Earlier today I got word that the US Department of Energy (DOE) has released an update to its Critical Materials Strategy, which was first published as a report in December 2011 2010. This document has helped to shape a fair amount of the debate on rare earths in particular, and critical & strategic materials in general, in the past 12 months.

You can download a copy of the report from here.

I’m still digesting the contents of the report; I can tell you that the DOE still considers the five rare earths dysprosium, neodymium, terbium, europium and yttrium to be critical in the short and medium term; indium is judged to now be near-critical in the near term, compared to being categorized as critical in the 2010 report.

New sections include one that covers the use of rare earths in fluid cracking catalysts, and how the petrochemical refining industry reacted to escalating prices of materials in 2011.

More to follow once we’ve had a chance to read through the report more thoroughly.

Update (01/17/12): the URLs for the report have been updated, since the original links no longer work.

I’ve received a number of emails today from people wanting to hear my thoughts on a news release from Northeastern University published earlier today, pertaining to a new magnetic material that researchers at the University have apparently discovered.

According to the announcement, the “super-strong magnetic material” may “revolutionize the production of magnets found in computers, mobile phones, electric cars and wind-powered generators“. According to one of the co-authors of the study, “[s]tate-of-the-art electric motors and generators contain highly coercive magnets that are based on rare-earth elements, but we have developed a new material with similar properties without those exotic elements“.

The material is apparently based on a compound of manganese (Mn) and gallium (Ga), with Northeastern claiming that the material “can be synthesized on the nanoscale to produce a coercive field that rivals materials containing rare-earth elements, which are considerably more expensive to process and mine“.

The message boards are abuzz with this announcement, apparently with many people (i.e. retail investors in the rare-earth sector) now worried that this material is the death knell for permanent magnets based on the rare earths neodymium / praseodymium (Nd / Pr), and thus the hopes and dreams for untold riches from these commodities…

Take a deep breath, folks.  Being a materials scientist by training, I am naturally a big fan of ongoing research & development work on new engineering materials, and I will read with interest more details on this research, in a forthcoming edition of Applied Physics Letters. I am much less of a fan of the now well-worn path of hype disguised as scientific (and more importantly engineering) breakthroughs, which this announcement represents.  Here’s why:

• While Mn is cheap as chips, Ga is at present 2-3 times more expensive than Nd / Pr;

• The production of Ga is approximately 200 tpa – of which perhaps 100 tpa comes from recycling – and it is presently all spoken for. Compare this to the more than 20-25 ktpa of Nd + Pr available each year, and the prospects for multiples of this production rate in the near future, from new sources of supply.

• All new Ga is produced as a byproduct of aluminum and zinc production. The supply dynamics of these two metals alone will determine future availability of Ga – not its potential use in a permanent-magnet material.

• Given the painfully long road to commercialization for other materials that rely on similar processing routes, it is highly unlikely that synthesis “at the nanoscale” will be less expensive than mining and processing rare earths any time soon.

• Finally, while we’re at it – a “highly coercive” magnet material, is not the same thing as a “super-strong” magnetic material. The former refers to the ability of a material to resist being demagnetized; the latter to the ability of the magnet to do work.

On Wednesday of this week, the National Center for Policy Analysis (NCPA) hosted its Rare Earths, Critical Metals, Energy & National Security Conference, close to Capitol Hill in Washington, DC. Very much aimed at the DC crowd, the event was billed as an attempt to “raise awareness of how current public policies lead to dependence on China for the U.S. supply of rare earths, and thus undermine our national security.” The announcement from the NCPA on the event went on to say that “[a]s key policy makers, executive branch analysts and think tanks experts, conference participants will play a key role in shaping U.S. resource policies.”

I was a participant in the first panel of the day titled “The Rare Earths: Supply, Shortfall, Strategy“, moderated by NCPA’s Sterling Burnett. Joining me on the panel were Jeff Green, President of J A Green & Company, a DC-based government relations firm, and Thomas Tanon of T² & Associates, an energy and technology industry consulting services firm.  We each gave an overview of our perspectives on the rare earths, with my own presentation focused primarily on defining the rare earths, and reviewing the sources of current and potential future supply. There were some good questions from the audience.

