Q&A Session 1 - Roskill
Updated: May 18, 2020
Welcome to our first Q&A Session with Founding Member, Roskill - Jack Bedder, Director and David Merriman, Manager – Battery & Electric Vehicle Materials.
Our Q&A will cover:
UK opportunities for Critical Minerals
Effects of Covid-19 on Critical Mineral and EV markets
Challenges to global critical mineral supply chains
What governments can do to secure critical mineral supplies.
Jack has explored the processes and behaviours that shape critical materials supply chains in his PhD at Cambridge University. David manages Roskill’s analysis on the lithium, lithium-ion battery, cobalt, rare earths and electric vehicle markets.
1) Critical Minerals Association (CMA): From a UK standpoint, what top 5 critical minerals should we be paying attention to?
Jack/ David: It depends on the definition. Using the European Commission’s 2017 list, the UK has a few projects/ production in exciting growth markets:
Lithium – Potential for domestic supply, existing expertise in country for lithium processing, desire to create domestic battery supply chain
Cobalt – Central hub for global trading and key location for some refined production + desire to form domestic battery supply chain
Tungsten – Existing project development in UK, could create stable supply chain for UK consumers
Rare Earths – Existing UK expertise in REE supply chain (compound -> metal -> magnet alloy), strong drive-train industry in UK which can target electric motors for EVs using permanent magnets
There are some Industrial Minerals that we have a good foothold of in in the UK, with Fluorspar probably the main one
2) CMA: What do you think are the greatest challenges to global critical mineral supply chains?
Jack/ David: I think the biggest challenges are part of what makes a material critical – the 'economic importance' and the 'supply risk'.
With regard to 'economic importance,' a challenge is the scale of these supply chains vs the scale of the new demand – in many cases, these markets were nothing but curiosity metals a few years ago, but are now household names and front and centre of key growth areas like EVs. Some markets like cobalt and lithium have grown at huge rates over the past few years, and that comes with challenges, and leads to price volatility
With regard to 'supply risk', much depends on geographies – Europe and the UK are not blessed with significant reserves of many critical materials. As a result, end users are becoming exposed to new geographies such as the DRC (e.g. cobalt, tantalum), Chile (e.g. lithium), China ( e.g. antimony, REEs) – which can bring new issues – supply risk, resource nationalism, issues with corporate social responsibility
3) CMA: What are the key things that Governments should do to secure/ diversify supplies of critical minerals?
Support local enterprise through incentivising domestic purchases for companies creating value-add products domestically
Make funds/support available for FDI into foreign upstream/downstream assets to help domestic players
Explore centralised purchasing platforms – to create a level playing field for all domestic market players with good price security (i.e. Lithium on LME)
4) CMA: What do you think are the UK's greatest opportunities for Critical Minerals?
Jack/ David: The UK doesn’t have a clear strategy yet. Producing one could create opportunities for producers, projects, and the wider economy. In Europe, while the three (nearly four) lists to date may have promoted potential raw material supply risks, other aims of the European Commission’s critical materials agenda (such as strengthening European industrial policy, stimulating the production of raw materials in Europe, fostering more recycling of critical materials, and improving sustainable development) seem not to have been met.
In terms of specific markets, for metals like tungsten and rare earths, there are opportunities to create more value/jobs as the UK already has quality assets in these areas. Nurturing the supply chain around these industries will be crucial to support longer term stability (i.e. expand tungsten metal/APT production, or downstream magnet production in the UK)
5) CMA: What do you think will be the biggest effects of Covid-19 on the Critical Mineral markets?
Less investment in ‘risky’ projects as capital is tied up in safe havens and blue chips during economic weakness.
Lower prices for some critical materials (owing to weaker demand) which may reduce the incentive for domestic or regional supply
A greater focus on supply risk in the (inter)national consciousness as we appreciate more what is, and what is not, sourced from abroad
Lower demand over 2020, with the possibility of an extended downturn, which should recover in 2021
6) CMA: What do you think the EV Industry should do to mitigate the impacts of Covid-19?
Subsidies on EV purchases should be continued to maintain consumer demand but there is scope to increase these further
Financial support for companies actively developing EV programs and models, as EV production remains a loss maker in 2020 and needs sales of high margin vehicles to support it
7) CMA: Tell us more about Roskill and your work with Critical Minerals
Jack/ David: Roskill has been analysing these supply chains since the 1960s. We produce around 40 different commodity reports at Roskill, many of which focus on “critical” minerals. Furthermore, we undertake a considerable amount of strategic consulting, helping clients to better understand critical minerals supply chains. We also work closely with government and international bodies and have helped shape various critical material strategies.
8) CMA: How can Roskill's services support Critical Mineral companies?
Jack/ David: We support Critical Minerals companies by helping them to:
Understand past and future supply, demand and price trends
Understand the cost dynamics of critical materials markets
Understand complex, ever-evolving supply chains from mine to market
Develop strategies for critical material risk mitigation and procurement
9) CMA: Why did you decide to join the CMA?
Jack/ David: We joined the CMA because there is a need now, more than ever, to develop a strategy for the UK’s extractive (and CRM) sector and bring industry, government and academics together to help support UK players and help develop a more sustainable, low-carbon economy.
Thanks Jack, David and Roskill! For more on Jack's insights into critical minerals, his published articles on 'Classifying critical materials: A review of European approaches' and 'Critical Thinking about Critical Raw Materials in the EU' can be found here.
Save the Date for Roskill's On the Road LME Week on Tuesday, 20th October at the Tower of London. This year's theme is: 'Battery and electric vehicle raw materials insights'
Make sure to register here: https://roskill.com/event/on-the-road-london-2020/
For more information on Roskill and services please see: https://roskill.com/
Photos by Harshil Majmudar