Demand, Supply, and Price Trends for Mineral Raw Materials Relevant to the Renewable Energy Transition

Transcription

1 Review 141 Demand, Supply, and Price Trends for Mineral Raw Materials Relevant to the Renewable Energy Transition Wind Energy, Solar Photovoltaic Energy, and Energy Storage Peter Buchholz* and Torsten Brandenburg DOI: /cite For the next decades, wind and solar photovoltaic power generation is predicted to have the largest growth rates among renewable energy systems. This includes new stationary energy storage systems such as redox flow or Li-ion battery systems, which are almost none existent in current electricity networks. The demand, supply, and price situation for base and minor metals most relevant for these renewable energy technologies is reviewed and future demand scenarios are considered. Further market specific differences for base and minor metal markets are demonstrated and future challenges for their supply are outlined. Keywords: Mineral raw materials, Price risk, Renewable energy, Solar photovoltaic energy, Wind energy Received: August 02, 2017; revised: October 19, 2017; accepted: October 26, Introduction The renewable energy market is growing rapidly and the energy transition, labeled as Energiewende by the German government, demands a massive change in the energy markets and an increase for renewable energy technologies such as solar and wind electric power. Storage capacities in the form of mobile and stationary batteries or hydrogen are essential not only to direct renewable power to consumers but also to buffer the volatile power. Major applications are housing, electric mobility, or industrial manufacturing. Over the forthcoming decades, the renewable energy transition and its technologies probably will induce a structural change in global economies. The dynamics of this transition will depend on political action plans to reduce greenhouse gas emissions and financial strength to modernize national economies. In the light of the European targets and the outcomes of the 2015 Climate Change Conference in Paris, the German Climate Action Plan 2050 for example outlines a gradual transformation in technology, industry, society and culture with a final target of 80 to 95 % lower greenhouse gas emissions compared to 1990 by 2050 [1]. Research provides strong evidence of an interdependence between renewable energy consumption and economic growth. It seems that renewable energy is important for economic growth and likewise economic growth encourages the use of more renewable energy source [2]. A dynamic change from fossil and atomic energy resources towards renewable energy systems will have a major impact to the mineral raw material markets. The required extension of the electric power infrastructure will demand more Cu, Al, Zn, steel, ferroalloy metals, and other construction materials. Besides that, renewable energy technologies will significantly increase the demand for rare earth elements such as Nd, Dy, Pr, and Tb contained in permanent magnets of wind turbine generators, for Li, Co, Ni, Mn, C, and V contained in batteries, and for Si, In, Ga, Te, and other base and minor metals as part of solar photovoltaic cells and other relevant technologies (Tab. 1). As for fossil energy resources, Germany is highly dependent on mineral raw materials imports relevant to these renewable energy systems. Almost all of these materials are currently mined and processed outside Germany. Recycling materials alone cannot accommodate the future demand because a circular economy can only be established once higher material volumes return into the supply stream after usage. Thus, primary raw materials need to supply most of the new applications, at least for the upcoming decade. In addition, many of the mineral raw materials relevant to renewable energy technologies are currently sourced in markets that are politically and economically rated critical, similar to the situation that applies to the oil and gas mar- Dr. Peter Buchholz, Dr. Torsten Brandenburg peter.buchholz@bgr.de German Mineral Resources Agency (DERA) at the Federal Institute for Geosciences and Natural Resources (BGR), Wilhelmstraße 25 30, Berlin, Germany.

2 142 Review Chemie Table 1. Important mineral raw materials for renewable energy systems. Renewable energy Relevant raw materials (among others) * Solar photovoltaic energy Wind energy Energy storage facilities Electric grids and transmission kets. Under these circumstances, a growth in demand for raw materials relevant to renewable energy markets may also lead to new international trade conflicts and increase price and supply risks. Various relevant World Trade Organization (WTO) trade dispute cases for mineral raw materials have already been fought in the past years [3, 4]. This paper reviews changes in the mineral raw material demand relevant to the renewable energy transition, led by wind, solar photovoltaic, and new energy storage systems, and highlights some supply and price risks which may challenge the transformation of the energy market. The paper first reviews demand trends for mineral raw materials relevant to the renewable energy transition driven by a) global economic growth and b) emerging key and future technologies. In a second step fundamentals of the mineral raw material markets relevant to this transition and inherent price and supply risks are described. This is followed by a brief conclusion of major future challenges. 2 Demand Trends In general, mineral raw material markets are demand driven. Major driving forces for demand are i) global economic growth leading for example to a massive expansion of infrastructure in emerging countries and ii) future technologies gaining market maturity. 2.1 Global Economic Growth In, Ga, Se, Cd, Te, Si, Ag, Sn, Ge, Mo Cu, REE (Dy, Nd, Pr, Y, Tb), Co, Mn, Cr, Mo, Ni, Fe, B, Ba Over the past 150 years, rapidly industrializing economies have had a major effect on metal demand, exemplified by time series of the demand of Al, Cu, steel, Zn, and Sn [5]. Metal demand of the United Kingdom peaked in the second half of the 19th century caused by its main stage of industrialization. During this period, the United Kingdom had a % share of global demand for the mentioned commodities and a share of more than 50 % for Cu and around 40 % for Al (Fig. 1). Germany followed with its metal demand peaking around the millennium change of the 19th to the 20th century. Global demand for Cu and Al then shifted to the USA. Its maximum share of global metal demand reached over 50 % with a peak in the 1950s (Fig. 1). Li, Co, Ni, C, Mn (lithium-ion batteries) V, Zn, Fe, Cr (vanadium redox batteries) Al, Cu, Ge, steel, Zn, Sn * italic printed raw materials are considered in more detail within this paper For most of the 20th century, the USA dominated metal markets as the main market driver. Starting in the new millennium, s fast growth in domestic has been the major global driver of the raw material