critical metals in strategic energy technology
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Objective Capital's Rare Earths, Speciality & Strategic Metals Investment Summit 2012 Ironmongers' Hall, City of London 13-14 March 2012 Speaker: Adrian Chapman, Oakdene HollinsTRANSCRIPT
RARE EARTHS, SPECIALITY& STRATEGIC METALSINVESTMENT SUMMIT
IRONMONGERS’ HALL, CITY OF LONDON ● TUESDAY-WEDNESDAY, 13-14 MARCH 2012
www.ObjectiveCapitalConferences.com
Critical metals in strategic energy technologyAdrian Chapman – Consultant, Oakdene Hollins
Oakdene Hollins
Critical Metals in Strategic Energy Technologies
Adrian Chapman
Rare Earths, Specialty & Strategic Metals Investment Summit
Objective Capital, 13th March 2012
Disclaimer
• Oakdene Hollins Ltd believes the content of this presentation to be correct as at the date of writing. The opinions contained in this presentation, except where specifically attributed, are those of Oakdene Hollins Ltd. They are based upon the information that was available to us at the time of writing. We are always pleased to receive updated information and opposing opinions about any of the contents.
• The listing or featuring of a particular product or company does not constitute an endorsement by Oakdene Hollins, and we cannot guarantee the performance of individual products or materials. This presentation must not be used to endorse, or suggest our endorsement of, a commercial product or service.
• All statements in this presentation (other than statements of historical facts) that address future market developments, government actions and events, may be deemed "forward-looking statements". Although Oakdene Hollins believes the outcomes expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance: actual results or developments may differ materially. Factors that could cause such material differences include emergence of new technologies and applications, changes to regulations, and unforeseen general economic, market or business conditions.
• We have prepared this presentation with all reasonable skill, care and diligence within the terms of the contract with the client. Although we have made every reasonable effort to ensure the accuracy of information presented in this presentation, Oakdene Hollins cannot expressly guarantee the accuracy and reliability of the estimates, forecasts and conclusions herein. Factors such as prices and regulatory requirements are subject to change, and users of the presentation should check the current situation. In addition, care should be taken in using any of the cost information provided as it is based upon specific assumptions (such as scale, location, context, etc.). Clients should satisfy themselves beforehand as to the adequacy of the information in this presentation before making any decisions based on it.
• Background on materials security
• Strategic Energy Technologies:‐ SET Plan‐ Metal screening‐ Bottleneck metals‐ Mitigation options
• Summary
Agenda
Sectors:• Food & Drink• Textiles & Clothing• Metals & Mining• Wastes Management• Chemicals & Materials
Services:• Market Appraisal• Supply Chain Risk Assessment• Technology Appraisal• Protocol & Standards
Development• Economic Modelling• Financial Impact Assessment• Management of Research
Projects• Carbon Footprinting
Consulting to business on sustainable products, services and clean production:
Oakdene Hollins
Materials Security
• Study on by-product metals (International Lead & Zinc, Copper and Nickel Study Groups, ongoing)
• Assessing rare metals as supply chain bottlenecks in priority energy technologies (European Commission Institute of Energy, 2011)
• Expert Review of Criticality Studies (Private Client, 2011)
• Investing in Critical Metals (Report for Investors, 2011)
• Study into the feasibility of protecting and recovering critical raw materials (European Pathway to Zero Waste, 2011)
• Lanthanides resources and alternatives (Department for Transport, 2010)
• Materials security: Ensuring resource availability for the UK economy (Resource Efficiency KTN, 2008)
(Reports available from www.oakdenehollins.com)
EU’s “Critical 14 Materials”
Analysis based on Supply Risk vs Economic Importance
2010 USGS Production Figures, (tonnes)
Large Volumes Small Volumes
Fluorspar – 6,010,000 Indium – 609
Graphite – 925,000 Tantalum – 681
Magnesium – 576,000 Platinum Group – 467
Antimony – 167,000 Beryllium – 205
Rare Earths – 133,000 Germanium – 118
Tungsten – 68,800 Gallium – 182
Niobium – 62,900
Cobalt – 89,500
EU Critical Raw Materials Initiative
Source: EU Raw Materials Initiative
Criticality Ranking – 12 Studies
Most Critical
Moderately Critical
Near Critical Not Critical
Beryllium Antimony Bismuth Aluminium
Gallium Cobalt Chromium Boron / borates
Indium Germanium Fluorspar Cadmium
Magnesium Manganese Lead Copper
PGMs Nickel Lithium Molybdenum
REEs Niobium Silicon / silica Selenium
Tin Rhenium Silver Vanadium
Tungsten Tantalum Titanium
Tellurium Zirconium
ZincSource: Oakdene Hollins
EU Strategic Energy Technology PlanThe SET-Plan is the first step to establishing a European energy technology policy. The principle goals are;
• Accelerating knowledge development, technology transfer and up-take;
• Maintaining EU industrial leadership on low-carbon energy technologies;
• Fostering science for transforming energy technologies to achieve the 2020 Energy and Climate Change goals;
• Contributing to the worldwide transition to a low carbon economy by 2050.
