CRM Lecture Notes PDF

17/11/22 Lecture 3 CRITICAL RAW MATERIALS (CRM) P. Ferro Department of Engineering and Management, University of Padova, Stradella San Nicola 3, 36100 Vicenza (Italy) P. Ferro, University of Padova (IT) 1 Contents Materi...

17/11/22 Lecture 3 CRITICAL RAW MATERIALS (CRM) P. Ferro Department of Engineering and Management, University of Padova, Stradella San Nicola 3, 36100 Vicenza (Italy) P. Ferro, University of Padova (IT) 1 Contents Materials supply-chain risk RM Criticality assessment Supply risk & Mitigating actions …the next step (DERMAP) P. Ferro, University of Padova (IT) 2 1  17/11/22 MATERIALS SUPPLY-CHAIN RISK How many materials are there in a SMARTPHONE? P. Ferro, University of Padova (IT) 3 MATERIALS SUPPLY-CHAIN RISK uropean signe d by The E eriodic le de al year o fp odic Tab n e w k in d of Peri 9: the internation The (201 l Society ) Chemica imed by UNESCO la 30 p ro c table (some reports claim as many as 70)…over half of which may give cause for concern in the years to come because of increasing scarcity P. Ferro, University of Padova (IT) 4 2  17/11/22 MATERIALS SUPPLY-CHAIN RISK 30 (some reports claim as many as 70)…over half of which may give cause for concern in the years to come because of increasing https://www.youtube.com/watch?v=YMzN_a66NKg scarcity P. Ferro, University of Padova (IT) 5 MATERIALS SUPPLY-CHAIN RISK k s Ri s …the competencies of a future engineer have to include not only technical skills but also the ability to manage risk. P. Ferro, University of Padova (IT) 6 3  17/11/22 MATERIALS SUPPLY-CHAIN RISK Pric vol e atil Ris y it (2011) Strikes in the copper k mines of Chile and a surge in demand from China (2007) The cobalt supply was disrupted in 2007 by war in the Democratic Republic of the Congo, causing the price to increase three-fold. P. Ferro, University of Padova (IT) 7 MATERIALS SUPPLY-CHAIN RISK Pric vol e atil Ris y it k (2011) The price of rare earth elements rose by more than a factor of 10 when China imposed export restrictions in 2011 P. Ferro, University of Padova (IT) 8 4  17/11/22 MONOPOLY OF SUPPLY AND GEOPOLITICAL RISK Countries accounting for largest share of global supply of CRMs (main CRMs producers) The Figure Russia Palladium 46% identifies the main countries-of- origin of the France critical materials Hafnium 43% listed in previous USA China Beryllium 90% Antim ony 87% lecture. If one of Baryte 44% Helium 73% Bism uth 82% these controls a Fluorspar 64% Gallium 73% large fraction (a Germ anium 67% Indium 57% half, say) of global Magnesium 67% Rwanda Natural graphite 69% supply of a Tantalum 31% Phosphate rock 44% Brazil Phosphorous 58% material, the Scandium 66% Niobium 90% Silicon m etal 61% market in that South Africa Tungsten 84% Indium 85% Vanadium 53% material is LREEs 95% Platinum 70% Rhodium 83% HREEs 95% unbalanced and Ruthenium 93% the potential for disruption exists. https://ec.europa.eu/growth/sites/growth/files/global_suppliers_of_crms.jpg P. Ferro, University of Padova (IT) 9 MONOPOLY OF SUPPLY AND GEOPOLITICAL RISK Russia Rwanda Thailand DRC France high level of 2% 2% 2% Brazil 2% 2% 2% Turkey concentration of set 2% Usa critical raw materials in 5% particular S. Africa 9% countries High supply risk: non-producer China countries will depend on unpredictable CRMs export 72% administration of producers countries P. Ferro, University of Padova (IT) 10 5  17/11/22 MONOPOLY OF SUPPLY AND GEOPOLITICAL RISK Countries accounting for largest share of EU supply of CRMs (main countries supplying CRMs to EU) Russia Scandium 67% Finland Tungsten 50% Cobalt 66% Vanadium 60% Norway Silicon m etal 23% France USA Hafnium 43% Erbium 40% China Antim ony 90% Helium 51% Morocco Sam arium 40% Phosphate rock 27% Baryte 44% Bism uth 84% Turkey Mexico Borate 98% Cerium 62% Fluorspar 27% Dysprosium 40% Europium 40% Kazakhstan Gadolinium 40% Gallium 36% Nigeria Phosphorous 77% Germ anium 43% Tantalum 43% Helium 40% Indonesia Indium 28% Brazil Natural rubber 32% Lanthanum 40% Niobium 71% Magnesium 94% Natural graphite 69% Neodym ium 40% Praseodym ium 40% Terbium 40% Thulium 40% Ytterbium 40% Yttrium 40% P. Ferro, University of Padova (IT) http://ec.europa.eu/growth/sectors/raw-materials/specific-interest/critical_nl 11 MONOPOLY OF SUPPLY AND GEOPOLITICAL RISK A 0. n H 25 H in I v The Herfindahl-Hirschman Index (HHI) is a measure of the risk su dic alu co pp ate e a nc ly- s bo when the supply of a material is controlled by one or a very few en ch se ve tra ai ve nations. This is the index: t i o n re n $ 𝐻𝐻𝐼 = $ 𝑓!% !"