A RARE SHIFT

AS THE SHORTAGE OF RARE-EARTH MAGNETS TURNS INTO A FULL-BLOWN CRISIS WITH CHINA'S IMPORT RESTRICTIONS, DOMESTIC PLAYERS ARE LOOKING BEYOND TO SUCCEED WITH THEIR EV PLANS

- BY ASTHA ORIEL

IN THE 20TH century, oil emerged as the most critical commodity, reshaping geopolitics. Nations with vast oil reserves gained unprecedented economic and political influence. In the 21st century, rare earths are set to replace oil, driving the next wave of economic and geopolitical shifts. The reason: these 17 elements are indispensable to modern technologies such as smartphones, wind turbines, defence systems, and satellites. They are also the heart of the automotive industry as it moves towards electrification (they are used in high-performance magnets in EV motors and are crucial for its torque and energy efficiency).

However, as shortage of rare earth magnets due to China's export restrictions turns into a full-blown crisis, the global automotive industry, including domestic players, is looking at options. One of the things it has zeroed in on is ferrite magnets. Can these low-cost, non-conductive permanent magnets support the future of electric mobility?

SUBSTITUTING RARE EARTHS

In 2010, the global auto industry had faced a similar crisis when China cut its rare earth export quota by 40%, slashing exports from 50,000 tonnes in 2009 to about 30,259 tonnes. This drove up prices nearly sevenfold and ignited a global rush to develop rare earth mining and processing projects.

In April this year, the world faced a similar crisis when China imposed export restrictions in response to import tariffs by US President Donald Trump. The restrictions covered seven of the 17 elements—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.