Material Scarcity

Transcription

Material Scarcity

Material Scarcity
An M2i study
November 2009
Huib Wouters
Corus Research, Development & Technology
P.O. Box 10,000
1970 CA IJmuiden
The Netherlands
T: 0251 – 497553
E: huib.wouters@corusgroup.com
Derk Bol
Materials innovation institute (M2i)
Mekelweg 2
2628 CD Delft
The Netherlands
T: 015 – 278 25 35
E: d.bol@m2i.nl
Project MA.09160, Material Scarcity
© Stichting Materials innovation institute (M2i); 2009
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worden ondernomen op basis van deze uitgave.
Summary
Material Scarcity
Material scarcity is about the shortages in metal and mineral resources which are expected in
the next decades. With a growing world population which is also getting more prosperous, the
demand for products increases and therefore also the demand for metal and mineral resources.
In the past century the increase in demand has been equalled by an increase in mining and
extraction of the required material resources. Exploration of new locations and technological
innovation in mining and extraction has kept the available and known material reserves on par
with the increase in demand. Will this continue in the 21st century as well? It is difficult to predict
a century ahead, but looking at a number of developments, we are afraid the answer is: no.
Developments
Which developments indicate that material scarcity may become a reality in the near future?
One is that for a number of material resources the peak production is already in the past. An
example is Zirconium, an element used for high temperature materials. Despite the ongoing
need for Zirconium and rising prices, the extraction rate is declining. Another development is the
continuing decrease in ore grade at which some materials are being mined. For instance, copper
with an ore grade of 25 % was available for mining in 1925, in 1985 the available ore grade for
copper mining was decreased to 0.8 %. This was made possible by ongoing technological
developments in mining and extraction techniques. But mining at lower ore grades requires
exponentially more energy. And energy being a scarce resource as well, it will not be possible to
extract resources at ever lower ore grades using more and more energy. Also geopolitical
developments can lead to material scarcity, sometimes on much shorter timescale. A recent
example is the plan of the Chinese government to restrict or stop the export of rare earth metals
to the rest of the world in 2009 – 2015. China produces 95 % of most of these elements, which
are used in the production of for instance iPODs, mobile phones and LEDs.
This study
Development of new materials and material applications for industry and society is the core
business of the Materials innovation institute M2i. If material scarcity has to be taken seriously,
and M2i is of that opinion, properly directed material innovation is needed to help solving
material scarcity. Therefore M2i has carried out the present study on the shortage of non-energy
raw materials: for the benefit of its industrial and university partners, to increase the awareness
for material scarcity and to support the discussion how to approach material scarcity in material
research and production. The study is also intended as a help for the government by highlighting
several aspects of material scarcity and the effect on the Dutch industry.
Solutions
As this report will show, material scarcity is a complex issue. The whole lifecycle of products has
to be considered, from mining of materials to the final disposal or better, recycling of the product
at the end of its lifetime. The stakeholders are not confined to one industry or one country.
Material scarcity is a global issue.
Let’s for the moment ignore the complexity of material scarcity, what are the main elements for a
solution? The first element is to reduce the use of materials, by more efficient production
processes and longer lifetime of products. The second element is to greatly enhance the
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recycling of materials. The goal should be no less than ensure that materials are fully recycled to
serve as new materials for new products, which is the Cradle to Cradle philosophy. The third
element in the solution for material scarcity is to find alternatives for scarce elements and
reserve these scarce elements to be used in specific applications for which no alternatives are
yet available. These three elements or building blocks to work on material scarcity are combined
in this report into a Trias Materialis.
Universities, industry and government
Finding solutions for material scarcity will require the concerted effort of universities and
research institutes (to find substitutes for scarce materials and work on material innovation
which enables the recycling of the material constituents), industries (to develop new products
and production processes requiring less material and energy, and including recycling as fixed
element), and government (sponsoring long term research in material scarcity solutions and
providing a level playing field for industry to implement material scarcity solutions).
Transition to sustainable use of materials
No doubt, the transition to sustainable use of materials will be as difficult and time consuming as
fighting climate change or replacing fossil energy by other, sustainable energy sources. However
we can learn from the transitions currently being made in these fields. As an example, a recent
scenario study of Shell on energy transition has been translated in this report to the situation of
material scarcity. The outcome of this scenario study shows that a successful transition requires
the following ingredients: a number of bottom-up initiatives to study and work on material
scarcity (we hope this study will contribute to these initiatives), a government policy to combine
these initiatives at national level, and as a next step making connection with other countries to
come to coordinated plans, first on EU and than on global level.
Content of this report
In this report the information from literature study and interviews has been compiled into an
introductory report on material scarcity. The report provides an overview of the various aspects
of material scarcity. It contains data on for instance the availability of various materials and
references for further reading for those who want to study material scarcity in more detail. With
help of the industrial partners of M2i, the effect of material scarcity on industry is discussed for
two cases: the steel industry and the microelectronics industry. For policy makers the report
contains elements for finding solutions for material scarcity, in terms of the ‘Trias Materialis,
steps to a sustainable use of materials’, ways of thinking about scarcity and scenarios for
transitions.
Many sources have been used for this study and many persons provided advice. The authors
like to acknowledge Ton Bastein and André Diederen of TNO Defence, Security and Safety in
particular. They brought material scarcity to the attention of M2i and provided valuable
information and references on material scarcity.
Contents
1.
INTRODUCTION ................................................................................................................... 9
2.
METHOD OF WORKING .................................................................................................... 11
3.
MATERIAL SCARCITY ....................................................................................................... 13
3.1 SUPPLY OF MATERIALS ................................................................................................. 13
3.2 DEMAND OF MATERIALS ................................................................................................ 16
3.3 RATIO OF RESERVES TO ANNUAL EXTRACTION ............................................................... 20
3.3.1 Hubbert peak theory ..................................................................................... 21
3.3.2 Present estimates of ratio of reserves to annual extraction.......................... 26
3.3.3 Comparison with previous estimates ............................................................ 28
3.4 TECHNOLOGICAL INNOVATION & EMERGING TECHNOLOGIES ........................................... 31
3.5 ORIGIN OF RAW MATERIALS AND TRADE ......................................................................... 35
4.
SCARCITY AND INDUSTRY .............................................................................................. 39
4.1 FLOW OF MATERIALS .................................................................................................... 39
4.2 MINING INDUSTRY ........................................................................................................ 41
4.3 IMPORT OF RAW MATERIALS TO THE EU ........................................................................ 47
4.4 MATERIAL SCARCITY AND DUTCH INDUSTRY .................................................................. 49
4.4.1 Material scarcity and the steel industry......................................................... 49
4.4.2 Material scarcity and the micro-electronics industry ..................................... 50
4.5 MATERIAL SCARCITY ACTIVITIES ABROAD....................................................................... 52
5.
SOLUTION PATHS ............................................................................................................. 53
5.1 ELEMENT TYPES........................................................................................................... 53
5.2 TRIAS MATERIALIS; TO A SUSTAINABLE USE OF MATERIALS ............................................. 59
5.2.1 Reduction of the demand or use of materials............................................... 59
5.2.2 Recycling of materials................................................................................... 60
5.2.3 Avoid use of materials with limited stocks and find alternatives ................... 60
5.2.4 Boundary conditions: energy, environment, return on investment................ 61
5.3 ON RECYCLING............................................................................................................. 61
6.
THINKING ABOUT SCARCITY .......................................................................................... 65
6.1 FIXED STOCK PARADIGM ............................................................................................... 65
6.2 OPPORTUNITY COST PARADIGM .................................................................................... 66
7.
SCENARIOS FOR TRANSITION ........................................................................................ 67
7.1 SCRAMBLE SCENARIO ................................................................................................... 67
7.2 BLUE PRINTS SCENARIO................................................................................................ 68
8.
CONCLUSIONS AND RECOMMENDATIONS................................................................... 69
8.1 CONCLUSIONS ............................................................................................................. 69
8.2 RECOMMENDATIONS FOR THE WAY FORWARD ............................................................... 69
9.
FURTHER READING .......................................................................................................... 71
9.1 ENGLISH LANGUAGE ..................................................................................................... 71
9.2 GERMAN LANGUAGE ..................................................................................................... 71
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Figures
FIGURE 1.
FIGURE 2
FIGURE 3.
FIGURE 4.
FIGURE 5.
FIGURE 6.
FIGURE 7.
FIGURE 8.
FIGURE 9.
FIGURE 10.
FIGURE 11.
FIGURE 12.
FIGURE 13.
FIGURE 14.
FIGURE 15.
FIGURE 16.
FIGURE 17.
FIGURE 18.
FIGURE 19
FIGURE 20.
FIGURE 21.
FIGURE 22.
FIGURE 23.
FIGURE 24.
FIGURE 25.
THREE WAYS TO DEFINE THE AMOUNT OF AVAILABLE MATERIAL ................................... 13
TECHNICAL DEVELOPMENT OF DRILLING TECHNIQUES ................................................. 14
REDUCTION IN ELECTRICITY USE OVER PAST FIFTY YEARS IN PRIMARY
INDUSTRY ................................................................................................................. 15
GROWTH OF RESOURCES .......................................................................................... 16
GROWTH OF WORLD POPULATION .............................................................................. 17
RICHER PEOPLE USE MORE MATERIALS ...................................................................... 18
GLOBAL PRODUCTION OF REFINED INDIUM .................................................................. 19
BELL-SHAPED PRODUCTION CURVE, AS ORIGINALLY SUGGESTED BY
HUBBERT IN 1956 ..................................................................................................... 21
US OIL PRODUCTION (LOWER 48 STATES, CRUDE OIL ONLY) AND
HUBBERT'S HIGH ESTIMATE........................................................................................ 22
PEAKING OF LEAD ..................................................................................................... 22
PEAKING OF ZIRCONIUM............................................................................................. 23
PEAKING OF IRON ORE............................................................................................... 24
GLOBAL DISCOVERY RATE ......................................................................................... 25
FLOWSHEET OF MATERIALS ....................................................................................... 39
CONCENTRATION TRENDS IN THE PRODUCTION OF THE MINING
INDUSTRY, MARKETS SHARES OF THE 3 LARGEST MINING INDUSTRY
PRODUCERS IN 2005 ................................................................................................. 42
DEVELOPMENT OF THE PRICE FOR RAW MATERIALS FOR THE STEEL
INDUSTRY ................................................................................................................. 43
VERTICAL INTEGRATION ............................................................................................. 45
GLOBAL MINING EXPLORATION EXPENDITURE (WITH 2008/2009
ESTIMATES) .............................................................................................................. 46
METAL CONCENTRATES AND ORES NET IMPORTS OF EU27 AS FRACTION
OF APPARENT CONSUMPTION IN 2008 ........................................................................ 47
MAJOR GLOBAL PRODUCERS OF SELECTED HIGH-TECH METALS (2006) ....................... 48
CRITICALITY MATRIX .................................................................................................. 53
THE THREE TYPES OF CHEMICAL ELEMENTS ............................................................... 54
THE TOOLBOX CONTAINING THE ELEMENTS OF HOPE, THE FRUGAL
ELEMENTS AND THE CRITICAL ELEMENTS (PGM = PLATINUM GROUP
METALS; REM = RARE EARTH METALS) .................................................................... 55
PROPORTION OF CONSUMPTION MET BY RECYCLED MATERIALS ................................... 62
A WASTE HIERARCHY ................................................................................................ 64
- 7 of 72 -
Tables
TABLE 1.
TABLE 2.
TABLE 3.
TABLE 4.
TABLE 5.
TABLE 6.
TABLE 7.
TABLE 8.
TABLE 9.
TABLE 10.
TABLE 11.
TABLE 12.
TABLE 13.
TABLE 14.
TABLE 15.
PRODUCTION PEAK AND ULTIMATE RECOVERABLE RESOURCES FOR A
FEW MINERALS .......................................................................................................... 24
ESTIMATES OF THE AVAILABILITY OF MINERALS AND METALS........................................ 27
RESERVES IN 1972 AND 2004 ................................................................................... 28
RESERVES AND R/P RATIOS IN 1972 AND 2004 ......................................................... 30
PORTFOLIO OF EMERGING TECHNOLOGIES THAT ISI AND IZT ANALYSED ...................... 32
SELECTED "HIGH-TECH MATERIALS" APPLICATIONS FOR INNOVATIVE
"ENVIRONMENTAL TECHNOLOGIES" ............................................................................ 33
GLOBAL DEMAND OF THE EMERGING TECHNOLOGIES ANALYSED FOR
RAW MATERIALS IN 2006 AND 2030 RELATED TO TODAY'S TOTAL WORLD
52
PRODUCTION OF THE SPECIFIC RAW MATERIAL ......................................................... 34
TOP THREE PRODUCING MINING REGIONS FOR SELECTED METALLIC
MINERALS (2006) ...................................................................................................... 36
EXAMPLES OF NON-ENERGY RAW MATERIAL EXPORT RESTRICTIONS ............................ 37
RECENT SUPPLY DISRUPTIONS................................................................................... 38
W ORLD TOP 10 COMPANIES IN NON-ENERGY MINERALS MINING IN 2007 ...................... 41
LARGEST MINING MERGERS AND ACQUISITIONS IN 2007 .............................................. 44
CRITICAL ELEMENTS .................................................................................................. 56
FRUGAL ELEMENTS ................................................................................................... 57
ELEMENTS OF HOPE .................................................................................................. 58
1. Introduction
Materials play an increasingly important role in our everyday lives. They underpin everything that
is needed for daily life, from home to work and leisure. New materials have a huge impact on all
the areas that make life liveable, from transport, medical, security, information and
communications technology to advanced manufacturing. Examples are hybrid cars, the Airbus
A380, MRI scanners, personal healthcare equipment, safety sensors, multi-functional mobile
phones, navigation equipment and sports equipment.
To be able to continue to use and produce such products, it is necessary to have a sufficient
supply of raw materials. The recoverable amount of a raw material is limited and more often than
not, raw materials are not uniformly distributed over the globe. For example, about 60% of the
iron ore in the world comes from three countries: Australia, Brazil, and China.1 A shortage of raw
materials may have consequences for the raison d'être of a company of the metallurgical
industry. Recently China announced to further restrict the export of rare earth metals (REM) in
the period of 2009 – 2015.2 Rare earth metals play an important role in the production of hard
disks, mobile telephones, iPODs, fuel cells, etc. Since China has 95 % of the global production
of REM, this will urge the manufacturing industry in the rest of the world to search for replacing
materials.