Large policy influence on energy technologies, and therefore raw material demand over the
coming decades.
SET-Plan Technologies
EU SET-Plan Technologies
• SET Plan Technology Map with development plans for 17 technologies
• Six priority technologies:‐ Nuclear Fission‐ Solar Energy (PV and CSP)‐ Wind Energy‐ Bioenergy (power generation, biofuels)‐ Carbon Capture and Storage‐ Smart Grids
• Widest selection of metallic elements quantified:• 60 metallic elements included• Iron, aluminium and radioactive elements are
excluded from study• Assess demand from industry targets for
uptake against current world supply: i.e. To compare most optimistic demand scenario to most pessimistic supply scenario
Metal Requirements
Significance Screening Results
Te In Sn Hf Ag Dy Ga Nd Cd Ni Mo V Nb Cu Se Pb Mn Co Cr W Y Zr Ti0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%Metals Demand of SET-Plan in 2030
% o
f 201
0 W
orld
Sup
ply
19%50%
Significant Metals by Technology
Metal Solar Wind Nuclear CCS TotalTellurium 50.4% 50.4%Indium 18.0% 1.4% 19.4%Tin 9.6% 0.02% 9.6%
Hafnium 7.0% 7.0%Silver 4.8% 0.4% 5.2%
Dysprosium 4.0% 4.0%Gallium 3.9% 3.9%
Neodymium 3.8% 3.8%Cadmium 1.5% 0.03% 1.5%Nickel 0.7% 0.2% 0.5% 1.5%
Molybdenum 1.0% 0.4% 0.02% 1.4%Vanadium 0.01% 1.3% 1.3%Niobium 0.04% 1.2% 1.2%Selenium 0.8% 0.8%
Market Factors Market Measures
Likelihood of rapid global demand growth
Limitations to expanding production capacity
Analysis of demand forecasts
Reserves, supply forecasts, evaluation of by-production dependencies
Political Factors Political Measures
Concentration of supply in few countries
Political risk related to major supplying countries
Production statistics
Political risk indicators (FSI & WGI)
Bottleneck Analysis
Example: Forecasts for Key Metals
Vana
dium
Niob
ium
Hafn
ium
Gal
lium Tin
Silv
er
Sele
nium
Mol
ybde
num
Nick
el
Neod
ymiu
m
Indi
um
Dysp
rosi
um
Tellu
rium
-70
-60
-50
-40
-30
-20
-10
0
10
20
30
20152020
Metal
Market Factors Political Factors
Overall risk
Likelihood of rapid demand
growth
Limits to expanding production
capacity
Concentration of supply Political risk
Dysprosium High High High High
HighNeodymium High Medium High HighTellurium High High Low MediumGallium High Medium Medium MediumIndium Medium High Medium MediumNiobium High Low High Medium
MediumVanadium High Low Medium HighTin Low Medium Medium HighSelenium Medium Medium Medium LowSilver Low Medium Low High
LowMolybdenum Medium Low Medium MediumHafnium Low Medium Medium LowNickel Medium Low Low MediumCadmium Low Low Low Medium
Bottleneck analysis by metal
Role of Metals by Technology: Wind
• Direct Drive Permanent Magnets :• Neodymium• Dysprosium
• Steel Alloying Elements :• Nickel• Molybdenum
Metal Prices: REE
2007
3918
439
268
3935
239
436
3952
739
611
3969
539
779
3986
839
952
4003
640
115
2010
4028
340
367
4045
140
535
4061
940
703
4078
740
871
4095
5
0
500
1000
1500
2000
2500
3000
Dy Oxide Nd Oxide
$/kg
Role of Metals by Technology: Solar
• CdTe Thin Films:• Cadmium, Tellurium, (Indium, Tin)
• CIGS Thin Films:• Indium, Gallium, Selenium, (Tin)
• Crystalline Silicon:• Tin, Silver
• Amorphous Silicon:• (Indium, Tin)
• Concentrated Solar Power:• (Silver)
