Strategically important metals - Science and Technology Committee Contents

Examination of Witnesses (Question Numbers 34-69)

Ian Hetherington, Sophie Thomas, Tony Hartwell and Louis Brimacombe

26 January 2011

Q34 Chair: Thank you for attending this morning. Perhaps, for the record, you would be kind enough to introduce yourselves.

Sophie Thomas: My name is Sophie Thomas. I am here representing the Design Council of the UK.

Ian Hetherington: My name is Ian Hetherington. I represent the British Metals Recycling Association.

Tony Hartwell: My name is Tony Hartwell. I am from the Environmental Sustainability Knowledge Transfer Network.

Louis Brimacombe: I am Louis Brimacombe. I am the environmental research manager for Tata Steel Europe but also I chair the Sustainable Development Group of the Institute of Materials, Minerals and Mining.

Q35 Chair: I have a simple question for you all and then I have a couple of specific questions. Perhaps you would tell us what criteria you would use to define a strategically important metal.

Louis Brimacombe: Tony and I have been discussing this. I regard something as strategically important if the UK is vulnerable in terms of either supply or production in terms of our future viability from a GDP viewpoint. I would include more than just rare earth metals. I would include steel, aluminium and all the alloying elements that go with that as well.

Tony Hartwell: Traditionally, "strategic" has been thought of in military terms. Historically, people have stockpiled to cope with situations to deal with military applications. Certainly that is the case in the US. In Japan, they have stockpiled for different reasons for their own economic performance and manufacturing industries. The US has one definition, which is called "critical materials", when the Department of Defense is the major customer for that material. For example, beryllium is what they consider to be a critical material. It is not only the materials themselves that are important but the facilities for processing and making a finished product from those materials. It is no good just having any rare earth metal itself if you can't process it and then convert it into a finished product. It is technology throughout the supply chain that makes a strategic material.

Q36 Chair: In your earlier written evidence from your organisation, you referred to the form of metals in the context of what was strategic. Could you expand on that?

Tony Hartwell: For example, there is a new manufacturing technique called Additive Layer Manufacturing where you can make complex components from metal powders, but the powder has to be in the right form. It is a special technique to make the powders for that particular process. You may be making something out of titanium but if you have a titanium ingot you can't use Additive Layer Manufacturing. You have to convert that titanium into a titanium powder that can be used in the process. That is the point I was trying to make. It's not just the material but it's the form that it's in that is important.

Ian Hetherington: Yes. We would hesitate to define strategic metals or strategic materials. In very broad terms, it's those that are critical, in danger or their scarcity would endanger the economy, not of the UK because I don't think we can look at this on a domestic UK basis, rather we have to look at Europe and at other western developed countries. A narrow definition of what is strategic to the UK leads us down some very black alleys and some dangerous paths.

Q37 Chair: Again, coming back to your evidence, Mr Hetherington, you encourage us not to look at metals that have volatile prices in the market. If the word "strategic" does mean to some end users what they pay for it, why are you trying to discourage us from looking at that?

Ian Hetherington: The reason why we submitted in that form and would continue to assert that is because metals are traded as a commodity, whether it is steel, copper or any of the rare earth metals, although some of those are special cases, we believe. These prices are volatile. They are volatile for particular reasons, but that in a sense does not make them in any national or geopolitical sense strategic. The economics of extraction, recycling, recovery and processing are such that they have price volatility. It is an inescapable fact. It doesn't necessarily signify any great scarcity. We would argue that there is no intrinsic scarcity of copper. The reason for price volatility at the moment is as much to do with hedge funds buying vast quantities of physical copper as it is to do with excessive demand within the Chinese infrastructure. There are many factors affecting price and we would contend that they do not form a basis on their own for needing to develop national strategies.

Sophie Thomas: I come from a very different point of view. As a designer and somebody who is representing the design industry, I see these materials as the building blocks of design. They are the raw materials that we make things with. If you look from the other side of the argument, with regards to the waste stream that is coming out, the fact that we are not being responsible in the way we are using these materials and the way that design should be thinking about the whole loop of how we recover them, I see great opportunity in that. There is a bigger picture when it comes to material scarcity.

Tony Hartwell: I would like to comment on one point that Ian made. I was talking to an alloys producer yesterday that uses a pure chromium metal in their alloys. They used to buy it from a company called Elementis in the UK that shut down their plant two years ago. The price they pay now is about £9 per kilo when they used to pay about £5. I agree with Ian that the UK needs to look at it in a European context, to consider the European Raw Material Initiative and the critical materials strategy and find places where the UK has niches where it can contribute in a European context. We have manufacturing facilities for magnesium and magnesium alloys in Manchester. That is a special facility which we should expand on. It makes special alloys for the aerospace industry. Let's find the niches where we can support a European programme.