The second panel, titled “Specialty Metals: Assessing Strategic Need” was moderated by Dan McGroarty, President of the American Resources Policy Network. Joining him were Kent Hughes Butts, Professor of Political Military Strategy at the US Army War College, Dan Cordier, the rare-earths specialist at the US Geological Survey (USGS), and Michael Steuer from the US Defense Logistics Agency. This panel covered the topics of stockpiling for national defense needs, and assessments of those needs by various government agencies.

There were some lively questions during this panel session. One note of interest that came out of it, was that the recently passed law that governs the National Defense Stockpile (which does not as yet include rare earths), requires that the President of the United States, and only the President, be authorized to release materials from the Stockpile. This effectively means that once materials go into the Stockpile, it is very difficult to get them out again. Doesn’t exactly seem like a practical approach to me…

I raised the point with this panel, of the relative ease of “solving” the so-called rare-earths problem, compared to other metals, by virtue of the fact that most of the potential new sources of supply of rare earths are primary sources – i.e. they will not necessarily rely on the economics of other metals in order to be produced. Even if they are contained in polymetallic deposits, generally (though not always), the economics of the rare earths will dominate. This is not the case with many of the other rare metals that are critical to hi-tech applications; most if not all of these are actually by-products of base-metals production, such as indium from tin and zinc production, gallium from aluminum production, and so on.

There is a danger that people (especially of the type with short attention spans, such as politicians in Washington, DC) will come to believe that solving the rare-earths supply problem is the same as solving the rare-metals supply problem, when this is clearly not the case. It will be much more difficult to resolve issues for the co-produced rare metals, given the dominance of base-metal economics in such cases. I don’t get the sense that this is really being addressed by the various agencies in Washington.

We then had a presentation from David Diamond, a policy analyst with the US Department of Energy (DOE), and a co-author of the Critical Materials Strategy Report that was published at the end of last year. Dr. Diamond presented a summary of the report’s findings, which we’ve discussed elsewhere on the TMR Web site before, and part of which was incorporated into the Critical Rare Earths Report that TMR published in the summer. He mentioned that the DOE was in the final stages of updating that report, and that the next version would be published in the near future. I look forward to seeing the results of that work.

The conference then adjourned for lunch, where we were later joined by three members of Congress (click on the photos above), who each spoke in turn on a variety of issues concerning rare earths. First up was Senator Lisa Murkowski (R-AK), who focused on the importance of mining to the US economy, and the problem of dependence on foreign sources of minerals. She also took the opportunity to criticize the Environmental Protection Agency (EPA) on a number of issues. Senator Murkowski discussed her Critical Minerals Policy Act, which she introduced earlier this year along 9 Democratic and 10 Republican co-sponsors. She said that

“The legislation requires that USGS generate a list of minerals critical to the U.S. economy, outlines a comprehensive set of policies that will bolster the production of those critical minerals, expands manufacturing, and promotes recycling and alternatives – all while maintaining strong environmental standards.”

Once she concluded her remarks, Senator Murkowski took quite a number of questions on the topics she had covered, before leaving.

Next up was Congressman Doug Lamborn (R-CO), who discussed the legislation that he introduced earlier this year, titled the National Strategic and Critical Minerals Policy Act of 2011, touting it as a “common-sense solution that will provide for our common defense”. Among other things, this bill would require that the Secretary of the Interior evaluate factors impacting domestic mineral development; it also directs the Department of the Interior to

“assemble a report within six months and require[s] them to include a specific inventory of the rare earth element potential on federal lands, and identify impediments or restrictions on the exploration or development of rare earth elements, and provide recommendations to lift the impediments or restrictions while maintaining environmental safeguards.”

Rep. Lamborn was then followed by Congressman Mike Coffman (R-CO), who is well-known for having introduced the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2011 earlier this year – also known as the RESTART Act. Rep. Coffman discussed his perspective that China’s stated industrial policy was mercantilist in nature, with the goal of expanding China’s industrial base at the expense of other countries, including the USA. Rep. Coffman said that he saw rare earths as being a part of the overall issue, and that his main concern was that China was an unreliable trading partner, which was prepared to leverage rare earths for political goals.

