The British Geological Survey (BGS) is the latest government body to release its opinion on what strategic elements are at the greatest risk to supply disruptions. The BGR's Risk List 2011 analyzes 52 "chemical elements" (primarily metal elements) and ranks them according to what it determines to be their risk to supply.
Risk to supply was determined by BGS by scoring quantitative data for four criteria: (1) scarcity, (2) production concentration, (3) reserve base distribution and (4) governance. Equal weight was given to each criterion.
According the Risk List, the 25 elements - or groups of elements - most at risk to supply disruptions are:
- Antimony
- Platinum Group of Elements
- Mercury
- Tungsten
- Rare Earth Elements
- Niobium
- Strontium
- Bismuth
- Thorium
- Bromine
- Carbon (graphite)
- Rhenium
- Iodine
- Indium
- Germanium
- Beryllium
- Helium
- Molybdenum
- Tin
- Arsenic
- Silver
- Tantalum
- Manganese
- Magnesium
- Cobalt
For the complete list, click here (.pdf download).
As opposed to many similar analyses, the BGS Risk List does not take into account end-use applications of the elements and, therefore, does not evaluate the 'criticality' or strategic nature of the elements. Instead, the BGS simply puts forth what it sees as the elements most at risk to supply disruptions.
Proxies:
One of the major problems with creating an analysis of this type is whether the proxy data accurately evaluates what, in theory, it is intended to analyze. In this case, there are four criteria that the authors believe reflect the threat of supply disruptions. Supply concentration is very much related to the risk to supply and is aptly measured by the amount of production coming from specific countries. However, scarcity and reserve distribution are not as clearly distinguishable.
To measure scarcity by looking at content of an element in the earth's crust ignores the fact that not all ore bodies are created equal. Gallium found in gallite is not the same as gallium found in bauxite, just as zirconium found in kosnarite is not the same as zirconium found in the mineral zircon. This problem also affects the evaluation of reserve distribution. Technical separation issues and simple economics cannot be ignored.
The reality is that using any template of statistical analysis to analyze metal markets, regardless of whether it is an analysis of criticality or of supply risk, is much like conducting an autopsy with just a magnifying glass. The analysis needs to be more intrusive and specific to the individual circumstances, unique to each metal and each country, in order to produce an effectual conclusion.
Reflection:
Studies such as the BGS Risk List, nevertheless, are useful and underscore some interesting dependency issues, such as the remarkably high share of metal elements that are produced and supplied by China (an issue that SM Report has highlighted in previous reports). They also point out potential issues for industries and end-users dependent upon materials derived from those elements deemed to be most at risk to supply disruptions.
Yet, a fundamental error that almost all government sponsored and research institute reports on material supply risk and dependence upon strategic metals make is that they are loath to acknowledge that no individual country possesses all resources in self-sufficient reserves. However, companies and individuals located in every individual country desire access to the end-products of these resources. This applies to REEs and antimony, as much as it does to oil, potash and drinking water.
The real lesson may not be that we need to produce as many resources domestically as possible, but that we should aim to ensure that the global market for natural resources is as transparent, balanced and equitable as possible, in order to provide every country, company and individual access to the building blocks for our world.
Link to Risk List 2011: http://www.bgs.ac.uk/mineralsuk/statistics/riskList.html
It does not highlight the 5 production by the leading country nor the % of say the next 2 producers. iron is a simple example - China is leader, yet both Australia and Brazil are very large producers and exporters [ wherever there is a good price].
As for REE - both Australia and US [and other non China influenced suppliers]are making very significant moves to build production, VERY rapidly eg Lynas expected to have production on stream early 2012. with more coming soon.
a point in time snapshot, but may not reflect real world "what is happening"
Posted by: Peter H | 10/19/2011 at 06:51 AM
You're right Peter, it is just a snapshot of things - a very static analysis of mineral distributions. For more insight into the economic and technological influences on strategic resource control, I suggest HCSS's report, which is reviewed below:
http://strategic-metal.typepad.com/strategic-metal-report/2010/10/scarcity-of-minerals-a-strategic-security-issue.html
Thanks for your feedback.
Posted by: Terence Bell - Editor SM Report | 10/19/2011 at 09:16 AM