27 April 2020
WP329 | The New “Rare Metal Age”: New Challenges and Implications of Critical Raw Materials Supply Security in the 21st Century
Abstract
When Beijing threatened to restrict China’s export of rare earths (widely used in numerous important civilian and military technologies) to the United States at the end of May 2019, the world was reminded of China’s rare earths export disruption in the autumn of 2010 amid a maritime territorial conflict between China and Japan. In the past few years, the worldwide attention cast on the future supply security of rare earths and other critical raw materials has increased in the United States, the European Union, Japan and other countries owing to the global expansion of “green technologies” (including renewable energy sources, electric vehicles and batteries, and smart grids) and digitalisation as well as equipment and devices embedded with artificial intelligence.
In this paper, the term “critical raw materials” (CRMs) refers to raw materials critical to industries that are also import-dependent on them, and to new technologies which often have no viable substitutes and whose supply, besides being constrained by limited recycling rates and options, is also dominated by one or a few suppliers. CRMs include rare earth elements (REEs), which comprise 17 different elements (see Figure 4).
The global race for the most advanced technologies dependent on CRMs has intensified the competition for access to as well as strategic control of REEs, lithium, cobalt, copper, nickel and other CRMs. This working paper analyses the global supply and demand balance of three CRMs (REEs, lithium and cobalt, the latter two being major raw materials for batteries) in the foreseeable future and whether ASEAN countries can play a role as producers and suppliers of CRMs. It also examines potential counterstrategies for mitigating and reducing the global demand for CRMs, such as substitution, reduced use of CRMs, and recycling and re-use.
About the Author
Dr Frank Umbach has been appointed as Adjunct Senior Fellow in RSIS with effect from 22 September 2017. Dr Umbach graduated from the University of Bonn with a M.A. degree in Political Science and a PhD (“Dr. phil”). He is presently the Research Director of the European Centre for Energy and Resource Security (EUCERS) at King’s College in London as well as a Senior Associate at the Centre for European Security Strategies (CESS GmbH), Munich and a Visiting Professor at the College of Europe in Natolin (Warsaw) in Poland, teaching on “EU External Energy Governance”. Furthermore, he is also a consultant for the Gerson Lehrman Group (GLG) and Wikistrat.com. Since 2014, he is an independent “Subject Matter Expert (SME)” on international energy security of NATO’s annual “Strategic Forecasting Analysis (SFA)”. He’s an internationally recognised expert on global energy se-curity, geopolitics, critical (energy) infrastructure protection/CEIP, and (maritime) security policies in Asia Pacific as well as Russia/Central Asia.
Previously, he was also a (Non-Resident) Senior Fellow of the Atlantic Council of the United States (ACUS) in Washington D.C. between 2010 and 2015. From 2003 to 2007, he was a Co-Chair of the European Committee of the Council for Security Co-operation in Asia-Pacific (CSCAP-Europe). From 1996 to 2007, he was the head of the programmes “Security Policies in Asia-Pacific” and “International Energy Security” at the German Council on Foreign Relations (DGAP) in Bonn and Berlin; a research fellow at the Federal Institute for East European and International Studies (BIOst) from 1991 to 1994 and a visiting research fellow at the Japan Institute for International Affairs (JIIA) in Tokyo from 1995 to 1996.
Dr Umbach has done consultancy work and testimonies for the German Ministries of Foreign Affairs and Defence Policies; European Commission and European Parliament, US-State and Energy Departments, US-China Economic and Security Review Commission (US-Congress), the Lithuanian Government, the House of Lords (British Parliament), the Polish Foreign and Economic Ministries, Hungarian Foreign Ministry, South Korean Foreign Ministry, NATO, OSCE, World Energy Council (WEC), Federation of the German Industries (BDI), energy and consultancy companies (incl. APCO and Roland Berger) and has advised international investors (via GLG). He is also the author of more than 500 publications in more than 30 countries worldwide, including being a contract author of the Geopolitical Intelligence Service (GIS) in Liechtenstein since 2011.
