CHAPTER 4
Applying the Matrix

USING THE MATRIX TO EVALUATE MINERAL CRITICALITY

The criticality matrix, introduced in Chapter 1, emphasizes that importance in use and availability (supply risk) are the key considerations in evaluating a mineral’s criticality. This chapter evaluates the criticality of 11 minerals, selected on the basis of two considerations. First, the set of minerals the committee examined had to illustrate the range of circumstances that the matrix methodology accommodates and considers. For example, in the selection of the minerals examined, the committee considered minerals used in large quantities throughout the economy in traditional applications and others used in limited quantities in a small number of (often emerging) applications, minerals produced largely as by-products, and other minerals for which recycling of scrap is an important source of supply. Second, the set of minerals had to consist of those that, in the professional judgment of committee members, would likely be included in a more comprehensive assessment of all potentially critical minerals.

The next section examines in detail 3 of the 11 selected minerals or families of minerals: copper, platinum group metals (PGMs), and rare earth elements (REs). The section thereafter assesses in a more general manner the eight additional minerals that the committee considered potential candidates for criticality: gallium, indium, lithium, manganese, niobium, tantalum, titanium, and vanadium. The committee did not have the time or resources to provide a comprehensive assessment of all potentially critical minerals. The analysis rather focused on establishing the framework and



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CHAPTER 4 Applying the Matrix USING THE MATRIX TO EVALUATE MINERAL CRITICALITY The criticality matrix, introduced in Chapter 1, emphasizes that importance in use and availability (supply risk) are the key considerations in evaluating a mineral’s criticality. This chapter evaluates the criticality of 11 minerals, selected on the basis of two considerations. First, the set of minerals the committee examined had to illustrate the range of circumstances that the matrix methodology accommodates and considers. For example, in the se- lection of the minerals examined, the committee considered minerals used in large quantities throughout the economy in traditional applications and others used in limited quantities in a small number of (often emerging) applications, minerals produced largely as by-products, and other minerals for which recycling of scrap is an important source of supply. Second, the set of minerals had to consist of those that, in the professional judgment of committee members, would likely be included in a more comprehensive assessment of all potentially critical minerals. The next section examines in detail 3 of the 11 selected minerals or families of minerals: copper, platinum group metals (PGMs), and rare earth elements (REs). The section thereafter assesses in a more general man- ner the eight additional minerals that the committee considered potential candidates for criticality: gallium, indium, lithium, manganese, niobium, tantalum, titanium, and vanadium. The committee did not have the time or resources to provide a comprehensive assessment of all potentially critical minerals. The analysis rather focused on establishing the framework and 109

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MINERALS, CRITICAL MINERALS, AND the u.s. ECONOMY criteria that might be considered by decision makers and mineral experts in determining a mineral’s criticality and, subsequently, on assessing the type and frequency of information needed at a federal level to mitigate economic impacts should the mineral’s supply become restricted. As a prelude to the criticality assessments, the committee reviews here the materials presented in Chapters 2 and 3 on mineral use and availability. These two chapters inform the “scoring” of the matrix for a specific mineral, or where in the matrix a specific mineral might fall at a given time. The Vertical Axis: Importance in Use or Impact of Supply Restriction The vertical axis, as noted previously, represents increasing importance in use, or analogously, the increasing impact of a supply restriction for a par- ticular mineral. The methodology uses a relative scale of 1 (low) to 4 (high) to represent different degrees of importance or impact (Figure 4.1). The key concept in locating a mineral on the vertical axis is substi- tution—the ease or difficulty of substituting for a mineral that becomes unavailable or too expensive. The position of a mineral on this axis depends on the context, the definition of which considers two important aspects. The first is scale. Are we concerned about a particular product and the im- pact a supply restriction would have on the performance of a product? Are we concerned about the effects on a local, regional, or national economy should the supply of a mineral essential to a local, regional, or national industry become restricted? Are we concerned about the effect of a supply restriction on a national priority, such as defense? For example, a mineral that is essential to the performance of a product (i.e., no ready substitutes exist to provide the same or similar performance) would be scored as a 4 by the manufacturer of the product. However, if this industrial sector was only a very small part of the national economy, it might be scored a 1 from the perspective of the U.S. economy. The second aspect of the context in placing a mineral on the vertical axis is time. The longer the period of time a user has to adjust to a supply restriction, typically the smaller is the con- sequence (substitution becomes easier). With a sufficiently long adjustment period, scientists and engineers usually can identify or develop a substitute 110