The situation for certain non-energy raw materials and metals may therefore become similar to
energy raw materials, i.e. coal, oil, and natural gas. The lack of certain non-energy raw materials
may have consequences for society and for companies. The continued growth of the use of
materials, together with the challenges posed by health, climate change, energy supply and the
quest for durability put increasing pressure on innovation to solve the current conflict between
satisfying society’s demand and the need for sustainability.
The anticipated shortage of non-energy raw materials has drawn the attention of various
researchers.3 André Diederen and Ton Bastein of TNO Defence, Security and Safety
approached M2i with this challenge.
1
D. Huy
Kurzbericht zur Konzentration in der Weltbergbauproduktion (Fortschreibung Februar 2007)
Bundesanstalt für Geowissenschaften und Rohstoffe(BGR); Hannover, Germany; 2007
2
Rembrandt Koppelaar
www.peakoil.nl, posted on 25 August 2009.
3
G. Angerer et al.
Rohstoffe für Zukunftstechnologien (Schlussbericht)
Einfluss des branchenspezifischen Rohstoffbedarfs in rohstoffintensiven Zukunftstechnologien auf die zukünftige
Rohstoffnachfrage
Fraunhofer Institut für System- und Innovationsforschung ISI; Institut für Zukunftsstudien und
Technologiebewertung IZT GmbH
Fraunhofer IRB Verlag; Karlsruhe, Deutschland; 2009
D. Cohen
"Earth's natural wealth: an audit"
New Scientist, 23 May 2007, pp. 34-41
M. Frondel et al.
Trends der Angebots- und Nachfragesituation bei mineralischen Rohstoffen
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI Essen); Fraunhofer-Institut für System- und
Innovationsforschung (ISI); und Bundesanstalt für Geowissenschaften und Rohstoffe (BGR)
Berlin und Bonn, Germany; 2007
- 9 of 72 -
Materials innovation institute M2i
M2i is a public-private partnership between industry, knowledge institutes and the
government of the Netherlands. The mission of M2i is to develop new and durable
materials of world-class level that significantly improve the competitive and
innovative position of the industry in the Netherlands and that greatly contribute to
realizing a sustainable society. M2i and its predecessor NIMR have built up a
strong reputation in bringing science into business via knowledge application and
transfer projects.
M2i industrial partners are: Aleris, Allseas, ASML, Bekeart, Boal, Bouwen met
Staal, Corus, DAF, FEI, FME-CWM, Federatie Dunne Plaat, Fontijne Grotnes,
FujiFILM, Henkel, INPRO Innovationsgesellschaft, Lightmotif, Metaalunie, MTI
Holland, Nedal Aluminium, National Aerospace Laboratory (NLR), NXP
Semiconductors, Philips Electronics, Schelde, SELOR eeig, SKF, Stork NV,
Sunergy and TNO.
M2i university partners are: Delft University of Technology, Eindhoven University of
Technology, University of Twente, University of Groningen, Foundation for
Fundamental Research FOM, Radboud University Nijmegen, FOM institute for
Plasma Physics Rijnhuizen, RWTH Aachen, Utrecht University, Max Planck
Institute for Eischenforschung, Katholieke Universiteit Leuven, Cambridge
University, Oxford University, EPFL Lausanne.
M2i has set itself the goal to carry out a study on the shortage of non-energy raw materials for
the benefit of its industrial and university partners, to increase the awareness for material
scarcity and to start the discussion how to approach material scarcity in material research and
production. The study is also intended as a help for the government by highlighting several
aspects of material scarcity and the possible effect on the Dutch industry.
The report is structured as follows. Chapter 2 describes the method of working that was
adopted. The present situation is the subject of chapter 3. It describes the reserves and
resources, the ratio of reserves to annual extraction, the influence of economical factors, the
effects of the development of new products, the origin of raw materials, and their trade.
Chapter 4 then looks at the issue from the material users view; the manufacturing industry in
Europe. Chapter 5 describes solutions that might be used when a shortage of material would
occur. Scenarios for the future are presented in chapter 7. Chapter 8 contains the overall
conclusions and recommendations from this report. Suggestions for further reading are given in
chapter 8.
Many sources have been used for this study and many persons provided advice. We like to
acknowledge Ton Bastein and André Diederen of TNO D&S in particular. They brought material
scarcity to the attention of M2i and provided valuable information and references on material
scarcity.
John E. Tilton
On Borrowed Time? Assessing the Threat of Mineral Depletion
Resources for the Future; Washington, DC, USA; 2003
2. Method of working
2.1 Overview
The method of working that is used consists of three steps; fact finding, interpretation and
concluding. Below some details about the followed way of working are given.
2.2 Fact finding
Via three routes an impression of the situation was obtained:
• searches for information on material scarcity in the literature,
•
•
interviews with representatives of the industrial partners of M2i,
discussion with René Kleijn, an expert on this subject in the Netherlands.
The interviews of the industrial partners of M2i revolved around:
• the extent to which effects of scarcity are noticed, with respect to price, supply, and
demand;
•
•
•
the products that may be affected by it;
the measures that may be taken by industry to mitigate the effects of scarcity, like:
o using less,
o recycling, or
o use of other materials; and
the measures that may be taken by others to mitigate or solve these scarcity issues.
The subject was discussed with René Kleijn, assistant professor at the Institute of Environmental
Science (Leiden University). His work is discussed in an article on the earth's natural wealth in
4
the New Scientist.
The method of working to find information on material scarcity in the literature consisted of the
reading of review articles, searches on the internet, and searches in the databases of the library
of Corus RD&T in IJmuiden, The Netherlands. Two sources that provide much of this type of
information are:
•
•
Wikipedia, the free encyclopaedia (www.wikipedia.org)
Ullmann's Encyclopaedia of Industrial Chemistry (Fifth, Completely Revised Edition)
It should be noted that the free online encyclopaedia Wikipedia is about as accurate on science
5
as the Encyclopaedia Britannica. The references of the literature used are listed in footnotes.
Suggestions for further reading are given in chapter 9.
4
David Cohen
New Scientist magazine, issue 2605 (23 May 2007), page 34-41
5
Jim Giles, 2005
"Internet encyclopaedias go head to head"
Nature, December 15, 2005: pp. 900-901
- 11 of 72 -
2.3 Reviewing
Once an image of the possible effects of material scarcity for the Netherlands has been
obtained, an opinion, i.e. an appraisal about a particular matter, can be formed. Discussions with
6
7
André Diederen and Jaap Weerheijm (TNO; Defence, Security and Safety) were very helpful
in this respect. Another important review was done by means of a presentation of the main
findings to the partners of M2i. On 30 June 2009 in Utrecht the results of the study were
presented to representatives from Corus, FujiFILM, Philips Consumer Lifestyle, TNO D&S, SKF,
TU Delft and M2i. Their conclusions were 1) the information gathered by the study has a great
added value to the understanding of material scarcity, 2) material scarcity has to be taken
seriously, and 3) M2i and TNO can certainly contribute to solving material scarcity but it is
necessary to team up with other stakeholders, like the government and international bodies like
the EU.
2.4 Reporting
The final step is reporting of the work. The presentation to the partners of M2i, has been used as
a "storyboard" for writing this report. The conclusions and the recommendations are based on
the discussions with the partners of M2i during the previously mentioned meeting.
6
André Diederen is a senior research scientist at TNO, where he has been working since 1997 on defence related
matters.
7
At TNO, Jaap Weerheijm is senior research scientist and he is responsible for the research on protective
materials under extreme conditions. In 2003 he joined the TU Delft for two days a week. There he is responsible
for the research field Impact Dynamics of Structures and Materials.
3. Material scarcity
Material scarcity (or any scarcity) is controlled by only two factors: the supply of the material
versus its demand. “Supply” here should be interpreted as the raw material that is made
available to the industry. Typically this is done through mining activities. It must be noted that
recycling of raw materials would be an alternative supply stream. For reasons of readability, this
is not discussed in chapter 3, but treated separately in chapter 5. The demand for a material is
ultimately determined by the end users together with the effectiveness of the supply chain.
3.1 Supply of materials
To be able to have a meaningful discussion, it is necessary to set a few definitions that are
relevant to this subject. Figure 1 shows three different ways to look at the amount available. The
“Resource base” is defined as the entire pre-set endowment of the earth's crust with this raw
material.8 “Resources” are those quantities of a raw material that can be extracted
economically. The “reserves” form that subset of resources that at this moment are indeed
proven.
Figure 1.
9
Three ways to define the amount of available material
8
M. Frondel, P. Grösche, D. Huchtemann, A. Oberheitmann, J. Petersand, G. Angerer, C. Sartorius, P. Buchholz,
S. Röhling, and M. Wagner
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI Essen),
Fraunhofer-Institut für System- und Innovationsforschung (ISI) & Bundesanstalt für Geowissenschaften und
Rohstoffe (BGR)
9
M. Ericsson (Raw Materials Group)
"Global Mining in 4643 Year of the Firedog"
Expert workshop on "Raw Materials Scarcity as a Risk of Conflict and an Impediment to Development"; Berlin,
Germany; 21-22 September, 2006
- 13 of 72 -
An important factor in the extraction of ores and the extraction of metals from ores is the energy
required for these activities. In case of unlimited energy supply, material resources are only
10
limited by the amount of mineral resources available in the Earth’s crust. As energy is as much
a scarce resource as materials are, the extraction of materials is limited. The energy
requirements of materials supply are discussed further below.
Reserves are more an economical than a geological quantity, and they largely depend on the
costs associated with the extraction of the mineral from the earth. These costs have come down
dramatically over the last decades, which have increased the reserves. This mechanism is
illustrated in Figure 2 which shows the development of the drilling speed (directly associated with
the drilling costs) over the last century.
Figure 2
Technical development of drilling techniques11
New techniques will enable an increase of both the extraction rate and the production rate of the
subsequent processes. Heavy machinery is needed in mining for exploration and development,
to remove and stockpile overburden, to break and remove rocks of various hardness and
toughness, to process the ore and for reclamation efforts after the mine is closed. Bulldozers,
drills, explosives, trucks and fuel are all necessary for excavating the land.
10
A.M. Diederen
Metal minerals scarcity: A call for managed austerity and the elements of hope
TNO Defence, Security and Safety; Rijswijk, The Netherlands; March 10, 2009
11
Magnus Ericsson (Raw Materials Group)
"Current trends in global metal markets – industry responses"
Presentation at Bergforsk
The 3rd Bergforsk Annual Meeting [organised by the Swedish Mining Research Foundation (MITU)]
Luleå, Sweden; 23-24 May 2007
Once the ore has been mined, the actual minerals need to be extracted from it. This is normally
referred to as extractive metallurgy. It addresses mineral processing (mechanical means of
crushing, grinding, and washing) that enable the separation and the actual production of the
minerals from the ore (extractive metallurgy). Since most metals are present in ores as oxides or
sulphides, the metal needs to be reduced to its metallic form. This can be accomplished through
chemical means such as smelting or through electrolytic reduction, as in the case of
aluminium.12 An essential "ingredient" of all these processes is energy; as such reduction
reactions are typically strongly endothermic.
Figure 3.
13
Reduction in electricity use over past fifty years in primary industry
A noteworthy example is the production of primary aluminium via electrolysis.
Figure 3 shows the amount of electric energy that is necessary to produce a single kilogram of
aluminium. This amount decreased through the years, but even today nearly two-thirds of all
energy consumed by the aluminium industry is for primary aluminium production14. Even with
further efficiency improvements there is a lower limit that thermodynamics dictates; the
15
theoretical energy requirement is 6.25 kWh per kilogram of aluminium produced.
12
"Mining"
From Wikipedia, the free encyclopedia
13
European Aluminium Association (EAA)
Aluminium for Future Generations
14
US Energy Information Administration, http://www.eia.doe.gov/emeu/mecs/iab98/aluminum/energy_use.html
15
W.B. Frank et al.
"Aluminum"
Ullmann's Encyclopedia of Industrial Chemistry (5th, Completely Revised Edition)
Volume A 1, pp. 459-480
eds. W. Gerhartz et al.
VCH Verlagsgesellschaft mbH; Weinheim, BRD; 1985
- 15 of 72 -
Figure 4.
Growth of resources
16
Also the “resources” from Figure 1 are not a static quantity. This is illustrated in Figure 4, where
it is shown that the resources for a number of elements have grown over the years as large
quantities of ore have been proven due to more and improved surveying activities.
In generic terms, it can be stated that the three categories of supply are correlated with the
short-, medium- and long-term potential supply of mineral commodities. The actual supply of a
certain mineral is of course even more volatile as it is determined by factors like market
dynamics, political decisions (especially relevant when a certain mineral is only found in
countries like China), political stability, etc.
3.2 Demand of materials
The demand of materials is even more volatile than the reserves and resources discussed
before. Roughly, the demand depends on the following parameters:
•
•
the present use of materials;
the growth of the global population;
•
•
the growth of the prosperity of the people;
the replacement of materials (the demand for material A drops when a specific
application is no longer made from it);
•
the development of new products and emerging technologies.
The world population has more than doubled since 1950 and is set to increase by 40% by 2050;
see Figure 5.
16
"European mining in a global context - Threats & opportunities"
European Social and Economic Committee; Non-energy mining industry in Europe
Bucharest, Romania; 15 May 2008
Figure 5.
17
Growth of world population
History has shown that as people become richer they use more energy and materials. To
foresee the influence of the growing economy on the sustainable use of resources, it is
important to take the consumption pattern into account. Economies in different stages of
development show a typically different consumption pattern. Figure 6 demonstrates this change
in consumption pattern by showing the metal consumption rate in relation to the GDP per capita.
For a general construction material like steel, a sharp rise of steel consumption with growing
GDP is observed for economies with a low GDP; typically the developing countries, in which
steel is consumed mainly for building and construction markets. As wealth increases the growth
in consumption with GDP drops off, because steel is used for other applications (e.g. consumer
goods) with lower associated volumes.
17
Shell energy scenarios to 2050
Shell International B.V.; The Hague, The Netherlands; 2008
- 17 of 72 -
Figure 6.
Richer people use more materials18
On the contrary, a metal like silicon is mainly used in the aluminium and chemical industries19.
