Objective Capital's Rare Earths, Speciality & Strategic Metals
Investment Summit 2012
Ironmongers' Hall, City of London
13-14 March 2012
Speaker: Adrian Chapman, Oakdene Hollins
1. RARE EARTHS, SPECIALITY
& STRATEGIC METALS
INVESTMENT SUMMIT
Critical metals in strategic energy technology
Adrian Chapman –
Consultant, Oakdene Hollins
IRONMONGERS’ HALL, CITY OF LONDON TUESDAY-WEDNESDAY, 13-14 MARCH 2012
www.ObjectiveCapitalConferences.com
2. Oakdene Hollins
Critical Metals in Strategic
Energy Technologies
Adrian Chapman
Rare Earths, Specialty & Strategic Metals Investment Summit
Objective Capital, 13th March 2012
3. Disclaimer
• Oakdene Hollins Ltd believes the content of this presentation to be correct as at the date of writing. The
opinions contained in this presentation, except where specifically attributed, are those of Oakdene
Hollins Ltd. They are based upon the information that was available to us at the time of writing. We are
always pleased to receive updated information and opposing opinions about any of the contents.
• The listing or featuring of a particular product or company does not constitute an endorsement by
Oakdene Hollins, and we cannot guarantee the performance of individual products or materials. This
presentation must not be used to endorse, or suggest our endorsement of, a commercial product or
service.
• All statements in this presentation (other than statements of historical facts) that address future market
developments, government actions and events, may be deemed "forward-looking statements".
Although Oakdene Hollins believes the outcomes expressed in such forward-looking statements are
based on reasonable assumptions, such statements are not guarantees of future performance: actual
results or developments may differ materially. Factors that could cause such material differences
include emergence of new technologies and applications, changes to regulations, and unforeseen
general economic, market or business conditions.
• We have prepared this presentation with all reasonable skill, care and diligence within the terms of the
contract with the client. Although we have made every reasonable effort to ensure the accuracy of
information presented in this presentation, Oakdene Hollins cannot expressly guarantee the accuracy
and reliability of the estimates, forecasts and conclusions herein. Factors such as prices and regulatory
requirements are subject to change, and users of the presentation should check the current situation. In
addition, care should be taken in using any of the cost information provided as it is based upon specific
assumptions (such as scale, location, context, etc.). Clients should satisfy themselves beforehand as to
the adequacy of the information in this presentation before making any decisions based on it.
4. Agenda
• Background on
materials security
• Strategic Energy
Technologies:
‐ SET Plan
‐ Metal screening
‐ Bottleneck metals
‐ Mitigation options
• Summary
5. Oakdene Hollins
Consulting to business on sustainable
products, services and clean production:
Sectors: Services:
• Food & Drink • Market Appraisal
• Textiles & Clothing • Supply Chain Risk Assessment
• Technology Appraisal
• Metals & Mining
• Protocol & Standards
• Wastes Management Development
• Chemicals & Materials • Economic Modelling
• Financial Impact Assessment
• Management of Research
Projects
• Carbon Footprinting
6. Materials Security
• Study on by-product metals (International Lead & Zinc, Copper and
Nickel Study Groups, ongoing)
• Assessing rare metals as supply chain bottlenecks in priority energy
technologies (European Commission Institute of Energy, 2011)
• Expert Review of Criticality Studies (Private Client, 2011)
• Investing in Critical Metals (Report for Investors, 2011)
• Study into the feasibility of protecting and recovering critical raw
materials (European Pathway to Zero Waste, 2011)
• Lanthanides resources and alternatives (Department for Transport, 2010)
• Materials security: Ensuring resource availability for the UK economy
(Resource Efficiency KTN, 2008)
(Reports available from www.oakdenehollins.com)
7. EU’s ―Critical 14 Materials‖
Analysis based on Supply Risk vs Economic Importance
Large Volumes Small Volumes
Fluorspar – 6,010,000 Indium – 609
Graphite – 925,000 Tantalum – 681
Magnesium – 576,000 Platinum Group – 467
Antimony – 167,000 Beryllium – 205
Rare Earths – 133,000 Germanium – 118
Tungsten – 68,800 Gallium – 182
Niobium – 62,900
Cobalt – 89,500
2010 USGS Production Figures, (tonnes)
8. EU Critical Raw Materials Initiative
Source: EU Raw Materials Initiative
10. EU Strategic Energy Technology Plan
The SET-Plan is the first step to establishing a European energy
technology policy. The principle goals are;
• Accelerating knowledge development, technology transfer
and up-take;
• Maintaining EU industrial leadership on low-carbon
energy technologies;
• Fostering science for transforming energy technologies to
achieve the 2020 Energy and Climate Change goals;
• Contributing to the worldwide transition to a low
carbon economy by 2050.
Large policy influence on energy
technologies, and therefore raw material
demand over the coming decades.
