Rare Earth Magnet Supply Crisis
Context: Following China’s export restrictions on rare earth magnets (April 4, 2025), global industries—especially automakers and renewable energy sectors—are facing a supply shock, prompting them to pay premium prices for non-China sources and diversify their supply chains.
Background:
- Rare earth magnets (notably neodymium-praseodymium oxide or NdPr) are essential for electric vehicles (EVs), wind turbines, and electronics.
- China controls ~90% of global permanent magnet supply, benefiting from low costs, economies of scale, and state subsidies.
- Beijing’s restrictions disrupted EV and electronics supply chains, leading to plant shutdowns and panic among manufacturers.
Risks and Trade-offs:
-
Premiums too high could reduce usage of rare earths or force tech redesigns.
-
Premiums too low make non-China projects unviable.
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Automakers, amid an EV price war and thin margins, are cautious but still seek supply security.
Alternatives:
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Companies like BMW are building EVs with reduced or no rare earths, though complete elimination is not feasible in the short term.
What Are Rare Earth Magnets?
Permanent magnets made from rare-earth element alloys.
Discovered in the 1960s–1980s (Yttrium-Cobalt alloy, Neodymium-Iron-Boron by Dr. Masato Sagawa).
Much stronger than regular (ceramic or alnico) magnets.
Used where high strength, compact size, or weight constraints are critical.
Types of Rare Earth Magnets:
| Type | Features | Applications |
|---|---|---|
| Neodymium (NdFeB) | - Strongest, most affordable - Susceptible to rust and temperature | Audio devices, printers, DC motors, medical tools |
| Samarium Cobalt (SmCo) | - Highly stable at high/cryogenic temps - More brittle, corrosion-resistant | Aerospace, satellites, sensors, magnetic couplings |
Comparison: Neodymium vs Samarium Cobalt
| Feature | NdFeB | SmCo |
|---|---|---|
| Strength | Higher magnetic strength | Lower than NdFeB |
| Cost | More affordable | More expensive |
| Temperature sensitivity | Sensitive to heat | Stable at high temperatures |
| Corrosion resistance | Needs protective coating | Naturally corrosion-resistant |
| Brittleness | Less brittle | More prone to chipping |
Rare Earth Magnets vs Regular (Ceramic/Ferrite) Magnets
| Feature | Rare Earth Magnets | Regular Magnets (Ferrite/Ceramic) |
|---|---|---|
| Strength | 2–7x stronger | Much weaker |
| Composition | Rare earth alloys (Nd, Sm) | Mostly iron oxide (Ferrite) |
| Size for strength | Small size, high power | Larger size for same strength |
| Demagnetisation | High resistance | Easier to demagnetise |
| Cost | More expensive | Cheaper |
| Temperature resistance | Limited for NdFeB, high for SmCo | Better thermal stability |
Key Technical Details:
Remanence: Exceeds 1.2 Tesla in rare earth magnets.
Curie Temperature (NdFeB): ~310°C — beyond which they lose magnetism.
Protection: Coated with nickel or stainless steel to prevent corrosion.
Applications: Electronics, EVs, medical devices, aerospace, defence systems.
Disadvantages of Rare Earth Magnets:
Susceptible to corrosion (especially NdFeB).
Temperature limitations in standard grades.
Brittle nature, especially in SmCo, requiring careful handling.