Friday, May 8, 2009

Wind: So Why the Interest in Rare Earths?

Our posts today, "China tightens grip on rare earths" and "With a Name Like Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., it has to be good ( 600111:Shanghai)" were prompted by this post at the Gerson Lehrman Group:
Analysis of Windpower to overtake nuclear in China by 2020


If China commits to producing 100 gigawatts of wind generated electricity by 2020 it will place this goal in its next two five-year plans as part of the official statement of the goals for the Chinese utility industry. If this happens then China's recent takeover of the Australian rare earth mining industry makes perfect sense. The Chinese, you see, like to make long term plans not only for economic goals but also for implementing the necessary steps in the value chain to achieve them.


To make the most efficient, lightest weight, lowest service wind turbine generator of electricity takes one ton of the rare earth metal, neodymium, per megawatt of generating capacity. This to to build the neodymium-iron-boron permanent magnet necessary for the generator to function.

The current production of neodymium is around 20,000 metric tons a year, and all of it is produced in China.

The world's demand for neodymium for current uses is now in balance with production.

If none of the world's current demand becomes obsolete, and in fact, if it grows then where is 100,000 metric tons of neodymium going to come from for China's projected 100 gigawatts of new wind generated electricity, if China opts for 100% neodymium-iron-boron permanent magnet type electric generators??>>>MORE