Market

Strong, diversified demand

NdPr are critical elements in the manufacturing of permanent magnets used for motors, turbines and in mobile phones. Permanent magnet production accounted for 91% of the total value of total rare earth oxides consumption in 2019.

Permanent magnets and catalysts are the largest rare earth demand drivers:

Megatrends

There are some fundamental global megatrends which are driving strong and diversified demand for NdPr, which include:

• Automation: accelerating technological progress;
• Low carbon transition: environmental protection and climate change;
• Sustainable resource security: increasing scarcity of and global competition for resources; and
• Supply chain security: against backdrop of heightened national protectionism.

Evolving emissions legislation and targets

NdPr demand is likely to be accelerated by increasingly ambitious government targets and evolving global emissions legislation, particularly in the wake of COP27 in 2022.

Wind power will be a key contributor to meeting the Paris Agreement climate goals, with the IEA stating that almost 70% of electricity generation will need to come from solar photovoltaics and wind by 2050 in order to reach the targets¹.

Governments around the world have set targets around wind power generation, including:

• A policy paper was outlined in July 2022 for the UK’s first critical minerals strategy including the broad group of rare earth elements specifically for permanent magnets.
• The EU has announced the Raw Materials Act, a legislative proposal aimed at building a more resilient supply chain, supporting projects and attracting more private investment from mining to refining, processing and recycling.
• The UK’s offshore wind capacity target has been increased from 40GW to 50GW by 2030.
• The EU is targeting at least 30 million EVs by 2030 and is proposing legislation to completely cut emissions from cars and vans by 2035.
• France aims to produce one million EVs annually by 2025.
• The Biden administration has set a 50% EV sale share target in the U.S. by 2030.

The electrification of the transport sector is also central to a clean-energy future and, whilst EV sales are increasing worldwide, a significant shift from fossil fuel cars will be required in order to meet Paris Agreement goals. Governments around the world are increasingly turning to legislation to accelerate the transition to EVs, as demonstrated below:

• UK to ban new petrol and diesel car sales by 2030.
• France will ban the sale of petrol and diesel vehicles beginning in 2040.
• Japan plans to ban gasoline car sales by 2035.
• The European Commission is targeting 30 million zero-emission vehicles by 2030.

Anticipated global REO magnet demand growth