February 21, 2019

Report: REIA-FairMagnet workshop on REE supply chain certification and transparency

EIT Raw Materials-REIA – FairMagnet Workshop on REE supply chain certification and transparency
“How a sustainable supply chain can benefit your business”

21 February 2019 in Berlin
9.00- 9.30

9.30- 9.40
Welcome KU Leuven, Dr. Nabeel Mancheri
Inauguration and introduction EIT Raw Materials GmbH, Dr Karen Hanghøj
Coffee break
From GloREIA to REIA GloREIA, Elbert Loois & Nabeel Mancheri
Round table discussion EC’s perspective on sustainable supply of REEs, EC, Milan Grohol

Why REIA-FairMagnet is relevant: Experience from the field Brugger Magnetsysteme GmbH, Thomas Brugger & Berners Consulting, Lutz Burner

Round table discussion
REIA Life Cycle Inventory: a benchmarking tool for the industry KU Leuven, Gwendolyn Bailey & Karel Van Acker
Round table discussion
A sustainable REE supply chain and what REIA can do Grundfos, Badri Veluri
Round table discussion
Coffee break
New international standards on rare earths production: ISO/TC298 Strategic Materials Advisors, Gareth Hatch
Round table discussion
Wrap-up: The way forward

Meeting Report

Session 1. Inauguration and introduction, EIT Raw Materials GmbH, Dr Karen Hanghøj

After an introduction and welcome by Nabeel Mancheri, the workshop was started with an intervention by Karen Hanghoj, who is the CEO of EIT Raw Materials. The theme of her presentation was Circular Economy (CE) and how raw materials are a key enabler for achieving the 17 Sustainable Development Goals. The problem is that there is little consensus on what CE initiatives exactly entail as CE has 116 various definitions. She presented the “Lighthouses” framework within EIT which hone in on CE synergies within specific high impact categories such as mobility. After Karen gave her talk, concerns regarding some of these CE schemes–such as end of life collection–were raised by workshop attendees. One company representative presented a case on how they are dealing with some of these issues in CE schemes.

Session 2. From GloREIA to REIA, GloREIA, Elbert Loois

In the next session titled, “From GloREIA to REIA” Elbert Loois presented the menu of activities and services offered by the future association. The first item on the menu is the access to a global stakeholder network. He explains that this network includes but is not limited to: access to up-to-date information, optimization of risk awareness and opportunities for R+D matchmaking. The second offering is the access to research and research activities such as the LCA which can be used by companies who want to view their environmental hotspots. The third offering is sustainable supply strategy services such as the fair magnet certificate. It is also revealed that to become a self-sustaining organization, the REIA will need a minimum of 20 members.

The membership base could include all members from the REE supply chain, but today the focus is on the permanent magnet supply chain. The membership cloud could still dramatically transform but it is clear that the rest-of-world players from the upstream side are already partnering in our first efforts. The membership fee structure was also revealed. It could be reevaluated with the new management team when elected in June.

Several of the constituents are dubious when it comes to a sustainable supply chain. For example, one attendee stated that there is not a demand for people who want to pay extra for a clean magnet. Another states that the problems with the supply chain are already known, and the next step should be to fix them. Tackling these problems and finding solutions together—in conjunction with the Chinese and other global stakeholders—is one of the prime objectives of the association.

The trigger statement from this session was: It is important that the REIA will make rare earths value chains more transparent, as financial decisions are driven by publicly communicated information. While many participants admitted that financial decisions are driven by publically communicated information, some attendees were adamant that legislation will be the only driver for a transparent, sustainable supply chain.

Session 3. EC perspective on sustainable and transparent supply chain, Milan Grohol, EC MP for DG Growth

It was suggested to develop the REE action plan along the lines of the European Battery Alliance to recover the value chain steps of mining, refining and components.

It was explained that the trilateral EU, US, Japan conference adds value in terms of updating information on the downstream supply of REE products.