markets. Thereby changed from a primarily raw material producing and exporting country to the worldwide leading consumer and site. While the industrialization process lasted around 600 years in the United Kingdom or Germany, it took about 40 years for its industrialization process [5]. This process shifted the global value chain towards, what had a huge impact on the raw material markets. Today, consumes 40 to 50 % of metals as well as of coal and crude oil [6]. On a global scale, the three emerging countries Brazil, India, and Russia do not or net yet have a major impact to the metal markets at least not as consumers of metals. They rather exhibit a stagnating or decreasing rate of consumption for metals with a total share of global metal demand not exceeding 2.5 % each [5]. In Russia, metal demand even collapsed from around 15 % in the late 1980s to 2.1 % in the 1990s after destruction of the former Soviet Union. However, because of its high population and steady economic growth above 7 % India might become a next major driver for raw materials demand. Interestingly, the data by Stürmer and von Hagen [5] shows that during the phase of economic growth some metals are used earlier by the society than others. First, Sn, highly used as Sn plate for canned food and as solder in electronic applications, is followed by Zn, steel, Cu, and finally Al used for infrastructure and housing. The level of the intensity of use (in t/1 million GK-$ versus per capita gross domestic product (GDP) in constant GK-$) seem to be highest for steel, especially for railway lines and housing, followed by Al, Cu, Zn, and Sn [5]. For example, a 1 % increase in per capita manufacturing output may lead to an approximately 1.5 % increase in Al demand and about a 1.0 % rise in Cu demand [7]. Over the past 50 years compound annual growth rates (CAGR, for explanation see Tab. 2) for supply and demand for steel, Cu, Al, Zn, and Sn were between 0.9 to 4.5 %, which points to a low to moderate growth [8]. Al, comprising a 4.5 % growth (Tab. 2), had the leading position, followed by Iron ore/steel (3.8/2.9 %), Cu (2.7 %, Tab. 2), Zn (2.6 %), and Sn, the latter growing at a rate of 0.9 % (database ). Over the past 15 years, during s industrialization phase, the global demand for these raw materials grew at a 1 to 2 % higher rate each, between around 1.8 to 8.9 %. Iron ore and Steel were in the leading position, followed by Al, Zn, Cu, and Sn (Tab. 2) [8]. As the energy transition will broadly be implemented most probably in industrialized countries and at first, ª 2018 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim Chem. Ing. Tech. 2018, 90, No. 1 2,

3 Review 143 a) Share of global demand for copper b) Share of global demand for aluminium Great Britain USA Germany Japan South Korea Great Britain USA Germany Japan South Korea % 30 % Brazil Russia India % Brazil Russia India % Figure 1. Share of global demand for a) Cu and b) Al in major industrialized (upper charts) and emerging countries (lower charts) over the past 150 years (after [5], data series updated to 2015). their transition process and economic growth will have the highest effect on the demand of the mentioned raw materials. However, solar power concentration is highest in the Middle East and Africa and parts of Asia and the United States, according to the International Monetary Fund [9]. Morocco has recently unveiled the first phase of a massive solar power plant in the Sahara Desert that is expected to have a combined capacity of 2 GW by 2020, making it the single largest solar power facility in the world [9]. Once renewable energy could be transferred over long distances (e.g., power lines from Northern Africa to Europe or by carries such as hydrogen), countries in Northern Africa could additionally increase their demand for mineral raw materials relevant to renewable energy systems as well. 2.2 Emerging Key and Future Technologies A broad range of studies have analyzed trends in raw material demand generated by the renewable energy market [10 13]. They mainly conclude that the envisaged transformation from fossil and atomic energy towards renewable energy would increase demand for these raw materials to a new scale of dimension. However, as the energy transition will take place over decades, markets are generally able to adjust. Around 13.8 % of the global primary energy consumption is from renewable energy [14, 15]. This includes a share of 70 % of solid biomass (wood and charcoal) mainly used in developing countries. However, renewable primary energy consumption including wind, geothermal, solar, biomass, and waste (excluding solid biomass/charcoal for heating) today have a relatively low share of around 3.2 % of global primary energy consumption [16] (excluding hydroelectricity and cross border electricity supply). Instead, growth rates per annum for renewable primary energy consumption are high with 16.1 % for the period 2005 to By country, the highest share of global renewables consumption is for (20.5 %), followed by the USA (20.0 %), and Germany (9.0 %). Regionally, Asia & Pacific and Europe & Eurasia had the highest shares totaling 34.4 % and 34.3 %, respectively [16]. Global renewable electricity generation including hydropower, wind, bioenergy, and solar photovoltaic represent

4 144 Review Chemie Table 2. Compound annual growth for and consumption of mineral raw materials relevant to the renewable energy transition for the past 50 and 15 years (data in [8]). Mineral raw material Category CAGR* [% a 1 ] around 24 % of global power output, the bulk coming from hydropower electricity generation (70 %) [15]. In 2016, renewables accounted for more than half of new additions to power capacity and overtook coal in terms of world cumulative installed capacity [15]. Annual grid-connected solar photovoltaic capacity in and the USA more than doubled in 2016 as compared to 2015, global onshore wind capacity however decreased 15 % against 2015 because of extremely high expansions in in 2015 [15]. Currently, 173 states have formulated strategic plans to develop the renewable energy market in their countries and for the past ten years, the global financial investment volume in renewable energies has risen from 73 billion USD per year to over 286 billion USD a year in 2015 [14]. For the period 2015 to 2021, total renewable power is forecast to grow by 36 % making it the fastest-growing source of electricity generation globally [15]. Renewable electricity generation is forecast to triple for solar photovoltaic and double for onshore as well as for offshore wind [15]. Continued analyses of demand and investments trends over the forthcoming years will track how fast the energy transition actually is going to advance. Regarding the raw material content, emerging key and future technologies for wind and solar photovoltaic power generation and the associated expansion of infrastructure Steel Smelter Cu Refined consumption Zn Refined consumption Al