Siemens Gamesa, Chinese magnet suppliers discuss European production, COO says

By Christoph Steitz

ERLANGEN, Germany (Reuters) -Wind turbine maker Siemens Gamesa is in talks with Chinese suppliers of rare earth permanent magnets about the possibility of bringing production to Europe, in a bid to cut the region's reliance on imports after curbs on supplies from China.

Delays in Chinese rare earth export permits have caused European car makers and their suppliers to scramble for alternatives in a market that is dominated by the world's No. 2 economy, threatening production stops across the continent.

The wind sector also depends on rare earths processed in China, most notably neodymium, which is used in permanent magnets - a key turbine component - but currently not affected by export permit delays.

A division of Siemens Energy, Siemens Gamesa, the world's biggest maker of offshore wind turbines, has already taken steps to diversify away from China, including a deal earlier this week under which it will get permanent magnets from Japan's TDK.

"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?," Carina Brehm, Siemens Gamesa's chief operating officer said at a company event.

"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."

While Brehm did not identify any of the suppliers, some of the biggest include JL MAG Rare-Earth, Ningbo Yunsheng and Baotou Tianhe Magnetics Technology.

Siemens Gamesa, which is trying to emerge from a quality crisis that has caused major losses in recent years, was working hard on its goal to break even in 2026, Brehm said.

Asked about whether the onshore wind division, which was the source of the issues, was up for sale, Siemens Energy's finance chief Maria Ferraro said the portfolio was staying together with the expectation that double-digit margins would be generated in the future.

"The team is rallying around ensuring the stability in that business. It's not easy. But what's important is that it's performing in line with our expectations," Ferraro said.

(Reporting by Christoph Steitz; editing by David Evans)