These typical applications are not amongst the basic needs of developing economies, mainly
building and construction, and the silicon consumption shows no drop of in growth rate with
increasing GDP. Noteworthy is that the semiconductor industry, which manufactures computer
chips and solar cells from high-purity silicon, accounts for only a small percentage of the total
silicon demand.
A German study on the influence of economy and emerging technologies on raw materials
demand20, shows two drivers for demand. The main driver discussed here is the growing world
18
Study on global flow of metals - An example of material recycling
National Institute for Materials Science; Tsukuba-city, Ibaraki, Japan; May 2008
19
U.S. Geological Survey
Mineral Commodity Summaries, January 2009
http://minerals.usgs.gov/minerals/pubs/commodity/silicon/mcs-2009-simet.pdf
20
G. Angerer, L. Erdmann, F. Marscheider-Weidemann, M. Scharp, A. Lüllmann, V. Handke, and M. Marwede,
2009
Rohstoffe für Zukunftstechnologien - Einfluss des branchenspezifischen Rohstoffbedarfs in rohstoffintensiven
Zukunftstechnologien auf die zukünftige Rohstoffnachfrage
Fraunhofer-Institut für System- und Innovationsforschung ISI; und
Institut für Zukunftsstudien und Technologiebewertung IZT
Fraunhofer IRB Verlag; Stuttgart, Germany; 2009
economy, which has grown on average by 3.8% annually over the past 20 years. A second
driver is emerging technology, such as the use of indium for flat screens.
Summarising the findings, the consumption of commodity materials with many applications,
such as iron, steel, copper and chrome, is dominated by world economic growth. The
consumption of specialities, like gallium, neodymium, indium, germanium and scandium, is
driven by technological development. Both drivers appear to be dominant for platinum metals,
tantalum, silver, titanium and cobalt. The influence of technological developments is discussed
in more detail in section 3.4.
The replacement of materials in products will affect the extraction and subsequent processing of
raw materials. Until the 1930s aircraft were made from wood, steel tube and fabric. The interbellum period saw the rise of all-metal aircraft such as the Boeing 247 and Douglas DC-2. This
change had a huge impact on the aluminium industry.21
Figure 7.
Global production of refined indium
22
The development of new products will also have an effect on the extraction and subsequent
processing of raw materials (see section 3.4). An example is the increase in the demand for
indium that is used in the form of indium tin oxide in flat screen televisions and in the form of
indium gallium arsenide in solar cells.23 Figure 7 shows the global production of refined indium
that demonstrates a steep increase around the turn of the century.
21
M.B.W. Graham and B.H. Pruitt,
R&D for Industry, A century of technical innovation at Alcoa
Cambridge University Press; Cambridge, UK; 1990
22
Bill McCutcheon (Minerals and Metals Sector, Natural Resources Canada.)
"Indium"
Canadian Minerals Yearbook, 2001
Natural Resources Canada
23
"Liquid crystal display"
David Cohen
- 19 of 72 -
3.3 Ratio of reserves to annual extraction
The ratio of reserves or resources to the annual extraction is called the range, and this quantity
is used very frequently to estimate the number of years that a certain raw material will still be
present. The smaller the range, the more urgently is the necessity for investments into the raw
24
25
material exploration. This range is also known as static duration period.
Estimates that others recently made of the range will be presented in section 3.3.2. The Club of
Rome raised considerable public attention in 1972 with its report "Limits to Growth". It predicted
that economic growth could not continue indefinitely because of the limited availability of natural
resources.26 Their estimates will be compared with the present ones in section 3.3.3.
The unit of reserves and resources is mass. The extraction rate is measured in mass per unit of
time. The range is the result of the division of the reserves or resources by the extraction rate.
Its unit is, therefore, time. Hence the error in the estimated range is determined by the errors in
the estimates of the reserve and the extraction rate.
It was shown before that both supply and demand are rather dynamic parameters. Nevertheless,
there are models that can be used in limited resource production-domains to be able to predict
the future supply of a certain element. A well-known model is the Hubbert peak theory.27 M.K.
Hubbert created and first used the models behind peak oil in 1956 to accurately predict that the
24
Rohstoffe (BGR)
25
National Institute for Materials Science; Tsukuba-city Ibaraki Japan; May 2008
26
"Club of Rome"
Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III
"The Limits to Growth"
Universe Books; New York, NY, USA ; 1972
27
"Hubbert peak theory"
"Peak oil"
"Predicting the timing of peak oil"
M.K. Hubbert (Chief Consultant General Geology, Shell Development Company)
"Nuclear Energy and the Fossil Fuels"
Paper presented at Spring Meeting of the Southern District Division of Production, American Petroleum Institute
San Antonio, Texas, USA; 7-8-9 March 1956
Publication No. 95, Shell Development Company, Exploration and Production Research Division
Houston, Texas, USA; June 1956
Maarten Schinkel
"Komt na Peak oil straks ook Peak finance?"
NRC Handelsblad, 16 juni 2009, katern 2 (Economie), pagina 14 (Schinkels forum)
oil production of the United States would peak between 1965 and 1970. Scientists also applied
28
the Hubbert peak theory to minerals, which is discussed in more detail below.
3.3.1 Hu bb ert p eak t heo ry
Peak oil is the point in time when the maximum rate of global petroleum extraction is reached,
after which the rate of production enters terminal decline. The concept is based on the observed
production rates of individual oil wells, and the combined production rate of a field of related oil
wells. The aggregate production rate from an oil field over time usually grows exponentially until
the rate peaks and then declines - sometimes rapidly - until the field is depleted. This concept is
derived from the Hubbert curve, and has been shown to be applicable to the sum of a nation’s
domestic production rate, and is similarly applied to the global rate of petroleum production; see
Figure 8.
Figure 8.
Bell-shaped production curve, as originally suggested by Hubbert in 195629
Hubbert's logistic model, now called Hubbert peak theory, and its variants have described with
reasonable accuracy the peak and decline of production from oil wells, fields, regions, and
countries. Figure 9 shows a comparison for the United States. This theory also proved useful in
other limited resource production-domains. According to the Hubbert model, the production rate
of a limited resource will follow a roughly symmetrical bell-shaped curve based on the limits of
exploitability and market pressures.
28
Ugo Bardi (Professor; Department of Chemistry, University of Florence, Italy) and Marco Pagani
"Peak Minerals"
Posted at "The Oil Drum: Europe" by Chris Vernon on 15 October 2007
Retrieved 23 April 2009 from http://www.theoildrum.com/node/3086
A.M. Diederen
29
"Hubbert peak theory"
- 21 of 72 -
Figure 9.
30
US oil production (lower 48 states, crude oil only) and Hubbert's high estimate
Scientists applied the Hubbert peak theory to minerals as well. A historical peaking is that of
lead, that peaked in 1986; see figure below.
Figure 10. The data for the "ultimate recoverable resources" (URR) calculated from the fitting
(330 million tons) is in good agreement with the amount calculated from the United States
Geological Survey (USGS) data (290 million tons).31
Figure 10.
Peaking of lead32
30
"Peak oil"
31
"Peak Minerals"
A more recent example of peaking is that of zirconium mineral concentrates, mainly zircon
(ZrSiO4), which is the main source of zirconium and zirconium oxide, two important materials,
often used as components of high temperature resistant materials; see Figure 11. There is no
doubt that the initial nearly exponential growth of production started slowing down in the 1970s
and that growth stopped in the 1990 to decline afterwards. The fit of the data gives the date of
the peak as 1994. According to the USGS data, the URR for this mineral should be about 670
million tons. The fitting of the production curve produces a smaller value, around 390 million
tons.
Figure 11.
Peaking of zirconium33
Several minerals show sudden jumps in production that lead the production curve to abandon
the tendency to peaking of a few years before. One such case is that of iron ore, which shows a
sudden rise in the production data around the year 2000; see Figure 12. Here, it is difficult to say
whether the rapid rise in the past few years is due to inconsistencies in reporting or to an actual
increase of production that may be related to the quickly growing Chinese economy.
In general it can be said that the Hubbert peak theory helps to predict the peaking and decline of
the production of material resources. However, critics of the Hubbert theory say that the model
has very limited validity “because it does not consider likely resource growth, application of new
technology, basic commercial factors, or the impact of geopolitics on production.”34
32
"Peak Minerals"
33
"Peak Minerals"
34
Cambridge Energy Research Associates;
http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=8444
- 23 of 72 -
Figure 12.
Peaking of iron ore
Table 1.
Production peak and ultimate recoverable resources for a few minerals
Mineral
Peak year
(logistics)
URR from
logistic fitting
35
URR from USGS: reserves +
cumulative production up to 2006
[ton]
[ton]
5
5.9 10
5
4
Mercury
1962
(5.8 ± 0.4) 10
Tellurium
1984
(1.0 ± 0.4) 10
2.8 10
Lead
1986
(3.3 ± 0.2) 108
2.9 108
Cadmium
1989
(1.33 ± 0.09) 106
1.5 106
Potash (K2CO3)
1989
(1.54 ± 0.09) 109
9.5 109
Phosphate rock
1989
(8.1 ± 0.4) 10
Thallium
1995
(4.7 ± 0.3) 10
Selenium
1994
(1.1 ± 0.14) 10
1.6 10
Zirconium minerals
1994
(3.9 ± 0.25) 107
6.7 107
Rhenium
1998
(1.0 ± 0.3) 103
3.3 103
Gallium
2002
(2.5 ± 0.5) 103
1.65 104 (?)
4
9
2.4 10
10
2
7.6 10
2
5
5
Bardi and Pagani examined 57 cases of mineral extraction from the USGS data. Of these, they
found 11 cases where a clear production peak can be detected. These cases are listed in Table
1. The table contains also the "ultimate recoverable resources" (URR) derived as the sum of the
amount of the already extracted resource and the amount of the reserves listed in the USGS
35
"Peak Minerals"
tables. This value can be compared with the amount that the logistic or Gaussian fitting of the
36
curve provides.
For four minerals (Mercury, Lead, Cadmium and Selenium), Bardi and Pagani found a good
agreement of the URR determined from the logistic fitting with the URR determined from the
USGS data. For five minerals (Tellurium, Phosphorus, Thallium, Zircon and Rhenium), the URR
obtained from fitting is still acceptably close to the USGS data, although smaller.
The URR derived from the USGS data are significantly higher only for Gallium and Potash. This
discrepancy can be due to the high uncertainty of the data for gallium and potash; i.e. data on
world production of primary gallium are unavailable because data on the output of the few
producers are considered to be proprietary and data on the reserves and reserve base of potash
are rounded to avoid disclosing company proprietary data.
Figure 13.
Global discovery rate37
The peak in the Hubbert peak theory suggests that at the end the number of deposit discoveries
will decrease. This effect is discernible in Figure 13, which shows the global discovery rate of
deposits. Furthermore, exploration and mining are becoming increasingly difficult for the
activities have to take place in remote locations under harsh conditions. The grades of the
discovered ores are lower, the pertinent ore-bodies are lying deeper and the permitting
processes last longer.38 Hence, the exploration expenses are increasing; see Figure 13. Not only
36
"Peak Minerals"
37
"Exploration in the Nordic Countries"
Presentation at Raw Materials Group 5th Exploration & Mining Conference
Stockholm, Sweden; 20 November 2008
38
"Exploration in the Nordic Countries"
Presentation at Raw Materials Group 5th Exploration & Mining Conference
Stockholm, Sweden; 20 November 2008
- 25 of 72 -
the exploration expenses go up, but also the energy needed for the exploration and extraction,
as well as the exploration risks.
3.3.2 P resent esti mat es of rati o o f reserv es to ann ual extracti on
Several authors estimated the ranges, i.e. the availability in years, for a number of materials.
Table 2 contains an overview of the findings of a few authors:
39
•
•
André Diederen (2009) ,
Stephen E. Kesler (2007)40 ,
•
•
David Cohen (2007) ,
Manuel Frondel et al. (2007)42 , and
•
National Institute for Materials Science
41
43
.
All authors mentioned above assume that both reserves or resources and extraction rates are
constant or change gradually. That is to say, their estimates are based on unaltered policies and
take no account for technological changes.
•
Diederen assumed that the production of materials increases by 2% per year.
•
Kesler calculated the ratios of global reserves to annual global production or
consumption, for most mineral and energy commodities for the year 1992.
•
Cohen considered two cases: the global population continues to consume at the present
rate, and the global population starts to consume at half the rate of the USA.
•
Frondel also assumed that the global population continues to consume at the present
rate.
•
The National Institute for Materials Science, an independent administrative institution in
Japan, compiled a report at the request of the United Nations Environment Programme
(UNEP), to assist the International Panel for Sustainable Resource Management. This
report relates to the global flow of metals and material recycling.
39
A.M. Diederen
40
Stephen E. Kesler
"Mineral Supply and Demand into the 21st Century"
J.A. Briskey, and K.J. Schulz, eds.
Workshop on Deposit Modeling, Mineral Resource Assessment, and Sustainable Development
pp. 55-62 (paper 9)
U.S. Geological Survey Circular 1294, 2007
41
David Cohen
New Scientist magazine, issue 2605 (23 May 2007), page 34-41
42
Rohstoffe (BGR)
43
National Institute for Materials Science; Tsukuba-city, Ibaraki, Japan; May 2008
Table 2.
Estimates of the availability of minerals and metals
Element
Availability
Diederen
(2009)
[years]
Ag
silver
12
Al
aluminium
65
Au
gold
15
B
boron
Bi
bismuth
C
coal
Kesler
(2007)
[years]
10 - 25
> 100
10 - 25
Cohen
(2007)
Frondel et
al. (2007)
present rate
½ rate
of USA
reserves
[years]
[years]
[years]
29
9
14
1027
510
157
36
45
17
> 100
38
25 - 50
65
> 100
natural gas
50 - 100
oil
25 - 50
Cd
cadmium
20
25 - 50
32
Co
cobalt
59
50 - 100
135
Cr
chromium
Cu
copper
25
Fe
iron; steel
48
In
indium
18
Li
lithium
> 70
> 100
203
Mg
magnesium
> 70
> 100
515
Mn
manganese
29
> 70
> 100
25 - 50
143
40
61
38
> 100
10 - 25
46
32
119
13
4
25 - 50
7
41
Mo
molybdenum
33
Nb
niobium
40
Ni
nickel
30
50 - 100
90
57
44
Pb
lead
19
10 - 25
42
8
21
PGM
Ru, Rh, Pd,
Os, Ir, Pt
> 70
> 100
360
42
177
REM
Sc, Y, La etc.
