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Europe, US strive to develop regional rare earths value chains: conference


Demand for RE-containing magnets to outstrip supply

Prices 'soaring' since late 2020

Recycling not yet economical

  • Author
  • Diana Kinch
  • Editor
  • Kshitiz Goliya
  • Commodity
  • Electric Power Energy Transition Metals

Europe and the US are urgently seeking to cut their dependence on imports of rare earths elements, or REE, particularly from China, as demand for REE grows for use in permanent magnet motors for electric vehicles and in wind towers, speakers at an industry conference said March 31.

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China is, meanwhile, set to reduce its own production amid environmental curbs.

Investments are needed to open or reopen rare earths mines and processing in Europe and the US, following a decade or more of underinvestment, speakers said at the virtual Global Rare Earths Summit 2022, organized by City & Financial Global and the Global Rare Earth Industry Association.

REIA, a non-profit organization founded in 2019 with the support of the European Commission, groups together 45 industry stakeholders including companies, government bodies and research institutions.

"To be a leader in the transition to the green economy, we need to strategically invest into the full materials value chain .... Today we lack various raw materials and the rare earths value chain is of particular concern," said Roland Gaus, head of innovation and business intelligence at EIT Raw Materials GmBH, a pan-European innovation community, also funded by the EC. "Wind turbines use up to 4 mt of Nd-Fe-B (a REE magnet material); 95% of EVs use permanent magnet motors and rare earth magnets are essential for mobile technology," he said.

Initiatives are underway with potential new partners, including in Canada, to diversify supplies, and there could "absolutely" be mining in Europe at "concrete" projects in Greenland, Norway and Sweden, including potential for REE extraction from phosphates in Finland and Sweden, Gaus noted. "The key is to get local approval for these projects, and establish the economics with scale of production," he said.

REE are a group of 17 metals comprising lanthanides, scandium and yttrium, with exceptional luminescent, catalytic, electrical, magnetic, and conductive properties.

US 'vulnerability'

Salim Bhabhrawala, critical minerals sector lead at the US Department of Commerce's Office of Materials Industries, and Gary Stanley, OMI director, told the event that the US has been making a concerted effort via three executive orders issued since 2017 to bolster its supplies and supply chains of so-called critical minerals.

"The US has net import reliance with little to no domestic production and needs to strike partnerships," the OMI officers said, citing Canada and Brazil as potential partners.

Bhabhrawla said the US may have reached a "Sputnik moment", regarding rare earths and other critical minerals.

"Being dependent on any primary or secondary source of supply (of critical minerals) creates strategic vulnerabilities and this is not sustainable," Stanley said.

Chinese producers, which currently account for around 63% of the world's rare earth oxide mining, 93% of oxides production and 92% of permanent magnet production, according to specialist US-based researcher Adamas Intelligence, are meanwhile set to see their own mine production fall amid environmental curbs and consolidation.

Chen Zhanheng, vice secretary-general of the China Rare Earth Industry Association, said that six major producing groups had recently been consolidated into four very powerful groups and that "supply has reached a bottleneck: we need more players (outside China)". The Nd-Fe-B critical REE raw material price index has been "soaring" since the fourth quarter of 2020 due to shortages, he said.

Substantial REE mine reserves are also held in Russia, Brazil and Vietnam.

"We expect demand for REE to triple by 2035, while production will only double.... as Europe and North America seek to fully electrify their vehicle production and sales soon after 2035," Ryan Castilloux, managing director of Adamas Intelligence told the conference. "We see a widening gap between oxide production and demand," he said.

Rare earths oxides production reached 260,000 mt in 2021, according to Castilloux.

REE are rarely concentrated into significant ore deposits, hampering efforts to develop new mines. In addition, REIA pointed out that rare earths mines typically have a high environmental impact during mining, refining and waste management processes, particularly as some are found together with radioactive elements such as thorium and uranium.

Lloyd Kaiser, general manager, sales and marketing of Australian mine developer Arafura Resources, said that environmental curbs may make it more difficult in future for China's producers to gain new mining licences, particularly in the country's south. "We won't see China expand so quickly," he said, noting that China has also developed a policy to import some feedstock from the US and from Australia via Malaysia for processing. "There's an opportunity here for all of us."

Recycling: costly and minimal

Still, primary sourcing of REE will continue to be the dominant source of material for the time being. Recycling REEs is not yet economical, being highly energy-intensive and without prospects of a sufficient stock of recyclable materials for around 20 years, expected to be the typical life of the permanent magnet motors now being made, conference participants said.

"100,000 iphones would need to be recycled to give enough REE for just four EVs," said Filip Kozlowski, CEO of Leading Edge Material, a Canada-based mine project developer. "We need to transfer from a linear system to a circular system".

REIA noted in a statement that recovery of RE from end users is "inefficient", with less than 5% of RE magnets currently recycled. Due to the complexities and costs involved in recycling, secondary production may even be worth more than primary metal, Guillaume Pitron, author and journalist active in the sector, told the event.