Evaluating Supply Markets for Minor Metals – Indium, Gallium and Selenium

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Several weeks ago, I had written a post on China and the critical metals supply chain covering various metals such as indium, gallium and selenium as they related to an article I had read in which the author was critical of a DOE (Department of Energy) loan guarantee to a company in California building thin film photovoltaic solar cells. The criticism centered around China becoming the de-facto beneficiary of the US stimulus program, because the US government had not required the company to provide an independent review that the raw materials required for this technology were “earth abundant.” In other words, China holds the keys in terms of raw material supply. What bothered me when I wrote the post, and since then, is the way in which the media (self included) have created some misperceptions about the criticality (or lack thereof) of many minor metals. So I decided to conduct some research and find a more systemic or analytic approach to classifying these metals.

Who cares and why does it matter? It matters because we end up making emotional arguments as to where we can and can’t or should or shouldn’t source materials (e.g. China is the enemy, “the predator”, etc). These statements provide a disservice to innovative manufacturers. Instead, let’s start with a little quiz:

[survey_fly]

If you answered 1, indium, you would be correct. None of the others are actually critical metals. Criticality refers to a mineral that is both essential in use and subject to the risk of supply restriction, according to a book published by the National Academy of Sciences entitled: Minerals, Critical Minerals and the US Economy, copyright 2008. If a company produces a product reliant on one of these critical metals, the sourcing process obviously also becomes quite critical. CIGS, which is used in thin film solar cells, relies on these metals and understanding the underlying supply dynamics can help reduce raw material supply risk.

At the end of the day, should the US government not support end user industries that rely on some of these materials because they remain in critical supply? Of course not, and in fact, some critical metals have been critical since, well, 1941. Take manganese for example. This story from October 13, 1941 explains. We have written about the scarcity issues involving manganese as well.

The supply dynamics that matter most when examining one of these particular minor metals, according to Minerals, Critical Minerals and the US Economy, include both primary sources of supply (relating to mineral availability, ease of processing, can it be mined cleanly, and governmental policies/incentives, cost effectiveness etc) as well as secondary sources of supply such as ready access to recycled materials and access to landfills. Both primary and secondary sources of supply remain critical in the overall evaluation of any metal in terms of criticality. But other factors also play a role such as demand and in particular, volatility of demand, market concentration etc. There are more factors that comprise this analysis on supply availability. When looking at the metal in light of how essential it is in use the notion of product substitution also plays an important role.

We will dive further into what all of this means for metals buyers and the harsh words from metals pundits for countries like China (which may not be justified). In the meantime, the research from this book specifically lists several critical metals including indium, manganese, niobium, PGM’s (precious metals) and RE’s (rare earths). Noticeably absent, gallium. Selenium was not considered in the study.

–Lisa Reisman

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