I asked Rep. Coffman if he would agree with me that a root cause of our current dependence on China was a major disconnect in the supply chain between end-user companies who pursued a “lowest cost at any cost” profit motive, at the expense of the upstream part of the supply chain and all the while ignoring any potential national security concerns. Rep. Coffman did not acknowledge this point; instead he chose to blame the situation solely on China’s non-free market policies. I suppose in retrospective, that it was perhaps a little much to expect a Republican Congressman to criticize the virtues of American capitalism, at an event hosted by a conservative think tank…

Rep. Coffman was asked if non-US companies could fill the gap in the supply chain. He responded by saying that his key issue was the reliability of trading partners; if companies in friendly countries brought rare-earth production online, this, he said, would “lower the temperature on the issue in Congress” and would “lessen the need for invasive policies from Congress”. This shouldn’t be surprising; even the specialty-metals clauses of the defense-procurement regulations, have exemptions from some strict sourcing requirements, for companies based in a number of countries friendly to the USA.

Both Congressmen commented further on the issues of permitting in the USA, and how overly restrictive permitting practices, and environmental regulations, were reducing the ability of the country to get projects up and running.

The final session of the day was another panel chaired by Dr. Burnett, this time titled “The Value Chain: Industry’s View on Critical Metals Supply“. On the panel were Peter Dent, with Electron Energy Corporation, a US rare-earth magnet manufacturer, Michael Berry of Discovery Investments and publisher of Morning Notes, and Anthony Young, an analyst at Dahlman Rose. Mr. Dent and Dr. Berry gave presentations on their respective viewpoints on this issue at hand. Mr. Dent noted that companies are beginning to switch production to China in order to access materials. Mr. Berry made the interesting comment that the USA should not be relying on Canada to get them through the current issues; China was more than a little interested in investing in Canadian companies, and so the US should be prepared to put its own infrastructure in place. He said that China’s policies on rare earths were just the tip of the iceberg of a much larger strategy.

Mr. Young made a comment on the volatility of share prices, and how news such as the announcement that the DOE would not be giving Molycorp a loan guarantee, caused prices to swing dramatically. I put it to the panel, and Mr. Young in particular, that the bigger issue for this market was the sometimes outlandish valuations made by analysts of the stocks in this sector, with those valuations seeming to have little connection with reality. Mr. Young responded by saying that this was a relatively new sector, with it being difficult to predict production costs and potential product prices, and that his own valuations reflected this. He commented that he had valued Molycorp, for example, at something like $70 / share, before revising it down to $40 / share. Note that this is in contrast to the actual valuation that Dahlman Rose set in May 2011, of $125 / share for Molycorp. Needless to say, I was not exactly convinced by the response. If analysts have such unreliable data, as Mr. Young suggested, then perhaps they shouldn’t be publishing valuations at all…

The panel session closed, and the meeting was brought to a conclusion by NCPA’s Richard Walker. Overall, it was useful to meet new Washington, DC types, and to re-connect with other contacts in the strategic-materials sector and US government at the event.

A couple of weeks ago the US Department of Energy (DOE) announced a Request for Information (RFI) on rare-earth metals and other materials used in the energy sector. This follows on from a similar solicitation made last year, that culminated in the publication of the DOE’s Critical Materials Strategy in December 2010.

The DOE says that this second RFI will be used to update the Critical Materials Strategy, and will also cover areas not considered in the original document, such as fluid-cracking catalyst materials for the petroleum refining industry.

The DOE is soliciting information in eight categories:

1. Critical Material Content
2. Supply Chain and Market Projections
3. Financing and Purchasing Transactions
4. Research, Education and Training
5. Energy Technology Transitions and Emerging Technologies
6. Recycling Opportunities
7. Mine and Processing Plant Permitting
8. Additional Information

The deadline for RFI submissions is May 24, 2011 and submissions from the public are welcomed. You can get more information from the DOE Web site.

China is by far the world’s largest end user of copper, from which is constructed the nerve system of our civilization, the electric power distribution grid, as well as all of the devices that generate electricity and transform it into motive power or heat for individual or industrial end use.