Q38 Stephen Mosley: We heard in the previous panel that there might be an opportunity for UK domestic extraction to meet some of the shortfall in future demand. We are also considering the environmental impact of that. As a starter question, how do you consider that the environmental impact of mining in the UK compares with the impact of mining elsewhere in the world?

Ian Hetherington: I have nothing to add to that, I'm afraid.

Louis Brimacombe: The economic viability of mining materials in the UK has reduced compared with countries which have large reserves of richer grades of material such as Brazil and Australia, for example. When pre-credit crunch demand was high, the risks regarding the availability of resources and the fact that iron ore prices escalated, made industry look again and say, "Is it now economically viable to look at the low grade materials?" and, even, " Is it economic to look at, for example, landfill materials?" It is an economic issue to begin with.

  In terms of environmental impact, if you look at it on a global basis, we probably manage environmental issues of our mining operations very well and probably do it better than overseas and further away. So the net impact globally might be better than overseas, although I think that the mining community now in general is improving its environmental and social performance overseas as well.

Tony Hartwell: Once upon a time we had the biggest copper mine in the world in the UK in Anglesey, and Swansea was called "Copperopolis". It was the centre of copper production in the world. That was one of the bubbles before the internet or after the tulips.

  There is a demand for these metals and they are going to be produced somewhere in the world. The point is that, if we are using the metals, we have a responsibility to see that they are mined sustainably wherever they are made. The International Council on Mining and Metals is working towards a sustainable development programme for all of their members, for all of the international mining groups. There is the prospect to develop a tungsten mine in the UK. Coming back to the military connection, it was developed during the Second World War because tungsten was a strategic material. They built a pilot plant. It was never quite developed before the end of the war. It was revisited in the 1970s, and they were going to reopen it. They had planning permission to reopen it, and then there was an oil crisis and it never happened. Now they are looking at redeveloping it again. Tungsten is certainly a strategic material and Europe is very dependent on imports of tungsten. In my view, tungsten is a critical material so we should look at how we can develop it and process it sustainably within the UK.

Sophie Thomas: It helps in terms of when you are looking at closed loop systems and concepts such as cradle to cradle, which is about knowing where your materials come from, how they are mined, making sure that there are proper labour laws in your chain of suppliers and building it into the whole infrastructure of when and how you get it back. The more you can control quality throughout the whole phases of material and design, reprocessing and recovering, the better.

Q39 Stephen Mosley: On that last point, when it comes to importing materials from elsewhere, do you think the Government have a role in setting and monitoring environmental standards, or do you think that we should be moving in the direction of some sort of voluntary scheme, for instance, similar to the Forest Stewardship Council, having some sort of mark to demonstrate that the materials are coming from an environmentally friendly source?

Sophie Thomas: They are very interesting points. I was with the Institute of Materials and Materials KTN last week on a Designing out Landfill mission in the Netherlands. We were shown really good case studies of manufacturing systems which had very close relationships with their waste manufacturing companies. They were backed up by good, strong central government laws and local municipal laws which helped make sure that the chain of custody, knowledge and experience of all the people came together to create very innovative ways of designing and recovery of materials. We could learn a lot from them here. And it showed that a mixture of these things brought the ideal environment for innovation. There was a big push from Government there, including the landfill ban, for instance, and a move towards effective recycling, efficient recovery and incineration.

Tony Hartwell: I am in danger of being considered a Japanophile if I talk through this presentation, but they have an organisation called JOGMEC that looks at resourcing materials such as oil, gas and minerals for the Japanese industry. They not only look at what they do with materials within Japan but they invest in mining developments. If you are going to influence how a mine is developed, then investment and engagement in the mining activities is a way that you can do that. They will take a share. People are now talking about the Chinese buying into mining organisations and controlling them. The Japanese have done that for many years. Britain did it, but through commercial companies in the past. There is not really a central agency in the UK that is responsible for managing resource inputs into the UK. So there is not one department that is responsible for that. Maybe that is something we could consider.

Q40 Chair: Should there be?

Tony Hartwell: When we produced more than 100 million tonnes of coal we had a National Coal Board. Materials are responsible for a great deal of energy consumption and a lot of CO2 emissions. So if we have agencies for energy and CO2, it would make sense to have an agency for materials that was looking at aspects of materials.

Q41 Stephen Mosley: In answer to one of the previous questions, you mentioned about planning permission being granted in the 1970s for this tungsten mine. One of the issues that we heard about from the previous panel was that it is difficult to open new mines because of the planning restrictions, and in many cases you do have to rely upon mines that gained planning permission many years ago in order to look for new resources. Do you think that the UK's planning system needs some sort of reform to make it easier to open new mines?

