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China’s Rare Earth Prices Surge

Motors in electric vehicles are powered by magnets mostly made of neodymium, a rare earth metal almost entirely mined in China. Since 2018, Beijing has raised the price by nearly 80%.

Photo by Michael Marais / Unsplash

Rare earths are a series of 17 chemical elements in the earth’s crust vital to many modern technologies. While the elements aren’t rare, ore bodies containing sufficient concentrations to make processing economically viable are exceedingly rare.

The metal neodymium is used extensively across numerous applications, including electric vehicles, generators, wind turbines and MRI scanners.

Neodymium oxide is almost entirely mined and processed in China. Since 2018, Beijing has raised the price of neodymium by 78.9%.

California’s Mountain Pass mine, the sole producer of rare earth elements in the United States, shut down in 2002 due to environmental concerns.

MP Materials bought the mine and restarted production. In 2015, the Las Vegas-headquartered company produced around 5,900 tonnes of rare earths. It plans to restore the domestic supply chain from mine to magnet. MP Materials is hedging its bets on neodymium-praseodymium to become the lowest-cost producer.

In recent years, MP Materials received grants and contracts from the Department of Defense and the Department of Energy to research and improve domestic production.

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