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Applying the Matrix 4 (high) Impact of Supply Restriction 3 2 1 (low) 1 (low) 2 3 4 (high) Supply Risk FIGURE 4.1  Criticality matrix diagram showing the two main factors that determine the scoring of a mineral’s criticality: the impact of supply restriction (importance in use and ability to substitute for the mineral), and the supply risk (potential factors affecting the availability of the mineral). The axis scales are guides for the purpose of developing a weighted score for a mineral in terms of its criticality. fig 4-1 material with satisfactory or perhaps even better chemical and physical properties than the material whose supply was disrupted. In the analysis that follows, the committee took a predominantly na- tional perspective and one that is short to medium term (an adjustment period of one or several years, and no more than a decade). This framing 111

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MINERALS, CRITICAL MINERALS, AND the u.s. ECONOMY of the analysis would not preclude someone else from evaluating a mineral from a local or regional perspective or over longer adjustment periods. As long as the context is established at the start of the analysis, the matrix concept can ideally be applied by anyone interested in evaluating a mineral’s criticality. It is important to recognize that the degree of a mineral’s importance is likely to vary from one end use to another. Substitution is likely to be easier in some applications than others. The committee, therefore, evaluates the degree of importance (or impact of supply disruption) for each important application or end use of a specific mineral. The committee asked a number of questions in placing a mineral on the vertical axis. What is the technical substitution potential in a particular end use? If technical substitution is possible, what are the economic con- sequences (in other words, by how much will production costs rise)? How vital is the end use for national considerations (e.g., national security)? How vital to the nation’s economy is the industrial sector encompassing the dominant use of the mineral? How important to society is the dominant use of the mineral? What portion of the mineral will be used in emerging technologies or in applications expected to experience substantial growth? In the end, the actual placement of a mineral on the vertical axis repre- sents the judgment of the committee considering these questions rather than the result of quantitative analytical assessment. Nonetheless, as shown below, the scoring is semiquantitative in that it attempts to weight the various application sectors for the mineral against the risk to the mineral’s availability. Finally, to facilitate consistency from one application of the matrix to another, the committee presents three indicators for each mineral it assesses: (1) estimated value of U.S. consumption of the mineral, giving an indication of the economic size of the sector (large or small); (2) the percentage of U.S. consumption in existing uses for which substitution is difficult or impossible (measured as the percentage of consumption; a score of 4 in this analysis indicates a high degree of impact from a supply disrup- tion); and (3) the committee’s professional judgment about the importance 112

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Applying the Matrix of growth in emerging uses that could overwhelm existing raw material production capacity in the short term (Table 4.1). The Horizontal Axis: Availability and Supply Risk The horizontal axis of the criticality matrix represents increasing risk (or probability) of supply disruption, which could exhibit itself not only in the form of physical unavailability of a mineral input but even more likely in the form of sharply higher prices for the mineral. As with the vertical axis of the matrix (importance in use), the way in which a specific mineral is placed on the horizontal axis depends on context. For supply risk, time is the essential aspect on which to focus. Are we concerned about availability in the longer term, over periods of a decade or more? Alternatively, are we concerned about the likelihood of short-term disruptions lasting weeks, months, or a few years? In either case, analysis depends on considering the five fundamental determinants of a mineral’s availability: geologic, technical, environmental and social, political, and economic. How these determinants are assessed depends on whether the analysis is short term or long term. For purposes of this chapter, as noted in the previous section, the committee primarily assesses short- to medium-term supply risks, while commenting on longer- term issues as appropriate. When locating a mineral on the vertical axis, it is important to evalu- ate each significant application of a mineral separately because the degree of importance (ease or difficulty of substitution) typically varies from one application to another. When it comes to supply risk, however, the com- mittee does not attempt to estimate different degrees of supply risk for different applications. At one level, especially when markets are large and well functioning, the supply risk is the same for all users. A supply disrup- tion typically will exhibit itself in the form of higher prices that all end us- ers face. The committee realizes that there may be circumstances in which different end use sectors face different supply risks. Such a situation might occur, for example, when one or a few large and powerful buyers are able to 113

