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Dynamic neodymium stocks and flows analysis in China

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Abstract

Neodymium is widely used for magnetic materials in electronic devices, electric vehicles and home appliances. China is facing challenges of increased neodymium demand and a lack of neodymium recycling systems. However, few studies focus on neodymium resource utilization in China—a major consumer of this resource. This study traces and forecasts neodymium flows and stocks in China using dynamic material flow analysis from a life cycle perspective. The results show that China's demand for neodymium at the use stage had increased over 20 times during 2000-2017. By contrast, official neodymium production has only doubled, indicating the existence of illegal mining to meet the increasing neodymium demand. Also, the total net neodymium exports have continuously decreased due to reduced export of primary products and intermediate products. In addition, smuggling of primary products remains an issue and needs to be eliminated. Wind turbines and electric vehicles will become major neodymium consumption sectors greatly increasing future demand requirements. To avoid insufficient recycling and illegal neodymium mining, more appropriate neodymium management policies should be released to balance neodymium supply and demand.

Introduction

There are 17 different rare earth elements (REEs). These elements can be categorized into three clusters—lanthanides, scandium, and yttrium. Their unique physical and chemical properties make REEs vital to clean energy technologies and high-performance materials (Ayres and Peiro, 2013; Zhang et al., 2017). Neodymium—a light rare earth element (LREE)—is an essential material for green technology development (Morimoto et al., 2019). It is listed as a strategic mineral resource by the Ministry of Natural Resources of People's Republic of China during the 13th five-year plan (2016-2020) (Ministry of Natural Resources, 2016).

Neodymium naturally occurs in bastnaesite, monazite and ion-adsorption clays (IACs) in Inner Mongolia, Sichuan, and several southern provinces with concentrations varying from 10% to 30% (Chen et al., 2018; Chen, 2011). Its strong magnetism and high coercivity make neodymium and its compounds useful in various emerging technological fields. Neodymium–iron–boron (NdFeB) permanent magnets are a critical component of electric vehicles and wind turbines (Ciacci et al., 2019; Sekine et al., 2017). Recent environmental policies have caused greater demand for these products. For example, China's State Council proposed accelerating green and low carbon development to ensure that the country meets its carbon peak and carbon neutrality goals (State Council, 2021). Similarly, the global communities are key to promote low carbon development to respond climate change, indicating that the total demand for neodymium will continue to increase since neodymium is widely used in electronic devices, home appliances, electric vehicles and other applications (Habib et al., 2014; Nansai et al., 2015).

China is the largest neodymium supplier and exporter in the world—dominating the neodymium industrial chain (Du and Graedel, 2013; Geng et al., 2020a). The global neodymium reserve is estimated to be 11.6 million tons (Mt)—a 13.6 Mt of neodymium oxide equivalent (USGS, 2020). China owns 2.9 Mt of neodymium, accounting for 23% of global reserves, but responsible for over 60% of global neodymium production over the past few decades (CSRE yearbook, 2018). China's expanding demand from various industrial sectors has led to a 50% increase of neodymium mining since 2000, reaching 20,000 tons in 2019 (Ministry of Natural Resources, 2019; USGS, 2020). The lack of refining and separation capacities in other countries led to that China supplied more than 2,000 tons of neodymium annually to the rest of the world in the form of metal and oxide exportation. This means that global neodymium consumption depends on neodymium imports from China (China Customs, 2019).

Although China;s Ministry of Industry and Information Technology (MIIT) and the Ministry of Natural Resources (MNR) jointly issue annual production quotas of rare earth ores, illegal mining activities exist and are difficult to be entirely eliminated (Liu, 2016; Tse, 2011). Such illegal extraction and oversupply have resulted in the sharp decline of neodymium reserves over the past few decades. Moreover, such mining activities led to significant environmental pressures on the local ecosystems (Liu, 2016; Werker et al., 2019).

However, current neodymium recycling rate is less than 1%, indicating that the overall neodymium resource efficiency is very low. Actually, those neodymium-containing products represent a significant resource to alleviate increasing future demand (Binnemans et al., 2013; Ciacci et al., 2015; Jowitt et al., 2018). But due to a lack of effective neodymium management policies and serious enforcement of relevant regulations, neodymium-containing products collection and recycling systems are yet to be established (State Council, 2012). As such, current policies do not consider the neodymium's importance for high-tech development and renewable energy products. Under such a circumstance, it is critical to investigate the impacts of neodymium supply and consumption patterns from a life cycle perspective.

Academically, several studies have investigated various aspects of neodymium. These studies include: accounting of in-use stock (Du and Graedel, 2011c; Du and Graedel, 2013); assessing recycling potential (Peiro et al., 2013; Sprecher et al., 2014); tracing embodied rare earth flows among different industrial sectors (Wang et al., 2017; Wang et al., 2019); evaluating corresponding environmental impacts (Lee, J. and Wen, Z., 2018); quantifying neodymium product content (Xu et al., 2016); and forecasting neodymium demand under different scenarios (Nassar et al., 2016; Pavel et al., 2017). These studies provide valuable data sources and foundational information for this study.

