Promoting the growth of a strategic rare earths value chain for Europe

On 21 April, the European Raw Materials Alliance (ERMA) brought together over 120 stakeholders for a mid-term meeting of the first Cluster on Rare Earth Magnets and Motors.

Over the last months, the task forces of the ERMA Cluster 1 have developed the first draft of an Action Plan on Rare Earth Magnets and Motors that addresses regulatory bottlenecks hindering the emergence of a strong European rare earth value chain, from (urban) mine to rare earth magnet and motor.

Rare earths are a gift from nature. They offer great opportunities for the design of advanced materials that can help us to fight global warming. The ERMA Cluster on Rare Earth Magnets and Motors has prepared a first Action Plan draft to promote the growth of the industry in Europe.

Dr Roland Gauss, Senior Advisor – Substitution and Recycling at EIT RawMaterials, ERMA Cluster for Rare Earths Magnet and Motors, Leader

The Action Plan identified a number of items that are currently in a feedback loop with DG Grow, European Commission. The actions centre around the creation of a level playing field with Asian competitors in terms of market conditions, promoting a commitment by European OEMs (Original Equipment Manufacturers) to source rare earth materials from EU producers, providing public investment to match private capital expenditure, and keeping end-of-life products containing rare earths in Europe for recycling. Setting up a sustainability agenda, raising awareness, and promoting innovation capacity – particularly with the help of Horizon Europe and Member States’ funding programmes – are additional requests.

Rare earths are not rare and can be extracted and processed sustainably. It is up to us Europeans to decide whether we want to invest and take leadership in a strategic value chain growing worldwide. ERMA has identified specific investment cases that would cover the rare earth value chain across Europe.

Dr Roland Gauss, Senior Advisor – Substitution and Recycling at EIT RawMaterials, ERMA Cluster for Rare Earths Magnet and Motors, Leader

Bernd Schäfer, CEO, Managing Director of EIT RawMaterials, gave an update on the ERMA Raw Materials Investment Platform. ERMA has identified 14 projects with an overall investment need of about EUR 1.7 billion and the means to significantly increase Europe’s autonomy in rare earth supply chains and to create and growth in the sector.

This will result in:

• Separated REE oxides: ramp-up from 1,000 tonnes to 10,000 tonnes capacity per year.
• REE metals: ramp-up from virtually 0 to 5,000 tonnes capacity per year.
• REE magnets: ramp-up from 500 tonnes to 7,000 tonnes capacity per year.

In terms of financing, ERMA follows a three-fold approach. First of all, making use of public grants at the EU level and Member State levels. For instance, investments in the rare earth value chain were marked as strategically of the highest importance by the Commission when defining the rules of the NextGenerationEU recovery plan. ERMA also supports the creation of an IPCEI (Important Project of Common European Interest) that will include rare earth materials. Thirdly, ERMA has set up a Raw Materials Investment Platform that facilitates access to public funding and private venture capital.

Peter Handley, DG Grow, European Commission, gave an update on the development of the Industrial Alliances. They have developed into a key approach in the Commission’s interaction with industry representatives and other stakeholders in a specific value chain context.

Philip tho Pesch of the German Automotive Association, VDA, gave a presentation highlighting the automotive industry’s high level of interest in an EU rare earth industry. Sustainability in rare earth value chains would gain visibility and importance for the carmakers. Erwin Coolen, ECHT Community, presented the Circular Wind Hub, an investment case to develop the recycling capacity of wind turbines in Europe. There is growing recognition of the use of sustainable materials and circularity of wind turbines. Timur Sirman, MagnoTherm Solutions, presented an investment case related to magnetic cooling, which has the potential to be significantly more energy-efficient than existing air compression-based cooling technologies. The technology is based on using rare-earth containing magnetic materials.

The next steps for the ERMA Cluster on Rare Earth Magnets and Motors include:

• Finalise the EU Action Plan, and collect final feedback (May 2021)
• Meet with Commissioner Breton to present the Action Plan and connect with major downstream players of automotive, renewable energy, and equipment manufacturing (May 2021)
• Prepare an IPCEI (ongoing)
• Evaluate potential investment cases via the Raw Materials Investment Platform of ERMA (ongoing)

More information about the progress of the ERMA Cluster on Rare Earth Magnets and Motors will follow soon.