Critical Raw Materials Revisited

By: Richard Mills | Fri, Mar 9, 2012
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As a general rule, the most successful man in life is the man who has the best information

A critical or strategic material is a commodity whose lack of availability during a national emergency would seriously affect the economic, industrial, and defensive capability of a country.

The French Bureau de Recherches Géologiques et Minières rates high tech metals as critical, or not, based on three criteria:

Demand is increasing for critical metals due to:

Access to raw materials at competitive prices has become essential to the functioning of all industrialized economies. As we move forward developing and developed countries will, with their:

Continue to place extraordinary demands on our ability to access and distribute the planets natural resources.

Threats to access and distribution of these commodities could include:

Accessing a sustainable, and secure, supply of raw materials is going to become the number one priority for all countries. Increasingly we are going to see countries ensuring their own industries have first rights of access to internally produced commodities and they will look for such privileged access from other countries.

Numerous countries are taking steps to safeguard their own supply by:

In this article I am going to take a look at three reports covering what the US and Europe consider critical or strategic minerals and materials.

In its first Critical Materials Strategy, the U.S. Department of Energy (DOE) focused on materials used in four clean energy technologies:

The DOE says they selected these particular components for two reasons:

In its report the DOE provided data for nine rare earth elements: yttrium, lanthanum, cerium, praseodymium, neodymium, samarium, europium, terbium and dysprosium as well as indium, gallium, tellurium, cobalt and lithium.

Five of the rare earth metals - dysprosium, neodymium, terbium, europium and yttrium - as well as indium, were assessed as most critical in the short term. The DOE defines "criticality" as a measure that combines importance to the clean energy economy and risk of supply disruption.

In a follow up to its earlier report the U.S. Department of Energy, Dec. 2011 - Critical Materials Strategy, examined the role that rare earth metals and other key materials play in clean energy technologies such as wind turbines, electric vehicles, solar cells and energy-efficient lighting.

Criticality Matrix - Short-Term (0-5 years)

The five rare earth metals - dysprosium, neodymium, terbium, europium and yttrium are considered to be the most critical of the elements considered in the report.


Securing Materials for Emerging Technologies

A Report by the APS Panel on Public Affairs and the Materials Research Society coined the term "energy-critical element" (ECE) to describe a class of chemical elements that currently appear critical to one or more new, energy related technologies.

"Energy-related systems are typically materials intensive. As new technologies are widely deployed, significant quantities of the elements required to manufacture them will be needed. However, many of these unfamiliar elements are not presently mined, refined, or traded in large quantities, and, as a result, their availability might be constrained by many complex factors. A shortage of these energy-critical elements (ECEs) could significantly inhibit the adoption of otherwise game-changing energy technologies. This, in turn, would limit the competitiveness of U.S. industries and the domestic scientific enterprise and, eventually, diminish the quality of life in the United States."

According to the APS and MRS report several factors can contribute to limiting the domestic availability of an ECE:

This report was limited to elements that have the potential for major impact on energy systems and for which a significantly increased demand might strain supply, causing price increases or unavailability, thereby discouraging the use of some new technologies.

The focus of the report was on energy technologies with the potential for large-scale deployment so the elements they listed are energy critical:

The third report I looked at, "Critical Raw Materials for the EU" listed 14 raw materials which are deemed critical to the European Union (EU): antimony, beryllium, cobalt, fluorspar, gallium, germanium, graphite, indium, magnesium, niobium, platinum group metals, rare earths, tantalum and tungsten.

"Raw materials are an essential part of both high tech products and every-day consumer products, such as mobile phones, thin layer photovoltaics, Lithium-ion batteries, fibre optic cable, synthetic fuels, among others. But their availability is increasingly under pressure according to a report published today by an expert group chaired by the European Commission. In this first ever overview on the state of access to raw materials in the EU, the experts label a selection of 14 raw materials as "critical" out of 41 minerals and metals analyzed. The growing demand for raw materials is driven by the growth of developing economies and new emerging technologies."

For the critical raw materials, their high supply risk is mainly due to the fact that a high share of the worldwide production mainly comes from a handful of countries, for example:

Taking all the metals, from all three lists, gives us:

Antimony
beryllium
Cerium
Cobalt
Dysprosium
Europium
fluorspar
Gadolinium
Gallium
Germanium
Graphite

Helium
Indium
Lanthanum
Lithium
Magnesium
Neodymium
Niobium
Palladium
Platinum
Praseodymium

Rhenium
Samarium
Selenium
Silver
Tantalum
Tellurium
Terbium
tungsten
Yttrium

The key issues in regards to critical metals are:


Conclusion

Critical materials should be on every investors radar screens. Are they on yours?

If not, maybe they should be.

 


 

Richard Mills

Author: Richard Mills

Richard (Rick) Mills
www.aheadoftheherd.com

Richard Mills

Richard lives with his family on a 160 acre ranch in northern British Columbia. He invests in the resource and biotechnology/pharmaceutical sectors and is the owner of Aheadoftheherd.com. His articles have been published on over 400 websites, including: SafeHaven.com, WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette, VancouverSun, CBSnews, HuffingtonPost, Beforeitsnews, Londonthenews, Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTreport, Vantagewire, Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks, SeekingAlpha, BusinessInsider, Investing.com and the Association of Mining Analysts.

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