Access to Critical Materials

Number 609 September 2019 Access to Critical Materials Overview ◼ Materials may be deemed critical because of their economic or national security importance, or high risk of supply disruption. ◼ Rising consumption has led to high demand for materials used in products such as wind turbines, computers and electric vehicles. ◼ Access to critical materials may be restricted by political, environmental, economic, legal and social factors. Critical materials (CMs) – such as cobalt, ◼ Security of supply may be improved by helium and rare earth elements – are vital opening mines, diversifying suppliers and commodities for UK manufacturing, including increasing resource efficiency through for the aerospace, automotive, chemical and recycling, reuse or substitution of materials. energy sectors. Such sectors rely on materials ◼ UK industry relies on critical materials but typically extracted and processed abroad. This the UK Government does not have a note looks at the demand and supply of CMs in specific critical materials strategy. the UK and ways to improve supply security. Background ‘critical’.13 A material may be considered critical if it has Global consumption of raw materials is rising due to rapid properties (such as being magnetic or emitting light) that are population growth and the increasing amount of disposable essential for a product and cannot readily be provided by income spent on goods and services.1 Rapid development other materials, or if it is at risk of supply disruption. and adoption of digital devices and low-carbon technologies Methods for assessing material criticality vary and are (such as wind turbines, solar panels, and electric and usually based on a range of inputs, including data or expert hydrogen vehicles) has also boosted demand for materials; judgement.11,13,14 Most include measures of economic smartphones typically contain around 60 metals.2,3 Many UK importance and likelihood of supply disruption, while some manufacturers rely on a range of materials to make products include factors such as environmental impact. such as jet engines, alloys and catalytic converters.4–6 Criticality can vary over time and between users. For Manufacturing has become more globalised, increasing both instance, battery materials such as cobalt may be deemed competition for resources and the likelihood that the supply critical by some countries that make electric vehicles but not of materials will be affected by geopolitical events.7 For by others. It may be expressed in binary terms (critical or example, rare earth elements (REEs) are widely used in non-critical) or as a criticality score. Methods include those modern technologies; some are relatively abundant in the used by the European Commission (Box 1), the British Earth’s crust, but often not in high enough concentrations to Geological Survey and the US Geological Survey.15,16 make mining economically viable.8,9 China, which accounts This POSTnote considers the CMs on the 2017 European for an estimated 71% of global mine production of REEs,10 Commission (EC) list (Box 1) and lithium, a near-critical introduced export restrictions in 2010 that led to prices of material important for battery technology. It covers current some REEs rising by between 10- and 40-fold.11 Despite a and future demand for CMs, supply of CMs, and subsequent decline in prices, the introduction of new trade approaches for addressing supply chain security. tariffs between China and the US in May 2019 has prompted speculation that China may limit REE exports to Demand for CMs 12 the US, currently worth trillions of dollars to US industry. Current Demand Assessing Criticality No official list of CMs has been published for the UK, but the Governments and other organisations may evaluate the Government Office for Science has noted that ensuring the materials in their supply chain to identify those that are supply of key materials is an ongoing challenge for UK The Parliamentary Office of Science and Technology, Westminster, London SW1A 0AA; Tel: 020 7219 2840; email: [email protected] www.parliament.uk/post POSTNOTE 609 September 2019 Access to Critical Materials Page 2 industry.7 Materials on the 2017 EC list are used to create Box 1: Criticality of Materials in the EU products of strategic importance for UK sectors, such as: The European Commission’s criticality assessment method gives ◼ Energy. Wind turbines use magnets that contain REEs each raw material a score, based on its economic importance to the such as neodymium, dysprosium and praseodymium EU and vulnerability to supply disruption. High scores for both (POSTnote 602);17 certain solar panels use gallium;18 and economic importance and vulnerability of supply lead to a ‘critical’ lithium-ion batteries contain lithium, cobalt and graphite.19 classification. This method does not consider the extent of criticality: a material is either critical or non-critical. It also does not consider the ◼ Transport. Electric motors use rare earth magnets, environmental impact on producing countries.38 Other assessments, 5 electric