Categories: Energy / General Market Commentary
Topics: General Energy / General Market Commentary

The US rare earth vulnerability and mammoth battery supply disconnect

The US rare earth vulnerability and mammoth battery supply disconnect

The most startling act of cognitive dissonance in the mining space in this day and age is amongst those investors and analysts that enthuse about Lithium, Cobalt, Graphite and yet cannot raise an eyebrow for Rare Earths.The thesis is rather simple.

If you believe that we are on the cusp (or indeed already in) of a massive surge in adoption of EVs and HEVs and therefore the batteries for these vehicles (primarily the Li-Ion battery format) will rule the Earth then how can one not also posit that the type of engine that dominates the same vehicles will have a proportionate need for the Rare Earth magnets produced from Neodymium and Praseodymium.  If one is disturbed by potential shortages of Lithium and Cobalt, then why no sleepless nights about Rare Earths?

Alarm Bells?

It seems that concern is rising but not amongst investors. Then again how real is any professed concern if it doesn’t lead to action? Japanese and Korean companies have supposedly been concerned for a decade now about their dependence upon Chinese REE (rare earth element) sources but what has it actually prompted them to do? Sure we had some Japanese prominently and publicly support some of the most notorious fakers in the Canadian REE space during the last boom but they got burned when they discovered they 

had been snookered by the perennial promoters with zero intention of ever moving to production. On the rebound the Asian end-users retreated into their shells but that doesn’t put bread on the table when one is facing an imminent supply crunch.The Europeans are just as vulnerable, if not more so.

In a recent JRC study, presented at the 9th Conference of the European Strategic Energy Technology Plan, the following was noted:“The EU resilience to supply bottlenecks is currently low for several materials, such as the rare earths – neodymium (Nd), praseodymium (Pr) and dysprosium (Dy) – used in permanent magnets for wind and electric vehicles technologies, as well as for graphite (C) required in electric vehicles rechargeable batteries. Moderate supply issues are seen for indium (In), silver (Ag) and silicon (Si) required in the photovoltaic technology as well as cobalt (Co) and lithium (Li) requisite in electric vehicles.”

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