> 70
> 100
Re
rhenium
36
50 - 100
Sb
antimony
14
50 - 100
30
13
Sn
tin
17
25 - 50
40
17
Sr
strontium
11
25 - 50
50 - 100
Ta
tantalum
53
Ti
titanium
61
Tl
thallium
28
U
uranium
V
vanadium
W
tungsten
25 - 50
25
129
863
60
16
23
12
116
20
38
130
10 - 25
25 - 50
> 70
61
> 100
59
19
> 100
323
50 - 100
Y
yttrium
40
Zn
zinc
15
10 - 25
Zr
zirconium
19
50 - 100
39
> 100
46
34
23
45
- 27 of 72 -
3.3.3 Co mparison w it h previ ous est imat es
Estimates of the reserves and the periods of time that materials will be available have been
made before. A well-known example is the Club of Rome, a global think tank that deals with a
variety of international political issues, which raised considerable public attention in 1972 with its
report "Limits to Growth". It predicted that economic growth could not continue indefinitely
because of the limited availability of natural resources, particularly oil.44 Frondel and his coauthors compared the findings of the Club of Rome with the data for 2004. Table 3 shows their
comparison for reserves of a number of non-energy raw materials.
Table 3.
Reserves in 1972 and 200445
Material
Reserves
1972
2004
(Club of Rome)
[million tonnes]
bauxite
1,170
23,000
91
67
775
810
100,000
80,000
lead
chromium
iron ore
[million tonnes]
cobalt
2.18
7.00
copper
308
470
manganese
800
380
molybdenum
nickel
tungsten
zinc
66.5
1.32
123
tin
44
4.95
4.35
8.6
62
2.9
220
6.1
"Club of Rome"
Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III
"The Limits to Growth"
Universe Books; New York, NY, USA ; 1972
45
S. Röhling, and M. Wagner, 2007
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI Essen), Fraunhofer-Institut für System- und
Innovationsforschung (ISI) & Bundesanstalt für Geowissenschaften und Rohstoffe (BGR)
Despite the 32 years interval, the reserves increased for the materials bauxite, chromium,
cobalt, copper, molybdenum, tungsten, zinc and tin, whereas a decrease was observed for lead,
iron ore, manganese and nickel.
Table 4 shows the comparison for reserves and the R/P ratio, i.e. the ratio between reserves
and production. This ratio is also known as the static range. It should be noted that the R/P
ratios of the Club of Rome indicated that by the year 2000 we would have already depleted the
reserves of lead, zinc, and tin.
The Club of Rome computed the static range, by dividing the reserves by the exponentially
increasing extraction rate, instead of using the outputs at that time. That is to say, instead of
assuming a constant rate of usage, the assumption of a constant rate of growth of 2.6% annually
was used.
Static ranges obviously do not mark the end of raw material supplies. The crucial error with the
computations by the Club of Rome lies in the assumption that the reserves decrease
continuously while the exponential increase of raw materials use continues. Even if the
assumption of an exponential consumption appears justified, the examples shown in Table 3
demonstrate that the reserves of a raw material do not always decrease; on the contrary, they
46
even may increase.
The increase of many reserves of raw materials is not necessarily due to higher prices, which
make mining of available resources more economical. The real prices of base metals and some
alloying elements have dropped, or have been approximately the same level since the beginning
of the 1970s. The increase of the reserves of raw materials for base metals is caused by other
factors. The main factor is the progress of technology, in particular technology for the exploration
and production of the corresponding ores, and for extraction of the metals from ores.
46
- 29 of 72 -
Table 4.
Base Metals
Reserves and R/P ratios in 1972 and 2004
Reserves
47
R/P Ratio
2004
1972
(Club of Rome)
2004
1972
(Club of Rome)
[million tonnes]
[million tonnes]
[years]
[years]
23,000
1,170
147
100
67
91
21
26
80,000
100,000
64
240
Copper
470
308
32
36
Nickel
62
44
150
24
23
24
17
Bauxite
Lead
Iron Ore
Zinc
Tin
47
220
6.1
66.5
123
4.4
M. Frondel (RWI Essen)
"Supply and Demand Trends of Mineral Resources"
Presentation at:
Expert workshop on "Raw Materials Scarcity as a Risk of Conflict and an Impediment to Development"
Berlin, Germany; 21-22 September, 2006
3.4 Technological innovation & emerging technologies
Technological innovation can have positive and negative effects on material scarcity. One the
one hand, new mining technologies can make the mining of yet unattainable resources possible
and profitable, hereby increasing the reserves (see Figure 1), and new production technologies
can lead to reduced use of materials. One the other hand, the rise of new products like flat
screen televisions or electric vehicles, can pose a demand on certain materials of which the
current reserves are insufficient. This section will look at product innovation and emerging
technologies which can lead to a radically different demand for materials.
The German Institute for Futures Studies and Technology Assessment IZT did a thorough study
48
into the effects of emerging technologies on material use : "The efficient use of materials and
the closing of material cycles by recycling is a challenge for the future, which complies with
climate protection. The management of material efficiency relies on information about the
applications of materials in the industrial sectors, the technologies utilized there and the products
produced. The question here is which impulses for the raw materials demand will originate from
the future utilization of emerging technologies, and on which raw materials these innovations will
depend in particular. Emerging technologies are industrially exploitable technical capabilities
which cause revolutionary pushes of innovation far beyond the borders of individual industrial
sectors. Emerging technologies cannot be restricted to 5, 10 or 20 innovations. Rather, a
fundamental renewal of the economy is under way in all sectors, which is driven by the goal of
the industrialized high-wage countries to improve their position in the global competition due to
technological excellence."
A search for emerging technologies in the IZT study resulted in almost one hundred innovations
which may have impacts on the future raw materials demand. Of these, 32 technologies were
selected to anticipate their industrial utilization until the year 2030 and to assess the resulting
demand for raw materials in detail (see Table 5). A bottom-up approach was applied as foresight
method. This means the specific characteristics of the technology and its utilization and market
potential were deduced from a technical and economic innovation analysis.
A similar study was performed by the European Raw Materials Initiative49, which looked at
current technological challenges and their foreseen solutions. A list of these technological
challenges, possible solutions and their demand for raw materials is given in Table 6.
48
G. Angerer et al.
Raw materials for emerging Technologies - Final report
Fraunhofer Institute for Systems and Innovation Research ISI;
Institute for Futures Studies and Technology Assessment IZT
Karlsruhe / Berlin, Germany; 2009
49
The Raw Materials Initiative; Meeting Our Critical Needs for Growth and Jobs in Europe
Commission Staff Working Document accompanying the Communication from the Commission to the European
Parliament and the Council Commission of the European Communities
Brussels, Belgium; 4 November 2008; SEC(2008) 2741
- 31 of 72 -
Table 5.
50
Portfolio of emerging technologies that ISI and IZT analysed
Market
Emerging technologies
Automotive engineering,
1
Light-gauge steel with tailored blanks
aerospace industry,
2
Electric traction motors for vehicles
traffic engineering
3
Fuel cells electric vehicles
4
Super capacitors for motor vehicles
5
Scandium alloys for constructing lightweight airframes
Information and communication
6
Lead-free solders
technology,
7
RFlD - Radio Frequency Identification
optical technologies,
8
Indium-Tin-Oxide (ITO) in display technology
micro technologies
9
Infrared detectors in night vision equipment
10
White LED
11
Fiber optic cable
12
Microelectronic capacitors
13
High performance microchips
Energy, electrical and
14
Ultra efficient industrial electric motors
drive engineering
15
Thermoelectric generators
16
Dye-sensitized solar cells
17
Thin layer photovoltaics
18
Solarthermal power stations
19
Stationary fuel cells - SOFC
20
CCS - Carbon Capture and Storage
21
High performance lithium-ion batteries
22
Redox flow batteries for electricity storage
23
Vacuum insulation
Chemical, process, production
24
Synthetic fuels
and environmental technology,
25
Seawater desalination
mechanical engineering
26
Solid state lasers for industrial applications
27
Nano-silver
28
Orthopaedic implants
29
Medical tomography
30
Superalloys
31
High-temperature superconductors
32
High performance permanent magnets
Medical engineering
Materials technology
50
G. Angerer et al.
Raw materials for emerging Technologies; Final report - Abridged
Karlsruhe / Berlin, Germany; 2 February 2009
Table 6.
Selected "high-tech materials" applications for innovative "environmental
51
technologies"
Problem
Solutions
Future energy supply
Fuel cells
Raw materials (application)
Platinum
Palladium
Rare earth metals
Cobalt
Hybrid cars
Samarium (permanent magnets)
Neodymium (high performance magnets)
Silver (advanced electromotor generator)
Platinum group metals (catalysts)
Alternative energies
Silicon (solar cells)
Gallium (solar cells)
Silver (solar cells, energy collection /
transmission, high performance mirrors)
Gold (high performance mirrors)
Energy storage
Lithium (rechargeable batteries)
Zinc (rechargeable batteries)
Tantalum (rechargeable batteries)
Cobalt (rechargeable batteries)
Energy conservation
Advanced cooling technologies
Rare earth metals
New illuminants
Rare earth metals (LED, LCD, OLED)
Indium (LED, LCD, OLED)
Gallium (LED, LCD, OLED)
Environmental protection
Energy saving tyres
Industrial minerals
Super alloys (high efficiency jet engines)
Rhenium
Emissions prevention
Platinum group metals
Emissions purification
Silver
Rare earth metals
High precision machines
Nanotechnology
IT limitations
Miniaturisation
Silver
Rare earth metals
Tantalum (MicroLab solutions)
Ruthenium (MicroLab solutions)
New IT solutions
Indium (processors)
Tungsten (high performance steel hardware)
RFID
Indium
(hand-held consumer electronics)
Rare earth metals
Silver
51
- 33 of 72 -
52
The IZT study clearly demonstrates the consequences of the on-going technological change. It
introduced an indicator by dividing a raw materials demand of emerging technologies by today's
total world production. This indicator states what share of today's world production will be
required for emerging technologies in 2030. It is at the same time an indicator for the expansion
needs of the mining capacity.
For gallium the indicator reaches the value 6 and for neodymium 3.8., which means that in 2030
the technology-induced demand for these two raw materials will be 6 respectively 3.8 times
higher than their total present worldwide production. For indium, germanium, scandium, platinum
and tantalum it yields values higher than 1. The values for these and other critical elements are
given in Table 7.
Due to the dominance of the technical drivers on the demand, the elements listed in Table 7 are
at the same time raw materials that are of paramount importance for future technologies
development and their utilisation.
Table 7.
Global demand of the emerging technologies analysed for raw materials in 2006
52
and 2030 related to today's total world production of the specific raw material
Raw material
2006
2030
[fraction of
today's total
world
production]
[fraction of today's
total world
production]
Emerging technologies (selected)
Gallium
0.28
6.09
Thin layer photovoltaics, IC, white LEDs
Neodymium
0.55
3.82
Permanent magnets, laser technology
Indium
0.40
3.29
Displays, thin layer photovoltaics
Germanium
0.31
2.44
Fibre optic cable, IR optical technologies
Scandium
low
2.28
solid oxide fuel cell, aluminium alloying element
Platinum
low
1.56
Fuel cells, catalysts
Tantalum
0.39
1.01
Micro capacitors, medical technology
Silver
0.26
0.78
RFID tags, lead-free soft solder
Tin
0.62
0.77
Lead-free soft solder, transparent electrodes
Cobalt
0.19
0.40
Lithium-ion batteries, synthetic fuels
Palladium
0.10
0.34
Catalysts, seawater desalination
Titanium
0.08
0.29
Seawater desalination, implants
0.09
0.24
Efficient electric motors, RFID tags
0.11
Thin layer photovoltaics, alloying element
Copper
Selenium
low
Niobium
0.01
0.03
Micro capacitors, ferroalloys
Ruthenium
0.00
0.03
Dye-sensitized solar cells, Ti-alloying element
0.01
Super conduction, laser technology
Yttrium
low
Antimony
low
low
Antimony-tin-oxides, micro capacitors
Chromium
low
low
Seawater desalination, marine technologies
52
G. Angerer et al.
Raw materials for emerging Technologies; Final report - Abridged
Karlsruhe / Berlin, Germany; 2009
3.5 Origin of raw materials and trade
This chapter is looking into the definition of material scarcity, its effect and influencing factors.
Material scarcity is certainly a common issue for all mankind. Up to now we considered
resources to be global.
In the practise however, raw material resources are often regional; with a region defined here as
the EU or Northern America. Many raw materials are only found in certain regions of the world,
which are determined by geophysics of the earths crust. As an example iron ores are mainly
found on the Northern and Southern hemisphere, whereas a mineral like bauxite is mainly found
near the earths equator. An overview of the top three producing regions of selected metallic
minerals is given in Table 8.
The combination of regional resources or the lack of resources in the region, and trade
restriction or trade barriers can lead to material scarcity on a regional scale. Many of the
countries listed in Table 8 are not the main consumers of these materials, and in many cases
these countries impose some form of trade restrictions. As a result the advanced economies,
like Europe and Northern America, with a typically high consumption of raw materials but low
local reserves, are vulnerable to scarcity.
An illustrating example of trade restrictions is the recently proposed export restrictions of China
for the rare earth metals (REM) Neodymium (Nd), Europium (Eu), Cerium (Ce) and Lathanum
(La) to 35,000 ton per year, and completely stop the export of Thulium (Tm), Terbium (Tb),
Dysprosium (Dy), Yttrium (Y) and Lutetium (Lu). China states that it needs these REM resources
for its own economic development in the coming years. The plan is to implement these
restrictions in steps in the period 2009 – 2015. These exotic elements are used in many
products, like magnets, hard disks, wind turbines, mobile telephones, iPODs, electric engines,
fuel cells, etc. Since China alone takes care of 95% of the world production of REM elements,
this places the rest of the developed world for the task to find alternative rare earth metal
resources or find substitutes for REM elements quickly.
- 35 of 72 -
Table 8.
