October 04, 2011
Hundreds of political leaders, mining officials and executives,...
In 1980, Paul Ehrlich, a professor of population studies at Stanford, famously bet Julian Simon, an economist at the University of Maryland, that mineral prices would rise over the next decade because of the ballooning world population. He lost. Simon figured that technology would make the extraction of the metals cheaper, or we would find alternatives for those that are really running out, and his faith in technology proved to be well founded. It has been a long time since we worried much about the availability of materials to sustain the world’s industrial economy and, averaged over time, the inflation-adjusted prices of raw materials actually declined more-or-less steadily from the middle of the nineteenth century until the end of the 20th.
Things have changed. Right around the turn of the millennium, prices for raw materials (along with food and energy) began to rise steadily and – so far – seemingly inexorably. Even taking the 2010 price spike for rare earths out of the picture, average prices are going up rather than down.
What is causing this? Ehrlich was nearly right, but it’s not the size of the world population that drives up demand: it is the number of consumers. Most of the population growth of the 20th Century came through growth in the ranks of the poor, but now it is the turn of the middle class. Between now and 2030, the fraction of the world’s population living in poverty will decline from about two-thirds to about one-third, according to the Organization for Economic Cooperation and Development. The middle class will add about 3 billion people worldwide to reach a total of 4.9 billion consumers who all want products like cell phones, vehicles and household appliances — and the energy needed to run them too. And all of those consumer products, and the associated energy infrastructure, have to be made out of materials that we obtain from our environment.
We are going to need more raw materials.
Shortages will show up first where supply and demand are the most delicately balanced, but they will have more pervasive impacts than past materials shortages because of the way we use materials today. We are getting to the point where there is a little bit of everything in every thing that we own. Actually, that used to be true, because we did not purify materials so well in the past, but today a smartphone, for example, contains more than 60 elements, each of which provides some specific function or property: silicon for the CPU (along with oxygen, copper, tantalum, boron, arsenic, phosphorus, hafnium, etc.); gold for connectors; silver for solder (now that we don’t use lead); indium and tin for the touch-screen connectors; lithium for the battery; lanthanum for the high-dispersion camera lens; neodymium, iron and boron for the speaker magnets; and europium, terbium and yttrium for the color display. A modern phone made from 60 elements is a bigger challenge than a 10-year-old phone that might have used only 30 elements in two ways: First, it is much more vulnerable to materials supply disruptions. Manufacturers are much more likely to run into a shortage when they have to find 60 elements than when they only had to find 30. Second, it is much harder to recycle. It is very difficult to separate all of those elements from each other at the end of the phone’s life, so recycling costs more and takes more energy.
With the multiplication of materials supply-chains for any single product, the effects of materials shortages become more extreme as we saw in 2010 when the prices of rare earth metals like neodymium, europium, terbium and dysprosium spiked up to more than 10 times their 2009 prices.
Corporations and governments around the world have taken note of critical materials issues and begun to respond in a variety of ways. The Critical Materials Institute is part of the U.S. response. It is one of the Department of Energy’s Energy Innovation Hubs and it is charged to relieve materials criticalities that impact clean energy technology manufacturing efforts. It is working to develop technologies to diversify sources for rare earths, in addition to tellurium and lithium; to find substitute materials that can deliver competitive magnetic, phosphorescent or catalytic properties as the existing critical materials; and to reduce the draw on the currently-available materials by developing more efficient manufacturing and waste recovery. The hub also provides background research necessary for all of these efforts, in basic physics and chemistry, in addition to economic analysis. The biggest challenge is predicting which materials will become critical and when. Research requires significant lead-time, and it is only effective when its results emerge in time to deal with a materials shortage.
Dr. Alexander H. King, director of the Critical Materials Institute at The Ames Laboratory.