Review of Previous Lists and Methods of Selection

Transcription

1 Appendixe

2 Appendix A Review of Previou it and ethod of Selection ot lit of trategic material are baed, implicitly at leat, on the two trand of criticality and vulnerability. A 1981 report by the Congreional Reearch Service lited the following criteria for defining a material import vulnerability (a ditinguihed from import dependency ): 1 1. Critical need for the material. 2. ack of adequate dometic reource (including both a total lack and an inufficiency). 3. imited potential for ubtitution. 4. ack of alternative ource of upply (including politically table ource and geographically cloe ource). It will be noted that factor (1) and (3) have to do with criticality of ue, and factor (2) and (4) with vulnerability of upply. On the bai of thee factor, the Congreional Reearch Service defined the following a material of particular concern : Bauxite/aluminum Cobalt Chromium Columbium anganee Platinum-Group etal Tantalum Titanium A emiquantitative index for rating trategic material on the bai of vulnerability wa devied by the Strategic Studie Intitute (SSI) of the U.S. Army War College in The index wa baed primarily on five factor affecting vulnerability to coercive preure from foreign upplier, a follow: 1. Availability of dometic reerve. 2. Availability of ubtitute, 3. Number and location of foreign upplier. 4. Ideology of foreign upplier. 5. U.S. tockpile objective (baed, at that time, on 1 year wartime need). aterial elected for the SSI aement were the 20 mineral for which the United State imported half or more of it requirement, plu tungten. The author included tungten, even though U.S. import dependency for tungten wa below 50 percent, becaue the ratio of U.S. production to conumption wa rapidly decreaing and becaue ICongreional Reearch Service, A Congreional Handbook on U.S. aterial Import Dependency/Vulnerability, cited in note 2, p. 341 ff, ZAlwyn H. King and John R. Cameron, aterial and the New Dimenion of Conflict, Strategic Studie Intitute, U.S. Army War College (Carlile Barrack, PA: 1974) available from National Technical Information Service, U.S. Department of Commerce, Springfield, VA (AD/A ). of the unuual circumtance that the Communit countrie poe about 75 percent of world reerve. 3 Of the 21 material, 10 were eliminated becaue of favorable combination of uch factor a adequate U.S. reerve, declining dometic demand, available ubtitute material, availability of technology to proce low-grade ore, and proximity of foreign upplie. 4 The other 11 mineral were aigned index number and ranked by relative vulnerability, a hown in table A-1. The SSI doe not decribe exactly how the index number for each material were derived. The text implie that the index number are the um of numerical value aigned (on the bai of the author judgment) to each of the five principal factor mentioned above. The election of thee factor give far more weight to vulnerability of upply than to criticality of ue. However, it i evident from the text that factor other than thoe five entered into the rating. For example, the author dicuion of individual material refer to the eential ue of each, a well a the availability of ubtitute. In any cae, a the author tate, the number do not refer to anything quantitative but were baed on qualitative aement, that i, their own judgment. In 1977, one of the author of the SSI tudy revied the vulnerability index in an attempt to refine it and make it more quantitative. 5 The 1977 verion of the SSI Index included 27 factor, each rated for the importance of it influence on economic, political, and military vulnerability of material. Table A-2 how the factor and their rating. Of the 27 factor on the lit, no more than 5 are related to criticality. Not one explicitly mention the eential ue of particular material. Yet one mut aume that eential ue are implicit in the rating cheme, at leat in the election of material to rate and in aeing the availability of ubtitute material. A further complication in the rating cheme i that each of the 27 factor i alo aeed for the lbid,, p etimate indicate that China hold 47 percent of the world reerve bae of tungten, and another 11 percent i in the Soviet Union and North Korea. Both Canada and the United State have large reerve bae of tungten; Canada i 15 percent of the world trade. Ibid. 5Alwyn H. King, aterial Vulnerability of the United State An Update, Strategic Studie Intitute, U.S. Army War College (Carlile Barrack, PA: 197 7), available from the Defene Technical Information Center, Defene ogitic Agency, Cameron Station, Alexandria, VA 22314, : Q 3

