Did you know that China halted exports of Rare Earths permanent magnets (REPMs) since April 4th? It is part of its ongoing trade war with the United States and shows just how much leverage China has on the rest of the world, as it can weaponize one of the most critical elements in green energy transition.
REPMs are magnets with enhanced magnetic properties (through the addition of rare earths elements (REEs)), that are key to many modern life devices, from medical and defense equipment to any small electronic (razors for instance). They are used to reduce the size and weight of products, and they are especially key for wind turbines and electric vehicles (EVs) motors. They allow to convert mechanical energy into electrical energy and vice-versa.
There are two main challenges when it comes to REPMs:
Demand is rising. According to the International Energy Agency, the global demand for neodymium, praseodymium, and dysprosium in magnets is expected to rise by 4 to 7 times by 2040 compared to 2018 levels. In the wind energy sector, demand for REPMs is expected to rise from 10,5kt (2024) to 26,7kt in 2050. In the EVs sector, it is expected to rise from 8,36kt (2024) to 49,89 kt in 2050.
China produces 92% of all REPMs and refines 91% of the world’s REEs.
So, one question arises: how to secure supply ?
One way forward is recycling Rare Earth Permanent Magnets (REPMs). Currently, less than 1% of REPMs are recycled throughout the world. And yet, recycling them would be a strategic choice to support the energy transition. It would allow to:
Reduce environmental impacts of magnet production and be less dependent on raw materials extraction. Recycling REMPs allows to skip REE mining and refining, which are very energy and water intensive processes, as well as very pollutive (release of GHGs and radioactive byproducts). The ADEME estimates that a recycled REPM has 80% less environmental impact than a virgin REPM.
Strengthen industrial autonomy and regain sovereignty. China controls the majority of the value chain for geographical reasons (largest REEs deposit on Earth) as well as industrial policy reasons. China actually state-backed the development of the industry through active investments, subsidies, R&D in every step of the magnet manufacturing process (mining, refining, processing, fabrication), and infrastructure development since the 1980s. Japan used to be the main producer until it got bypassed by China in the 1990s. The EU and the US used to have mines and refining facilities, but they all delocalized them in China in the 2000s because of cheaper costs. China consciously recognized REEs as strategic before any other country, and today they hold the majority of the supply chain.
China consciously recognized REEs as strategic before any other country, and today they hold the majority of the supply chain. Build a European REPM recycling supply chain. Technologies to recycle REPMs benefit from continuous technological advancements, allowing for better environmental footprint and better conservation of magnetic properties. There are 2 main routes:
Short-loop recycling, in which magnets extracted from end-of-life devices or electronic waste are reintroduced into production with minimal processing.
Long-loop recycling, which involves breaking the magnet into its basic elements through acid reactions.
Solutions are emerging
The most commercially scalable technique is Hydrogen Processing of Magnet Scrap (HPMS), patented by the Magnetic and Materials Group of the University of Birmingham. It corresponds to short loop recycling and uses hydrogen to fracture the magnet into a fine powder (decrepitation), which can be reprocessed into new magnets. Successful examples of companies using this technique, or inspired techniques, include HyProMag, a UK-based firm now also in Canada and Germany, and MagREEsource, a French company established in 2024. They both aim to create a European REPM recycling supply chain, and they have a market opportunity: demand is very high for recycled REPMs. MagREEsource already produces around 50t of REPM a year.
Now, how come only 1% gets recycled? That’s for another article.
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Author: Diane Naffah Reviewed by: Hélène Trehin Isermeyer
Published: June 2025
