Analysis: The Growing Impact of Rare Earth Elements

Trouble may be brewing as China’s monopoly of the critical materials needed for electric vehicles and national security may be impossible to break.

As electric vehicles (EVs) begin to reach markets in significant numbers, much has been written about the supplies of lithium and cobalt needed for their advanced battery systems. But better batteries are not the only key to electrification of transportation. Traction motors have continued to improve, becoming lighter and more powerful, thanks in part to advances in materials.

Many of the most effective electric drive motors used on today’s electric vehicles (EVs) use permanent super magnets attached to their rotating armatures. These extremely powerful magnets interact with the magnetic fields produced by the stationary coils in the stator to produce driving torque.

But there is a speed bump approaching. Today’s most powerful magnets are made from metallic alloys that contain rare earth elements. Currently, the source for more than 95% of these rare earth elements is China. This rare earth element monopoly has the potential to cause problems.

rare earth elements

Pictured are rare earth elements including, clockwise from top, praseodymium, cerium, lanthanum, neodymium, samarium, and gadolinium. (Image source: Peggy Greb / USDA)

Not So Rare

Rare earth elements are a group of metallic materials that are grouped together on the periodic table. They are not actually very rare, but are often found together in the same minerals. Because they don’t collect into large deposits, like iron or copper, they are also relatively difficult to extract from ore and are thus expensive. They are used in small amounts in everything from specialty glass for medical lasers (gadolinium, yttrium) to super magnets (neodymium, dysprosium, praseodymium, samarium) and catalysts for oil refining (samarium, lanthanum). Although rare earth elements can be found in many places around the world, parts of China— including Inner Mongolia—are the primary source for the rare earth materials used today.

The supply of rarer earth elements wasn’t always like this. In the 1960s through the 1980s, the Mountain Pass Rare Earth Mine on the California and Nevada border was the world’s leading producer. By the 1990s, however, Chinese companies began buying up production, eventually controlling the world’s production of the useful minerals. Meanwhile, the company that owned the Mountain Pass Mine in California went bankrupt and the mine was purchased by a Chinese company in 2017.

Security Concerns

Having a monopoly on rare earth elements has allowed the Chinese government to control the market. Pricing on rarer earth elements spiked upward when China imposed a 40% cut in its production quota in July 2010. In September 2010, China instituted a temporary ban on shipments of rare earth elements to Japan in retaliation for the Japanese Coast Guard detaining a Chinese fishing boat captain.

Because rare earth elements are in use in so many high technology products, control of their production by a single government raises definite national security concerns. Aside from the magnets in electric motors, the US military’s need for rare earth elements includes use in communications, devices, weapons systems, and guidance, targeting, and control systems—just about everything having to do with modern warfare.

The auto industry and the emerging electric vehicle market are also particularly sensitive to the price and availability of rare earth elements. A typical EV has around 2 kilograms of rare earth elements in the permanent magnets of its drive motor(s). In addition to use in traction motors, other smaller electric motors—like those powering the air conditioning, power steering, and even the electric windows—all potentially use magnets made with rare earth elements. China’s export production quotas are in place for raw materials, but not for finished products. This means that Chinese manufacturers have been able to build up their capacity, building and selling powerful magnets and electronic devices on the world market.

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