Minerals: A Critical Commodity in the Global Economy

Recently, a number of news stories have appeared on the rare earth elements, a group of 17 chemicals with similar properties that are crucial to technologies ranging from hybrid cars to cell phones. The United States relies on foreign sources of rare earth elements, causing concerns that if prices climb or supply is cut off, some parts of the domestic economy could be significantly affected.  Although the rare earth elements are getting most of the press, several other types of minerals—many of them imported—are also potentially of concern for a diverse manufacturing economy. These issues are the subject of a 2007 report, Minerals, Critical Minerals and the US Economy, which makes the point that keeping a watchful eye on mineral supply and demand could help to avoid disruptions to the nation’s economy and security.

What are the rare earth elements?

The “rare earth elements” are set of chemical elements with similar properties. Although rare by name, the rare earth elements are not necessarily rare by nature, and are actually quite plentiful in the earth’s crust. However, because of their chemical properties, rare earth elements are not often found in concentrated, easily-mined ore deposits. Consequently, most of the world’s supply of rare earth elements comes from only a handful of sources.

Source: U.S. Geological Survey Rare Earth Element Factsheet, http://pubs.usgs.gov/fs/2002/fs087-02/

Europium, one of the rare earth elements.

What Makes a Mineral Critical?

Chemicals derived from minerals are part of virtually every product we use.  Their unique properties contribute to the provisioning of food, shelter, infrastructure, transportation, communications, health care, and defense.  Every year more than 25,000 pounds of new mineral products must be provided for every person in the United States just to make items we use every day, and a growing number of these minerals are imported.

The report’s authoring committee was careful to point out that a reliance on foreign sources of minerals is not necessarily a cause for concern. However, a better understanding of exactly which minerals are most critical to the economy would allow planning to ensure mineral resources are available in time—and at acceptable costs—to meet demands. To help address this issue, the committee developed a “criticality matrix” to assess how critical a particular mineral is for the US.  The extent to which a mineral is considered critical is determined  both by its importance (vertical axis) and its subjectivity to supply restrictions (horizontal axis).

The mineral criticality matrix.

Usefulness of Minerals

Minerals vary in usefulness based on the demand for that mineral from different sectors of the U.S. economy. Depending on the mineral’s chemical and physical properties, some minerals will be more crucial for specific uses than others. For example, platinum group metals and rare earth elements are fundamental to the construction and function of catalytic converters. Because no viable substitutes exist for these minerals in this application, restrictions in supplies of platinum group metals and rare earth elements would mean that the manufacture of the current generation of catalytic converters would be threatened.  In general, the greater the difficulty, expense, or time needed to find a suitable substitute for a given mineral, the greater the impact of a restriction in the mineral’s supply.

Availability of Minerals

The availability of any mineral supply is based on factors such as mineral resources, the difficulty of extracting and processing the mineral, the environmental and social issues associated with mineral extraction, political considerations, and the economic cost of extracting the mineral. Supply risks can increase if mineral production is concentrated in a small number of mines, companies, or countries.  For example, part of the concern about rare earth elements is that domestic sources have not been widely explored or mined, so the United States relies on imports of rare earths from other countries, in particular China, which now supplies approximately 97 percent of the world’s rare earths.

In the report, 11 minerals are assessed to demonstrate how the matrix might be used to assess mineral criticality. Of this group, platinum group metals, rare earths, indium, manganese, and niobium are the most critical.

Applying the Criticality Matrix. This matrix shows the criticality of 11 minerals. The circles for each mineral represent the composite score on a scale of 1 to 4 on each axis of the impact of a supply restriction and the supply risk.

Planning for Disruptions in Mineral Supply

An improved understanding of the criticality of minerals allows decision makers to develop strategies to limit the effects of possible restrictions in mineral supply. Since the release of the report in 2007, members of the report’s authoring committee have testified before numerous House of Representatives and Senate committees. Following testimony for the Committee on Science and Technology, the House passed a September 2010 bill authorizing research to address the supply scarcity of rare earth minerals and addressed the larger, long-term issue of critical materials supply. The bill set up a program of research and development aimed at advancing technology that would affect rare earths throughout their life cycle, from mining to manufacturing through to recycling. In addition, the bill authorized research to find substitutes for rare earth materials in manufacturing, and to find ways of reducing their usage.  (http://archives.democrats.science.house.gov/press/PRArticle.aspx?NewsID=2932)