The complicated supply chain of wind turbines exposes contradictions in the realm of international affairs. Kristin Vekasi breaks down the physical components and the fraught dependencies of this green technology.
By Kristin Vekasi
In the dark, prevaccine COVID winter of 2021, my family was fortunate enough to buy a piece of land on a lake in Maine, about an hour north of my home university in Orono. The lake is almost completely undeveloped, and visiting in any season brings a deep sense of peace. As a bonus, on the opposite side of the lake we can see turbines rising in the hills from a wind farm, which fills me with a sense of optimism about the transition to a greener energy future.
When we visited that winter, we could sometimes hear a soft “whomp whomp” sound from the turbines echoing across the icy lake. In the summer, the noise is even more subtle—yet the politics of land-based wind energy often revolve around noise or landscape pollution. In Maine, there are also complicated politics with offshore wind and the fishing community.
Far less visible, but still deeply political, is the concern behind the ingredients in the wind turbines themselves and their complicated supply chains. The most common wind turbine manufacturers in the United States are GE (a US company), Vestas (Danish), and Siemens Gamesa (Spanish). Within these turbines are powerful permanent magnets—made of materials that generate their own magnetic field—most of which are manufactured in China. Within the permanent magnets are small amounts of critical minerals also with geographically concentrated supply chains.
How the turbines are built and where their parts come from tell a complicated story of globalization and competitive geopolitics. Peaceful images of wind turbines obscure the contradictions in international affairs today: global climate cooperation within fierce international economic competition, green technology with dirty production processes, and mercantilist competition versus global markets.
The COVID-19 pandemic vividly revealed how intense concentration in any stage of a supply chain increases the risk of deep market disruptions. Within green energy supply chains, a natural disaster, public health crisis, or political turbulence could create similar disruptions and severely delay the transition away from fossil fuels. For wind power, China holds chokepoints in the manufacture of the mineral content and specialized components of turbine generators.
In 2020, the World Bank published a report called “Minerals for Climate Action.” In this report, the researchers outlined the types of mineral content necessary in order to make the transition from fossil fuel-based energies to clean energy technologies such as wind, solar, and geothermal, as well as ways to store energy like next-generation high storage capacity batteries. Beyond the need to mine more minerals in order to make the transition swift and successful, there is also a need to efficiently transform minerals—whether they come from traditional mining or recycling processes—into industry-ready metals and alloys. The World Bank report estimates that demand for minerals—just for wind power—will double to triple over the next thirty years depending on how swiftly the technology is developed and what styles of generators are adopted.
Permanent Magnet Technology
A lot of green technology depends on powerful permanent magnets composed of rare earth and other minerals. Unlike electromagnets, permanent magnets retain their magnetism through their internal atomic structure instead of from an external source. They do not need an external electrical charge to become magnetized, which simplifies the infrastructure needed for wind farms.
When the blades of a wind turbine turn, they generate kinetic energy that a permanent magnet generator then converts into electricity from the interplay between two permanent magnets with reverse polarity. While other magnets could do the job, permanent magnets have a number of advantages, including increased efficiency, smaller size, fewer moving parts that can break, and no need for an external charge. The wind is doing all the work.
These magnets have a number of properties determined by the elemental structures of their ingredients that make them very well-suited for green power generation. However, they also present tradeoffs between longevity, heat resistance, and power.
Two magnet types are particularly suitable for turbines: neodymium iron boron (NdFeB) and samarium cobalt (SmCo); both are types of rare earth magnets. NdFeB magnets are the strongest available, but can lose their magnetic properties if they become overheated. SmCo are not as strong, but have a wider temperature range and are not as susceptible to corrosion compared to NdFeB. While the neodymium magnets are used more frequently, I will discuss both here.
While innovations and advances in permanent magnet technology are possible (and happening), the chemical properties of the elements are fixed, so there are real chemical constraints to technological innovation. The physical constraints are particularly relevant in the short term. There is real urgency to respond to the climate crisis, and we need to work with the technology we have now, not the surmised technology of the future.
These materials also have tough geopolitical and environmental tradeoffs. But politics and policy are far more mutable than the magnetic properties of metals.
Essential Minerals
Both of these magnets rely on small amounts of minerals for their critical properties, such as neodymium and samarium (elements from the rare earth group), cobalt, nickel, molybdenum, and manganese. In my broader research I look at the supply chains for all these minerals, but here I will focus just on rare earths and cobalt. These minerals are not necessarily geologically rare. Elements in the rare earth group were first discovered and named in Europe, where they are geologically rare, but globally they are far more abundant. Rare earths could be mined in almost every continent given conducive economic and regulatory conditions. However, these minerals are extremely concentrated in areas of current mining and midstream production—such as the processing and refinement of minerals into alloys—largely due to economic and political conditions as well as policy choices governments have made.