Refined consumption Si (ferrosilicon) Refined n.d In Refined n.d Se Refined Cd Refined Ga Refined n.d. n.d. Te Refined n.d. n.d. RE Elements Mine n.d / 7.89** Li (Li-content) Mine n.d Co Mine V Mine n.d * CAGR is a formula to describe the growth rate within a time series, e.g., for metal demand, widely used in commodity market analyses; Formula: CAGR = (EV/BV) 1/n 1; EV = ending value; BV, beginning value; n = number of periods (months, years, etc.) **does include about additional t of illegal mine in [52, 53, 55]; n.d. = not determined and electricity transmission vary widely according to the technologies, the location of deployment, and efficiency (Tab. 1). Therefore, the mineral raw material demand is difficult to predict so that current scenarios are quite unreliable. Among renewable energy technologies, wind and solar photovoltaic will have the highest impact to the future raw material demand, metals in particular [14, 15]. Over the past 15 years CAGRs for minor metals relevant to today s renewable energy transition ranged from 1.1 % for Cd and Se, 8.5 % for In to over 10 % for mined Co (Tab. 2) [8]. Within small markets like these (see Tab. 3), any technological breakthroughs may enormously shift growth in demand. Infrastructure and electricity transmission are fundamental for the envisaged energy transition and the geographic expansion of renewable energy technologies. Cu and Al are essential for the construction of infrastructure including power generation, new overland power lines or storage facilities. Electricity demand growth for is, e.g, expected to triple to 2030, from 5400 TWh in 2012 to almost TWh [17]. Until 2035, the envisaged Cu demand by increased energy efficiency and renewable energy technologies could account for an additional 4.9 million t [56] (Tab. 3). For the period 2010 to 2050, Elshkaki et al. [18] estimate an increase in global Cu demand between 275 and 350 % according to various scenarios, which compares to a CAGR of around 3.3 to 3.8 % in the longer perspective. The envisaged demand for Al semi-finished products could increase from around 77 million t in 2014 to almost 100 million t in About two thirds of the demand could be driven by the transport, construction, and electricity sectors [19]. By 2025, the global primary Al metal demand is estimated to increase from around 50 million t in 2015 to around 90 million t [20], which would result in a CAGR of around 6 %. 2.3 Wind Energy The International Energy Agency (IEA) assumes that the share of global wind power generated in offshore facilities will increase from 2.1 % (2013) to about 20 % in 2035 [15]. ª 2018 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim Chem. Ing. Tech. 2018, 90, No. 1 2,

5 Review 145 Table 3. Estimated raw material demand for wind, solar photovoltaic and energy storage systems. Mineral raw material Category Global or consumption 2013/2014 [t] Estimated additional demand for renewable energy technologies [t] Szenario Comment Cu Refined * a) 2035 Energy efficiency, renewable energy Al Refined n.d. n.d. Global economic growth and infrastructure extension total t in 2025 b) Si Refined n.d. n.d. Thick layer and thin film solar PV In Refined to 218 c) 2035 Thin film solar PV Se Refined to 240 c) 2035 Thin film solar PV Cd Refined to 190 c) 2035 Thin film solar PV Ga Refined 250 f) 25 to 26 c) 2035 Thin film solar PV Te Refined 450 to 550 f) 198 to 218 c) 2035 Thin film solar VP Neodymium / praseodymium oxide Dysprosium / terbium oxide Consumption e) 4000 to c) 2035 Permanent magnets for wind turbines Consumption 2000 e) 200 to 1200 c) 2035 Permanent magnets for wind turbines Li (Li-content) Mine d) 2025 Stationary energy storage systems Co Refined n.d. n.d. Stationary energy storage systems V Mine c) 2035 Stationary energy storage systems a) [56]; b) [20]; c) [11]; Values for Nd/Pr and Dy/Tb do not include (and consumption) by illegal mining in [52, 53]; d) [24]; e) current Neodymium/praseodymium oxide and dysprosium/terbium oxide consumption for permanent magnets; f) current Te and Ga [28, 30, 54]; PV = photovoltaic energy; Low-maintenance wind power plants in offshore facilities contain Nd, Pr, Tb, and Dy as components of permanent magnets for the generators. Permanent magnetic directdrive wind turbines require, e.g., significantly higher magnetic masses than other drive technologies. The amount of Nd is between 194 and 211 kg MW 1 and for Dy between 13 and 29 kg MW 1 [13, 21]. However, generator technologies are developing rapidly and their raw material content depends on the rare earth element prices, efficiency gains, and new technology breakthroughs. Thus, scenarios up to 2035 are extremely uncertain. For Nd in permanent magnets the additional demand may increase between 4000 to t (average t), which to date is one third of global mine (metal). For Dy, the amount ranges between 200 and 1200 t (metal) (average 500 t), which is about one quarter of today s global mine (Tab. 3) [11]. 2.4 Solar Photovoltaic Energy On the photovoltaic market thick layer cells of the crystalline silicon wafer technology dominate the market with around 90 % of the delivered modules. The thin film technology, however, seem to have the largest future potential [11, 21]. For thin film solar cells, the coating materials are, e.g., amorphous Si (a-si) or amorphous Si-Ge, Cu-In-(Ga)-di-selenide (CIGS) or CdTe. Thin film cells have been commercially available for several years but have a global market share of only 3.4 % (a-si), 5.5 % (CdTe) and 2.4 % (CIGS) (data 2011 [11]). The type specific raw material demand of the semiconductor compounds of the thin film cells depend mainly on the thickness of the layer, the efficiency to be achieved, and the amount of rejects. Taking a technology breakthrough scenario for the period up to 2035 into account, the installed annual electric capacity for CdTe and CIGS cells could increase eight and fifteen times, respectively [11]. Considering all thin film technologies, the

