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.