Turnabout Is Fair Play
Can coal cure America’s rare earth crisis?
“Glory paid to ashes comes too late.” – Marcus Valerius Martial
Among the key demand-growth drivers for rare-earth elements (REEs) are the high-end magnets that underpin the so-called green energy transition. Neodymium-based magnets, a core component of the electric motors in fully electric and plug-in hybrid electric vehicles (BEVs and PHEVs), have become the industry standard. In China, where PHEVs are often tuned for maximum motor power, such hybrids contain as much or more neodymium as their BEV counterparts.
The wind sector also relies heavily on neodymium-based magnets, especially in the modern direct-drive designs typically used in offshore projects and in some new onshore installations. The amount required per megawatt (MW) of installed capacity is surprisingly large:
“The amount of REEs needed to build the permanent magnets used in wind turbines depends on the specific design and size of the wind turbine. However, neodymium-based magnets, which are the most commonly used type of permanent magnet in wind turbines, typically contain between 28% and 32% neodymium by weight, as well as other elements such as iron, boron, and small amounts of other rare earth elements such as dysprosium and praseodymium.
A 3 MW wind turbine may contain up to 600 kg of neodymium in its permanent magnets and ~50 kg of dysprosium can be present, which is added in small quantities to improve the high-temperature performance of the magnets. Other statistics suggest that 1 MW wind turbine power generation requires ~150 kg of rare earths.”
China dominates nearly all aspects of both the green energy and rare-earth supply chains. Having convinced Western nations to fully buy into both, it now holds substantial leverage in its ongoing economic war with the US. This success of this strategy is made all the more ironic when one considers that China’s green energy actions are little more than a cloak for how much coal it continues to burn. Despite consuming vastly more coal than the US and the 27 member states of the European Union (EU) combined, China still clings to its status as a “developing country” in international climate-change negotiations, freeing it to effectively do as it pleases on the energy front.
As is well chronicled by now, China’s recent threats have triggered a whole-of-government effort to close America’s rare earth metals gap, and tens of billions will be thrown toward the problem. In a recent sit-down interview with Fox Business, US Secretary of the Treasury Scott Bessent held up what he claimed was “the first magnet made in the US in 25 years,” declaring that the US was “ending China’s chokehold on our supply chain.”
Time will tell how long it will take for Bessent’s bluster to be translated into reality, but as we pointed out in “Taleb’s Law,” we have little doubt it will be faster than most are currently expecting, and, eventually, a glut of rare earth metals and magnets will hit the market. When a country as rich and sophisticated as the US throws its full weight behind an important project, results are quite swift.
Among the unexpected sources of potential relief is a national stockpile of rare earths just waiting to be processed. In a development that could rival China’s energy irony, burning coal in the US just might serve as America’s rare-earth savior, turning the tables on the world’s biggest carbon polluter. Let’s find out how.