Why are Critical Elements Important?

Transcription

1 Critical Minerals The Issues and the Importance of a Life-cyle Approach to Management Murray W. Hitzman National Research Council CER October 12, 2011 Why are Critical Elements Important? US Economic Development Energy Technologies Information Technologies Communications Transportation National Security DOE-EIA, Page 1

2 Possible Critical Elements Today They would have been different in the past and They will be different tomorrow APS-MRS Study, 2011 Critical Elements for New Energy Technologies Neodymium Dysprosium Praseodymium Samarium Tellurium Gallium Indium Germanium Terbium Europium Helium Page 2 Lithium Lanthanum

3 Constraints on Availability of Critical Elements Absolute abundance & concentration COPPER, TELLURIUM... Though not intrinsically rare, they are not concentrated efficiently by geological processes and rarely form primary ores. Copper critical in use, but no supply risk Cu World s leading copper producer (Chile, 34%) Countries with 4% or more of global production Other countries with production or major reserves Page 3

4 Tellurium critical in use, possible supply risk % of earth s crust (compare gold %) Almost all comes from by-product of copper smelting Key in Cd-Te thin-film solar photovoltaics 150 World Annual Production Tonnes of Tellurium * Production unknown USGS Mineral Commodity Summary 2005 Tellurium in Photovoltaics 9 gm/m 2 & 10% efficiency 1/10 gm (Te)/W or 100 tonnes (Te)/GW 20-25% capacity factor 400 tonnes (Te)/GW World electric consumption (2006) ~2000 GW (USEIA) Te Reserve base approx. 48,000 tonnes (USGS) 120 GW Bottom line we don t know of enough Te in the world today to make solar as big a contributor to power generation as we would like. Page 4

5 Tellurium in Photovoltaics Tellurium has been produced as a by-product of copper smelting (and often unwanted due to toxicity!) Tellurium production has gone down as more copper is produced from solvent extraction (SXEW) treatment of copper oxides rather than smelting of copper sulfides. Tellurium in Photovoltaics Tellurium has been produced as a by-product of copper smelting (and often unwanted due to toxicity!) Tellurium production has gone down as more copper is produced from solvent extraction (SXEW) treatment of copper oxides rather than smelting of copper sulfides. There are undoubtedly high tellurium deposits out there several known (Colorado, Mexico, Fiji). We have not developed geological models of how they form and how to find them. Page 5

6 Tellurium in Photovoltaics Tellurium has been produced as a by-product of copper smelting (and often unwanted due to toxicity!) Tellurium production has gone down as more copper is produced from solvent extraction (SXEW) treatment of copper oxides rather than smelting of copper sulfides. There are undoubtedly high tellurium deposits out there several known (Colorado, Mexico, Fiji). We have not developed geological models of how they form and how to find them. Running out of tellurium is NOT the problem. But disruptions and discontinuities in supply and price are immediate issues. Abundance of Critical Elements Critical elements There probably is a Hubbard Peak for the critical elements, but we are at the beginning (not the middle) of the curve. Page 6

7 Constraints on Availability of Critical Elements Absolute abundance & concentration COPPER, TELLURIUM... Though not intrinsically rare, they are not concentrated efficiently by geological processes and rarely form primary ores. Geopolitical risks REEs & PLATINUM GROUP (PGEs) Concentrated in several large or rich deposits (Bayan Obo, Bushveld, Noril sk). Complex economics and politics have led to dominance of a single or small number of countries, allowing market manipulation and raising political issues. Geopolitics U.S. relies on imports for over 90% of many critical elements. Reliance on imports is not a priori bad can make for efficient markets. Problems arise when monopoly economic policies concentrate production in one or a very few countries. Page 7

8 Geopolitics China South Africa Others Elements Top three supply countries and share (%) Top three share (%) Metal life (years) REE China 95% USA 3% CIS 2% 100% 709 Mo (Re) USA 32% China 25% Chile 22% 78% 46 Sb China 88% Guatemala 3% Bolivia 2% 95% 13 Ga China 43% Germany 20% Kazakhstan17% 80% 365 W China 75% CIS 6% Canada 5% 86% 55 In China 58% Japan11% Canada, Korea 9% 78% 22 Bi China 52% Mexico 21% Peru17% 90% 55 PGE South Africa 80% CIS 12% Canada 4% 96% 154 Cr South Africa 38% India 18% Kazakhstan 18% 74% >24 V South Africa 39% China 32% CIS 27% 98% 221 Mn South Africa 20% Australia 19% China 14% 53% 40 Ni CIS 19% Canada 16% Australia 11% 46% 40 Li Chile 38% Australia 22% Argentina, China 12% 84% 164 Co Congo 36% Canada 13% Australia 12% 61% 22 Rare earth elements (REE) critical in use, significant current supply risk REE World s leading REE producer (China, 95%) Countries with 4% or more of global production Other countries with production or major reserves Page 8

