GKN's cancellation of plans for a magnet factory is a setback to Europe's goal for rare earths
GKN Powder Metallurgy scrapped plans to manufacture rare earth permanent'magnets' in Europe. Three sources familiar with the matter confirmed this, highlighting Europe’s struggle to create a domestic rare Earths?industry that can compete with China, the dominant producer.
China controls 90% of the rare earth output processed and 70% of the mining production. Europe is being criticized for falling behind the U.S. when it comes to offering financial support to projects that develop its own supply.
One source said that GKN PM's plans to manufacture rare earth magnets for EVs, electronics, and defence applications were abandoned late last year before the completion of a U.S. takeover. The plan was seen as non-core with uncertain profit prospects, the source added.
Another source stated that GKN was evaluating options for a pilot magnet factory it had constructed.
Sources declined to identify themselves because the information was not made public.
GKN PM refused to comment.
A HANDFUL OF MAGNIFACTORIES ARE BEING PLANNED
The GKN PM Magnet Factory was one of only a few such plants in Europe that were either operating or planned.
Neo Performance Materials?last year started production at its permanent magnet factory in Estonia. Vacuumschmelze in Germany produces magnets. However, its major expansion plans are currently in the United States.
First source: The company spent 20 million euro on the project after announcing plans in 2022 to produce permanent magnets (for EVs) for EVs.
GKN PM announced in 2024 that it was operating a German pilot plant and aimed to reach 4,000 metric tonnes of magnets in commercial production by 2030. The location of the commercial plant was not yet determined in Europe.
It also hoped to set up a permanent magnetic plant in North America.
A senior executive said at the time the economy was uncertain because of the low-cost competition coming from China, and that plans were dependent on customers who would guarantee orders.
The GKN PM site has removed a page devoted to magnets.
An internal audit report published earlier this month criticized the EU's plans for a boost in domestic production of critical minerals.
The EU's Critical Raw Materials Act of 2024 established targets for the EU to extract 10% of minerals by 2030. It also set a goal to increase recycling capacity?for these materials to 15%, and to be able process 40% of their annual raw material needs.
GKN WORKED WITH PARTNERS
GKN PM worked with Ionic Technologies, an innovative start-up that has developed a process for recycling permanent magnets. This was revealed in a statement released by Ionic Rare Earths' parent company, Ionic Rare Earths, in October.
GKN sent Ionic Technologies a letter in December informing them that it would cease its work on magnets. However, it produced a batch for Ionic at its 'pilot plant' before closing down, according to a third source.
Ionic has declined to comment.
GKN PM signed a Memorandum of Understanding in October 2023 for the supply of permanent magnets to German auto parts supplier Schaeffler AG.
Schaeffler declined to comment.
Takeover finalized
Detroit-based American Axle & Manufacturing changed its name from Dauch Corp. to Dauch PM earlier this month. The deal was worth $1.44 billion.
The announcement of the takeover took place about a year before. The combined group was looking to gain scale in the face of volatile demand for electric cars, economic uncertainty and the global expansion by Chinese EV manufacturers. (Reporting and editing by Veronica Brown, Barbara Lewis and Eric Onstad)
(source: Reuters)