These studies can be classified as retrospective analysis and prospective forecasts. In terms of retrospective analysis, material flow analysis (MFA) is used to aid policy makers, researchers, and industrial stakeholders to gain valuable insights to address resource scarcity concerns (Hao et al., 2017). For instance, Du and Graedel (2011a, 2011b) developed a global neodymium flow model to estimate in-use stock of neodymium and NdFeB magnets. They highlighted the importance of efficiently recycling neodymium-containing products. Several other studies investigated flows of neodymium and NdFeB magnets at national and regional levels from a life cycle perspective and clarified the neodymium industrial chain based on static and dynamic MFA methods (Habib et al., 2014; Sekine et al., 2017). Guyonnet et al. (2015) and Ciacci et al. (2019) explored neodymium flows and stocks in Europe and found imbalances within the neodymium value chain. Swain et al. (2015) evaluated Korean domestic neodymium consumption structure and recognized the necessity to establish a neodymium recycling and management system. Chen et al. (2018) and Geng et al. (2020a) accounted for neodymium flows in China using static MFA. However, no studies focus on the dynamic evolution of neodymium supply and demand in China.

Neodymium prospective projection studies focus on future demand for renewable energy equipment, electric vehicles, and energy-metal nexus (Grandell et al., 2016; Månberger and Stenqvist, 2018; Tokimatsu et al., 2018; Valero et al., 2018). Various models incorporate multiple scenarios for demand prediction (Imholte et al., 2018; Moreau et al., 2019; Shammugam et al., 2019; Watari et al., 2020). For example, Alonso et al. (2012) predicted demand for neodymium in wind turbines and new energy vehicles using exponential growth models. Elshkaki and Graedel (2013) predicted neodymium demand in wind power industry using International Energy Agency (IEA) scenarios. Roelich et al. (2014) estimated neodymium demand for wind turbines and new energy vehicles using the IEA clean energy roadmap 2050 scenarios. Li et al. (2019) estimated China's neodymium demand in the electric vehicle sector using the Bass diffusion model for different automobile electrification pathways.

Stock-driven approaches can support neodymium demand forecasts. Elshkaki and Shen (2019) combined dynamic flows and a stock model by setting up seven energy scenarios to determine potential neodymium demand. Watari et al. (2019) applied a dynamic stock and flow model to assess neodymium demand in transport and electricity sectors. Deetman et al. (2018) integrated a stock dynamic model and shared socioeconomic pathway scenarios to estimate the neodymium demand. Harvey (2018) used a stock-turnover model to forecast neodymium demand in the electric vehicles under different GDP growth scenarios. Fishman et al. (2018) applied a material stock and flow approach and a logistic consumption model to predict neodymium supply and demand in new energy vehicles in the United States. Li et al. (2020) evaluated the neodymium supply risks in ten different regions under different wind power development scenarios using a stock-driven method.

Since neodymium is used in both clean energy technologies (electric vehicles and wind turbines) and commercial durables (home appliances, traditional vehicles, and electronic devices) and these fields have different development trends, a policy-driven approach using specific product growth rates should be combined with a stock-driven approach—such as the Gompertz function. This integration can more accurately forecast future neodymium demand by preparing growth curves of per-capita stocks based on assumed neodymium saturation levels (Dong et al., 2019; Liu et al., 2012; Muller et al., 2014; Pauliuk et al., 2013). It would be ideal to consider historical growth rates or based on national and industrial development plans in these circumstances (de Koning et al., 2018; Rademaker et al., 2013; Schulze and Buchert, 2016).

In order to fill the above research gaps, this study aims to identify major challenges and opportunities for neodymium cycles to improve neodymium resource efficiency. This study addresses four important challenges: (1) tracing neodymium flows in different life cycle stages along the whole neodymium industrial chain; (2) analyzing neodymium demand structure, including both import and export, and assessing neodymium recycling potential; (3) forecasting future neodymium demand; (4) proposing sustainable neodymium resource management policies.

Section snippets

Dynamic material flow analysis

MFA is a commonly used method to characterize material cycles—including stocks and flows—so that sustainable material management such as material recycling and recovery can be realized (Zeng and Li, 2015). The first step of MFA is to set up explicit boundaries. The spatial boundary for this study is mainland China. Taiwan, Hongkong and Macau are excluded due to a lack of relevant data. The study period is from 2000 to 2050, allowing for both retrospective and prospective neodymium flows

Material flow features of neodymium for the period of 2000-2017

Fig. 2 illustrates China's neodymium material flow features. Neodymium is mainly extracted from monazite, bastnaesite and ion adsorption clays. With rapid economic development, China's neodymium mining volume has doubled from 12,000 tons in 2000 to 27,000 tons in 2017, while China's demand for neodymium at the use stage has increased nearly 20 times during the same study period.

The production of neodymium concentrates from monazite and bastnaesite has remained stable. However, neodymium

Policy recommendations

The results obtained in Section 3 provide practical insights to those policy makers so that that can prepare more appropriate neodymium management policies. The next three subsections summarize major policy insights from these results.

Conclusion

Neodymium has become a critical rare earth element due to rapid development of high-tech industries. This study conducted a dynamic neodymium material flow analysis in China. Our results show that market growth in the downstream products has resulted in a nearly 20-fold neodymium demand increase since 2000. Another important finding is that net neodymium exports gradually decreased. However, some primary products were exported through unreported—smuggling—activities, although such smuggling

Credit author statement

Yao and Geng designed this study and other authors co-authored the main text. Yao and Geng revised this paper.

Declaration of Competing Interest

We declare that there are no conflicts of interests in this study.

Acknowledgment

This study is supported by the National Key Research and Development Project (2019YFC1908501), the Natural Science Foundation of China (72088101, 7169024, 71810107001).

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