# where fi is the fraction of the market sourced from nation i and n is the total number of source-nations (0 < HHI < 1). P. Ferro, University of Padova (IT) http://ec.europa.eu/growth/sectors/raw-materials/specific-interest/critical_nl 12 6  17/11/22 MONOPOLY OF SUPPLY AND GEOPOLITICAL RISK Depen de mater nce on ials w sup ith conce ply-chain n t ra risk o tion carries action f monopo ,d ly supply isruption o an d v f o pricin latile g. The Herfindahl-Hirschman Index (HHI) for a number of critical materials. Data from USGS, 2012. P. Ferro, University of Padova (IT) http://ec.europa.eu/growth/sectors/raw-materials/specific-interest/critical_nl 13 CONFLICT RISK n t ra t i o n : f c o n c e n s i d e r e d Risks o d uce r s a re c o n c e: e p r o ov er n a - Som w i t h p o o r g o n fl i c t i e s d c countr a b ili t y o r a r m e i t i c a l i n st m p l e te ly Po l u p p ly c o t e rru p t s m a y i n P. Ferro, University of Padova (IT) 14 7  17/11/22 CONFLICT RISK …Ethical concerns inhibit the purchase of minerals from nations in which the proceeds might be used to fund conflict Nations with on-going conflicts in 2013 P. Ferro, University of Padova (IT) 15 LEGISLATION AND REGULATION RISK Many producers are emerging economies that try to reserve their resource base for their exclusive use, and can even adopt measures against international commitments: export taxes, quotas, subsidies... P. Ferro, University of Padova (IT) 16 8  17/11/22 LEGISLATION AND REGULATION RISK nal natio r- ross ns can c panese ca rictio Ja Rest rs. Thus a omply wit if e c bord er must legislatio in k h n EX: For long-lived m a rU S cars ean o sell their Eu r they o p wish to those natio ns. products such as aircraft there is a risk that the materials it contains may become restricted, requiring that substitutes be found and re- qualification be sought – an Some of the legislation bearing on materials enacted since 1976. expensive imposition. P. Ferro, University of Padova (IT) 17 ABUNDANCE RISK The richest iron ores contain almost half a kilogram of iron per kilogram of ore, but to get 1kg of platinum requires the mining of about 500,000kg of ore. If energy prices rise, the less abundant elements are the most vulnerable. Nations with on-going conflicts in 2013 P. Ferro, University of Padova (IT) 18 9  17/11/22 MATERIALS SUPPLY-CHAIN RISK an e Europe …from th What are CRMs? perspective · economically and strategically important for the European (and World, too!) economy · but have a high-risk associated with their supply: Ø significant economic importance for key sectors in the European economy Ø high-supply risk due to the very high import dependence and high level of concentration of set critical raw materials in particular countries Ø lack of (viable) substitutes P. Ferro, University of Padova (IT) http://criticalrawmaterials.org/critical-raw-materials/ 19 MATERIALS SUPPLY-CHAIN RISK Why are CRMs so important? Why should we take them into account? - to securing a transition to green energy technologies - to securing growth and sustainable consumption - to securing access to clean and efficient consumer technologies Europe is highly dependent on importing raw materials to secure the global competitiveness of its manufacturing industries and to accelerate the transition to a resource efficient, sustainable society. Smartphones, light bulbs, wind turbines, cars – CRMs are everywhere. A sustainable supply of raw materials is vital for the future of Europe and the World, as well P. Ferro, University of Padova (IT) http://criticalrawmaterials.org/critical-raw-materials/ 20 10  17/11/22 MATERIALS SUPPLY-CHAIN RISK Why are CRMs so important? Why should we take them into account? P. Ferro, University of Padova (IT) 21 Raw Materials CRITICALIY ASSESSMENT LREEs Economic importance and 5 HREEs Antimony supply risk results of 2020 criticality Germanium Magnesium 4 Phosphorus assessment Niobium Critical raw materials (CRMs) are Borate Supply Risk highlighted by green dots and are located 3 Scandium Natural graphite PGNs within the criticality zone (SR ≥ 1 Strontium Indium Beryllium and EI ≥ 2.8) of the graph. Bauxite Bismuth 2 Tungsten Helium Cobalt Baryte Vanadium Blue dots represent the non-critical raw Gallium Lithium Titanium Fluorspar materials. Natural cork Silicon metal Hafnium Phosphate rock 1 Tantalum Natural rubber Mn Chromium Tellurium Tin P Molybdenum Iron ore Potash Silver Zn Aluminium Nickel Gold Lead Copper 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 Economic Importance P. Ferro, University of Padova (IT) 22 11  17/11/22 Raw Materials CRITICALIY ASSESSMENT Th e4 th ac o b 2020 Critical Raw Materials (30) c or f R lack di M ng s list Antimony Gallium Magnesium Scandium Fluorspar to EC ! Baryte Germanium Natural graphite Silicon metal LREEs Beryllium Hafnium Natural Rubber Tantalum Bauxite Bismuth Helium Niobium Tungsten Lithium Borate HREEs PGMs Vanadium Titanium Cobalt Indium Phosphate rock Phosphorous Strontium PGMs iridium, platinum, palladium, rhodium, ruthenium (excl. Ormium) HREEs dysprosium, erbium, europium, gadolinium, holmium, lutetium, terbium, thulium, ytterbium, yttrium LREEs cerium, lanthanum, neodymium, praseodymium, samarium P. Ferro, University of Padova (IT) 23 INTRODUCTION to Critical Raw Materials GREEN Technology Automotive RRE Sc Ga In PGM In Co Metals Electronic devices Mg V Nb W Ti RRE In Co P. Ferro, University of Padova (IT) 24 12  17/11/22 Raw Materials CRITICALIY ASSESSMENT Increasing trend (examples)… Strategic technologies and sectors for the EU economy and their interlinkages ….Be careful, CRMs are an European list P. Ferro, University of Padova (IT) 25 Raw Materials CRITICALIY ASSESSMENT The role of Titanium as a ‘new entry’: Why?Automotive Semi-quantitative representation of flows of raw materials and their current supply risks to the nine selected technologies and three sectors Materials distribution in different parts of the combat aircraft. P. Ferro, University of Padova (IT) 26 13  17/11/22 SUPPLY RISK and MITIGATING ACTIONS Why not in Europe? - Environmental regulations – high cost - Social rejection - Aggressive policies of some exporters – European (and other worldwide) industries had to close P. Ferro, University of Padova (IT) 27 MANAGING THE RISK, MITIGATING ACTIONs OPTIONS: 1. Building reserves or negotiating long-term supply contracts (to face short- term fluctuations in availability and price); 2. Redesigning to use critical materials more efficiently and by increasing take-back, recycling and reuse to keep them in service; 3. Seeking substitutes. P. Ferro, University of Padova (IT) 28 14  17/11/22 MANAGING THE RISK, MITIGATING ACTIONs (engineer/designer) Factors reducing the risk: mitigating actions 2) Substitution by other raw materials - not always possible 1) End-of-life recycling - but 3) Component efficiency (better Low recycling rate design) Difficult separation from the other metals - economically not viable P. Ferro, University of Padova (IT) 29 MANAGING THE RISK, MITIGATING ACTIONs (engineer/designer): Sodium-ion battery breakthrough. Safer, cheaper and cleaner than Lithium-ion www.youtube.com/watch?v=cHNELRnJ_4Y P. Ferro, University of Padova (IT) 30 15  17/11/22 SUPPLY RISK and MITIGATING ACTIONS (engineer/designer) Abundance risk Risk of scarcity due to low abundance of the material level in the earth’s crust Sourcing and Risk that supply might be geopolitical risk level disrupted by political with HHI index instability or civil unrest Environmental Risk that environmental country risk level legislation enacted by supplying nations might with HHI index disrupt supply Herfindahl- Measure of market Hirschman Index concentration, (HHI) P. Ferro, University of Padova (IT) 31 SUPPLY RISK and MITIGATING ACTIONS (engineer/designer) risk of a disruption supply Supply risk of the materials Importance of a given material Economic in the EU end-use applications and performance of available Importance substitutes in these applications Difficulty in substituting Substitution index the material: 0, the easiest; 1: the least Ratio of recycling from End-of-Life post-consumer functional recycling input rate recycling to EU demand P. Ferro, University of Padova (IT) 32 16  17/11/22 …THE NEXT STEP (DERMAP) Goal - learning a strategy for materials selection in mechanical design that mitigates the issues related to CRMs P. Ferro, University of Padova (IT) 33 Self-VERIFICATION 1) What are Critical Raw Materials? o materials that suffer from supply risk o materials that are used only in specific industrial sectors o all the materials in the periodic table of elements o aluminium and copper 2) Which are the main parameters used to asses the criticality? o there are no parameters that can be used o Supply risk and Economic importance o The End of Life Recycling input rate o The abundance in the Earth’s Crust 3 : Which are the factors reducing the supply risk?: o The resources concentration reduction o increased competition o giving up new technologies o Recycling, substitution, more efficient use of materials P. Ferro, University of Padova (IT) 34 17