Tony Hartwell: Yes. I don't think it is just the UK, but Europe as a whole is in a similar position. We spoke to a company that was looking at developing mining assets and they said they wouldn't even look at deposits in Europe because they know it is going to take them 10 or 15 years to go from discovering the deposit to getting into production. They just can't afford to do that. They can't afford to invest in developing the deposit, exploring for it and going on to do that. The same is happening now in America where they are trying to shorten their planning process from two years to one year for minerals and metals. Certainly the planning process takes a long time.

  There are two aspects to that. Of course, these things do need to be properly evaluated, but we need, perhaps, to educate, not indoctrinate, the public that we all use materials, so if we are using them they have to come from somewhere. If you have a quarry or a mine close to where you live and you don't want that, then maybe you shouldn't use any materials at all because we all use them, so somebody has to have a mine next to them.

Q42 Stephen Mosley: One thing that is a slight contradiction from what we heard earlier was from you, Ms Thomas. You have just said that we need to move to a process involving more extraction and incineration.

Sophie Thomas: No. I was saying there is evidence that the Netherlands had moved towards incineration in their plans. They have put the infrastructure in place and are now in a position where they have overcapacity. Their emphasis has changed and now they are putting more emphasis on recoverability. It means that their waste streams are reducing, which they have started to factor into the planning of their business models. The people who are dealing with the structure of their waste manufacturing now know that they can't rely on keeping those incineration plants open so they are looking more towards recovery as a business opportunity.

Q43 Roger Williams: There are plans to reopen Parys Mountain on Angelsey, which has been exploited, I think, since Bronze Age times. You never know how these things come around again. There are other ways of meeting the needs for these materials other than mining virgin ore and virgin materials through reduction, reuse and recycling. Some of the metals that we are talking about were not used to any great extent 10, 20 or 30 years ago. So the opportunities for recycling are reasonably limited in terms of the current day use. What is the potential to meet the UK demands for these metals from reuse and recycling? I know that may vary between any particular metal, but perhaps you could give us some examples.

Louis Brimacombe: Can I make a general point? Picking up on what Sophie said, you can have an avoidance of landfill by having incineration and so on, but there is no doubt about it that, in life cycle terms, in trying to reduce environmental impacts, reuse, recycling and reduction are the key strategies. The way you have mentioned it it is as if the reuse systems are already there, but they are not. There is a huge opportunity for the UK to develop infrastructure and knowledge to improve reuse. That would be a significant change to the environmental impact, but it would also be a significant change in terms of the availability of scarce materials because the range of materials that we are talking about is broad. But there are things in electronic goods, phones and computers. The material is in there. If we have a scarcity of supply, why not develop technologies to move into that area? It is a fairly new concept that will require new technology and we need to do some research to support that.

Ian Hetherington: The volumes of strategic metals—I will borrow that phrase— occurring in the end of life supply chain at the moment are very limited. As to the life cycle for any of this type of equipment, if it is a car, it is running currently at 16 years. I suspect that some of the energy generation equipment that we are talking about and some of the more sophisticated electronic uses of rare earth metals may be shorter than that. They are of that type of dimension—10 to 12 years. If we look 10, 12 to 16 years back from today, the use of these materials was not as great as it is today and, clearly, it is probably not as great as it will be in another 10 years. We are now at the point of having to plan as recyclers to start to receive these materials in meaningful quantities. At the moment the quantity is not available, so it is not that the capability does not exist within UK recycling - because it does exist - but the volumes are not available.

Currently, we are recovering substantial quantities of platinum, rhodium and palladium, along, with gold and silver, mainly from recovered waste electrical and electronic equipment. Recovery rates from materials that actually get to UK recyclers are very high. We are hitting over 90% of all materials that are recovered and reused. The difficulty comes from collecting the stuff in the first place. The rates of collection are low. Government are trying to do more with that at the moment and I think they will succeed in time. So the capability is there. Not only is there not the supply but also there is not a market. I did some work ahead of today to find out what the current quoted price for secondary neodymium was, which is probably the most frequently occurring, and nobody can find a price. There isn't actually a market for a lot of these secondary strategic materials. While there isn't a market, there won't be any effective recycling.

Q44 Chair: It sounds to me as though you could have a discussion with Mr Brimacombe afterwards and a deal could be struck. You talked about the collection issues. Have you given any thought to how that ought to be put in place strategically? Do we need regional collection structures? Who should be responsible for it?