6 146 Review Chemie demand for In, Ga, Se, Cd, and Te could increase 10 to 50 % of today s global (Tab. 3). 2.5 Energy Storage Facilities For fluctuating power supply by solar photovoltaic and wind facilities appropriate buffers are required. The projects range from storage facilities coupled with photovoltaic plants in the housing sector to power storage units of a megawatt scale, which can be used by energy suppliers. Current research focus on electrical or electrochemical systems for storing electrical energy such as Li-ion batteries, redox flow batteries or double-layer capacitors, mechanical storage devices such as compressed air storage or flywheels, as well as and storage of hydrogen and pumpedstorage hydropower supply [22]. Major metal intense technologies include Li-ion and V redox flow batteries. Among storage systems, residential and commercial energy storage probably will be the main driver of Li-ion battery demand. They are a vital technology in matching the need to produce elasticity locally (e.g., via consumer-owned photovoltaic cells on rooftops) and make this electricity useable and accessible. They will also have a key role in the grid stability, as they can store peak demands. Currently, Li-ion batteries have a relatively small share within the electrical storage system segment [23]. But, as the market for residential and commercial energy storage is growing strongly, it will contribute to an increased demand for raw materials used in modern Li-ion-batteries, e.g., Li, Co, Ni, Mn, and C (natural and synthetic). Within the upcoming decade, there are a number of drivers backing the development of residential and commercial energy storage systems. These are declining costs for Li-ion batteries, the large number of existing consumer-owned photovoltaic cells, potentially increasing electricity prices, large numbers of new providers, and the desire to use clean electricity locally. Governmental subsidies and incentives are also drivers of the current electrical storage boom and currently make it economically feasible, not only for many energy storage applications but also for a large group of customers. Accordingly, many analyst estimate that residential and commercial energy storage will become a key drive of the increasing demand of Li-ion batteries right after the e-mobility sector [23]. The total market of these batteries, with an average capacity between 5 12 KWh in private household and up to 50 KWh in industrial application, may become a 40 GWh market in 2025 ]24]. Many of these storage systems use a Li-Fe-phosphate (LiFePO 4 ) cathode other than most modern electro vehicles, which use a Ni-Co-Al (NCA) or a Ni-Mn-Co (NMC) cathode. Therewith, modern energy storage applications will have a large effect especially on the demand of Li from virtually zero in 2016 up to 5000 t a 1 in 2025, which would be about 5 % of the estimated global Li demand in 2025 (Tab. 2) [24]. V redox batteries, in which V is used in both half-cells (V/V system), currently are the most widely used redox flow batteries. V is present here in four different valencies and is used on both electrodes. Until 2035, the V demand for this technology could increase ten times, which would additionally amount to an annual demand of t V (Tab. 2). This additional amount is 40 % of today s annual global V mine. V redox batteries, thus, could have a major impact to the future V market. 3 Current Market Situation for Mineral Raw Materials 3.1 Copper and Aluminium Cu is mainly used for the electronic and energy sectors (58 %), followed by the building sector (26 %), mechanical engineering (10 %), and transport (5 %) [25]. For the transition towards renewable energy systems, the share of Cu demand in the electronic and energy sectors will further increase in the future. The current major Cu mine producer is Chile (31.1 %), followed by (9.6 %) and the USA (7.5 %). Global mine is around 18.5 million t Cu (data 2014) [26], mainly from large low grade high volume porphyry Cu deposits. Because Cu mine and refinery is highly diversified over many countries, and global has a low weighted country risk, the global price and supply risks generally are rather low (Fig. 2). The major challenges for large scale Cu mining (surface and underground) and processing are social and environmental issues in mining countries, electricity costs, cost reduction through automation in mining as well as discovery of new giant Cu deposits by new exploration technologies. Global demand for Al products is mainly from transport and construction sectors (26 and 25 %, respectively), followed by foil stock and packaging, electrical engineering (14 %), machinery and equipment, and consumer durables (data 2015) [27]. The envisaged expansion of the renewable energy infrastructure will probably further increase the current share of electrical engineering in future. Al-based electrical wiring nowadays is the preferred conductor for electricity transmission and distribution uses. The major primary raw material is bauxite. About 69 % of global Bauxite mine is from three countries, namely Australia,, and Brazil [26]. The global market concentration as well as the global weighted country risk are moderate. However, primary Al metal of around 53 million t is highly concentrated in (51.6 %), followed by Russia and Canada with a market share of less than 10 % each. The weighted country risk of global is rated moderate (Fig. 2). As for Cu, major challenges for large scale mining (surface) and processing are electricity costs and social and environmental issues in mining countries. ª 2018 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim Chem. Ing. Tech. 2018, 90, No. 1 2,

7 Review 147 Mineral raw material Price Vola HHI 2014 GLR 2014 Share of the three largest producer countries Aluminium (Bauxite) mine Aluminium smelter , , Brazil Russian Federation Canada Australia 64 % 69 % Copper mine Copper , , USA Chile Japan Chile 48 % 53 % Silicon 8.7 4, Brazil Norway 78 % Indium , Japan Rep. Korea 82 % Selenium , USA Japan 61 % Cadmium , Japan Rep. Korea 60 % Gallium , Germany Kazachstan 91 % Rare Earth E. mine Rare Earth E , , USA Australia USA (incl. Estonia) 4) Russian Federation 97 % 100 % Lithium mine , Argentina Australia Chile 86 % Cobalt mine Cobalt , , Canada Finland Belgium DR Congo 62 % 71 % Vanadium mine , South Africa Russian Federation 97 % Tellurium 28.7 n.d. n.d % Figure 2. Global market concentration of mineral raw material (HHI), weighted global country risk of global mine and refinery (GLR), global market share of the three largest producer countries, and price volatility. The selected mineral raw materials are highly relevant to renewable energy systems. HHI: Herfindahl-Hirschman Index, sum of squared values of raw materials ( in %) in each country; in order to quantify the global country concentration of with the HHI, scores up to 1,500 are rated as lowly concentrated markets (low price and supply risk), between 1,500 and 2,500 they are rated as moderately concentrated markets (moderate price and supply risk), and scores above 2,500 are rated highly concentrated markets (high price and supply risk) (further information on the methodology see [49] and [50]). GLR: Global weighted country risk, standardized World Bank scale for country risk [51]. Countries with a country risk above +0.5 are rated low risk countries, between +0.5 to 0.5 medium risk countries, and below 0.5 high risk countries [26]. The Country risk is calculated by averaging the World Bank s worldwide governance indicators for each country: Voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, control of corruption. The averaged value is multiplied by the country s share, then the country s shares are summed up to give the global weighted country risk for raw material. Price volatility: Based on the period January 2012 to December 2016 as the standard deviation of the difference of log monthly average prices and annualization [47].

