Mineral Resources. science technique. Stefan ZIELIŃSKI Programme Board for the monthly magazine CHEMIK science technique market, Poland

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1 Mineral Resources Stefan ZIELIŃSKI Programme Board for the monthly magazine CHEMIK science technique market, Poland Please cite as: CHEMIK 2014, 68, 5, Resources falling into four different groups, i.e. energy resources, organic resources, water and mineral resources are required for the efficient operation and the development of any economy. The consumption of raw materials belonging to these groups by given economy depends on three main factors: the use of raw materials, population size and quality of life that determines the individual consumption. Thus, it is obvious that the increase of population size and the improvement of life quality are two main factors causing the increase of demand on raw materials. The increase in demand has become one of the main problems that world economy has to face. The 20th century was the period of extraordinary social and economic development. The world population has increased from 1.7 bln in 1900 to almost 7 bln in 2000, while globally the income per capita has increased almost 6 times. It has been achieved not only due to technological and scientific advances, but also due to the unprecedented consumption of resources the consumption has increased 8 times, from approx. 7 Gt in 1900 to 55 Gt in 2000, including the increase of consumption of building materials 34 times, ores and minerals 27 times, energy resources 12 times and biomass 3.6 times. The increase of population size and economic growth was especially rapid after the World War II. While the increase of resource consumption was slower than the global economy growth, it was still faster than the world population growth. Therefore, while the rate of material metabolism (i.e. quantity of resources per global product unit) has decreased, the material consumption per capita has increased from 4.6 to 8.9 t/y. The growth trajectories for various groups of resources were also different. While the biomass consumption was growing in similar way as the population size, the consumption of mineral resources was growing much faster. As the result, formerly dominating renewable organic resources (biomass) has yielded to the non-renewable mineral resources. It is worth to consider forecasts of global population and economic growth that clearly indicate that it will involve further growth of resource consumption. If the current trend continues, in 2050 will be consumed globally approx. 140 Gt, that is almost 2.5 times more than currently [1 3]. Therefore, it should not be a surprise that the problem of raw material supplies is not only of interest to governments and industry, but also is in the spotlight of public opinion. While the previous discussion on the future of world resources has been focused mainly on energy resources and biomass, non-energy raw materials (such as minerals and metals) had not gotten similar attention perhaps due to the fact that most people had not realized in how many everyday products they are used. The situation has changed only in recent years when it was realized that industrialized society and modern technologies cannot exist without minerals. Minerals are widely present throughout economy making advanced societies strongly dependent on them as shown by their broad range of application from building materials to microelectronics. Meanwhile, in order to satisfy the hunger for minerals of rapidly industrializing societies, growing economy and population, more and more resources are mined. It is especially true for metals that are indispensable for modern industry, as well as for infrastructure and everyday products. The biggest rise in the resource production is expected for metal ores. Estimates show that by 2020 their production will be almost two times higher than in It is a serious problem, especially for countries that are strongly dependent on their import [4, 5]. This situation raises a number of questions. Will not they at some point in the future just run out? And if so, when? What will be consequences of that? Does it mean we can expect crisis in supplies of mineral resources in 21st century? Will it be possible to solve the crisis by the intensification of exploration and by providing better access to the potential deposits? Where, finally, are our futures reserves of mineral raw materials and what do we know about them? Such questions are today in the centre of the discussion on the shortage of mineral raw materials. Answers to these questions must be based on the forecasts of global demand for minerals in 21st century and better understanding of relation between their global reserves and reserves in individual deposits. Minerals shortage Public discussion on mineral resources, similarly to discussions on fossil fuels or fresh water, is dominated (by often hidden) intuitive idea of shortage, so called static shortage paradigm. The crucial assumption of this model is simple: there is constant amount of mineral resources (not necessarily precisely known) on Earth. The continuous exploitation and consumption of these resources decreases these finite deposits, and the rate of exploitation and consumption determine depletion level. Existing deposits will become depleted and new ones will be probably even smaller and harder to find. The key metric in this static model of mineral shortage is the so called static range, i.e. estimate of the time left till given mineral runs out. The examples of such estimates for number of minerals and elements are presented in Tables 1 and 2 [6, 7]. Table 1 Years of extraction of known some mineral resources for 1992 [6] > 100 years years years years Rare Earths Cobalt Molybdenum Thalium Yttrium Phosphate Oil Sulphur Magnesium Rhenium Selenium Mercury Lithium Antimony Fluorspar Gold Iodine Tantalum Copper Arsenic Coal Ilmenite Uranium Lead Potash Natural gas Bizmuth Zinc Niobium Tungsten Manganese Diamont Bauxite Zirconium Graphite Silver Rutile Nickel Barite Indium Platinum Group Iron Ore Vanadium Boron Chromium Strontium Tin Cadmium 438 nr 5/2014 tom 68

