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A labourer works at a site of a rare earth metals mine at Nancheng county, Jiangxi province March 14, 2012. The United States, Europe and Japan have joined forces to challenge China's restrictions on exports of rare-earth metals, escalating a trade row over access to some of the most important raw materials used in advanced technologies.
Credit: Reuters/Stringer
By Braden Reddall and Julie Gordon
Fri Jun 22, 2012 11:54am EDT
(Reuters) - The hunt for substitutes for rare earth minerals is gaining momentum as auto makers, lighting companies and clean tech developers seek to reduce their reliance on thin and unreliable supplies of the raw material.
Rare earths, found in everything from Apple Inc's iPhones to energy-efficient lighting and wind turbines, gained global attention last year as China, which produces more than 90 percent of global supply, repeatedly clamped down on exports. Prices of the individual oxides, alloys and metals soared.
The emergent battery-powered vehicle industry, with its world-scale ambitions, is leading efforts to find alternatives to rare earths, or at least curb reliance on the minerals, even as prices have fallen from last year's record levels.
General Motors Co, maker of the Chevy Volt, says it is close to a breakthrough that would reduce its need for dysprosium, a rare earth in especially high demand.
Magnets are what make electric motors spin, and the strong and durable permanent magnets used in many electric and hybrid vehicles are made from the rare earth neodymium, with dysprosium added to ensure performance at high temperatures.
While dysprosium may be the ideal option in terms of performance, carmakers must plan several years out, and do not want to depend almost exclusively on China for supplies of a key raw material.
"The problem for them is not necessarily price," said Jon Hykawy, a clean technologies and materials analyst at Byron Capital Markets. "The problem for them is the availability and security of that supply."
The price of dysprosium oxide rose from an average of $229 a kilogram in 2010 to an average of $1,454 in 2011, according to Dundee Securities.
Made of an element aptly named for the phrase "hard to get" in Greek, it now goes for about $1,000 a kg.
GM is looking at reducing its overall use of rare earths by eventually replacing permanent magnet motors, but that will take time, said Yucong Wang, manager of GM's Department of Materials Technology.
"We know that permanent magnets are still the best magnets and we want to use (them)," he said. "But then how can we, from a materials standpoint, reduce the usage of the rare earths?"
GM is not alone. Japanese media reports say Toyota Motor Corp has found a way to make electric cars without rare earths, while Renault SA has started producing cars with electric motors that do not need permanent magnets.
Two months ago Hitachi unveiled an electric motor that does not require any rare earths at all, but it will not go into commercial production for two years.
Carmakers are also rethinking other design elements, like the tiny electric motors that move seats and side mirrors, to see if those can be made with fewer rare earths, or none at all. Bob Wolf, head of sales at magnet supplier Alliance LLC, counts more than 100 permanent magnet applications in a modern car.
FROM PURSE CLASPS TO LEDS
The pricing roller-coaster is a boon for rare earth substitute makers like Nanosys, which produces rare earth-free backlighting technology for monitors and handheld devices. Nanosys has a licensing deal with display maker Samsung, which is also an investor, and a commercial deal with LG.
Nanosys CEO Jason Hartlove said that even at less-inflated rare earth prices, the cost to make light-emitting diode (LED) products using yttrium, a rare earth, is twice that of Nanosys lighting -- and LEDs are expected ultimately to replace standard light bulbs once they are competitive on price.
"We have an ambition to move into general illumination, probably in the next year or so," said Hartlove, whose firm's backers also include Germany's Nanostart AG.
Among larger competitors, Philips said in April that it was developing technology to "significantly reduce" its reliance on rare earths in the production of LEDs.
A few years ago, rare earth magnets were so abundant in China that they were used in purse clasps, but that all stopped once prices soared, said Doug Jackson, senior vice president of business development at U.S. rare earth miner Molycorp Inc.
Demand from clean-energy technologies such as wind turbines may triple global demand for dysprosium by 2025, according to the U.S. Department of Energy, which has been scrutinizing the rare earths market for two years.
With an eye on the supply shortage, Molycorp last year invested in Boulder Wind, a maker of turbines that are free of dysprosium, though they use other, less-scarce rare earths.
"We think that their technology will accelerate the uptake of the permanent magnet generator," Jackson said.
(Reporting by Braden Reddall in San Francisco and Julie Gordon in Toronto; Editing by Patricia Kranz and John Wallace)
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