Supplier Soundbytes: Rare earths, real politics

For years, rare earth elements were the wallflowers of the electric vehicle revolution: chemically exotic, geopolitically awkward and largely ignored. Lithium and cobalt stole the limelight. Rare earths — essential to the permanent magnets that power electric motors — were treated as a niche sustainability concern, a footnote to the main act.

No longer. As supply chains fray and industrial policies harden, rare earths have been recast as instruments of national security. Control over them increasingly shapes trade policy, investment screening and corporate strategy. Carmakers that once asked how "green" their materials were now ask how secure they are. The shift is subtle but profound: from carbon accounting to strategic resilience.

That is the backdrop to the latest episode of Supplier Soundbytes, part of S&P Global Mobility's Autology series. In it, Ahmad Ghahreman, founder and chief executive of Cyclic Materials, argues that the future of electromobility may depend less on what is mined than on what is recovered.

The numbers explain the anxiety. The bulk of rare-earth mining — and an even greater share of processing — takes place in a single country. Deposits elsewhere are often deep, dispersed or environmentally fraught. Even when ores are dug up outside Asia, they are frequently shipped back there for separation and refining. The result is a supply chain that is efficient in calm times, but brittle in turbulent ones.

Ghahreman's contention is that recycling offers not merely an environmental salve but a strategic hedge. Unlike mining, which is hostage to geology, recycling is governed by product cycles and policy choices. End-of-life motors, wind turbines and electronics constitute what he calls an "overground deposit" — a stock of material already extracted, processed and embedded in goods now reaching obsolescence. In North America and Europe, that urban mine is growing quietly each year.

Particularly striking is the distinction between light and heavy rare earths. The latter, vital for high-performance magnets, are more geologically concentrated and more tightly controlled. Yet over decades of importing finished products, Western economies have effectively accumulated sizeable above-ground reserves of these same heavy elements. Well-executed recycling can tap that stock far faster than a new mine can be permitted, financed and built.

Still, bottlenecks abound. Mining is constrained by geology and permitting; processing by capital intensity and technical know-how; end-of-life recovery by fragmented collection systems and products never designed for disassembly. Asked where the pinch point will be as EV volumes rise, Ghahreman's answer is disarmingly comprehensive: all of the above.

That breadth of constraint sharpens the case for circularity. A local recycling loop, he says, shortens supply chains and anchors value domestically. It also alters the calculus for carmakers choosing motor technologies. A magnet that is marginally more efficient but dependent on a precarious supply may look less attractive once strategic risk is priced in.

Yet, redesigning every vehicle for easy rare earth recovery is unrealistic. Global platforms, tight margins and long development cycles conspire against bespoke recyclability. Cyclic Materials has instead pursued what Ghahreman calls a "feedstock-agnostic" approach: technology capable of handling mixed materials — copper, aluminum, steel, plastics and magnets — without demanding that manufacturers reengineer their products first.

The implication is pragmatic. Waiting for perfect design standards may delay circularity for a generation, while building robust, adaptable processing capacity could accelerate it within this decade.

The message is clear enough. In the contest for clean mobility, rare earths have moved from the margins to the center, and the winners may be those who treat yesterday's waste as tomorrow's strategic reserve.

Ahmad Ghahreman

Source: Cyclic Materials

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