vehicles use lithium-ion batteries, and hydrogen such as that developed at Yale University, consider the environmental fuel cells require platinum group metals (PGMs).20 impacts on human health and ecosystems,39 but data for reliable ◼ Healthcare. Platinum group metal catalysts are used for environmental impact assessments are limited.38 The most recent EC drug synthesis,21 and helium (Box 2) is a vital coolant for list, released in 2017, contains 44 individual materials, 20 of which are 40 magnetic resonance imaging (MRI) scanners.22 divided into 3 sub-groups (Table 1). A new list is due in early 2020. ◼ Defence. Infra-red detectors and thermal imaging Table 1: The 2017 European Commission list of CMs. cameras use germanium.23 Antimony Germanium Niobium ◼ Electronics. Energy-efficient components, such as light Baryte Hafnium PGMs*** emitting diodes (LEDs), use gallium, indium and yttrium; Beryllium Helium Phosphate rock speakers and smartphones use rare earth magnets.24,25,26 Bismuth HREEs* Phosphorus Borate Indium Scandium The variety of materials used in products is increasing. For Cobalt LREEs** Silicon metal example, microchips now contain about 60 metals, whereas Coking coal Magnesium Tantalum in the 1990s around 20 were commonly used.13 The rate of Fluorspar Natural graphite Tungsten Gallium Natural rubber Vanadium metal usage has risen in recent decades, with more than 80% of the total global production of REEs, indium, gallium * HREEs (Heavy Rare Earth Elements): Dysprosium, Erbium, and PGMs, occurring since 1980.13 Europium, Gadolinium, Holmium, Lutetium, Terbium, Thulium, Ytterbium and Yttrium. Future Demand ** LREEs (Light Rare Earth Elements): Cerium, Lanthanum, Several trends are likely to shape future UK demand for Neodymium, Praseodymium and Samarium. *** PGMs (Platinum Group Metals): Iridium, Palladium, Platinum, CMs. These include a global transition towards low-carbon Rhodium and Ruthenium. energy sources, the development of electric vehicles and advancements in digital technologies.11 Box 2: Case Study: Helium Batteries and Electric Vehicles Helium has the lowest boiling point (-269°C) of all the elements and is The UK Government has set a target for all new cars and often used as a cryogenic liquid coolant for MRI scanners.24 It is vans to be effectively zero-emission by 2040.27 Other primarily used for welding, semiconductor manufacturing, filling 24 countries, including France and China, have announced balloons, and creating inert atmospheres, but also has a range of research applications, such as microscopy.41,42 Helium has a very low similar plans.28,29 This is likely to increase competition for density and can therefore be permanently lost from the atmosphere the raw materials involved in the production of these into space. It can be reused to avoid loss, but this is technically technologies.4 For example, the global demand for lithium is difficult.22 The price of helium has risen by 500% in the last 15 years, forecast to grow by over 20% a year in the next decade.30–32 and there have been three supply shortages.43,44 Despite the discovery of a sizeable deposit in Tanzania in 2016, enough to fill 1.2 The UK Government says it will invest up to £274 million to million MRI scanners, another global shortage occurred in 2019.44,45 support the innovation needed for the UK to establish a market for battery technology, through the Faraday Battery technologies. For example, demand for indium in the EU is Challenge (FBC) strand of the Industrial Strategy Challenge predicted to grow from approximately 200 t (tonnes) in 2015 Fund.33,34 This includes funding research and development to 270 t in 2030, driven by its use in touch screens.36 projects, and working with UK manufacturers to establish new infrastructure to make and recycle batteries. Recently Supply of Critical Materials (CMs) funded projects include a study looking to develop a UK Global Sources lithium supply. Through the FBC, £108 million has been China is the main producer of 31 of the 44 CMs on the 2017 announced for the UK Battery Industrialisation Centre, EC list (Box 1).24 For example in 2018, it accounted for 71% which is expected to open in 2020.35 of the estimated global production of antimony, 71% of REEs, 82% of tungsten and 95% of gallium.10,46–50 A small Lithium-ion batteries also require cobalt, for which global number of countries dominate the production of other CMs: 36 demand is predicted to at least double by 2035. Global ◼ Niobium – Brazil, 88% of global production51 use of neodymium and dysprosium is projected to double ◼ Beryllium – USA, 74%52 36,37 over the same period. Demand for other materials ◼ Cobalt – Democratic Republic of Congo (DRC), 64%53 associated with electric vehicles, such as magnesium for ◼ Helium – USA, 56%54 36 lightweight alloys, is also projected to increase. ◼ PGMs (platinum and palladium) – South Africa, 48%.55 Digital Technologies Global supply figures may not reflect the sources accessed Demand for certain materials is projected to rise over the by a given user.

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