China’s domestic mining produced just short of one million tons of new copper in 2009, a year in which the total global production of copper was 16 million tons. Yet China used in 2009 just short of 6 million tons of copper, nearly 40% of 2009’s total world supply of that metal. This amount used in China, 6 million tons, is one and one-half times the total annual copper production of copper by all Chilean sources. Chile is the world’s largest producer of copper at 4 million tons a year, which is 25% of global production.

China imports its copper mostly as a standard form of crude (impure) metal and then purifies it and fabricates it into forms for drawing wire and producing sheet and bar stock for manufacturing purposes. The crude – in the sense of too impure for electrical use – copper has usually already been processed at the originating mine, to remove most of its non-metallic impurities, but still very much carried in the ‘crude’ copper, as it goes into final electro-refining, are molybdenum, gold, silver, platinum, palladium, selenium, tellurium and rhenium. Some copper ores are even very significant sources of gold, but most are not. What is significant about China’s inflow and the processing to ‘purify’ it is the sheer volume of it. Even ‘impurities’ in the copper that are present only as traces, can be produced in relatively substantial quantities when the flow through produces 6 million tons of copper.

China, through this final purification step, is gifted with the world’s largest reliable supplies of the above named rare technology metals, some of which are critical to the green revolution in sustainable  alternate energy technology.

Take the example of tellurium, which in addition to being recovered from the vast volumes of copper processed in China, is also able to be recovered from the vast volumes of lead, zinc, bismuth, and antimony produced or refined in China. In addition to the low grade sources ( ie. the ‘traces’ in the base and more common other metals), a Chinese company operates the only mine in the world the primary product of which is tellurium. The mine’s avaerage grade of tellurium is an astounding 1.17%.

That company, Apollo Solar Engineering in Chengdu, Sichuan, which is listed in the USA, (ASOE.OB)  is the world’s largest producer of ultra-high purity tellurium, which it produces primarily from its mine, at a rate of 3-4 tons a month. The company is also the destination point for much of the crude tellurium recovered in China, from the refining of the ores, domestic and imported, of copper, lead, gold, silver, antimony, and bismuth.

There can be no cadmium telluride thin-film photovoltaic solar cells made without ultrahigh purity tellurium, ultrahigh purity cadmium telluride, and ultrahigh purity cadmium sulfide. The pre-eminent American producer of thin film photovoltaic solar cells, First Solar (FSLR), is already Apollo’s largest customer for its production of all of these items.

There is an International ‘New Energy’ Fair in Chengdu during September 28-30, 2010. ‘New Energy’ is the most common translation into Chinese of the term ‘Alternate Energy.’  I have been invited to speak on the future and the importance of the production of rare technology metals such as tellurium, selenium, indium, gallium, as well as of the ‘common’ technology metal, copper, to the thin-film photovoltaic solar cell industry both in China and in the world.

China is already the world’s largest producer or the largest end user or both of ALL of those metals! Those who want to invest in green technologies need to take note.  China now dominates the production and use of the specialized technology metals critical for solar. China should be the first place that anyone who wishes to invest in the future of thin film photovoltaic solar cell production looks.

Keep in mind that China is rapidly going green, even as the rest of the world just talks about it, and that if we in the West wait any longer it will be of no avail to us, because the critical raw materials production is already centered in China.

Disclosure: I am a business development consultant to Apollo Solar Engineering.

From Materials Recycling Week – Published: May 17, 2010

Their names are like tongue twisters: neodymium, molybdenum and niobium. For the past 20 years, these metals have been used to make high-tech products smaller, smarter, stronger, and more energy efficient. Without them, technology would be thrown back in time. They are also badly needed to make the transition to an economy that is not dependent on fossil fuels.

Today, experts claim that these metals will become scarce in the near future. And it is said that reserves of commonly used metals such as copper will be depleted. So what is really going on and what role can recycling play?