Metal
Top three producing mining regions for selected metallic minerals (2006)
First
country
Second
fraction
country
[%]
Rare Earth
concentrates
China
95
Third
fraction
country
[%]
USA
2
Cumulative
fraction
[%]
India
53
[%]
2
99
Niobium
Brazil
90
Canada
9
Australia
1
100
Antimony
China
87
Bolivia
3
South Africa
3
93
EU
4
Tungsten
China
84
Canada
Gallium
China
83
Japan
4
Germanium
China
79
USA
14
Russia
7
100
Rhodium
South Africa
79
Russia
11
USA
6
96
17
-
92
100
Platinum
South Africa
77
Russia
11
Canada
4
92
Lithium
Chile
60
China
15
Australia
10
85
Indium
China
60
Korea
9
Tantalum
Australia
60
Brazil
18
Japan
9
78
Mozambique
5
83
Mercury
China
57
Kyrgyzstan
29
Chile
4
90
Tellurium
Peru
52
Japan
31
Canada
17
100
Selenium
Japan
48
Canada
20
EU
19
87
Palladium
Russia
45
South Africa
39
USA
7
91
Vanadium
South Africa
45
China
38
Russia
12
95
Titanium
Australia
42
South Africa
18
Canada
12
72
17
76
8
76
Rhenium
Chile
42
USA
17
Kazakhstan
Chromium
South Africa
41
Kazakhstan
27
India
Bismuth
China
41
Mexico
21
Peru
18
80
Tin
China
40
Indonesia
28
Peru
14
82
11
Canada
11
58
7
51
Cobalt
D.R. Congo
36
Australia
Copper
Chile
36
USA
8
Peru
Lead
China
35
Australia
19
USA
13
67
Molybdenum
USA
34
China
23
Chile
22
79
Bauxite
Australia
34
Brazil
12
China
11
57
Zinc
China
28
Australia
13
Peru
11
52
Iron ore
Brazil
22
Australia
21
China
15
58
Cadmium
China
22
Korea
16
Japan
11
49
Manganese
China
21
Gabon
20
Australia
16
57
Nickel
Russia
19
Canada
16
Australia
13
48
Silver
Peru
17
Mexico
14
China
13
44
Gold
South Africa
12
China
11
Australia
11
34
53
Table 9.
Examples of non-energy raw material export restrictions
54
Raw material
Country
Aluminium
(ores, concentrates, unalloyed unwrought metal)
China
Cokes
Ukraine, China
Copper
(ores, concentrates, intermediates, unwrought metal, master alloys)
China
Ferroalloys of chromium, nickel, molybdenum and tungsten
China
Ferrous scrap
Russia, Ukraine
High-tech metals
(Rare earth metals, Tungsten, Indium)
China
Iron ore
India
Magnesium
(ores, concentrates, intermediates, unwrought metal)
China
Manganese
China
Molybdenum
(ores, concentrates, intermediates, unwrought metal)
China
Nickel
(ores, concentrates, unwrought metal, electroplating anodes)
China
Non-ferrous scrap
China, India, Pakistan, Russia
Wood
Russia
A list of current trade restrictions for raw materials is given in Table 9, and this list is far from
complete. Many countries impose trade restrictions even for recycled materials. For example
most former Soviet countries and China forbid the export of aluminium scrap, because good
quality bauxite and/or energy that are required for primary aluminium production are not
55
abundant locally in these countries . Because of the risk these trade restriction pose for the
local industry, the European Union and the United States filed a complaint against China with the
56
World Trade Organization on 23 June 2009.
54
Commission Staff Working Document accompanying the
Communication from the Commission to the
European Parliament and the Council Commission of the European Communities
55
Proceedings of the 15th International Recycled Aluminium Conference, 2007, Munich, Germany.
56
Klacht tegen China bij WTO van EU en VS - Westerse industrie benadeeld
NRC Handelsblad, Woensdag 24 juni 2009, katern 2 (Economie), pagina 13
- 37 of 72 -
Table 10.
Recent supply disruptions
57
Year
Material
Major Source
Problem
Effect
1978
Cobalt
Dem Rep. Congo
Rebels invaded
copper-cobalt mining
region in Congo.
Rapid rise in price.
1993-1994
Antimony
China
Flooding was alleged
reason though some
industry sources
believe Chinese
suppliers withheld
material to increase
price.
Price per pound rose
from USD 0.80 to
USD 2.28 in 1995 and
from USD 1.61 in 2005
to USD 2.25 in 2006.
1994
Titanium (rutile). Key in
producing titanium
metal.
Sierra Leone has one
of the largest deposits
of rutile.
Production suspended
when rebels invaded
mining sites.
Global shortage.
2001
Tantalite. Used for
capacitors.
Australia
Closure of facility in
Australia for long-term
maintenance.
Shortage, price rise,
and smuggling from
central Africa.
2005
Tungsten
China dominates
supply and restricts
amount produced and
exported.
Exports reduced due to
alleged inadequate
supplies within China,
the largest consumer.
Steep price increase.
2005-2006
Rhenium. 65 percent
goes to aerospace (jet
engine blades and
rocket nozzles).
75 percent from two
companies—Molymet
in Chile (50 percent)
and Redmet in
Kazakhstan (25
percent).
Redmet exports
blocked due to dispute
over debt with copper
company that supplies
Redmet.
Price rose from
USD 1,000/kg to
USD 6,000/kg. Known
future production
increases are already
sold.
Besides trade restrictions, limited global resources make the consuming industries vulnerable to
other disruptions, like natural catastrophes or political conflicts. Examples of recent supply
disruptions are given in Table 10. Even in today’s world news many examples can be found of
conflicts over local resources. Examples are the Democratic Republic of the Congo with its
resources of cobalt and diamonds, and Burma with its tin resources58.
57
National Research Council, Committee on Assessing the Need for a Defense Stockpile
Managing Materials for a Twenty-first Century Military
National Academies Press / National Academy of Sciences; Washington, DC, USA; 2008
58
J. Oßenbrügge
"Ressourcenkonflikte; Umweltaspekte in der Friedens- und Konfliktforschung"
Vorlesung "Naturwissenschaft, Friedensforschung und internationale Sicherheit"
UniHH, Dept. Geowissenschaften, Institut für Geographie; Hamburg Germany; 9. April 2008
4. Scarcity and industry
In chapter 3, material scarcity was considered from a general point of view. Topics considered
were its cause by limited resources and demand, ways of forecasting scarcity, its dependence
on economic growth and technological developments and last but not least, the difference
between the more theoretical global scarcity and the more practical regional or local scarcity.
In this chapter, material scarcity will be considered from the industry’s point of view. How is the
European or Dutch industry affected by material scarcity, and what are the measures taken.
Section 4.1 looks at material trade between industries, section 4.2 deals with the mining industry
and the negotiating power this industry has when dealing with its customers, and section 4.3
looks at the flow of raw materials into Europe. The global materials flow, trade and negotiations
become even more concrete when section 4.4 focuses on this issue from the Dutch industry’s
point of view. How does the Dutch industry deal with limited material availability? Finally section
4.5 touches on the material scarcity activities abroad, to get a view on measures taken by other
countries to protect the competitive position of their industry.
4.1 Flow of materials
The primary route of materials as sketched before is far from complete. This becomes apparent
looking at a generalized picture of material flow (Figure 14). Raw materials or ores are taken
from the earth, processed to various forms of semi and end products, traded, used and wasted.
Figure 14.
59
Flowsheet of materials59
M. Ericsson
"Rocky future"
Materials World, Vol. 13, No. 7 (July 2005), pp. 33-35
M. Ericsson, and P. Noras
"Minerals-based Sustainable Development - One Viable Alternative"
BHM: Berg- und Huttenmannische Monatshefte, Vol. 150 (2005), No. 12, pp. 424-431
- 39 of 72 -
In this renewed view on materials availability it is quite clear that a concept like recycling and reuse of old materials was missing earlier, and that it can change the playing field completely. In
our modern world the focus on sustainability is present in our everyday lives; efficient use of
energy and materials, recycling and re-use of used materials are advocated actively by
politicians and the industry.
Even though recycling of metals has been around for decades, most of the metals consumption
depends heavily on mining and primary metals production. As will become apparent in section
4.2, the consuming industries are vulnerable to the large power of the mining industry.
Developments in recycling technologies that enable re-gaining of high-quality metals from waste
streams offers a unique opportunity for the industry in the advanced economies, like Europe and
60
Northern America to decrease their vulnerability to effects of material scarcity .
60
Proceedings of the 15th International Recycled Aluminium Conference, 2007, Munich, Germany.
4.2 Mining industry
All of our materials streams start with the mining operation. For commodity materials like
aluminium, steel and copper, recycling nowadays plays a major role in the materials economy.
But even here, high-quality metal grades still require primary production from ores. This primary
metals stream is even more important for major alloying elements, which are difficult if not
impossible to retrieve from waste streams, or for speciality or precious metals, for which
relatively small quantities of highest purity are needed. It is apparent that the mining industry
plays an important, if not the most important, role in our current materials supply.
Table 11 lists the world top 10 companies in non-energy minerals mining. Even though these
companies are huge in terms of their revenue, their share in the world production seems
relatively small, with Vale owning just over 5% of the world non-energy minerals mining
business. However, this picture changes completely looking at the concentration in the
production of the mining industry for individual metals (Figure 15).
Table 11.
World
Rank
World top 10 companies in non-energy minerals mining in 200761
Name
Headquarters
Share world
production
Metals
1
Vale (CVRD)
Brazil
5.45
Fe, Mn, Ni
33,115
2
BHP Billiton
Group
Australia / UK
4.92
Ag, Al, Cu,
Fe, Ni, Pb,
Ti, Zr
47,473
3
Anglo American
UK
3.76
Cr, Cu, Fe,
Nb, Pd, Pt,
Rh, Ti, V,
Zn, Zr
25,470
4
Rio Tinto
UK / Australia
3.59
Al, Cu, Fe,
Mo, Ti, Zr
33,518
5
Freeport
McMoRan
USA
3.28
Au, Cu, Mo
16,939
6
Norilsk Nickel
Russia
2.91
Ni, Pd, Pt,
Rh
17,119
[% of value]
[Million USD]
7
Codelco
Chile
2.88
Cu, Mo
16,988
8
Xstrata
Switzerland
2.72
Cr, Pb, Zn
28,542
9
Barrick Gold
Corp.
Canada
1.61
Ag, Au, Cu,
Ni
6,332
Grupo Mexico SA
de CV
Mexico
1.56
Ag, Cu, Mo
7,078
10
61
Revenue 2007
M. Ericsson
"Global Mining: New Actors!"
Nordic Steel and Mining Review; Bergsmannen, 2008/03, pp.112-118
- 41 of 72 -
Figure 15.
62
Concentration trends in the production of the mining industry,
markets shares of the 3 largest mining industry producers in 200562
Kurzbericht zur Konzentration in der Weltbergbauproduktion – Fortschreibung Februar 2007
Bundesanstaltfür Geowissenschaften und Rohstoffe (BGR); Hannover, Germany; 2007
For many of the commodity materials the three largest mining companies own approximately
30% of the world business, whereas this number rises to 50 % or more for the more scarce
metals, like for instance titanium, tantalum and niobium.
For a commodity material like iron ore a figure of 30 % for the three largest players on the
market seems relatively small. However, most steel producing companies, and all steel
industries in the EU, have no local supply of iron ore and depend on ore transported from
overseas. The world top three iron ore producers (Figure 15) Companhia Vale do Rio Doce
63
(CVRD), BHP Billiton and Rio Tinto control 70 % of maritime trade in iron ore. Figure 16 shows
that the price of raw materials for the steel industry was approximately 2.5 x higher than the
1997 level, but the cost of freight shot up by as much as a factor 5.5.
Figure 16.
64
Development of the price for raw materials for the steel industry
63
64
L. Gronwald
"Rohstoffversorgung der Stahlindustrie am Beispiel ThyssenKrupp Steel AG"
Bergbau, 7/2008, pp. 318-321 (Steine und Erden)
- 43 of 72 -
Table 12.
Rank
65
Largest mining mergers and acquisitions in 2007
Buyer
Share
Target
Sector
[%]
Amount
[million USD]
1
BHP Billiton
100
Rio Tinto
Diversified
2
Rio Tinto
100
Alcan
Alumina
3
NorilskNickel
100
Lionore Mining
International
Nickel
6,335
4
Teck Cominco
100
Aur Resources
Copper
4,100
5
Uranium One
100
UrAsia Energy
Uranium
3,407
6
Yamana Gold
10
Meridian Gold
Gold
3,307
7
Xstrata
100
Jubilee Mines NL
Nickel
2,900
8
Areva
95
UraMin
Uranium
2,500
9
Uranium One
100
Energy Metals
Corp
Uranium
1,607
Newmont Mining
Corp
100
Miramar Mining
Corp
Gold
1,500
10
150,000
38,100
It is clear that the mining industry is governed by a few large companies, and this consolidation
in the industry has not stopped (Table 12). Furthermore, mining companies tend to integrate
vertically and include primary metal production in their business (Figure 17). Whereas the
relationship between mining companies and metal producers was traditionally that of ore
supplier and metals producer, nowadays, especially in the aluminium industry, primary metal is
produced by the mining company and the metal producer focuses on the production of value
added products.
65
M. Ericsson
"Global Mining: New Actors!"
Nordic Steel and Mining Review; Bergsmannen, 2008/03, pp.112-118
Figure 17.
66
Vertical integration
Recently there has been resistance in the steel industry against the mergers and acquisitions in
the mining industry. Industry sector associations, like the European Confederation of Iron and
Steel Industries (Eurofer), fear skyrocketing of the iron ore prices. These mergers and
acquisitions have to pass muster of competition authorities. Therefore, associations like Eurofer
67
contacted the competition authorities about their concerns.
66
"Global Trends in Exploration & Mining"
Presentation at 6th Fennoscandian Exploration & Mining Conference
Rovaniemi, Finland; 28 November 2007
67
P. Depuydt
"Verzet in staalindustrie tegen mijnbouwfusies; Brancheverenigingen vrezen prijsopdrijvingen en stappen
wereldwijd naar mededingingsautoriteiten"
NRC Handelsblad, 26 juni 2009, katern 2, pagina 15
- 45 of 72 -
Figure 18.
