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.

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.