EV/Hybrids first big challenge

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The rare metals that are used in the batteries for EV's/Hybrids are reaching a supply shortage.

As hybrid cars gobble rare metals, shortage looms

By Steve Gorman Steve Gorman – Sun Aug 30, 11:52 pm ET

LOS ANGELES (Reuters) – 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 U.S. source is a rare earths mine slated to reopen in California by 2012.

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 U.S. 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 1 kilogram (2.2 lb) of neodymium, and each battery uses 10 to 15 kg (22-33 lb) 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 United States alone for 2009, and 180,000 next year. The company forecasts sales of 1 million units per year starting in 2010.

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 are 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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As China currently mines 95% of these metals. They seem to want to stop the exportation.

http://www.autoblog.com/2009/08/26/c...brids-and-evs/

China pondering hoarding precious metals used in hybrids and EVs by banning exportation?

by Sebastian Blanco (RSS feed) on Aug 26th 2009 at 2:40PM

Ever hear of neodymium? How about dysprosium or yttrium? Thulium or lutetium? These are just some of the metals that China's Ministry of Industry and Information Technology is considering either banning the exportation of, or at least severely limiting the amount that it will let leave the country. These precious metals are used in manufacturing new (and sometimes green) technologies, and China wants keep the goods available for its growing domestic use.

Neodymium, in particular, is required for making the electric motor in hybrid cars, and every Toyota Prius you've ever seen contains 25 pounds of rare earth elements. iPods, Blackberries and countless other items also require these rare earth minerals.

Right now, China mines more than 95% of the rare earth minerals that are taken out of the ground. Let us repeat that: Ninety-five percent. While some might see the export limits as an act of aggression by China, an Australian rare metals expert told the UK's Telegraph, "This isn't about China holding the world to ransom. They are saying we need these resources to develop our own economy and achieve energy efficiency, so go find your own supplies." Does this mean BYD will one day have a big, big advantage?

[Source: Telegraph via China Car Times | Image: Martin Bernetti/AFP/Getty]