Siemens Gamesa in talks to bring Chinese production to Europe
Executive at wind turbine manufacturer asked whether it is worth spending 'a little more money to become resilient'
Siemens Gamesa is in talks with Chinese suppliers of rare earth permanent magnets to bring production to Europe as it looks to de-risk its supply chain in the face of global trade tensions.
"Regarding the issue of Chinese magnet dependence it's also about the following question: Would I rather spend a little more money in Europe to become resilient? Or are there ways to incentivise suppliers from outside Europe to build a footprint in Europe?
"In general, we are also talking to Chinese suppliers about the possibility of building factories in Europe. If investments in sustainable structures are made here as part of fair competition, this is definitely an option."
Permanent magnets are used in most onshore and virtually all offshore wind turbines to create the magnetic field needed to produce electricity.
They often contain tonnes of rare earths, including dysprosium, neodymium, praseodymium, terbium and others, production of which is dominated by Chinese suppliers. Some 60% of rare earth mining and 90% of refining capacity is in China.
China’s dominance of the supply chain has been a concern for European manufacturers like Siemens Gamesa in recent years amid growing trade tensions with the West.
Those tensions were brought to the fore again this year when US President Donald Trump elected to ignite a global trade war on his return to the White House, targeting China in particular.
China responded by, among other things, curbing rare earth exports to the US which, although not directly affecting Europe, was the latest show of how they can be used as a diplomatic lever by Beijing.
Rare earth magnets are used in a wide range of other sectors too, everything from jet fighters to cars.
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