Take, for example, rare earth metals (REMs), a well-suited name in a story about scarcity, even though they are spread widely over the Earth’s crust. The problem here is that one country, China, has a monopoly on 95% of their production. Last year, the Chinese threatened to ban the export of REMs, which resulted in mines in Australia and the US either expanding or reopening. But in the coming years, demand will likely exceed supply by about 40,000 tonnes a year. World-renowned REM expert Jack Lifton stated in an analysis that, “when there are no rare earth metals to be had in China for export, the prices of these metals will skyrocket”, particularly as “there is little or no recycling of them”.

Some metals are only found in one or two countries. When there are problems in such a country, metal production can decline rapidly. “In 2008, a power crisis in South Africa resulted in the shutdown of all platinum mines for five days in January. This caused production loss and record-high prices in the first half of 2008,” according to the US Geological Survey (USGS).

“Another cause for scarcity is that certain metals, such as gallium, germanium and tellurium, are by-products of other metals: independent production growth is therefore not an option,” says Dutch defence specialist André Diederen. Other experts like engineer Richard Walden claim that, “large amounts of gallium can be extracted from the Idaho phosphate plants fly ash waste, for example”.

And something else has come up: the depletion of reserves of some metals due to growing global demand, as has been researched by professor Tom Graedel from Yale University, Swedish geoscientist Harald Sverdrup, Diederen and others. Analysis of the USGS data on reserves show that metals such as silver, copper and tin will be depleted in 20 years.

But this is a heavily debated topic. Some experts say the data on reserves is incomplete as it is expensive to prove the reserves because it requires the drilling and testing of ore for extraction rates. Others, such as Ugo Bardi from the University of Florence, and Diederen, claim that, “mining of metals will be affected by peak oil”. In their opinion, resources cannot be turned into reserves because energy will be too expensive.

Experts do agree that an increase in recycling rates will be essential. Different reports about metal scarcity mention recycling as an important means of diminishing import dependence. Problems that need to be solved include “difficulties in obtaining scrap, the lack of information about the quality of recycled materials and about who is buying and selling”, according to an EU report.

Metals such as copper and silver have been used to make products for years, effectively keeping them in use and therefore the material out of the recycling loop. Others are only used in very low quantities, such as lithium in mobile phone batteries, making extraction difficult and expensive. A leading company in this area is Umicore in Belgium. Recently, the UN published a report that focuses on urban mining stating that “a gram of gold can be obtained by recycling 41 mobile phones instead of mining a tonne of ore”.

Other discoveries are being made by scientists from the University of Leeds, who are now able to recover significant quantities of rare earth oxides from the waste stream of titanium dioxide refining. Japanese scientists, meanwhile, have experimented with molten silver to extract neodymium from permanent magnets. But since silver itself could become scarce, it is not likely that this technology will be widely accepted.

There are also companies including Neo Material Technologies in Canada that are working on a closed loop system. The company produces magnetic materials based on REM. Last year, it acquired Recapture Metals, a Canadian producer and recycler of gallium, indium and rhenium as part of its strategy to fully integrate every step of production, whether primary or secondary, into its company.

I’ve just completed the finishing touches to a new report that I’ve written for subscribers to The Jack Lifton Report.

In December 2009, I was invited to New York’s Essex House by CLSA, one of Asia’s leading independent brokerage and investment groups, to present a short seminar on “Rare Metals in the Age of Technology” to CLSA University, an ongoing executive education program that CLSA produces for its clients.

The seminar focused on discussion of the rare metals, and the issues and challenges facing their supply and production rates. I also presented a set of tables detailing production rates of a wide range of metals, to illustrate some key points on the subject.

The seminar answered three fundamental questions relating to the business of the technology metals:

1. How are metals produced, which is to say, where do the metals we can use actually come from?
2. What quantities of new metals are produced each year, and can the production rates of any or all of them now be increased beyond 2008 levels, or can or will the production rates for some of them actually decrease?
3. How does the location of the production sites for any and all metals factor into their availability, if at all?

A free 10 page PDF copy of the new report based on this seminar, is now available exclusively to subscribers of The Jack Lifton Report.  Just fill out the simple form in the upper right of this Web page and you’ll have the report in minutes.

A note to existing subscribers – if you took a look at the report prior to 6:15 PM EST today, then you’ll want to download a slightly updated version which was missing some minor data in the tables. It can accessed with the same URL and password that you received already.

