Rare Earth Chain Shifts to High-End Development

“Orders for the company are fully booked from this year's fourth quarter to next year's first quarter,” recently stated Li Qiuwei, general manager of Feishi Green Energy Technology (Ganzhou) Co., Ltd., during a survey of the rare earth industry in Ganzhou, Jiangxi Province. The powertrain produced by this factory employs permanent magnet motors, which represents a significant application of rare earth neodymium-iron-boron.

Feishi Green Energy has rapidly grown into a motor manufacturing company reliant on the resource endowment of Ganzhou, becoming a representative of the rare earth new materials and application cluster in the region. The rare earth materials used by the company are known as the “vitamins of industry,” with remarkable magnetic, optical, and electrical properties that significantly enhance product performance, diversify product types, and improve production efficiency. Currently, the integration and collaborative efforts within the rare earth industry are intensifying, expanding into high-end applications. As the largest entity in rare earth applications, rare earth permanent magnet materials hold broad prospects for development.

Expansion of downstream applications into high-end materials.

China is rich in rare earth resources, yet there is still room for improvement in high-end applications.

At the recent 2024 (7th) China Rare Earth Forum held in Ganzhou, Liu Lei-yun, secretary of the Party Committee and chairman of China Rare Earth Group Co., Ltd., remarked that the unbalanced, uncoordinated, structural, and phased problems accumulated during the development of China's rare earth industry remain prominent. The industry's innovation capabilities, as well as its levels of greening and automation, still require enhancement. The value of rare earth resources has yet to be fully realized, the development level of mid- to high-end rare earth new materials is still low, and the industry order urgently needs further regulation.

Advertisement

Developing high-end rare earth new materials is the way to break through challenges. Downstream applications of rare earths include rare earth functional materials, devices, and equipment, which constitute the segment with the highest technological content and greatest value along the entire industrial chain. Among them, rare earth functional materials, as one of the key strategic materials with unique resource characteristics, are core materials that support advanced technology fields, such as the next generation of information technology, aerospace and modern weaponry, advanced rail transportation, energy conservation, and new energy vehicles, as well as high-performance medical devices.

Rare earth functional materials include rare earth permanent magnet materials, rare earth hydrogen storage materials, rare earth catalytic materials, and rare earth luminescent materials, with rare earth permanent magnet materials being the largest category of rare earth application. Within rare earth permanent magnet materials, neodymium-iron-boron exhibits the best overall performance and the highest production volume, widely used in magnetic drives, communications, and sensor equipment, with the overall economic scale of the industry reaching hundreds of billions.

Ge Honglin, secretary and president of the China Nonferrous Metals Industry Association, suggested further exploring the application potential of neodymium-iron-boron in fields such as new energy vehicles, wind power generation, energy-saving appliances, artificial intelligence, and consumer electronics, while effectively utilizing a series of policy supports to expand the application of rare earth permanent magnets in large-scale industrial equipment, thereby enhancing the overall energy-saving and carbon-reduction levels in the industrial sector.

Particularly, the wind power industry continues to benefit from the rapid development of high-performance neodymium-iron-boron.

“Wind energy is highly sensitive to the cost of magnetic materials. Previously, the prices of rare earth permanent magnet materials were high and volatile, hindering market promotion,” said Liao Wuping, deputy director of the Ganzhou Innovation Research Institute of the Chinese Academy of Sciences. He noted that if the price of magnetic materials decreases and performance further improves, there may be significant application potential for rare earth permanent magnet materials in the wind power sector. Permanent magnet generators are highly efficient, reducing energy losses during wind energy conversion. The structure of rare earth permanent magnet generators is relatively simple, needing no external excitation systems, which can diminish the size and weight of the generator and show significant advantages in scenarios such as offshore wind power platforms where equipment weight and spatial requirements are critical.

Strengthened integration and collaboration in the rare earth industry.

The output of heavy rare earths from Ganzhou, Jiangxi, accounts for 70% of global production. Leveraging its resource endowment, the overall collaboration between upstream and downstream sectors of the rare earth industry chain in Ganzhou continues to improve. The headquarters of China Rare Earth Group is located here; the group was established in December 2021, integrating several rare earth groups and enterprises and their respective rare earth assets.

The Ganzhou High-tech Zone has become a significant driver for local rare earth industry development. The Chinese Academy of Sciences’ Ganzhou Innovation Research Institute, located here, features brand new office buildings and engineering testing centers adjacent to dormitory and research facilities. Liao Wuping mentioned that one of the main focuses of the research team is on developing high-performance magnetic materials to reduce the use of heavy rare earths while also creating new technologies aimed at achieving verification at the application end.

Li Wenyuan, deputy secretary of Ganxian District Committee and district chief, as well as director of the management committee of the Ganzhou High-tech Zone, introduced that the zone has formed an innovative technology cluster centered around platforms such as the Chinese Academy of Sciences’ Ganzhou Innovation Research Institute and the National Rare Earth Functional Materials Innovation Center, known as the “Two Academies and Five Centers” innovation cluster, becoming one of the main battlegrounds for scientific and technological innovation in the province. Additionally, the Ganzhou High-tech Zone hosts 48 enterprises in the rare earth new materials and application cluster, including China Rare Earth Group, Zhongke San Huan, Yueci Rare Earth, and Feishi Green Energy, establishing a complete industrial chain from rare earth oxides to rare earth metals, rare earth magnetic materials, rare earth permanent magnet motors, and high-end equipment manufacturing.

As the synergy among various segments of the industry chain improves, further integration and reorganization within the industry are anticipated.

Ge Honglin stated that it is crucial to accelerate industrial integration and reorganization, uniting internal and external forces to build a robust operational entity, establish an orderly supply guarantee, and create a new pattern of high-quality development that enhances the core functions and competitiveness of serving national development strategies.

“The results of rare earth industry integration have been substantial, evolving from initially over a hundred companies to six, and then to the establishment of the China Rare Earth Group in 2021, which has ultimately formed a ‘heavy in the south, light in the north’ development structure led by two enterprises among upper industry players, fundamentally reversing the previous situation of being ‘small, scattered, disordered, and polluted,’” Ge Honglin noted. The self-controlled guarantee capabilities for rare earth industry resources have further strengthened, leading effects from industry leaders continue to manifest, while the international influence and market leading capabilities have been effectively consolidated and enhanced.