You may not have heard of neodymium, but you may be carrying some around right now. This rare metal is used in the manufacture of mobile phones, headphones and even cars.

Neodymium is a rare earth element and demand for this metal is increasing globally. Roderick Eggert, deputy director of the Critical Materials Institute at the Colorado School of Mines, said that neodymium is currently the main factor driving the growth in demand for rare earth metals.

The rare metal is needed in iPhones, AirPods, wind turbines and the motors in Toyota Prius or Tesla Model 3. If you combine neodymium with iron and boron, you can create neodymium-iron-boron magnets, which are the most powerful permanent magnets ever created.

Applying neodymium magnets to cell phones and other devices could not only reduce their size but also enhance their performance. For motors, using permanent magnets means more power and fewer motor components.

Magnets may seem insignificant, but the NdFeB magnet market was worth $11.3 billion in 2017, according to market research group IMARC. Separately, Import Genius CEO Michael Kanko said that over the next few decades, 1 million electric vehicles are expected to be sold in the United States, which means demand for neodymium will surge.

Earlier this year, Tesla became one of several electric car manufacturers to use neodymium magnet motors, which it is planning to install in the Tesla Model 3. Kanko said Tesla imported more than four million pounds of auto parts from China and Taiwan, mostly neodymium magnet motors. In addition, Julie Klinger, author of "Rare Earth Frontiers" said that the global neodymium supply and demand gap is expanding at a rate of more than 3,000 tons per year, and neodymium is currently in short supply.

Neodymium supply mainly comes from China, and more than 80% of the world's neodymium is produced in China. In 2017 alone, China mined 105,000 tons of rare earth metals, while the United States has only produced about 43,000 tons of rare earth metals in the past 20 years.

One miner from the Mountain Pass mine in southern California near Nevada noted that the United States was once the most important country producing rare earths. In the 1960s and 1970s, the mine was the world's dominant rare earth mine. But as Chinese mines were developed in the 1980s and 1990s, the Mountain Pass mine declined.

Around the same time, China was investing deeply and successfully in its own mining and production of rare earth metals. Kanko noted that from the late 1990s to 2010, China became the dominant player in the rare earth metals market.

Klinger said the 2010 trade dispute illustrated the risks posed by having a single source of goods of this value. The price per ton of neodymium skyrocketed from US$50,000 in 2010 to US$250,000 in 2011. While prices have eased, there are still concerns around the world's supply of the metal. For example, Toyota recently developed a new neodymium-reduced magnet developed in response to the neodymium supply shortage.

The Mountain Pass mine was recently rescued from bankruptcy by two U.S. investment firms and named MP Materials, which said it hopes to rebuild the U.S. rare earths industry. This means the United States will start producing rare earths again.

Although MP Materials still needs to export materials to China for further refining, a person familiar with the matter said the company plans to become fully self-sufficient within 18 months. In fact, extracting and processing these materials can cause environmental damage.

Klinger said that if you want to mine a neodymium ore, you have a bunch of other elements that go along with it, such as uranium. It is very difficult to mine in a specific place without destroying the original ecological environment. However, as demand for neodymium continues to grow, miners will implement better extraction processes. Klinger believes that one benefit of the expected increase in demand for neodymium is the diversification of global neodymium supply, and that international cooperation around the recycling of used electronic motors and the recycling of neodymium will increase.

This article comes from Qianzhan.com