Siemens Reducing Rare Earths

Last week, Bloomberg reported that Siemens AG is launching a new effort aimed at reducing its dependence on Chinese rare earth minerals. Like other major wind turbine manufacturers, Siemens is heavily dependent upon China for metals such as dysprosium and neodymium. These specific metals are critical composites in the permanent magnets found in Siemens expanding range of direct-drive wind turbines. According to the report, Siemens will instead look to finance and develop new production sites across Australia, Russia, Greenland, and California.

The application of permanent magnets in wind turbines is a relatively new but growing trend in the wind energy industry. Offering attractive advantages across areas such as efficiency, reliability, and design flexibility, these new generators are now being employed by Siemens and other leading manufacturers within the industry. As a result, direct-drive permanent magnet (DDPM) wind turbines are expected to account for an increasing number of total wind turbine deployments in the coming year.

The Bloomberg article compares Siemens’ approach to that of Vestas Wind Systems, which is said to be opposed to a move to direct-drive wind turbines largely because of its dependence on rare earths. Vestas claims that its geared generators contain a tenth of the quantity of rare earths found in direct-drive machines. Although effective, a significant downside of these systems is excess weight. Although the rotors for DDPM turbines must be significantly larger than those of geared generators when developing the same power, the overall weight of the DDPM unit is significantly less. At the same time, Siemens is also understood to be developing a new model that does not rely on rare earth metals.

Siemens’ new strategy is reflective of the wider fears surrounding the current state of the global rare earth metals market. In the face of China’s increasing influence over rare earth prices, clean technology manufacturers involved in industries such as wind turbines, electric vehicles, solid oxide fuel cells, and high-efficient lighting phosphors, are looking to diversify their rare earth supply lines while also pursuing technologies that serve to reduce their rare earth dependence. Potential high-growth industries such as wind turbines and electric vehicles that currently rely on significant quantities of a very select group of rare earth metals are understood as being at particular near-term risk because of the skyrocketing market prices. Other large manufacturers of rare earth-intensive clean technologies are expected to follow suit as market prices continue to rise.

Article by Euan Sadden.

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