8 148 Review Chemie 3.2 Rare Earth Elements Rare earth elements (REEs) are summarized as a group consisting of La and additional 14 elements, the lanthanides (Ce, Pr, Nd, Pm, Sm, Eu, Gd, Tb, Dy, Ho, Er, Tm, Yb, and Lu) as well as Y and Sc. In nature, lanthanides occur together and can only be mined together. The group is subdivided into light (La Nd) and heavy (Sm Lu) REEs. Nd and Pr belong to the light REE, Dy and Tb are among the heavy REE. After high-purity processing and refining, rare earths are used in numerous high-tech areas. For example, they are applied in powerful magnets (20 %) and alloys (19 %), in chemical and petroleum catalysts, polishing, lightning, special glasses, and in ceramics [26]. In particular Nd, Dy, Tb, and Pr are needed for the of powerful Nd-Fe-B magnets in high-temperature applications. Examples are gearless and therefore low maintenance wind power plants in the offshore area or hybrid and electric vehicles. For the vast majority of REE deposits heavy REEs occur in very low absolute concentrations and among the REE group, heavy REEs have a share of only less than 10 %. In 2014 the mining industry has produced t of rare earth oxides (REO, official without illegal mine in [26]). The extraction is concentrated in four countries, mainly (> 90 %), followed by the USA, Australia (Processing in Malaysia), and Russia. Furthermore, monazite (a heavy mineral containing REE) is mined in smaller quantities in Malaysia, Brazil, Indonesia, and Vietnam. All heavy rare earths have so far only been produced in. Because of s dominance in the market combined with unpredictable political measures in the rare earth sector (e.g., consolidation, export quotas, limitations, market power on pricing), the supply risk is rated as relatively high (Fig. 2). Current low prices of REE have led exploration companies to drastically reduced their exploration efforts, although more than 200 companies had started new projects during the past price boom between 2010 and Similarly, new processing technologies were developed, but current stage mining and processing cannot compete with REE prices in. In addition, recycling of rare earth elements in magnets and other applications may play an important role in the future. In recent years, many efforts were made to increase the recovery of rare earth elements from scrap and also to reduce the amount of material being used within high-tech applications. However, all measures to increase the resource efficiency and to close the resource loop in the rare earth industry do not have a measurable impact on the supply side as yet. 3.3 Silicon, Indium, Gallium, Tellurium, Selenium, and Cadmium Si is mainly used as ferrosilicon for the steel industry and as an alloying component in Al/Si alloys. However, for the solar photovoltaic and computer industries, amorphous or crystalline silicon metal has to be used and must be of very high purity ( % Si or higher). The major source is high purity quartz from pegmatite or quartz gravel deposits, the latter been available in many countries. Major producers of high purity silicon metal however are (62.4 %), Brazil (9.6 %), and Norway (6.2 %). Global refinery is around 2.4 million t [26]. As for Cu and Al, electricity costs are critical for competitive. With dominating the market, the country concentration of global is high and the weighted country risk is moderate (Fig. 2). The most important application of In are thin films of In-Sn-oxides (ITO) in liquid crystal displays (LCD) or flat screens, which are installed in entertainment electronics. In used for the of solar cells (Cu-In-di-selenide or sulfide cells) currently is of minor importance (8 %, [11]). However, their market share will strongly increase within the upcoming years [11]. In is a by-product of the zinc ore smelting and refining process with an annual global output of around 830 t. The current global supply is highly concentrated and the largest suppliers are (55.2 %), the Republic of Korea (18.0 %) and Japan (8.6 %) (Fig. 2) [26]. The weighted global country risk is at a moderate level. If demand increases, In could be produced as a by-product at further Zn refinery locations and process efficiencies also could be improved. The main application of Ga are semiconductors such as Ga-As and GaN for integrated circuits and optoelectronic devices (LEDs, laser diodes, photodiodes, solar cells). The current demand for solar modules is below 20 % [11]. Ga is only produced in small quantities (250 t and around 600 t capacity [28]) and extracted as a by-product of the refinery of Al or Zn. is by far the largest producer (81.6 %) (Fig. 2) [26]. A small refinery in Germany closed last year and the second largest Ga producer has a market share of 3.7 % (Kazakhstan), only. The global market is highly concentrated and the weighted country risk of is moderate. If demand starts to increase, Ga capacities could in principle be built at many Al refineries in the world [28]. With approximately 40 % share of global demand, Te is used as CdTe in thin-film solar photovoltaic cells [29]. Te is also used for thermoelectric components and metallurgical application, especially as an alloying additive in steel. As for In and Ga, Te has so far only been produced in small quantities. It mainly is a by-product from the electrolytic refining of Cu and processed from the anode sludge. The global annual is estimated to be around 450 t [30]. The largest producers are, Japan, and Belgium, but their market shares are less than 10 to 20 % each and the ª 2018 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim Chem. Ing. Tech. 2018, 90, No. 1 2,

9 Review 149 weighted country risk is relatively low. The supply concentration is, thus, rather uncritical (Fig. 2). The main commercial applications of Se are metallurgical processes (40 %), glass, agriculture (fertilizers, animal feeds, food supplements), the chemical industry, and electrical engineering [31]. Less than 10 % of global is used for thin film solar photovoltaic cells. Se is, as in the case of Te, a byproduct of processing anode sludges from Cu refineries. Very small quantities are also processed as a by-product of Au, Pb, Ni, Pt, and Zn refining. About 2500 to 3000 t Se are produced annually in a variety of countries. The biggest producers are, Japan, and the USA. has the highest market share of less than 30 % (Fig. 2) [26]. Thus, the market concentration is moderate and global has a relatively low weighted country risk. More than 80 % Cd is used for the of Ni-Cd batteries [32]. Other uses are pigments, stabilizer of plastics, and anti-corrosive agents. The share of the global Cd demand for CdTe-solar photovoltaic modules currently is less than 1 %. Cd mainly is a by-product of Zn refining. The global annual is around t. The supply is low to moderately concentrated and is leading the market (30.1 %), followed by the Republic of Korea (22.3 %), and Japan (7.3 %) (Fig. 2) [26]. The global weighted country risk of is moderate as well. Taking into account that Cd belongs to the group of environmentally toxic elements, its use and recycling may become a future challenge. As is the major supplier for all minor metals used in solar photovoltaic technologies, the