 20% due to conflicts, but shortages delay projects. Fun fact: Iran exports methanol (impact on REE chemicals), increasing costs by 20%. Long-term: if conflict >6 months, prices +20%, but recycling (e.g., from e-waste) may mitigate by 2028.

At dhit.pl, we monitor the market, offering neodymium magnets from alternative sources.

Global Challenges for the REE Market in the Face of Conflict

The war highlights chain fragility – China (90% processing) loses cheap oil from Iran, increasing costs. Risks: sanctions on Iran cut off deposits, alliances with Russia expand conflict. For EV (Net Zero goals) and defense, this is a threat. Solutions: accelerate recycling (cover 20% demand) and exploration in Africa/Australia. For dhit.pl, this is an opportunity for custom solutions resistant to disruptions.

Globally: Japan invests in seabed, but war shows need for reserves – REE prices +25% to 2030 without changes.

Summary: REE Fragility in the Shadow of War with Iran

Conflict with Iran exposes risks for REE – time for reserves.

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