2 Table 2 Years of extraction until exhaustion some elements [7] Element At 2008 consumption Years If the world consumption increases to 50% the rate of the USA Iodine J 13 4 Silver Ag 29 9 Antimony Sb Lead Pb 42 8 Tin Sn Gold Au Zinc Zn Uranium U Copper Cu Nickel Ni Tantalum Ta technologies that would allow industrial exploitation of dispersed elements are not yet available. They can be only mined if they are present as minerals, i.e. highly concentrated aggregations of many elements formed by natural geological processes in most external layers of Earth. Today, only minerals found in the Earth s crust might be localized and mined mechanically. Are there many minerals in the earth s crust? If the total quantity of the element found on Earth is irrelevant to its shortage, then one might ask how much of it can be found in mineral form and therefore can be mined. The estimation what part of given element is present in theoretically minable is highly speculative and varies depending on the data source. It is estimated that for different elements only 0.01% 0.001% can be found in mineral form [7]. Although it is only a small share, it is enormous in comparison with the quantity of the elements extracted so far. Even if the annual production skyrocketed to the total sum of production in the whole 20th century, in earth s crust there would still be sufficient quantity of elements for many years to come. The problem of shortage would not exist if it were based on the amount of minerals in earth s crust. Chromium Cr Phosphorus P Platinum Pt Aluminium Al Under static paradigm there are only two ways to avoid the shortage of resources. First, by stretching the static range by smaller and more efficient consumption. Second, by technological progress that will allow to substitute almost depleted resources by more common ones. While the first way is successfully implemented, capabilities of the second one are very limited. Static shortage paradigm has dominated public opinion and politicians attention, because it is intuitive, logically consistent and allows to formulate clear conclusions and directions of political actions. However, it should be understood that this model has a number of basic conceptual flaws that do not allow to grasp precisely complex reality of resource shortage, because the determination of static range is inherently uncertain. This uncertainty comes from two fact: uncertainty concerning future consumption size and patterns and uncertainty concerning quantity of raw material available in the ground. The best indication showing that the static paradigm is flawed is data concerning deposits of various elements that are base for estimation of static ranges, because the actual reserves are practically constant despite constantly growing production. This discrepancy may be explained by the fact that geologic data provided by individual countries does not present absolute quantity of an element available for extraction as the static paradigm would suggests. Instead, the reserve data provide only estimates of the small fraction of large amounts of mineral or element present on Earth which exploitation is cost effective (now or in the nearest future) using existing technologies and current market conditions. If the available reserve data of given element does not represent its total amount on the Planet, the real question is: how much of it can we exploit? Are there many elements on the Earth? The answer to the question how much of given element is on Earth is simple and short: a lot, even for rarest of mined elements. The physical state of elements does not allow to use such answer in discussions about their shortage, because all elements have one, common important feature: they all are strongly dispersed. Currently How strongly are dispersed minerals that are profitably mined? Presented values don t allow to discuss mineral shortage. The availability of minerals in bigger degree applies to future shortage, than its total content. Minerals are highly concentrated natural forms of elements, mining operations are only technically and economically possible in such areas where minerals are accumulated in geological formations as deposits. In other words, for the deposit to be minable it has to have sufficient concentration of mineral (practically and economically). The deposit must be at the same time sufficiently large to justify introductory costs of new mining operation. The small deposits, even of high concentration, might not provide sufficiently high production during the exploitation period, it also has to be accessible for mining. Only small part of all minerals can be found in concentrated form in accessible areas. The mineral reserves data provided by geological bodies concerns precisely such deposits, available using today mining technologies and market prices. Therefore, it can be assumed that published reserve data does not represent total quantity of potentially available minerals. Thus, the compilation of global reserves data cannot be real indicator of mineral accessibility in the long run. The estimates of reserves (or resources) and based on them calculations of static raw materials lifetimes should not be used for estimation of future availability of minerals, as it might lead to erroneous conclusions. Geological and technological determinant factors of exploration and exploitation of mineral deposits For the given level of the global demand for mineral resources, it is very important to examine whether accessible technologically and geologically mineral resources that can be found in earth s crust may satisfy future demands of the mankind. Increasing recycling, material efficiency and demand management will surely play important role in satisfying the needs, but in foreseeable future the new supplies of raw materials will be still required. As mentioned above, the uncertainties regarding reserve estimates are high. However, even in the past reserves have been replenished by newly discovered deposits. As the result, in past 50 years mining industry was able to satisfy the global demand and estimated lifetime of deposits and reserves was extended. This process will continue. The key factor allowing to satisfy the demand in the past was the actual technological progress in exploration, exploitation and processing of mineral resources. The crucial factors in ensuring nr 5/2014 tom