The New York Times reported on March 20, 2009, that “The Department of Energy (DoE) has tentatively awarded its first alternative-energy loan guarantee, breaking a four-year logjam in the federal loan program.” What wasn’t reported was that this was one of the most short-sighted – and harmful to the domestic American natural resources industry – decisions in history, and that it makes no sense at all if the purpose of such loans is to reduce greenhouse gas emissions and stimulate the American economy to produce not only jobs, but new wealth.

In effect, the DoE is adding value to Chinese production of the base metals aluminum, zinc, and copper by making the recovery of select technology metals, which can be, if in demand and/or priced sufficiently high, byproducts of the production of those base metals.

It seems that anyone at the DoE with the skills to look at the long-term consequences of decisions and actions involving the demand for technology metals, has left the Department.

The DoE and its supporters in Congress are patting themselves on the back for “breaking the logjam” of applications for Federal subsidies for sustainable energy with this “loan” guarantee. These market-ignorant, myopic bureaucrats are proud of themselves for deciding, in fact, to mis-use more than $500 million of the taxpayers’ money. They are requesting that an application by a thin-film photovoltaic solar cell manufacturer to develop the mass production of a product based on a technology called CIGS be approved forthwith without any independent verification of claims made by the applicant that the critical raw materials are “earth abundant” and available in the marketplace. Applause, please.

But has any one of the DoE bureaucrats or temporary appointees of the current administration noted that CIGS technology is critically dependent on the supply not only of (C) copper, but also of (In) indium, (Ga) gallium and (Se) selenium? Has any of them noted that the United States is today a net importer of copper, and that the United States is totally dependent on foreign sources for indium and gallium, and that they, along with selenium, are only produced as byproducts of zinc, aluminum and copper base-metal production? All of them – the byproduct metals, that is – are also only present in newly mined base metals. Even then, they are only recovered if and when those metals are processed, at added costs, to separate out these byproducts, which are part of a group of the minor metals that I call the technology metals.  Without these metals, no country can maintain itself as a high-tech economy.

The U.S. Congress funds the budget of the Department of Commerce, the Bureau of Land Management (BLM), and the BLM funds the U.S. Geological Survey (USGS). At the USGS Web site, you’ll find the updated “2009” commodity mineral surveys for copper, gallium, indium and selenium. These surveys note the world production of these metals, their sources with regard to the producing nations, the amounts currently used in the United States and the percentage of those amounts that are imported.

It is also important to look at data on import reliance as a percentage of total American domestic demand. The aforementioned link includes a table produced just a month ago by the National Mining Association, a lobbying group in Washington. You will note that America’s import reliance on gallium is 99% and for indium is 100%; for copper our reliance is only 32%. Selenium is not listed because domestic production and use are not well enough known.

Note that the USGS data indicate that for gallium, world production in 2008 was estimated at 95 metric tons (t) and U.S. consumption at 48.4 t, more than 50% of the world’s production! For indium, the figures are 568 t total production and 160 t of U.S. consumption. In other words, the United States consumed nearly one-third of the world’s new production of indium just last year.

Gallium, indium and selenium used for new production by the DoE’s loan applicant will need to come from new production of gallium, indium and selenium, because the existing supplies are not known to be in surplus, and, in any case, are all byproducts that are only produced if and only if the base metals in which they are found are produced and processed to recover them.

The use of gallium in existing applications in the United States, as just one example, has tripled in just the last four years. The production of the base metal from which almost all of the gallium is obtained, aluminum, has in the same time period risen, though only by 20%, since 2004, to 40 million t. Clearly, the increase of the recovery of the byproduct gallium has risen far beyond the rate of increased production of aluminum, but we do not know which aluminum smelters are now producing how much gallium.  We therefore do not know if the world recession that has already caused a sharp reduction in the production of aluminum, may have caused a disproportionately large decrease in the production of new gallium.

The same arguments may be made for our knowledge of the present and near future production of indium, from zinc, and selenium, from copper.

