Gadget Makers Face Shortage of Essential Elements

When General Electric faced a shortage of the metal called rhenium, few Americans knew or cared. They might have paid more attention if they had realized that rhenium forms part of the steel alloys in turbine blades used by almost all commercial, military and even space rocket engines.

The U.S. corporation didn't give up on rhenium's high melting-point qualities, which allow engines to withstand higher temperatures during jet flight. Instead, GE bought itself time with an ambitious recycling program while launching research efforts that ended with an alternative alloy within five years of realizing there was a possible rhenium shortage. 

But growing demand for a wide array of smartphones, flat-panel TVs, hybrid cars and wind turbines has raised worries about future disruptions to a huge supply chain that seems to span the periodic table of elements. Most U.S. companies seem unprepared or unable to cope with such disruptions that could slow the pace of innovation, said Robert Jaffe, a physicist at MIT.

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"The world isn't going to run out of any of these materials anytime soon," Jaffe explained. "[But] we face possible short-term constraints to supply that could do serious harm to otherwise game-changing technologies."

A new report calls for U.S. government help in safeguarding so-called energy-critical elements that are crucial to new energy-related technologies. Jaffe co-chaired the study group for the report set up by the Materials Research Society & American Physical Society, and presented the results on Feb. 18 during the American Association for the Advancement of Science (AAAS) conference in Washington, D.C.

Keeping track of it all

The sense of growing vulnerability is highlighted by tech giant Intel's estimates that computer chips held just 11 mineral-derived elements in the 1980s, but may have up to 60 elements in the coming years. A slew of recent reports in the U.S. and Europe have also pointed to rare earth minerals and other critical materials that form essential parts of clean technology and common electronics.

One huge problem is that the life cycles for most of these elements remain unknown. That means almost nobody has any overall sense of where the materials go and what happens to them during their lifetime of use, according to Thomas Graedal, an industrial ecologist at Yale University and a member of the report committee.

Getting a better sense of the supply chain is massively complicated for even single products. The turbine blades of one particular jet’s engine use13 different elements in the alloy and five different elements in the coating, Graedal said. A company that makes such jet engines not only needs to know if it can get the 18 elements for production, but also wants to secure a supply over the next 25 years of the engine's lifetime for when the blades need to be replaced.

"For some products you really want a long-term view of material supply, and we have no way to get that information," Graedal told InnovationNewsDaily.

The new report suggested that a federal agency with an authority similar to that of the U.S. Bureau of Labor Statistics should track the life cycle statistics for any designated energy-critical elements. It added that what would count as an energy-critical element remains open for discussion.

More precious than gold

The government should also invest in research to support more efficient mining and metallurgy, and to develop substitute materials, according to the report. Recycling, also called urban mining in some circles, could also help — though that alone cannot supply the growing demand of the market.

"Energy-critical elements are literally more precious than gold … but we treat them like trash," Jaffe said during the AAAS press conference. "Cell phones and iPods end up in landfills, yet they contain energy-critical elements in concentrations that exceed the richest ores."

The report committee recommended against stockpiling except in the case of helium — an element that chills magnets used in medical scanners and pressurizes rockets used by NASA and the U.S. Department of Defense. The United States also cannot rely upon domestic mineral reserves, given that many are located primarily in other countries.

"We do not recommend economic stockpiling, which we believe is a disincentive to innovation and has backfired in the past," Jaffe said. "We do not believe we can mine our way to energy-critical element independence."

Consumers may not see much of a price increase for new gadgets even if critical-material costs triple due to demand, because relatively little of each material goes into most products. More worry comes from the fact that some critical materials are produced in just a few countries, which means the actions of just one main producer can cause a severe supply shortage.

"There's this specter of the unavailability of an essential element constraining the rollout or expansion of technology," Roderick Eggert, director of the division of economics and business at the Colorado School of Mines, said in a phone interview.

Rare earth minerals

Such worries have stood out in the case of rare earth minerals that grabbed headlines over the past year. The U.S. Department of Energy (DOE) identified six minerals in a Dec. 2010 report as most crucial to the clean energy technologies  based on their relative importance and supply risks. Those include five specific rare earth minerals: dysprosium, neodymium, terbium, europium and yttrium.

"The concern there was two-part  — one is the geopolitical risks that come with concentration of production in China," Eggert said. "Second, there is the strong likelihood of increased demand for these five elements, primarily for their use in permanent magnets."

Rare earth minerals are found all around the world, but only China currently has the refineries to turn the rare earth oxides into usable material for industry. The country supplies as much as 97 percent of such rare earth materials, and has occasionally used its near-monopoly to block exports of the material to Japan and U.S. during political spats in 2010.

The sixth element singled out by the DOE, indium, is not a rare earth mineral. It is, however, a crucial ingredient used in liquid crystal displays for smartphones and other products, and forms a material component of photovoltaic technologies found in solar panels.

For now, the market for many of these materials still has few producers and end-users, unlike more widely and heavily used materials like copper. Such "small and fragmented" markets are more vulnerable to disruption and less able to meet unexpected shortages or leaps in demand.

"In some sense, we can have greater trust in the market adjustment for copper, aluminum, and iron ore used for steel," Egger explained. "It's not that there can't be instability in these markets — and there certainly are — but there's more confidence that the markets will take it."