3 technical accessibility to mineral raw materials will still be technological progress allowing to exploit farther areas and mine deeper. The most of the currently exploited mineral deposits is relatively close to the earth surface, with the deepest opencast mine less than 1 km deep and the deepest underground mine of approx. 4 km deep. Therefore, it can be said that the shortage of minerals in the absolute sense is non-existent. Mineral shortage is not an issue of depleting existing resources, but issue of exploiting them profitably under existing market conditions. Mineral reserves are thus not physical, but economical variable. Therefore, reserve data shall consider their dynamic character and shall continuously adjust to developing knowledge of geological environment, constantly changing market forces and new exploitation technologies. It does not mean there are no real problems. The known mineral reserves are limited. It is not clear to what degree future resources will be economically and technically available for exploitation. The majority of easy-to-access high-quality deposits have already been exploited that means it is necessary to exploit lower-quality deposits located in deeper and less accessible layers of earth s crust, as well as transfer of mining industry to remote and harsh environments. New deposits may be present for example in the seabed, deserts, at the great depths, in arctic regions or even in areas not explored yet. These factors might cause that mining industry will be more expensive and more energy consuming. That in combination with possible rise of energy costs in subsequent decades might lead to much higher production costs. If technological progress, not only in mining industry, but as well in energy industry will not compensate more difficult geological and geographical conditions, the mineral shortage might become a reality. The acceptance of the idea that mineral reserves change dynamically is not the same that possible shortage will not occur in future. A huge number of factors determining possible shortage and multiple feedbacks introduce large degree of uncertainty and therefore can be treated as a warning not only against the evaluation of future mineral shortage, but also against determination of point of increased deficiency. Critical elements Obviously, not all the elements are similarly valuable for economy and its growth. Therefore which ones might be classified as essential elements, i.e. such elements which lack or shortage would have the largest negative consequences for economy in comparison with other raw materials? In order to answer this question, HCSS (Hague Center of Strategic Studies) has collected and analysed data regarding scarce minerals. Collected data included: physical and geological properties of selected minerals current and possible future applications prices geographical distribution of production and reserves national and transnational policies on production, use and trade. For purposes of analysis 15 individual elements and two groups of elements (rare earth elements and platinum metals) were selected. The collected data refer to 35 of 94 naturally occurring elements. The collection has been prepared in accordance with three criteria: elements of considerable importance to the industry, with a particular emphasis on high-tech industry elements that are hard to replace, as the economy is especially sensitive to shortage of these elements elements essential for the development of technologies. Elements have been divided into three groups: Mass application elements elements used in economy in large quantities for production of mass products and materials, sometimes used in small quantities in final products Dopant elements elements that are produced in much smaller quantities. They are used both as additives in composites and alloys, where they bring new and unique properties into the final material, and in very small quantities in semiconducting and optical materials. The particular attention shall be paid to rare earth elements that include lanthanides, scandium and yttrium. Due to their properties resulting from so called lanthanide contraction they may be combined with other elements in compounds or alloys with unique characteristics that allows to obtain materials widely used in novel technologies. Noble metals used as catalysts mostly in chemical and oil industry or in small quantities in electronics. The unique aspect of noble metals is the fact they that are used in global financial markets as dependable capital investment. It influences strongly prices and availability of these elements, especially in times of economic instability. Table 3 Critical elements and their main technical use [7,16a] Element Mass consumables Main technical use Copper Cu electrical and elektronics industries, nonferrous metallurgy, transportation, building/ construction Manganese Mn iron and steel production, ferroalloys, batteries (kathodes) Nickel Ni stainless steel, superalloys, non-ferrous alloys, batteries, catalysts, plating Zinc Zn protective coating, non-ferrous alloys (brass&bronze), batteries, chemicals (textile industry, chemical industry, agriculture and animal feed) Tin Sn protective coatings, non-ferrous alloys, soldering alloys, chemicals Doping elements Lithium Li heat resistant glass and ceramics, batteries, metallurgy, lubricants Gallium Ga microelectronics, photoelectronics, laser diodes and LED, solar cells Molybdenum Mo stainless steel, superalloys, ferroalloys, high speed steel, catalysts Niobium Nb metallurgy(iron-niobium alloys, superalloys), construction alloys (aerospace industry) Tantalum Ta microelectronics, medical applications, superalloys, tools Hafnium Hf hightemperature ceramics, nuclear power plants, superalloys Tungsten W cemented carbides, alloy steels, superalloys, wear resistant alloys Rare Earth (Cerium, Dysprosium, Erbium, Europium, Gadolinium, Holmium, Lanthanum, Lutetium, Neodymium, Praseodymium, Promethium, Samarium, Terbium, Thulium, Itterbium, Scandium, Ittrium) catalysts, permanent magnets, metallurgy (alloyed steel), batteries, phosphors, polishing materials, glass Precious Metals Platium Group Metals (Irydium, catalysts (transportation, petroleum, chemicals), microelectronics, LCD display Osmium, Palladium, Platinum, Rhodium, Ruthenium) Table 3 presents contents of each group and main technical applications of selected elements. As shown, all chosen elements are metals and their classification as critical results from their application and the role they play in modern economy. Due to that, it is of great importance to answer the question: what are possibilities of 440 nr 5/2014 tom 68