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MINERALS, CRITICAL MINERALS, AND the u.s. ECONOMY TABLE 4.1  Criticality Indicators for Selected Minerals and Metals Copper PGMs REs Niobium Gallium Relevant for Vertical Axis U.S. consumption 16,625 1832 >1000 173 10 (million $, 2006)a Percent U.S. 15 55-90 44 32 ~40 consumption in depending (indium- existing uses for which on which dependent) substitution is difficult or PGM impossible (4 in matrix) considered Importance of growth 1 2 3 3 3 in emerging uses that could overwhelm existing global production capacity (1 = low; 4 = high) Relevant for Horizontal Axis Percent U.S. import 40 95 (Pt) 100 100 99 dependence (2006)b 82 (Pd) Ratio of world reservesc- 31 139 715 73 NA to-production Ratio of world reserve 61 156 1220 87 NA based-to-production 114

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Applying the Matrix Titanium Mineral Titanium Indium Lithium Manganese Tantalum Concentrates Metal Vanadium 107 Not 314 164 Not 3255 68 estimated estimated ~10 0 90 90 10 (for 90 11 (partly pigments) gallium- dependent) 3 2 1 2 1 2 2 100 >50 100 87 71 Net 100 percent exporter 6 194 40 33 122 NA 208 13 521 473 116 241 NA 609 continued 115

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MINERALS, CRITICAL MINERALS, AND the u.s. ECONOMY TABLE 4.1  Continued Copper PGMs REs Niobium Gallium World by-product Small Primarily Primarily NA ~100 productione as percent coproducts coproducts of total world primary production U.S. secondary 7 Significant Small ~20 0 productionf from old scrap, as percent of U.S. apparent consumption NOTES: NA = not available. Estimated either as (1) the value cited in U.S. Geological Survey (USGS) Mineral a Commodity Summaries, or (2) the product of U.S. consumption and price. b Net import reliance as a percentage of apparent consumption. Net import reliance is defined as imports minus exports plus adjustments for changes in government and industry stocks. c Defined by the USGS (2007) as “that part of the reserve base which could be eco- nomically extracted or produced at the time of determination. The term does not signify that extraction facilities are in place and operative.” obtain supply preferentially, even while other, less powerful end users are unable to buy a mineral at all or must pay a sharply higher price. As with the vertical axis, the actual placement of a mineral on the horizontal axis represents the judgment of the committee, rather than the result of a quantitative analytical method. To assist in this evaluation, five indicators for each mineral that relate to current or future supply were also assessed (Table 4.1): (1) U.S. import dependence, which provides a starting 116

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Applying the Matrix Titanium Mineral Titanium Indium Lithium Manganese Tantalum Concentrates Metal Vanadium Most Nil Nil Nil Small NA Most Small Insignifi- Negligible 13 NA <1 Small cant percent Defined by the USGS (2007) as “that part of an identified resource that meets speci- d fied minimum physical and chemical criteria related to current mining and production practices, including those of grade, quality, thickness, and depth” and “the reserve base includes those resources that are currently economic (reserves), marginally eco- nomic (marginal reserves), and some of those are currently subeconomic (subeconomic resources).” e Judgment based on published descriptions of production. f Numerical estimates when available; judgment otherwise based on published descriptions. SOURCES: Johnson Matthey, 2007; USGS, 2007. point for evaluating short-term political risks, although one that is subject to many caveats; (2) the worldwide ratio of reserves to current production, giving an estimate of the lifetime of reserves; (3) the ratio of worldwide reserve base to current production, providing a longer-term perspective on geologic availability; (4) the relative importance of world by-product production in world primary production; and (5) the relative importance of U.S. secondary production from old scrap in overall U.S. consumption. 117

