Strategically important metals - Science and Technology Committee Contents


Written evidence submitted by The Environmental Sustainability Knowledge Transfer Network (ESKTN) (SIM 07)

DECLARATION OF INTERESTS

The Knowledge Transformation Networks (KTNs) are funded by the Technology Strategy Board. Their purpose is to promote innovation in the UK. The Environmental Sustainability KTN focuses on developments that can make the UK economy more sustainable. It has no vested interest in the subject of this inquiry. In this response we aim to present a balanced view derived from interactions with our membership of more than 3,000 registered users.

Is there a global shortfall in the supply and availability of strategically important metals essential to the production of advanced technology in the UK?

1.  The supply of metallic minerals and global markets tend to respond to the demand. If demand exceeds supply the price increases which stimulates investigations into the use of alternate minerals and the development of new deposits. However the processes involved in discovering and developing a new deposit or substitute material can take many years so there is a lag in the response to demand which tends to result in shortages and price peaks (followed by subsequent price falls when supplies meet or exceed demand).

2.  The availability of a metal was in the past determined by price and technology. The richest and most accessible deposits of minerals are exploited first and when these are exhausted lower grade and less accessible resources will be developed if the technology is available to produce the material at a satisfactory price. The cost of energy and environmental impacts are now important elements. The development of lower grade deposits usually requires the utilisation of more energy per tonne of mineral produced. If fossil fuels are used to generate the energy this will increase the "carbon footprint" of the mineral and together with high energy input costs this could have an impact on the demand for a metal.

3.  UK manufacturers would like equal access to metals. If this is the case then, even if the price is high, availability is roughly equal for all users and so there is fair competition. However if the supply of a particular mineral or metal is controlled by a small number of entities (be they countries or companies) there is a risk that they may exploit their monopoly/oligopoly to control the market or favour certain clients.

4.  If the UK is to be in a position to access strategic metals it must develop policies that recognise the relative risks associated with global supply chains and assist UK businesses to manage these risks. Since the size of the UK market may be small in terms of global demand the UK should be pro-active in engaging in the development of EU policies. The UK needs to be recognised as key player in specific roles within the EU because it would not be possible for each EC member country to aim to be self-sufficient for all strategic metals.

5.  However it is not just a question of access; availability in the appropriate form is also important. For example the Nuclear Industry needs large forgings which cannot be produced in the UK at present (the loan guarantee request from Sheffield Forgemasters aimed to address this). Similarly if the UK is to be a leader in Additive Layer Manufacturing a supply chain for metal powders is essential.

How vulnerable is the UK to a potential decline or restriction in the supply of strategically important metals? What should the Government be doing to safeguard against this and to ensure supplies are produced ethically?

6.  One problem here is how strategically important metals are defined. In the past this term may have referred to metals with critical roles in military applications. A broader approach would consider materials that are important to the performance of an advanced systems, machines or new technologies. Rare Earth Elements are currently in the news in this respect.

7.  A recent EU Study looked at "critical raw material":

"With regards to geological availability, the Group observes that, as geological scarcity is not considered as an issue for determining criticality of raw materials within the considered time horizon of the study, eg 10 years, global reserve figures are not reliable indicators of long term availability. Of greater relevance are changes in the geopolitical-economic framework that impact on the supply and demand of raw materials. These changes relate to the growing demand for raw materials, which in turn is driven by the growth of developing economies and new emerging technologies. Moreover, many emerging economies are pursuing industrial development strategies by means of trade, taxation and investment instruments aimed at reserving their resource base for their exclusive use. This trend has become apparent through an increasing number of government measures such as export taxes, quotas, subsidies etc. In some cases, the situation is further compounded by a high level of concentration of the production in a few countries. This report analyses a selection of 41 minerals and metals. In line with other studies, the report puts forward a relative concept of criticality. This means that raw material is labelled "critical" when the risks of supply shortage and their impacts on the economy are higher compared with most of the other raw materials."