4 their shortage today and in the future and what we know of their quantity and availability? The answer is far from simple because there are three important factors having influence on possible shortage. Those factors are: prices, geographic distribution of mining sites and reserves and national and transnational policies on production, use and trade of elements. Prices The decisive factors in the examination of mineral shortage are their prices in the global market. They reflect market balance between global demand and supplies and can be treated as indicators showing how minerals are evaluated in comparison with other goods and services. In 20th century raw materials prices were characterized by large fluctuations periods of stability were interrupted by increased volatility and sudden price spikes, the last one occurred in price index presented by International Monetary Fund (Fig. 2) [8]. Increasing value of the index to mid-1980s indicate the price trend towards shortage, especially when taking into account fact that after temporary slump during 1980s crisis it has very quickly regained the pre-crisis level. Although this index does not concern directly prices of critical elements (as it takes into account prices of 51 basic products from three sectors: energy, industrial products and agrifood products) it can be treated as measure of economic activity. Its rapid recovery proves that demand for critical elements will not be lower in the future. Exploitation and reserves Table 4 presents global exploitation of ores and minerals of critical elements in period it shows how rapid was the increase of the demand in that period. Total exploitation has increased 6 times and in individual groups it increase almost 6 times for mass application elements, 21 times for dopant elements and almost 4 time for noble metals. This data show only large differences between individual elements in each group, especially for group of dopant elements. The rate of exploitation growth after 1980s crisis is still high. In the period the exploitation of mass application elements has increased approx. by 12.4% and dopant elements by 14.1% [12]. If the demand will still force such rate of growth, it may become one of the main sources of shortage. Table 4 Global extraction of minerals and ores of critical elements in and known global reserves [tonnes] Fig. 1. Real prices of minerals (2000=100) [7] Fig. 2. IMF Commodity price index [8] It is worth to analyse the changes of critical elements prices in the last three decades (Fig. 1) [7]. While the prices were decreasing for two decades after price spike in 20th century eighties, this trend has reversed since Actual prices began to rapidly rise and have doubled by 2006 reaching a level close to oil crisis period of 1980s. At this time, it is hard to say whether it is a lasting change in mineral price trajectory in the direction of shortage or is it just passing spike that global market has experienced many times in 20th century. Some information in this regard is provided by raw materials and products Metal 1950 [9] 1980 [10] 2010 [11] 1980/ / /1950 Reserves [12] Mass consumables Cu a) t Cu Mn b) t Mn Ni a) t Ni Sn a) t Sn Zn a) t Zn Total Doping elements Li b) t Li Ga b.d. b.d. 106 e) Mo f) t Mo (Nb+Ta) b) Nb a) > t Nb Ta a) > t Ta Hf b.d. b.d. b.d.. W i) t W Zr b) t ZrO 2 RE c) 276 g) t REO Total Precious metals PtX d) , t PtX All critical elements Total a) metal contents in ore or concentrate, b) extraction of concentrate or ore, c) REO contents d) including all platinum group metals, e) estimated data, f) in MoS 2 contents, g) monacyte and other minerals, h) in WO 3 contents nr 5/2014 tom

5 The reserves presented in Table 4 include currently known and published data. Due to that, they cannot be treated as final values. Firstly, huge areas in Africa, Asia or South America are the area of intensive exploration (unknown data) and secondly such data is not always published by all countries (companies). It is interesting how rising demands has caused shift in mineral production in 20th century [7]. Whereas in 1900 all production was almost completely concentrated in Europe and United States, in 2000 this share dropped below 20% and new producers have emerged such as Russia (CIS), Canada and Australia, China and 6 other resource rich developing countries (RRDC: Brazil, South Africa, Democratic Republic of Congo, India, Chile and Peru) (Fig. 3). The contribution of the latter group of countries is especially significant as they provide to global market more than a third of needed minerals. This shift reflects two trends: first one is the result of rapid industrialization in 20th century in many countries outside US and Western Europe that caused that mining industry became global; second one, caused by the depletion of the resources in countries that were earlier industrialized and the transfer of exploration and mining to new areas. It can be expected that the trend of transferring production from Western countries to developing countries will continue in 21st century. The high level of concentration of rare minerals makes it possible to control their supplies by few countries and private companies exploiting deposits of these