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MINERALS, CRITICAL MINERALS, AND the u.s. ECONOMY U.S. imports support investment in the exporting countries and gener- ate social and economic benefits there. A high degree of import dependence for certain minerals is not, in itself, a cause for concern. Increased trade and investment flows contribute to economic growth and prosperity, both for the United States and for its trading partners. However, import dependence can expose a range of U.S. industries to political, economic, and other risks that vary according to the particular situation, including the country or countries concerned, the structure of the industry, and other factors. The world reserve-to-production ratio integrates certain aspects of geologic, technical, and economic availability and is expressed in years. This term does not signify that extraction facilities are in place and opera- tive. The world reserve base-to-production ratio is also expressed in years and integrates aspects of geologic, technical, and economic availability, but with less restrictive economic constraints. The ratio represents that part of an identified resource that meets certain physical and chemical criteria but includes resources that are currently economic (reserves), marginally economic (marginal reserves), and currently uneconomic (subeconomic resources). These two ratios represent high-level assessments based on an inventory of identified resources and key assumptions. Neither is based on a detailed, site-specific analysis of technical and economic feasibility. Classification of reserves and resources does not necessarily correspond to definitions used by regulatory agencies and relied on by investors. The ratios therefore provide an indication of the long-term availability of a mineral from primary sources. It is difficult to anticipate future explora- tion success, prices, costs, exchange rates, or production levels, all of which affect the resulting ratios. The underlying database may provide insight into the economic outlook for existing mines, but the ratios provide little insight into market dynamics. Other sources of data, information, and analysis are required to assess the outlook for supply, demand, inventories, and prices of minerals over the short to medium term. Because such analyses are based on actual in- vestment intentions and project evaluation activity, they provide a clearer indication of short- to medium-term availability, based on recent technical and economic assessments that take technical, political, economic, and 118

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Applying the Matrix other risks into consideration. Project proponents and investors attempt to identify and mitigate project risks and secure insurance coverage against residual risks that cannot otherwise be controlled, but supply restrictions can arise from technical, environmental and social, political, economic, or other disruptions that were unforeseen, were unforeseeable, or could not be mitigated effectively. Overall Assessment The overall placement of a mineral on both the vertical and the horizon- tal dimensions of the matrix thus defines the degree of criticality of the mineral. The most-critical minerals are both essential in use (difficult to substitute for) and prone to supply restrictions. In the committee’s view, criticality is best regarded as a continuum of possible degrees. There might, however, be specific situations in which a company or government agency would desire to create a list of “critical” minerals for the purpose of under- taking specific actions or policies to ensure supply or facilitate substitution away from highly critical minerals. The exact definition of what is critical (and by implication what is not critical) would depend on the specific con- text. Conceptually, however, a list of critical minerals would contain those minerals in one or more of the boxes in the upper right-hand portion of the matrix (Figure 4.1). CRITICALITY ASSESSMENTS This section applies the criticality matrix to three minerals or families of minerals: copper, REs, and PGMs. The committee selected these minerals because they exhibit a range of characteristics and serve to demonstrate the ability to differentiate levels of criticality for minerals with a variety of   Investment decisions are based on a site-specific evaluation of ore reserves; capital and operat- ing costs for alternative mining plan; the net present value (NPV) of after-tax cash flows, based on certain assumptions; and the sensitivity of NPV (or a related measure such as the rate of return) to changes in key parameters such as ore grade and tonnage, capital and operating costs, metal prices, and exchange rates. 119

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MINERALS, CRITICAL MINERALS, AND the u.s. ECONOMY in the manufacture of capacitors for the base stations that are part of the cellular telephone network, operating at 2.2 gigahertz, as well as almost all other modern electronics (Table 4.13). Although considerable research has been carried out, to date no effec- tive substitute has been found for tantalum in this application. Tantalum can be substituted for, but only with a loss in performance (e.g., more dropped calls, shorter battery life, reduced electronics performance). Do- mestic recycling of tantalum is essentially nonexistent, because of its use in very small quantities in a large number of products. The committee therefore determines that the appropriate criticalities and weighted rank- ings are those shown in Table 4.13. Horizontal Ranking—Risk to Tantalum Supply Tantalum is not mined in the United States; most of our imports come from Australia. Other major sources of tantalum are Canada and Brazil. Because most of the tantalum mined in the world is used in capacitors, compared to the relatively small quantities needed for this market, cell phone manufacturers can be held captive to high prices. As an example, the price of tantalum has increased 1000 percent since 1955. Australia, Canada, and Brazil are considered reliable suppliers. In terms of the avail- ability of tantalum, it is not so much a question of obtaining the material, but its price. The committee would thus rank supply risk as moderate (2). TABLE 4.13  Relative Importance of End-Use Applications for Tantalum Proportion of Impact of Supply Weighted Application Group Total U.S. Marketa Restriction Score Capacitors 0.65 3 1.95 Specialty alloys, other 0.35 2 0.70 Overall importance in use 2.65 a USGS, 2007. 158

