Rare earth materials are vital to a variety of economic sectors, including healthcare and clean energy. In a new study, Argonne scientists highlight that rare earth elements may be particularly vulnerable. Source: U.S. Department of Defense and Argonne National Laboratory

Rare earth materials are essential to many industries. A new study by Argonne explores the impact of supply disruptions, such as mine closures.

A range of devices and machines, from cell phones to fighter jets, rely on rare earth elements, which are mostly mined and refined in China. Such supply disruptions could have wide-ranging consequences, but little is known about their impact on global markets. Researchers at the U.S. Department of Energy's Argonne National Laboratory are using a unique computer model to understand this effect.

Of the 17 elements classified as rare earths, most are not actually rare, but they are difficult to extract from the ground and expensive to separate from each other. Rare earth elements are critical to many emerging technologies, including those that support a clean energy future. They include neodymium, praseodymium and dysprosium, which are energy-efficient permanent magnet components used in products like wind turbines and electric vehicles; and gadolinium, which you might know is the contrast agent used in MRIs. The U.S. government classifies these elements as critical materials, in part based on their importance in making products that support national security.

China dominates the global rare earth market. According to estimates (USGS 2020 data), China produces 58% of global rare earth production and controls about 85% of global refining capacity. U.S. production of rare earths will account for more than 15 percent of global production by 2020, but the material is used in value-added processing and production.

Various disruptive events can affect the supply of rare earth materials, including natural disasters, labor disputes, construction delays, and an epidemic that everyone is thinking about right now.

In a recently published study, Argonne researchers analyzed the potential impact of three supply disruptions on 10 rare earth elements and a small number of related compounds to determine market impact. The analysis was supported by the U.S. Department of Defense Defense Logistics Agency, which used Argonne's Global Critical Materials (GCMat) tool.

GCMat is an agent-based model, which is a computational framework for simulating interactions between different entities in a given system. This provides the ability to predict rare earth market dynamics by simulating the decisions that individual mining projects, producers and consumers might make. These "agents" continually update their product prices, supply sourcing, production and capacity plans in response to market prices and supply availability.

"With agent-based modeling, we can capture what's happening in the market with greater precision and detail than other types of modeling," said Matthew Riddle, an assistant energy scientist at Argonne and lead author of the study. Riddle) said.

The GCMat team used the Argonne High Performance Computing Bebop cluster at the Laboratory Computing Resource Center to calibrate the model and assess uncertainty in a variety of different market scenarios.

"Agent-based modeling looks at the parameters that trigger decisions, such as whether to open or close a mine, and how those decisions are communicated through markets and supply chains," said study co-author Allison Bennett Irion, chair of the Argonne Advanced Supply Chain Analytics Program.

The findings highlight which rare earth elements may be particularly vulnerable to damage. Dysprosium oxide saw the biggest price increase due to production disruptions. Dysprosium is used in permanent magnets, specialty alloys, and other applications. Neodymium oxide, a mixture of neodymium and praseodymium, is also prone to price spikes.

Overall, the analysis found that under temporary conditions – a one-year export disruption and two years of mine closures – the price impact tends to extend into the years following the disruption. The impact on production, capacity and demand is also likely to last longer. The modelling suggests that some mines that started outside China due to supply disruptions may not be able to continue operations after basic supply is restored.

The GCMat team is currently working to change the model to help it align with U.S. goals to reduce greenhouse gas emissions. They are strengthening the rare earth magnet market's representation of energy-efficient motors, including those used in wind turbines and electric vehicles. A new agent-based model of the lithium-ion battery supply chain will assess how global material shortages may affect the adoption of battery technologies critical to the electric vehicle market.

GCMat, also supported by the U.S. Department of Energy's Office of Energy Policy and Systems Analysis, is based on Argonne's Repast Simphony, an open-source toolkit for implementing and using agent-based modeling.

"At Argonne, we are able to leverage our expertise in a range of energy systems, such as batteries, combined with unique modeling and computational capabilities to do such research," Riedel said.

The researchers also plan to use GCMat to assess the effectiveness of strategies such as recycling, conservation and supply diversification to reduce the severity of market disruptions for rare earths.

The study, "Agent-Based Modeling of Supply Disruptions in Global Rare Earth Markets," was published in the January issue of the journal Resources, Conservation and Recovery.