Rare Earth Magnets: NdFeB and SmCo

Rare earth permanent magnets represent one of the most strategically significant material technologies of the modern era. These magnets, composed primarily of rare earth elements alloyed with transition metals, produce magnetic fields far more powerful than any conventional alternative. Two families dominate the market: neodymium-iron-boron (NdFeB) magnets, which account for roughly 95 percent of all rare earth magnet production, and samarium-cobalt (SmCo) magnets, which serve specialized high-temperature and corrosion-resistant applications.

Neodymium-Iron-Boron (NdFeB) Magnets

NdFeB magnets were independently developed by General Motors and Sumitomo Special Metals in 1984 and have since become the most widely used permanent magnet material in the world. The base composition is approximately Nd2Fe14B, though commercial magnets contain additional elements to optimize specific properties. A typical high-performance sintered NdFeB magnet contains 29 to 32 percent rare earth content by weight, with the balance being iron, boron, and small quantities of other additives.

The key rare earth elements in NdFeB magnets are neodymium (Nd) and praseodymium (Pr), which together form the primary magnetic phase. Because neodymium and praseodymium are often co-extracted and have similar magnetic properties, they are commonly blended as a "didymium" (NdPr) mixture. Demand for NdPr oxide is projected to grow by 40 to 70 percent by 2030, driven overwhelmingly by EV traction motors and wind turbine generators.

For applications requiring operation at elevated temperatures, such as EV motors that can reach 150 to 200 degrees Celsius, NdFeB magnets must be doped with heavy rare earth elements, particularly dysprosium (Dy) and terbium (Tb). These elements improve the magnet's coercivity, the resistance to demagnetization at high temperatures, but they are significantly scarcer and more expensive than neodymium. Dysprosium and terbium supply is especially constrained because they are predominantly sourced from ionic adsorption clay deposits in southern China and Myanmar, where environmental regulations and geopolitical risks are acute.

The manufacturing of sintered NdFeB magnets is a complex metallurgical process. Raw rare earth oxides are first reduced to metals, then alloyed with iron and boron in vacuum induction furnaces. The alloy is rapidly cooled, crushed, milled into fine powder, aligned in a magnetic field, pressed, and sintered at high temperature. The sintered blocks are then machined, coated to prevent corrosion (NdFeB is inherently susceptible to oxidation), and magnetized. Each step requires specialized equipment and expertise, and China's dominance of this manufacturing chain is nearly complete.

Samarium-Cobalt (SmCo) Magnets

SmCo magnets predate NdFeB by over a decade, with the first SmCo5 magnets developed in the late 1960s and the improved Sm2Co17 formulation following in the 1970s. While SmCo magnets produce slightly weaker magnetic fields than NdFeB, they offer two critical advantages: superior temperature stability, maintaining performance at temperatures up to 300 degrees Celsius or higher, and inherent corrosion resistance, eliminating the need for protective coatings.

These properties make SmCo magnets the material of choice for aerospace and defense applications where extreme thermal environments are routine. They are used in satellite systems, military actuators, missile guidance systems, and radar components where NdFeB magnets would lose performance or degrade. SmCo magnets require both samarium, a rare earth element, and cobalt, a critical mineral with its own supply concentration risks centered on the Democratic Republic of Congo.

SmCo magnets account for a small fraction of the total rare earth magnet market by volume, but their strategic importance in defense systems means they attract outsized attention from national security planners. The United States Department of Defense has funded multiple programs to develop domestic SmCo magnet manufacturing capacity, recognizing that dependence on foreign supply for a defense-critical material is an unacceptable vulnerability.

Applications Driving Demand

Electric vehicle traction motors are the single largest and fastest-growing application for NdFeB magnets. A typical EV contains 1 to 3 kilograms of NdFeB magnets in its drive motor, with some high-performance models using even more. At projected 2030 EV production volumes, the automotive sector alone could consume 80,000 to 120,000 metric tons of NdFeB magnets annually, roughly doubling the entire current global market.

Wind energy is the second major growth driver. Direct-drive offshore wind turbines, favored for their reduced maintenance requirements, use 600 to 700 kilograms of NdFeB magnets per megawatt of generation capacity. As offshore wind deployment accelerates globally, the cumulative magnet demand from this sector is expected to reach tens of thousands of metric tons per year. Other significant applications include industrial robotics, medical devices such as MRI machines, consumer electronics, elevators, HVAC compressors, and a wide range of defense systems including guided munitions, sonar arrays, and electromagnetic aircraft launch systems.

Supply Chain Concentration

The rare earth magnet supply chain is the most concentrated of any critical material system. China mines approximately 60 percent of the world's rare earth ores, but its dominance increases dramatically at each downstream stage. Chinese firms separate over 85 percent of global rare earth oxides, produce over 90 percent of rare earth metals, and manufacture over 90 percent of sintered NdFeB magnets. This means that even when rare earths are mined outside China, in Australia, the United States, or Myanmar, the ores are overwhelmingly shipped to China for processing.

Building competitive rare earth processing and magnet manufacturing outside China is technically feasible but commercially difficult. The expertise is concentrated in Chinese firms, the scale economics favor established producers, and environmental permitting for rare earth processing facilities is challenging in Western jurisdictions due to the radioactive thorium and uranium that co-occur with many rare earth deposits. Despite these hurdles, companies such as MP Materials in the United States, Lynas Rare Earths in Australia and Malaysia, and several European ventures are investing billions to create alternative supply chains. The timeline for achieving meaningful independence from Chinese processing, however, is measured in years to decades rather than months.