Posted on 03 Jun 2024
The global refining capacity of rare earth magnets is expected to remain highly geographically concentrated by 2030, with China alone accounting for 77% of global refining, according to the International Energy Agency (IEA).
Magnets made from these elements are critical to the clean energy transition due to their use in automotive traction motors for electric vehicles and in wind turbine motors. In its latest report titled Global Critical Minerals Outlook 2024, the agency notes that rare earth element (REE) is the most geographically concentrated of all key energy transition minerals in terms of global refining capacity.
China, Malaysia, and Australia dominated the total REE refined output in 2023 with a staggering 98% market share, with China representing 92% of the global refined output. The three countries will continue to dominate by the end of this decade, accounting for 92% of the total market.
Malaysia represents the fastest-growing region for refined production of REE magnets, growing from a 5% share today to 12% in 2030. Australia, meanwhile, is expected to hold a 3% share by the end of the decade, while China’s dominance falls to 77%.
In terms of REE mining, the IEA expects to see some improvements in geographical concentration “on the horizon.” Last year, China, Australia, and Myanmar controlled 85% of the total market. Of this, China’s share alone was 62%. In 2030, the dominance of the top three countries falls slightly to 81% of the total, with China’s share dropping to 54%. Australia and Myanmar are expected to account for 18% and 9% of the market, respectively.
Global demand and supply outlook
The global demand for REE magnets nearly doubled between 2015 and 2023 to reach 93,000 t. The IEA expects the demand to reach 131,000 t by 2030 and 181,000 t by 2050, under its Announced Pledges Scenario (APS) forecast, which assumes governments meet all climate-related commitments in full and on time. This demand will be primarily driven by EV motors and wind turbines, with the demand from EVs rising most from 7% in 2023 to nearly 30% in 2050.
Under its Net Zero Emissions (NZE) scenario, which assumes a boost in EV sales and wind turbine deployment compared to APS, the agency estimates demand to reach 146,000 t by 2030.
The IEA predicts the supply of REEs from operating and announced mining projects to increase by 44% from today’s levels to over 107,000 t in 2030. It is expected to further rise by 52% to 114,000 t in 2040. Similarly, the forecast refined supply from operating and announced projects increases to 106,000 t in 2030 and more than 110,000 t in 2040, respectively.
For the four rare earths analysed by the IEA – neodymium (Nd), praseodymium (Pr), dysprosium (Dy) and terbium (Tb) – the already operating projects are set to be enough to meet the demand in 2024 and 2025.
“However, after 2025, for the NZE scenario and 2035 for the APS, a gap emerges between projected primary supply requirements and supply additions,” the IEA notes. In the NZE scenario, the agency expects an implied supply gap of 5,000 t in 2030 and 14,000 t in 2040.
“The major concern for magnet REE, however, is not a huge gap between demand and supply like in the case of copper or lithium, but rather an extremely important level of geographical concentration of today’s as well as future mining and refining projects that expose this market significantly to supply disruptions,” the report warns.
Source:Kallanish
