Background
Rare earth elements9 (REEs) are comprised of the lanthanides,10 scandium, and yttrium. The REEs are classified as “light” and “heavy” based on atomic number.11
Light REEs (LREEs): lanthanum through gadolinium (atomic numbers 57 through 64)
Heavy REEs (HREEs): terbium through lutetium (atomic numbers 65 through 71) and yttrium (atomic number 39), which has similar chemical and physical attributes with the other heavy REEs
Neodymium and praseodymium (LREEs) are key critical
materials in the manufacturing of neodymium-iron-boron
(NdFeB) magnets. NdFeB magnets have the highest
magnetic strength (energy product) among commercially
available magnets and enable high energy density and high
energy efficiency in energy technologies. Dysprosium and
terbium (HREEs) are key critical materials often added to the
NdFeB alloy to increase the operating temperature of the magnets. HREEs tend to be less abundant more
expensive than LREEs. The deployment of energy technologies such as wind turbines and electric vehicles (EVs) could lead to imbalances of supply and demand for these key materials
REEs are found combined in mineral deposits such as bastnaesite and monazite, the world’s two largest sources of REEs. Bastnaesite, a carbonate-fluoride mineral, typically contains cerium, lanthanum, neodymium, and praseodymium. Monazite, a phosphate mineral, typically contains cerium, lanthanum, neodymium and samarium.
The United States currently lacks the domestic capability to separate REE concentrates into REOs and process them into rare earth metals at a commercial scale. MP Materials has announced it will begin developing its own separation and processing capability at Mountain Pass by the end of 2020.20
Since 1995, the U.S. permanent magnet manufacturing sector has been reduced by half through industry consolidation, relocation, and closure. There are currently no large scale manufacturers of sintered NdFeB magnets in the United States. Gaps in the REEs supply chain pose a barrier to domestic manufacturing. Urban Mining Company, based in Texas, is now actively making bonded and sintered NdFeB magnets, but not at commercial scale. Electron Energy Company, which manufactures samarium cobalt magnets, actively stockpiles rare earth metals to prevent supply disruption – carrying between six to twelve months supply.
Technology Transfer
Scaling up and commercializing new technologies is a challenge. However, there are no test-bed or pilot-scale facilities to help validate, demonstrate and compare new technologies for a wide-range of feedstock inputs. Getting industry input is often a challenge for researchers at DOE national laboratories and in academia at early stages of discovery and development. Conversely, the hand-off of new technologies is difficult without sustained engagement between industry, academia and national laboratories to address scientific and technical
Obtaining intellectual property rights for manufacturing is another barrier. Historically, NdFeB magnets were independently invented in Japan (Sumitomo Special Metals Corporation) and the United States (General Motors Corporation). Japanese inventors won the rights to sintered (fully dense) NdFeB magnets and American inventors won the rights to bonded and hot pressed (in which magnet particles are dispersed in a binder) NdFeB magnets. Sumitomo Special Metals Corporation merged with Hitachi Metals, Ltd and the division at General Motors became Magnequench, which was bought by Chinese investors and relocated to China. Major manufacturers of sintered NdFeB magnets worldwide, including China and Germany, currently license the right to manufacture and sell from Hitachi.28 Three Chinese companies filed inter partes reviews of Hiatchi’s U.S. Patent No. 6,461,565 in 2017, claiming the processes were unpatentable. The final decision in 2018 determined that these claims did not show “by a preponderance of the evidence” that the Patent was unpatentable.29
Market
The market is volatile and uncertain, and there is a lack of transparency in the rare earths supply chain. Concerns about market manipulation exist internationally, as iterated by the participants from Australia, Canada, and Japan. When rare earth oxide prices are too low, new mining projects are not economical upstream. When rare earth metal prices are high, magnet manufacturers can be constrained. The REO market is about $3-5 billion, but translates into an order of magnitude larger in value-added market.
Another challenge is to connect those markets in a way that allows for new capabilities to be developed upstream. Low material price is a large impediment to developing both a domestic and international supply chain that is not dependent on China. For example, Molycorp Inc., the previous operator of the Mountain Pass mine, invested $1.6 billion in a separation and processing facility30 in the $3-5 billion REO market,31 and ultimately filed for bankruptcy in 2015. This example illustrates the difficulties of developing economically competitive processes. Additionally, Chinese policymakers imposed a 25 percent tariff on imported REE concentrates (effective June 1, 2019), more than doubling the previous duty.
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