We have not done too much by way of reporting some of the rare and obscure metals though we are admittedly starting to re-think that strategy given growing demand. And by no means are we expert regarding any of those metals we’ll leave that to people like Jack Lifton who seems to be somewhat of an authority on the subject. But a recent article written by Mr. Lifton raises some interesting questions about the viability of some clean energy technologies that rely upon some of these more obscure metals.
This recent article discusses what Lifton believes to be a short-sighted decision on the part of the DOE (Department of Energy) when it awarded its first alternative energy loan guarantee to Solyndra Inc, a manufacturer of photovoltaic systems. Jack takes issue with the DOE’s decision because, They [the DOE] are requesting that an application by a thin-film photovoltaic solar cell manufacturer to develop the mass production of a product based on a technology called CIGS be approved forthwith without any independent verification of claims made by the applicant that the critical raw materials are earth abundant and available in the marketplace.
The critical raw materials in question, according to the article include: indium, gallium and selenium. The author fears that China’s natural resource production will become the unintended beneficiary of our government’s stimulus because the US relies on these metals as imports.
His fears are not unjustified but let’s take a quick look at a few points in greater detail. First, China is not the sole producer of any of three technology metals ” indium, gallium and selenium, as Lifton calls them. Each are produced as by-products of other base metals such as zinc, aluminum and copper.
According to the links in the article from the USGS (where we also cite our data below), here is the breakout of import sources to the US and actual worldwide production by country of origin:
Gallium Import Sources (2004-07): China, 17%; Ukraine, 17%; Germany, 16%; Canada, 14%; and other, 36%. (Editor’s Note: All gallium was imported to the US. None of it was produced here)
Gallium by country of origin: In 2008, world primary production was estimated to be about 95
metric tons, about 19% higher than that in 2007. China, Germany, Kazakhstan, and Ukraine are all producers; countries with smaller output were Hungary, Japan, Russia, and Slovakia.
Indium Import Sources (2004-07): China, 43%; Japan, 18%; Canada, 17%; Belgium, 7%; and other, 15%. (Editor’s Note: All indium was imported to the US. None of it was produced here)
Indium by country of origin: Top producers include China (by a lot in all fairness, 330 tons) Japan 60 tons, Canada and South Korea each with 50 tons, Belgium with 30 tons and other.
Selenium Import Sources (2004-07): Belgium, 45%; Canada, 15%; Germany, 10%; Philippines, 10%; and other, 20%. (Editor’s Note: All selenium was imported to the US. None of it was produced here)
Selenium by country of origin: Top producer, Japan, 840 tons followed by Belgium, 200 tons, Canada 120 tons, Other 120 tons, Chile 75 tons, Peru 75 tons plus several others
I am struck by two findings. First, of the three metals, the only China claim that can be seriously raised applies to indium. China controls 58% of the world’s production. Large, for sure but we’ve seen industries in which China controls a much greater share. For gallium and certainly selenium, China is hardly the runaway recipient of anything. China is not obtaining any additional benefit above what any other producing country of these metals is receiving. Why point the finger only at China? The second finding and perhaps more interesting is how many countries contribute to these new technology metals. Many countries from all over the globe contribute to the world supply. They appear to represent quite a diverse supply base. From a sourcing perspective, this creates many options for US value-add manufacturers.
Now certainly the fact that the US is a net importer of these metals is something that needs to be analyzed, and potentially addressed. Ideally, the US would also produce these metals. But the fact is, many industries in the US rely exclusively on imports to produce value add products. I can think of countless examples from cable wrap (the industry relies on an imported product) to certain filters a large earth-moving equipment manufacturer sources and activated carbon (used in many major water treatment systems throughout the US is also supplied by importers).
Why should we sound alarmist bells regarding China in the alternative energy industry when we haven’t bothered to ring them for countless others?
Editor’s Note: We take no position on the efficacy of CIGS in photovoltaic cells