country related supply risks, outlined for REE, are valid here as well. Furthermore, only few suppliers around the globe are able to produce extremely high purity metals, which are essential for the solar industry. In addition, the case of the Fanya Metals Exchange shows the vulnerability especially of these small raw material markets [33]. After the bankruptcy and collapse of the Fanya Metals Exchange in 2015 large inventories were sold and the uncertainty of a complete dissolution still remains in the markets. Because of that, alternative suppliers keep their projects on hold. In contrast to base metals, the supply of minor metals in general has some limitations. Because of their nature as byproducts and their low concentration in ores, the industry normally would not increase their base metal just to meet a certain minor metals demand. However, the capacities for minor metals are higher than rates at many refinery locations and an increase in depends on the economics of mines and refineries, especially the ore composition and the price development for both major and minor metals [34 36]. Therefore, many current research projects focus on new processing methods to achieve efficiency gains [37]. 3.4 Lithium and Vanadium Li is mainly used for rechargeable batteries (37.4 %), followed by the ceramic and glass industries. A number of further applications include polymers, metal powders, processing of air, non-rechargable batteries, and Al alloys [23]. Because of the envisaged boom in e-mobility, the demand for Li in rechargeable batteries could increase dramatically. However, for renewable energy systems the current Li demand is almost zero for stationary energy storage facilities, although demand for this technology could grow significantly. About 86 % of global Li mine is from Australia, Chile, and Argentina. Li is mined from salt brines located in large salars such as the Salar de Atacama in Chile or the Salar de Olaroz in Argentina. Alternatively, Li is mined from pegmatite deposits, of which the larges being mined is the Greenbushes deposit in Australia. Global mine is around t Li (content). Although the global market concentration of is high, the weighted country risk is low (Fig. 2) [26]. Thus, the supply risk is rated low to moderate. Current supply and demand scenarios for 2025 indicate, that depending on the size of demand growth, future mine could meet demand at annual growth rates of around 10 %. But if in the forthcoming ten years the demand for energy storage systems strongly increases, the Li market could also run into deficits [38]. V is mainly used as ferrovanadium as a steel alloy where it consumes about 90 % of global demand. Further uses are in catalysts in the chemical and ceramic industries [39]. In addition, V or V 2 O 5 are currently used to a small extend in redox-flow batteries as the main electrolyte for energy storage. V is derived from V rich titanomagnetite and associated slags of the pig iron and steel process. About 70 % of the total global V of around t are from slags. The most important mining countries are (54 %), South Africa (26 %), and the Russian Federation (18 %). The country concentration of mine is high and global has a moderate country risk (Fig. 2) [26]. Taking current political and economic problems in South Africa into account (e.g., power shortages, labor strikes, less attractive new mining law), as well as environmental restrictions in, political tensions between Europe and the Russian Federation, the risk for supply disruptions may become more prominent in future. 3.5 Price Trends Economic growth and emerging key and future technologies are not only drivers of raw material demand, they also have a major influence to their price developments. Typically, the prices for industrial metals such as steel, Cu, Al, Pb, Zn, and ferroalloy metals, also used for the electricity infrastructure, are moving up and down along global economic growth cycles [40]. Over the past six decades, prices of these metals almost run concurrent, sometimes with a one to two year offset to each other (Fig. 3). The major reasons for price increases are infrastructure developments and urbanization in industrial and emerging countries com-

10 150 Review Chemie a) Main price driver: economic growth and global crises (real price) Al Cu Pb Zn Sn Ni Steel V b) Main price driver: emerging technologies (real price) Si In Se Cd Ga Nd Co Li Figure 3. Time series for real prices of Al, Cu, further base and ferroalloy metals. Prices for major metals are mainly driven by a) economic growth and global crises, and of minor metals driven by b) emerging technologies. For better understanding of real price trends of Cu and Al, further base and ferroalloy metals not necessarily being key raw materials to the renewable energy transition are shown in Fig. 3a. Prices are calculated as real price based on the US producer price index (2017 based, BGR database, [40]). 1 and 2: First and second oil price crises; 3: collapse of the former Soviet Union; 4: Asia crisis; 5 and 7: effect; 6: global financial cruch; 8: increasing global economic growth after weak global economic phase; 9: silicon peak, US government abandons price controls in 1974, low global capacities; 10: silicon peak, high demand for steel and Al-alloys and in the chemical industry, increasing costs, increasing demand for solar photovoltaic cells; 11: high In demand for nuclear reactors in the USA and low supply; 12: high In demand for In-Sn-oxide for flat screens especially in Japan and South Korea, closure of several In refineries; 13: high Se demand in and SE- Asia in metallurgical applications, electronics, and to a minor extend for CIGS-thin film solar photovoltaic cells; 14 and 15: Cd peaks in 1987 attributed to the flourishing Japanese Ni-Ca battery, labor disputes at Cominco s Pb-Zn operation in Canada; the Cd peak in 2010 was due to an increased demand in Ni-Cd batteries for electronic devices and to a minor extend for solar photovoltaic cells; 16: Ga peak attributed to the expected high demand for new LED lights; 17: peak for RE elements such as Nd because of high demand for permanent magnets in vehicles and wind turbines; 18: Co peak in 1978 due to the second Shaba crisis in Zaire, the main global Co producing country; 19 and 20: Co and Li prices on the rise due to recovering global economic growth and expectations of an increased demand for Co bearing Li-ion batteries. bined with supply shortages and/or speculative activities. Decreasing prices are often associated with economic crisis such as the oil crises in the 1970s, the collapse of the former Soviet Union in 1989/1990, the Asia crisis in the middle of the 1990s, or the financial crunch in 2008 [40]. The last major price cycle started in 2003 and was driven by s economic growth and its associated high demand in raw materials. Along s path of industrialization, the country reached a critical mass in demand after more than 20 years of steady but intense economic growth at 7 to 15 % GDP growth. Supply deficits followed the exponential increase in demand between 2003 and 2012 (with the financial crush in between) and raw materials prices skyrocketed dramatically. Exploration and mining