When rare earths are mined, the concentrate contains multiple elements that need to be separated and refined before they are transformed into metals or alloys ready for industry. Efficient midstream processing to maximize yield and sustainability and minimize environmental damage requires considerable technical expertise. Historically, countries that have invested in expertise in the industry have commanded the largest market share.
In the post-World War II era, the United States government invested in basic research, and the Mountain Pass Mine in California was a leading source of most global rare earths. By the 1980s, state support had waned considerably. Global control of the market shifted from the United States to China in the 1990s, first because China was willing and able to sell rare earths quite cheaply and undercut US firms; second because environmental regulations in China were minimal and enforcement was rare, so small illegal mining companies flourished. But at the same time, China funded basic research in the sector and worked toward consolidation into vertically integrated companies, state control, and improving environmental and efficiency outcomes along the whole rare earth supply chain. Twelve years ago, China controlled more than 90 percent of global rare earth mining and midstream production—in sharp contrast with their control of global reserves at 30 percent.
Following Japanese accusations that China coercively used the rare earth trade against them during a 2010 territorial dispute, there has been considerable effort to diversify the rare earth supply chain. Today, China mines 50–60 percent of rare earths; the United States is the second largest producer with 15 percent; and Australia the third with 8 percent. However, China still processes the vast bulk of rare earths—between 80–90 percent—including most of what is mined in the United States, and also makes the bulk of industrial components that include rare earths. Mining and processing is largely under a small number of consolidated and vertically integrated state-owned enterprises. According to my research of the global permanent magnet market, China controls at least 60–70 percent in downstream manufacturing for these products. Unlike the upstream, many of these firms are private and far more numerous. China has also become the world leader in many rare earth processes, including ways to mine and process more safely.
Cobalt is more geographically concentrated than rare earths. Over 51 percent of proven reserves are in the Democratic Republic of the Congo (DRC), and the mining conditions there involve terrible political and human rights violations. Today around 75 percent of cobalt is mined in the DRC in poorly regulated “artisanal” mines with horrific working conditions, use of child labor, and lasting environmental damages. Forced labor is also a concern in China, particularly in the “hinterlands” of the country where much of the mining and some refining takes place: Inner Mongolia, Xinjiang, and Sichuan Province.
The midstream of the cobalt supply chain resembles that of rare earths. The bulk of the DRC cobalt is shipped to China for refining, and China refines 60–70 percent of global cobalt. This similarity is no accident. The last two five-year plans from China have explicitly recognized the growing need for critical minerals for China’s other domestic economic and industrial goals, particularly in green technology.
The United States, Japan, and the European Union have been attempting to gear up either domestic mining and midstream production, or the near-shoring of critical mineral production. Japan has, with state support, developed a rare earth supply chain with Australia and Malaysia. Its new Economic Security Protection Act will likely focus on supply chain resilience in critical minerals and expand industrial policy efforts. The United States is reinvigorating domestic rare earth mining, and the Biden administration has a plan to enhance progress in midstream production in critical minerals. These plans are driven both by concern over China’s potential weaponization of its chokepoint, and also recognition that supply of critical minerals will not be able to meet the new demands from green energy technologies.
The entire mineral supply chain for green energy technologies and other technologies is driven by social, political, and economic decisions. Although mining to some extent is driven by geography, it is no exaggeration to say that most of the geographic concentration within the sector is driven by political decision making. National dominance in minerals arises from policy, not geography.
Forging Ahead
As we work to make critical mineral supply chains more resilient and match rising demand, we should strive to avoid replicating mistakes of the past. We should not exoticize the small but crucial ingredients, claiming that they can be found only in faraway places. That encourages looking in remote locations instead of closer to home, exporting pollution for our own green goals, and blinds us to homegrown solutions. Nor should we securitize the supply chain in a race to keep foreign competitors down and domestic companies up. That will slow innovation and the transition away from fossil fuels.
Instead, we should pursue international cooperation in standards setting for both mining and midstream processing of key ingredients. Mining is a dirty process, and the heavy environmental and social costs are largely borne by local communities. The world needs to find a mechanism to both make mining cleaner and safer, and also to stop outsourcing the negative externalities to isolated and vulnerable peoples. Midstream processing of minerals can also be a dirty and dangerous process, and we need to see shared standard-setting across borders. Standard setting could happen through existing international organizations such as the World Bank, the International Renewable Energy Agency, or even trade agreements. Building shared standards in production and the midstream is a place where China, the United States, and other large mining and consuming countries could likely find common ground.