8.  There are fewer facilities for the primary production of metals in the UK than in the past so businesses must import more of the strategic metals required in forms that are suitable for their manufacturing operations or rely on suppliers of the products that contain the strategic metals. Thus from a strictly nationalistic point of view although the UK may not appear to be directly dependent on the supply of strategic metals this should not disguise the fact that the efficiency and competitiveness of important sectors of the economy (ITC, Advanced Materials, Aerospace, Military, Renewable Energy, etc) are reliant on them - even if this may not be apparent because they are imported incorporated in components of machines and products (invisible imports).

9.  During normal trading conditions this situation has not resulted in major problems but in abnormal conditions, such as major conflict or other disruption to international trade, the UK would be vulnerable. This situation was recognised after WW1 and strategies to source minerals were developed that mitigated the problems experienced during WWII. However at present the UK does not have a national strategy for mineral/metals supply. The EU has taken cognizance of the security of supply issues and has identified 14 minerals as being critical to the economy of the EU. In the global market it would be difficult for the UK to have a strong position in relation to securing mineral supplies so it is recommended that it develops a policy that aligns with that of the EU. The UK can make some contribution to developing European resources (an Australian company is currently working on the development of a Tungsten mine in Devon).

10.  Since many of the UK imports of "strategic metals" are invisible the systems for managing end-of-life materials are important as is the development of policies that promote the efficient utilisation of these important elements.

11.  In addition to the security of the supply of energy and mineral resources the UK and EU must also promote ensure the development of the appropriate human resources, technological know-how and infrastructure. Unless all of these issues are addressed the supply of strategic materials could be constrained in the future. Examination of one specific metal that is considered to be strategic in the US will illustrate these issues. Magnesium is a metal that has a wide range of applications; it is particularly useful for applications where 'light-weighting' is an important factor (it is less dense than Aluminium) and the utilisation of this metal will probably expand in a low carbon economy. Over the past 10-20 years China has become the dominant supplier of magnesium metal. It now produces more than 80% of global metal output whilst primary magnesium producers in Norway and France have been shut down. Another high technology magnesium smelter in Canada closed because it could not compete with low cost imports from China. The sole remaining producer of primary magnesium in North America is only viable because local prices are supported by import duties placed on magnesium from China.

12.  With regard to ethical sourcing the leading mining companies based in the UK participate in the sustainable mining programmes and policies of the International Council for Mining and Metals (ICMM). However there are potential problems with "invisible imports" because of the difficulties ensuring the traceability of metals incorporated in the parts or components of machines and equipment. If the broader context of carbon management is included in the ethical considerations then engagement with the EU could be used to expand development work with mineral producing countries to ensure that world class standards for safety, environmental management and economic management are applied in all countries that partner with the EU.

13.  About 70% of the Earth's surface is covered by water. As land based reserves of oil became depleted oil companies began off-shore developments. Mineral exploration has also gone off-shore and was partly responsible for the recent disputes between Japan and China. The potential for off-shore "mining" has been discussed for many years and the first industrial developments have been reported. It is important that the UK engages in this process to ensure that these resources are developed in a way that does not cause significant environmental degradation. Two of the leading marine minerals companies have UK connections (Neptune Minerals and Nautilus Minerals).

How desirable, easy and cost-effective is it to recover and recycle metals from discarded products? How can this be encouraged? Where recycling currently takes place, what arrangements need to be in place to ensure it is done cost-effectively, safely and ethically?

14.  In terms of resource efficiency it is very desirable but in the past some primary producers have viewed metal from secondary sources as a potential source of competition. Now many primary metal producers also process secondary materials. There are a number of stages in the chain of utility where metals can be recovered/recycled. The following diagram from a publication from the International Panel for Sustainable Resource Management (Metal Stocks in Society) give a good illustration of these:

Key  (Note - one additional "stock" added to represent process losses)