9 Platinum critical in use, possible supply risk Or Platinum? Pt World s leading Pt producer (South Africa, 80%) Countries with 4% or more of global production Other countries with production or major reserves Constraints on Availability of Critical Elements Absolute abundance & concentration COPPER, TELLURIUM... Though not intrinsically rare, they are not concentrated efficiently by geological processes and rarely form primary ores. Geopolitical risks PLATINUM GROUP (PGEs) & REEs Concentrated in several large or rich deposits (Bayan Obo, Bushveld, Noril sk). Complex economics and politics have led to dominance of a single or small number of countries, allowing market manipulation and raising political issues. Risks of coproduction RHENIUM, INDIUM, GALLIUM, TELLURIUM... They are only recovered as by-products in extraction of more common metals. Raise a host of economic issues. Page 9

10 Coproduction Economics Many critical elements are produced entirely as byproducts of the refining of major metals Tellurium (copper) Indium & germanium (zinc) Gallium (aluminum) Rhenium (molybdenum) Cobalt (copper, nickel) Prices are artificially low (economy of scope) until the co-production saturates By-product does not drive production of main product, even at high prices Price demand inelasticity Cu Coproduction Economics Main Product By-product By-product Cu Se Te Global production (metric tons) 16,200,000 2, ? Price ($/kg) $7.50 $77 $210 Value of global production ($) $122 x 10 9 $174 x 10 6 $105 x 10 6 Page 10

11 Zn Co-production Economics Global production (metric tons) Main Product By-product By-product By-product Zn In Ge Cd 12,000, ,000 Price ($/kg) $2.20 $575 $940 $3.90 Value of global production ($) $26 x 10 9 $324 x 10 6 $113 x 10 6 $86 x 10 6 Coproduction Issues - Rhenium Rhenium is produced as a by-product of molybdenum there are no primary rhenium producers. It is used in producing specialty steels. Page 11

12 Coproduction Issues - Rhenium Rhenium changes the phase structure in complex alloys, allowing turbine blades to operate longer at higher temperatures (>1600 C) and pressures without deformation General Electric discovered that sufficient Re (by-product of molybdenum production) for mass produced turbines might not be available (or extremely expensive). ~25 kg Re per gas turbine General Electric s Rhenium Story GE launched a two pronged approach in 2005: Recycle pre-consumer scrap to forestall shortage (new supply) Develop new alloys with low (zero?) Re (substitution) Had success over 5 years* * Fink, P.J., Miller, J.L., and Konitzer, D.G., 2010, J. Minerals Metals Mater. Soc. 62, 57. $10,000 $2,000 $6,000 Rhenium 10 Years On Anthony Lipmann (2009) 2005 Page 12

13 Is there really a shortage of Rhenium? Serendipity recently resulted in the discovery of a new type of super high grade moly deposit with a high Re content. Merlin, Australia (6.7 Mo, 23.2 g/t Re) Discovery of additional deposits (if we can develop a geological model for the deposits) should ease fears of Re Ivanhoe Australia Limited supply. MDQ % Mo, 29 g/t Re Constraints on Availability of Critical Elements Merlin Molybdenum (Mo) and Rhenium (Re) Project Absolute abundance & concentration COPPER, x Merlin is the world s highest grade molybdenumtellurium... and rhenium deposit and is Australia s key development project Though not intrinsically rare, Ivanhoe they are not concentrated efficiently by geological processes and rarely form primary ores.resource % Mo, 23.2 g/t Re (NI ) x Merlin Mineral Geopolitical risks x Merlin NI March 2010 Scoping Study (SRK Consulting) outcomes; PLATINUM GROUP (PGEs) & REEs - Conventional flotation and concentrate roast - 9 year mine life Concentrated in several large or rich deposits (Bayan Obo, Bushveld, tonnes (12 mlbs) molybdenum & 7.5 tonnes of rhenium Noril sk). p.a Complex economics and politics have ledcosts to dominance of a single or small - Cash operating of US$3.16 per lb Mo (incl Re by-product credits of US$4.90 lb) number of countries, allowing market manipulation and per raising political issues. Risks of coproduction Average LOM cost of US$115 per tonne. RHENIUM, INDIUM, GALLIUM, TELLURIUM... Merlin to be a high project withof strong longcommon term cashflows They are only recovered asxby-products inreturn extraction more metals. Raise a host of economic issues. x Pre-feasibility due for completion Q incorporating Osborne facilities x Incorporates new mining rate of 500Kt p.a. Environmental and social concerns REEs... x Full feasibility expected by Q Developed world will not accept environmental disruption. Countries willing to tolerate environmental degradation for short term gain can dominate markets.page 7 February 2011 Rising environmental consciousness renders this unsustainable. Page 13

