Critical minerals and rare earth minerals play a significant role in the transition of green energy across the globe. However, reserves are scattered across the globe, giving a few countries more benefits, while others have to depend on importing them. Neodymium is one such rare earth element that India is heavily import-dependent on, despite the country being the fifth largest in the world having rare earth resources.

What is neodymium and why is it essential to green energy transition?

There are 17 rare earth metals present in the periodic table. They are divided into light and heavy rare earth elements. Among the light rare earth elements, the most critical one is neodymium as it is used in mobile phones, electric vehicles (EVs), and medical equipment. Neodymium is essential in manufacturing permanent magnets that are also used in data storage systems, and wind turbines.

Over 90 percent of EVs use brushless DC (BLDC) motors that are made of rare earth neodymium iron boron (Nd-Fe-B) magnets, as per the Ministry of Science and Technology. These operate at temperatures of 150 to 200 degrees Celsius.

As the planet continues to heat up, countries across the world are looking at green energy transition to reduce dependence on fossil fuels and reduce carbon emissions. Switching to greener alternatives such as electric vehicles, wind energy, etc, is essential to the energy transition goal.

Why is India import-dependent on rare earth supplies?

The Centre's Department of Atomic Energy in April this year said rare earth resources in India are the fifth-largest in the world. Mining of rare earth elements is constrained in the country because of regulations such as Coastal Regulation Zones (CRZ), mangroves, forests, etc.

India does have some deposits of neodymium, however, they are not extracted to their full potential. "In Indian deposits, only neodymium and praseodymium are available and are being extracted up to 99.9 percent purity level. Neodymium and Praseodymium occur in the BSM ore of Indian deposits to the extent of 0.0011 to 0.012 percent. Minability of rare earth elements is further constrained due to CRZ regulations, mangroves, forests and inhabitation," the department said in a statement.

The department said Indian resources are significantly lean with regards to grade and it is tied with radioactivity, which makes the extraction complex, long and expensive. Also, Indian resources comprise the light rare earth elements, while the heavy rare earth elements are not available in extractable quantities.

In the same month, the National Geophysical Research Institute found deposits of 15 rare earth elements in Anantapur city of Andhra Pradesh.

However, in May this year, PM Modi inaugurated the rare earth permanent magnet plant on the Bhabha Atomic Research Centre campus in Vishakapatnam.

The magnet plant, valued at Rs 165 crore was constructed by Engineering Projects (India) Ltd. The plant is built to produce magnets such as the neodymium-iron-boron and samarium-cobalt magnets.

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China, the largest producer of neodymium

The International Energy Association (IEA) in its latest critical minerals report said China remained the largest producer and processor of rare earth elements in 2022 and 2023. It accounted for 90 percent of processing and 70 percent of the production of these elements. Meanwhile, Myanmar was a significant rare earth ores exporter to China. However, the COVID-19 pandemic and the border closures between China and Myanmar at the beginning of 2022 caused a significant supply constraint and uncertainty.

"The Chinese export price of neodymium-praseodymium oxide rose by 30 percent in March 2022 from the beginning of the year. While import restrictions were eased later in April, weak automotive production and the slowing economic recovery dampened rare earth elements demand, resulting in price decreases to levels last observed in July 2021. The prices recovered to some extent in the latter half of 2022, supported by expectations of China's re-opening," the IEA report stated.

Global measures for neodymium

There are several rare earth elements projects being developed globally, including in the US and Canada. Last year, the US, Canadian and Australian governments funded domestic rare earth elements mining and processing plants, the IEA reported.

It also added that this year, the Japanese government provided additional funding to Lynas to build a heavy rare earth elements separation and production facility, aiming to diversify heavy supplies away from China.

Alternative for neodymium

The Nikkei Asia website recently reported that Proterial, a Japanese metal maker, has developed a prototype motor for electric vehicles that make use of magnets that do not comprise neodymium. The new magnet instead is mainly composed of ferrite. The company said the prototype's tests confirmed that the motor output required for EVs can be achieved, Nikkei Asia reported.

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