Editors Machacek and Kalvig reported in 2017 that this market report results from the data produced during the EURARE project, in the form of maps and summaries of the REE and associated industrial activities within the EU that are based on producing or consuming rare earth elements (REE). The objective of the report was to provide the context within which the products of EURARE-funded research are to be considered, and to develop a market forecast for the European REE-industry. More specifically, this report describes key issues around mining and processing of REE, and the intermediate REE-industrial industries; elucidates the global and EU REE markets; and provides forecasts for REE-demand in various industrial sectors with a view to EU2020 renewable energy targets up to 2025 and 2030. These targets affect a number of technologies that use different suites of the individual REE.
The EURARE Work Package 1 (WP-1) partners have identified about 157 REE-occurrences located in 18 European countries, of which 34 are classified as deposits. Among these are three EURARE-partner projects which are considered to have reached an advanced stage of exploration: Norra Kärr in Sweden, and Kringlerne and Kvanefjeld in Greenland. A fourth EURARE partner project is the less developed Fen Complex in Norway.
Beneficiation studies were conducted by the EURARE project (WP-2) to investigate new routes for treating ore from these four projects and also some unconventional ore materials, for example red mud waste from bauxite processing. Promising beneficiation pilot-scale results have been achieved for the non-conventional ore from Kvanefjeld, Kringlerne and Norra Kärr deposits; less promising results have been achieved for the bench-scale test of the Fen-REE-ore. In WP-3 new methodologies have been developed for cracking eudialyte in which the the well-known problem of silica gel formation is avoided.
Additionally, the EURARE project WP-4 has developed potential alternative routes to the traditional separation routes of the mixed REE-compounds and more detail will follow in the road map deliverable (WP-6); this report presents common technologies used and findings available to-date. However, this report points to the fact that technological developments on their own cannot be portrayed as the solution to establishing an independent REE-supply chain in Europe, in the context of a globalized REE-market in which China holds a politically supported near-monopoly position.
It is in this light, that the attempts at opening alternative REE-mines outside China should be viewed. REE price dynamics are instrumental in the competition between the Chinese and non-Chinese REE-industry. The main players in the European REE-industry are mapped in this study, which reveals that many of them are part of globally connected value chains in which they negotiate their REE-product input and prices with (vertically integrated) subsidiaries, including from within China. This access to REE-raw material in China through subsidiaries is not to be interpreted as a secure and stable source of supply, as raw material access in China might become increasingly restricted amid growing domestic demand.
Importantly, REE-projects outside of China will need not only a reliable process and viable feed source, facilities for REE-separation, as well as industrial off-takers with demand for the different suites of a European supply, but also a strategy for how to address fluctuations in REE-prices. Current REE-prices do not just reflect supply and demand, but are to a significant extent subsidized and controlled by the Chinese government through industrial policy. Moreover, prices and supply are affected by a significant illegal REE-supply.
While the advanced exploration stage of the three EURARE project partners is noteworthy, their development can be considered in the context of another six advanced-stage projects that have been identified. These include two projects in Australia (Dubbo, and Nolans Bore), Canada (Kipawa, Strange Lake and Nechalacho), and South Africa (Steenkampskraal). All of these projects, at the time of assessment, were considered developed due to a prepared feasibility study (see Machacek and Kalvig, 2016), and could all be regarded as potential new REE-players for 2025 and onwards.
The potential total supply from these projects exceeds anticipated global REE demand, and thus there will not be room for all of them to reach the production stage. The industrial demand for REE in the EU is small compared to that of China, and Japan, but could be about equal to the industrial demand for REE in the U.S. Establishment of a REE material supply chain from mine to market in Europe appears to need substantial and continuous political support, as a reliance on economic performance might be insufficient to maintain such a venture in the supply-demand situation described. The Japanese support of the Lynas separation plant in Malaysia, with feed material from Mount Weld in Australia, is illustrative.
Uncertainties remain as to the actual REE-volumes used by the industry in the EU. This is partially due to unclear reporting codes in the EUROSTAT statistical database, in which imports of individual REE remain grouped, and thus, obscured, despite a significant improvement in the recent revision. The lack of clarity inhibits clear-cut conclusions as to REE-volumes uses in the EU. Further, most REE-consuming firms remain reluctant to disclose their precise REE-volume use.
REE market demand scenarios for the EU have been developed, based on policy targets for energy – both electricity generation and energy efficiency improvements – and for transport, for the timeframe until 2025 and 2030. The scenarios are used to forecast demand in three REE-consuming sectors:
i) REE-permanent magnets in wind energy,
ii) REE-phosphor-based general lighting, and
iii) the transport sector with respect to REE-permanent magnets used in vehicles, REE-use in catalytic converters, and REE-use in fluid cracking catalysts to refine oil for automotive passenger cars.
These forecast demand scenarios are compared with the potential supply from advanced stage REE-projects located outside China. The scenario forecasts suggest the following key points:
i) increasing demand for REE-materials in the deployment of REE-permanent magnet driven wind turbine generators, especially in offshore technology, for the achievement of renewable energy targets in the EU. Specifically, the REE content to be installed is estimated at:
74 tons Pr2O3,
1,740 tons Nd2O3,
18 tons Tb4O7, and
180 tons Dy2O3 annually until 2020.
ii) reduced demand for REE-based phosphors, due to changes in general lighting technology, with forecast demand of:
723 tons Y2O3,
92 tons La2O3,
61 tons Eu2O3,
46 tons CeO2, and
35 tons Tb4O7 in 2020.
iii) the transport sector is forecast to have a growing demand for REE-permanent magnets contained in numerous small motors in the generic car (specifically for about 1,350 tons Nd metal in 2020), alongside growing demand for REE-use in alloys of catalyst converters due to general rises in car demand. This is forecast to demand about 360 tons CeO2 in 2020.
As the share of diesel and gasoline driven passenger cars makes way for hybrid cars towards 2030, increasing demand for LREE in alloys of batteries are also forecast, namely in 2020 about:
1,000 tons La metal,
840 tons Ce metal,
280 tons Nd metal, and about
80 tons Pr metal in 2020.
In 2030 about:
7,000 tons La metal,
4,300 tons Ce metal,
1,500 tons Nd metal and
430 tons Pr metal.
Given the risks attached to investment into building and maintaining a material supply chain from REE-mine to market outside of China, it also makes sense to examine flows of secondary REE-material from end-of-life applications. This would be particularly appropriate under the condition of targeted legislation that could enable, through specific targets and checks, and the installation and operation of well-governed collection systems, the closing of material loops through reuse and recycling.
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