efforts combined with increased substitution, more recycling and resource efficiency as well as new technological innovations finally met the demand in 2013 but with a time lag of almost ten years. Meanwhile, s economic growth decreased from around 10 to 14 % GDP growth between 2003 and 2010 to around 6.7 % in 2016 [41]. The increased supply on the one side and the weakening demand, especially from, on the other side, led raw material prices drop significantly since With decreasing metal prices till the end of 2015, exploration and mining projects where put on hold, almost across all mineral raw material groups, closing up a typical hog cycle [42]. Since then, prices especially for base metals recovered. However, current prices are far beyond the peak between 2003 and According to market analysts, the economic outlook for in 2020 could be below 6 % annual GDP growth [43]. Global economic growth is anticipated to moderately range between 3 and 4 %. However, many global political, economic and environmental problems may inhibit growth including risk factors such as increased restrictions on global trade, the continuing debt crisis of states and companies, global imbalances coupled with sharp exchange rate movements, social imbalances, civil war and domestic ª 2018 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim Chem. Ing. Tech. 2018, 90, No. 1 2,

11 Review 151 conflict in parts of the Middle East and Africa, and generally increased geopolitical tensions and terrorism [44]. Instead, the renewable energy transition and its expected massive extension of infrastructure could have a positive impact on global economic growth but also a significant impact on prices for mineral raw materials. In the near future, the largest effect would most probably come from industrialized countries and, which are financially powerful and have a high gross domestic product. At current stage, none of the emerging countries could increase global economic growth in a way did at the beginning of the 21st century. However, further highly populated emerging countries are queuing up the line waiting for their time to rev up gross domestic product. Among those countries are India, which is part of the BRICS states [45], and the so called Next Eleven (N11) [46] states or the 2020-Seven states [43], mainly Middle-East, SE-Asian and South American states plus Nigeria, Turkey and Poland. All these countries have a large potential to build up or modernize their electricity supply by using renewable energy systems, thus, increasing demand for relevant mineral raw materials. If the dynamics of the energy transition and economic growth in highly populated countries or regions will be underestimated, their possible impulse to consumption could lead to a new raw material hog cycle. In contrast to the cyclical behavior of many base metal prices, sudden price peaks may occur, when speculative elements or high market expectations for emerging technologies meet a weak supply in small and inelastic markets. The risk for price peaks increases in small markets where global raw material is highly concentrated and mining occurs in countries with an elevated country risk. For example, between 2009 and 2011 the price for individual rare earth elements increased 20 times for Nd (Fig. 3) and Dy and almost 40 times in the case of Sm. The main reasons were export restrictions by as the main supplier controlling 97 % of world, as well as the panic-like response of the market due to an expected sudden rise in demand for permanent magnets used in vehicles and wind turbines. A massive expansion of the capacities in as well as substitution by the manufacturing industry and efficiency increases led to the collapse of the speculative bubble causing a considerable price relaxation. In the past, strong price peaks also occurred for Si, In, Te, Se, and Cd used for the solar photovoltaic cell. The most recent price peaks were for Li and Co. High expectations from the battery sector strongly influenced prices for Li-carbonate in 2016/2017, which doubled from 6600 US$ t 1 in January 2016 to US$ t 1 in March 2017, and for Co, which doubled from US$ t 1 to US$ t 1 in the same period (Fig. 3). The past boom in mineral raw materials also caused high price volatility. Price volatility significantly differs between typical raw materials used for infrastructure expansion and those used for specific emerging technologies. For the five year period from 2012 to 2016, the price volatility ranged between 13 % (Al) and 25 % (V) for industrial metals (average 17 %, Figs. 2 and 3), and between 9 % (Si) and 51 % for minor metals (average 23 %, Fig. 3, [47, 48]). Price peaks and high price volatilities may affect the economies of future renewable energy projects, because they highly depend on minor metals. 4 Conclusions This review about the demand, supply, and price trends for mineral raw materials relevant to renewable energy systems shows that the transition from the fossil and atomic fuel era towards the renewable energy era is facing great challenges. Global economic growth combined with the extension of wind and solar photovoltaic power supply and the extension of the necessary electricity infrastructure by new power networks and energy storage systems will in an order of magnitude scale up the demand for base and minor metals. However, at current stage, it is not yet clear which specific technology finally will take the market lead. During the past hog cycle, several efficiency gains and technological developments already have modified the mineral raw material compositions of wind turbines and solar photovoltaic cells. Thus, scenarios of the future demand for relevant raw materials are highly uncertain. Despite those uncertainties, a number of price and supply risks occur in the outlined mineral raw material markets. Risks include high market concentrations and unpredictable measures by trade partners especially in countries with an elevated country risk. In comparison to the politically complex crude oil market with a moderate market concentration (HHI = 2093; OPEC behaving like one country), many mineral raw material markets relevant to renewable energy systems have a much higher market concentration (up to a HHI of 8826 for rare earth elements [26]). Especially for mineral raw materials produced in countries with a moderate to high country risk, the market power could turn into new political tensions. Further risks include sudden price peaks and high price volatility typically in minor metal markets. Unless via increased activity in local recycling, mining, or refining, European economies like the German economy in future will more heavily depend on mineral raw material imports, as either mineral concentrates, metals, or intermediate products. Under these circumstances, the German manufacturing industry should develop effective mitigation strategies to meet the supply chain challenges of the forthcoming decades. Additionally, more research about and monitoring of the technological progress of renewable energy systems as well as of economic growth patterns in industrialized and emerging countries is necessary to better foresee demand the major driver of mineral raw material markets.