Metal Prices: Indium
05/0
1/20
01
05/0
1/20
02
05/0
1/20
03
05/0
1/20
04
05/0
1/20
05
05/0
1/20
06
05/0
1/20
07
05/0
1/20
08
05/0
1/20
09
05/0
1/20
10
05/0
1/20
11
05/0
1/20
120
200
400
600
800
1000
1200Indium min 99.99% (EU)
$/kg
Metal Prices: Tellurium
03/11/2009 03/11/2010 03/11/20110
100
200
300
400
500
Tellurium min 99.99% (EU)
$/kg
Data collection and
dissemination
Resource efficiency strategies
(e.g. recycling)
Primary production
Trade and international co-operation
Design and innovation
(e.g. substitution)
Procurement and stockpiling
Responses to Materials Criticality
Source: Oakdene Hollins
Mitigation Strategies for solar
• By-product metals extraction, opportunities for Cu/Al/Zn refineries
Expanding Output
• Indium – Considerable research, but early stage• Gallium – Linked to germanium• Tellurium – Options for low value applications
But technology choice available
Substitution
Recycling• Recycling potential limited due to dispersive
applications
Summary• Greatest risks for six primary SET-Plan
technologies:‐ Solar: tellurium, gallium, indium‐ Wind: dysprosium, neodymium
• No overall bottlenecks – technology mix matters• Mitigation required in long term
• Opportunities for expansion of production/by-production to meet demand
• Recycling, substitution will have a role• Further policy factors – e.g. REACH, revision of
RMI, global trade rules
EU Energy Generation Capacity
European Generation Capacity to 2030 (GW)
Source: EU energy trends to 2030 — Update 2009, DG Energy (2010)
Bottleneck Metals: Dysprosium & Neodymium
HDD; 31%
Motor; 26%
Automobile; 24%
Optical Devices; 5%
Acoustic; 5%MRI; 5% Others; 3%
Applications for Nd Magnets, 2009
Reserves
Mine production
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
48%
97%
17% 11% 19%
Geographical Location of Rare Earths, 2010ChinaIndiaBrazilMalaysiaCISUnited StatesAustraliaOther countries
Source: Shin Etsu
Source: USGS
• Primary product (55%), by-product of iron (45%)
Bottleneck Metals: Tellurium
Source: EU RMI
Sources: USGS & BGS
Metallurgy; 42%
Photo-voltaics, 26%
Chemicals & Pharma-ceu-ticals, 21%
Electronics & Others; 11%
Applications for Tellurium, 2009
Reserves
Refinery production
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
10%
6%
14%
10%
73%
8% 7% 65%
Geographical Location of Tellurium, 2010
JapanRussiaPeruCanadaUnited StatesOther countriesUnknown
• By-product of copper (90%) & lead (10%)
Bottleneck Metals: Gallium
Source: EU RMI
Source: USGS
Production Capacity
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Geographical Location of Gallium, 2008 ChinaGermanyKazakhstanJapanRussiaUkraineHungarySlovakia
Integrated circuits; 66%
Lasers & LEDs; 18%
R&D; 14%
Photo-detectors & so-lar, 2%
Applications for Gallium, 2009
• By-product of alumina
Bottleneck Metals: Indium
Source: USGS
• By-product of zinc
Flat Panel Displays; 74%
Other ITO; 10%
Low m.p. Alloys; 10%
Others; 6%Applications of Indium, 2009
Source: EU RMI
Reserves
Refinery production
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
75%
52%
17%
14% 12% 6%5%
Geographical Location of Indium, 2010/2007 ChinaSouth KoreaJapanCanadaBelgiumPeruBrazilRussiaUnited StatesOther countries