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China frictions steer electric automakers away from rare earth magnets

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As tensions mount between China and the United States, automakers in the West are trying to reduce their reliance on a key driver of the electric vehicle revolution – permanent magnets, sometimes smaller than a pack of cards, that power electric engines.

Most are made of rare earth metals from China.

The metals in the magnets are actually abundant, but can be dirty and difficult to produce. China has grown to dominate production, and with demand for the magnets on the rise for all forms of renewable energy, analysts say a genuine shortage may lie ahead.

Some auto firms have been looking to replace rare earths for years. Now manufacturers amounting to nearly half global sales say they are limiting their use, a Reuters analysis found.

Automakers in the West say they are concerned not just about securing supply, but also by huge price swings, and environmental damage in the supply chain.

This means managing the risk that scrapping the metals could shorten the distance a vehicle can travel between charges. Without a solution to that, the range anxiety that has long hampered the industry would increase, so access to the metals may become a competitive edge.

Rare earth magnets, mostly made of neodymium, are widely seen as the most efficient way to power electric vehicles (EVs). China controls 90% of their supply.

Prices of neodymium oxide more than doubled during a nine-month rally last year and are still up 90%; the U.S. Department of Commerce said in June it is considering an investigation into the national security impact of neodymium magnet imports.

Companies trying to cut their use include Japan’s third-largest carmaker Nissan Motor Co, which told Reuters it is scrapping rare earths from the engine of its new Ariya model.

Germany’s BMW AG did the same for its iX3 electric SUV this year, and the world’s two biggest automakers Toyota Motor Corp of Japan and Volkswagen AG of Germany have told Reuters they are also cutting back on the minerals.

Rare earths are critical for the electronics, defence and renewable energy industries. Because some can generate a constant magnetic force, the magnets they make are known as permanent magnets.

Electric cars with these require less battery power than those with ordinary magnets, so vehicles can go longer distances before recharging. They were the no-brainer choice for EV motors until about 2010 when China threatened to cut rare earth supply during a dispute with Japan. Prices boomed.

Now, supply concerns are opening a divide between Chinese EV producers and their Western rivals.

While automakers in the West are cutting down, the Chinese are still churning out vehicles using the permanent magnets. A Chinese rare earths industry official told Reuters that if geopolitical risks are set aside, China’s capacity can “fully meet the needs of the world’s automotive industry.”

Altogether, based on sales data from JATO Dynamics, manufacturers accounting for 46% of total light vehicle sales in 2020 have said they have scrapped, plan to eliminate, or are scaling down rare earths in electric vehicles.

And new ventures are springing up to develop electric motors without the metals, or to boost recycling of the magnets used in existing vehicles.

“Companies that spend tens or hundreds of millions developing a family of products… they don’t want to put all their eggs in one basket – that’s the Chinese basket,” said Murray Edington, who runs the Electrified Powertrain department at British consultancy Drive System Design. “They want to develop alternatives.”

BMW says it has redesigned its EV technology to make up for a lack of rare earths; Renault SA has slotted its rare-earth-free Zoe model into a growing niche of small urban cars that do not need extended driving ranges.

Tesla Inc, the U.S. EV giant whose $621 billion market value is just below that of the top five automakers combined – is opting for both types of motors.

“You’re pulling your hair deciding whether you think supplies will be viable in the future and at what price,” said Ryan Castilloux of Canada-based consultancy Adamas Intelligence.

His consultancy expects global consumption of rare earths for magnets to climb to $15.7 billion by 2030, nearly four times this year’s value.

Graphic: Strong Demand to Spark Shortages of Rare Earths to Make Permanent Magnets – https://fingfx.thomsonreuters.com/gfx/mkt/qmypmdlmovr/Adamas%20Intelligence%20NdFeB%20alloy%20Balance%20Graphic.png

EVS AND WIND TURBINES

Neodymium is a mighty metal. The neodymium magnets in a typical EV weigh up to 3kg (6 lb), but even at 1/12th of that weight, a neodymium magnet can support steel as heavy as prizefighter Tyson Fury, and will have about 18 times more magnetic energy than the standard variety, British magnet company Bunting told Reuters.

Even though the pandemic has dented auto sales, demand for these magnets in electric vehicles shot up by 35% last year alone to 6,600 tonnes, Adamas Intelligence says.

The permanent magnets in hybrid and EV motors cost more than $300 per vehicle or up to half the cost of the motor, analysts say.

