Han Media: Europe Seeks Self-Sufficiency in Rare Earths, But It Is Still Far Off!
On December 13, the South Korean media "Herald Economic" published an article stating that Europe is striving to get rid of the supply chain centered around China, but achieving self-sufficiency remains far off. Estonia is taking measures to address this issue, including establishing a rare earth magnet factory in the eastern border city of Narva. However, due to the initial production being far below demand, the regional supply base is severely insufficient.
Neo Performance Materials (Neo) recently launched its factory in Narva, marking Europe's active efforts to consolidate its position in the global rare earth supply chain. Narva has become the location of the largest rare earth permanent magnet production facility in Europe, which is a key component for electric vehicles and wind turbines. The construction of this factory is one of Europe's strategies to strengthen its own supply chain, yet China holds absolute advantages in all aspects of rare earth mining, refining, processing, and magnet manufacturing.
The factory, supported by EU financial assistance, was completed in about 500 days. Experts believe that it is rare for Western countries to build rare earth magnet factories at such a fast pace. It is expected to start supplying products to large companies, including German automotive parts manufacturer Bosch, next year.
Neodymium-praseodymium (NdPr) is a key raw material for rare earth magnets, and its current price in China is approximately $76 per kilogram. Industry insiders said that automakers are willing to pay a 20% to 30% premium for third-party products to avoid supply disruptions. They believe that even at higher prices, ensuring a stable supply is much better than the risk of factory shutdowns due to rare earth shortages.
However, the biggest obstacle lies in the production scale. The factory's initial annual capacity is 2,000 tons, which is just a small fraction of what European manufacturers need.
Neo company plans to increase production to 5,000 tons in the long term, but this is still not enough to significantly reduce Europe's reliance on China. The industry research company Adama Intelligence predicts that by 2030, Europe's demand for rare earth magnets will reach about 45,000 tons.
The U.S. large-scale subsidy policy encouraging European companies to "move to the U.S." is also bad news for Europe. British rare earth company Pensana chose to build a refining plant in the U.S. instead of the UK for its Angolan mining project, and the $160 million support funds provided by the U.S. Export-Import Bank were crucial. In contrast, the UK government only offered $6.6 million in subsidies.
Industry opinions suggest that the EU needs to increase its support level to match that of the U.S. in order to narrow the price gap between Chinese products and Western products.
Original: toutiao.com/article/1851360321231900/
Statement: This article represents the personal views of the author.