A second approach is investing in long-term technologies that could mitigate or even eventually eliminate the need for more mining. While there is huge potential for reclaiming critical minerals through recycling, it also faces some very practical constraints. If we take a snapshot of the materials we have available today, and the materials that we need for estimated future production, there are not enough minerals in existing products to meet demand for future products through recycling—yet.
As one example, in the World Bank study the authors found that only 3 percent of the electric vehicle mineral demand could be met by recycling by 2030, which is to say nothing of the demand for similar minerals in wind power. However, as the use of these technologies starts to dramatically increase, so will the stock of neodymium, samarium, cobalt etc. that are available for recycling. The materials can be reused—the technical challenge again lies in the separation and refinement of the different elements from old products. We need to invest now in the technologies and know-how for the recycling processes so by 2030 or 2050 when some of the current products start to go offline, we will be ready to recycle those materials efficiently and sustainably. This sort of long-term planning can be difficult with a short political and news cycle. However, long-term investments in know-how and technology is what will help overcome the market challenges in the transition away from fossil fuels.
Lastly, and likely most challenging, government-mandated supply chain tracking would help ameliorate not just the environmental but also many of the human rights costs that arise from these minerals. Supply chain tracking would require industry actors to know the sources of their products—from raw materials to finished products—in order to monitor potential points of abuse. The Uyghur Forced Labor Prevention Act that has just gone into effect in the United States has revealed many of the challenges of tracking supply chains in China. The rare earth and cobalt supply chains are just as difficult to track as the solar cell or cotton supply chains that US buyers are scrambling to prove are free of forced labor. As an added complication in the wind sector, Xinjiang Province (home to most Uyghurs), is where China’s largest wind turbine manufacturer is located.
Supply tracking gets right to the heart of some of the political disputes between China and the United States, such as policies on human rights, domestic sovereignty, and economic governance. Unlike shared production standards where both US and Chinese producers could benefit from a shared policy, it is unlikely that international cooperation will be possible. China is unlikely to invite additional international scrutiny into their domestic business practices. That said, incentivizing non-Chinese companies to diversify supply chains quickly through supply chain monitoring and tracking mechanisms could help motivate diversification and increase the supply of critical minerals more quickly.
[This map shows the maximum potential output from wind power given the number of installations in a state in the year 2022. Visit the WINDExchange website for an interactive map of output over time.]
I hope that peaceful scenes like the small wind array I can see from my land become ubiquitous. Wind power holds enormous potential for the future. The United States Department of Energy estimates that the country could greatly increase its capacity, from a current 9 percent to 15–20 percent of electricity generation over the next decades. Accomplishing this transition will also require more capacity along the mineral-magnet supply chain. Although the specifics of the technology and supply chains differ, many of the political risks and supply chain challenges for wind energy also apply to other green technologies. Notably, similar chokepoints and sociopolitical concerns exist in the supply chains for high-capacity batteries and solar cells.
It is at once frustrating and encouraging that the critical mineral/permanent magnet supply chain and those for other green technologies have similar challenges. Frustrating because challenges abound. But also encouraging because the same templates of international cooperation and domestic policies—shared standards, a focus on recycling technologies and midstream processing expertise, and supply chain tracking—can be applied across sectors. Solving these challenges will help accelerate the adoption of green technologies like wind and help achieve a cleaner future for the planet.
Contributor Bio
Kristin Vekasi was a 2021–2022 Academic Associate at the Program on U.S.-Japan Relations at the Weatherhead Center for International Affairs. She is an associate professor in the Department of Political Science and School of Policy and International Affairs at the University of Maine. Her research interests focus on the politics of trade and foreign direct investment; supply chain politics; political risk management; Japan-China relations; and rare earth elements.
Captions
- "A bunch of wind turbines near a lake in winter in painting style” as prompted by Kristin Caulfield. Artwork by DALL·E 2/Courtesy OpenAI
- Climate-Smart Mining: Minerals for Climate Action. Credit: World Bank, YouTube
- An aerial photograph of the Mountain Pass Rare Earth Mine & Processing Facility in San Bernardino County, California, largest operating mine of its kind in the United States. Credit: Wikimedia Commons, User: Tmy350, 4 February 2022 (CC BY-SA 4.0)
- Graph showing world mine production of rare-earth oxides, by country and year, from 1994 to 2021. The layers of the graph are placed one above the other, forming a cumulative total. Data are from the US Geological Survey. Credit: Kristin Vekasi
- US Installed and Potential Wind Power Capacity and Generation. Credit: WINDExchange, US Department of Energy, Wind Energy Technologies Office
- A view of wind turbines from the author’s northern Maine property. Credit: Kristin Vekasi