minerals. Such raw materials might be used not only for economic purposes, but also political ones [7, 13]. This situation is definitely worrying. Some countries (e.g. US, China, Japan) assuming increase of shortage and economic problems in the event of supply reduction are already pursuing policy aimed at preventing or mitigating the shortage of minerals. It usually involves such actions as securing supplies from internal sources by strengthening governmental control over them, securing supplies from external sources by forming strategic partnership with important suppliers, creation of strategic reserves of selected elements working as a buffer in case of supply difficulties [7, 14]. Such actions may cause disturbances in supplies both in international and local markets. Instead of competitive sharing of rare minerals they might be more and more often delivered through long-term contracts between larger companies with significant (not always open) support of the government. Such actions may result not only in price increase, but might also lead to temporary rationing or limiting the use of some minerals in raw materials-poor countries. Therefore, the shortage of minerals is not just an issue of technical capabilities or trade, but also a strategic interest. It does not help to estimate or foresee balance between supply and demand of rare minerals in the long run. Fig. 3. Geographic shift in production of minerals [7] National and transnational polices on production, use and trade of critical elements Both, increase of prices on global markets related to the growing demand as well as difficulties with providing sufficient supplies might be source of raw materials shortage it appears that in the nearest future major role will be played by changes in geopolitics and economy field. The structure of Earth s crust is heterogeneous and mineral deposits are spread unevenly. Individual countries are provided by nature with unequal quantities of mineral resources deposits are located in the territories of few countries and therefore control of rare minerals supply is in the hands of few countries. In view of the expected increase in demand and limited supply of elements used in advanced technologies, access to rare materials is more and more often regarded as a vital or even national security interest. Many of resource rich countries pursue policy focusing on maintaining their resource base, both for exclusive use and as a source of income. The policy is usually implemented in three ways: all minerals are owned by the country, the exploration and exploitation is fully controlled by the government (legislative measures) and export of exploited minerals is controlled by taxes and export quotas. The control of export is one of the most used measures: by September 2009 there were 1233 decisions limiting export of raw materials and in 2010 China reduced export quotas for rare earths by 72% on the grounds of environmental protection [13]. As a result, the return to national protectionist approach to the production and export of raw materials can be observed. These trends are accompanied by increased focus on national interest and the decreasing importance of agreements concluded within international organizations such as UN or WTO. Critical raw materials elements for European Union Mineral shortage is especially dangerous problem for European Union. Although EU is a big producer of building minerals and is selfsufficient in that area, the production of metal minerals in EU is just 3% of global production and EU as a whole is dependent on import of metal minerals and minerals used in high-tech industry. In many cases total demand, especially for dopant metals is met only by import [7] (Fig. 4), while in the case of metals used in high-tech industry EU dependence on import might be treated as critical due to the high economic value and high risk of supplies. Due to that European Commission has initiated Raw Material Initiative programme, that sets integrated strategy as an answer to various challenges related to access to non-energy raw materials [15]. Fig. 4. Concentrates and ores UE-27 net imports as a percentage of apparent consumption [7] One of the main goals of the programme was to identify the list of non-energy raw materials critical for European Union. For executing such task a team of experts was appointed. The list of 41 materials as potential candidates for evaluation of criticality was compiled (Tab. 5) [16]. The evaluation was performed for each of the materials by calculating three indexes for each material: Economic importance of evaluated material calculated not based on the main application of the material, but by summation of added values in individual sectors of application while taking into account their contribution to the total consumption. 442 nr 5/2014 tom 68

6 Table 5 List of metals and industrial minerals *) selected for criticality assessment [16] Aluminium Antimony Barytes Bauxite Bentonite Beryllium Borates Chromium Lithium Magnesite Magnesium Manganese Molibdenum Nickel Niobium Perlite Clays (and kaolin) Platinum Group Metals **) Cobalt Rare Earth ***) Copper Diatomite Feldspar Fluorspar Gallium Germanium Graphite Gypsum Indium Iron ore Limestone (high grade) Rhenium Silica sand Silver Talc Tantalum Tellurium Titanium Tungsten Vanadium Zinc *) the term metals is used to indicate metallic ore ; metallic ore : a mineral, from which a metal can be extracted economically; industrial mineral : a mineral, which may be used in a range of industrial processes due to its chemica/physical properties **) Platinum Group Metals include platinum, palladium, iridium, rhodium, ruthenium and osmium ***) Rare Earth include yttrium, scandium ans so-called lanthanides Supply risks calculated based on material production while taking into political and economic stability of producing country, degree of global production concentration, substitutability of the material in all its applications and recycling level. For risk evaluation, 10 year period was assumed, as longer periods would introduce into the evaluation too high uncertainty. Environmental