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Applying the Matrix The composite criticality for tantalum is located together with the other seven criticality candidates on Figure 4.6. Titanium Vertical Ranking—Ease of Substitution and Impact of Supply Restriction on User Sectors The element titanium has important uses in two distinct forms: titanium dioxide (TiO2) and titanium metal. Titanium dioxide is a vital component in paints and pigments—its overwhelming use on a mass basis. Titanium metal is quite resistant to corrosion and has a high melting temperature. While its strength is similar to steel, it is 45 percent lighter, and titanium alloys can be twice as strong as aluminum alloys. As a strong, lightweight metal, titanium is thus an important component in aerospace applications, which have very few substitutes. In 2004, an estimated 60 percent of the titanium metal (as opposed to the oxide for pigment) used in the United States went into aerospace applications. The remaining 40 percent was used in such applications as armor, chemical processing, marine, medi- cal, and power generation, for example. Because it is compatible with the human body, titanium is often used in surgical instruments and medical implants. Titanium presents an interesting example of the distinction between total uses and the impact on different user sectors (Table 4.14). In its dominant use, pigments, reasonable substitutes are available; as a result, the overall importance according to the algorithm used in this report is quite moderate. However, the metal is absolutely crucial to the manufacture of aircraft and other high-technology products, and these products are crucial to the U.S. economy and to its balance of payments. Restrictions on supply would thus have major implications for one sector that is (relatively) not a big titanium user, but is very important to the U.S. economy. Conversely, supply restrictions would be much easier for the dominant pigments sector to address. 159

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MINERALS, CRITICAL MINERALS, AND the u.s. ECONOMY TABLE 4.14  Relative Importance of End-Use Applications for Titanium Proportion of Impact of Supply Weighted Application Group Total U.S. Marketa Disruption Score Pigments 0.95 2 1.90 Aerospace, high technology 0.05 4 0.20 Total 2.10 a USGS, 2007. Horizontal Ranking—Risk to Titanium Supply Titanium is the ninth most common element in the Earth’s crust. Tita- nium occurs in the minerals rutile and ilmenite; ilmenite provides about 90 percent of the titanium every year. Chlorinating rutile and reducing the product to titanium sponge using magnesium metal produces titanium metal. The sponge is converted to titanium metal in an ingot form in an electric arc furnace. In 2006, the United States was 67 percent reliant on foreign sources for titanium. The major import sources were Australia and Canada (USGS, 2007). The committee considers supply risk for titanium to be moderate (2), based on supply sources, substitutability, and recycling constraints. The composite criticality for titanium is located together with the other seven criticality candidates on Figure 4.6. Vanadium Vertical Ranking—Ease of Substitution and Impact of Supply Restriction on User Sectors Vanadium is a very hard metal with a relatively high melting point of 1895°C. Addition of vanadium during steelmaking results in the formation of a finely dispersed vanadium carbide phase that is very hard and wear re- sistant. High-performance titanium alloys for aerospace applications typi- cally contain 4 percent vanadium and 6 percent aluminum (Table 4.15). 160

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Applying the Matrix TABLE 4.15  End Uses of Vanadium and Its Compoundsa End Uses Percentage Carbon steels 25 High-alloy steels 27 High-strength, low-alloy steels 27 Other alloys (e.g., with titanium) 11 Catalysts and chemicals 10 a Primarily ferrovanadium and vanadium pentoxide. SOURCE: USGS, 2007. Niobium, manganese, molybdenum, titanium, and tungsten are to some degree interchangeable with vanadium as alloying elements in steel. In some catalytic applications, platinum and nickel can be substituted for vanadium, but usually at a higher cost. In aerospace titanium alloys, there is currently no acceptable substitute for vanadium. These considerations lead the committee to conclude that the impacts of supply disruption and weighted rankings are as shown in Table 4.16, where the alloys have been combined into a single end use category. Horizontal Ranking—Risk to Vanadium Supply Vanadium is found in a broad spectrum of minerals distributed in many countries, as well as in Canadian tar sands and crude oil produced by Mex- ico and Venezuela. Vanadium has been produced domestically for decades, primarily from wastes and residues such as slags and boiler ash, but do- mestic production is dependent strongly on prices. In 1996, nine vanadium producers had eight active extraction operations whose feed comprised ferrophosphorus slag in Idaho, vanadium-bearing iron slag, petroleum residues, spent catalysts, and boiler ash, for example, from ships burning Mexican fuel oil. In 2006, eight producers of vanadium-bearing materi- als existed, but all used imported feedstock and semirefined compounds. 161

