Essential for electric cars, medical scanners and weaponry, the EU is almost totally reliant on China for the materials used in rare earth magnets. The race is on to open new mines, develop alternatives, reduce waste and recycle more
Europe is set to remain almost entirely dependent on China for the rare earth magnets that are critical to electric vehicles, wind turbines, missiles, fighter jets and consumer electronics well into the 2020s, according to researchers and entrepreneurs trying to find alternative sources.
Russia’s invasion of Ukraine has spurred the EU to end its reliance on Russian oil and gas, but when it comes to critical supplies of rare earth materials, European dependence is even more acute: it relies on China for 98% of its supply.
As the internal market commissioner Thierry Breton blogged earlier this month, “China controls the entire value chain.”
“We are seeing a true global race to source and recycle critical raw materials,” he warned.
Such worries in Brussels aren’t new, and stretch back to at least 2008, said Vasileios Rizos, head of sustainable resources and circular economy at the Centre for European Policy Studies.
“But this is a momentum that we haven't seen before, fuelled by the gas and oil dependency on Russia,” he said.
The irony is that Europe is trying to reduce dependence on Russian fossil fuels through electric vehicles and wind turbines - but these are built using Chinese rare earth magnets.
“It is true to an extent that we know we are replacing one dependency on oil and gas with a dependency on materials,” warned Rizos.
Not so rare
Rare earth is something of a misnomer in that these 17 elements are in fact relatively abundant. However, they are dispersed in the earth’s crust, making them difficult and costly to extract. China has managed to corner the market though decades of strategic investment in mines and refining facilities, just as the rest of the world was closing mines due to their environmental impact.
One or more of these elements are then typically combined with the magnetic elements iron, cobalt or nickel, to create powerful alloy magnets that function in extremes of temperature and resist wearing out. The most common magnet – NdFeB - combines iron, the rare earth metal neodymium, and boron.
Each electric car motor needs about 2 kilograms of rare earth magnets, said Alena Vishina, a materials scientist at Uppsala University. A single wind turbine can require 400 kilograms. “It’s ridiculously huge amounts,” she said.
Magnets are therefore central to the plans of European carmakers like Volkswagen, which is competing with the likes of Tesla and Chinese rivals Nio, Xpeng and Li, for the rapidly growing electric vehicle market, estimated to account for a third of all global vehicle sales by 2030.
Less discussed is how rare earth magnets are also crucial for modern weaponry, like laser guided missiles, planes and tanks – exactly the kind of precision equipment being sent to Ukraine by the west. Each F-35 fighter jet requires more than 400 kilograms of rare earth materials, for example. “Rare earth elements have become the new oil,” an analysis by the US Army concluded in 2019.
They also play a key role in consumer electronics like smartphones and headphones - anything where miniaturisation is important.
China’s choke point
After years of happily importing magnets from China – and exporting the environmental damage their mining and separation entails, with huge amounts of low level radioactive spoil generated during their processing - the rest of the world got a wake-up call in 2010 when Beijing halted exports to Japan during a maritime dispute, causing global prices to rocket more than 10-fold.
Prices have since calmed down, but in the 12 years since, tensions with Beijing have only grown, leading to fears that China could once again turn off the taps.
Even if China didn’t monopolise rare earth magnets, Europe and the wider world would still have a problem.
That’s because demand is rapidly outstripping supply as rare earths are gobbled up by electric vehicles and wind turbines. Global demand for NdFeB magnets is expected to gallop ahead by 12.5% every year this decade, according to an assessment by the US Department of Energy released earlier this year.
Next gen mining
The first and most obvious answer to this problem is for Europe to copy China and mine and process rare earth metals itself.
A Norwegian company, REE Minerals, is one of the firms trying to do just that. It says preliminary drilling has confirmed high levels of key rare earths, including neodymium, at a site about 120 kilometres southwest of Oslo.
“You need to open a mine like ours every year for the next few years in order just to supply a little bit of what the market would want,” said Thor Bendik Weider, the company’s chief executive.
If and when the mine gets up and running, it should be “very, very lucrative,” Weider said. But the problem is that while returns are uncertain and profits a long way off, the company can’t attract private money to do the hard, expensive work of exploration to prove the mine is viable. “It’s a catch 22,” he said.
This is where governments should step in, but EU institutions have failed to come through with support. There have been “good intentions” but “little action,” said Weider.
A spokeswoman for EIT RawMaterials, an EU funded venture attempting to boost supply of critical resources, said that the project was at too early a stage to fund yet, but it had recently given €5 million to a different rare earth mining project in Norway that is at a more advanced phase.
EIT RawMaterials is also in talks with investors to secure money for some of the 14 rare earth metal projects identified in an European Raw Materials Alliance (ERMA) action plan last year as needing funding.
But even in a best case scenario where all these projects get funding – the plan calculates they’ll need €1.7 billion – the EU will still only be able to supply 20% of its rare earth magnet needs by 2030.
Even if REE Minerals got the funding it needed, Weider estimates it would take five years to get the mine up and running. Physically, it’s possible to open a mine much quicker than this, he said, but local regulations and laws mean it takes a lot longer.
This points to a big obstacle to a revitalising mining in Europe: its impact on the environment and communities. In a speech last year, commissioner Breton called for a mining debate “without taboos”.