country risk evaluation of risks that measures might be taken by countries with the intention of protecting the environment and by so endangering the supply of raw materials to European Union. Results of evaluation During the first phase, selected materials were evaluated based on economic importance and supply risk. The results of calculations are presented in Figure 5, where X-axis reflects the positioning of the material in relation to its importance to the EU economy, while Y-axis reflects the positioning of the materials in relation to the identified supply risks. Three sub-clusters of points representing materials of different economic importance and risk supply may be distinguished as illustrated in Figure 5. The first cluster located in lower left corner contains materials that have relatively low economic importance and supply risks. For some of them, especially the industrial minerals, the group considered that possible supply risk may occur within a longer time horizon if the restrictions on access to EU land will be maintained to adversely affect mining production. Materials in lower right corner of the Figure 5 are those that have a high degree of economic importance, but have relatively low supply risk. It shall be stressed that even small shift in one of the supply risk metric (e.g. level of concentration or political stability of producing countries) may result in a sudden change upwards. This is particularly the case for rhenium and tellurium. Fig. 5. Economic importance and supply risk of the 41 chosen materials [16] Table 6 Main producers and main sources of imports of critical raw materials into EU [17] Raw materials Main producers (2008,2009) Antimony China 91% Bolivia 2% Russia 2% South Africa 2% Beryllium USA 85% China 14% Mozambique 1% Cobalt DR Congo 41% Canada 11% Zambia 9% Fluorspar China 59% Mexico 18% Mongolia 6% Main sources of imports into EU (2006 or 2007) Import dependency rate (**) Recykling rate Substitutability index(***) Bolivia 77% China 15% Peru 6% 100% 11% 0.64 USA, Canada, China, Brazil (*) 100% DR Congo 71% Russia 19% Tanzania 5% China 27% South Africa 25% Mexico 24% 100% 16% % 0% 0.9 Gallium not available USA, Russia (*) (*) 0% 0.74 Germanium China 72% Russia 4% USA 3% Graphite China 72% India 13% Brazil 7% Indium China 58% Japan 11% Korea 9% Canada 9% Magnesium China 56% Turkey 12% Russia 7% Niobium Brazil 92% Canada 7% Platinum Group South Africa 79% Metals Russia 11% Zimbabwe 3% Rare Earths China 97% India 2% Brazil 1% Tantalum Australia 48% Brazil 16% Rwanda 9% DR Congo 9% Tungsten China 78% Russia 5% Canada 4% China 72% USA 19% Hong Kong 7% China 75% Brazil 8% Madagascar 3% China 81% Hong Kong 4% USA 4% Singapore 4% China 82% Israel 9% Norwey 3% Russia 3% 100% 0% % 0% % 0,3% % 14% 0.82 Brazil 84% Canada 16% 100% 11% 0.7 South Africa 60% Russia 32% Norwey 4% China 90% Russia 9% Kazakhstan 1% China 46% Japonia 40% Kazakhstan 14% Russia 76% Bolivia 7% Ruanda 13% 100% 35% % 4% % 4% % 37% 0.77 (*) subject to strong fluctuation (**) import depemdence is calculated as net imports/(net imports + production in EU) (***) substitutability index: value substitution is possible at no cost; value substitution is feasible at relatively low cost; value substitution is possible at high cost; value substitution is not possible or very difficult nr 5/2014 tom

7 The sub-cluster of 14 materials in top right corner of the figure represents the materials of high economic importance and of high supply risk. Due to that this materials have been evaluated as critical for EU and as such they were classified by European Commission [17]. Their high supply risk is mainly due to the fact that a high share of worldwide production comes from China (antimony, fluorspar, gallium, germanium, graphite, indium, magnesium, rare earths and tungsten), Russia (PGM), the Democratic Republic of Congo (cobalt, tantalum) and Brazil (niobium and tantalum). The high production concentration is often compounded by low substitutability and low recycling rates (Fig. 6) During the second stage of evaluation, environmental country risk was calculated to identify possible additions to the list of critical raw materials. However, it turned out that materials with metric over the threshold value (1.2) are materials already considered to be critical listed in Table 7. It means that no materials would need to be added to the list of critical materials on the sole basis of high environmental country risk. Table 7 The Environmetal Risk for selected metals and industrial minerals [16] Environmental risk index Metal or industrial mineral tytanium, zinc, silver, feldspar, aluminium, silica sand, copper, nickel, iron ore, tellurium, gypsum, manganese, bentonite, molibdenum, borates bauxite, limestone, vanadium, tantalum, cobalt, rhenium, lithium, chromium, magnesite PGM, tungsten, graphite, fluospar indium, berylium, niobium gallium, magnesium, antymony, germanium <4.1 Rare Earth Comments and notes of assessment group Due to the lack of clear methodology in this regard, the threshold values used for evaluation of individual metrics separating material of relatively high economic importance and supply risk from these of lower economic importance and supply risk have been determined practically. Due to that the distinction between critical and noncritical material is the result of relative and not absolute evaluation and assumed quantitative methodology not only limits the number of factors taken into account, but in the same time gives only static view of the issue. The criticality evaluation is influenced by a number of different factors. Assumed 10 years time horizon results from unstable parameters. It especially holds true for supply risk that for some materials may change relatively fast. The list of 41 materials covered by this analysis is not complete. If additional materials were taken into account, it is possible that some of them could be regarded as critical. The criticality as the attribute of given element or mineral due to its application is not a permanent attribute and it is affected by many factors, the major one being