1  Metal in virgin ore bodies.

2  Metal in tailings.

3  Metal in Processor stockpiles.

4  Metal in Government stockpiles.

5  Metal in Manufacturer stockpiles.

6  Metal in-use stocks (in the "Technosphere").

7  Metal in Recycler stockpiles.

8  Metal in Landfill stockpiles.

9  Metal Losses (in transit, in off-gases, effluent streams, etc).

15.  It can be difficult to recover some of the metals that go into the manufacture of products and systems because of the number and complexity of the components and sub-assemblies and the joining techniques employed. It is particularly difficult to do this efficiently where there are a wide range of metals used in components and sub-assemblies or the valuable elements are present in low levels or are associated with incompatible materials. It is important that engineers and designers are trained to optimise material selection and to consider the fate of all the materials employed at the end of the product life. If more sustainable ways of managing metals are not adopted the global demand for primary metals will continue to grow and put increasing pressure on prices and supplies. Better management of information on the composition of components and assemblies would facilitate more intelligent management of end-of-life materials.

16.  In Japan there is a national body that supports Japanese access to raw materials (JOGMEC) and they have a strong National Research Institute for Metals (NIMS). Within this organisation they have a specific group working on strategic materials (Center for Strategic Natural Resources). In 2009 they developed an innovative system for recycling mobile phones and in 2010 they reported on the recovery of cobalt and gold from urban waste.

There is also a Research Center for Materials, Cycles and Waste Management at their National Institute for Environmental Studies (NIES). "Sustainable Material Cycles" is one of NIES's priority programmes and their research objectives include:

  • Projecting the amount of recyclable resources and waste that will be produced in the next 10 to 20 years and setting strategic targets using relevant indicators for material-cycle management.
  • Designing concrete scenarios including technologies and policies, and identifying the specific issues to be solved to achieve such targets at both the local and national level.

17.  The transitions that have occurred in the UK economy are such that the UK is no longer a significant importer of many primary ores (the main exceptions are iron, aluminium, lead & nickel). The fact that a large proportion of the components and equipment utilised is imported means that significant quantities of secondary metals are available when these imported items reach the end of their useful life. The UK is currently a net exporter of scrap metals - some in a semi-processed state. This scrap is then processed (or discarded) in other countries.

Are there substitutes for those metals that are in decline in technological products manufactured in the UK? How can these substitutes be more widely applied?

18.  Given the rapid development of some Asian economies there is continued growth in total global demand for all metals even if the intensity of use of some metals has declined in developed economies.

19.   There are some applications where technological change can reduce the use of metals for specific applications (fibre optic cable replacing copper wire, mobile phone networks, etc). In other cases optimising design can reduce the quantities of metal required to deliver a specific function. All manufacturers must strive for innovations that can provide them with advantages in the global market. Where the UK can be innovative is in the development of new materials, the exploration of new forms of materials and the utilisation of materials for new technologies. If the UK is to be competitive on a global scale it must train more material scientists and ensure that all engineers and designers are trained in the concept of sustainable materials management (SMM). Economies that have been successful in building their technological base (Japan, South Korea & Taiwan) have supported R&D in materials and encouraged businesses to develop new materials and applications.

What opportunities are there to work internationally on the challenge of recovering, recycling and substituting strategically important metals?

20.  Clearly there are other organisations and countries that are examining the issues relating to the supply of strategic materials (see recommended references below). Scandinavian countries have important metals and minerals industries and countries like Germany, Holland and Belgium are developing systems to support a transition towards more sustainable materials management. Here in the UK the Institute of Materials, Minerals and Mining (IoM3), in association with the Environmental Sustainability KTN, Tata and other sponsors, recently held a conference on "Innovation Towards Sustainable Materials". The head offices of several global mining organisations (Anglo American, Rio Tinto, etc) are based in London and many other mining and metallurgical groups are listed or source financing in London. Mining companies are working towards more sustainable practises and their programmes of continuous improvement in global mining operations through the international organisation, the ICMM, should be encouraged and supported.

