CRMs in Products
New technologies, products and other advancements are key to the continued success and
development of the European economy.
To achieve this, the supply of raw materials is crucial.
However, the supply of raw materials which is the lifeblood of many of today’s high-tech
industries, is increasingly under pressure.
In the last five years, about 80% of companies in the high tech sector have dealt with serious
delivery issues concerning vital raw materials and semi-finished products.
As a means of quantifying this problem, the European Commission has created a list of critical
raw materials, or CRMs for short, which is subject to a regular review and update.
Critical Raw Materials are those raw materials which are economically and strategically
important for the European economy, but have a high-risk associated with their supply.
These materials are ‘critical’ for key industry sectors and therefore the sustainable functioning
of the economy.
These materials are used in diverse fields such as environmental technologies, consumer
electronics, health-care, steel-making, defence, space exploration, and aviation, to name but
a few.
It is important to note that these materials are not classified as ‘critical’ because these
materials are considered scarce, rather they are classified as ‘critical’ because: they have a
significant economic importance for key sectors in the European economy, such as
electronics, environmental technologies, automotive, aerospace, defence and health.
For example, a smartphone might contain up to 50 different kinds of metals, all of which
contribute to its small size, light weight and functionality.
Critical raw materials are closely linked to cleaner technologies.
They are irreplaceable in solar panels, wind turbines, electric vehicles, and energy-efficient
lighting.
The EU CRM policy is especially relevant for defence as it is a multi-product and high-tech
sector.
To be considered critical they also have a high-supply risk due to the very-high import
dependence and high concentration of set critical raw materials in particular countries, based
on their governance performance.
There must also be a lack of viable substitutes, due to the very unique and reliable properties
of these materials.
The main parameters used to determine if a material is a CRM for the EU are: Economic
importance – an attempt to measure the importance of a material for the EU economy in
terms of end-user applications and the value added (VA) of corresponding EU manufacturing
sectors.
Supply risk - reflects the risk of a disruption in the EU supply of the material.
It is based on the concentration of primary supply from raw materials producing countries,
considering their governance performance and trade aspects, poor end of life recycling rates,
and low potential for substitution.
The EU’s industry and economy are reliant on international markets to provide access to many
important raw materials since they are produced and supplied by countries outside of the EU.
Although the domestic production of certain critical raw materials exists in the EU, in most
cases the EU is dependent on imports from non-EU countries.
China is the major supplier of critical raw materials, accounting for 70% of the global supply
and 62% of the supply to the EU.
Examples include: rare earth elements, magnesium, and antimony.
Brazil for niobium, USA for beryllium and helium, Russia for palladium and South Africa for
iridium, platinum, rhodium and ruthenium are also important producers of critical raw
materials.
There have been 3 revisions of the CRM list published thus far: - in 2010, 2014 and most
recently in 2017.
The current revision of the list identifies 27 materials which are now considered critical by the
Commission.
These are now shown on the screen.
Because of their prominence in the critical raw materials list, this MOOC focuses on metals.
Mining CRM
Welcome to this lesson, where I will explain you geopolitical and environmental issues
associated with the mining of critical raw materials.
A mineral deposit contains one or more commodities, which may be extracted depending on
the economic considerations.
Few critical raw materials occur on their own, such as platinum group metals in South Africa,
which is the leading global producer of these metals.
Otherwise, platinum group metals occur together with base metals like copper and nickel and
is rather a by-product than main commodity.
Many other critical raw materials are extracted as by-products of major metal or mineral
mining operations.
These include for example bismuth, cobalt and gallium, which are extracted together with
gold, nickel, aluminium, etc.
Because of this, the extraction of critical raw materials is often dependant on the development
of major projects and can take several years.
For these commodities, the production bottleneck is usually further down the value chain.
They are typically extracted from the mine in raw ore form, but are not recovered at the
refineries or smelters, due to the lack of economic incentive or simple technology.
Today’s increasing demand for digital, IT, automotive and hi-tech products results in an
increasing demand for critical raw materials, which puts further stress on a scarce finite
resource.
Many European countries are strongly dependent on the import of these materials from
abroad.
Some critical raw materials are located in parts of the world, which are politically and
economically unstable and do not have systems in place that would guarantee responsible
sourcing of these materials.
Hence, the rising demand combined with localisation of critical raw materials in such regions
becomes a major political and economic issue.
For example, China is a top producer of 18 out of 27 critical raw materials, while Europe is a
top producer for only 1 critical raw material.
Next to China, the largest global suppliers are the USA, Brazil, Russia and the Democratic
Republic of Congo.