technological changes. Fast penetration of new technologies may increase the demand on certain materials, while decreasing the demand for the materials used in outdated or obsolete technologies. Therefore, the evaluation or rather forecast of future demand on raw materials related to new technologies is of high importance. Because the evaluation gives only instantaneous view on situation, the evaluating team recommends that list of critical materials shall be updated every 5 years and the scope of evaluation extended. The evaluation does not take into account global economic growth it is obvious that this factor will additionally increase the demand on mineral resources. Recent economic crisis has considerably weakened that, what in assumed time horizon is likely to translate into lower demand. This cannot be expected in the long run. European Programme Raw Materials Initiative Initiated by European Commission Raw Materials Initiative programme is EU s answer to situation on global raw material market and aims to develop a strategy that would ensure access to nonenergy and non-agricultural raw materials. The initiative recognizes the fact that mineral resources are essential for the functioning of modern society and the supply and access to mineral resources are crucial for the sustainable operation and development of the EU s economy. It also states that EU faces fundamental changes in the global mineral resources market and its dysfunctionality risks and that these changes are probably permanent and may even worsen. The strategy covers actions in three different fields: ensuring access to raw materials from the international markets, foster the supply of raw materials from EU sources and boost resource efficiency and promotion of recycling [15]. Despite the progress in the implementation of the programme objectives, the Commission has concluded that further improvement is necessary [17]. To this end, the Commission will monitor the issue of critical raw materials for establishment of priority actions and regularly update the list of critical resources, at least once every three years. In the field of clear and continuous supply of raw materials from the international market, EU shall actively pursue raw materials diplomacy by strategic partnership and policy dialogues and encourage economic development of rich-in-raw materials developing countries. The Commission has also stated that EU shall expand bilateral talks on raw materials, intensify raw materials discussions on international forums, promote open market policy in the trade of rare raw materials and metals, pursue a policy of monitoring the export restrictions, use policy instruments to ensure that the supply of raw materials will be not disturbed by noncompetitive agreements, mergers or unilateral actions. The Commission believes that it is necessary to promote investment in European raw material resources in order to ensure better conditions for raw materials exploitation in EU countries. At the same time, taking into account contradictory objectives of environmental protection (Nature 2000, Birds and Habitats Directive) and development of mining activities, the Commission has compiled guidelines on how to exactly use rules of the Nature 2000 Directive. The Commission has considered as of particular importance for promoting the investments in mining industry determination of National Raw Materials Policies to ensure the mineral resources are mined properly and to establish a clear and understandable authorization procedure for exploration and exploitation of minerals. In accordance with the flagship initiative of Europe 2020 strategy the improvement of raw material efficiency is one of the main objectives of the EU in the view of incoming raw materials shortage [18]. The Commission puts much emphasis on increasing the level of recycling and proposes i.a. developing a better strategy for collecting and processing of the major waste streams, supporting research and pilot actions on increasing raw material efficiency, 444 nr 5/2014 tom 68

8 promote economic incentives for recycling, the development of new initiatives to improve competitiveness of EU recycling industry by introducing new market-based instruments favouring secondary raw materials. The Commission puts emphasis also on the need to strengthen controls and restrictions on export of waste electric and electronic products and devices, as well as used vehicles, as they are potentially important source of raw materials, including those critical ones. Although Raw Materials Initiative is important, it is not an official policy of EU to emerging challenges associated with mineral resources shortage. The current EU policy in this regard is in fact rather slow and indecisive. As a result, common EU policy on rare minerals that would provide patronage for the European companies dependent on such materials in the global market is still insufficient. One of the reasons is undoubtedly the differences of raw material policies inside the EU. While some of the countries (such as Germany, France, United Kingdom and Netherlands) have developed or are working on clear policy on rare minerals many smaller member states do not participate in such actions hoping that the problem will resolve itself. The lack of such common and firm policy is not positive. While the rising prices and the global increase in demand might have negative impact on long-term prosperity in Europe, a growing share of all kinds of barriers in global raw material market is more worrying. The actions taken by major economies to ensure preferential supply of minerals for their domestic industry are also disturbing. Such policies are harmful to the interests of EU, as they increase the deficiency of rare minerals, thereby weakening position and competitiveness of European industry. The opinion of industry representatives confirms that [19]. They believe that shortage of rare minerals and metals will become major problem for the industry and the risk of shortage will increase greatly within five years. Due to the crucial roles of these minerals and metals, the shortage