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MINERALS, CRITICAL MINERALS, AND the u.s. ECONOMY TABLE 4.16  Relative Importance of End Use Applications for Vanadium Proportion of Impact of Supply Weighted Application Group Total U.S. Marketa Restriction Score Steel alloys 0.79 2 1.58 Other alloys 0.11 4 0.44 Catalysts and chemicals 0.10 3 0.30 Overall importance in use 2.32 a USGS, 2007. Recycling is not widely practiced, although the extent of recycling would probably increase if warranted by restricted supply or sustained high prices. However, ample domestic sources of vanadium exist and processing plants could probably be restarted if economically justified. Several mothballed U.S. uranium mills are likely to be reactivated within the next 3 years and at least one could have a vanadium by-­product. One mothballed conventional uranium mill is located in Utah and the other in Wyoming. One operating plant is in Utah and one is in ­Colorado. A mothballed plant in Idaho that produced vanadium metal and vana- dium pentoxide from ferrophosphorus slag may be capable of reactivation. U ­ ranium can also be recovered as a by-product of phosphoric acid produc- tion, and there are two plants each in Florida and Louisiana on standby status. The United States at present is essentially 100 percent dependent on imported vanadium feedstocks, with 74 percent of ferrovanadium from the Czech Republic and 82 percent of vanadium pentoxide from South Africa. In mid-2006, Anglo American was reportedly in the process of selling its 79 percent controlling interest in Highveld Steel and Vanadium Corpora- tion Limited to Russia’s Evraz group for U.S. $678 million (Moore, 2006). The committee has not confirmed this transaction, but it could potentially increase supply risk. Reported U.S. consumption for the last 15 years has been fairly constant in the range 3000-4300 metric tons annually. From 1991 through 2003, the price of vanadium pentoxide was in the range 162

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Applying the Matrix $1.34-2.95 per pound, but prices then rose sharply to a high of $16.28 in 2005, falling to a 2006 average of $8.08 (USGS, 1997, 2007). Thus, total 2006 value was about $68 million. The committee considers supply risk for vanadium to be only moderate (2) for all applications, and the composite criticality for vanadium is located together with the other seven criticality candidates on Figure 4.6. 4 (high) Impact of Supply Restriction 3 2 Gallium Indium Lithium Manganese Niobium 1 (low) Tantalum Titanium Vanadium 1 (low) 2 3 4 (high) Supply Risk FIGURE 4.6  Criticality matrix for the eight candidate minerals discussed above. Of the eight, niobium, indium, manganese, and potentially gallium stand out as minerals of potential concern to the U.S. economy. fig 4-6 163

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MINERALS, CRITICAL MINERALS, AND the u.s. ECONOMY SUMMARY AND FINDINGS The information in this chapter does not constitute an assessment of all minerals critical to the U.S. economy. Rather, it demonstrates how such an assessment could be conducted given sufficient and appropriate informa- tion. In the process, the committee’s assessment shows that designating a particular material as critical is a multifaceted and nuanced activity—the designation can differ from material to material, from country to country, and from user to user. This observation leads to the point that establishing the context for the evaluation of one or more minerals is important when employing the committee’s matrix, or another methodology, to evaluate mineral criticality. Minerals that rank high on both axes of the criticality matrix are char- acterized as “critical minerals,” although it is important to understand that a mineral can rank high on one or both axes for quite different reasons. Examples discussed earlier in this chapter include the following: • PGMs, several different applications of which are regarded as hav- ing high importance in use; • REs, whose criticality is strongly dependent on supply risk concerns; • Titanium, for which a minor use in terms of mass is vital to U.S. economic interests; and • Lithium, which is not critical today, but could potentially become critical should a new use (hybrid vehicle batteries) be widely adopted. In general, the committee found it easier to evaluate importance in use than risk to supply because there is no comprehensive, reliable, trans- parent, public evaluation of most of the aspects of supply risk. The U.S. government provides such evaluations for many considerations related to fossil fuel supplies; it would seem appropriate and useful for a similar set of evaluations related to nonrenewable but reusable resources to be per- formed as well. 164

