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Industry Bulletin: Magnet Industry identifies Supply Chain "Capability Gap" as potential barrier to achieving a Green Energy Future for North America

April 27, 2009

In this Industry Bulletin, we present some of the highlights from the Magnetics 2009 Conference, held in Chicago on April 15 and 16 at which Avalon was invited to deliver one of two keynote speeches addressing the theme of a reliable and secure supply chain for the magnetic materials needed to support the rapidly growing Green Energy Economy. The conference attracted some 120 delegates representing magnet manufacturers, end-users, researchers, and raw material suppliers, from around the world to discuss industry trends and address the issue of the supply chain "capability gap" which has evolved in North America.

Avalon was represented by Ian London, Vice-President, Market Development, who delivered a presentation entitled: How are we going to meet the demand for Rare Earths?, which provided an overview of key supply/demand fundamentals for the rare earth elements ("REE") needed for high strength permanent magnets, including projections discussed by Dudley Kingsnorth in his presentation to the 2009 PDAC convention in early March.

Mr. London also emphasized some key raw material supply factors such as:

  • The few potential near-term sources of REE supply outside of China and the status of these projects including the two advanced Australian projects, which are either delayed (Lynas) or now subject to Chinese influence (Arafura).
  • The complexities and variability of the mineralogy of REE deposits, including the lights and heavies imbalance and its impact on pricing and availability on the five REE used in magnets, as well as related processing challenges.
  • That new mine development is a long lead-time investment that needs to be integrated into the national policy initiatives and supported by consumers. 


Ed Richardson, an executive with US-based magnet manufacturer Thomas & Skinner, in his presentation titled Industrial Infrastructure: The Magnet Industry's Role in a Successful US Economy, stated "energy is now a US National Security issue, with trillions of dollars to be spent globally to find and secure new energy sources".

The focus of Mr. Richardson's remarks was on the fundamentally important reality, as seen by a growing number of policy makers, economists, and end use project and technology developers, thatů the US magnet industry must re-establish itself as a thriving, innovative industry sector in order to build and deliver green energy solutions, be they wind turbines, energy efficient motors or fuel efficient cars.

Conference attendee Peter Dent, Vice President of US-based Electron Energy Corp, shared the following industry data from a presentation he made at the Strategic Materials Conference held in Cleveland a week earlier, which illustrate the decline in the U.S. magnet manufacturing sector over the past 10-15 years.

Magnet industry component



Employment - US magnet metal producers



Industry Association



Alnico magnet producers



Samarium Cobalt magnet producer



NdFeB magnet producers



Grain Oriented Electric Steel producers



REO or REE metal producers



Non-captive Ferrite producers



Mr. Richardson reviewed recent studies that describe the underlying causes of the declining U.S. magnet sector and proposed collaborative approaches to revitalizing the industry through partnerships and vertical integration.  Richardson noted that "manufacturing and high value added services are complements, and as manufacturing moves, engineering and R&D follows".  Essentially it means that when the U.S. outsourced both its rare earth mining and magnet-manufacturing base from the U.S. to low-cost suppliers in China, it lost its own innovation capability in this sector, creating a "capability gap". Presentations made by Mr. Richardson and Mr. Dent to the Strategic Materials Conference held earlier in April which focused on implications for national defense, can be found at:

Molycorp Minerals, the owner of the Mountain Pass REE mine in California, was an attendee at Magnetics 2009 and another presenter at the Cleveland meeting, where they also drew attention to the "capability gap" and made the case for a made in North America solution to the REE magnet supply chain issue. For this presentation follow:

Avalon, with its Lake Zone deposit at Thor Lake, NWT being the only known North American REE deposit containing economically significant quantities of the heavy rare earths terbium and dysprosium, is in a position to provide a key contribution to solving the problem of the North American supply chain "capability gap".

If you have any comments or questions on this article or the rare earths generally, please do not hesitate to post them on or feel free to contact the company directly at