effect will be felt throughout the supply chain system. At the same time economic and political factors are generally seen as more important sources of shortage than factors related to accessibility to the raw material deposits and their depletion. The effects of mineral raw material shortage Forecasts clearly indicate that the demand for mineral resources driven by the growth of large emerging economies will continue to rise and suppliers may encounter serious problems. On one hand, it will inevitably lead to an increase in prices and on the other hand, to increase the number of countries, which pursue the policy of securing their own supplies and maximizing the benefits from deposits located within their territory. Political and economic stability of raw material-rich countries is not always clear therefore, the probability of disruption in global raw material market increases. However, forecasting the effects of the shortage based on that is subject to a considerable level of uncertainty. One of the crucial issues is how long the large emerging economies (BRIC countries: Brasil, Russia, India and China) will be able to sustain the unprecedented economic dynamism of the past decade and whether other emerging economies will be able to follow the same path. The evolution of advanced, industrialized economies of the Western world is also not certain as the global economic centre of gravity seems to shift and they are struggling with the stagnation of labour force and relatively high levels of debt. Nevertheless, it is expected that the effects of mineral raw material shortage will manifest themselves in the economic, social and political areas, although their impact in each country will be different [5, 7, 13, 20]. One of the results of the shortage may be economic slowdown, which will primarily affect the countries, which economy is dependent on the import of raw materials and which will not be able to ensure sufficient supplies. Given the international economic relations this slowdown will affect also other countries, which will give rise to differences in global economic growth, in which some countries will achieve high, even double-digit economic growth, while others will struggle with maintaining the current quality of life. The ongoing rapid technological, economic and geopolitical changes already have a significant impact on the way societies organize themselves and how they see the surrounding world. Although the value systems sometimes differ significantly within societies and between societies, people always perceive their relation to government and governance in terms of increasing consumption. Any economic imbalance can cause frustration and associate with decision-making processes excessive tardiness in taking actions. This situation leads to the increase of importance of non-governmental organizations. As a result, the states still will be major force in international relations, but their internal significance will tend to decrease. Rapid and uneven changes in the world have impact on international relations and existing geopolitical order. Economic and technological dynamism of many economically developing countries weakens the existing dominance of Western countries. Rising and recovering economic powers as BRIC countries will seek to achieve the hegemony over the access and management of raw materials in their regions and market security at the expense of current influence of Western countries. Tightening the raw materials market will accelerate and strengthen these efforts. At the same time power and importance of international companies rises, and so rises their influence on global integration processes. It can be expected that in a situation of raw materials shortage these companies will cooperate with resource-rich countries on the acquisition of control not only over the sources and supplies of raw materials but also over foreign investments. As a result, resource-dependent countries will be forced to compete with strong global corporations, not always successfully. Such forecasts, although highly uncertain, present not too encouraging view of the future. The inevitable increase in the demand in increasingly difficult global raw materials market will put many countries in the difficult position, thereby ruining their development plans, especially in regard to new technologies. Unless adequate actions are taken to ensure the supply, this will result in technological lag and technological gap will only widen. Many experts warn that this forecast may also apply to European Union. Another issue is whether the access to the resources may result in conflict. Due to the increasingly stronger transnational relations and economic independence, military conflicts between the major economic powers seem unlikely in the decades to come. However, other types of conflicts cannot be excluded (trade wars or proxy wars, uprisings, civil wars, etc). Such conflicts will become more complex and will be probably related to access and control over certain raw materials deposits. The example of such conflict is the Great War of Africa in period that was de facto war for the control over tantalum ore deposits and have taken more than 5 million lives. Stefan ZIELIŃSKI Professor (Sc.D., Eng) graduated from the Faculty of Chemistry at the Wrocław University of Technology in 1959 with the specialization in Reactor materials. He took job in R1 Industry Plants in Kowary working on the exploitation of uranium ore and then he moved to Wrocław and initially worked in the Department of Inorganic Technology, transformed into the Institute of Inorganic Technology and Mineral Fertilizers, Wrocław University of Technology as the result of its reorganisation in In 1968, he received the degree of Doctor in Chemical Sciences after a successful defence of his dissertation on Research on concentrated fertilizers based on glassy potassium metaphosphate. In 1981, he earned habilitation in Technical Sciences after defending his dissertation on Kinetic aspects of gypsum crystallisation in the production process of phosphorous extraction acid. nr 5/2014 tom