Weekly News Review February 24 – March 2 2025

This week brought headline-making developments, including the U.S.-Ukraine raw materials deal within reach  and the EU’s new industrial policy roadmap. We also attended the Critical Minerals Conference: EV & Battery in Frankfurt and are sharing our key takeaways from the high-profile industry event focused on battery and magnet materials.  But first, our weekly news review.

RARE EARTH ALLOYS: MADE IN THE USA?

Australian Strategic Metals in Talks with the Pentagon.

Rare earth deposits are found in many locations worldwide. However, extraction is not economically viable everywhere, and processing capacities outside China remain severely limited. This could soon change in the United States. According to S&P Global, the U.S. Department of Defense is in talks with Australian Strategic Metals (ASM) about building a rare earth alloy factory. The plant replicates a similar facility opened by ASM in South Korea in 2022. At that facility, rare earths are converted from oxide form into metals and, eventually, alloys used in magnet production.

In addition to rare earths, the Department of Defense is also interested in technology metals such as hafnium and niobium, as ASM CEO Rowena Smith explained in an interview with S&P Global. Like rare earths, both raw materials are found at the Toongi deposit in eastern Australia, which ASM is developing as the “Dubbo” project. The U.S. Export-Import Bank has offered financial support for this initiative (we reported). According to the company, hafnium and niobium will also be among the resources produced at the South Korean plant in the future.

ARTIFICIAL BUTTERFLIES: RARE EARTHS GIVE WINGS TO INNOVATION –

New design could revolutionize environmental monitoring, rescue operations, and more.

Permanent magnets made from rare earth elements are well known for their applications in electric motors, wind turbines, and consumer electronics. However, robotics is emerging as another crucial field of application. A groundbreaking invention in this area has recently been introduced by a research team from the Technical University (TU) Darmstadt and the Helmholtz Centre Dresden-Rossendorf in Germany: flexible robotic wings that are not powered by electronics or batteries but instead react to aerodynamic forces like butterfly wings, adjusting their movements accordingly. This is made possible by magnetic fields.

Inspired by the monarch butterfly, renowned for its exceptional endurance and adaptability and migrating thousands of kilometers annually, the TU Darmstadt researchers explain that the key to its remarkable flight lies in the insect’s wings. The combination of active movement and passive bending enables highly efficient airborne locomotion.

With this natural model in mind, the scientists developed wings from flexible plastic embedded with magnetic particles of neodymium-iron-boron (NdFeB), the material used for the most potent known rare earth permanent magnets. External magnetic fields generated by NdFeB magnets cause the particles to move, bending the wings and mimicking the butterfly’s flight movements. In the future, miniaturized magnetic field generators could even be integrated into flying devices, enabling autonomous movement.

The Greatest Challenge: Balancing Flexibility and Durability in Design.

Twelve different wing designs were initially created using 3D printing, some of which incorporated structures inspired by the natural veins of monarch butterfly wings. The team examined how these patterns influenced the wings’ agility and efficiency through analyses and experiments. According to lead author Kilian Schäfer, the primary challenge was printing ultra-thin, flexible structures that are still robust enough to withstand stress and strain. The results, published in Advanced Intelligent Systems, demonstrate that more enormous wings with vein-like structures best meet these requirements.

According to the researchers, their invention has numerous potential applications. In environmental monitoring and agriculture, “winged” robots could monitor populations of important pollinators like honeybees or assess air quality. They would also be ideal for search-and-rescue operations in hard-to-reach disaster areas, as the wings allow for a small, energy-efficient design. This new approach could also be applied to other shape-shifting, lightweight robots, such as those used in minimally invasive surgery, enabling precise controlled movements.

However, the second lead author, Muhammad Bilal Khan, explains that further research is still needed, and the wings themselves must be optimized. In addition to integrated magnetic field generators, the researchers are also exploring how movement and flight paths can be controlled through modifications in the magnetic field.

AUSTRALIA: LYNAS REPORTS SIGNIFICANT PROFIT DECLINE DESPITE INCREASED OUTPUT –

The Australian mining company increased production and sales volumes, but low rare earth prices are currently weighing on revenues.

Australian mining company Lynas released its financial results (PDF) on Wednesday for the half-year ended December 2024. The leading rare earth producer outside China reported a net profit of $3.7 million (AUS$ 5.9 million), a sharp decline compared to the 25 million recorded in the same period of the previous year. The company attributes the drop in profit to the currently low market environment for rare earths.

However, revenue increased to $161 million, up from nearly $149 million in the second half of 2023. Lynas cited the main reason for a 22% increase in neodymium and praseodymium (NdPr) production to nearly 3,000 tonnes. Sales volumes for this product group also rose by 23%.

CEO and Managing Director Amanda Lacaze described the current challenges in the rare earth market as short-term issues. She believes that growing demand in key industries and continued support from the Australian government for domestic supply chains could help the market recover.