Ian Hetherington: I think it's very clear. Domestic WEEE—excuse the acronym, but I mean waste electrical and electronic equipment—is controlled under the European directive. Local authorities and, primarily, manufacturers have an obligation to secure the recycling of equipment they are putting into the market. That is working. It's working more slowly in the UK than in Holland, for example. Holland have embraced this and done it very well. Some other European countries have done it less well than the UK, but we are all moving in the right direction. Where there are no controls is in the area of industrial and commercial electronic and electrical waste. That is an area which Government need to grasp but equally industry. A lot of this can be done on an informational basis, especially as we are beginning to see some of this more sophisticated material coming through, which is essentially industrial equipment. We need to build more sophisticated models for its collection, recovery and reuse. Reuse is absolutely critical, especially with magnets, for example, because they can be reused.

Tony Hartwell: There are two important points that I would like to make here. We don't consume metals. When we use oil, we burn it and it is destroyed, but, with metals, we don't consume them. We dissipate them to a greater or lesser extent. So when we look at metals, we have supply from ore and from scrap, and it goes into the technosphere and is available for future use. We have to try and balance the supply of primary material and the supply of secondary material to replace the losses in the system, and that is different for different metals. If anybody talks about consuming metals, it is a term that is used loosely because they divide the number of tonnes produced by the number of people and it gives you consumption per head. But please don't think of it in consumption terms like we do with oil. It is available.

What is important with secondary materials is that the environmental impact of using those, if the system is designed well, is significantly less than primary production. We can help to reduce our CO2 emissions and improve our energy efficiency by a well-designed secondary recovery.

The second point is that the problem we have with recovering some of these hi-tech metals is that they are used in very small quantities. It is probably 50 mg of tantalum here (pointing to a mobile phone) and 50 mg of other high-value materials. We need to try and design them in a way that we can dismantle segments of it that have compatible metals. At the moment this would probably go to a copper smelter in Belgium or Sweden and they will recover some of the metals, but some of the hi-tech metals will not be recovered because they are incompatible with that smelting process, whereas if you separated them out into different components and processed them in a different way you would have a better chance of recovering them.

Q45 Roger Williams: Mr. Hetherington, following on from that point, we have been told that British metal recycling is a big industry. It has a £5 billion turnover. We were told by a previous witness that much of the recovered material is sent abroad to be processed. So there is a lot of recovery taking place in Britain but not quite so much of the reprocessing. Is there any opportunity to increase that reprocessing in this country and then, at the same time, recovering some of these important rare earths but in very limited quantities?

Ian Hetherington: Yes. If I can just use that opportunity to make another point, when this discussion was taking place in the earlier evidence session, there was some confusion between the theft of non-ferrous metals and the export of non-ferrous metals. Metal theft is a serious issue for us. It's illegal and it is not endorsed by anybody in the industry. We work with the police and the Home Office to try and eradicate it. It is a criminal activity, so let's put that down as a marker. This is entirely different from the legitimate export and import of secondary metals.

The numbers are right. Yes, we process, as an industry, around about 15 million tonnes of metal every year and about 40% of that is exported. There is a very good reason why it's exported. Our friends at Tata Steel were always the mainstay of the UK ferrous recyclers and virtually every tonne of iron and steel recycled in the UK was sold into Tata and its sister plants. Sadly, those volumes and the scrap buying of Tata Steel has followed the pattern of many other UK metal processing activities by falling away. The UK has a substantial surplus of recycled metals. As a consequence, we have a highly successful and very well developed export market. I would add that our members would love to sell all their material to UK processors. Nothing would give them more pleasure. They are producing a furnace-ready product and it has an international market.

Q46 Chair: Just for the record, because there is potentially a slight contradiction between what you and Mr Hartwell said, I want to be clear. You were not disagreeing with the example of his mobile device when, earlier on, you were referring to 90% being recycled. Your 90% was of those big volume metals—steel, copper and so on.

Ian Hetherington: Yes.

Q47 Chair: You are accepting that there is a real problem with those low volume small devices and things like that.

Ian Hetherington: I totally agree. I am agreeing, not disagreeing.

Tony Hartwell: That's a design element that I think we'd all agree with.

Q48 Chair: We are coming on to that.

Louis Brimacombe: On Ian's point about recycling in the UK, it is quite true that we have been exporting 5 million to 6 million tonnes of steel scrap for many a year now. Part of the explanation for that is because the UK has built up infrastructure for primary ore steel production and glass furnace operations simply because it is more economic to do so when electricity prices are very high and the scrap-based route is electric arc furnace-based. The iron ore prices at the moment are also on the increase and there may be more incentive for us to look again at scrap. But because the arc furnace infrastructure is not really there in the UK, there is about 20% to 25 % arc furnace infrastructure, we could do with improving the rates of recycling scrap in the primary routes as well. The BOS route has the potential to increase the scrap levels and when you do that, the site CO2 emissions per tonne will reduce. In a way, when you are exporting scrap, you are exporting carbon credits. We need to think about that and about how to incentivise scrap use in the UK.