To further exacerbate the problem, resource rich countries are very protective of their
resources and want to keep them for their own development.
Measures and decisions undertaken in these countries can cause serious distortions on the
world market and put many industrial sectors at a competitive disadvantage.
In the next lessons, you will learn what EU is doing to counterbalance these measures.
The availability of raw materials is not determined solely by geopolitics.
Another important factor that needs to be taken into account are the environmental risks of
mining.
These environmental problems influence not only the social acceptance of mining, but can
also seriously affect the cost of raw materials.
A good example is price rise for nickel, after more than 20 mines in the Philippines were shut
down, due to environmental problems in February 2017.
These mines were closed because they were polluting rivers, rice fields and watersheds with
red nickel laterite.
Another location affected by environmental issues associated with mining is Papua New
Guinea.
Here, the Ok Tedi copper and gold mine is located at the headwaters of Ok Tedi River in Papua
New Guinea.
It is one of the largest copper mines in the world.
Initially, the government demanded that the river must be protected from the mine tailings
by a dam in order for it to be operational.
Tailings are the materials left over after the process of separating the valuable fraction from
the uneconomic fraction of an ore.
Tailings are usually unstable and damage the land and water environment by releasing toxic
substances, like arsenic and mercury, and by acid drainage.
Unfortunately, a landslide destroyed the tailings dam and afterwards the mine operators
successfully continued operating without building a new dam.
This means that thousands to millions of tonnes of waste rock, tailings and tailing fine sand
were now discharged annually into the river.
The obviously ruinous environmental consequences of this decision were tragic for the river
ecosystem as well as for the people whose livelihood depended on the river.
As you can see, operation of mines results in emissions to air and water, but building a mine
carries also a significant ecological burden.
Surrounding forests are cut, rivers polluted and local fauna and flora disturbed as their
biological niches are eliminated.
Next to that, there are also social challenges related to the operation of mines.
Very often mines are built in remote areas in developing countries, with little social control.
Forced labour, poor health and safety conditions, child labour and corruption are not
uncommon in these regions.
The best way to stop these unethical practices, is if the major consumers of certain metals or
minerals impose the sustainable procurement rules on their suppliers.
A good example is Umicore, which is the first company in the world to have introduced a
Sustainable Procurement Framework on Cobalt.
1.4 Materials shortage?
What is materials shortage?
In this video we define materials shortage as the lack of a material at a certain price to make
it an economically viable product.
That means that if there is a shortage of a material to make a product, two things could
happen simultaneously.
The first one is that the price will increase to a level where new exploration is economically
feasible.
In other words; a higher price for the material makes more expensive exploration possible.
There is more money around to dig deeper.
The second thing that could happen is that some products are getting too expensive and will
not be made, or a substitute material will be used, if possible.
This outlook on possibilities does not include the dynamics around materials exploration.
It takes about 3 to 5 years to open a mine on land and make it operational.
The required investments are quite significant.
Since 2010 the prices of different critical raw materials have been fluctuating.
In 2011, for example, the prices of neodymium, which is used in wind turbine production,
went up 6 fold.
These turbulent price fluctuations make large investment in mining on land or at the ocean
bottom very risky.
It also increases the supply risks.
The world population is expected to increase from 7 billion in 2017 to 9 billion by 2037,
according to the United Nations Population Division.
This organization expects the 10 billion mark to be met in 2055.
Such a population increase will obviously increase the demand for materials and CRMs, as
more people will buy more products, necessitating more materials.
Furthermore, material demand has sharply increased due to the fast growth of consumers in
large emerging economies such as China and India.
This sharp increase puts additional pressure on the materials demand.
Many critical raw materials are used in high tech devices such as smartphones.
A shortage of these critical raw materials due to any of the aforementioned factors could
hamper the further development of high tech devices for the high tech economy.
Another important undertaking could also be hampered by such a shortage; the development
of a zero carbon economy.
In order to achieve a zero carbon economy, new high tech products are necessary for the
production of zero carbon electricity, such as solar panels and wind turbines.
Current crystalline solar panels need silver for their contacts.
The new thin film solar panels need Germanium amongst others.
Wind turbines need neodymium for their dynamo’s.
Other products have to be adapted for this carbon neutral economy, such as cars.
We have to switch from gasoline or diesel to electric cars.
For these electric cars neodymium is necessary for the electric motors.
For a zero carbon economy we have to switch to more energy efficient products such as
energy efficient LED-lights.
LED lights need gallium and indium.
