21st Century Products: A Challenging Economic Future

This article discusses how rare earth elements (REEs) and precious and specialty metals — collectively known as critical materials (CMs) — are sourced as well as some issues and engineering challenges that may lie ahead.

The past few decades have seen astounding advances in the capabilities and production of numerous electronic, industrial, and consumer products. Simultaneously, the use of catalysts has increased in chemical and fuel production to reduce pollutants and toxic emissions. Many of these advances could not have occurred without critical materials (CMs), i.e., rare earth elements (REEs), and precious and specialty metals. Although various gases and liquids are important, this article focuses on metals because of their overwhelming importance economically, societally, and in the defense sector. Similarly, while lithium is widely and increasingly used in batteries, it will likely remain sufficiently available in the foreseeable future at a practical cost and therefore is also not discussed.

Several countries are taking steps at the national level to increase production and develop more efficient extraction and purification processes for CMs. The U.S. federal government has prepared a preliminary list of materials identified as having strategic importance for the security and prosperity of the country (Table 1) (1). Table 2 lists eight CMs and provides examples of their use; the limited availability and high prices of many of these metals have concerned equipment suppliers.

The criticality of various materials depends on their economic importance, supply risks, and other environmental considerations. The European Union (EU), the U.S. Dept. of Energy (DOE), and private companies have evaluated these criteria for many materials. Their approaches and conclusions are publicly available and are discussed in a previous CEP article (2).

Initial sources of critical materials

Almost all CMs are available somewhere in the earth’s crust or oceans, commonly as compounds such as chlorides, oxides, phosphates, or sulfides. A few are synthetic. Many sources are located in regions of political instability, or countries where corruption of high-level government officials is common, as well as in areas with poor infrastructure or poor environmental, health, and safety (EHS) practices. For example, the Democratic Republic of the Congo, the source of approximately two-thirds of the world’s cobalt and copper, was publicly criticized for allowing unsafe working conditions and the use of child labor (3, 4). Many large companies have policies that prohibit transactions with entities that allow such practices, and encourage using only ethically sourced cobalt, straining the supply. Conversely, China, the source of most REEs, has now shut down much of the illegal mining and raised the EHS requirements for official mines. These positive steps toward human rights have, however, undoubtedly incurred costs that will be passed on to customers.

Many source countries tend to view their mineral resources as strategic assets. They sometimes limit exports for political reasons as a tactic in trade and tariff wars, or to benefit their domestic industries. China reduced exports for molybdenum and tungsten by 40% in 2010, citing environmental reasons (5). The U.S., EU, and Japan sued in the World Trade Organization (WTO) to overturn this practice, won, and after an unsuccessful appeal, China removed these caps in 2015 (6). Indonesia banned the export of nickel ores and bauxite in 2014 specifically to help its smelting industry. International nickel prices then increased by 50%, but the country’s revenues from the export taxes were lost and its national budget was seriously harmed; the ban was removed in 2017 (7).

To remain competitive, many countries do not provide detailed information about production rates and inventories of their mineral resources. This introduces large uncertainties into the economic viability of opening a new mine or expanding the capacity of one already in existence.

Rare earth elements and other desired materials found in the earth’s crust or oceans are present in higher volumes than the word “rare” implies. The practical problem is that their concentrations vary considerably from mine to mine and...