Abstract: Rare earth industry is a strategic industry in our country in which we have the advantages of resources endowment and competitive advantages.For a long time,due to the variety of the rare earth elements,the different uses of them and the fluctuation of rare earth market,Challenges has been brought to the rare earth industry in product related decision making and production plan.The effect of scale economy is to reduce the operating costs of enterprises.In this paper,the scale economy of rare earth industry is studied,and the scale economy model of the rare earth industry is established to analyze the scale economy of the rare earth industry and the influential factors,and it is expected to provide a reference to the operation of the rare earth enterprises.