Analysts at investment bank UBS expect electric models to make up half of global new car sales by 2030, up from only 4% last year. The magnets are also in demand for wind turbines, global installations of which jumped 53% last year, according to the industry trade group.

Over the past two decades, Western countries largely withdrew from producing rare earth metals, which involves complex processing and often noxious byproducts. Today, China’s dominance runs through the entire production chain.

“The upstream rare earth supply chain, including mining and processing, is definitely a big concern, but when it comes to actual RE magnet production, China has an even tighter grip,” said David Merriman at Roskill, a critical materials consultancy in London.

NOT ENOUGH

For many EV drivers, range anxiety may not be an issue.

“Most people are driving less than 100 miles a day, so for that you can have a less efficient motor,” said researcher Jürgen Gassmann at Fraunhofer IWKS in Germany.

Even so, automakers in the West have adopted a range of strategies. Some, like Toyota, still use permanent magnets but have trimmed use of rare earths, developing a magnet that needs 20%-50% less neodymium.

Others, like BMW, have undertaken major redesigns: The German carmaker told Reuters it overhauled its drive unit to combine motor, electronics and transmission in a single housing, cutting down on space and weight.

“Our goal for the future is to avoid rare earths as much as possible and to become independent of possible cost, availability and – of course – sustainability risks,” said Patrick Hudde, BMW’s vice president of raw material management.

Tesla started in 2019 to combine engine types. Its S and X models have two motors: one with rare earth magnets, one without. The induction motor provides more power, while the one with permanent magnets is more efficient, Tesla said: Including a rare earth motor boosted the models’ driving range by 10%. Volkswagen also uses both types of motors on its new ID.4 crossover SUV, it said.

The use of non-rare-earth electric motors is set to jump nearly eightfold by 2030, according to Claudio Vittori, senior analyst of e-mobility at data analytics company IHS Markit. But he said permanent magnet motors will still dominate, mainly because of their power and efficiency.

Graphic: Most EVs to Use Rare Earth Permanent Magnet Motors – https://graphics.reuters.com/AUTOS-RAREEARTHS/MAGNETS/azgvoqeqovd/chart.png

If the forecasts are correct, it’s not certain that even these tweaks can cool the market.

“I think we need these innovations to help balance the really strong demand growth that we’re looking at,” Castilloux says. “There’s almost no scenario where supply will be enough.”

(Additional reporting by Eimi Yamamitsu in Tokyo, Jan Schwartz in Hamburg, Christoph Steitz in Frankfurt, Yilei Sun in Beijing and Tom Daly; edited by Veronica Brown and Sara Ledwith)

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Northern Canada may be a popular destination at the end of the world – CTV News

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TORONTO —
In the event of societal collapse, researchers suggest northern Canada may be “habitable” and could act as a lifeboat, but that other countries are better suited for survival.

The researchers found that Earth is in a “perilous state” due to rapid population growth and an energy consuming society that has altered the Earth’s system and biosphere. They say that societal collapse could happen in various forms, including economic collapse, worsening climate catastrophe, a pandemic worse than COVID-19, or another mass extinction event, which the researchers say is already underway.

The goal of the study, published in the journal Sustainability on July 21, was to create a shortlist of nations that could host survivors in the event of a societal collapse, where civilization could start over. The researchers evaluated the land, how much was available and its quality, how easy or difficult it is to travel to the country, available renewable resources, climate and agriculture, to determine where it would be best to survive the end of the world.

Islands with low population density, particularly those with distinct seasonal changes, fared the best with New Zealand topping the list. Iceland, U.K., Australia (specifically Tasmania) and Ireland made up the rest of the shortlist where it would be best for society to restart after a collapse.

Northern Canada, while not on the shortlist, could act as a “lifeboat” in the event of societal collapse due to climate change and extreme temperatures, but survival would rely on maintaining agriculture and renewable energy sources to keep the population alive.

The researchers showed that the shortlisted countries had strong renewable energy sources, were in temperate climates, and have plenty of agricultural land and space for growth. In the case of Iceland, where suitable land for livestock is not in abundance, this downside is offset by fisheries and the island’s wealth of renewable resources, of which geothermal resources have already been widely developed.

While this may give Canadians living in northern regions a chance to breathe a sigh of relief, there are still zombie fires to contend with as climate change warms the north and shortens winters.

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Coronavirus: What's happening in Canada and around the world – CBC.ca

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The latest:

Health authorities in Thailand are racing to set up a large field hospital in a cargo building at one of Bangkok’s airports as the country reports record numbers of coronavirus cases and deaths.

