Don't panic over rare-earths, says The Switch
The wind industry no longer needs to fret about the global supply of rare-earth metals, insists Jukka-Pekka Mäkinen, chief executive of The Switch.
Rare-earth metals are critical to the production of a number of high-tech products, including permanent-magnet generators (PMG) for wind turbines, of which Finland's The Switch is a leading supplier.
The price of rare-earths surged in early 2011 on fears that China had begun clamping down on their export in order to protect its own high-tech industries.
The spike prodded new non-Chinese producers into the sector, such as Molycorp, and led some in the wind business to question the future of permanent-magnet direct-drive turbines.
But those questions have now been laid to rest, says Mäkinen.
While noting that prices are still above where they were before the rare-earths panic began, Mäkinen adds that “they’re now maybe only 20% over that”.
“We’re practically on a stable level and pricing is slowly going down. So we’re home free on that,” he claims.
Mäkinen ascribes the price run-up to “[Chinese] government policies, partially.
“But even more than that was the hot money pouring into buying stockpiles of permanent-magnet material.”
US-based Molycorp, which made a splash in March 2012 by purchasing rare-earths processor Neo Material Technologies, has since seen its share price crumble by 75% amid falling prices. In December Molycorp fired its chief executive.
A number of positives have emerged from the rare-earth panic, Mäkinen says. For one thing, many consumers of the materials found ways to dramatically reduce their reliance, including the wind business.
“And it also forced us to compare [PMG] technology with other technologies,” he says. “And we came away convinced that this is still the best technology around.”