Reshoring the Rare Earth Supply Chain

­As we continue the process of decarbonisation, our dependence on rare earth minerals is growing at a tremendous rate. These minerals, which include neodymium, praseodymium, dysprosium, and terbium, make a huge contribution to the high performance and efficiency of green technologies. For example, Neodymium (Nd) and Praseodymium (Pr) are two of the main components in neodymium-iron-boron (NdFeB) magnets, which are essential for the high-performance electric motors used in electric vehicles and wind turbine generators. Dysprosium (Dy) and Terbium (Tb) are two elements which are added to NdFeB magnets to enhance their high-temperature performance and resistance to demagnetization, making them suitable for demanding applications like wind turbines and electric vehicle motors. Almost every aspect of green technology relies on rare earth materials to function efficiently.

There are two major problems with using rare earth minerals – firstly, the process of extracting and refining the minerals is very environmentally unfriendly and secondly, China dominates the rare earth market, with an estimated 60% of global rare earth mine production and 90% of rare earth processing. That market dominance gives China a ‘big stick’ when it comes to negotiations. This was seen recently, when the country’s leaders enacted export restrictions on the materials in response to President Trump’s sanctions. Car plants around the world felt the effect almost immediately, with Ford particularly being forced to shut down some of its production lines. If the ban had lasted much longer, other industries would have soon been affected. Fortunately, China suspended the ban quickly, but the consequences could easily have been much greater.

As mentioned above, rare earth materials are not exactly rare, and it is the extraction and processing that can lead to environmental damage such as soil and water contamination. The use of dangerous chemicals means careful handing is necessary and the process uses lots of power and generates vast quantities of hazardous waste materials. Until now, most developed countries have been happy to leave that burden on China. However, faced with the ongoing threat of embargoes that could halt industry in its tracks, countries that are serious about decarbonizing will now have to look to building their own rare earth supply chain and developing ways of extracting and processing the materials with minimal effect on the environment. These countries will also have to look at developing better ways of recycling materials to reduce the need for additional extraction.

Better still, the threat of being cut off from the rare earth supply chain should prompt innovation that lessens our reliance on these materials. Some companies, such as ZF and Valeo, have already made a start to this process by developing electrical motors that do not require rare earth metals. Hopefully that type of innovation can continue and we can someday rid ourselves of the environmental troubles that they cause. After all, how green can technologies be that rely on environmental devastation in their manufacturing process?