The addition of trace rare‐earth alloying elements to wrought magnesium products can dramatically improve the formability of the base metal, leading to the development of the commercial Mg‐Zn‐Nd‐Zr alloy ZEK100 for lightweight vehicular components [1]. Of particular importance in rare‐earth alloy design is a greater understanding of the role of solute species to which the favourable texture and ductility are attributed [2,3]. Here we use an analytical transmission electron microscope, combined with electron tomography and multivariate statistical analysis (MSA), to study the microstructure and partitioning of the trace alloying elements in alloy ZEK100. We observe three distinct precipitate populations in the matrix; large spherical neodymium rich precipitates decorate the microstructure at the micrometer length‐scale (Fig. 1a), and at the nanometer length scale, a fine dispersion of smaller round zinc‐rich and rod‐shaped zirconium rich intermetallic precipitates populations are present, as revealed by energy dispersive x‐ray analysis and electron energy loss spectroscopy (EELS). An electron tomographic reconstruction of a precipitate‐rich region (b) enabled the distinction between round and rod‐shaped precipitates and elucidation of the rod precipitate orientation distribution and preferred habit plane via principal component analysis (iii). By utilizing the high sensitivity of MSA when applied to EELS spectrum images, we interpret a weak component in the spectral dataset to represent the presence of zinc and neodymium rich shells, just a few monolayers thick, encapsulating the zirconium rich intermetallic precipitates (i,ii). This interpretation was supported by subsequent targeted analysis. An individual elongated precipitate was identified as a Zn 2 Zr 3 structure by lattice‐resolved HAADF‐STEM imaging (Fig. 2a, i), and a few monolayer thick shell is observed at the precipitate/matrix interface (ii). The partitioning of neodymium and zinc at a precipitate interface was also observed in a needle specimen of the same alloy by atom probe tomography (b), providing strong evidence in support of the MSA zinc and neodymium rich shell component interpretation. The combination of EDX, EELS, electron tomography and MSA techniques enabled an efficient and targeted analysis of the complex microstructure in alloy ZEK100. In particular, the use of MSA enabled the detection of a subtle, few monolayer thick solute rich shell around the small rod‐shaped precipitates, which may have otherwise gone unnoticed using conventional data analysis techniques. The tendency of the rare‐earth solute Nd to encapsulate precipitates may affect its role as a texture‐modifying element, and could therefore be of great significance in optimizing the chemistry and processing of rare‐earth magnesium alloy systems.