SMM: it is reported that efforts in the United States and Europe to expand domestic supply of rare earths for electric vehicles and wind turbines while reducing dependence on foreign imports will face obstacles, including high costs and environmental concerns.

Last week, members of the U.S. Congress from both parties introduced a bill to reduce dependence on rare earths, similar to the one introduced by Senator Ted Cruise (Ted Cruz) in May. Subsequently, the European Union also proposed to reduce the dependence on imports of raw materials, and claimed that in view of its importance in industrial development, it would set up a raw materials alliance before the end of the year.

According to the analysis, the cost of obtaining raw materials and environmental concerns may be the biggest obstacles to the independence of the supply chain in Europe and the United States. Jennifer Bischeli (Jennifer Bisceglie), CEO of supply chain risk management firm Interros (Interos), said, "achieving supply chain continuity is very difficult and expensive. If

If you want to build the entire local supply chain, you need to invest a lot of investment in training manpower, and if the raw materials are not at home, you need to buy them from other countries. " She believes that large multinationals are highly dependent on small suppliers, which need local supplies of raw materials that may not be available elsewhere.

In 2019, more than 80% of the supply of rare earths in the United States needs to be imported from Asia. President Trump has ordered the U.S. Department of Defense to expand production of rare earth magnets.

Tax incentives

Bills submitted by the U.S. House of Representatives and Senate include tax incentives aimed at improving the competitiveness of domestic industries in the United States. In addition, for some countries, it takes time to establish domestic technology and equipment systems, and mineral exploration and development is also faced with environmental obstacles, which may lead to serious environmental damage.

The United States is rich in rare earth resources, but the costs, including manpower and energy, are high, so it is necessary to choose between domestic rare earth industry and environmental costs.

The introduction of Europe's raw material self-sufficiency program is mainly due to criticism from some organizations that too much attention is paid to mining and not enough attention is paid to recycling. Although European and American officials say they want to end their dependence on imported raw materials, executives of rare earth companies believe that only a certain percentage is needed.

Jim Lidinsky (Jim Litinsky), CEO of (MP Materials), the only producer of rare earths in the United States, said, "you don't need to occupy the entire industry chain, you just need to occupy an important part of the supply chain. As long as there is one or some important Western competitors, the whole industrial chain can be protected from being controlled by others.

Mount pass's rare earth concentrate needs to be exported abroad for final processing. If the processing of rare earths in the United States and other countries returns home and its production accounts for a certain share, it can break the current supply pattern.

Michel Stafas (Mikael Staffas), CEO of Boliden (Boliden), lamented in a telephone interview, "just two years ago, when we talked about rare earths, people thought that free trade would solve anything, and you could buy it if you wanted to. However, now this concept needs to be changed as soon as possible, and there are more and more signs that this is not the case. "

Diversification

Louis Black (Lewis Black), chief executive of Almonti Industries, which produces rare metal tungsten, believes that it is wise and realistic to encourage supply chain diversification. Mr Blake said proper federal support was the right solution, otherwise companies would still be heavily dependent on foreign countries.

Changing the supply chain is easier said than done, especially at low costs.

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