Abstract
When Beijing threatened to restrict China’s export of rare earths (widely used in numerous important civilian and military technologies) to the United States at the end of May 2019, the world was reminded of China’s rare earths export disruption in the autumn of 2010 amid a maritime territorial conflict between China and Japan. In the past few years, the worldwide attention cast on the future supply security of rare earths and other critical raw materials has increased in the United States, the European Union, Japan and other countries owing to the global expansion of “green technologies” (including renewable energy sources, electric vehicles and batteries, and smart grids) and digitalisation as well as equipment and devices embedded with artificial intelligence.
In this paper, the term “critical raw materials” (CRMs) refers to raw materials critical to industries that are also import-dependent on them, and to new technologies which often have no viable substitutes and whose supply, besides being constrained by limited recycling rates and options, is also dominated by one or a few suppliers. CRMs include rare earth elements (REEs), which comprise 17 different elements (see Figure 4).
The global race for the most advanced technologies dependent on CRMs has intensified the competition for access to as well as strategic control of REEs, lithium, cobalt, copper, nickel and other CRMs. This working paper analyses the global supply and demand balance of three CRMs (REEs, lithium and cobalt, the latter two being major raw materials for batteries) in the foreseeable future and whether ASEAN countries can play a role as producers and suppliers of CRMs. It also examines potential counterstrategies for mitigating and reducing the global demand for CRMs, such as substitution, reduced use of CRMs, and recycling and re-use.
About the Author
Dr Frank Umbach has been appointed as Adjunct Senior Fellow in RSIS with effect from 22 September 2017. Dr Umbach graduated from the University of Bonn with a M.A. degree in Political Science and a PhD (“Dr. phil”). He is presently the Research Director of the European Centre for Energy and Resource Security (EUCERS) at King’s College in London as well as a Senior Associate at the Centre for European Security Strategies (CESS GmbH), Munich and a Visiting Professor at the College of Europe in Natolin (Warsaw) in Poland, teaching on “EU External Energy Governance”. Furthermore, he is also a consultant for the Gerson Lehrman Group (GLG) and Wikistrat.com. Since 2014, he is an independent “Subject Matter Expert (SME)” on international energy security of NATO’s annual “Strategic Forecasting Analysis (SFA)”. He’s an internationally recognised expert on global energy se-curity, geopolitics, critical (energy) infrastructure protection/CEIP, and (maritime) security policies in Asia Pacific as well as Russia/Central Asia.
Previously, he was also a (Non-Resident) Senior Fellow of the Atlantic Council of the United States (ACUS) in Washington D.C. between 2010 and 2015. From 2003 to 2007, he was a Co-Chair of the European Committee of the Council for Security Co-operation in Asia-Pacific (CSCAP-Europe). From 1996 to 2007, he was the head of the programmes “Security Policies in Asia-Pacific” and “International Energy Security” at the German Council on Foreign Relations (DGAP) in Bonn and Berlin; a research fellow at the Federal Institute for East European and International Studies (BIOst) from 1991 to 1994 and a visiting research fellow at the Japan Institute for International Affairs (JIIA) in Tokyo from 1995 to 1996.
Dr Umbach has done consultancy work and testimonies for the German Ministries of Foreign Affairs and Defence Policies; European Commission and European Parliament, US-State and Energy Departments, US-China Economic and Security Review Commission (US-Congress), the Lithuanian Government, the House of Lords (British Parliament), the Polish Foreign and Economic Ministries, Hungarian Foreign Ministry, South Korean Foreign Ministry, NATO, OSCE, World Energy Council (WEC), Federation of the German Industries (BDI), energy and consultancy companies (incl. APCO and Roland Berger) and has advised international investors (via GLG). He is also the author of more than 500 publications in more than 30 countries worldwide, including being a contract author of the Geopolitical Intelligence Service (GIS) in Liechtenstein since 2011.