The demand for the technology metals such as gallium, indium and selenium has little in common with the demand for their source base metals, aluminum, zinc and copper, but the supply of those technology metals is completely dependent on the supply of those base metals. Has the DoE taken this into account?

The production of thin film photovoltaic solar cells using CIGS technology will increase the demand for gallium, indium and selenium.

Will it be possible to satisfy that demand? Is it possible today to determine if it is possible to satisfy that demand? Is it significant that the largest producer of gallium, indium and selenium is the People’s Republic of China (PRC)? Is it significant that the PRC has been reducing its export allocations and raising its export taxes on these and other technology metals steadily for the last five years? Is it significant that the PRC openly admits that it plans and wants to be the world’s source of high-technology finished goods, which will require in the foreseeable future all of its current and projected supply of the technology metals to meet its domestic demand?

The United States has a greater variety of mineral resources than any other nation in the world. Yet because of activist pressure, the United States does not produce most of the technology metals, which it could produce in quantities that could make America’s high-tech industry self-sufficient and secure the U.S. economy.

The same activists turn a blind eye to mining and refining in America being the cleanest and safest in the world, and prefer that we obtain metals such as gallium, indium and selenium, as much as we still can, from the PRC, which utilizes low-paid labor in appalling conditions, and produces many times more pollution in their production, than we can ever eliminate in their use.

I would ask if the DoE has taken into account any of the above data or analyses in their decision to grant a $500 million loan guarantee, to an applicant that cannot prove it can economically utilize the facility it is planning to construct, because it cannot prove that its production capacity will be not be limited by the availability and rate of production of its critical raw materials, which will entirely need to be imported?

There are two factors, which present obstacles that must be overcome if solar energy conversion is ever to be practical and widespread:

1. The limitations on the availability and/or production of the natural resources needed to manufacture the best currently known technologies, and
2. The comparative economics of “solar” energy conversion and all other alternate energy conversion technologies.

It’s official: a peer-reviewed scientific journal with the word “environmental” in its title, “Environmental Science & Technology,”  will shortly publish an article repeating what I have been saying for years to my own peers in the natural resources production industry: there is not enough cadmium, tellurium, indium, gallium, or selenium available or producible, annually, in a reasonable time frame or scale, to make “solar” energy conversion devices, critically based on any combination of them, abundant enough or cheap enough to be anything more than a niche alternative to fossil fuels or nuclear.

A recent Popular Mechanics article on the subject of photovoltaics was not written by a well-informed person, nor edited by anyone who bothered to check or understand the facts of “solar grade” polycrystalline silicon mass production development. The article says that

“While silicon is the second most abundant element in the earth’s crust, it requires enormous amounts of energy to convert into a usable [for solar energy conversion] form. This is a fundamental thermodynamic barrier that will keep silicon costs comparatively high.”

and continues cluelessly.

The writer and editors of Popular Mechanics do not seem to have ever heard of upgraded metallurgical grade silicon (UMGSi), upon the development of which, dozens of companies are working and which development, as a commercial process, at least 6 of the well capitalized metallurgical grade silicon producers have said they have now accomplished. If even one of them has achieved mass production of UMGSi, then the cost of producing a wafer-based silicon solar cell will decline dramatically.

I would also like to point out that people who refer to an element’s concentration in the earth’s crust as a measure of its availability are completely ignorant of mining and geology. I call such people the “Earth Fundamental” crowd, and I have previously written about this nonsense recently.

There is simply not enough of the critical raw materials for thin-film solar energy conversion cells, for any technology not based on silicon to make a difference.

First Solar’s share price and market capitalization are ridiculous as even the peer-reviewed literature has found out at last.

The production of metallurgical grade silicon is today routine; globally there are 1.5 million metric tons a year produced for use by the steel industry as an additive. If 10% of that capacity could be converted to the production of UMGSi for solar cell production, it would spell the end of cadmium telluride and copper indium gallium diselenide as the basis for economical solar energy conversion technologies. There is no doubt that the probability of this UMGSi mass production occurring in the next 10 years is high, whereas the probability of increasing global production of cadmium, tellurium, indium, gallium, and selenium beyond the all time highs that were achieved in 2007 is vanishingly small.