On the 27th of July 2021, Jeff Townsend led CMA’s breakfast chat, ‘Defining Criticality - What Makes a Critical Mineral?’ alongside Jack Bedder from Roskill, Andrew Clifton from Rolls Royce, and Allison Britt from Geoscience Australia.
The discussion focused on how a critical mineral can be defined and what determines ‘criticality’ of a metal or mineral. The panellists considered different perspectives and approaches to defining criticality across the industry, including the upstream and downstream, academia and government.
Presentations from the event are available below.
Geoscience Australia – The Australian Approach
Roskill – Defining Criticality
Rolls Royce – Material Criticality
A Brief History of Critical Minerals
China’s dominance in the critical minerals space comes as no surprise given their approach to securing ‘strategic minerals’ ahead of the rest of the world:
The Chinese media’s attention was caught in the 1950s over ‘strategic minerals’, leading to the formation of the State Reserve Bureau
In the 2000s, strategic mineral resource planning became a key focus of policy and planning documents.
The ‘Go out’ policy was adopted in 2021, following calls for more exploration of strategic minerals.
In the 2010s, China’s National Mineral Resource Plans (NMRP), included ‘staple mineral’, ‘advantageous mineral’ and ‘strategic emerging mineral’ terms.
The NMPR (2016-2020) introduced a catalogue of 24 strategic metals and minerals.
China’s early strategy placed them in a competitive position against major western economies, such as the US or Australia, which only began releasing critical mineral strategies and critical mineral lists from 2018 onwards.
China’s dominance does not only lie in foresight (and the undisputable natural endowment of the nation), but also the diversification of Chinese-owned projects outside of China and the monopolisation of the midstream industry.
Whilst the western world is racing to secure critical mineral projects to meet their critical minerals demand for the net-zero transition, many nations, including the UK, still lack a solid critical mineral strategy or list.
The Green Energy Transition
Fuelled by society’s appetite for green energy, critical minerals are gaining more traction in mainstream media. Downstream manufacturers are increasingly taking a look at their supply chains aiming to identify where exactly the necessary raw materials are coming from and how they are sourced.
As technologies develop and the demand for greener products soars, the issue of critical minerals and their supply security are felt by original equipment manufacturers, who are increasingly looking at the ESG credentials of the raw materials they use. The global race for securing reliable and ESG-compliant critical minerals is on.
The rise of gigafactories has seen the formation of partnerships between electric vehicle manufacturers and mining companies, such as that between Britishvolt and Glencore for long-term supply of cobalt or Tesla’s nickel supply agreement with BHP.
What exactly are critical minerals?
The world of critical minerals is complex, and the umbrella terminology lacks a singular, all-encompassing definition or list. With governments, industries and organisations viewing criticality from different lenses, a singular global list would fail to be fit for purpose. Canada has released their critical minerals list earlier this year, whilst EU’s 2020 list remains in place alongside Australia’s updated 2020 critical minerals list.
Geoscience Australia defines a critical mineral as “a mineral or element (solid, liquid or gas) that is essential for modern technology and cannot be easily substituted with a different mineral AND there is a risk that the supply of that mineral could be disrupted”.
What determines criticality?
Despite mining dating back millennia, the critical minerals space is an evolving, fluid space, responding to latest demand forecasts driven by the western world’s competition to reach net-zero. As market trends shift and technological advances progress, so will the ‘criticality’ of minerals.
Geological scarcity is one of the biggest factors affecting criticality of metals and minerals. As more of the world’s resources are becoming depleted, those that are yet to be found are increasingly in frontier regions, occurring at greater depths, driving the costs of exploration and mining as a result.
Geopolitical instability along with a lack of large-scale markets and monopolised processing facilities, often concentrated in a handful of nations, adds to the risk of supply disruption. Disruption, such as the blockage seen at the Suez Canal earlier this year, highlights the threat posed by lack of diversification within the supply chain.
Criticality of minerals continues to be affected by lack of substitution or recycling and, recovery limitations within those processes. Despite ‘circular economy’ buzzing around, the reality remains that until technology provides sufficient recovery rates for recycling and until associated infrastructure is put in place, what cannot be grown will have to be mined.
Despite the complexities, factors and varying viewpoints, the CMA splits critical minerals into three sub-sets based on supply chain vulnerability and necessity of application. These are:
1. Critical Minerals: Minerals necessary for the industrial objectives of a country or company. Most of these have supply chain vulnerabilities.
2. Technology Metals: Necessary to make new technology work. No supply chain vulnerabilities.
3. Strategic Minerals: Minerals with diplomatic or defence importance
Even within a single nation, the metals and minerals falling under one of the sub-sets may vary depending on industries, defence strategies and technological advances.
An answer to tackling the rapid evolution of market trends and technological advances impacting the classification of criticality lies within track and trace technologies. Chemical fingerprinting of ore paired with blockchain has the ability to monitor global supply of critical minerals in real-time, enabling flagging of critical minerals at most risk.
What might criticality look like for the UK?
The revival of mining and metal extraction in the UK signifies a step in the right direction. The boom of exciting new projects concentrated in the South West of England, focusing on lithium, tin, tungsten and copper signifies a new era of sourcing critical minerals domestically in a responsible manner.
The UK Prime Minister’s ambitious Ten Point Plan is a huge undertaking. The UK will need to source majority of the critical minerals needed for EVs, renewables and technology from international locations. These are often areas of conflict and alleged human abuses such as the Democratic Republic of Congo, which supplies 70% of world’s cobalt mine production.
The limitation of domestically available resources will affect what criticality might look like for the UK. It is no doubt that the UK will need to forge collaborative relationships with other countries, such as the Five Eyes over securing critical minerals as responsibly as possible, at least to diversify its supply chain feeding the industry, and minimise reliance on Chinese-owned supply.
The emergence of Nissan and Britishvolt gigafactories along with rumours of a potential Tesla gigafactory coming to the UK puts several metals and minerals as sure contenders for the UK’s critical minerals list, including lithium, cobalt, nickel, tin and REEs as the frontrunners along with tungsten and graphite. The sheer scale of the infrastructure update needed to facilitate the change from conventional cars to EVs will require monumental volumes of copper, solidifying its criticality in achieving the Ten Point Plan.
Biographies:
Allison Britt, Geoscience Australia
Allison is currently the Acting Director for Mineral Resources Advice and Promotion at Geoscience Australia, where her mission is to support the discovery and sustainable development of the nation's mineral resources.
Andrew Clifton, Rolls Royce
Andy Clifton is the Manager for Sustainable Development for Rolls-Royce. His primary role at Rolls-Royce is to lead the development of the company's design evaluation capabilities so that sustainability forms an integral part of all decision-making processes across all businesses and functions.
Jack Bedder, Roskill
Jack is a Director at Roskill. He has over 10 years’ experience of analysing the economics of natural resources and managing, developing and building client relationships in the commodities research and consultancy sector.
Jeff Townsend, CMA
Jeff is the Co-founder of CMA launched in 2019. Jeff is an experienced Public Affairs and campaign strategist working at the highest levels in business and politics. He is skilled in lobbying, public and government affairs, campaign strategy development and communications.
Article by Olimpia Pilch, CMA's Business Development & Communications Associate