Engaging Energy

Published at http://www.ukerc.ac.uk/support/tiki-index.php?page_ref_id=1871

Dear All,

By way of a reply to Jeff’s short piece on Rare Earth Elements and in the hope that the UK takes a rational view on mineral supply chain policy I bring the following points to the table.

1. REEs are found at economic grades on 5 continents. We let China mine them because they have a peculiar deposit that has very little associated radioactivity. Yes, labour is cheap, but the price differential compared with, for example Australian deposits is mainly in the processing. Chinese artisinal miners can mine and partially process the ore from the Baotau deposit without worrying about the uranium and thorium minerals that come with REEs almost everywhere else in the world. We in the west don’t like to mine REEs because the come from ‘hot’ granites and we have to deal with the waste accordingly.
2. There is a credible suggestion that China has only kicked up a fuss over REEs because Greenland was equivocating over whether to allow development of its world-class mixed REE/uranium deposits.
3. REEs are not alone in being of concern to policy-makers. The wider minerals supply chain is currently being viewed through the lens of what should probably be known as The Critical Minerals Discourse. The USA, the EU, Japan and China have all put in place policy or are in the process of putting in place policy with regard to the minerals that each economic bloc feels are most critical under their own definitions. For the US supplies of minerals that it feels are necessary for military superiority are key, for the EU its economic stability but with a special reference to nuclear technologies, for Japan its metals necessary to drive its auto export industry and for China there is a real mix of developmental metals and high tech metals. The UK’s report was carried out from completely the wrong perspective and has little relevance to the global minerals trade.
4. So far the world has listed 34 minerals as ‘critical’. REEs are only one group. If there is a bubble every time a new piece of technology comes to the fore then we should prepare for many, many more bubbles. My bet for the next good bubble, on the basis of the energy technologies that I know are in the pipeline, is ruthenium. It’s a by-product of platinum processing but is currently mostly poured away with waste. Bubbles are no good for the mining industry because they inject uncertainty into future pricing. It takes 5-50 years to develop a mine and its difficult enough convincing investors to take a risk on metals prices without hyperinflation of specific products due to policy intervention or media hype. Everyone in the business knows that bad decisions get made in bubble conditions and mines funded in those times close quickly.
5. Larger miners are generally not interested in the kind of materials that are currently considered critical because the products are low volume and so relatively low profit. The smaller miners that we are relying on to bring us these critical minerals are therefore higher risk investments as they are usually undercapitalised.
6. Every report published on critical minerals in the last 10 years is wrong. The EU’s report is least wrong. They are wrong because they concentrate on the minerals critical to advanced manufacturing and not the minerals necessary to support a basic public infrastructure. This means that we have the ridiculous situation whereby food is deemed less important than magnets and shelter is seen as less critical than night-vision goggles. We have used REEs for less than 100 years. In less than 10 years they have apparently become more critical to survival than phosphates or aggregates. They are not and never will be as important to long-term human survival as fertilizer or building materials, and they will never be as important as copper is in technological terms. So please, a sense of perspective. If you really want to get into a justifiable panic do it over being able to electrify the world using copper wire, because there is a genuine risk that we will not be able to bring electricity to everyone for lack of the red metal over the next 50-100 years, but we have policies in the UK that allow or even promote disposal of large amounts of copper in preference to recycling.

A final note on the energy efficiency of metals cycles; recycling of critical minerals is underdeveloped in most cases and impossible in some due to their mode of use. REEs for example are mostly used in alloy or in mixed oxide form, so present a difficult recycling target, while other critical metals such as tungsten and cobalt are already recycled to a high degree because their uses are constrained in high value sectors and relatively pure forms. But as a sector the volumes of critical minerals are so low that energy efficiency in their supply chains is not as big a deal as it is in, for example aluminium, zinc, copper or nickel. For example, while the UK may boast a headline copper recycling figure of 80%, the vast majority of that metal recycled never makes it into product before it is shipped back to copper smelters to be re-formed into ‘virgin’ forms for re-use. So an individual copper atom may be shipped back and forth across the world 4 or 5 times before it actually gets used in a technology and the chances that it gets recycled after it has been embodied in a product is virtually nil. Only around 10% of ‘old scrap’ copper is recycled in the UK and the figure is similar across Europe once you dig through the rhetoric.

The urban mining movement has a potential economic value of over $50bn per year in copper and gold alone and yet we export end-of-life products and e-waste to China by the shipload. Contrary to received wisdom China is currently the leader in e-waste recycling, both by value and technology, and is publishing paper after paper on the automation of that process. We are their mine for this raw material and they get it at knock-down prices because we have the wrong end of the stick with regards to its value. So in my mini-polemic I plead for a rational view on minerals, their supply chains and their use. Be concerned over mineral supplies, but be concerned over those supplies that actually matter not the ones where you have a choice over whether they matter or not. Your definition of ‘critical’ minerals defines you.

Update:
A Reuters piece on the same subject