Market

Driving the green transition

The shift to a clean energy system is set to drive a huge increase in the requirements for REE and other critical minerals, meaning that the energy sector is emerging as a major force in mineral markets.

The International Energy Agency (IEA) estimates that the market for permanent magnet REE nearly doubled over the period from 2015 to 2023, driven by their use in clean energy technologies, particularly electric vehicles (EVs) and wind turbines. These demand drivers are anticipated to continue to see significant growth in the coming years, in line with global efforts to decarbonise.

Currently, ca. one third of global REPM demand is driven by EV drivetrains and wind turbines applications. The remaining ca. two thirds is driven by consumer electronics, traditional automotive, HVAC, disk drives, speakers, robotics and a variety of consumer/industrial/defence applications. However, growth in the clean energy sector is expected to see its share of the REPM market rise to ca. 56% by 2028, according to Canaccord Genuity and Adamas Intelligence.

Electrification of our transport system

The long-term trend for vehicle electrification is expected to continue, with EV penetration of the global fleet forecast by Argus Media to grow from 1% in 2020 to 43% by 2040. The use of rare earth permanent motors (REPM) in the motor of an EV increases efficiency, allowing greater power and longer range for a given battery storage capacity compared to drive trains that do not use REPM, whilst maintaining a light weight.

Recent trends have shown higher global growth rates for plug-in hybrid electric vehicles (PHEVs) than full battery EVs (BEVs), but this does not have a significant impact on REPM demand, with the average PHEV or BEV using 2 to 5kg of REPM, depending on the design. This represents a substantial growth in demand for REE compared to traditional internal combustion engine (ICE) cars.

The Adamas Intelligence slides below demonstrate that while PHEVs have smaller batteries than BEVs, the average power of the motors in the drive trains is not significantly different, meaning that the use of REPM is still significantly higher compared to ICE cars.

Global sales across battery BEVs and PHEVs have grown from ca. 3 million units in 2020 to over 19 million units in 2024, putting EVs’ share of the global car market above 20% for the first time. While sales volumes may be impacted by economic and policy uncertainties, EV sales are forecast to increase 23% to surpass 24 million units in 2025. Looking ahead, sales are forecast to reach ca. 50 million units by 2040, at which point EV penetration of the global vehicle fleet will have increased from 1% in 2020 to 43%.

Global EV sales by type 2020 – 2034

It’s important to note that REPM are also used for other electric transport options, such as electric bicycles and scooters, and these markets are also expected to continue their strong growth trajectory globally.

Wind Power

The IEA forecasts that wind power will grow from ca. 8% of global generation capacity in 2023 to ca. 14% by 2030, with wind expected to become the second largest source of global renewable electricity generation behind solar, surpassing generation from hydropower.

The increasing use of REPM direct-drive generators  in wind turbines is driven by efficiency benefits over traditional gearbox-based designs. Direct-drive turbines are cheaper to make, lighter, more reliable and cost less to maintain. They also provide a better yield, especially in light winds. This technology is expected to become the mechanism of choice in the coming years, especially for offshore wind turbines (where low maintenance is vital) and because many of the available high-wind locations are already in use.  Each 3MW direct-drive wind turbine requires 1 to 2t of REPM. .

Global off-shore wind power installed capacity has grown 161% from 36GW in 2020 to 95GW in 2024, with a further 955GW of capacity forecast to be installed by 2040. With a 3MW direct-drive wind turbine requiring 1 to 2t of REPM this is expected to be a further demand driver for Magnet REE.

Global offshore wind capacity additions 2020 – 2034 (GW)