USA AND UKRAINE TO AGREE ON RARE EARTH DEAL:

Mining revenue is intended to contribute to the country’s reconstruction.

Ukrainian raw materials in exchange for further military and economic assistance: This “deal” was recently proposed by United States President Donald Trump to the country attacked by Russia (we reported). After intense disputes over the details, Kyiv and Washington have reached an agreement, according to reports from the Financial Times. Based on the media reports, the U.S. will receive access to Ukraine’s natural resources, such as rare earths and oil and gas. Fifty percent of the revenue from the future extraction of these resources is set to flow into a fund for the reconstruction of Ukraine, which both countries will manage. Further details are expected to be clarified in follow-up agreements.

The current contract text does not include explicit security guarantees, which the Ukrainian government had recently insisted on. The U.S. has dropped its original demand to receive $500 billion worth of potential revenue as compensation for the military aid already provided. According to the Financial Times, Ukrainian President Volodymyr Zelensky is expected to travel to Washington on Friday to sign the agreement.

As the German Bundestag  outlined in an analysis, the Eastern European country has titanium, lithium, and rare earth reserves. However, the U.S. think tank Center for Strategic and International Studies points out that data on the potential economic viability of mining is limited. Furthermore, the war has destroyed essential infrastructure, including the energy sector needed for mining operations. Another challenge is the further processing of the raw materials, as China dominates this part of the value chain, while capacities in the U.S. and Europe are still under construction.

EUROPE REVEALS CLEAN INDUSTRIAL DEAL:

On Wednesday, the EU Commission presented its Clean Industrial Deal, an initiative to boost the bloc’s competitiveness while advancing climate protection. The Commission stated that domestic industries urgently need support in light of “tough, often unfair global competition” and internal EU challenges such as excessive bureaucracy. Climate-friendly technologies, including wind and solar energy, are expected to drive growth.

The legislative package explicitly aims to reduce Europe’s high energy costs, partly by accelerating the expansion of renewable energy. Approval processes for state aid in relevant sectors—such as industrial decarbonization—will also be streamlined. To stimulate demand for “Green Tech Made in Europe,” the Commission plans to introduce new sustainability criteria for public and private procurement. Additionally, 40% of key components for climate-friendly technologies are to be manufactured within the EU.

Joint Raw Material Procurement and Circular Economy Law Planned:

Securing critical raw materials for green technologies is a central focus in addition to new trade agreements and incentives to attract skilled workers. A joint procurement platform for these materials is set to be established—an initiative already outlined in the EU Critical Raw Materials Act. Furthermore, the Commission plans to introduce a Circular Economy Law by 2026 to ensure that 24% of materials are reused by 2030.

However, the proposal lacks concrete details on financing. Suggested measures include strengthening existing instruments such as the EU Innovation Fund and establishing an “Industrial Decarbonization Bank” with a proposed budget of €100 billion. Industry associations, including the German Automotive Industry Association (VDA) and the Federation of German Industries (BDI), have voiced concerns over certain aspects—particularly mandatory production quotas—but support the overall direction of the Clean Industrial Deal.

Alongside the Clean Industrial Deal, the EU Commission also introduced the Omnibus Regulations to significantly reduce corporate reporting obligations—aiming to cut bureaucracy by up to 35% (we reported). Additionally, the controversial Supply Chain Act, passed only last year, is set to be postponed and simplified.

RUSSIA PLANS TO EXPAND SCANDIUM PRODUCTION:

The announcement may be linked to the expected rare earth agreement between the U.S. and Ukraine.

Russian aluminum producer Rusal wants to enter the production of the rare earth element scandium. According to a press release published on Thursday, a pilot plant with an annual capacity of 1.5 tons is planned. The facility will be located at Rusal’s Bogoslovsky Aluminum Smelter in the Sverdlovsk region of the Urals. The extraction process will use red mud, a by-product of alumina production. Commissioning is expected by the end of 2025.

Even during the pilot phase, Rusal claims it will be among the leading scandium oxide producers, as the global annual production of this critical raw material is estimated at only 15 to 25 tons (PDF). If commercial production is launched, the annual capacity at Bogoslovsky could increase to 19 tons, according to Rusal.

Rising Demand for Scandium in Future Technologies Expected:

A key application of scandium is in alloys with other metals, such as aluminum or titanium, which are used for ultra-lightweight components in the aerospace industry, among other industries. Another growing use case is solid oxide fuel cells for electrochemical power generation.

According to the U.S. Geological Survey, Russia is already a major producer of this rare metal, alongside China and the Philippines. As demand for scandium is expected to rise significantly in various future technologies, efforts are underway to develop new mining sites or expand existing production capacities.

Rusal’s announcement may be linked to the planned “raw materials deal” between the U.S. and Ukraine: access to Ukrainian resources such as rare earth elements in exchange for further support for the war-torn country. Media reports suggest that the Russian government has also offered the U.S. access to critical raw materials, both in occupied Ukrainian territories and within Russia itself.