3 382 Strategic aterial: Technologie to Reduce U.S. Import Vulnerability aterial Table A-1. Strategic Studie Intitute Index of Relative Vulnerability: 1974 Ranking Chromium Platinum metal Tungten anganee Aluminum Titanium Cobalt Tantalum Nickel ercury Tin Vulnerability index Principal or major exporter 34 Soviet Union, South Africa 32 Soviet Union, Canada, South Africa 27 Canada, Peru 23 Brazil, Gabon 22 Jamaica, Canada 20 Autralia, Canada 20 Canada, Zaire 16 Canada, Brazil, Zaire 14 Canada, Norway 11 Canada, exico, Spain 6 alayia, Thailand SOURCE: Alwyn H. King and John R. Cameron, ater/a/ arrd the New Dimenion of Conf/ict, Strategic Studie Intitute, U.S. Army War College (Carlile Barrack, PA, 1974) Table A-2. Factor Affecting aterial Vulnerability Index: 1977 it Effect on Vulnerability Factor Economic Political ilitary Dometic reerve: Availability Cot of developing Dometic production indutry: Preent capability Cot of augmenting Subtitute material: Preent availability Cot of reearch to develop Time required to develop Additional dometic reource: Preent availability Cot to develop uitable procee Time to develop uitable procee Probability of dicovery if not available Cot of additional exploration Foreign upplier: Number of controlling companie Number of upplier countrie Political tability of upplier countrie Ideology of upplier countrie Productive capacity of upplier countrie Economic ufficiency of upplier countrie Hitory of political relation with U.S U.S. dollar involvement in upplier country Acceibility of upplier countrie (upply route) U.S. tockpile: Preent U.S. tockpile objective Actual quantity in U.S. tockpile Cutomary indutry tockpile Trend in uage of critical material Proportion of national conumption directly related to military requirement lmportance of econdary ource (recycling) KEY: = arge = edium = Small SOURCE: Alwyn H. King, ater/a/ Vu/nerabty of the United State An Update, Strategic Studie Intitute, U.S. Army War College (Carlile Barrack, PA: 1977).

4 Appendix A Review of Previou it and ethod of Selection 383 direction of it influence on vulnerability; that i, whether it currently contribute to a ignificant increae, a moderate increae, or a decreae in the vulnerability of material upplie. All thee factor, including their importance and direction, are given numerical value, the um of which i the relative vulnerability index number of each material. Figure A-1 how the reult for four material. The author uggeted uing thi numerical index to help et prioritie for tockpiling, allocation of fund to reearch and development, and other uch deciion. A pitfall in uing thi index, or other like it, 6 for uch purpoe i that it may convey a mileading impreion of certainty or objectivity. The ue of index number to how relative vulnerability may be a convenience but doe not at all evade the neceity of applying ubjective judgment a the author of the index recognized. Judgment i involved at every tep: in deciding what factor to include, how much importance each hould be given, how to rate a material in relation to a pecific factor (e. g., political tability of upplier countrie ), and o on. Another attempt to contruct a ytematic rating ytem for trategic material wa the Critical ineral Index pilot tudy done by the U.S. Department of the Interior Office of ineral Policy and Reearch Analyi in Deigned to be ued a warning of potential problem, the index included two component: one to meaure the likelihood of diruption of upply (i.e., vulnerability) and the other to meaure the cot of diruption or, converely, the importance of the mineral to the U.S. economy (including factor of vulnerability and criticality). The cheme propoed to ue the ubjective judgment of a panel of expert to aign index number for both component to pecific mineral. Example of event conidered poibly diruptive to upply were: Colluive price agreement (cartel). Shift in demand. Embargoe. abor trife. Tranportation bottleneck. Violent conflict, including local rebellion, regional war, riot, border kirmihe, blockade, and abotage. An index with ome imilaritie to the Strategic Studie Index, with a clearer decription of how it i contituted, i in Bohdan O. Szuprowicz, HOW to Avoid Strategic A4aterial Shortage (New York: John Wiley & Son, 1981), p. 8ff and p. 285 ff. 7 Robert. Adam, Barbara A. White, and Jame S. Crichar, Developing a Critical ineral Index: A Pilot Study, Office of ineral Policy and Reearch Analyi, U.S. Department of the Interior, July Figure A-1. Strategic Studie Intitute Relative Vulnerability Index: 1977 Ranking t 3,400-3,200 3,000 2,800-2,600-2,400-2,200-2,000-1,800-1,600 - Aluminum (bauxite) NOTE: Overall Index number IS the um of military, polltlcal, and economic index number SOURCE: Alwyn H King, aferlal Vulnerabl/ffy of the United State Arr UKJ date, Strategic Studie Intitute, U S Army War College, (Carllle Barrack PA: 1977) Factor uggeted for incluion on the cot ide were: The magnitude and duration of the diruption. Total annual U.S. demand for the mineral. Availability of alternative ource of upply; e.g., dometic or other foreign ource. Time required to deliver alternate upplie. Availability of ubtitute. Time required to adopt ubtitute. Expectation of thoe controlling invetment about the future of alternative upplie and of ubtitute technologie. 1

