Neodymium : the new "fuel" of the green revolution ?

The paris climate agreement is going to bring a whole set of new challenges for countries all around the world in the years to come. Developped countries but also developping countries will need to find ways to start the transition from fossil fuels to renewable energy without putting at risk their economies. As such, renewable energies like solar panels or wind turbines seems like the most efficient answer.

However, as point out many geologist, the "green" revolution creates new need especially in the commodities sector with what we call the rare earth and wind turbines are not excluded from this new appetite for environmentally costly minerals. Indeed, rare earth metals and particularly lanthanides such as neodynium are required for the magnets in wind turbine generators.

Knowing that we can see that an investment opportunity lies in the commodity sector for those willing to bet on the development of wind power. Indeed, more and more countries are developping wind farms as shows the example of the egyptian farm developped with the partnership of the Societe General or the project in Australia which aims to developp the biggest farm of the world in Tasmania. Moreover, many analyst from diverse area predict that the percentage of wind energy production will rise sharply in the years to come. So it could be interesting for investors to invest in the mining companies producing Neodymium in China or Australia but also in the refining companies which separates Neodymium from mine wastes.

Also, it is interesting to highlight that the permanent magnet using Neodymium are also fundamental to the powertrain of electric vehicle motors and already used in many electric vehicle models such as :

• Nissan Leaf
• Chevrolet Bolt
• BMW i3
• Tesla Model 3 Long Range

Nevertheless, it is important to note that Toyota recently annonced the development of a new type of magnet for high-energy applications like electric motors that uses a fraction of the amount of neodymium used in the current standard magnet (1-2 kg by engine) thanks to a new design and the combination in the core of the magnet of Neodymium with two other rare earth elements : lanthanum and cerium

So, for investors willing to play simultaneously the development of the wind power and electric vehicle sectors it appears interesting to hedge between the several rare earth elements used in this potential new engine which is set to be released in the early 2020s in order to bet on the potential replacement later on of the current magnet of the wind turbine by the one currently developp by Toyota.

To conclude, we can see that the Neodymium appears to be as several other rare earth elements a crucial tool in the green revolution to come and as such a good opportunity of investment for anyone willing to bet on this promising green tech sector.