Unlike aluminum, for which the European Union recently tightened its import restrictions, scandium has no similar regulations currently in place. Russia accounts for nearly a quarter of the EU’s rare earth imports.

CRITICAL MATERIALS CONFERENCE: KEY TAKEAWAYS –

In our recap of the Critical Materials Conference: EV & Battery 2025, we summarize key takeaways from this high-caliber event.

For two days, Germany’s financial hub became a hotspot for electric mobility and battery technology. This week, the Critical Materials Conference: EV & Battery 2025 occurred in Frankfurt. The discussions focused on the challenges and opportunities within the rapidly evolving battery supply chain and the difficulties Europe faces in building a competitive battery industry for electric vehicles (EVs). Topics also covered the developments in global raw material markets and the role of government measures in securing critical supply and value chains.

Dr. Robert Burrell, Research Manager at the market intelligence provider Project Blue, kicked off the event by highlighting the dynamic growth of electric mobility outside Europe. Between 2020 and 2024, China saw an impressive annual growth rate (CAGR) of 77% in EV sales—driven by targeted subsidies, cost reductions, and a strategic supply chain expansion.

Europe, however, is struggling to keep up. The end of German subsidies in late 2023, high purchase costs, and an underdeveloped infrastructure are slowing growth. However, despite setbacks, one thing is sure for e-mobility: electrification is here to stay (“The path of electrification is irreversible”). Burrell ended on a hopeful note, emphasizing that where there are challenges, there are opportunities for the industry outside of China. Through partnerships, innovation, supply chain optimization, and much more recycling, the future remains bright.

Siyamend Al Barazi also advocated for an end to the crisis narrative. Al Barazi, Head of the “Raw Materials Economy” division at the German Raw Materials Agency (DERA), explained the cycles that commodity prices undergo. Increased demand drives prices, making resource exploration more attractive and potentially leading to a new supply. However, this can result in an oversupply, causing prices to drop. Despite these fluctuations, he emphasized that businesses can prepare for such circumstances.

One way to do so is through stockpiling the necessary resources. However, according to Al Barazi, this responsibility will likely remain with the companies themselves in the foreseeable future. He does not expect national or EU-level state inventories to be implemented. On a positive note, he highlighted two significant political measures: the EU’s Critical Raw Materials Act, passed last year, and the newly launched German Raw Materials Fund. With a budget of one billion euros, the fund is intended to support financing domestic and international projects in extraction, processing, and recycling. Al Barazi also pointed out that countries like Japan are further diversifying their supply chains. He concluded with a call for Europe to take more decisive action, including investing in subsidies.

The Energy Transition Must Happen—But Where Will the Necessary Funding Come From?

On the first day of the conference, financing new mining and refining projects was a central topic. Discussions covered uncertainties around investments in junior miners or start-ups, the risks of unproven technologies, and the role of government subsidies. Experts also debated how geopolitical uncertainties could impact supply chains, such as a second term for U.S. President Donald Trump. While some did not expect a direct effect, others felt it was too early to make a definitive judgment.

It became clear in Frankfurt and at past critical mineral conferences that Saudi Arabia and the United Arab Emirates are increasingly establishing themselves as major players in raw material investments. Both countries seek to diversify their economies, which have long relied heavily on oil extraction. Saudi Arabia, in particular, also hosts deposits of rare earths, a key topic of discussion on the conference’s second day.

Rare Earths Are in Demand, but Europe Faces Challenges:

It is not just electric vehicles: Rare earth elements are gaining increasing attention in the media due to their wide range of applications. However, China’s dominance in mining and processing these materials is well-known. Building domestic capacity within the European Union remains a significant challenge. As explained by David Merriman, Research Director at Project Blue, several factors contribute to this. The environmental impacts, which were long accepted during rare earth processing in China, have led to negative associations among the public. In addition to this image problem, which contributes to resistance against European projects, practical challenges arise when building a rare earth industry from “mine to magnet.” One key issue is closing the “refining gap”—the divide between mining and refining.

A look at China, particularly at the magnet producer JL Mag, offered valuable insights. Jurre Stienen, Chief Operating Officer of the European branch of the world’s largest rare earth magnet manufacturer, pointed to the strong vertical integration of the industry in China, which allows companies to rely on a steady supply of raw materials, including recycled materials. A recurring theme throughout the presentations and discussions was that China is no longer focused solely on mass production but is also driving innovation and working on reducing resource usage. This is a development that Europe should pay more attention to: What is China doing right, and what can be improved here?

Dr. Nils Backeberg, Founder and Director of Project Blue, expressed satisfaction with the conference and highlighted its broad scope. He particularly emphasized that the event provided a comprehensive view of the entire value chain through expert presentations and lively discussions. This approach gave participants valuable insights into various aspects of the topic and underscored the importance of interdisciplinary exchange. We wholeheartedly agree and thank Project Blue for organizing and inviting us to the conference.