It was indicated, that in Europe high-tech materials are not missed in the geology, but in the production.

The REIA could pick up, where the ERECON left the stage in 2014 and implement its recommendations.

The EC will have a R&D project call programme that will offer a support of 90 m€ for 2020


To get more support from DG Growth, if a major political voice, such as Mr Bütikofer, would be lend to promote the topic towards the EC.

Session 4. Why REIA-FairMagnet is relevant: Experience from the field, FairMagnet, Brugger Magnetsysteme / Berners Consulting

The risks within the China-Germany supply chain were addressed

The FairMagnet was set up from a EHS perspective to create a more personal relationship with Chinese suppliers and start a discussion on CSR optimisation potential, as Chinese upstream supply is a black box

Also the contractual and operational relationship is expected to improve from the FairMagnet initiative; performance has been increasing since

FairMagnet was implemented with the help of the Nanjing University, that developed a set of EHS principles, which were implemented in a FairMagnet supply certification scheme

Four Chinese suppliers have opened up to the FairMagnet programme; some insight into the upstream supply chain has been given

German management is allowed to visit production sites and maintain a regular dialogue

The target is, to maintain ecological, economic and social standards along the entire value chain, by:

Offer support over the entire life cycle of the magnet

Step by step introduction of sustainable chain management in the magnet industry

Set up partnership relationships and promote cooperation between German and European and Chinese actors
The western knowhow of operational and contractual vs. Eastern ways of personal relationships can thus be combined

FairMagnet is interested, if the REIA can obtain and share more upstream information from the REE Permanent Magnet value chain.

Triggering question: “fairness of the magnet supply chain concerns mainly issues of health and safety, as existing EHS standards are not always properly implemented?”

CSR issues should be traced upstream, as this is where the life cycle starts

The FairMagnet initiative gets feedback and delivers optimization to the supply chain, but does not offer a tool for direct control

The REIA has the potential to expand the FairMagnet initiative on a global basis, as an Upscaling Project

It was confirmed, that the EIT RawMaterials and H2020 have the means to sponsor such global projects, if the EU participation plays a vital role. Also other regional funds are available for such project initiatives.

Battery parallel: due to public pressure, the German government will now investing 1.5 billion € in battery manufacturing.

The European Battery Alliance could possibly be expanded into a Motor Alliance, in which an REE Alliance could be incorporated

Small 48V motors with strong permanent magnet driven motors could be key to sustainable e-mobility.

FairMagnet could also integrate CO2 policies into its portfolio

Session 5. REIA life cycle inventory: a benchmarking tool for the industry, KU Leuven, Gwendolyn Bailey.

Gwen stated that the lifecycle inventory data is based on the primary industry data, which consists information on three mineralogical routes of rare earths production: Bastenaesite, Ion Adsorption Clays and Monazites. So far the assessment has been done on producing a kilogram of mixed rare earth oxides but she said that the data base can be extended to magnet level or any other rare earth containing product. This was followed by some fundamental questions she raised in relation to rare earth mining and processing, and its environmental impact. For example,
How we asses if toxic waste is treated instead of dumped? What is the environmental impact of treatment process and can the climate protection effects be measured in such cases?
How the upstream industry mitigates the effects from low impact radioactivity and in such cases, are the environmental benefit quantifiable?
How the companies make decision on for solvent extraction:
Is it better to use ionic liquids or acids?

So the objective of building this data base is to provide the industry a benchmarking tool and companies could use this LCA to compare their own footprint to know if they are above or below or within industry average.

Gwen provided primary results of her study on different impact categories (the standard LCA tools) such as global warming potential, human toxicity, particular matters etc which is measured as a person equivalent.

The results showed that the human toxicity impacts are suspiciously high compare to other impact categories in producing one kilogramme of rare earth mix from all three mineralogical types.

The LCA results of contribution analysis shows that the solvent extraction having the highest impact.