The necessity of all these materials for high tech products to make a zero carbon economy
possible, can drive up the price of critical raw materials.
It can also slow down the development of the economic viability of zero carbon technology,
that is so important to stop climate change.
To reduce this increasing pressure on material mining, we can recycle the products we now
thoughtlessly discard, such as mobile telephones and laptops.
Although recycling technology is developing at a steady pace, the recycling rate of many
critical raw metals is quite low.
According to a study by the Oeko-institute from Darmstad, Germany in 2012, the recycling
rate of silver for example was above 50%, but for other critical raw metals needed for our zero
carbon economy, such as neodymium and gallium, the recycling rate was less than 1 percent.
And even if more and more critical raw materials could be recycled, the sheer increase in
demand for new products by a growing number of consumers with a spending power coming
close to EU or US citizens, puts a lot of pressure on winning primary materials.
To counter this pressure closing the loop of these materials, a longer lifetime of products, and
substitution of materials amongst others, is of significant importance.
In the coming modules we show you all kinds of idea’s how to do this.
EU Policy
In this lesson, I will introduce some elements of the EU policy, which aim to ensure the supply
of critical raw materials in Europe.
Today, the world is facing a tremendous challenge related to resource supply.
It threatens our way of life - while some resources, such as water, are vital for all forms of life,
others became essential to maintain our current standard of living.
This is the case for metals and minerals, which are used in a wide range of applications, from
the production of phones and computers, to the growing of our food.
The growth of the worldwide population, which is expected to reach 9.5 billion by 2050,
results in an increased consumption of resources.
The global consumption of materials increased by 60% from 1980 to 2008, and is expected to
increase by almost 40% by 2030 compared to 2010, reaching 100 Giga tonnes per year.
This increased resource consumption is also accompanied by an increase in the world average
income induced by economic growth in non-OECD countries such as China and India.
The European Union has to deal with this in the form of increasingly competitive use of
resources, while ensuring good living conditions for its citizens.
To this end, ensuring access to critical raw materials has become a priority.
To tackle this challenge, the EU has developed two parallel strategies: improve the
management of raw materials within the EU via the establishment of several policy
instruments, and secure the supply of raw materials on global markets.
The EU has developed several policies, starting in the early seventies with the waste
management policies, which aimed to safely dispose waste streams and avoid the emissions
of harmful substances, such as lead or copper, into the environment.
In 2006, the waste hierarchy was introduced in the Waste Framework Directive and defines
the prioritised set of measures and treatments, which member states should use in the
treatment of waste.
In order of precedence, these are: waste prevention, preparing for reuse, recycling, recovery
and disposal.
The waste hierarchy has resulted in a new wave of waste policies, which aim to improve the
management of high value materials containing many critical raw materials.
This is the case of the Batteries Directive and the Directive for Waste Electrical and Electronic
Equipment, or WEEE.
These directives define measures to establish schemes for high level of collection and
recycling, and fix targets for collection and recycling activities.
In parallel, the Eco-design Directive supports these measures for example by asking
manufacturers to provide technical ‘information relevant for disassembly, recycling or
disposal at end-of-life’ at the product level.
Product-specific regulations have been put in place for example for computers, power
transformers or ventilation units, which generally contain significant amounts of CRMs.
The most recent measures implemented to tackle the challenge of resource supply are
gathered in the EU action plan for the circular economy.
In this action plan, critical raw materials are clearly presented as a priority for Europe.
One example of such measure is the definition of European standards for material-efficient
recycling of electronic waste, waste batteries and other complex end-of-life products.
The European Commission also wants to improve the exchange of information between
manufacturers and recyclers on electronic products and the sharing of best practice for the
recovery of critical raw materials from mining waste and landfills.
However, as you can see on this map, Europe is still highly dependent on the import of critical
raw materials from non-EU countries and has to secure its supply on global markets.
It is especially the case for rare-earth elements for which no recycling or substitution
processes are currently commercially viable.
The instability of some parts of the world and the impact of their relationship with the EU can
threaten the supply of raw materials to the EU.
To tackle this challenge, the EU has set up the EU Raw Material Diplomacy, which intends to
reach out to non-EU countries through strategic partnerships set during missions for growth
and policy dialogues.
The aim is to maintain or create collaborations on raw materials production, trade and
recycling.
The EU has developed relations with countries, which are key actors for the supply of critical
raw materials to the EU.
Examples include Morocco, which provides 27% of the phosphate rock, and China, which
provides 94% of the magnesium consumed in the EU.