14 Environmental and Social Concerns Decades of increasing vigilance in mining industry w.r.t. environmental and social issues Generally high environmental and social standards in developed world. Rising worldwide social and environmental sustainability standards International Council on Mining and Minerals (ICMM) International Finance Corp (IFC) World Bank Major lending banks Environmental and Social Concerns Mountain Pass, CA REE Once was world s leading producer of REE; first operations in early 1950 s; large scale 1960 s-90 s. Thorium & radium contamination of wastewater spills caused mine closure in 1990 s Molycorp has been trying to reopen mine for nearly a decade. Environmental issues: Desert tortoise Evaporating pools Water use Waste materials (Th, Ra) Page 14

15 Environmental and Social Concerns Chinese HREE Much of the world s HREE come from weathered granites in southern China. Mining of these deposits (and onsite processing of ore) has led to locally severe environmental damage. China is closing operations in response to public sentiment. supergene REE deposits Similar deposits in US (Bear Lodge, WY - 2 nd largest REE deposit in US) and Australia will also have to be environmentally conscious. China REE Clay deposit Constraints on Availability of Critical Elements Absolute abundance & concentration COPPER, TELLURIUM... Though not intrinsically rare, they are not concentrated efficiently by geological processes and rarely form primary ores. Geopolitical risks PLATINUM GROUP (PGEs) & REEs Concentrated in several large or rich deposits (Bayan Obo, Bushveld, Noril sk). Complex economics and politics have led to dominance of a single or small number of countries, allowing market manipulation and raising political issues. Risks of coproduction RHENIUM, INDIUM, GALLIUM, TELLURIUM... They are only recovered as by-products in extraction of more common metals. Raise a host of economic issues. Environmental and social concerns REEs... Developed world will not accept environmental disruption. Countries willing to tolerate environmental degradation for short term gain can dominate markets. Rising environmental consciousness renders this unsustainable. Response times in production & utilization All critical elements It takes 5-15 years to bring new sources online and/or research and develop substitutes. Page 15

16 Response Times in Production & Utilization 5 15 years from discovery of a geologic resource to production of refined metals 5 15 years from conceptual design to production for novel technology Response Times in Production & Utilization 5 15 years from discovery of a geologic resource to production of refined metals 5 15 years from conceptual design to production for novel technology These long time lags hinder markets both in metal production and technology development Current situation with Li-ion or NiMH batteries for electric vehicles Page 16

17 Response Times Lithium & Lanthanum for Batteries Batteries for electric vehicles Lithium or NiMH? Lithium or Lanthanum? Chevy Leaf uses 180 kg of Li-ion batteries Typical Toyota Prius uses kg of La Which technology will win? Lithium 0.002%, ~25 Kt/yr, ~$70/kg Possible technology route for electric vehicle batteries Lanthanum 0.004%, ~39 Kt/yr, ~$120/kg Possible technology route for electric vehicle batteries Response Times Lithium & Lanthanum for Batteries Lithium Produced from lacustrine brines (Chile, Argentina) and pegmatites (Australia) New deposits with large reserves known- Brines (USA, Bolivia, China, Canada) Pegmatites (USA, Canada, China, Madagascar) Li-clay deposits (USA) Geology well understood No potential geological resource issues Lanthanum Produced from REE deposits (primarily Bayan Obo carbonatite, China) La is one of most common REEs Numerous deposits with significant La reserves known (Australia, Canada, USA, Brazil) Geologically both are potentially viable however, response times of production will depend on technology developments Page 17

