As the world transitions to cleaner energy, one rare element has become critical for electrification: neodymium. While it may not have the name recognition of lithium or platinum, neodymium is essential in powering technologies like electric vehicles (EVs) and wind turbines. With increasing global demand for these technologies, the question is quickly becoming: can the supply of neodymium be scaled up sustainably?

Neodymium: A Key Player in Clean Energy

Neodymium, when paired with boron, creates one of the most powerful permanent magnets, essential for a variety of electrical applications. This includes small devices such as smartphones and hard drives, as well as larger clean energy technologies like wind turbines and electric motors, as mentioned.

In wind turbines, neodymium magnets help make generators more efficient, increasing the amount of electricity produced while minimizing weight. This also reduces the need for additional raw materials, contributing to lower environmental impact. Moreover, neodymium’s resistance to demagnetization allows wind turbines and electric vehicle motors to last longer, decreasing maintenance costs and increasing their cost-competitiveness with fossil fuels.

A Growing Demand for Neodymium

The push for clean energy is intensifying globally, with governments setting ambitious targets for electric vehicle adoption and expanding renewable energy sources. In the U.S., for example, the Inflation Reduction Act is driving significant investments in EV infrastructure. China and the EU are also making strides toward increasing clean energy capacity, aiming to make wind and solar energy generate one-third of the world’s electricity by 2030.

However, these goals hinge on the availability of rare earth elements, with neodymium being one of the most critical. Currently, the majority of neodymium production is concentrated in China, with smaller contributions from the U.S., Myanmar, and Australia. With demand for neodymium expected to outstrip supply in the coming years—potentially by 250% by 2030—the risk of price volatility is a serious concern. If the price of neodymium rises, it could drive up costs for EVs and wind power, threatening the economic feasibility of the clean energy transition.

The Environmental & Social Toll of Mining Neodymium

Increasing the supply of neodymium is going to be a challenge. The mining process itself can be harmful, as it often involves the use of toxic chemicals to separate neodymium from other elements. This process also generates large amounts of waste, some of which is radioactive, leading to contamination of soil and water in mining regions.

Moreover, the health of local communities is at risk. Mining operations often cause environmental degradation that negatively impacts the quality of life for people living nearby. According to the Harvard International Review, extracting just one ton of rare earth elements can result in 2,000 tons of toxic waste.

Innovating for a Sustainable Neodymium Supply Chain

Although in the early stages, one promising solution is rare earth recycling. For example, the EU-funded SUSMAGPRO project uses robots to disassemble devices and extract neodymium magnets more efficiently than traditional methods. By 2030, the EU aims to meet 15% of its REE needs through recycling. But with only 1% of rare earth elements currently being recycled worldwide, scaling up this solution will require significant effort.

International Collaboration: A Path Forward

For the clean energy transition to succeed, any solutions must be implemented at scale. This will require international cooperation, including the establishment of global standards to make supply chains more circular, international agreements to ensure environmental protection, and collaborative research projects to develop new materials and technologies.

Electrifying power grids and transportation systems is another component of the transition. However, without action today to ensure that neodymium’s supply chain is sustainable, this seemingly minor yet crucial element could become a bottleneck issue.

Apex Magnets

At Apex Magnets, we’re here to assist you in making decisions about sustainable energy solutions and their materials. This includes creating blanket purchase orders of neodymium magnets in order to lock-in prices and maintain supply chain stability. For more information, feel free to reach out to us or call us at 1-304-257-1193.