Tony Hartwell: This is important, too. People won't invest in electric arc furnaces or aluminium smelters in Anglesey if they can't get an electricity deal that is suitable for them for long-term production. Uncertainty over electricity prices will mean that those large infrastructures won't happen. The only reason we have any aluminium smelting left in the UK is because it is relatively low CO2 emissions. They are very small plants in world class terms. The one in Scotland handles about 40,000 to 50,000 tonnes a year, but most world plants are working on half a million tonnes a year to be economic. The reason why it is in Scotland is because it is hydropower, so it is a low CO2 emission product. We need to think structurally about what we want to do with these secondary materials. If we want to process more, we need to have a system in place that encourages that.

Q49 Roger Williams: The other way to reduce demand is to reduce waste. So the question is: are these materials wasted in some of the manufacturing processes in the UK, and what can be done about it to make the use more efficient?

Tony Hartwell: I suspect a lot of them were talking about invisible imports because we don't import a lot of these special metals directly. They are in the computers and the equipment we purchase and support. In a way, we could look at that as a potential resource. It makes sense for us to look at special ways and techniques of dismantling and researching on doing this. That is the sort of work that is happening in Japan.

Ian Hetherington: We are not excluded from that in the UK. We are now starting discussions with the automotive manufacturers on advance battery packs because the design of the battery pack in the cars we are going to be seeing in the next 10 years is absolutely critical to the means and effectiveness by which we can extract the critical metals from those battery packs. Those discussions are going on. They are very receptive to it and we are looking here at a closed loop, so, hopefully, by the time we are seeing the volumes of these materials coming through on to the end of use market we will have those processes in place. The UK is not immune from that.

Q50 Chair: We are going to move on to look at the design and disassembly issues now. Before we do that, when it comes to large volume smelting of scrap materials, the larger the volume, the better the economics in terms of design of furnaces, I guess. But for recovery purposes of very specific materials that are in scarce supply I am presuming that, with some of the smaller more sophisticated furnaces that per tonne might be more expensive, but in the long term might be a better way of operating.

Louis Brimacombe: That may be true for some of the lower volume materials.

Q51 Chair: When you deal with large tonnages, as you do, what effort is put in to screening them for more scarce materials?

Louis Brimacombe: I don't think there is very much effort to look for scarce materials in our scrap.

Q52 Chair: But you can see the logic that there ought to be.

Louis Brimacombe: Well no, the key thing for us is that to manage the metallurgical process you need to define scrap in certain qualities to optimise the processing requirements for alloying and so on. Scrap management is about optimising the through value, if you like. The scarce materials, from a steel industry perspective, is fairly low on the agenda. For niobium, for example, which is in some high strength steels, it is in tiny amounts. If you are referring to trying to recover low volume materials you wouldn't go to the steelworks to try and recover rare earth metals. It is probably better done by the equipment dismantlers and scrap merchants at source.

Tony Hartwell: Generally speaking, in the scrap process, to separate steel is relatively straightforward because it is magnetic. The valuable materials go in with the non-magnetic fractions. It is processing of the non-magnetic residues from a scrap processing method.

Q53 Chair: My point is that there is a dilution factor, is there not? You lose some of the rare materials in that recycled steel.

Louis Brimacombe: It's possible, but I suspect there's not really much of it in steel scrap.

Q54 Chair: That's the whole point. There isn't much of it. That is why we are having this inquiry.

Louis Brimacombe: From another perspective some of it could be useful, though. If you have low niobium alloy steels in the scrap, you can factor that into your processing to achieve the required new alloy. So you are reusing that alloy again. So it is not all waste, by the way. It is cleverly done. The recycling of scrap in steelworks is a very efficient process. It is very technical and very economically organised. I don't think we waste very much in that respect.

Q55 Stephen Metcalfe: We touched on the design qualities of products. How do we encourage manufacturers to design with reuse and recycling in mind? What incentives do we need to put in place to make that happen?

Sophie Thomas: From the experience of going round different manufacturing systems in the Netherlands, as I said before, there seem to be a number of elements that pushed the agenda forward, particularly in the way that they have been looking at their landfill issues, which for them is a big critical factor, and looking at new ways to reduce and recover.

Crucial partnerships were set up within manufacturing systems, including waste manufacturers like Van Gansewinkel, a large waste manufacturing group in the Netherlands, who are now working closely with Philips. They are setting up what they are calling "cradle to cradle" groups, looking at the whole process of a closed loop system, because Philips could tell them exactly what was in their product and they could then work out how it was collected at the end of life. If there is a design product like, for instance, a coffee maker that they send to the recovery plant, and which is a closed loop product, they needed to know that they could easily recover all the materials in it and they could have accreditation for the quality of those different separated materials afterwards making it gradable so that it would go back up into the loop to be re-made into another coffee maker. The design of the components and their recovery was made much simpler through this design process.

