Rare earths neodymium and dysprosium, critical components needed to create high-performance permanent magnets to support certain technologies, will be on the brink of supply in coming years, according to a research by the Massachusetts Institute of Technology's Materials Systems Laboratory.

The supply shortage, the research said, was being induced by the rapid developments in the global green energy movement. The fast demand growth for high-performance permanent magnets needed to make batteries for hybrid and electric cars and motors for wind turbines will push demand for neodymium and dysprosium to soar at an extraordinary rate.

While there exists enough present supply to meet global demand, the study saw miners involved in rare earths will have a hard time scaling up extraction and refining the elements to match the lightning speed demand increase, more so that mining rare earths can bring up and yield massive environmental consequences.

Researchers from the Massachusetts Institute of Technology's Materials Systems Laboratory said requirement for dysprosium will jump 2,600 per cent in the next 25 years, while necessity for neodymium will rise by as much as 700 per cent for the same period.

Neodymium and dysprosium are two of the 17 precious metals classified as rare earths. Around the world, China is the global supplier of the precious minerals, producing 98 per cent. The world's second largest economy holds 50 per cent of known rare earth metal reserves.

But the country is now enmeshed in a heated debacle with other developed economies such as Japan, the European Union and the United States over its self-imposed quotas of rare earth metals exports which they started applying in 2010. China had repeatedly argued the export quotas were needed to preserve its immediate environment and prevent future damages of past rare earths extractions.

The MIT Materials Systems Laboratory study recommended industries engaged or involved in the rare earths supply chain should conduct more research into developing new sources of the materials, as well as substituting materials or improving the efficiency of their use. Ways to recycle the metals once the devices reach end of life could also be valuable.