Global mining exploration expenditure (with 2008/2009 estimates)68
The consolidation and rising power of the mining industry has not been the main factor in the
sharp price increases of ores and metals over the last decade. The growing economy and
consequently growing demand for materials pushed the need for investments in the exploration
and production of raw materials. With limited availability of high-quality easily-accessible
resources, the mining industry reacted by investing heavily in more capacity and in exploration of
mining sites that are less accessible (Figure 18). These large investments and higher
economical risks that had to be taken have had obvious price consequences.
68
4.3 Import of raw materials to the EU
What are the consequences of material scarcity on the material flows for the industry in the EU?
Section 3.5 already touched on the vulnerability of an industrialised region without many natural
resources for disturbances in raw materials production, either by natural catastrophes or by
political conflicts. The EU is such an industrialised region without many natural resources. The
economy of an industrialised region like the EU depends heavily on manufacturing industry, but
it depends almost entirely on raw materials imports; as illustrated by Figure 19 and Figure 20.
Section 4.2 showed that the powers of the large mining industries make it difficult for EU-based
materials consuming industries to achieve a good negotiating position. The economic power of
the EU can warrant a fair playing field for our industries, using its negotiating power and by
antitrust legislation.
Figure 19 Metal concentrates and ores net imports of EU27 as fraction of apparent
69
consumption in 2008
69
- 47 of 72 -
Figure 20.
70
Major global producers of selected high-tech metals (2006)70
4.4 Material scarcity and Dutch industry
What is the effect of material scarcity on Dutch industry, and how does Dutch industry react to
material scarcity? Answering these two questions would require an extensive research, which is
outside the scope of this study. With help from the industrial partners of M2i we can give here
two illustrative examples, on both sides of the spectrum of industries: the steel industry
manufacturing bulk products and the microelectronics industry making large number of products
with small quantities of material.
From the two examples below the following first conclusions can be drawn:
1. Material scarcity is already felt by the industry for key materials (like zinc and gold) which
are difficult to replace with other materials. This fuels research for substitutes or reduced
material use.
2. The rising price of materials is the prime indicator of scarcity, but industry also takes into
account the availability on the longer term by looking at the production of materials and
competing users of materials.
3. The added value of products is an important element in the decision to continue the use
of certain materials or start looking for substitutes. Small quantities of expensive and
scarce materials in products with high added value, like microelectronics, can remain
profitable, while use of less expensive and less scarce material in bulk products, like
steel strip, require serious research for alternatives.
4. Apart from costs, industry is also susceptible to social and environmental requirements.
Either imposed by law, or as part of the business ethics. This can form a good basis for
dealing with material scarcity on the long term.
4.4.1 M at erial scarcity an d t h e st eel ind ust ry
An example of the reaction of an industry, manufacturing bulk products, to limited materials
availability is the steel industry. This example is not specific for the industry in the Netherlands,
but it is common for the steel industry world wide. From the environmental and sustainability
reports of the major steel companies the two main goals appear to be: cost reduction and
profitability, and minimising the energy and CO2 footprint.71 However, two common topics in the
strategies of major steel producers indicate that these companies become aware of the limited
availability of materials and its impact on the sustainability and long term profitability of the
companies.
A first indicator is the focus on the availability of primary feedstock of coal and iron ores. Capital
investments show the integration of mines for strategic raw materials, and R&D expenditures
show the development of technologies that enable the use of lower grade raw materials and reuse of waste materials that were previously valueless.
A second indicator is the goal to minimise the use of raw materials. An excellent example is
development of advanced zinc coating technologies. Although the construction and building in
developing countries uses mainly uncoated steels, in the developed countries approximately
30% of steel strip is zinc coated for corrosion protection. Well known examples are building and
71
Arcelor-Mittal, Corporate Responsibility Report, 2008.
Nippon Steel, Sustainability Report, 2008,
Tata Steel, Corporate Sustainability Report, 2008.
Posco, Sustainability report, 2008
- 49 of 72 -
automotive sheet materials. It was shown in section 3.3.2 that the ratio of zinc reserves to
current consumption is approximately 20 to 30 years.
Currently there is no real alternative for zinc coating, and it still offers the best corrosion
protection for steel strip. The zinc coating maintains its protection after forming and most welding
operations and after small damages of the coating layer. If no zinc were available at reasonable
costs for steel protection, a large part of the market for steel strip would shift to alternative
materials; for instance aluminium sheet for automotive applications.
Long time availability of zinc appears to be of key importance for the steel industry in the
developed countries, and research efforts shows developments of technologies for applying
lower coating weights, metallic coatings with lower zinc concentrations and improved methods
for recycling of zinc and zinc oxide from steel scrap. Although costs of zinc are often mentioned
as the prime driver for these developments, the market price seems to affects developments
only on the short term. As zinc becomes scarcer, the rising price will only fuel developments
further.
Noteworthy, world’s largest steel producer Arcelor-Mittal demands social and environmental
72
sustainable behaviour not only for its own operations, but also for its suppliers. Propagation of
its core values over the supply chain will discourage risky and irresponsible mining operations as
raw materials become scarcer (see section 3.3.1).
4.4.2 M at erial scarcity an d t h e m icro- elect ro nics in dust ry
Another example of the reaction of industry on material scarcity is that of the microelectronics
industry, in particular the development and production of semiconductor devices. This industry is
characterized by the use of small quantities of material in products with high added value. With
the ongoing miniaturization, the trend is that still smaller quantities of materials are used in
products, and the added value per milligram of used material will go up.
Gold (Au) en platinum (Pt) are two scarce elements used in semiconductor devices, which are
considered as critical elements (see figure 23, where the elements of the periodic system are
split in three categories of scarcity). Gold is used in applications like bonding and ultra high
frequency devices and platinum is applied in specialty devices for components like high density
capacitors and ferro-electric memories. Gold bonding is more and more replaced by copper
bonding. For platinum, no alternatives are available yet. Due to ever rising prices and the
competition of other industries – the use in catalytic converters for cars and the production of
jewelry – the semiconductor industry has started dedicated research efforts to look for
substitutes and alternative designs. A substitute for platinum could be to look for substrates
made of different conducting materials. An example of alternative designs with less use of
platinum is to go for thinner layers. This has the short term benefit of reduction of the use of
platinum, but an adverse effect on the long term: it makes recycling of platinum difficult or
impossible. In a harsh economic climate like we live in today, industry will tend to go for the short
term financial benefit.
The materials that end up in the semiconductor devices form only a small part of the materials
used in the overall production process. Much use is made of chemicals and purified water, and a
lot of effort is put into reducing the effect on environment. Recycling of materials and waste and
emission management are an integral part of the industry policy, because the environmental
72
Arcelor-Mittal, Corporate Responsibility Report, 2008.
requirements are already imposed by law for many years. Reducing the use of scarce materials
in semiconductor devices is currently only fuelled by economic motives.
Shortages of materials caused by export restrictions or regional conflicts are more difficult to
anticipate by the semiconductor industry. Take for an example the possible export restrictions of
China on REM elements (see section 3.5). REM elements are used in minute quantities in
devices like mobile telephones, in LED lights and in displays. Again, these products have a high
added value, so industry can afford high prices for these elements. However if shortages occur,
substitutes must be found. At present, the authors of this study are not aware of research on this
point.
The semiconductor industry is driven, as any industry, by economic factors like profit and
continuity. Research for substitutes for scarce materials is driven by the costs of these materials.
The industry is certainly susceptible for societal goals, like saving the environment and avoiding
use of toxic materials. The REACH73 regulation, which limits or forbids the use of certain
chemical elements, has triggered a serious research effort in the semiconductor industry and
resulted, for instance, in a strong reduction of the use of lead for soldering.
73
REACH is the Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals. It entered into
force on 1st June 2007. It streamlines and improves the former legislative framework on chemicals of the
European Union (EU).
- 51 of 72 -
4.5 Material scarcity activities abroad
Many countries have already conducted research into material scarcity for reasons of protecting
their own economies against future changes in technology, economy or political situation.
Examples are Australia, China, the EU, Germany, Japan, the UK and the USA.
In Europe, Germany has been most active in this field because its economy relies heavily on the
manufacturing industry, which consumes a large volume of materials, while lacking its own
natural resources. Other European countries such as the United Kingdom and France provided
for their need for raw materials from their colonies until the Second World War.74 This may
explain why Germany is more active in the field of scarce materials than other European
countries.
The institutes that have been invited by the German government to study relevant issues are:
•
Bundesanstalt für Geowissenschaften und Rohstoffe (BGR)
•
•
Institut für Zukunftsstudien und Technologiebewertung (IZT)
Fraunhofer Institut für System- und Innovationsforschung (ISI)
•
Rheinisch-Westfalisches lnstitut fur Wirtschaftsforschung (RWI)
For references to these studies, see section 9.2.
74
F. Woudenberg en J. van der Zanden
Wisselwerking tussen techniek, wetenschap en maatschappij
Vereniging voor Studie- en Studentenbelangen te Delft, Delftsche Uitgevers Maatschappij B.V.
Delft, Nederland; 1973
5. Solution paths
It may be clear from chapters 3 and 4 that a definite solution for material scarcity is not easy to
obtain. This would require a complete and real sustainable use of materials. It is not surprising
that in the field of material scarcity one often speaks of mitigating (the effects of material
scarcity). But if we want to work on mitigating and finally solving material scarcity, what are the
possibilities? What are the steps to be taken? Guidelines or building blocks can be found in this
chapter. Section 5.1 discusses the elements of the periodic system and their relative scarcity.
The possible steps towards a sustainable use are discussed in section 5.2 on Trias Materialis.
5.1 Element types
Figure 21 shows the material criticality matrix, which scores materials on supply risk and their
impact. The score for a certain element on the Y-axis is determined by three fundamental
issues. Firstly there is the option of substitutes. When element A can be easily substituted by
element B (or a range of other elements depending on the application), the score on the Y-axis
will be lower.
Figure 21.
Criticality matrix75
Secondly, the actual application itself is of importance. If the depletion of element A will result in
the stoppage of the production of one specific niche product, then the impact will be much lower
compared to for instance a hypothetical stoppage in the production of for instance cars or
75
National Research Council
Committee on Critical Mineral Impacts of the U.S. Economy & Committee on Earth Resources
Minerals, Critical Minerals, and the U.S. Economy
National Academies Press / National Academy of Sciences; Washington, DC, USA; 2007
- 53 of 72 -
generic drugs. Indirectly this leads to the third factor; i.e. the point of reference that is chosen for
an analysis. A niche product to the world may very well be a major product for a country or a
specific industry or even individual manufacturer.
The score on the X-axis in Figure 21 is much less open for interpretation. Here the score is
dictated by measurable parameters like:
•
•
Availability (the uncertainty is in the undiscovered reserves)
Primary / secondary supply (partly determined by the effectiveness of recycling loops)
In summary, this means that graphs like Figure 21 can and maybe should be constructed but
only accompanied by a set of clearly stated boundary conditions. The actual construction of
graphs like Figure 21 is beyond the scope of the current discussion.
Figure 22.
The three types of chemical elements
A more straightforward manner to plot the different elements is shown in Figure 22, in which the
probability of a supply disturbance is plotted against the period of availability. In this graph we
can distinguish three groups:
o
o
o
Critical elements
Frugal elements
Elements of hope
Some metal minerals appear to be more critical than indicated by their ratio of reserves against
primary production. The study by Diederen76 showed that several metal minerals suffers from
relatively low absolute amounts of reserves and associated low extraction rates, effectively
making them non-viable large-scale substitutes for other metals which will be in short supply.
76
A.M. Diederen
For example it is up for debate whether lithium is a viable large-scale substitute for nickel in
accumulators for electric energy.
Other metal minerals, like for example manganese, have no acceptable substitutes for their
major applications. This is of special interest for those metals which will run out relatively fast at
the present course.
Even metals with a high ratio of reserves to primary annual production combined with large
absolute amounts of reserves and associated extraction rates, can be susceptible to future
supply constraints because they are located in just a few geographic locations. An example is
chromium which is mainly located in Kazakhstan and southern Africa.
Figure 23.
The toolbox containing the elements of hope, the frugal elements and the critical
elements (PGM = Platinum Group Metals; REM = Rare Earth Metals)77
Summarising these considerations, Figure 23 splits a large number of elements into the three
described categories.
Critical elements: It is seen that there are over 30 elements that have reached the status of
“critical”. Table 13 shows the expected time period of their availability. Many of these (Zn, Li) are
also likely to score high on the impact axis from Figure 21 as they are used in societal critical
applications like automotive and battery technology. For these elements it would be advisable to
develop some sort of mechanism that ensures that they are used sparsely and only for those
applications where they cannot be substituted by other elements.
77
A.M. Diederen
- 55 of 72 -
Table 13.
Critical elements
Element
78
Minimum availability
Applications
[years]
Ag
silver
12
Jewellery, alloying element for aluminium,
As
arsenic
17
Semiconductors
Au
gold
15
Jewellery
Be
beryllium
>70
Bi
bismuth
38
Cd
cadmium
20
Electronics
Co
cobalt
59
Super alloys
inertial guidance systems, turbine blades, lasers, rocket engine
liners, springs, aircraft brakes, ball bearings, injection and blow
moulds, electrical contacts, X-ray tube windows, spark plugs,
electrical components, ceramics, gears, aircraft engines, oil and
gas, welding electrodes.
Soldering alloys, pharmaceuticals and chemicals, ceramics,
paints, catalysts, and a variety of minor applications.
Ga
gallium
?
Semiconductors
Ge
germanium
?
Industrial glasses, electronics, light and temperature sensors
Hg
mercury
In
indium
?
Li
lithium
>70
Mo
molybdenum
33
Alloying element for steel
Nb
niobium
40
Alloying element for steel
Nd
neodymium
24
Vacuum seals
Alloying element for aluminium, batteries
?
Ni
nickel
30
Alloying element for steel, super alloys
Pb
lead
19
Building
Pd
palladium
PGM
platinum etc.
>70
?
REM
rare earth metals
>70
Re
rhenium
36
Ru
ruthenium
?
Sb
antimony
14
Sc
scandium
?
Se
selenium
?
Sn
tin
17
Sr
strontium
11
Ta
tantalum
53
Te
tellurium
>70
Tl
thallium
V
vanadium
Steel coating
28
>70
W
tungsten
25
Y
yttrium
40
Zn
zinc
15
Zr
zirconium
19
78
Alloying element for aluminium
Steel coating, alloying element for aluminium
A.M. Diederen
Table 14.