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Applying the Matrix The committee selected 11 mineral candidates for criticality analysis, based on committee members’ own experiences and on minerals identi- fied as potentially critical at the committee’s March 2007 information- gathering meeting. Of these 11, 5 minerals or mineral groups—indium, manganese, niobium, PGMs, and REs—were determined to fall in or near the critical zone of the matrix (Figure 4.7). Although the United States is essentially completely dependent on imports for all five minerals or mineral groups, it is not import dependence per se that leads to the committee’s determination that these are critical; rather in each case there are comple- mentary circumstances that lead to significant supply risk, typically includ- ing a high degree of concentration of production in one or a small number 4 (high) Impact of Supply Restriction 3 Copper Gallium Indium Lithium Manganese 2 Niobium Platinum Group Metals Palladium Platinum Rhodium Rare Earth Elements 1 (low) Tantalum Titanium Vanadium 1 (low) 2 3 4 (high) Supply Risk FIGURE 4.7  Criticality matrix for all 11 candidate materials discussed in the chapter. Of the 11, indium, manganese, niobium, PGMs, and REs fall in the critical “zone” of the matrix. fig 4-7 165

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MINERALS, CRITICAL MINERALS, AND the u.s. ECONOMY of countries or companies. However, the committee emphasizes again, as stated in Chapter 1, that the minerals analyzed in this chapter do not represent an absolute list of critical minerals. Other minerals could equally well be evaluated and determined to be critical for the nation, for individual industry sectors, or for other users. The 11 examples demonstrate the ap- plication of the methodology established by the committee for determining mineral criticality. The committee makes the following findings on the basis of the ex- ample criticality assessments made in this chapter: • The criticality matrix is a useful tool to evaluate the degree of criti- cality of a material. Criticality is not a state of being or not-being, but a location on a two-dimensional, multi-indicator continuum. Critical minerals are those that are both essential in use and subject to considerable supply risk. • In placing a mineral or mineral product on the vertical axis (im- pact of supply restriction), technological importance in use is easier to evaluate than the other, largely economic factors. Tech- nological importance in use depends primarily on whether or not technical substitutes for the mineral exist that can provide similar functionality. • The economic impacts of a supply restriction depend on the degree to which costs rise if a mineral’s supply is restricted and, more gen- erally, on how a supply restriction affects a company’s profitability (and in turn labor needs) or a nation’s ability to supply a public good such as national defense. These economic impacts require case-by-case economic impact analyses. • In placing a mineral or mineral product on the horizontal axis (supply risk), caution is required to assess supply risk because of the lack of suitable information on primary, secondary, and tertiary material flows and, more specifically, on subeconomic resources, by-product production, secondary production from scrap, intra- company trade, and mineral products embedded in imports and exports. 166

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Applying the Matrix REFERENCES Edwards, C.R., and A.J. Oliver, 2000. Uranium processing: A review of current methods and technol- ogy. JOM 15(9):12-20. Herring, I. 2007. Presentation to the Committee on Critical Mineral Impacts on the U.S. Economy. Washington, D.C., March 7. Johnson Matthey, 2007. Platinum 2007. Available online at http://www.platinum.matthey.com/­ publications/Pt2007.html (accessed August 9, 2007). Joseph, G., 1999. Copper: Its Trade, Manufacture, Use, and Environmental Status. Materials Park, Oh.: ASM International. Kohler, S., 2007. California. In state summaries. Mining Engineering (May):72-75. Moore, P. (ed.), 2006. Regional review: South Africa. Mining Magazine (September):62. Newton, F.T., S.P. Collings, and B.C. Little, 2006. Nuclear power update. SEG Newsletter (67):1, 8-15. Stevens, L. 2007. Presentation to the Committee on Critical Mineral Impacts on the U.S. Economy. Washington, D.C., March 7. USGS (U.S. Geological Survey), 1997. Mineral Commodity Summaries 1997. Washington, D.C.: U.S. Government Printing Office. USGS, 2002. Rare Earth Elements—Critical Resources for High Technology. USGS Fact Sheet 087-02. Available online at http://pubs.usgs.gov/fs/2002/fs087-02/fs087-02.pdf (accessed November 13, 2007). USGS, 2007. Mineral Commodity Summaries 2007. Reston, Va.: U.S. Geological Survey, 195 pp. World Nuclear Association, 2005. Can Uranium Supplies Sustain the Global Nuclear Renaissance? Available online at http://www.world-nuclear.org/reference/position_statements/uranium.html (ac- cessed November 13, 2007). 167

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