How a Lack of Heavy Rare Earths Could Hamper Building a North American Permanent Magnet Supply Chain
EXPERT OPINION ARTICLE BY:
Chief Marketing Officer,
"Due to the urgent need to close the supply gap of all rare earths, and critically the heavy rare earths, all rare earth projects that have dysprosium and terbium, are economically attractive, meet ESG criteria, and have a social license, should be developed."
Rare earth permanent magnets are crucial to North America’s electrification and decarbonization ambitions. Permanent magnets are essential to manufacturing high-efficiency motors used in electric vehicles, drones, robotics and increasingly in wind turbine generators. Electric vehicles (EVs) require a high-performance battery and a high-performance drivetrain motor. The battery system is unavoidably bigger and more expensive than the drive train motor. This means that motor efficiency, enabled by permanent magnets, is critical because a less efficient motor requires a larger battery, which adds significant cost and weight.
The type of permanent magnet used in EVs contains rare earths neodymium, praseodymium, dysprosium, and in some cases terbium. The light rare earths—neodymium and praseodymium—are the key magnetic elements for producing a permanent magnet. Less understood though is the critical role that heavy rare earths—dysprosium and terbium—play in high-performance applications such as a drivetrain motor. Heavy rare earths create a stronger magnet and allow the magnet to retain its magnetic properties in elevated temperatures during motor operation. (More technically, dysprosium and terbium increase the energy density of the magnet and improve the thermal stability, resulting in increased power, size efficiency, and long-term reliability.) Dysprosium and terbium do not occur in significant quantities in most rare earth deposits, causing serious difficulty in matching supply to demand. Despite higher prices, dysprosium and terbium continue to be cost-effective considering the combined cost of the battery and motor system.
Over the past decade, there have been significant advances in permanent magnet technology to deploy dysprosium and terbium more efficiently. This has allowed the tight supply of dysprosium and terbium to be stretched over an ever-increasing number of EVs and other applications, but the need for heavy rare earths is continuously growing.
Given the supply problem, why not use magnets that do not contain dysprosium and terbium?
With the rapid acceleration in the production of EVs, dysprosium, and terbium have risen to the top of the criticality list because they work so much better than any other options. However, due to the risks and uncertainty of supply security, there have also been efforts to remove dysprosium and terbium entirely, or even to move to non-permanent magnet motors. These alternatives inevitably come with compromises to efficiency, performance, reliability, and costs. This means that companies and countries that can establish long-term supply security for these two heavy rare earth elements will have a distinct and significant competitive advantage.
In short, dysprosium and terbium are essential for an independent and secure supply chain. Currently, China controls almost 100% of the supply. China’s dysprosium and terbium supply comes from domestic mining and up to 50% comes from ore concentrate from Myanmar. China is also increasingly importing concentrate from other countries.
Despite progress underway on other aspects of the supply chain, such as developing new magnet manufacturing facilities in North America, EV production will remain dependent on China unless secure dysprosium and terbium supply can be increased to support the rapidly growing demand for high-efficiency permanent magnet motors.
What do EV and green technology manufacturers need from their rare earth permanent magnet supply chain?
Companies are increasingly planning to measure and report on their ESG performance in their supply chain all the way back to the mine. This is a requirement from their customers to protect their brand from social license and environmental integrity concerns. Therefore, in addition to the long-term security of supply, they need traceability, transparency, and commitment to an acceptable level of ESG performance.
If new secure and responsibly produced dysprosium and terbium are essential for a fully independent rare earth permanent magnet supply chain, where should they come from?
Due to the urgent need to close the supply gap of all rare earths, and critically the heavy rare earths, all rare earth projects that have dysprosium and terbium, are economically attractive, meet ESG criteria, and have a social license, should be developed. All projects meeting these criteria are needed; not needed is debating and competition between projects. Meeting climate change and decarbonization targets requires manufacturing of products that use critical minerals sourced from a fully independent and diverse supply chain. Increasing the dysprosium and terbium supply globally is mission-critical, and requires a deliberate, collaborative effort, where everyone plays, allowing everyone to win.
Image courtesy of Torngat Metals