Element
Frugal elements
Minimum
availability
79
Applications
[years]
Cr
>70
Cu
25
Mn
Ti
29
61
•
alloying element for (stainless) steel, nickel and aluminium alloys;
high speed tool steels contain between 3 and 5% chromium
•
used as surface coating to prevent oxidation
•
piping
•
electrical applications
•
architecture
•
coinage
•
alloying element for aluminium alloys;
•
alloying element for steel and aluminium alloys;
•
large amount of manganese dioxide is produced for the use as depolarizer in zinccarbon batteries and alkaline batteries
•
95% of titanium ore extracted from the earth is destined for refinement into titanium
dioxide (TiO2), a white permanent pigment
•
Ti in metallic form is used in the transport
•
alloying element for steel and aluminium alloys
Frugal elements: These types of elements are still less scarce than critical elements but they
should be used in a frugal (restrained, austere) manner. Table 14 gives an overview of the main
applications of the frugal elements. As with the critical elements, they should only be applied in
mass for applications in which their unique properties are essential. In this way their remaining
reserves will last longer (most notably copper and manganese).
Elements of hope: These are the most abundant elements available to mankind and can be
extracted from the earth’s crust, from the oceans and from the atmosphere. They constitute both
metal and non-metal elements. Table 15 lists the main elements of hope.
79
A.M. Diederen
- 57 of 72 -
80
Table 15.
Elements of hope
Element
Minimum
availability
Applications
[years]
Al
65
• aerospace
• automotive
• packing
• building industry
Fe
48
• automotive
• yellow goods
• packaging
• building industry
Mg
>70
• automotive
• aerospace
• electronic devices (mobile phones, laptop computers, cameras)
• alloying element (aluminium)
• removal of sulphur from iron and steel
• refining of titanium in the Kroll process
• additive agent in the production of nodular graphite in cast iron
Si
?
• alloying element for steel, cast iron and aluminium;
• semiconductor industry
80
A.M. Diederen
5.2 Trias materialis; to a sustainable use of materials
In 1996, Erik Lysen of Novem introduced the term Trias Energetica in the Netherlands for a step
81
by step approach to achieve a CO2 neutral energy consumption. The three steps are:
1. Reduce the overall need for energy;
2. Use durable energy sources as much as possible; and
3. Use fossil fuels only if necessary.
The concept of Trias Energetica can also be adapted to materials to summarize the type of
measures necessary to come to sustainable use of materials.. We propose82 a Trias Materialis
consisting of the following steps:
1. Reduce the use of materials;
2. Recycle materials as much as possible; and
3. Avoid use of materials with limited stocks and find alternatives.
These steps to come to sustainable use of materials have to be taken within boundary
conditions with respect to energy, environment and return on investment. In the following
sections these steps as well as the boundary conditions are explained in more detail.
5.2.1 Red uct ion of t h e demand or use of mat eri als
Using less material is an obvious first step to come to a sustainable use of materials. Especially
material with limited stocks should get priority here. Reduction of the use of materials consists of
the following elements:
•
Increase the lifetime of production and consumer goods.
Every percent increase in the lifetime of goods means a percent reduction in use of
materials. Reparability of products will contribute to a longer life time. If possible, it is
better to refrain from using throw away products.
•
Reduce the use of materials in products and in production.
Lighter, thinner, smaller products will reduce the use of materials. Also the generation of
less waste in production is an important element.
•
Find alternatives for scarce elements.
As much as possible the use of scarce material resources must be avoided by finding
alternative solutions.
81
E.H. Lysen
"The Trias Energica: Solar Energy Strategies for Developing Countries"
Paper for the Eurosun Conference; Freiburg, Germany; 16-19 Sept 1996
82
Welmer and Ham use the term Trias Materia with a slightly different definition.
N. Welmer, and M. Ham (Eindhoven University of Technology)
"Zero energy housing with low environmental impact: The Trias Materia"
Paper for PLEA 2008 – 25th Conference on Passive and Low Energy Architecture
Dublin, Ireland; 22-24 October 2008
- 59 of 72 -
5.2.2 Recycl ing of mat erials
Recycling of materials is the key element for sustainable use of materials. Priority should be
given to material with limited stocks. Recycling consists of the following elements:
•
Design products for recyclability.
Starting with the selections of materials, everything in the design of product must ensure
the possibility to recycle the materials. Alloys should be separated in the original
elements; the different layers in multi-materials should be delaminated from one
another. The ideal situation is to bring the materials back to their original substance so
they can be used for new high value products. This is the philosophy of Cradle to
Cradle.
•
Close the recycle loop.
Recycling is already around for quite some time, but often products do not come back
for recycling. Closed systems must be set up to ensure a high percentage of recycling.
Section 5.3 discusses recycling in more detail.
5.2.3 Avo id u se of mat erials w it h limi ted sto cks an d f in d alt ern at iv es
Material resources with a limited stock should only be used for special purposes for which no
alternatives are available. The use of materials with limited stocks should consist of the following
elements:
•
Carefully selection of the applications of materials with limited stocks.
This applies to elements in the categories "critical" and "frugal" as described in section
5.1. Only applications for which no alternatives are available should be chosen. For
these applications only small volumes of the mentioned element types should be used.
Bulk applications should be avoided.
•
Continuously search for alternatives for applications of materials with limited stocks.
Scarce element types may be used for certain applications for which there are no
alternatives today, but alternatives may turn up in the future. To make this happen,
continuous research for alternatives for scarce elements must be undertaken.
An example could be rhenium, one of the rarest elements on earth, which is used to create a
83
high temperature resistant alloy for turbine blades in jet engines for airplanes. Recycling efforts
for rhenium have gone up in the last years. At present no alternative for rhenium is available.
One could reserve rhenium for application in jet engines under the provision that research is
carried out to find an alternative in 5 years from now.
83
H.G. Nadler, and H.C. Starck, 1993
"Rhenium and Rhenium Compounds"
Ullmann's Encyclopedia of Industrial Chemistry (5th, Completely Revised Edition)
Volume A 23, pp. 199-209
eds. B. Elvers et al.
VCH Verlagsgesellschaft mbH; Weinheim, BRD; 1993
Michael J. Magyar
"Rhenium"
U.S. Geological Survey Minerals Yearbook - 2004
5.2.4 Bo un dary co nd it ion s: en erg y, en v iro nment , ret urn o n inv est ment
Of course the measures described above only provide one side of the picture. To find real
sustainable solutions the following boundary conditions must be taken into account:
•
Avoid or make careful use of scarce energy resources.
Energy must be brought into the equation when considering reduction of the use of
materials. Alternative production processes which require less use of materials must be
traded of against a possible extra use of energy. Energy should also be treated as a
scarce resource.
•
Avoid detrimental effects on the environment.
Sustainable use of materials cannot go without sustainable use of the environment.
Processes for mining, production, and recycling of materials must be designed in such a
way that the burden on the environment is minimized.
•
Industry should be able to make a return on investment.
All of the above measures and the two boundary conditions on energy and environment
cannot and will not be adopted by industry if there is no reasonable return on
investment. That is to say, the payback period, i.e. the pertinent period of time to recover
the costs, is short enough. For instance carrying out expensive research to find
alternatives for scarce elements requires a level playing field for a company and its
competitors. This could be created by EU regulations on the banning of the use of
certain type of elements. Another measure could be government sponsoring of
fundamental research on alternatives for scarce elements.
In chapter 6, the role of industry and the necessary boundary conditions are discussed in more
detail.
5.3 On recycling
In his article in New Scientist on the earth's natural wealth, David Cohen showed the proportion
84
of consumption that is met by recycled materials. Figure 24 shows his results.
It is advisable to avoid the downgrading of materials during recycling. That is to say, to use a
material for the same purpose before and after recycling. For example, used beverage cans
(UBC) are used in the United States and Sweden to make aluminium sheet that is used for the
production of new cans.85
84
D. Cohen
85
Ö. Clevesson and A. Lundström, 1994
"Melting of Used Aluminium Beverage Cans (UBC) Regained from the Swedish Recycling System"
Elektrowärme International, 52 (1994) B1, März, pp. B8-B15
- 61 of 72 -
80
Fraction recycled [%]
70
60
50
40
30
20
10
0
Ag
Al
Au
Cr Cu
Ga Ge
In
Ni
Pb
Sn Ta
U
Zn
Element
Figure 24.
Proportion of consumption met by recycled materials86
Although the automotive industry is the single biggest market in the United States for aluminium,
most American consumers most likely associate aluminium with soft-drink cans. Because of this
metal's sustained recyclability, manufacturers may repeatedly use and reuse aluminium without
a decline in quality. Thus, during the last two decades, aluminium recycling has become a
V. Newberry and R.F. Jenkins
"Advanced Technology Delacquering and Melting at Alcan Rolled Products, Oswego, New York"
3rd Int. Symposium on Recycling of Metals and Engineered Materials
eds. P.B. Queneau and R.D. Peterson
The Minerals, Metals & Materials Society; Warrendale, PA, USA; 1995
pp. 685 - 702
R.E. Sanders Jr., J.K. McBride, and M.W. Milner, 1985
"Recycling and Fabrication of Used Beverage Cans (UBCs) into 3004 Alloy Can Sheet"
Recycle and Secondary Recovery of Metals
Proc. Int. Symposium, pp. 407 - 415
Fort Lauderdale, FL, USA; 1 - 4 December 1985
eds. P.R. Taylor, H.Y. Sohn and N. Jarrett
TMS; Warrendale, PA, USA; 1985
G. Sjöberg and A. Lundström, 1992
"Channel Furnace for Melting Used Beverage Cans"
Aluminium, 68. Jahrgang (1992), Heft 7, pp. 576-579
86
D. Cohen
widespread and cost-effective practice. Most recycled aluminium comes from beverage cans,
87
and most beverage cans now undergo recycling.
Downgrading can be illustrated with the following example. Aircraft manufacturers use thick
plate of high strength aluminium alloys to make aircraft parts. To this end they employ several
metal removing operations, like milling, or drilling, during which approximately 80 – 90% of the
metal is converted to scrap; e.g. turnings, borings, chips, swarf88. The primary aluminium
suppliers recycle most of their internal scrap directly back into aircraft products. For the process
scrap generated at the aircraft manufacturers however, most scrap is sold to scrap dealers and
secondary aluminium smelters, which blend it into lower grade aluminium-silicon foundry alloys
89
using well established process technology.
Of interest is furthermore the time materials may spend in a product before they are recycled.
For example, a single cycle of the recycling loop of aluminium cans lasts a few months90. Steel
rods and beams can be a part of a building for a few decades.
Recycling is a part of the waste hierarchy. The waste hierarchy refers to the 3Rs of reduce,
reuse and recycle, which classify waste management strategies according to their desirability.
The 3Rs are meant to be a hierarchy, in order of importance. The waste hierarchy has taken
many forms over the past decade, but the basic concept has remained the cornerstone of most
waste minimisation strategies. The aim of the waste hierarchy is to extract the maximum
practical benefits from products and to generate the minimum amount of waste.91
87
Angela Ellis and James D. Norris
"Nonferrous Metals"
Dictionary of American History; 2003
Retrieved 8 September 2009 from http://www.encyclopedia.com/doc/1G2-3401803002.html
88
Swarf = material (as metallic particles and abrasive fragments) removed by a cutting or grinding tool
In Merriam-Webster Online Dictionary
Retrieved 18 March 2009, from http://www.merriam-webster.com/dictionary/swarf
89
W.R. Wilson, D.J. Allan, O. Stenzel, M. Lorke, K.-W. Krone, and C. Seebauer
"Al-Li Scrap Recycling by Vacuum Distillation"
th
Aluminum - Lithium Alloys; Proc. 5 Int. Al-Li Conf., Vol. III, pp. 473 - 496
Williamsburg, VA, USA; 27 - 31 March 1989
Material and Components Engineering Publications; Birmingham, UK; 1989
90
M.B. He, 2006
Analysis of the Recycling Method for Aluminum Soda Cans
Dissertation Submitted in Fulfillment of Requirements of Degree of Bachelor of Engineering
University of Southern Queensland; Toowoomba, Australia; October 2006
91
"Waste hierarchy"
- 63 of 72 -
Figure 25.
A waste hierarchy92
The waste hierarchy, which is shown in Figure 25, may be considered in product and package
development. It consists of the following issues;
•
•
•
•
•
•
92
Prevention – Waste prevention is a primary goal. Packaging should be used only where
needed. Proper packaging can also help prevent waste. Packaging plays an important
part in preventing loss or damage to the packaged-product (contents). Usually, the
energy content and material usage of the product being packaged are much greater
than that of the package. A vital function of the package is to protect the product for its
intended use: if the product is damaged or degraded, its entire energy and material
content may be lost.
Minimization (also "source reduction") – The mass and volume of packaging (per unit of
contents) can be measured and used as one of the criteria to minimize during the
package design process. Usually "reduced" packaging also helps minimize costs.
Packaging engineers continue to work towards reduced packaging.
Reuse – The reuse of a package or component for other purposes is encouraged.
Returnable packaging has long been useful (and economically viable) for closed loop
logistics systems. Inspection, cleaning, repair and recoupment are often needed.
Recycling – Recycling is the reprocessing of materials (pre- and post-consumer) into
new products. Emphasis is focused on recycling the largest primary components of a
package: steel, aluminium, papers, plastics, etc. Small components can be chosen
which are not difficult to separate and do not contaminate recycling operations.
Energy recovery – Waste-to-energy and Refuse-derived fuel in approved facilities are
able to make use of the heat available from the packaging components.
Disposal – Incineration and placement in a sanitary landfill are needed for some
materials.
"Packaging and labeling"
6. Thinking about scarcity
In the previous chapters, the situation concerning material scarcity has been described. The
problems, which are expected as result of material scarcity, are discussed and a number of
approaches have been presented. It is clear that without additional actions, material scarcity will
cause serious problems ranging from (very) high prices for materials, shortages of essential
materials, up to regional conflicts.
The question is in which way we can turn this uncomforting knowledge into action. To what
extent is it enough to tell this story to as many people as necessary? Should people be
convinced or perhaps forced by their governments to change to a more sober lifestyle to ensure
that future generations can also lead lives in peace and with some prosperity?