One challenge the EU is facing is that critical raw materials are often located in politically
unstable countries where their trade can be used to finance armed groups, fuel human rights
abuses, and support corruption and money laundering.
Therefore, one aspect of EU policy is to ensure a responsible sourcing of materials.
The new EU Conflict Minerals regulation which will come into force in 2021 will contribute to
it by requiring EU companies to ensure they import selected minerals and metals from
responsible and conflict-free sources only.
So, Europe is taking action to ensure its supply of critical raw materials by encouraging their
recovery and recycling within Europe and by maintaining or creating collaborations with key
regions of the world where these materials are available.
These measures are key to maintaining the current way of life of European citizens.
People should also be aware that their consumption patterns directly contribute to this
dependency on critical raw materials and could positively influence this dependency by
switching towards more sustainable consumption.
Current waste management
Most of the critical raw materials are to be found in discarded electronic and electrical
equipment (the double U triple EEE), in end-of-life vehicles and in metal scrap.
Although the recycling rate of metal scrap is quite high, critical raw materials in alloys are not
recovered.
In most cases, there is separation at the scrap yard in generally used steel, stainless steel,
copper, aluminium, and lead.
But this separation is crude at best.
Most of the critical raw metals are lost when melting the steel and other metals in the
recycling process.
In end-of-life vehicles there is a fair separation of steel and other metals such as aluminium,
however the recovery of critical raw materials in the electronics or electro motors of a car, is
considered economically not viable.
Recyclable waste containing mostly mixed metals, such as WEEE, is first shredded.
This is followed by the removal of steel and plastics.
The mixture of non-ferrous metals is then sent to hydro- and/or pyro metallurgy.
In hydro metallurgy, metals are dissolved in acids at low temperature, and in pyro metallurgy
the metals are smelted at high temperature.
For example Umicore in Belgium is specialized in retrieving metals using such processes and
can currently retrieve 17 different metals from waste.
However products such as electrical and electronic equipment contains more and more
different critical raw materials such as Gallium and Indium, both having a recycling rate of less
than one percent.
Batteries are usually collected and treated separately.
Batteries containing mercury are separated and the mercury is recovered.
In 2016 about 10 and a half million tons of WEEE was generated in the EU, Norway and
Switzerland.
In that same year about 2 million tons of battery waste was generated in that area.
As of 2019, every member state of the European Union has to make sure either 65% of electric
and electronic equipment put on the market, or 85% of WEEE generated in that Member State
must be recycled.
The waste that is not recycled is landfilled, incinerated or exported illegally.
When this waste is tossed in the bin for residual waste, it ends up on a landfill or in an
incinerator.
There are problems with landfilling with waste that contains metals, such as batteries or
electric and electronic equipment.
The major problem is that the critical raw materials in this waste dissolve into heavy metal
oxides.
When this is combined with organic material decomposing in the same landfill, organic acids
are formed.
These acids dissolve heavy metals forming metal ions, such as lead, cadmium, mercury,
copper and tin-ions.
These ions partially dissolve into the water in the landfill, forming a substance called
“leachate”.
When a landfill is not isolated from the surrounding environment, these heavy metals will
pollute this environment.
Therefore most modern landfills have a practically non-permeable bottom layer, as well as
practically non-permeable concrete walls, or a rubber lining.
You can compare such an isolated landfill to a bathtub.
However, even this solution is not without risks - any concrete wall or rubber lining can fail
over time and the heavy metals still can enter the surrounding environment.
Therefore the leachate water in the landfill is pumped out so that the water level in the landfill
is lower than the water level outside the landfill.
Water can only enter the landfill, not leave the landfill.
The leachate water is treated in a water treatment plant before being released back into the
sewage system.
In this water treatment plant the heavy metals are precipitated.
In other countries such as the Netherlands combustible residual waste such as household
waste or waste from offices is incinerated.
An incinerator operates at a temperature of about 850 degrees Celsius.
At this temperature some metals melt and are mixed with the slag, or oxidizes.
Some of these of metals end up in the slag.
In many cases ferrous and non-ferrous scrap is removed from the slag to give the slag
acceptable properties for civil works and to have an extra financial income from the scrap.
However in the slag, the tiny metals from WEEE cannot be removed - nor can oxidized metals
and metals mixed with other slag particles.
These metals will eventually leach out.
In many countries the slag is landfilled.
When slag is used for civil works, regulations apply to control the leaching of heavy metals.
According to the European regulations, WEEE must be safely processed within the European
Union.
However, obsolete or non-functioning equipment has a market value in countries outside the
European Union.