Other field hospitals are already in use in the capital after it ran out of hospital facilities for thousands of infected residents. Workers rushed to finish the 1,800-bed hospital at Don Mueang International Airport, where beds made from cardboard box materials are laid out with mattresses and pillows.

The airport has had little use because almost all domestic flights were cancelled two weeks ago. The field hospital is expected to be ready for patients in two weeks.

The quick spread of the delta variant also led neighbouring Cambodia to seal its border with Thailand on Thursday and order a lockdown and movement restrictions in eight provinces.

-From The Associated Press, last updated at 6:30 a.m. ET


What’s happening in Canada

WATCH | Get the latest on Alberta’s plan to ease restrictions: 

Alberta will be pulling back on requirements for COVID-19 testing, contact tracing and quarantines, despite rising cases in the province. 2:05


What’s happening around the world

Spain’s head coach David Martin Lozano, left, is interviewed under COVID-19 precautions after a win over Serbia in a preliminary round men’s water polo match at the 2020 Olympics in Tokyo on Sunday. (Mark Humphrey/The Associated Press)

As of early Thursday morning, more than 196 million cases of COVID-19 had been reported worldwide, according to Johns Hopkins University. More than 4.1 million deaths had been reported.

In the Asia-Pacific region, Tokyo reported 3,865 new cases on Thursday, up from 3,177 on Wednesday and double the number it had a week ago. Japan’s Chief Cabinet Secretary Katunobu Kato told reporters the new cases are soaring not only in the Tokyo area but also across the country. He said Japan has never experienced an expansion of infections of this magnitude.

The World Health Organization’s Africa director says the continent of 1.3 billion people is entering an “encouraging phase after a bleak June” as supplies of COVID-19 vaccines increase. But Matshidiso Moeti told reporters on Thursday that just 10 per cent of the doses needed to vaccinate 30 per cent of Africa’s population by the end of 2021 have arrived. Some 82 million doses have arrived in Africa so far, while 820 million are needed.

A health worker administers a dose of the Janssen Johnson & Johnson COVID-19 vaccine in Dakar on Wednesday. Senegal is seeing an uptick in cases, sparking worry among health-care workers. (Leo Correa/The Associated Press)

Less than two per cent of Africa’s population has been fully vaccinated, and the more infectious delta variant is driving a deadly resurgence of cases.

“There’s a light at the end of the tunnel on vaccine deliveries to Africa but it must not be snuffed out again,” Moeti said. 

In the Americas, the Centers for Disease Control and Prevention (CDC) said on Wednesday that 66.6 per cent of U.S. counties had transmission rates of COVID-19 high enough to warrant indoor masking and should immediately resume the policy.

COVID-19 continues to inflict a devastating toll on the Americas, with Argentina, Colombia, Cuba, Ecuador and Paraguay among the countries with the world’s highest weekly death rates, the Pan American Health Organization said.

In the Middle East, Iran on Wednesday reported 33,817 new cases of COVID-19 and 303 additional deaths. The country, which has been hit hard by COVID-19, is experiencing yet another surge in cases.

In Europe, Spain’s prime minister said existing measures to protect the most vulnerable from the pandemic’s economic fallout will be prolonged until the end of October.

Spain, one of the countries that was hardest hit at the beginning of the health emergency, has extended subsidies for the unemployed and furloughs for companies that have gone out of business to try to cushion an economic drop of 11 per cent of its gross domestic product in 2020.

-From The Associated Press, Reuters and CBC News, last updated at 11:15 a.m. ET

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Washington's reasons for keeping border closed to Canadians still murky a week later – CBC.ca

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A week after the U.S. government surprised many by announcing the land border with Canada would remain closed for the time being, the exact reasons for that decision remain shrouded in secrecy.

Not even American members of Congress have been given a detailed explanation for the decision. New York State Rep. Brian Higgins said the lack of information is leading to confusion among his constituents.

“The silence from this administration about the northern border is maddening,” said Higgins, who has been asking for a meeting with officials in the administration of President Joe Biden to get an explanation. “With the border now closed for 16 months and counting, the people deserve to know what it will take to reopen the U.S. border to Canadians.”

Washington State Rep. Suzan DelBene’s office says she “remains frustrated that we haven’t received a clear answer from the administration on why the closure was extended.”

Washington State Rep. Suzan DelBene. (Elaine Thompson/The Associated Press)

News that the U.S. land border would remain closed until at least Aug. 21 came just after Ottawa announced that fully vaccinated Americans would be able to enter Canada starting Aug. 9.