5 384 Strategic aterial: Technologie to Reduce U.S. Import Vulnerability The Critical ineral Index wa imply propoed in a pilot tudy. It author did not apply it to produce a lit of mineral. A different approach to a rating ytem for trategic material, making no attempt to produce overall index number, wa propoed by the Britih Intitute of Geological Science (IGS) in a 1982 emorandum to a Committee of the Houe of ord in Parliament. 8 Dividing the factor that define a trategic material into the vulnerability and criticality trand, the intitute vulnerability lit included: Import dependence (beide net import dependence, thi factor included total import dependence, recognizing that ome of Britain mineral proceing and export indutry relie entirely on the import of raw material). Concentration of upplie to Great Britain. Concentration of world production. Indirect import dependence, involving a long, complex chain of upply. Concentration of world reerve (or economic reource ). Reliability of producer countrie. arket mechanim, which include: Ž the lead time to develop new productive capacity. the proportion of material tied up in longterm contract, compared to the amount available on the free market. the potential for cartel formation, on the bai of hared interet and value of producer. The potential for recycling. The adequacy and ecurity of upply link on land and ea. The IGS memorandum pointed out that many of the meaure for vulnerability can be quantified, ome quite imply. To how the concentration of upplier to Great Britain, the IGS devied an index baed on the total number of upplying countrie and the hare they upply; the ame kind of index wa ued to denote concentration of world production, Reliability of upply, on the other hand, cannot be quantified becaue it depend on uch conideration a political tability, ideology, or exceive economic nationalim, which are matter of qualitative judgment. On the criticality ide, the intitute mentioned the range of ue, the availability of ubtitute, the nature of Britih indutrie conuming the of Geological Science, Strategic ineral, emorandum ubmitted to the Parliament, Houe of ord. Select Committee on the European Community (Subcommittee F), Feb. 18, and a number of meaure of the economic importance of the material, all of which, the IGS conceded, were difficult to analyze and apply. Altogether, the IGS concluded that criticality cannot be quantified readily. The quantitative pointer are either crude or trivial. The more important quetion defining the national interet, judging the importance of one manufacture in relation to another, determining whether ubtitution for a material are poible and how long it would take to effect ubtitution are all matter of judgment. However, it i poible to combine judgment about thee factor into a ubjective criticality rating of high, medium, or low for each material. Overall, the IGS rating cheme eparated the vulnerability and criticality trand; dientangled factor which can be quantified from thoe which cannot; quantified different factor, each in it own term; and gave ubjective rating to factor that cannot be meaured adequately by quantitative indicator. No effort wa made in the cheme to combine all thee unlike apple and orange into a common index number. In their tatement to the Houe of ord, the author concentrated on decribing their rating cheme rather than applying it to produce a lit of trategic material. They did elect 15 material to illutrate how the cheme would work. Two of the 15 material were elected to how the independence of vulnerability and criticality. Fluorpar i critical for the production of aluminum and teel, but i mined in Great Britain and thu i not regarded a vulnerable. Vermiculite ha high vulnerability becaue Great Britain i entirely dependent on import from one dominant upplier (South Africa), but it i not critical becaue ubtitute are readily available. Of the 13 other material ued to illutrate the IGS rating cheme, the author aid that mot are likely to manifet high degree of both vulnerability and criticality, and would therefore be identified a trategically important. They are: Aluminum Columbium Chromium Cobalt anganee olybdenum Nickel Phophate rock Platinum-group metal Tantalum Tin Tungten Vanadium The material elected are trategic to Great Britain but not necearily to the United State, olybdenum, for example, would not appear on a lit of U.S. trategic material becaue the United State i the world larget producer and exporter and hold more than half of the world reource bae a great deal more than any other country.

6 Appendix A Review of Previou it and ethod of Selection 385 A impler cheme, baed on the aggregate judgment of an expert panel, wa ued by the Britih aterial Forum on Strategic aterial. Applying the concept of degree of criticality and degree of vulnerability to the metal ued by Britih indutry, the forum reported that the following group of eight metal emerged a meriting the highet priority in the newly defined trategic ene : 10 Chromium Cobalt Columbium Tungten anganee Vanadium olybdenum Platinum-group metal All member of the forum agreed on the rating, and all the metal were thought to merit equal rating. Again, the material lited are trategic from the Britih point of view, For each metal on the aterial Forum lit, the criticality apect wa brought out by examining the metal more important ue in key indutrie. To help ae vulnerability, the forum member looked at the ratio of reerve to production in each of the major producer countrie of the world to etimate which countrie are likely to become dominant in the future. The group recognized that the reerve-to-production ratio i a tatic indicator of reerve life (and could very well change a new The aterial Forum, Strategic etal and the United Kingdom, cited in note Ibid., p, 3, reerve are dicovered or a countrie rate of production change). The member ued qualitative judgment, a well, in etimating probable future diverity of upply and in evaluating the political factor involved in vulnerability of upply. The flavor of the forum evaluation i uggeted by the following excerpt from it dicuion of chromium: ll Although the phyical long-term upply ituation for the world a a whole look reaonable.. neverthele, 97 percent of the preently known reerve of chromium are located in South Africa and adjacent Zimbabwe. The relatively mall reerve located in other countrie indicate that their preent level of production are unlikely to be maintained for more than 10 to 20 year (unle new reerve on a very ubtantial cale are found and then developed commercially within thi time cale). Thu, along with many other conumer countrie, the U.K. could teadily hift toward a greater dependence on South Africa and Zimbabwe for chromium upplie, whatever countrie are upplying u at preent. Since thee two countrie are urrounded by political uncertaintie, or at leat uch i the generally accepted view by mot Wetern countrie, then import to the U.K. need to be regarded a becoming increaingly vulnerable in the future. IiIbid., p. 6.