Rare Earths Refining Challenges Threaten Global Green Energy Transition
Refining rare earths for the green energy transition is proving to be a difficult task for the world’s two biggest rare earths companies outside of China, MP Materials and Lynas. These companies are facing numerous challenges in turning the rocks from their mines into magnets that are essential components in various high-tech products, including smartphones, electric vehicles, and fighter jets.
The urgency to develop independent supplies of critical minerals has increased after Beijing imposed export controls on gallium and germanium, raising concerns that China could block rare earths exports or processing technology in the future. This has prompted the West to seek alternatives and reduce its dependency on China, which currently controls 87% of the global rare earths refining capacity, according to the International Energy Agency.
However, recent struggles faced by MP, Lynas, and other companies in refining their own rare earths highlight the challenges that the rest of the world faces in breaking China’s stranglehold on these crucial metals necessary for the clean energy transition. Technical complexities, strained partnerships, and pollution concerns are hindering these companies’ efforts to gain market share from China.
The failure of plans for Lynas to build a rare earths refinery in the United States with a Texas-based partner is just one example of the difficulties faced by these companies. Lynas is now working towards completing a refinery in Western Australia and is building its own plant in Texas. Similarly, MP’s goal of refining its own rare earth metals by 2020 was affected by the COVID-19 pandemic and technical challenges, shifting their target to the end of 2023.
MP is currently reliant on China for refining and generating revenue as its efforts to commission refining equipment near its California mine have not succeeded yet. The company is also constructing a magnet facility in Texas to supply General Motors, which requires the operational California refining equipment. The commissioning process for rare earths refining is known to be painstaking and complex.
Rare earths magnets play a crucial role in the clean energy transition as they convert power into motion and are widely utilized in electric vehicles’ motors. These magnets are lighter and can withstand much higher temperatures compared to traditional magnets due to their unique chemical properties.
The challenges faced by MP, Lynas, and other companies underscore the importance of finding alternative sources of rare earths and refining capacity. Maintaining a global supply of these critical minerals is essential for countries to achieve their goals of reducing carbon emissions to net zero by 2050, minimizing the impact of climate change. Without viable alternatives, China’s dominance in the rare earths market could impede the progress of the global green energy transition.
It is clear that refining rare earths and breaking China’s stranglehold on the market is a complex and multifaceted task. The rest of the world must continue to invest in research, development, and partnerships to overcome these challenges and ensure a sustainable and independent supply of rare earths for the clean energy technologies of the future.
