Materials.Business Newsletter ⚙️ August 14th, 2023
An old economic model
Today there are more and more concerns about how the economy works. Two hundred fifty years ago, the knowledge-based impact arose with the First Industrial Revolution, leaving behind Feudalism and entering Society in a new economic relationship where Capitalism has been predominant. The incidence of the factors concerning richness production has been evolving. The workforce has moved to talent (incorporated knowledge), and the specific weight of capital is sometimes questioned against knowledge assets (e.g., General Electric, HP, Xerox, Apple, Google, Facebook, etc.). Knowledge appeared as an essential factor some decades ago, and now it is the dominant factor. And the land is far less critical than before, and one of the alternatives is to change with natural resources. In addition, post-globalization trends show that two other new factors are becoming increasingly outstanding. One of them is related to societal issues looking for a world in peace based on inclusiveness, justice, and equity. The second new factor is environmental issues, searching for more sustainable development (“in peace with nature”). Arrangements against technological revolution are going well, and the pandemic has fostered its implantation, moving us to an actual Knowledge Society. Societal topics are complicated, but advances are evident, and new ideas are emerging more and more often. Environmental subjects are being considered seriously, and today, an increasing number of economic issues are driven by sustainability guidelines. But the former reign factor in the Feudal era, land, or natural resources, are running out. Consequently, society should consider a new economic model.
A small planet
From the point of view described above, one limiting factor is that the Earth becomes small for the required development. Signs of such a situation are, for example:
● Electric vehicles are an answer to environmental challenges. Such a trend will need vast amounts of batteries. Consequently, the USA Federal government plans to spend USD $174.000 million to promote electric cars and build new charge stations. In the same way, the global EV battery demand is expected to surge ten times by 2030. And in the case of Europe, estimations say that the requirements in 2040 will be about 0.7 – 1.5 TWh per year or equivalent to 45 – 95 mass-scale battery production plants or gigafactories. Estimates also say that recycled batteries could meet up to 40% of material demands. But the remaining 60% must be supplied by extracting and processing minerals.
● The EU's Raw Materials Initiative (RMI) began in 2008, marked by the assessment of Critical Raw Materials (CRMs), a cornerstone of the initiative. The RMI's goal is to secure non-energy raw materials for the EU's industrial value chains and societal well-being, achieved through supply diversification. This encompasses obtaining primary raw materials from within the EU and third countries, increasing secondary raw materials through circularity, and exploring alternatives to address scarcity. The RMI's central task was to establish a list of critical raw materials, updated every three years. CRMs are defined by their high economic importance to the EU, adjusted by a substitution index, and their elevated supply risk, influenced by supply concentration and governance performance.
As these evaluations unfolded over time, the outcome became increasingly telling. In the inaugural assessment of 2011, 14 CRMs were recognized among 41 candidate materials. This number expanded in 2014, identifying 20 out of 54 candidates. By 2017, the count rose to 27 CRMs from a pool of 78 candidates, and in 2020, the list further grew to encompass 30 CRMs out of 83 candidates. The successive assessments revealed the significance of CRMs amid growing global pressures. Factors like population growth, industrialization, and climate neutrality transitions drive the demand for resources. OECD projections estimate that global materials demand will double by 2060. This escalating demand and competition emphasize the urgency of securing critical raw materials, similar to the concerns associated with oil dependency.
● Both situations push the market. Commodity prices have a clear tendency to increase. Materials, parts, structures, equipment, and infrastructure, in general, are becoming more expensive and are increasingly away from lower-income people.
● Consequences of the situation today are current news about:
o An illustrative example of the complexities surrounding resource management is China's recent announcement. On July 3, 2023, China's Ministry of Commerce and General Administration of Customs revealed export restrictions on gallium and germanium, both minor metals integral to electronics production. Effective August 1, 2023, Chinese exporters dealing with these materials are now mandated to secure export licenses. These metals, obtained as byproducts during the refinement of other metals, hold pivotal roles in various industries, including semiconductor fabrication, electric vehicles, and solar cells. Notably, the United States recognizes the critical importance of gallium and germanium for its economic and national security. While the Chinese government's statement does not explicitly target any nation, the move is perceived as a response to global semiconductor export controls, including those imposed by the United States and its allies like Japan and the Netherlands. This action reflects China's intent to safeguard its national security interests, potentially escalating further in response to future restrictions. As the dynamics of resource availability continue to unfold, the need for innovative and strategic solutions becomes more pressing. China is the world’s largest producer of these metals, accounting for 94% of the global gallium supply and 83% of the germanium supply, according to a study by the European Commission. Consequently, a significant reduction in China’s export of these metals would likely disrupt supply chains and lead to price increases for a diverse array of industrial and consumer end products
o A strong rally in the share prices of metal and mining companies in many years.
o The exploitation of new lower ore grade mines. For example, in copper, the average ore grade has decreased circa 25% in a decade. Consequently, the total energy consumption increased 46%, but the production just raised over 30%.
o The Association of Chief Police Officers of the UK estimated 15.947 metal theft offenses between March 2019 and March 2020, with a cost of USD $488 million. Criminal actions mainly affect sectors such as heritage, telecommunications, transport, and power.
