For more than 18 months, Alcimed has been conducting a study for three major French energy companies. These three actors, whose names have not been revealed, are concerned about their supply of strategic materials, which are essential to the energy transition. The firm is publishing part of its work and is making European recommendations to lessen the risk of a critical materials shortage on the continent.
The study examines the availability of 36 materials according to seven criteria: reserves, geopolitical risk, production, recycling, demand, substitution capacity and strategic deployment stocks. There are two key points to bear in mind. On the one hand, some materials have very low reserves in relation to their demand. "It has been noted that current reserves of antimony, tin and chromium would be depleted in less than 17 years at the current consumption rate," say the study’s authors.
Resources in the hands of a few
On the other hand, the reserves for raw materials are often concentrated in the hands of a few, which is a risk in the event of a decrease in exports or a sudden increase in prices. For example, China controls 80% of rare earth material, graphite, tungsten and vanadium production; South Africa controls 50% of chromium, platinum and ruthenium production; Brazil dominates with 90% of niobium production; and the Democratic Republic of Congo (DRC) supplies 50% of cobalt.
Based on these multi-criteria set, Alcimed concludes that eleven of the 36 elements studied have very high market risks. These elements are: Neodymium, Yttrium, Cobalt, Praseodymium, Dysprosium, Chromium, Niobium, Tungsten, Gadolimium, Ceryum and Antimony. "All of them have extremely important functions in renewable energy and digital technology, which requires manufacturers to ask themselves what is their level of exposure to these materials within the next three years", warns Jean-Philippe Tridant Bel, Director of the Energy, Environment and Mobility Division at Alcimed.
As a "bonus", social and environmental criteria have been added to indicate "warnings" for certain materials. By their own admission, the authors of the study were surprised to issue manufacturers warnings for 24 raw materials, as their exploitation poses social problems. Cobalt, for example, involves child labour. The authors also warn against lithium, which is exploited in arid areas and requires high water usage, much to the detriment of local populations.
A return to mining in France
In this context, Alcimed recommends three solutions be put in place in France to mitigate this major industry risk. The first is to reopen mines on French territory, like the Salau tungsten mine project in Ariège. "Europe is endowed with resources that are not being exploited. Opening mines may be of social concern, but we must stop exporting this pollution", says Tridant Bel who is convinced that citizens are willing to pay a little more for products originating from more responsible mines.
"But the European Union is unaccustomed to exploiting its resources because of its colonial past, unlike Russia, China and the United States which have a more internalised logic on the matter", he adds.
The second solution is the deployment of a real recycling system, which would enhance our waste usage and create jobs. "Some countries have thought of imposing a rate for secondary (editor’s note: recycled) raw materials to limit their dependence on producing countries", says Guillaume Passard, consultant at Alcimed. The third solution is managing mining assets. Alcimed calls for the creation of public or private investment funds to take shares of mining assets abroad. China and the United States have already created such devices.
Warning signs are multiplying
These recommendations have just come about in the last few months, raising real awareness that energy and digital transitions are not sustainable, because of the limits to certain primary resources and their environmental and social impact. Wind turbines, photovoltaics, and automotive batteries are all too resource-intensive.
In an essay outlining this problem, Guillaume Pitron, a freelance journalist, does not hesitate to say that "the energy transition was not well thought out because it completely ignored what it was going to cost in raw materials". Additionally, the BRGM (Bureau of Geological and Mining Research) and both McKinsey and CRU Consulting firms presented an alarming study at the World Materials Forum (WMF), this past June in France. Their work highlighted six minerals whose supply could become critical to global energy and digital transition: cobalt, tungsten, tin, dysprosium, neodymium and praseodymium.