Tue, Sep 01, 2009 page10

• Shortage looms as hybrid cars gobble rare metals

  • REUTERS
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  The Prius hybrid automobile is popular for its fuel efficiency, but its electric motor and battery guzzle rare earth metals, a little-known class of elements found in a wide range of gadgets and consumer goods.

  That makes Toyota’s market-leading gasoline-electric hybrid car and other similar vehicles vulnerable to a supply crunch predicted by experts as China, the world’s dominant rare earths producer, limits exports while global demand swells.

  Worldwide demand for rare earths, covering 15 entries on the periodic table of elements, is expected to exceed supply by some 40,000 tonnes annually in several years unless major new production sources are developed. One promising US source is a rare earths mine slated to reopen in California by 2012.

  

  Samples of rare earth elements are converted to glass discs inside a testing building at the Molycorp Minerals Mountain Pass Mine in Mountain Pass, California, on Aug. 19. The open-pit mine at Mountain Pass, California, holds the world’s richest proven reserve of “rare earth” metals, a family of minerals vital to producing the powerful, lightweight magnets used in the engines of Toyota Motor Corp’s Prius and other hybrid vehicles, as well as generators in wind turbines.

  PHOTO: REUTERS

  Among the rare earths that would be most affected in a shortage is neodymium, the key component of an alloy used to make the high-power, lightweight magnets for electric motors of hybrid cars, such as the Prius, Honda Insight and Ford Focus, as well as in generators for wind turbines.

  Close cousins terbium and dysprosium are added in smaller amounts to the alloy to preserve neodymium’s magnetic properties at high temperatures. Yet another rare earth metal, lanthanum, is a major ingredient for hybrid car batteries.

  Production of both hybrids cars and wind turbines is expected to climb sharply amid the clamor for cleaner transportation and energy alternatives that reduce dependence on fossil fuels blamed for global climate change.

  Toyota has 70 percent of the US market for vehicles powered by a combination of an internal-combustion engine and electric motor. The Prius is its No. 1 hybrid seller.

  Jack Lifton, an independent commodities consultant and strategic metals expert, calls the Prius “the biggest user of rare earths of any object in the world.”

  Each electric Prius motor requires 1kg of neodymium, and each battery uses 10kg to 15kg of lanthanum. That number will nearly double under Toyota’s plans to boost the car’s fuel economy, he said.

  Toyota plans to sell 100,000 Prius cars in the US alone for this year, and 180,000 next year. The company forecasts sales of 1 million units per year starting next year.

  As China’s industries begin to consume most of its own rare earth production, Toyota and other companies are seeking to secure reliable reserves for themselves.

  Reuters reported last year that Japanese firms were showing strong interest in a Canadian rare earth site under development at Thor Lake in the Northwest Territories.

  A Toyota spokeswoman in Los Angeles said the automaker would not comment on its resource development plans. But media accounts and industry blogs have reported recently that Toyota has looked at rare earth possibilities in Canada and Vietnam.
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