12 152 Review Chemie Acknowledgement We would like to thank the reviewers for their valuable contributions and improvement of this paper. We also thank M. Stürmer, research economist at the U.S. Federal Reserve Bank of Dallas, who updated the data and graphs of Fig 1 for the period 2011 to All figures were drawn by K. Lang at the German Mineral Resources Agency at BGR which we gratefully acknowledge. We also thank D. Huy and D. Homberg-Heumann at the Federal Institute for Geosciences and Natural Resources (BGR) for compiling and providing fundamental data through the BGR raw materials data base. Peter Buchholz is an economic geologists and has been with the Federal Institute for Geosciences and Natural Resources (BGR) since Since 2012 he is heading the German Mineral Ressources Agency (DERA) at the BGR. The main focus of DERA s work is to provide market intelligence to assess price and supply risks in raw material markets as well as to develop mitigation strategies for the German industry to diversify supply sources. Before his time at the BGR he worked in the areas of ore deposit research, exploration and commodity trading. In 1995 he completed his PhD on gold deposits at the RWTH Aachen. Subsequently, he worked as assistant professor at the TU Bergakademie Freiberg and from 1998 to 2002 as director of the M.Sc. Programe in Exploration Geology at the University of Zimbabwe. After that he joined a commodity trading company. Torsten Brandenburg jointed the German Mineral Resources Agency (DERA) at BGR in He is head of the unit mineral economics and in charge of the DERA monitoring system on critical raw materials. The monitoring system addresses the German industry and policy and aims to identify potential price and supply risks within the markets of raw materials. It also helps companies to identify mitigation strategies. Besides the monitoring system, Torsten s research focus is trade and security issues related to the supply of raw materials. Abbreviations BV CAGR CIGS EV GDP GLR HHI IEA ITO LCD n NCA NMC PV REE REO WTO beginning value compound annual growth rates Cu-In-(Ga)-di-selenide ending value gross domestic product global weighted country risk Herfindahl-Hirschman Index International Energy Agency In-Sn-oxides liquid crystal displays number of periods Ni-Co-Al Ni-Mn-Co photovoltaic energy rare earth elements rare earth oxides World Trade Organization References [1] Climate Action Plan 2050, Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety, Berlin Klimaschutz/klimaschutzplan_2050_kurzf_en_bf.pdf [2] N. Apergis, D. Danuletiu, Int. J Energy Econ. Policy 2014, 4 (4), [3] Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum, WT/DS431/9, WTO, Geneva [4] Duties and Other Measures Concerning the Exportation of Certain Raw Materials, WT/DS509/6, WTO, Geneva [5] M. Stürmer, J. von Hagen, DERA Rohstoffinformationen, Nr.11, DERA, Bonn [6] D. Huy, H. Andruleit, H.-G. Babies, H. Elsner, D. Homberg- Heumann, J. Meßner, S. Röhling, M. Schauer, S. Schmidt, M. Schmitz, M. Szurlies, B. Wehenpohl, H. Wilken, Deutschland Rohstoffsituation 2015, BGR, Hannover [7] M. Stürmer, J. Int. Money Finance 2017, 76, [8] A. Schumacher, P. Necke, S.-U. Schulz, P. Buchholz, DERA Rohstoffinformationen, Nr. 30, DERA, Berlin [9] IMF, World Economic Outlook April 2016: Too Slow for Too Long, IMF, Washington, DC [10] R. L. Moss, E. Tzimas, P. Willis, J. Arendorf, L. Tercero Espinoza, EN, JRC Scientific and Policy Reports, Critical Metals in the Path towards the Decarbonisation of the EU Energy Sector, Report EUR 25994, European Commission, Brusseles [11] F. Marscheider-Weidemann, S. Langkau, T. Hummen, L. Erdmann, L. Tercero Espinoza, G. Angerer, M. Marwede, S. Benecke, DERA Rohstoffinformationen, Nr. 28, DERA, Berlin [12] G. Angerer, P. Buchholz, J. Gutzmer, Ch. Hagelüken, P. Herzig, R. Littke, R. Thauer, F.-W. Wellmer, Rohstoffe für die Energieversorgung der Zukunft, acatech, München [13] The Growing Role of Minerals and Metals for a Low Carbon Future, World Bank Publications, Washington, DC [14] H. Andruleit, H. G. Babies, S. Fleig, S. Ladage, J. Meßner, M. Pein, D. Rebscher, M. Schauer, S. Schmidt, G. von Goerne, Energiestudie 2016, BGR, Hannover [15] World Energy Outlook, IEA, Paris ª 2018 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim Chem. Ing. Tech. 2018, 90, No. 1 2,