A report published today by Reuters Newsagency has suggested that the growing popularity of hybrid vehicles, such as the Toyota Prius, is causing a global shortage of rare earths and metals that are used extensively in the car's electric motors and battery cells.
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The other issue leading to this shortage is the world's dominant producer, China, limits exports of such 'rare earths' as global demand swells.

Worldwide demand for rare earths, covering 15 entries on the periodic table of elements, is expected to exceed supply by more than 36,000 tonnes annually in the next several years unless major new production sources are developed.

One promising US source is a rare earths mine slated to reopen in California by 2012.

Among the rare earths that would be most affected in a shortage is neodymium, the key component of an alloy used to make the high-power, lightweight magnets for electric motors of hybrid cars, such as the Prius, Honda Insight and Ford Focus, as well as in generators for wind turbines.


Close cousins terbium and dysprosium are added in smaller amounts to the alloy to preserve neodymium's magnetic properties at high temperatures. Yet another rare earth metal, lanthanum, is a major ingredient for hybrid car batteries.

Production of both hybrids cars and wind turbines is expected to climb sharply amid the clamour for cleaner transportation and energy alternatives that reduce dependence on fossil fuels blamed for global climate change.

Toyota has 70 per cent of the US market for vehicles powered by a combination of an internal-combustion engine and electric motor. The Prius is its No.One hybrid seller.

"The Prius is the biggest user of rare earths of any object in the world," explains Mr Jack Lifton, an independent commodities consultant and strategic metals expert. "Each electric Prius motor requires 1 kilogram of neodymium, and each battery uses 10 to 15 kilograms of lanthanum. That number will nearly double under Toyota's plans to boost the car's fuel economy."

Toyota plans to sell 100,000 Prius cars in the United States alone for 2009, and 180,000 next year. The company forecasts sales of 1 million units per year starting in 2010.

As China's industries begin to consume most of its own rare earth production, Toyota and other companies are seeking to secure reliable reserves for themselves.


Japanese firms are showing strong interest in a Canadian rare earth site under development at Thor Lake in the Northwest Territories.

A Toyota spokeswoman in Los Angeles said the carmaker would not comment on its resource development plans. But media accounts and industry blogs have reported recently that Toyota has looked at rare earth possibilities in Canada and Vietnam.

With Reuters