However, the market is not able to solve all the problems correctly. The planet is not more than enough for our requirements. Of the eight planets in our solar system, Earth is the fourth in size, bigger than Mercury and Mars, and a little bigger than Venus. The planet's total area is around 510 million km², and 70.8% is covered with water. There are only 148.9 million km² of land distributed in the five continents and islands. Estimations show that no more than 2.9% of the land surface can be considered to be faunally intact. Besides, only 20 -40% of the earth’s terrestrial surface is under low anthropogenic impact. A severe human footprint has already impacted more than half of the terrestrial surface. Conditions are becoming critical, the market knows, and it is impossible to wait any longer to act. Disruptive solutions must be implemented. Here, we can mention some of them: Protection of materials and assets. The importance of corrosion and anticorrosion measurements is becoming more salient than ever. Corrosionists are called to be fundamental in giving solutions to the above-described limitations. The circular economy is one of the most straightforward means at present offered. Materials and corrosion engineers are asked to lead action fronts such as the life-span extension, reuse and remanufacturing options, and so. Also, issues concerning the Circular Economy such as recycling and disposal of materials after the end of life open possibilities like urban mining. However, looking far beyond, the idea of extraterrestrial mining is gaining strength. But before, it is more obvious to look closer and consider our oceans.
The Blue Economy
Ours is a blue planet because of the predominance of the blue marble color given by the oceans when looking from space. In addition to land, Earth has just one great body of water surrounding the continents, divided by geographical reasons into five major regions or oceans: Pacific, Atlantic, Indian, Arctic, and Southern oceans. In total, 361 million km² storing 1350 million km³ of water, equivalent to 97% of the total worldwide. Oceans underwater is rugged mountains, vast plateaus, active volcanoes, and seemingly trenches, with average deep of 3.700 m. Landscapes are in an endless cycle of transformation. Indeed, the ocean provides humanity with “t sea” of opportunities and resources such as food, transportation, commerce, aquaculture, tourism, recreation, O&G, other energy sources, chemicals (particularly, drugs), and mining, the activities of the “Blue Economy.” But humans are from onshore, and the ocean is shocking. This only explains the timid approaches up to the appearance of some regional maritime commercial activities during the age of ancient Greece, followed by intercontinental shipping less than ten centuries ago. Then, the germination of modern marine practice and science at the turn of the 19-20th centuries, was associated with the emergency of laminated steel and cathodic protection of the steel ship hulls.
Blue materials
Here, we are not talking about blue minerals (azurite, chalcanthite, chrysocolla, linarite, opal, smithsonite, turquoise, and vivianite, etc.), or the blue metal hard aggregate construction rock, nor a bluing gun, a blue painted steel sheet or blue materials at all. We want to answer how possible it is to get the minerals that humanity will require in the following decades from the oceans. Knowledge about metal-rich minerals under the seabed is not existing yet. However, there is information about mineral sources on the seafloor, basically three kinds of geological formations—massive sulfites, formed around geothermal regions; ferromanganese and cobalt-rich crust; and polymetallic nodules. Pushed by reasons as mentioned before and supported by the most recent technological developments, commercial firms, governments, and researchers are starting to look for possibilities of study and exploration of such seabed deposits and determine the extension in which they can be exploited in 10 or 20 years ahead.
Most of the issues have been mentioned in the newspapers currently because two separate expeditions integrated by industry and academy researchers, and licensed by the International Seabed Authority (a branch of the United Nations based in Jamaica), have started studying the Clarion-Clipperton Zone – CCZ. This is a six million km² region of international water at the Pacific Ocean (the size of the continental U.S.A.) limited by Mexico, Hawaii, Kiribati, and the Clarion (North) and Clipperton (South) Fracture Zones. The CCZ is the most studied seafloor, between 4.000 and 6.000 m deep, littered with trillions of potato-size polymetallic nodules, whit an estimated weight of 21.000 million tons, each one containing high concentrations of Cu, Co, Mn, Li, and Ni.
Environmental concerns
As Douglas McCauley, professor of Ocean Sciences at the University of California, Santa Barbara, says, “Deep ocean ecosystems are the least resilient ecosystems on the planet. It’s a weird place, biologically speaking. The pace of life moves more slowly in the deep ocean than in any other place. Species live a long time, and ecosystems take a long time to recover.” Rationalism must be dominant. To impose informed over non-informed decisions, looking for a positive balance for all, society and nature. Studies are necessary for the right choices.
Challenges for ocean engineering, materials engineering, corrosion engineering, economists, and many other disciplines. It is not only the duty of environmentalists. These are complex problems, and solutions must be complex, too. Blue materials can be an answer to the expectations of post-globalization times. Still, barriers are high, and overpassing has severe limitations facing the new economic model (with the predominance of knowledge, environmental, and societal factors).
In a world rapidly evolving toward post-globalization paradigms, the potential of blue materials offers a glimpse into our future. This vision is anchored in the powerful concept of the Circular Economy, striving to harmonize environmental, societal, and economic factors. As we navigate the challenges and opportunities posed by oceanic resources, the resolve to find a positive balance between human advancement and ecological preservation must guide our course. The ocean, once a source of mystique, is now a realm demanding our responsible stewardship, and the concerted efforts of diverse disciplines can undoubtedly unlock its transformative potential.
The path forward demands interdisciplinary collaboration, bringing ocean engineering, materials engineering, corrosion engineering, economics, and more to the table. While the complexities may seem daunting, one truth remains: WE must assume a champion's role in the pursuit of sustainable solutions.
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