Magnetic RE demand growth faces obstacles

Growth in electric vehicle production coupled with new transport uses for permanent magnets will drive demand for magnetic rare earth elements, delegates heard at the Argus Rare Earths Asia 2018 conference in Guangzhou on 12 June. But government production quotas and technological barriers could hamper this development.

New electric vehicle engine designs and potential future uses in high-speed trains will require a greater variety of permanent magnet technologies. "Up to 70pc of all rare earth production last year was consumed by Chinese permanent magnet manufacturers," the Association of China Rare Earth Industry's deputy secretary general, Chen Zhanzheng, told delegates.

But Chinese government supply restrictions in the form of mining quotas and import embargoes could limit the amount of raw material available to consumers. This would be likely to put pressure on the supply of some elements, particularly praseodymium and neodymium, Chen said. And while the first batch of mining quotas was 40pc higher than last year, a continued crackdown on illegal mining activities and restrictions on the import of some rare earths would lessen the effect of oversupply on the market, he said.

Other delegates went further, expressing concern with the system of quotas currently in place, citing the possibility of a shortage of key rare earths needed to produce permanent magnets. "Mining quotas need to be aligned with actual market demand fundamentals in the future," Baotou Magnetic Materials chairman Jiu Shusen told delegates. "Current production of neodymium-iron-boron (NdFeB) alloy is limited to 115,000 t/yr and this is just too low given the full production quotas for praseodymium and neodymium alongside growth in permanent magnet demand," Jiu said.

The six largest rare earth groups have a total production capacity of 227,000 t/yr but are utilising only 44pc of this, Chen said. The electric vehicle market is now the largest sector for permanent magnet demand, with market share of 32pc, Zhongguancun Central Iron and Steel Research Institute's Advanced Permanent Magnetic Materials and Analysis Laboratory director, Zhu Minggang, told delegates. This presents opportunities for future demand but also challenges. "A finished car will require 5-10kg of permanent magnets in the vehicle's motor and the development of electric vehicle technology will require a greater variety of permanent magnet designs, namely more stable and smaller variations, which will put pressure on magnet developers," Zhu said.

Usage in trains could become more widespread following the approval of technologies for 200kW motors. The Chinese government remains committed to reducing the nation's carbon emissions by 40-50pc against 2005 levels by 2020, so such technology could become commonplace despite the design challenges, Jiu said.

Despite concerns in recent years over increased substitution of rare earths in permanent magnet designs, there is a limited chance of eliminating their use, including for costlier elements such as dysprosium and terbium because of their core role in providing operational stability, Zhu said.

Japanese carmaker Toyota's latest permanent magnet design utilising less neodymium and praseodymium was unveiled in February. It was the first time a permanent magnet design sought to reduce the volume of light magnetic elements with previous designs having focused on reducing terbium and dysprosium because of higher material costs.