On the tour, we looked around a fridge recovery facility. What was incredible was the huge factory you need just to take apart a fridge to recover the material from that fridge. As Ian was saying, there is a lag between the fact that some of these fridges are 10 to 15 years old and therefore we are having to deal with technology from 10 to 15 years ago. It was however amazing that they could come back with a chunk of aluminium, steel, copper and the polyurethane foam but without the CFCs, and they had recovered all the different elements from it, ready for re-use. But you have to bear in mind the amount of people you need to do that.

It shows that the way we recover things at the moment is not as innovative and technologically efficient as the way we are designing our electronics—our goods. Therefore, when the manager was saying, "We get the circuit boards from computers", they crunch them up in a pretty crude manner. If you think that in a single mobile-phone there are 40 different elements some of these elements are in such small quantities how can these crude recovery processes capture them all? From Dr Pitts's evidence there is about as much gold in one tonne of computer scrap as there is in 17 tonnes of gold ore. It seems there is opportunity to get it back having systems such as Philips and the waste manufacturing company, pulling together a group of people who work together on all the different processes within the loop, to design a very efficient recovery system.

Then you can start looking at how we recover that gold that deals with the dispersion that we have been hearing about. Very small amounts of these materials are very important, particularly for electronics, but they are in such small amounts scattered in our WEEE scrap - but it all adds up in the end. So how can we incentivise designers? We have nothing at the moment that is pushing this agenda. There is a need to lead by example. That is what the Design Council is looking for. How do we start having conversations with material scientists, with the Institute of Materials, with chemists? There is a huge opportunity for Government to push the design industry to take this on board through the Design Council because we are, effectively, a collection of cottage industries. There are 232,000 designers in the UK and most of them work in studios of five or fewer people. We are small, entrepreneurial and very innovative. How do we gather these people together?

Ian Hetherington: I am taken with Sophie's description. I would add that the most sophisticated and largest WEEE recovery and recycling plant in the world is in Newport. I commend the Committee that if anybody ever wants to come and visit, you are very welcome. We can arrange it.

The other point I would make on this—we were talking about exports earlier—is that the UK is a major importer of waste electrical and electronic equipment, largely because European manufacturers are working with our members on design for recycling. It is happening now. It may not be perfect but it is happening now, and the UK is the preferred route because of the economics of using high technology as opposed to the use of a very large labour force in that plant you looked at.

Sophie Thomas: Yes.

Ian Hetherington: It isn't really very economic and we are employing some high technology. I am sorry. Advert over.

As I said earlier, in terms of Government policy, there does need to be a focus on industrial and commercial product and driving the producer responsibility for those products, and those materials within those products, down through the recovery chain. It's not working perfectly, as I say, but it is beginning to work with domestic consumer electrical equipment. It isn't working with industrial and commercial. I think there is something that needs to be done there with a degree of urgency because that connection isn't being made. Some manufacturers and our members are working closely together but it is patchy. It is a very patchy picture. We must have compartmentalised use of critical materials so that they can be readily removed.

I would add this with regard to the refining process about which the Chairman was asking earlier. There are small refiners, mainly copper refiners, that are set up specifically to extract very small trace quantities of precious metals and what we would term critical metals from chipped WEEE, and this comes in in very small sizes. They are extracting probably 90% of what exists there but not in terms of certain metals. Mobile phones are a classic example where they are not set up to extract some of the critical rare earth metals that exist.

Q56 Stephen Metcalfe: Do you think, therefore, we need to change the WEEE legislation to widen the range that it is covered by and perhaps use it to target some of the more specific critical metals that we are after, so not just the weight issue, but actually trying to target material from it?

Ian Hetherington: First, the WEEE regulations should be expanded to cover industrial and commercial waste, yes. Can the WEEE regulations target particular materials? I am hesitant about that. Once the regulatory framework is in place, the commercial imperative will drive it because it is in manufacturers' interests—OEMs' interest—to drive this through, because these materials will and should find their way back, especially if it is closed loop, into the manufacturing process.

Q57 Stephen Metcalfe: As some of these materials are recycled, they lose their properties. In particular, I am thinking about rare earth magnets. They are very fragile, they break very easily and as they are recycled they lose that magnetic property. How easy is it to develop a recycling policy for materials that recognises different qualities in different materials? Is it possible to do that? Are we talking about recycling when actually what we should be doing is finding alternatives, substitutes, for some of these really rare metals?

