Evaluating United States and world consumption of neodymium, dysprosium, terbium, and praseodymium in final products

Abstract

This paper develops scenarios of future rare-earth-magnet metal (neodymium, dysprosium, terbium, and praseodymium) consumption in the permanent magnets used in wind turbines and hybrid electric vehicles. The scenarios start with naive base-case scenarios for growth in wind-turbine and hybrid-electric-vehicle sales over the period 2011 to 2020, using historical data for each good. These naive scenarios assume that future growth follows time trends in historical data and does not depend on any exogenous variable. Specifically, growth of each technological market follows historical time trends, and the amount of rare earths used per unit of technology remains fixed. The chosen reference year is 2010. Implied consumptions of the rare earth magnet metals are calculated from these scenarios. Assumptions are made for the material composition of permanent magnets, the market share of permanent-magnet wind turbines and vehicles, and magnet weight per unit of technology. Different scenarios estimate how changes in factors like the material composition of magnets, growth of the economy, and the price of a substitute could affect future consumption. Each scenario presents a different method for reducing rare earth consumption and could be interpreted as potential policy choices. In 2010, the consumption (metric tons, rare-earth-oxide equivalent) of each rare-earth-magnet metal was as follows. Total neodymium consumption in the world for both technologies was 995 tons; dysprosium consumption was 133 tons; terbium consumption was 50 tons; praseodymium consumption was zero tons. The base scenario for wind turbines shows there could be strong, exponential growth in the global wind turbine market. New U.S. sales of hybrid vehicles would decline (in line with the current economic recession) while non-U.S. sales increase through 2020. There would be an overall increase in the total amount of magnetic rare earths consumed in the world. Total consumption of each rare earth in the short-term (2015) and mid-term (2020) scenarios could be between: 1,984 to 6,475 tons (2015) and 3,487 to 13,763 tons (2020) of neodymium; 331 to 864 tons (2015) and 587 to 1,834 tons (2020) of dysprosium; 123 to 325 tons (2015) and 219 to 687 tons (2020) of terbium; finally, zero to 871 tons (2015) and zero to 1,493 tons (2020) of praseodymium. Hybrid vehicle sales in non-U.S. countries could account for a large portion of magnetic rare earth consumption. Wind turbine and related rare earth consumption growth will also be driven by non-U.S. countries, especially developing nations like China. Despite wind turbines using bigger magnets, the sheer volume of hybrids sold and non-U.S. consumers could account for most future consumption of permanent magnets and their rare earths.