Critical Metals and Cleantech – Part 1

0

Is China and its rare earth supply restrictions actually doing cleantech a favor?

On the one hand, limiting the supply of these metals, which are used in the manufacture of many clean technologies, clearly isn’t great for the growth of the low carbon economy.

Swiss-based VC firm Mountain Cleantech says it’s a troubling area for a number of prominent clean energy technologies such as wind turbines, electric vehicles, fuel cells and energy efficient lighting and that, in the short term at least, cleantech could suffer from a supply risk.

On the other, China’s supply limitations are driving efforts in other parts of the world to develop solutions to recover and recycle these metals from waste streams, rather than be at the mercy of virgin supply. This will not only reduce waste but will have much less environmental impact than mining operations.

Rare earths have been getting most of the attention lately, but it’s worth noting that generally strong prices across the metals markets as a whole, and increasing efficiencies in recovery processes, mean many other metals also have compelling recovery or ‘urban’ mining financials.

Old mobile phones are one example. According to Mountain Cleantech, in 1 billion mobile phones (in 2009, 1.4 billion were sold worldwide), you’ll find 15,000 tonnes of copper, 3,000 tonnes of aluminum, 3,000 tonnes of iron, 2,000 tonnes of nickel, 1,000 tonnes of tin, 500 tonnes of silver, 100 tonnes of gold and 20 tonnes of other metals like palladium, tantalum and indium.

And when you look at the numbers from Umicore, which compared the amount of silver that’s extracted from one tonne of ore from a primary mine (5 grams), with that from a tonne of mobile phones (300 – 350 grams), you get an indication of just how valuable the market for recovery and recycling is from just one waste stream.

But it’s the opportunities for recovering metals in the ‘critical’ category – tantalum and indium for example and, yes, rare earths – which are getting investors and innovators particularly excited. Because these metals are found in such tiny quantities, recovering them economically is not without its challenges though (an issue I’ll explore in more detail in the next parts of this blog).

So, how does a metal make it onto the ‘critical’ list?

Different analysts have different criteria. Oakdene Hollins is a UK consultancy focused on the low carbon sector which has produced several reports analysing the metals markets. It says that while there’s no precise definition, most studies don’t just base criticality on physical scarcity but also look at factors such as political risk, concentration of production and ‘importance’ of the materials.

Taking these factors into account, Oakdene formed the following consensus on the current critical nature of certain metals:

Highly critical: Beryllium, gallium, indium, magnesium, platinum group, rare earths, tin, tungsten

Moderately critical: antimony, cobalt, germanium, manganese, nickel, niobium, rhenium, tantalum, tellurium, zinc

Near critical: bismuth, chromium, fluorspar, lead, lithium, silicon / silica sand, silver, titanium, zirconium

Not critical: aluminium, boron / borates, cadmium, copper, molybdenum, selenium, vanadium

The majority of those in the ‘highly’ and ‘moderately’ critical categories are low volume specialty metals which are used for hi-tech applications such as smart phones, tablets, flat panel displays, semiconductors, photovoltaics, magnets, specialist alloys and catalysts. The notable exceptions are nickel, magnesium, tin and zinc, which have bulk uses in alloys, batteries and tooling.

Oakdene then conducted a review of supply-demand forecasts for 2015 to 2020. The rare earths, neodymium and dysprosium; as well as tellurium, indium, gallium, platinum group, tantalum and graphite, were identified as those having increasing demand for specific applications and where there are also limitations on increasing supply. This projected supply deficit provides positive support for prices and big opportunities for recovery.

But we should remember that it’s not just recovery measures that offer solutions to the critical metals crisis. Considerable effort is also going into finding alternatives to these materials and success here could meaning they’ll lose some of their main markets. This will affect the supply-demand imbalance and negatively impact on prices.

This is just one of the issues surrounding the recovery of critical metals and I’ll be exploring it, and others, in my next blog: Critical metals and Cleantech – Part 2.

Article by Tom Whitehouse. Tom is the Chairman of the London Environmental Investment Forum (LEIF), a conference platform which connects environmental innovation with capital, and the Founder and CEO of LEIF’s Initiating Partner, Carbon International, a fund-raising consultancy for environmental and cleantech industries.

About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.