Magnets Will Be Minting Tomorrow’s Billionaires


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Sep 28, 2023

Magnets Will Be Minting Tomorrow’s Billionaires

In one of the most iconic scenes of The Graduate, Dustin Hoffman’s young

In one of the most iconic scenes of The Graduate, Dustin Hoffman's young character, Benjamin Braddock, gets some unsolicited investment advice from a family friend: "plastics."

Replay that scene today and feckless Benjamin might hear a different word: magnets. In recent years, the humble magnet has become utterly essential to a number of modern industries, from electric vehicles to wind turbines. It's a high-tech building block upon which fortunes will be made.

The little-known story of how magnets came to conquer the world is about more than exotic metals and cutting-edge research. Increasingly, it's the tale of geopolitics, with growing tensions between China and the United States a central part of the story.

Prior to the industrial revolution, the only objects possessing permanent magnetic properties were lodestones: pieces of mineral magnetite. The "stones" were made up of three parts iron to four parts oxygen, along with a smattering of other critical ingredients including aluminum, titanium and manganese. And last but not least, lightning.

When a hunk of magnetite gets hit with a bolt from the blue, the lightning's magnetic field rearranges the ions in the rock, conferring magnetic properties across its surface. This remarkable phenomenon helps explain why natural magnets were treasured curiosities prior to the modern era.

At some point in medieval times someone figured out another way: rub an iron needle on a lodestone and the needle, too, acquired magnetic powers. This discovery, which led to the invention of the compass, was arguably the first practical use of a magnet (though it's worth noting that some medieval doctors also believed that lodestones could cure baldness — and as a bonus, serve as an aphrodisiac).

In the 18th and 19th centuries, scientists discovered that an electric current running through a wire imbued certain metals with magnetic properties. The resulting "electromagnets" found a place in a range of industrial applications. But they only worked when the power was on, which limited their usefulness and spurred a search for other "permanent" magnets.

The first advances on basic iron magnets came with the development of steel alloys fashioned within a magnetic field. These alloys had far more magnetic power than ordinary lodestones, as measured by a unit known as oersteds (named after Danish scientist Hans Christian Ørsted). But it still wasn't enough to play a reliable part in any kind of electric motors.

Japan took the lead in 1918 and by the 1930s had developed a new generation of permanent magnets by leavening ordinary iron with aluminum, nickel and cobalt – hence the name, Alnico magnets. These mega-magnets punched above their weight, yielding 400 oersteds compared with 50 for a simple lodestone. Then came the discovery that annealing these alloys in a magnetic field further multiplied their powers.

The world now possessed permanent magnets that could replace electromagnets. In the post-World War II era, these new magnets quickly found a growing role in everything from electric motors to sensors, fuel gauges, microphones and other devices.

In 1958, a little-known Austrian materials scientist named Karl J. Strnat arrived in the US to help the Air Force develop even more powerful magnets for its cutting-edge missiles and jets. Strnat had expertise in an esoteric cluster of elements known as rare earths, 15 elements that run in a horizontal line below the core periodic table, starting with lanthanum and ending with lutetium.

While not particularly rare, rare earths were hard to process and purify. But new methods inspired by the Manhattan Project enabled chemists to extract individual rare earths in considerable quantities. Strnat and colleagues became convinced the elements were promising candidates for a new generation of magnets. Unfortunately, the elements started losing their magnetic powers when they got near room temperature, limiting their utility.

But what if rare earths were combined with another element like cobalt? That discovery — of "magneto-crystalline anisotropy in rare earth cobalt intermetallic compounds" — stands as one of the greatest achievements in modern materials science. Strnat and company had found a way to make functional rare earth magnets.

If there was any justice in the universe, there would statues of Strnat in Silicon Valley and other high-tech hubs. In the space of a few short years, his laboratory and others energized by the discovery developed a range of new rare earth magnets. Some of these, such as SmCo5 — one part samarium and five parts cobalt — clocked in at 25,000 oersteds.

In an article published in 1970, Strnat anticipated that his rare earth magnets would soon be used in a range of products, from "electric wristwatches" to microwave tubes; electric motors and generators, even for "very large machines." He underestimated their potential.

The development of even more powerful rare earth "neodymium" magnets in the early 1980s opened the door to more applications. Rare earth magnets became ubiquitous in electronics, weapons systems, cell phones, digital cameras, hard drives and, last but certainly not least, the motors that power electric cars.

But there was a problem. Mining and purifying rare earths proved a messy business, generating lots of waste and pollutants. It was far easier to outsource production to China, home of some of the world's richest rare earth deposits. This wasn't a problem after the end of the Cold War, when globalization hit unprecedented levels. Now tensions with China are on the rise, jeopardizing the reliability of supplies.

Part of the solution lies in revving up rare earth production here in the US. But if we want to lessen our dependence on rare earths while producing enough magnets to meet growing demand, we’re going to need a new round of innovation.

It's already underway — at least in theory. Iron-nickel composites — particularly tetrataenite — show considerable promise as the raw material for a new 21st century magnet. Recent studies have underscored the potential. The only thing missing is the human element: a latter-day Karl J. Strnat to dedicate himself to the challenge.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Stephen Mihm, a professor of history at the University of Georgia, is coauthor of "Crisis Economics: A Crash Course in the Future of Finance."

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