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Can EU beat China in rare earth permanent magnet industry

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EU considers supporting rare earth permanent magnet industry to reduce dependence on China

EU is studying the local production of a special magnet crucial to electric vehicle engines by providing support to local manufacturers so that they can compete with Chinese competitors.  The EU's focus is now turning to minerals used to produce permanent magnets. By 2050, the demand for such minerals will soar up to 10 times. 

According to people familiar with the matter, the EU is studying the local production of a special magnet crucial to electric vehicle engines by providing support to local manufacturers so that they can compete with Chinese competitors.
According to Reuters, two sources who have seen the relevant plans but are not authorized to discuss them publicly disclosed that the proposals being considered by the EU include low-cost financing and compensation for the rising cost of raw materials.


China's supply accounts for 98% of the EU's demand for rare earth magnets. Rare earth magnets are composed of 17 minerals and are widely used in electronics, national defense, aerospace and other fields.


The EU's support for the production of rare earth permanent magnets will echo the legislation introduced by the United States earlier this month, which aims to provide tax credits for U.S. rare earth permanent magnet manufacturers.


The goal of the United States, the European Union and the United Kingdom is to expand the production of super magnets used in electric vehicles and wind turbines to help achieve the goal of reducing carbon emissions and reduce dependence on China, where Chinese manufacturers are currently in a global leading position.


European enterprises believe that they cannot compete with Chinese manufacturers, and the government subsidies received by relevant Chinese enterprises are equivalent to about one fifth of their raw material costs, resulting in 90% of the supply of the global magnet Market from China.


The European Union established the European Union for raw materials (Erma) at the end of last year to ensure that the region has a series of key minerals needed for its green transition, with rare earths as a top priority.


The EU's goal is to create rare earth mining, processing and magnet industries locally to reduce vulnerability to shocks due to supply disruptions in China.


Officials hope to replicate Europe's success in creating an electric vehicle battery industry. After the EU provided funds and coordination, investment in the battery industry surged. 


The EU's focus is now turning to minerals used to produce permanent magnets. By 2050, the demand for such minerals will soar up to 10 times. The EU and the UK have promised to reduce net greenhouse gas emissions to zero at that time.

According to the source, the establishment of a viable magnet industry in Europe also needs the support of customers such as automobile manufacturers. These customers must agree to pay a little premium to ensure access to environmentally friendly and traceable products.


People familiar with the matter said that the rare earth magnet and motor department under the European Union of raw materials will announce suggestions on how to create a rare earth magnet industry next month. They added that the Department had submitted the action plan to the EU's top leadership.



They added that Thierry Breton, the EU's internal market and Services Executive Committee, had agreed to approach carmakers for their support. The German Automobile Manufacturers Association (VDA) declined to comment on whether its members would support such an initiative. 


Brighton said at a meeting in June that the EU's goal is to meet 60% of the region's demand for wind turbine magnets by 2030. "I think our situation in rare earths and permanent magnets is similar to that in batteries and lithium a few years ago," he said at the time


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