Many had expected the U.S. to follow Canada’s lead. The U.S. closure order has been less stringent than Canada’s from the beginning; it allowed air travel into the U.S., for example. The COVID-19 case count is lower in Canada than the U.S., and the vaccination rate is higher.

A week after it issued the notice that the U.S. land border would remain closed, the Department of Homeland Security continues to offer the same vague explanation.

“To decrease the spread of COVID-19, including the Delta variant, the United States is extending restrictions on non-essential travel at our land and ferry crossings with Canada and Mexico through August 21, while ensuring the continued flow of essential trade and travel,” Homeland Security spokesperson Angelo Fernández Hernández said in a media statement.

“DHS is in constant contact with Canadian and Mexican counterparts to identify the conditions under which restrictions may be eased safely and sustainably.”

Fear of the delta variant

On Monday, White House Press Secretary Jen Psaki pointed to the U.S. Centers for Disease Control and Prevention (CDC), suggesting the decision to maintain border closures and travel restrictions was the result of its guidance.

“I think their decision was made based on the fact that the delta variant is more transmissible and is spreading around the world,” Psaki said, pointing out that it’s also spreading in the U.S. — particularly among unvaccinated Americans.

The CDC has yet to respond to questions from CBC News.

On Tuesday, the CDC stated that even those who are fully vaccinated can spread the COVID-19 delta variant. It now recommends that those fully vaccinated wear masks when they visit indoor public places in areas where there is a high degree of COVID-19 transmission.

One of the few people to offer any hint of what’s gone on behind the scenes is Biden’s chief medical adviser, Dr. Anthony Fauci.

“I can tell you that the border situation and letting Canadians in who are fully vaccinated is an area of active discussion right now in the U.S. government,” he told CBC News Network’s Power & Politics on Friday.

WATCH: Dr. Anthony Fauci says status of Canada/U.S. border the focus of “active discussion” in Washington

In a Canadian exclusive interview with Power & Politics, Chief Medical Adviser to U.S. President Joe Biden Dr. Anthony Fauci says the White House is discussing the possibility of allowing fully vaccinated Canadians into the United States. 13:24

Former U.S. ambassador to Canada Bruce Heyman said the U.S. may not be quite ready to follow Canada’s example by opening the border.

“It may very well have been that the U.S. said, ‘We are not prepared and we have not yet decided on the process and procedures of opening our land borders as of yet,'” Heyman said, adding that Canada would not have announced it’s loosening border measures if the U.S. had been uncomfortable with it.

Former U.S. ambassador to Canada Bruce Heyman.

The U.S. has yet to resolve some key questions about the land border, Heyman said — such as whether it’s going to require proof of vaccination or COVID tests from people entering from the Canadian side.

“If we are, what test and what vaccines will qualify and what won’t?” Heyman asked. “I think that’s still unclear, what process the U.S. will impose.”

Mexico is also a factor, he said.

The two-border problem

“Canada only borders the United States but the U.S. borders (Canada) and Mexico. And when making decisions about its border, it’s highly complicated to say, ‘On one of our borders we’re doing x, and on the other border we’re doing y,'” Heyman said. “If at all possible, you’d like to coordinate your entire border policy in one.”

Mexico’s low vaccination rate compared to Canada, and the aggressive spread of the delta variant in the U.S at a time when only half of eligible Americans are double-vaccinated, may also play into Washington’s decision-making, said Heyman.

Ideally, he said, the U.S. government will make a decision on the border it won’t have to quickly reverse.

“I hope that they make the decision as soon as they possibly can, but I hope they make a decision that is lasting,” he said.

Maryscott Greenwood, Washington-based head of the Canadian-American Business Council, said part of the reason for the border remaining closed could be uncertainty about the vaccination status of those entering the country.

“I think part of the reason could be that the U.S. administration said that they’re not going to validate, verify whether or not someone’s vaccinated before they cross,” she said.

Greenwood’s group speaks regularly with U.S. government officials. She said she hopes the U.S. land border will reopen before Aug. 21 and the country doesn’t apply the same rules to both its northern and southern borders.

“Policy makers and business leaders and communities, not just along the border, are all very frustrated with the decision to stay closed for another month,” said Greenwood, adding some businesses might not survive.

“We’re hoping that the administration will take another look at this next week and find a way forward to reopen the border to fully vaccinated Canadians. I know the White House is paying very careful attention to all of these voices and is trying its best to balance the pressures that it is getting.”

Elizabeth Thompson can be reached at elizabeth.thompson@cbc.ca

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