Or should society rely on the market forces and technological innovation to find solutions for
upcoming shortages, both by improving mining technologies as well as finding alternatives for
scarce materials? Up to now, the latter system worked reasonably well. However, it is doubtful
whether this will be true in the future as well since markets tend to have a fairly short time
horizon which might obstruct the development of longer term solutions.
To come to a balanced approach, this chapter discusses two conflicting paradigms for material
scarcity, put forward by John Tilton; the fixed stock paradigm and the opportunity costs
paradigm93.
6.1 Fixed stock paradigm
The fixed stock paradigm starts with the observation that since the earth is finite, the supply of
any mineral supply is finite, and hence there is a fixed stock. The demand for mineral supplies
however is a flow variable, it is ongoing and even growing exponentially with growing world
population and growing economic wealth. The depletion of mineral supplies is inevitable and
only a matter of time.
Despite the inherent logic, the fixed stock paradigm has a number of shortcomings. First, many
mineral resources are, like metals, not consumed when they are used, so recycling and reuse
are possible, at least in principle. Second, substitution of mineral resources by others will
alleviate the threat of mineral depletion. If depletion of one mineral resource drives the price up,
society will reduce their use and rely on alternatives. Third, the fixed stock of mineral resources
in the earth crust is huge. Although most of it will require too much energy, another scarce
resource, to mine it, the uncertainty in obtainable stock is large. This will fuel a constant debate
whether it is necessary to take stringent measures to curve material scarcity or not.
All in all, the fixed stock paradigm creates a grim outlook, which neglects the ingenuity of
mankind to find substitutes for scarce mineral resources. It will furthermore be attacked fiercely
and continuously by opponents on the assumed amount of available stock of mineral resources.
But most importantly the fixed stock paradigm takes away hope and with it the creativity to find
solutions.
93
John. E. Tilton
On Borrowed Time? Assessing the Threat of Mineral Depletion
Resources for the Future; Washington DC, USA; 2003
- 65 of 72 -
6.2 Opportunity cost paradigm
In this paradigm, the availability of mineral resources is determined by the costs of obtaining
resources, for instance another ton of copper or another kilogram of tantalum. A mineral
resource is economically depleted when it becomes too expensive to use. When the price of a
mineral resource is rising, this will eliminate the demand for this resource for one end use after
another. This economic depletion will happen long before physical depletion.
An implication of the opportunity costs paradigm is that depletion, economical or physical, is not
unavoidable. The costs of exploiting lower grade resources will drive the price up, but new
technology can reduce these costs or deliver alternatives. In the last century, the increase of the
costs of mining was counterbalanced by the cost reduction due to new technology and cheap
energy. This counterbalance has worked for many mineral resources. Of course there is no
st
guarantee that this will also be the case in the 21 century.
The great advantage of the opportunity cost paradigm is that it takes costs as determining
parameter for the availability of mineral resources. In this respect it is fully aligned with the
economic process for which cost is the ruling parameter. High costs of resources drive
innovation in the industry, resulting in more efficient use of scare resources and the use of
alternatives.
For this economically driven innovation to take place, it is necessary to include all costs in the
price of mineral resources. These costs are the value of the resources in the ground, plus the
mining, transportation and process costs for these resources. Also environmental costs of
mining the resources should be included. To reserve resources for next generations, one could
consider including a delta on the value of the resources in the ground.
However, also this paradigm carries a few disadvantages. Firstly, it may be not possible to
include all costs in the price of mineral resources. Not all costs are necessarily known at the time
that a price has to be established. Especially costs associated with environmental or health
damage that may or may not result from the mining or use of a specific mineral are difficult to
quantify and often not taken into account. This results in a too low price and therefore a too low
driving force for innovation to avoid detrimental effects for environment and health. A second
problem with the opportunity cost paradigm is that the costs do not cover uncertain future
developments like sudden changes in either supply or demand. This means that the
development of new technologies or finding substitutes necessary to cope with these sudden
changes in availability of resources is not triggered on time, and the society runs the risk of
being confronted with exploding prices.
To overcome the problems with the opportunity costs paradigm, it could be advisable for industry
to operate on the principle "forewarned is forearmed". In other words, if companies know about
material scarcity (which may not be “visible” from the price development) before it happens, they
can prepare for it. The problem of course lies in the creation of a mechanism that stimulates the
development in the right direction even in the absence of a direct (or generally expected) price
increase which can be expected to result in ‘normal’ investments in innovation. The search for
such a mechanism might be helped if we take a closer look at approaches that were developed
for the oil industry. This is done in chapter 7.
7. Scenarios for transition
Studying possible scenarios is another ingredient necessary to define an approach to tackle
material scarcity. What would happen if society or industry would take certain actions or would
refrain from them at all?
For energy scarcity already a lot of scenario studies have been carried out. In the study Shell
Energy Scenarios to 2050, two different scenarios are given as to how the efficiency of energy
use, the energy security and the reduction of emission of greenhouse gases may develop
94
globally in the period up to 2050. Depending on the actions taken and the cooperation between
the different actors, two rather different scenarios unfold, named "Scramble" and "Blueprints".
Because of the many parallels between the use and availability of energy resources and material
resources, e.g. both are exhaustible; these two scenarios may be applicable to material scarcity
as well. In the next two sections these two scenarios are translated to the case of material
scarcity.
7.1 Scramble scenario
Both scenarios start at the point that the public, industrial and scientific concern for the imminent
material scarcity has created a number of initiatives to tackle the problems. These initiatives are
varied and at that moment still isolated from one another.
In "Scramble", the following scenario unfolds:
94
•
Although a lot of the initiatives contain important elements to mitigate material scarcity,
there is no clear policy from the government to combine the initiatives to a concerted
action. After some years, some kind of national policy is adopted reluctantly, but there is
no further effort to coordinate the national policies on material scarcity on an EU level or
a global level.
•
The tightening supply of mineral resources is dealt with on national level, not on EU level
or global level. Supply of mineral resources is secured by trying to reach bilateral
agreements.
•
The focus is on securing the supply of mineral resources, there is no policy to stimulate
the industry to improve the mineral efficiency or the search for alternatives.
•
In the decade 2010 – 2020, the first crises in the supply of certain mineral resources will
occur: very sudden and strong price rises which will put some industries out of business,
large environmental damage to explore other less favorite locations, possibly a first
regional conflict over mineral resources. Crises with other mineral resources will follow
in the decades to come.
•
Draconian measures are necessary to come to a global approach to tackle mineral
scarcity. Expensive and painful measures are required to increase the mineral efficiency
and the search for alternatives in short period of time. As a result, the economic growth
will be suppressed for at least some years.
Shell Energy Scenarios to 2050
Shell International BV, The Hague, 2008
- 67 of 72 -
7.2 Blue prints scenario
Starting with the same initiatives to tackle material scarcity, which have sprung up at different
places in industry, society and science, in "Blue prints" the following scenario unfolds:
•
At an early stage the government develops a policy aimed at combining the various
initiatives at national level. At the same time connection is made with other countries in
the EU to come to a coordinated plan for material scarcity. Being a global issue, the EU
ensures that material scarcity is addressed on a global level.
•
To have a good picture of material scarcity, the effects and the solutions, the national
governments sponsor research on these points and share the information on a global
level.
•
The focus of research and industrial policies is on increasing the mineral efficiency and
the use of material scarcity friendly alternatives. On a national level, only the supply of a
few vital mineral resources is secured.
•
Energy and mineral scarcity are combined into one integrated approach.
•
Proposals are made for a pricing mechanism to include the environmental and other
social costs of mining and using mineral resources.
•
International governance is set-up to come to European and global approach towards
energy and material scarcity
•
A trading scheme for a limited number critical elements or mineral resources is
introduced in the decade of 2010 – 2020. With the following effects:
o
Reduction of investment uncertainty and a level playing field for industry
worldwide
o
Fuelling technological innovation to further reduce the use of these critical
elements, find alternatives and greatly enhance recycling.
•
Trading schemes for the frugal elements and other mineral resources follow in 2020 to
2040.
•
In 2050 a sustainable economic growth within the boundaries of minerals and energy
scarcity.
It should be noted that the "Blue prints" scenario, is probably the best avenue to ensure the
financial continuation of companies since there is time to adapt to future changes in the supply
of raw materials. Furthermore, it may enable continuous economic growth.
8. Conclusions and recommendations
8.1 Conclusions
The main conclusion of this study is that material scarcity is a real issue, and that there is
enough information to start taking actions.
In several studies, an estimate of material use has been made, accounting for a growth of the
world population, and the average economic growth; overall but especially in the developing
countries. Furthermore, the available resources of raw materials have been estimated. As a
result a number of critical materials have been defined; critical meaning that these materials are
used in such quantities and in such way that a change in supply has an impact on our current
lives, and that their resources will expire in the next two to five decades.
Focussing on a European or national scale, it becomes apparent that material scarcity is not just
a case of extraction rate and available resources, but that it is affected by a number of socioeconomic factors as well. Resources of many raw materials occur at a limited number of
geographic locations, and many of the industrialised countries have insufficient local resources.
As a result trade of raw materials is necessary, which makes that supply of scarce materials is
subject to disturbances by natural catastrophes, political instability and trade restrictions. For the
manufacturing industry this translates in unforeseeable price rises, and unreliability of supply.
Complicating the pricing and supply of raw materials to the manufacturing industry is the growing
power of the mining industry, which has seen changes by consolidation and by vertical
integration with primary metals production and transport. On the short term one could say that
the material scarcity experienced by the industry is more of an economic issue than an issue
determined by limited resources.
One way to get out of the spiral of rising cost and ever scarcer availability is to change the rules
of the game, by developing other sources of materials via recycling and re-use. The alternative
way means to minimise the use of scarce materials and develop sustainable alternatives where
possible, to use less materials by designing products differently and by advocating a sustainable
lifestyle of consumers, and to maximise recycling and re-use of materials by designing products
for recycling and development of new technologies for recycling.
8.2 Recommendations for the way forward
The questions we are now facing are: do we have to act to protect our economy and society,
what measures have to be taken, and how can we ensure these happen?
So far material scarcity has been most apparent in rising prices of raw materials, especially in
times of large economic growth. For the industry rising materials costs are the key incentive for
change in materials use. Long term effects, such as resource depletion, will not become
apparent on time for the industry to respond. This calls for a careful guiding role of the
government, and international collaboration on the issues.
The scenario exercise, discussed in chapter 7, learned that tackling material scarcity cannot be
left entirely with the industry. Government will have to play a role to help industry to anticipate
and avoid depletion of mineral resources on the longer term. Industry alone cannot cope with a
sudden interruption in the availability of mineral resources, caused by regional conflicts, or by
restrictions of exporting countries.
- 69 of 72 -
A first recommendation is that dealing with material scarcity, the problem is larger than national
level. Initiatives dealing with material scarcity should preferably be dealt with globally, but at least
on a European level.
Legislation on sustainability of products and responsible business operations will make the real
costs of resources visible. An excellent example is recent EU legislation on environmentally
responsible mining. Of course, such initiatives will be more effective if these are agreed on a
global level, which will warrant a level playing field for our industry. Through such an improved
cost mechanism, initiatives will arise with society, industry and academia to change to alternative
materials and more sustainable material use.
A further role of the government is to promote a more sustainable society. Recycling and re-use
of materials reduces our dependence on virgin materials. Actions are to promote a sustainable
lifestyle with consumers, legislation on product recycling, and stimulating research into new
recycling technologies and use of alternative sustainable materials.
The role of universities and research organisations on the issue of material scarcity is to develop
new technologies that enable sustainable use of materials, efficient recycling of materials, and to
develop alternative materials to replace the scarce materials.
For the industry itself, costs and supply reliability remain the key drivers for change. The cost
driver holds both for the manufacturing industry, as for the mining industry itself. More efficient
use of materials will become more important as costs of exploration or materials rise.
One could argue that industry should however look beyond costs and reliability. The choice for
sustainable materials, efficient use of scarce materials in products and to develop technologies
for recycling of old materials, is more than a modern trend. Even in today’s economy it can be a
choice for more profitable and less risky operations, through less dependency on costly and
unreliable supplies. In the end this choice could be a key factor for long-term survival.
9. Further reading
9.1 English language
•
D. Cohen
•
Committee on Critical Mineral Impacts of the U.S. Economy & Committee on Earth
Resources
Minerals, Critical Minerals, and the U.S. Economy
National Academies Press / National Academy of Sciences; Washington, DC, USA;
2007
189 pages
•
Committee on Assessing the Need for a Defense Stockpile
Managing Materials for a Twenty-first Century Military
National Academies Press / National Academy of Sciences; Washington, DC, USA;
2008
159 pages
•
John E. Tilton
On Borrowed Time?
Assessing the Threat of Mineral Depletion
Resources for the Future; Washington, DC, USA; 2003
158 pages
9.2 German language
•
G. Angerer, L. Erdmann, F. Marscheider-Weidemann, M. Scharp, A. Lüllmann,
V. Handke, and M. Marwede
Rohstoffe für Zukunftstechnologien - Einfluss des branchenspezifischen
Rohstoffbedarfs in rohstoffintensiven Zukunftstechnologien auf die zukünftige
Rohstoffnachfrage
Fraunhofer-Institut für System- und Innovationsforschung ISI &
Institut für Zukunftsstudien und Technologiebewertung IZT
Fraunhofer IRB Verlag; Stuttgart, Germany; 2009
•
M. Frondel, und C.M. Schmidt, 2007
"Von der baldigen Erschöpfung der Rohstoffe und anderen Märchen"
RWI : Positionen #19 vom 13. Juli 2007
Rheinisch-Westfälisches Institut für Wirtschaftsforschung; Essen, Germany; Juli 2007
- 71 of 72 -
•
M. Frondel, P. Grösche, D. Huchtemann, A. Oberheitmann, J. Petersand, G. Angerer,
C. Sartorius, P. Buchholz, S. Röhling, and M. Wagner, 2007
Fraunhofer-Institut für System- und Innovationsforschung (ISI) &
Bundesanstalt für Geowissenschaften und Rohstoffe (BGR)
•
S. Liebrich
"Die Suche nach den letzten Bodenschätzen"
Süddeutsche Zeitung, Nr. 276, Freitag, 30. November 2007, Seiten 26 & 27

Material Scarcity

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