21.  There is one specific opportunity that the UK should endeavour to make a significant input to in a current EU Framework 7 funding call. The aim is to establish a network to co-ordinate R&D in the EU:

"The objective of the ERA-NET is to step up coordination of research programmes in the field of industrial production and supply of raw materials. This should be achieved in line with the integrated strategy proposed in the EU Raw Materials Initiative (RMI) by improving use of the EU mineral resources through innovative exploration, extraction and processing technologies; and by reducing the EU's consumption of raw materials through new industrial processes increasing resource efficiency, recycling and substitution."

22.  With regard to secondary metals there are opportunities to look at how these can be recovered from existing products that at the end of their useful life. As indicated above the Japanese are very actively developing technologies for managing secondary materials. Given the similarity between these two island economies, both reliant on imports, it would make sense to identify mutually beneficial collaborative research programmes with the appropriate Japanese entities. A TSB funded mission to Japan is planned for 2011.

23.  It also important to move from "end-of-pipe" solutions and the UK businesses can differentiate themselves and become more resource efficient by ensuring that future designs are developed in ways that support remanufacturing, recovery and recycling. DEFRA have supported the Centre for Remanufacturing and Re-use (CRR) and it is important that the potential for re-manufacture and re-use are built in to products and systems at the design stage. To enhance the ability of UK manufacturers to compete in the global market it is important that the UK develops policies that help to maintain existing expertise and develop new areas that support the EU agenda for sustainable materials.

24.  Despite the decline in the metals industry in the UK there is still production of significant quantities of steel and aluminium from primary and secondary sources. It is important that the existing capacity and know-how is retained and extended. Some examples are listed below:

Carbon Steels for the automotive and construction industries (Tata Steel, CELSA, Thamesteel, etc).

Alloys steels, including stainless steel for advanced applications (Sheffield Forgemasters, Outokumpu, Doncasters, Goodwins, etc).

Nickel alloys for aerospace, chemical and specialist applications (VALE, Special Metals Wiggin).

Aluminium & aluminium alloys (Rio Tinto Alcan, Aleris, LSM, Novelis etc).

Lead from primary and secondary materials (Xstrata Zinc, Enthoven).

Platinum group metals from secondary materials (Johnson Matthey, BASF /Englehard).

Rare Earth Element & alloys (Great Western Mining Group/LCM).

Magnesium (Magnesium Elektron).

25.  There is potential for improving the way in which metals are recovered from secondary sources (end-of-life products and "waste" streams). It is important to devise efficient ways of harnessing the optimum value from "invisible" metal imports. The recovery of some metals is relatively simple but the thermodynamic properties of some alloys means that the constituents are difficult to separate or purify. These factors must be taken into account when materials are specified for a specific component and application. It is important we develop ways of tagging components with some means of identification that can record the properties of the materials that have been used to make them. It would then be easier to identify the valuable metal(s) at end-of-life and recover the maximum value from the constituents.

26.  At present the UK exports significant tonnages of metal scrap, in various forms. Between 2004-08 the UK was a net exporter of steel copper, aluminium and lead (~ 36 million tonnes total, of which 31 million tonnes was iron and steel). Income from these scrap sales was about £8 billion although these could be viewed as exports of carbon credits.

27.  This inquiry is very timely because if the UK is to transform into a low carbon economy it must put in a place a coherent policy for sustainable materials management (SMM). If life cycle thinking is employed at the product design stage this improve effective metal utilisation, reducing the overall energy and carbon burdens. To date the focus has tended to be on energy generation and "greenhouse" gas emission issues but policies to promote SMM would accelerate the transition to a low carbon economy. These should stimulate a more efficient approach to metal utilisation and enhance the UK's capacity to manage strategic metals. There are significant quantities of these strategic metals in the "technosphere" and countries like Japan and Sweden are conducting R&D into ways of recovering valuable metals from "mines above the ground", "urban mines", and landfills.

28.  The UK cannot turn back the clock but with the correct policies it could become a leader in the development of products designed using "life cycle thinking" and play an important role in the development of SMM. The ES-KTN and the Sustainable Development Group of the IoM3 are working to promote this approach.

The Environmental Sustainability Knowledge Transfer Network

17 December 2010


 
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Prepared 17 May 2011