Sophie Thomas: I was just reading the KTN material security report. They state that when you start looking for alternatives you end up using something that is probably rarer or you end up swapping it with something that does not have any kind of infrastructure at all to recover it, whereas before you might have something for which a system of recovery has been developed. I believe a huge amount of incentive needs to be built. Take the example of Xerox, the evidence suggests that they have redesigned their machines so that they can take bits back and directly use them in other products. They estimate they can get their products to have up to seven lives within each recovered component and this process is twice as profitable as manufacturing in the first instance. In terms of policy, designers tend not to be clued up on policy. A huge amount of communication is missing. Relationships with British Standards, where we are assisting with new sustainable design guidelines, have great potential.

I came away from the Netherlands with the incentive to create new conversations with manufacturers, designers, recovery and recycling facilities. That is where the power is and having the Government there and legislation in place is really key.

Tony Hartwell: It is not so much a question of recycle or substitute. You have to research on both because whether recycling is viable or not depends on the relative costs of the recovered material compared with the primary material. If the primary material is highly valued, then you have a big incentive to recover and recycle it.

The question then is: can you develop techniques that make it economic to recover those secondary materials? While the value remains high, you can. If you have recovered so much that the value came down again, there is a balance. When the price goes high people certainly look for substitutes.

My overall answer is that we need to continue that long-term research on recovery methods and on substitution, because if you don't have the expertise on the materials then the beginning of your whole supply chain doesn't exist and the reason for having manufacturing and production in the UK is weaker. If you have knowledge and expertise of the materials, you have the basis and the beginnings for doing that.

Louis Brimacombe: Following on from all the comments, one of the key things is that directives like the WEEE and End of Life Vehicle have been very positive in terms of environmental improvements, but we need to emphasise more and more the whole product life cycle. You can make decisions about end of life, which might have a marginal effect or even a detrimental effect on the use phase. Whichever way you look at it these days, roughly 60% of the environmental impacts of something is in the use phase, be it automotive, buildings and so on. We need to be careful that any kind of guidance or regulations takes that into account. There are tools such as life cycle assessment to assist with that kind of evaluation. That is a good thing.

  Life cycle assessment tends to look at environmental issues, carbon and water footprinting and so on. I am very much of the mindset that we should broaden that to a sustainability agenda which includes the economics and the social value of these products as well. We get into a fairly complex discussion about what is sustainable economically and how you drive that, because, if you drive sustainable economics in the right way, you will end up with a more efficient system. I appreciate there is no simple answer to that, but it is something we should be building into any policymaking, for sure. Also we must not underestimate the social value of all the things we are talking about. They are devices, buildings and consumer products, all of which we use in our everyday lives. That should not be undervalued or underestimated. The materials contribution is huge to that.

Q58 Stephen Metcalfe: Ms Thomas, in the written evidence that the Design Council gave us it stated: "For every £100 a design-alert business spends on design, turnover increased by £225." Can you give us some examples of how this is achieved in companies that use strategic metals?

Sophie Thomas: In relation to strategic metals, I have been trying to find them. In terms of the Xerox example, because they have a recovery system in place they get back their materials, they have managed not to have to bring in raw materials for that. That was a result of the design decisions. They designed and built them so that they could pull them apart easily. Also, their designers were in touch with their waste manufacturing people, so it was a completely closed loop. Again, Philips have now set up nine different 'cradle to cradle' design teams within their group. They also take a different perspective in that their profit includes areas relating to wellbeing, so broadening out their definition of profit. Because of these strategic moves they are in a situation where they can build in components with all the strategic metals they use within their microchips, within the coffee machines, knowing they will be able to recover them and not scrap them or down cycle them or send them to be recovered in developing countries, their value is not lost.

Q59 Chair: Are they marketing things like the coffee machine in a way that focuses on, "It's cool to have a recyclable coffee machine"?

Sophie Thomas: They are, but probably not in the UK because we put less emphasis on it. If you go to the Netherlands, they do. It is added value.

Q60 Chair: Britain has tremendous strengths in design and that is recognised across the world. Is it something that your profession needs to run hard with, to encourage designers to sell the concept that recycling is cool, to use the customers' language?

Sophie Thomas: Yes. Maybe not recycling but more designing for recovery.

Chair: Yes.

Sophie Thomas: And then recycling.

Q61 Chair: You are there to put the language in place because you know your customers better than I do.

Sophie Thomas: The UK is definitely a leader in terms of design, entrepreneurship and innovation. We are recognised for that. Because we are small groups scattered around the UK, we are very thought-led and creative-led in terms of how we go and find projects, how we go and work with different manufacturers, so the question is how to promote that and to push this industry to start talking properly to manufacturing. What is missing is knowledge - the life cycle analysis knowledge - the education of what materials they are using, how they are using it and where it is going to end up, the holistic thinking.