Untested cell phones are worth at least 5 euros in Nigeria, whereas the same cell phone only
has a material value of around one euro in Germany.
It is estimated that old TV sets, which still work, generate 17 to 35 euros in Nigeria, while in
Germany the treatment costs are higher than any income from sales of the recycled materials.
The higher environmental standards for treatment in the EU has correspondingly higher cost
for treatment or disposal.
This results in a lot of illegal export of WEEE from the EU.
This illegal export can offer significant income or savings to operators dealing with WEEE or ewaste.
In addition, export to Asian countries has a low threshold due to the low transportation costs
of containers going mostly back empty from Europe to South-East Asia.
It is not only the potential financial gains which cause people to engage in this criminal trade.
High unemployment rates can also encourage people to legally export e-waste, as it is rarely
prosecuted by national authorities.
The United Kingdom, the Netherlands and Sweden were in 2015 the only EU Member States
which have dedicated public prosecutors for environmental crime.
Once the e-waste arrives in locations such as Africa or Asia, the hazardous and unsafe
practices used to recycle the material is a danger for both the health of the workers as well as
the environment.
It is not uncommon for child labour to be used in scraping e-waste in such unhealthy
situations.
1_8
After we have seen a few elements about the urgency and challenges with critical raw materials
and before we go further on the way to deal with these materials, let's make a pause and ask
ourselves: do we need all that stuff?
This question implies that we wonder what our needs are. The problem is that there may be
numerous answers, and these should come as much from individuals as society as a whole.
This is also about how relation to technology and consumption habits. Low tech or high tech?
As a complement to our need for high technologies containing CRMs, there is still room for low
technologies, often abbreviated low tech. Indeed, in some cases, simple technology, often of a
traditional or non-mechanical kind, such as crafts and tools that pre-date the Industrial
Revolution can still be useful. Another interest is that low technology can typically be practiced
or fabricated with a minimum of capital investment by an individual or small group of
individuals, which empowers the independence towards manufacturers. Therefore, they often
have lesser environmental impacts.
However, the issue of multiple functionalities brought by high technologies needs to be
weighed. For example, a smartphone not only replace a telephone, but also a camera, music
player, agenda, and many other things. This means rethinking our needs. Our current approach
of consumerism is not the only one. We can state several examples: Firstly, Frugality: Frugality is
the quality of being sparing, prudent or economical in the consumption of consumable
resources and avoiding waste or extravagance.
This term implies the concepts of reduction of waste, seeking efficiency, detecting and avoiding
manipulative advertising and staying well-informed about local circumstances and both market
and product/service realities. In a sense, it is not far from we will be discussing in the following
lessons.
All these principles are general and can be easily applied to products containing CRMs. In
addition, frugality may contribute to health by leading people to avoid products that are both
expensive and unhealthy when used to excess. In corporations, frugality has been adopted as a
strategic imperative by large companies as a means of cost reduction.
Secondly, Eco leasing is a system in which goods are rented to a customer for a certain period
of time after which he returns the goods so the company that made it can recycle the materials.
The operation is similar to regular purchasing of goods, so not requiring a contract to be made
up as with leasing it is done with appliances and other products used for the household, rather
than with land or very expensive products.
The period of time the product is rented would be about the same as the lifespan of the
product, so it can only be rented once before it is taken back by the company to recover the
materials and to create another product with it. We will talk more about similar concepts in
Module 3. Finally, Presumption: This word composed by production and consumption refers to
the creation of products and services by the same people who will ultimately use them. This is
what is done in the Do It Yourself (DIY) approach as a means of economic self-sufficiency or
simply as a way to survive on diminished income. For example, the open source software
movement creates software on their own; this is the case of the operating system Linux which is
now used on most servers.
We also find the Fablab movement relating to self-fabrication capabilities, especially 3d printing,
and the voluntary simplicity movement that seeks personal, social, and environmental goals
through prosumer activities. Here are some examples: repairing clothing and appliances rather
than buying new items or distribution technologies to foster independent, open, non-profit,
"consumer-to-consumer" media and cultures, see Wikipedia. Sharing the resources, the issue of
common goods.
All these different approaches may question our consumption habits, and also our conception
of property. More precisely, such changes entail to rethink what is the domain of individual
property and what belongs to common goods. The commons are the cultural and natural
resources accessible to all members of a society, including natural materials such as air, water,
and a habitable earth. These resources are held in common, not owned privately. Commons
can also be understood as natural resources that groups of people, communities, user groups,
manage for individual and collective benefit. This involves a variety of informal norms and
values, social practice, employed for a governance mechanism.
Questions and answers