Rare Earth Prices Pushing Adoption of Alternatives

The sharp fall in rare earth prices is partly because large manufacturing companies in Europe, Japan and the United States, that use rare earth metals are turning to alternate materials and lowering the demand for rare earths. The trend has been most largely seen in the automobile industry. For example, Continental AG, a German Parts supplier, has invented an electric motor that operates without permanent magnets. Rare earth metal neodymium is commonly used to manufacture these magnets. Auto company Renault has already begun deploying the new motor in two of its electric vehicles.

Günter Fella, head of purchasing in Continental automotive division said, “We are trying to reduce the effect of [rare earth] cost increases by optimizing our processes and using alternative materials. But it’s essential that the industry finds a commercially sensible arrangement involving the entire supply chain.”

Another company that has eliminated the need for neodymium-based magnets is Germany’s wind turbine manufacturer Enercon, which has started using an electrical system to generate the magnetic field required by its generators.

Last year, General Electric announced the development of a ‘super alloy’ that could replace rare earth metals. However, there is still a long way to go. Frank Johnson, a materials scientist with GE said, “We’re exploring several different hard and soft materials but haven’t selected a special chemistry yet.”

The trend to try and replace rare earth metals is not surprising considering the fact that the cost of neodymium has increased by 10 times over the last two years. The cost of the rare earth dysprosium, also used during the manufacture of magnets for electric vehicles, has gone up nearly 20 times in the last one year.

Meanwhile researchers at the DOE’s Ames Laboratory in Iowa are working on replacing rare earth elements in magnets with electrolytic manganese. Larry Reaugh, CEO of American Manganese Inc. said, “The rare earth squeeze has made companies go full bore looking for alternatives, and manganese has been found to be one of the more diversified metals out there as an alternative. Researchers are looking to manganese to replace rare earths in magnets, which may even be stronger.”

Ames Laboratory reported that such technologies “hold the potential to double the magnetic strength relative to current magnets while using raw materials that are inexpensive and abundant.” The success of such a technology bodes well both for the manganese market and the rare earth market.

Critical Strategic Metals