18 Need for Life-cycle Analysis " of Critical Elements Every critical element has its own story. New technologies also have their unique path towards deployment. Understanding how critical elements fit into the economy will require looking at a myriad of issues over long time periods life-cycle analysis. Need for Life-cycle Analysis " of Critical Elements Important elements to be considered: Geological deposit modeling (deposit discovery) Mining and mineral processing including regulatory aspects Material characterization and substitution Utilization and manufacturing Functional recycling Workforce issues Page 18

19 Need for Life-cycle Analysis " of Critical Elements Important elements to be considered: Geological deposit modeling (deposit discovery) Mining and mineral processing including regulatory aspects Material characterization and substitution Utilization and manufacturing Functional recycling Workforce issues Geological Models for Critical Element Deposits We have good geological models for: Mafic intrusion-hosted PGE deposits Lithium deposits (lacustrine brines and pegmatites) Some REE deposits Many deposits that have ECEs as by-products: o Porphyry copper deposits (Te) o Porphyry moly deposits (Re) o Sedimentary rock-hosted copper deposits (Co) o Epithermal precious-base metal deposits (Ag, In) o We do not, however, understand why some deposits have higher concentrations of critical elements. Page 19

20 Geological Models for Critical Element Deposits We do not have good geological models for: Ge-rich Tsumeb-type Cu-Zn deposits (Tsumeb, Kipushi, Kombat, Apex) Kipushi, DRC Cu-rich As-rich Re, Ge Ga, Ge, and In-rich carbonatehosted zinc deposits Zn-rich (from demagnee and Francois, 1988) Geological Models for Critical Element Deposits We don t have robust geological models for the ionabsorption clay (weathered) deposits like those in China. Surface soil REE concentration layer REO grade (%) Page 20

21 Need for Life-cycle Analysis " for Critical Elements Important elements to be considered: Geological deposit modeling (deposit discovery) Mining and mineral processing including regulatory aspects Material characterization and substitution Utilization and manufacturing Functional Recycling Workforce issues Functional" Recycling There is almost no functional recycling of most critical elements at present Cell phones, computers, and other electronic waste represents a very rich ore for many critical elements. This material will only become more significant in the future Urban mining is already taking hold in some countries (South Korea) There needs to be a change in attitude to realizing that recycling may represent the world s richest resource fro some critical elements (though it will not replace need for virgin materials) Page 21

22 Functional" Recycling Recycling issues are non-trivial with many research opportunities: Economies of scale and scope (economics) Separation chemistry (chemistry, materials science, metallurgy, chemical engineering) Consumer culture and awareness (anthropology, sociology) Toxicity and regulation (environmental science, biology) Need for Life-cycle Analysis " for Critical Elements Important elements to be considered: Geological deposit modeling (deposit discovery) Mining and mineral processing including regulatory aspects Material characterization and substitution Utilization and manufacturing Functional Recycling Workforce issues Page 22

23 Workforce Issues Total number of geoscience graduates worldwide in 2004 was 4100 students. Very low number to discover and exploit world energy and mineral resources including critical elements. NORTH AMERICA (NAM) 4100 geoscience graduates 326p 8% 488p 12% LATIN AMERICA (LAM) EUROPE (EUR) 276p 6.5% MIDDLE EAST 476p (MEA) 11.5% 325p 8% Africa (AFR) RUSSIA & CASPIAN 802p (CIS) 20% Other Asia Pacific 928p 22% China 34% 480p 12% ASIA PACIFIC (ASA) Schlumberger data, 2006 Summary We are not facing an imminent absolute shortage of energy critical elements (Hubbard s Peak scenario). However, market-driven shortages are possible (happening today). No country can become critical element independent. Each element will go through a process of adjustment of application to abundance similar to what has happened (and recurred) in the past for better known elements such as gold and aluminum. Page 23

24 Summary Securing critical elements will require both Aggressive research (geological, metallurgical, materials science) Free markets Life-cycle analysis is required to better understand how critical elements flow through the economy. A much better understanding of the whole lifecycle of critical element exploration, production, processing, manufacturing, use, disposal, and recyling is critical for future US competitiveness. Critical Elements " A Grand Challenge Ensuring stable and sufficient supplies of critical elements links geology materials science and engineering environmental science sociology economics policy making Politics Undertaking life-cycle analyses of the critical elements will be a challenge to academic, corporate, governmental institutions and traditional disciplinary thinking Page 24