Magnate Gina Rinehart Moves into Rare Earth Metals

In a decisive move signaling confidence in the burgeoning rare earth metals market, Gina Rinehart, executive chairman of Hancock Prospecting Pty Ltd., has recently acquired a significant 5.3% stake in MP Materials Corp, a major player in the U.S. rare earth sector.
This strategic investment is particularly timely, as it coincides with a notable upswing in rare earth prices, reflecting a broader market recovery and an optimistic outlook for the sector.

Rare earth metals, crucial for a myriad of modern technologies, especially in clean energy applications, are at the forefront of the global shift towards decarbonization.

These metals are indispensable in manufacturing high-performance magnets essential for electric vehicle motors and wind turbine generators, playing a pivotal role in advancing renewable energy solutions and electric mobility.

Demand for Rare Earth Metals are on the Rise

You can find all but one of the 17 rare earth elements on a 2022 USGS list of 50 “critical minerals”.

The escalating demand for rare earth metals, projected to more than double by mid-century, underscores their critical role in the transition to a low-carbon economy.

According to the International Energy Agency, demand for rare earth elements is expected to reach three to seven times current levels by 2040.

According to commodities firm Katusa Research, China leads the global market in rare earth elements, crucial for its national security. To strengthen its hold, China combined its five biggest producers into one major company, enhancing its control over the world’s rare earth supply.

China uses a quota system to manage its production, similar to how OPEC regulates oil, to prevent oversupply and keep prices stable.

This surge is largely driven by the expanding electric vehicle market and the scaling up of renewable energy generation, highlighting the strategic importance of Rinehart’s investment in securing a stake in this vital industry.

However, the concentration of rare earth production in a handful of countries, with China leading the pack, introduces a layer of geopolitical and economic complexity. This concentration raises concerns about supply stability and the potential for geopolitical leverage, emphasizing the significance of Rinehart’s move to diversify and strengthen the supply chain, particularly for the U.S. market.

• The U.S. government’s $58.5 million grant to MP Materials to develop a rare earth magnet manufacturing facility in Texas exemplifies the strategic measures being taken to mitigate these risks.

This effort boosts domestic production and reduces reliance on foreign sources, strengthening the rare earth supply chain against rising demand and geopolitical risks.

Moreover, the focus on rare earth metals extends beyond their crucial role in clean energy technologies. These metals are integral to various other applications, including enhancing the efficiency of solar panels and the performance of lithium-ion batteries in electric vehicles.

Their unique properties enable advancements in lighting, electronics, and a range of other high-tech applications, further underscoring the strategic nature of Rinehart’s investment.

Rare Earth Metals and Decarbonization

Rare earth metals are essential for various clean energy technologies, including solar panels, wind turbines, and electric vehicles (EVs).

Here are just some examples of clean energy technologies that rely on rare earth metals:

1. Solar Panels: Rare earth metals, such as neodymium, dysprosium, and praseodymium, are used to enhance the efficiency of solar panels. They are doped into the silicon material of solar cells to improve light absorption capabilities, charge transport, and resistance to temperature extremes1.
2. Wind Turbines: Wind turbines use rare earth metals, such as neodymium, praseodymium, dysprosium, and terbium, in their permanent magnets. These magnets are located in the center of the blades in the electrical box (called the nacelle) and are used to increase power generation and reduce maintenance in larger offshore wind turbines3.
3. Electric Vehicles (EVs): Rare earth metals, particularly neodymium, are used in the motors of EVs. They are also used in the magnets for speakers, hard drives, and other electric motors4.
4. Lithium-ion Batteries: While lithium-ion batteries do not contain rare earth elements, they do rely on other critical minerals such as cobalt and nickel. However, the magnets in the motors of EVs and other electric devices do require rare earth elements, such as neodymium, samarium, and dysprosium5.

These examples demonstrate the importance of rare earth metals in various clean energy technologies, and their demand is expected to increase as the world transitions to a low-carbon economy.

Where Rare Earth Metals are Used

Rare earth metals are essential for improving the efficiency and performance of various clean energy technologies, particularly in the following ways:

1. Permanent Magnets: Rare earth metals, such as neodymium and dysprosium, are used to create high-performance permanent magnets that are crucial for the motors in electric vehicles and the generators in wind turbines. These magnets are significantly more powerful and efficient than traditional ferrite or aluminum-nickel-cobalt magnets, allowing for more compact and lightweight designs12.
2. Solar Panels: Rare earth metals, like neodymium, praseodymium, and dysprosium, are used to enhance the efficiency of solar panels. They are doped into the silicon material of solar cells to improve light absorption, charge transport, and resistance to temperature extremes1.
3. Battery Performance: While rare earth metals are not directly used in lithium-ion batteries, they are used in the permanent magnets of the electric motors that power electric vehicles. This improves the overall efficiency and performance of EVs compared to internal combustion engine vehicles5.
4. Lighting and Electronics: Rare earth phosphors, made from elements like europium, terbium, and yttrium, are used in energy-efficient LED and fluorescent lighting, as well as in the displays of electronic devices, improving their brightness and color quality1.

As the rare earth market continues to evolve, efforts to diversify sources and improve mining practices are paramount. This includes exploring sustainable mining options, enhancing recycling processes, and developing alternative materials to ensure a stable and environmentally responsible supply of these critical resources.