12. EU SET-Plan Technologies
• SET Plan Technology Map with development
plans for 17 technologies
• Six priority technologies:
‐ Nuclear Fission
‐ Solar Energy (PV and CSP)
‐ Wind Energy
‐ Bioenergy (power generation, biofuels)
‐ Carbon Capture and Storage
‐ Smart Grids
13. Metal Requirements
• Widest selection of metallic elements
quantified:
• 60 metallic elements included
• Iron, aluminium and radioactive elements are
excluded from study
• Assess demand from industry targets for
uptake against current world supply: i.e. To
compare most optimistic demand scenario
to most pessimistic supply scenario
14. Significance Screening Results
50%
19%
Metals Demand of SET-Plan in 2030
10%
9%
8%
7%
% of 2010 World Supply
6%
5%
4%
3%
2%
1%
0%
Te In Sn Hf Ag Dy Ga Nd Cd Ni Mo V Nb Cu Se Pb Mn Co Cr W Y Zr Ti
16. Bottleneck Analysis
Market Factors Market Measures
Likelihood of rapid global demand Analysis of demand forecasts
growth
Limitations to expanding Reserves, supply
production capacity forecasts, evaluation of by-
production dependencies
Political Factors Political Measures
Concentration of supply in few Production statistics
countries
Political risk indicators (FSI &
Political risk related to major WGI)
supplying countries
18. Bottleneck analysis by metal
Market Factors Political Factors
Limits to
Likelihood of Overall
Metal expanding Concentration
rapid demand Political risk risk
production of supply
growth
capacity
Dysprosium High High High High
Neodymium High Medium High High
Tellurium High High Low Medium High
Gallium High Medium Medium Medium
Indium Medium High Medium Medium
Niobium High Low High Medium
Vanadium High Low Medium High
Medium
Tin Low Medium Medium High
Selenium Medium Medium Medium Low
Silver Low Medium Low High
Molybdenum Medium Low Medium Medium
Hafnium Low Medium Medium Low Low
Nickel Medium Low Low Medium
Cadmium Low Low Low Medium
19. Role of Metals by Technology: Wind
• Direct Drive Permanent Magnets :
• Neodymium
• Dysprosium
• Steel Alloying Elements :
• Nickel
• Molybdenum
23. Metal Prices: Tellurium
Tellurium min 99.99% (EU)
500
400
300
$/kg
200
100
0
03/11/2009 03/11/2010 03/11/2011
24. Responses to Materials Criticality
Data collection Trade and
Procurement and
and international
stockpiling
dissemination co-operation
Resource
Design and
Primary efficiency
innovation
production strategies
(e.g. substitution)
(e.g. recycling)
Source: Oakdene Hollins
25. Mitigation Strategies for solar
Expanding Output
• By-product metals extraction, opportunities for
Cu/Al/Zn refineries
Recycling
• Recycling potential limited due to dispersive
applications
Substitution
• Indium – Considerable research, but early stage
• Gallium – Linked to germanium
• Tellurium – Options for low value applications
But technology choice available
26. Summary
• Greatest risks for six primary SET-Plan
technologies:
‐ Solar: tellurium, gallium, indium
‐ Wind: dysprosium, neodymium
• No overall bottlenecks – technology mix matters
• Mitigation required in long term
• Opportunities for expansion of production/by-
production to meet demand
• Recycling, substitution will have a role
• Further policy factors – e.g. REACH, revision of
RMI, global trade rules
28. EU Energy Generation Capacity
European Generation Capacity to 2030 (GW)
Source: EU energy trends to 2030 — Update 2009, DG Energy (2010)
29. Bottleneck Metals: Dysprosium & Neodymium
• Primary product (55%), by-product of iron (45%)
Geographical Location of Rare Earths, 2010
China
Mine production 97% India
Brazil
Malaysia
CIS
Reserves 48% 17% 11% 19% United States
Australia
Other countries
0% 20% 40% 60% 80% 100%
Source: USGS
Applications for Nd Magnets, 2009
Others, 3%
Acoustic, 5 MRI, 5%
%
Optical HDD, 31%
Devices, 5%
Automobile,
24%
Motor, 26%
Source: Shin Etsu
30. Bottleneck Metals: Tellurium
• By-product of copper (90%) & lead (10%)
Geographical Location of Tellurium, 2010
Refinery
Japan
productio 8% 7% 6% 10% 65%
n Russia
Peru
Canada
Reserves 10% 14% 73% United States
Other countries
Unknown
0% 20% 40% 60% 80% 100%
Sources: USGS & BGS
Applications for Tellurium, 2009
Electronics
&
Others, 11%
Chemicals & Metallurgy, 4
Pharma- 2%
ceuticals, 21
%
Photo-
voltaics, 26
% Source: EU RMI
31. Bottleneck Metals: Gallium
• By-product of alumina
Geographical Location of Gallium, 2008 China
Germany
Kazakhstan
Production Capacity Japan
Russia
Ukraine
Hungary
Slovakia
0% 20% 40% 60% 80% 100%
Source: USGS
Applications for Gallium, 2009
Photo-
detectors &
solar, 2%
R&D, 14%
Lasers &
LEDs, 18% Integrated
circuits, 66%
Source: EU RMI
32. Bottleneck Metals: Indium
• By-product of zinc
Geographical Location of Indium, 2010/2007 China
South Korea
Refinery production 52% 14% 12% 6%5% Japan
Canada
Belgium
Peru
Brazil
Reserves 75% 17%
Russia
United States
Other countries
0% 20% 40% 60% 80% 100%
Source: USGS
Applications of Indium, 2009
Others, 6%
Low m.p.
Alloys, 10%
Other
ITO, 10%
Flat Panel
Displays, 74
%
Source: EU RMI
