From Dependence On Foreign Oil to Chinese Neodymium?

There is a good article out in The Atlantic today discussing the concern of neodymium shortages, most of which is produced by China.  Neodymium is a key component used in hybrid and electric cars as well as wind turbines to manufacture powerful, light weight magnets for high torque, efficient performance.  It should be noted that neodymium is also used in data storage devices and just about every computer, so the supply crunch is very real and a big concern.  The growing need for this rare earth metal has prompted a resurgence in mining at Mountain Pass, CA which years ago supplied most of the world’s rare earth metals. .. that is until the early 90’s when China began producing an abundance of rare earth metals.  They have since curbed exports to take care of their own needs.  As a result, North American miners such as Avalon, Molycorp at Mountain Pass and other small players are looking to mine the rare earth metals to meet growing demand.  This will be an interesting area to watch as countries all over the world attempt to reduce foreign oil imports with greater use of clean technologies.  Are we just replacing our dependence on foreign oil with a dependence on China neodymium?  To what extent will neodymium shortages hinder green tech efforts and will China emerge as a leader because of their control of valuable rare earth metals? 


A few additional articles worth considering on the subject:

Naked Capitalism describing the way GM sold Magnaquench, a key manufacturer of neodymium magnets, to China in 1995
Energy Investment Strategies discussing the use of rare earth metals in clean technologies.

3 thoughts on “From Dependence On Foreign Oil to Chinese Neodymium?”

  1. I find it hard to believe that there have been no comments on this since April. Greenstocks needs to take a long hard look at where the REE miners and burgeoning industry is now, 6 months hence. You may find an entirely new playing field as Molycorp is mor a Molycorpse, and Avalon and the other favorites are stalled. Enter a little company called Great Western Minerals Group who has a Mine to Market strategy of mining, refining, and producing market ready products. Add to that that they have a strong chance of being not only the first operational miner outside of China, but the only vertically integrated REE company on the planet.
    I’m a small investor, and I like what I see here.

  2. Hey Tim, I have to say I’m surprised too! Thanks for your input.. I may explore this area again soon.

  3. Induction Motors (IM) were invented by Nikola Tesla in the 1880. They are nothing new. Permanent Magnet (PM) motors have an small advantage in power density and efficiency and are slightly easier to control but methods for near optimal control of both are well established. What would be interesting is to do a cost/benefit analysis of PM vs. IM motors in EV applications when you get down to the actual cost of manufacture of both in high volumes. I honestly don’t know how this would turn out or, more importantly, at what price per kilo of Neodymium does the analysis crossover for a typical vehicle lifetime.

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