Gian Andrea BlenginiPolitecnico di Torino

CNR-IGAG Torino

Materie primestrategiche per

l’industria ceramicaLunedì 24 settembre 2012 - Rimini

Le materie prime:evoluzione dei concetti di 

scarsità, strategicità e criticità

in collaborazione con

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Concetti di base

RISORSE(scarse)

BISOGNI(illimitati)

L’Economia è la scienza che studia la corrispondenza tra:

dove le risorse = fonti di beni e servizi

SCARSITÀ EFFICIENZA

Per quanto riguarda le materie prime minerarie, il concetto diScarsità è più articolato (Scarsità ≠ Limitatezza)l’Efficienza diventa un obiettivo più difficile da raggiungere

The fixed stock paradigm takes a geological perspective. It starts from the premise that the

supply of any mineral commodity is finite. Continued extraction and use will lead first to

scarcity and eventually to exhaustion (Baumol& Blackman 2007).

http://www.econlib.org/library/Enc/NaturalResources.html

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Una misura comunemente adottata per la scarsità fisica (limitatezza) è l'indice statico delle riserve

(static reserve index), cioè il rapporto tra le riserve e la produzione / consumo annuali. Il risultato è una stima della durata delle riserve, espressa in anni.

http://www.newscientist.com/data/images/archive/2605/26051202.jpg

4Fixed stock paradigmStatic reserve index sono utili perprevedere / programmare il futuro?

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“…long-run trends in real prices, real production costs, or othermeasures of what society has to give up to obtain another unit of amineral commodity provide a better indicator of trends in availabilitythan physical measures indicating how much is left in the ground.

Indeed, the available estimates of physical supply cannot beunderstood without recognizing the economics.”

(Gordon and Tilton – Resources Policy 33/2008)

Secondo la prospettiva dell’economia mineraria, la presente/futura disponibilità di materie prime

dipende principalmente dall’effettivo impegno che i soggetti interessati sono disposti a dedicare

(opportunity cost paradigm).

Geologia Geologia + Economia + Politica

Market response to scarcity model for minerals

(Shields et al. 2007)

MARKET EQUILIBRIUM t2

UPWARD PRESSUREON SUPPLY

DOWNWARD PRESSUREON DEMAND

RESEARCHInnovationTechnological Change

GOVT INCENTIVESAND INITIATIVES

PRICE INCREASE

SCARCITY

PRODUCTION-BASEDDepletionNatural disasterCivil Unrest

SUPPLY DISRUPTION

MARKET EQUILIBRIUM t1

MARKET-BASEDNew major consumer

GOVT-BASEDEmbargo

Industry andProducer Responses

LOWER CUT-OFFGRADE

EXPLORATION

REOPEN OLD ANDDEVELOP NEW MINES

Previously UneconomicPreviously Infeasible

DIVERSIFY SOURCES

ENHANCE DELIVERYAND DISTRIBUTION

Market andConsumer Responses

SUBSTITUTIONIn consumption

Increase efficiencyConservation

DEMATERIALIZATION

Reuse, Recycle,Remanufacture

SUBSTITUTIONIn manufacturing

INCREASED USAGE OFSECONDARY MATERIALS

Environment. Restrictions(socially driven scarcity)

Modello di meccanismo di equilibrio nei mercati delle

materie prime

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•Situational scarcity (locational) •Political scarcity•Social scarcity•Other types of scarcity

Scarcity caused by Restrictions to Flows

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• Critical Raw Materials (EU): when the risks of supply shortage and their impacts on the economy are higher compared with most of the other raw materials (REE are critical in the EU).

• Critical Raw Materials (US): importance in use, availability and in some cases dependency to national security and economy.

• Strategic Materials: whenever their location is concentrated in vulnerable or unfriendly places and when they are essential to production of military hardware.“The Rare Earth Elements are as strategic a commodity as crude oil or food, and will be for the rest of this century”.

ABN AMRO Geopolitical Analysis, 20118

Criticality Matrix

US NRC, 2008

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Short term and medium term criticality of some REEs (US Department of Energy, 2010)

Some selected Critical raw materials for the US

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Based on a criticality methodology, calculations are made regarding the economic importance and supply risk of the 41 materials.

Critical raw materials for the EU

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Global REEs reserves by 

country (2011) 

• Global reserves: 110 million tonnes (est.) • Global production: 133,600 tonnes (est.)• China produces approximately 97% - 99.8% of global REEs*. • Currently there is no mining of REEs in US** and EU.

Resources ‐ REE in the world (not RARE)

* 83% from Baiyunebo mine (35 Mt reserves)** Mountain Pass (CA) closed in 2002

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Resources ‐ REE in the world

AUSTRIA24%

BELGIUM2%

SPAIN 2%

ITALY2%

UNITED KINGDOM8%NETHERLANDS

16%

GERMANY8%

FRANCE38%

Relevant Importance of REEs ‐TradeMajor Importers of REEs (2008) 

Imports Share of imports from China

EU 27 23,013 t 90 %USA 20,663 t 91 %JAPAN 34,330 t 91 %

The share of European countries in terms of the 

total imports of REEs from outside EU‐27(2008) 

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China’s demand for REEs was estimated (*) that 

will reach  its production level by the year 2012

In 2008, China started to quote its REEs exports In 2010 China’s REEs exports rates were decreased 

by 29%  compared to 2008 China has been restricting the supply of its REEs 

exports since 2004 at average rate of 13% per year 15

Relevant Importance of REEs ‐ Geopolitics“There is oil in the Middle East; there is rare earth in China” 

Deng Xiaoping, Chinese leader (1992)

CHINA FORMER USSR

In China, the development of REEs mining and industry is considered to have a relationship to modern military technology.

