There’s new progress in the European and North American rare earths supply chain, but is it enough? Plus we have energy turmoil as China calls dibs on Qatar’s natural gas, Europe’s bans on Russian oil and diesel loom, and the world heads toward diesel shortage – all while strikes threaten US, South Korean, and UK logistics; China’s back in lockdown; the KMT sweeps in Taiwan’s elections; and the OECD summarizes things neatly with a gloomy economic outlook for the year(s) ahead.
A new rare earths supply chain spanning North America and Europe is taking shape. This month, the Swedish iron ore mining giant LKAB announced that it has become the biggest investor and owner in the Norwegian rare earths processing company REEtec.
LKAB’s 400 million kroner (40.3 million USD) investment will help fund the construction of REEtec’s first rare earths separation facility in Norway, expected to come online in 2024. To begin with, REEtec will source rare earth feedstock from Vital Metals’ mine in Canada; eventually, LKAB will also supply rare earth concentrate extracted as a byproduct from its iron ore mining.
These are promising developments. But there’s a big unanswered question: Given the extremely limited rare earth magnet manufacturing capacity in Europe, who will buy the REEtec’s rare earth oxides? If Chinese firms—which control 93 percent of the global permanent magnet market—are the only sizable customer around, then the supply chain is still reliant on Beijing.
On this front, the Canada-listed Neo Performance Materials — part of another emerging transatlantic rare earths supply chain with its partner Energy Fuels — is making some progress. Earlier this month, Estonia awarded Neo a grant of up to 18.7 million euros (19.5 million USD) to construct a vertically integrated rare earth magnet manufacturing facility, with an operational target of 2025. This is a step forward. But actually developing non-Chinese rare earth capacity will require understanding that the effort, and challenge, are about entire supply chains, not just nodes within them.