Q62 Stephen Metcalfe: So education of the designers.

Sophie Thomas: Education of the designers. We rely a lot on their knowledge on the WEEE directive, for instance, but if we had papers like that on materials, then we could push them that way and say, "This is now a law."

Q63 Stephen Metcalfe: Should the Government be encouraging or legislating to make that happen?

Sophie Thomas: I would say both.

Tony Hartwell: One thing we should be doing is encouraging more engineers and scientists to have a knowledge of sustainability. Probably what we shouldn't be doing is asking them to pay higher fees.

Louis Brimacombe: I agree with Tony about the content of courses. For sure, the Institute of Materials, for example, is encouraging much more life cycle assessment being taught to material scientists, mechanical engineers and so on. I still think that has not necessarily got through to the product designers and the architects on the more creative side of design. One of the things that would improve things is awareness.

Q64 Chair: At the moment, the mobile phone industry market is very complicated because of the packages that are sold on phone use and so on. If it were possible to encourage the market to look at recovery of materials as one of the criteria, it would undoubtedly help shift that market, wouldn't it?

Louis Brimacombe: I think so, yes, as long as it can be done economically as well, because otherwise it just shifts to somewhere else.

Q65 Chair: That's the problem. It is how you encourage the customer to look at all the design holistically and buy on the basis of other interests than simply their short-term financial ones.

Louis Brimacombe: Yes. That is absolutely right. If we encourage sustainable purchasing or sustainable consumption of things, that is the ultimate goal. It's the goal of Europeans.

Q66 Chair: That is precisely what the automotive industry is going through at the moment on trying to create the volume market to justify the investment in battery technologies. How do you incentivise the public to think about buying into an early technology?

Sophie Thomas: The automotive industry is a very good case study. We were discussing outside how we can get the mainstream design group to follow on from that. How can you incentivise these people to set up a system and look at all their processes. They can lead by example because they are looking at how you deconstruct a complicated object like that. But when you start talking about a toothbrush, a pen, something that has been designed by a designer, has had a design brief written for the designer to respond to and has taken a chain of people to make it, it is a different ballgame because then you go back to the dispersion of the elements. When we get back to the mobile phone, even though there are 40 elements in them, they are very small amounts.

Louis Brimacombe: But it leads on to awareness, for example. There is not a great deal of awareness of the contribution that materials can make towards sustainable design and improvements. It is quite significant that there is not an awareness of it. There is lots of naivety about recycling of materials. Quite a few groups that we have questioned didn't realise that steel was recyclable, which it clearly is.

Q67 Stephen Metcalfe: So what's the best way of raising that awareness, though?

Louis Brimacombe: For me it would be awareness, promotional campaigns, education, university education, and it is simple to build these things into courses, but you have got to hit the general public as well. It is not just about academia here. It is about raising people's awareness. If they want to be more sustainable, there are easier ways of doing it. Be aware of what materials are and how they are used.

Tony Hartwell: I have been accused of being a Japanophile, but they have done that since 2000. They engage their civilian population in those programmes. It is amazing what is possible. They even recycle disposable cameras. They refurbish a disposable camera so that it can be used again. There is no reason why we could not make phones or laptops recyclable and reusable. There are a few more bits and pieces that people pile on them, but the basic platform could be refurbished so you would reduce the amount of materials that you use in the system.

Q68 Stephen Metcalfe: I have one final question. If we are to change policy and amend regulation, how do you think that might affect the smaller businesses? You said that the designers are functioning in relatively small teams up and down the country. Do you think there is a risk that by overregulating we could damage that innovation and creativeness, and would that make us a less attractive country in which either to work or invest?

Sophie Thomas: Designers always moan and complain about legislation but they also thrive on it, too. Once you start putting boundaries on where we can do things, we are lateral thinkers. We enjoy challenges. That is what we are trained to do. It would probably be very good for designers because they would start to understand and educate themselves, obviously depending on what the legislation was. Basically, there is very little that they can grab hold of. Stephen Mosley was talking about the FSC accreditation. That has been a very good driver for communication designers, for instance, to start looking at their paper as a raw material. So something similar to that, even though it is not perfect in any way, it is a very useful incentive.

Q69 Stephen Metcalfe: Are there any other comments?

Ian Hetherington: In terms of legislation, given that we are talking essentially here of a combination of consumer goods, consumer goods manufacturing, development and design, this is not a UK-centric activity. We know it is a world market. Anything that is done in the domestic context needs to be done very carefully to ensure that competitiveness is not in any sense eroded. We would encourage promotion and encouragement rather than, probably, a regulatory solution there.

Chair: Thank you for a very interesting session.

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Prepared 17 May 2011