“It is very tricky,” said Rizos. “On the one hand there is this issue of environmental impacts on local communities and local environment. On the other hand, Europe cannot just export these environmental problems.”
Weider insists that his mine would be “state of the art”, and underground, unlike the opencasts that blight parts of China.
Since the price shock in 2010, the rest of the world has started to open its own mines. In the US, the Mountain Pass mine in California restarted in 2017 after having ceasing operations in 2002 due to environmental concerns and Chinese competition. China’s share of rare earth mining has shrunk from 92% in 2010 to 50% a decade later, found a recent analysis by Nato’s Defence College Foundation.
However, China still dominates the market for processing mined feedstock and for manufacturing finished magnets, according to the US Department of Energy.
Europe only has a few such processing and manufacturing facilities. The Canadian company Neo Performance Materials has a plant in Estonia, for example, and there are now plans to expand it.
Another solution is for Europe to make more efficient use of the rare earth metals it imports.
Currently, magnets are formed into basic shapes through pressing and sintering, a process that involves compression and heat treatment without melting. These shapes then have to be shaved down to get the perfect form, which means there are offcuts and waste.
3D printing would eliminate this waste, but at the moment, the metallic powders used to create magnets can’t be printed.
During two-year project called 3DREMAG, funded by EIT RawMaterials, Joni Reijonen, an advanced manufacturing research scientist at the VTT Technical Research Centre of Finland, worked with collaborators from across Europe to produce a NdFeB powder suitable for 3D printing.
However, as yet, the magnetic strength of 3D printed magnets falls short of commercial sintered versions. A “small breakthrough” and more basic science is needed to overcome the problem, said Reijonen.
Despite the hurdles, 3D printed magnets remain a tantalising prize. Reijonen estimates they could save up to 20-30% in rare earth metal waste during manufacturing. Even better, they could allow carmakers to create magnets in far more intricate geometric shapes than are currently possible, perhaps opening the door to much more efficient engines.
However, Reijonen is pessimistic that Europe will be able to reduce its reliance on China any time soon. It’s high on the strategic agenda of the US, too, “so the supply will diversify,” he said. “But it's not like something that will happen overnight.”
Although 95% of electric vehicles use rare earth magnet motors, there is an alternative. Induction motors with electromagnets, which gain their magnetic field from passing through an electric current, were used for the Tesla model S and X, for example, although the company has switched to rare earth magnets for its newer Model 3.
“You could go to an induction motor and still make a good electric car,” said Reijonen. But induction motors are bulkier and less efficient, limiting driving range, and would likely put any carmaker forced to use them at a significant disadvantage.
Other scientists are on the hunt for something more radical: new alloys that are just as efficient as current magnets, but do not require rare earth metals. Uppsala’s Vishina, for example, is using supercomputers to sift through a vast database of all the materials created in the last 60-70 years to see which might make a good magnet.
When she alights on a good potential fit, colleagues take over and test it in the real world. Other researchers at Uppsala are taking a slightly different approach, simulating alloys that have never been made before for their magnetic potential.
So far, Vishina says she’s found some promising replacements. But some contain platinum, which is even more expensive than rare earth metals.
In theory, Vishina, or other scientists, could stumble across a perfect replacement tomorrow that solves the shortage of rare earth magnets practically overnight.
But there’s no guarantee that such a substitute is out there, and it takes immense computing power to sift through the candidate magnets.
Vishina says she needs ever more computing power. As supercomputers get more powerful, they could massively accelerate the hunt for a substitute. “So what takes me years to go through this database will take me a couple of days,” she said.
She too is sceptical that Europe can significantly reduce its dependence on China in the medium term. “I don't think that we can change it within, say, five years. Maybe 10, 20 years.”
Recycling to the rescue?
Currently, just 1% of rare earth magnets in cars are recycled – so there’s enormous scope to increase supplies from this source.
Alongside electric cars, the potential of household appliances like dishwashers and washing machines to supply recycled magnets needs to be assessed, said Rizos. This is one of the focus areas of INSPIRES, a project to find new sources of magnets to recycle.
But so far there’s no systematic tracking of these products across the EU, making it far harder to harvest their valuable remains. And there’s often no clarity about what magnets are inside mobile phones or appliances, forcing organisations to manually break down products down to figure out what’s inside. “There is certainly a lack of transparency,” Rizos said. “In many cases [… ] we don’t know what is inside.”
For nickel and lithium for electric vehicle lithium-ion batteries, CEPS estimates that recycling could - under an ambitious scenario - provide about half of Europe’s needs by 2040. INSPIRES is currently working up a similar calculation for magnets.
The big problem with recycling is the mismatch between supply and demand, with the rapid growth of the electric vehicle market meaning that by 2030 vastly more will be sold than are scrapped.
“For the foreseeable future, recycling alone can only meet a minor fraction of the growing materials demands,” warned the ERMA action plan last year.
So during this decade at least, Europe will continue to pay the price for coming to rely upon a country that is now a geopolitical rival.
“For Europe to catch up, it needs time,” said Rizos. “We have to keep in mind as well that China has been doing this for many years…they have made a conscious decision and effort to invest in this domain decades ago.”