GE Renewable Energy and Arafura Resources have signed a non-binding memorandum of understanding (MoU) to supply neodymium and praseodymium (NdPr) oxides to help power GE’s Haliade-X offshore wind turbines.

Neodymium and praseodymium are used to manufacture neodymium-iron-boron (NdFeB) permanent magnets. These magnets are key components in motors and generators, offering the best-known optimisation of energy transfer between grid/storage and torque/motion (and vice versa). While wind turbines were the first major growth market for NdFeB in new-energy technologies, Project Blue estimates turbines are set to play second fiddle to the growth expected from electric vehicles (EVs). However, the EV market is going to have, and already is having, significant repercussions on wind turbine technologies for several reasons.

First, the EV traction motor is quickly soaking up what used to be a surplus NdPr supply, but quickly fell into deficit in 2017 and is hanging in the balance ever since. This has alerted the world outside of China to the role of NdFeB in net-Zero aspirations, with nearly every jurisdiction putting rare earths (mainly NdPr) at the top of critical materials and strategic lists.

Second, the high operating performance required for EV traction motors means that high-quality NdFeB products are earmarked for the automotive industry. As a result, other applications have resorted to adjusting the rare earth make-up of NdFeB magnets, reducing the Nd and heavy rare earth content (such as dysprosium and terbium) where possible – albeit at a cost of performance.

Thirdly, the market tightness is adding upward pressure to rare earth prices with the third wave of demand-driven NdPr and magnet rare earth price rises currently underway. While the magnets used in EVs are of higher grade, their relative cost is easily absorbed into the overall cost of the end-use application. This is less so the case for low-quality products or products where large magnets make up a high proportion of production costs, such as wind turbines.

Substitution away from rare earth NdFeB magnets will take place where technologies allow. However, when it comes to operating efficiency and global energy requirements, substitution away from rare earths comes at an energy cost. The move for GE to secure magnet materials is a key indication that in order for large-scale wind energy to play the planned role in energy transition, rare earth magnets are part of the equation.