Hybrid Cars, Wind Power to Trigger Rare Earth Metals Supply Crunch

Hybrids, as well as electric vehicles, are prized for their miserly use of gasoline and low carbon emissions. Recently, market analysts have become more vocal about how renewable energy technology, such as the high-tech electric motors and batteries used in hybrids like the Toyota Prius, are devouring rare earth metals faster than we can extract them. A recent report from Reuters cites experts who predict that demand will exceed supply by about 40,000 tons in the next few years. In the face of these figures, China, the world's number one exporter of rare earth metals, has limited its exports.

Neodymium, the first of the rare earth metals expected to be fall short of global demand, is required to make the high-performance magnets that power the rotors of an electric hybrid engine. This material is also key for the generators used inside of wind turbines. Other rare earth metals that are expected to fall short of demand include dysprosium, lanthanum, and terbium. These are also key components in the commercial grade batteries and engines that power not only hybrid cars, but renewable energy projects like wind turbines and electrical storage stations.

Reuters quoted an independent commodities consultant named Jack Lifton as saying that the Toyota Prius uses more rare earth metals than any other product in the world. The Prius is reported to use two pounds of neodymium and between 22 and 33 pounds of lanthanum. Lifton expects this figure to double under Toyota's plans to boost its Prius's fuel economy and eventually offer a plug-in version with a larger battery.

Prius sales this year are on track to consume about 100 tons of Neodymium— which the latest figures published by Oxford University Press say represents about .012% of our planet's estimated Neodymium reserves, and about 1.4% of our extraction capacity. When factoring in Lifton's prediction about emerging technologies and Toyota's forcasted ten-fold hybrid sales increase, the carmaker would be chipping away at about .24% of the remaining Neodymium on our planet and about 28% of our annual production capacity. A majority of these resources are thought to be in China and Canada, though California legislators are investigating the possibility of reopening a mine in Mountain Pass that may contain bits of this and other valuable elements.

Despite the numerous proposed methods of extraction by the Journal of Alloys and Compounds, recycling these metals is a tricky business. According to a study published in 2006, recovery of Neodymium from magnet scrap is unlikely to become cost effective due to the technology and heat required to extract even small amounts of the metal, and how quickly the element degraded into more stable forms. The 2006 study was conducted by Osamu Takeda of the University of Tokyo, Toru H. Okabe of the International Research Center for Sustainable Materials, and Yoshiaki Umetsu of the Institute of Multidisciplinary Research for Advanced Materials.

Neodymium, which is chosen because of its superb magnetic properties, is so powerful that it can attract other magnets from great distances with a shattering force. Also, the compound is so reactive that it is not found in nature in its pure form. The oxidation rate of neodymium is so fast that a square centimeter sample will "rust" into neodymium-oxide dust in a year's time. The substance also burns at relatively cool temperatures and is explosive under certain conditions. Like other rare earth metals, the effect of neodymium and neodymium-oxide on human health is not fully understood because it does not exist in nature.

Reuters reports that Toyota may be investigating a mining operation at Thor Lake in Canada in order to ensure a steady supply of rare earth metals will be available to the company as large scale wind energy projects and other hybrid car manufacturers compete with them for these scare resources.