metal accounts for less than 15 percent of the total catalyst cost).

These catalysts are expensive to produce for several reasons. They are made in very small quantities, and small-scale production tends to be expensive. In addition, these catalysis often require multistep syntheses, which add cost.

Even though the metals in homogeneous catalysts are usually not the most expensive component, the cost of these metals can fluctuate wildly. Rhodium prices, for example, increased 20-fold during a four-and-a-half-year period starting in early 2004, jumping from $16,000 to $314,000 per kilogram. Prices then plummeted in a matter of months to under $50,000 per kilogram. Stevens explained that price increases are not necessarily a bad thing for a big chemical company. When prices increase, the metal the company has in storage also increases in value, producing a gain in working capital. When the price plummets, as it did with rhodium, the result is a loss in working capital. Some of these short-term fluctuations can coincide with the startup of a new large chemical process and the purchase of these metals to have in inventory.

The supply chain for these metals is global and involves several players. As an example of how the supply chain operates, Stevens used a hypothetical case in which Dow Chemical developed a new process that required 100 kilograms of platinum. The platinum-group-metal inventory and purchasing manager at Dow would contract with one of the many precious metal brokers to either purchase or rent the necessary platinum, depending on the prevailing market conditions or whether the company wanted to hedge the price of platinum. After acquiring the metal, the company would send it to a catalyst manufacturer who would prepare the catalyst according to Dow's specifications. Once the catalyst was spent, or inactive, it would be sent to a refiner to recover the platinum. Often, the broker, catalyst manufacturer, and refiner are the same entity. For platinum-group metals, loss of metal is on the order of 1 to 2 percent. Small amounts of metal also can be recovered from the reaction vessels and pipes in the chemical plant once the plant is decommissioned.

Cost and Supply Constraints

Catalysts used in refineries, Stevens noted, have particular issues because of the enormous quantities of catalysts used, often on the scale or millions of kilograms. Fluid-cracking catalysts and isomerization catalysts, for example, require very large amounts of metal. Sometimes a process that looks promising becomes impractical because of the amount of metal it would require. In one instance, a superior iridium-based fluid-cracking process would have required more iridium than is available worldwide. These facts point to the enormous potential for catalysts that do not require platinum-group metals.

However, in trying to develop replacements, it is important to keep an eye on the real market drivers. As an example, Stevens cited the enormous effort that went into creating simple metallocene catalysts based on titanium and zirconium to produce isotactic polypropylene with a melting point of around 160°C. This effort took 15 years, cost $500 million, and was successful, but the catalysts are not used commercially, except for one catalyst used to make a very small amount of a specialty material.

One promising area is the development of hydrosilylation catalysts that do not require platinum-based metals. Hydrosilylation is the largest-cost application for homogeneous catalysis. Platinum-based hydrosilylation catalysts are used widely in pharmaceuticals manufacturing, while rhodium-and platinum-based catalysts are used to make siloxanes and silicone rubber. As a result of the catalytic process used to make cured silicones, for example, some 4 to 6 metric tons of platinum per year are "lost" with the product (Figure 3-1). At the current price of platinum, that amount represents $250 million to $377 million worth of metal, a cost industry swallows because of the catalyst's superior properties.


FIGURE 3-1 Current hydrosilylation processes lose some 4 to 6 metric tons of platinum per year.

SOURCE: T. Don Tilley, University of California, Berkeley (Stevens, 2011).

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