REEs were considered a national secret and very limited information was released due to their application to USSR’s defense systems 

The main effort of China’s search for global resources is to confine additional REEs from elsewhere to maintain economic growth.

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Year Country/Organization Event 2010 China – Japan Governments China announced retaliation measures against 

Japan (ban/embargo of Chinese REEs exports to Japan)

Columbia University, School of International & Public Affairs (SIPA)

Creation of academic course specifically dedicated to REEs research (3 academic credits). Full Course Title: “Citigroup, Global Commodities Research: Political and Economic Impact of Rare Earths”, Course Number: SIPA900.032

German – Mongolian Governments

First time visit of German Chancellor to Mongolia. Reason for visit: REEs trade agreement. 

2012 EU – Japanese – US ‐ Chinese Governments

US, Japan and the EU Governments filed a case against China at the World Trade Organization challenging its restrictions on REEs exports.

US Government US President Barack Obama accused China of breaking agreed trade rules on REEs during a Press Conference at the White House.

Global Geopolitical Events Related to REEs (2010‐2012)

Year Country/Organization Report / Document (*) 2010 US Air War College, US Air Force “Sustainability of Strategic Minerals in Southern 

Africa and Potential Conflicts and Partnerships”

US Institute for the Analysis of Global Security (Non‐profit Think Tank)

Report: “China’s Rare Earth Elements Industry:What Can the West Learn?”

US Army, Foreign Military Studies Office Report: “China’s Ace in the Hole: Rare Earth Elements”

The Hague Centre for Strategic Studies (HCSS ‐ Independent Think Tank ‐Netherlands)

Report: “Rare Earth Elements and Strategic Minerals Policy”

Organization for Economic Cooperation and Development (OECD)

Report: “Export Restrictions on Strategic Raw Materials and their Impact on Trade and Global Supply”

2011 US National Defense University, Joint Forces Staff College

Master thesis: “Mining and Exploitation of Rare Earth Elements in Africa as an Engagement Strategy in US Africa Command”

US Army College Master thesis: “An Integrated Rare Earth Elements Supply Chain Strategy”

ABN AMRO (Financial Institution, Netherlands)

Report: “Geopolitical Analysis: Rare Earth Elements Risk Analysis”

(*) all documents can be freely downloaded

Global Geopolitical Reports/Documents Related to REEs (2010‐12)

REEs Initiatives in US and EU (2010‐2012) ‐ Regulatory Initiatives Year US EU2010 US Congress, House bill: “H.R. 6160, Rare Earths and Critical Materials 

Revitalization Act” US Congress, House bill: “H.R. 4866, the Rare Earths Supply‐ Chain Technology 

and Resources Transformation Act” US Congress, Senate proposal: “S. 3521, Rare Earths Supply Technology and 

Resources Transformation Act”

2011 US Congress, Proposed House and Senate of defence authorization bill: “P.L. 111‐84, the Fiscal Year 2010 National Defence Authorization Act”

US Congress, House bill: “H.R. 5136, the Fiscal Year 2011 National Defence Authorization Act”

US Congress, House bill: “H.R. 1388, Rare Earths Supply Chain Technology and Resources Transformation Act of 2011 (RESTART Act)”

US Congress, House bill: “H.R. Rare Earths and Critical Materials Revitalization Act of 2011”

US Congress, House bill: “H.R. 2184 Rare Earths Policy Task Force and Materials Act”

US Congress, House bill: “H.R. 1314: RARE Act of 2011” US Congress, Senate proposal: “Critical Minerals Policy Act of 2011” US Congress, Senate proposal: “S. 1113 Critical Minerals Policy Act of 2011” US Congress, House bill: “Energy Critical Elements Renewal Act of 2011”

2012 European Commission, Proposal: “Innovation Partnership to Overcome Europe’s Raw Materials Shortage”

REEs Initiatives in US and EU (2010‐2012)Other Initiatives 

YEAR US EU2010 US Government Accountability Office, Report: “Rare Earth 

Materials in Defence Supply Chain”,  US Congressional Research Service, Report: “Rare Earth 

Elements: The Global Supply Chain”  US Department of Energy, Report: “Critical Materials 

Strategy” US Department of Interior, Geological Survey (USGS), 

Report: “The Principal Rare Earth Deposits of the United States –A Summary of Domestic Deposits and a Global Perspective”

European Commission, Enterprise and Industry, Report: “Critical Raw Materials for the EU”

2011 US Congressional Research Service, Report: “REEs in National Defence: Background, Oversight Issues, and Options for Congress”

US Congressional Research Service, Report: “REEs: The Global Supply Chain”

US Department of Defence, National Defence University, Joint Forces Staff College, Master’s Thesis: “Mining and Exploitation of REEs in Africa as an Engagement Strategy in US Africa Command”

US Department of Defense, US Army War College, Master’s Thesis: “An Integrated Rare Earth Elements Supply Chain Strategy”

European Commission, Joint Research Center (JRC), Institute for Energy and Transport, Report: “Critical Metals in Strategic Energy Technologies”

Green Party of the European Parliament, OKO Institute, Report: “Study on Rare Earths and Their Recycling”

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Gian Andrea BlenginiPolitecnico di Torino / CNR-IGAG

Corso Duca degli Abruzzi 24 - 10129 Torino, Italy blengini@polito.it

tel. +39 011 090 7715

Grazie per l’attenzione

in collaborazione con

Le diapositive 8, 10, 14‐20 sono adattate da:Sotiris N. Kamenopoulos and Zach Agioutantis (2012). Rare Earth Elements: A Review and Analysis of their Multi‐dimensional Global Importance. 23rd Annual General Meeting of the Society of Mining Professors, July 12‐16, Wroclaw, Poland