Some of the challenges to the study is that it is not useful to use all impact categories to explain REE production and there are very little information on Chinese waste management system.

Gwen concluded her presentation by saying that no industry association exists to gather altogether this life cycle information but from now on our association will do this task for its members to realize our objective collectively of a sustainable rare earth industry.

The presentation was followed by lively discussion on methodological aspects of LCA, allocation methods, originality of impact categories and falsification of data. On question of methodology, Gwen replied that LCA has its own ISO approved standards which is a recognized tool to analyze environmental impact globally.

Session 6. A sustainable REE supply chain and what REIA can do, Grundfos, Badri Veluri

Grundfos is one of largest water pump makers in the world and the business is to move liquids. According to some estimates, 10% of the energy in the world is used to pump liquids. Grundfos has developed its own strategy for a sustainable REE supply chain. Their policies comply with two aspects of UN sustainable development goals and they are actively working on a business model based on circular economy.

In complying with EU’s environmental foot print regulations, they have developed a product which is first in the world to get a certificate on FPD. Grundfos has also started a take back policy by collecting the end of life products and working with a recycling company to refurbish and re-use the components.

Finally there was a couple of questions as follows;

Is the company only driven by financial aspects and Badri replied, it is also driven by green aspects and not only finance.

Triggering point for discussion: A company can single handedly develop a strategy that minimizes the long-term risks of rare earths availability. There were largely a consensus among the participants on the triggering point.

Session 7: New international standards on RE production: ISO TC298, Strategic Material Advisors, Gareth Hatch.

Gareth started his presentation explaining the institutional set up of the ISO and describing what are ISO international standards. The standards are documents that “provide requirements, specifications, guidelines or characteristics that can be used consistently to ensure that materials, products, processes and services are fit for their purpose”. The standards themselves can be used consistently and there are standards to certify how to standardize. Technical Committees (TCs) within ISO lead the development, maintenance and review of ISO standards. The TCs on rare earth standardization process was formally initiated by the Standards Administration of China (SAC) in 2015 and ISO/TC 298 MCs were then formed by the various ISO members. Gareth mentioned that ISO/TC 298 is divided into four working groups such as WG 1: Terms and definitions; WG 2: Elements recycling. WG 3: Traceability, packaging and labelling. WG 4: Testing and analysis.

Why engage in ISO?
To promote mainstream best practices across the full life cycle of production, which ensure the health, safety and welfare of all involved. According to Gareth, the ISO led standardization is very much aligned with the REIA-FairMagnet initiative. He also highlighted the issue of illegal mining both China and other countries which is associated with low regard for health and safety of laborers, land disturbance with no investment in reclamation and responsible tailings management, destruction of arable and significant pollution of the water table, degradation of resources and economic losses to the state due to loss of taxes. There has been global efforts in the past to stop illegal mining, particularly that of conflict minerals, driven by increasing public awareness of the human and environmental suffering involved. The efforts included Kimberley Process-2003 (82 countries) – focused on restricting flow of ‘conflict’ diamonds, Dodd-Frank Act-2010 (USA) – some language on ‘conflict minerals’ in DRC and neighbouring countries and Regulation 2017/821 (EU). There are also challenges with implementing methods used elsewhere, for rare earths. Evaluation programs for determining within-source variability and between-source uniqueness as provenance indicators, could be expensive. Lynas has a ‘mine to magnet’ traceability system for PrNd oxide which appears to be effective. But the company controls each step from mine to separation plant. He said that authorities in China are requiring rare-earth operators to develop traceability systems by 2020 and authorities in the relevant provinces are specifically interested in systems for rare earths. Goal is the establishment of a Chinese national standard regardless of what happens with ISO. Gareth concluded by emphasizing that the traceability could be achieved using technologies such as block chain connecting the upstream and downstream pairs. There appears to be synergies with the FairMagnet initiative. Contributions, ideas and suggestions from general public or companies on traceability would be particularly welcomed in the interests of the entire re supply chain.

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