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Schaeffler signs five-year supply deal with REEtec for rare earth oxides

Global automotive and industrial supplier Schaeffler has signed a five-year contract with Norwegian company REEtec AS for the purchase of rare earth oxides. The aim is to make electric motors for hybrid modules, hybrid transmissions and all-electric axle drives even more sustainable.

Permanent magnets manufactured using rare earth metals such as neodymium produce optimum magnetic flux in electric motors. In future, Schaeffler will procure these metals from REEtec AS, which uses a sustainable production process. The partnership will begin in 2024.

In REEtec, Schaeffler has gained a highly innovative partner that uses a novel and especially sustainable process for the production of pure rare earth elements. Rare earths play an important role in the automotive and industrial segments. Schaeffler is focusing on achieving sustainability along the entire value chain and is systematically gearing its activities to the use of materials produced cleanly and sustainably. Through this partnership, we are also securing our supply of neodymium iron boron magnets for electric motors.

—Andreas Schick, Chief Operating Officer at Schaeffler AG

Schaeffler has been producing electric motors on a large scale since 2021 and offers its customers power classes ranging from 20 kW to more than 300 kW.

Based on its proprietary technology, REEtec has been separating rare earths at an industrial-scale demo-plant since 2019. The new plant in Herøya, near Porsgrunn in Norway, will process rare earth carbonates produced by Vital Metals in Canada.

In October 2021, Vital Metals and REEtec agreed to increase the volume of their offtake agreement by 50%. The off-take agreement will supply REEtec with 750tons NdPr per year over 5 years. The increase equates to 75% of Vital Metals’ expanded Saskatoon rare earth extraction plant capacity. REEtec is using Vital’s product as its principal feedstock.

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Energy efficient recycling of separation fluids. (Photo: Torbjørn Tandberg)

An important element in the REEtec process is that virtually all consumables are recovered and re-utilized. The energy demand is also very low and electricity consumption is based 100 % on hydro-electric sources from Norway’s green grid.

The partnership with REEtec is part of the sustainable supply chain that Schaeffler is currently in the process of establishing. The company aims to reduce the number of emissions generated by preliminary products and raw materials in the supply chain by 25% by 2030 (Scope 3 upstream) and is set to be carbon-neutral by 2040.


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