Mining operations should increase their expenditure on scarce mineral resources, known as rare earths. - Companies should increase their expenditures on scarce earth elements
In recent times, the dramatic surge in prices and supply disruptions of rare earth elements has posed significant challenges to German industries, particularly those involved in electric vehicle (EV) manufacturing and wind turbine production.
The turbulent situation was triggered by China's export controls on rare earths and magnets, which caused a drastic drop in shipments to Europe in 2025. This led to immediate shortages, production delays, and price spikes of up to 65% for key elements like neodymium oxide and dysprosium oxide[1]. Consequently, German automotive plants experienced temporary shutdowns due to magnet shortages, delaying EV production by 3-4 weeks, while wind turbine installations faced delays up to 8 weeks[1].
The volatility in prices and supply constraints pose serious challenges to manufacturers that rely on rare earths for high-performance magnets critical to EV motors and turbine generators[1][4]. Additionally, the hybrid vehicle market is driving higher demand for related metals like rhodium, which faces its own supply deficits, further complicating the raw materials landscape for German automakers[2].
To combat these challenges, potential solutions being explored include:
- Strengthening European and domestic rare earth supply chains through partnerships with North American and other non-Chinese producers to reduce dependency on China[3][4].
- Government interventions, such as price guarantees for certain rare earth products, to stabilise supply and encourage investment in alternative sources, refining, and recycling capacity[2].
- Developing recycling technologies and alternative materials to lower reliance on scarce elements.
- Encouraging long-term contracts and stockpiling strategies to buffer against short-term market shocks[1][4].
Bertram Brossardt, CEO of the vbw, expressed concern about the current uncertainty in the industry, although the city mentioned in the context is not related to the industry but is merely the location of Mr. Brossardt[5]. He emphasised the urgent need for stability in the industry, as the German industry faces increased costs for rare earths[6].
Interestingly, while no specific rare earths like Terbium, Yttrium, and Gadolinium were mentioned in the initial facts, it was later revealed that Yttrium, vital for high-performance ceramics, increased by 17%, Terbium, used in high-performance magnets and semiconductors, increased by nearly 28%, and Gadolinium, used in magnets, increased by 15%[7]. Furthermore, Gold, a material not previously mentioned, increased by 15% and is now more expensive than rare earths overall[8].
The German industry is actively addressing these supply challenges and price pressures through a combination of policy support, diversification efforts, and technological innovation to secure critical rare earth materials for the transition to electric mobility and renewable energy infrastructure[1][2][4].
- The community is contemplating strengthening European and domestic rare earth supply chains, seeking partnerships with North American and other non-Chinese producers, to reduce dependency on China and secure critical rare earth materials for vocational training in high-performance magnet production, essential for electric vehicle motors and wind turbine generators.
- The industry, particularly electric vehicle manufacturing and wind turbine production, that relies on rare earth elements for their operations, faces significant financial challenges due to volatile prices and supply disruptions, prompting the exploration of developing recycling technologies and alternative materials to lower reliance on these scarce elements.
- With the surge in prices of rare earth elements like Yttrium, Terbium, Gadolinium, and Gold, technology companies are innovating to create more efficient gadgets, ensuring the industry remains competitive despite the energy-intensive nature of producing rare earth elements.
