Hcss material scarcity PMI event NEVI 31 mei2011
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  • Transitie: uranium voorraad is voldoende voor civiel verbruik op huidige niveau. Reden: er wordt gebruik gemaakt van de grondstoffen die zijn overgebleven uit de kernwapenactiviteiten van de supermachten. Wanneer dat op is, is een relatieve schaarste te verwachten. De belangrijkste mijnen in de VS en Rusland zijn min of meer uitgeput tijdens de Koude Oorlog. Er zijn nu minder mijnen in bedrijf. Totaal in de wereld nog voor 40 jaar – getal wordt snel minder als het aantal van 440 reactoren in de wereld wordt uitgebreid.
  • UN Environmental Program, The Role of Natural Resouces and the Environment (2009): sinds 1990 werden 16 conflicten veroorzaakt door strijd om grondstoffen; gedurende de laatste 60 jaar heeft 40% van alle intrastatelijke conflicten te maken met grondstoffen. Vrees van UNEP is dat dit door bevolkingsgroei en schaarste zal toenemen. In de DRC zijn de belangrijkste strijdende partijen betrokken bij mineralenhandel. Het leger zet dwangarbeiders voor de ontginning is.
  • Eind januari 2011 bracht de Commissie het communiqué “A resource efficient Europe – Flagship initiative of the Europe 2020 Strategy” uit. Het is één van de zeven flagship initiatives die onderdeel vormen van de Europe 2020 strategy dat als doel heeft slimme, duurzame en inclusieve groei te realiseren. Resource Efficient Europe is een reactie op de vraag welke rol grondstoffen kunnen spelen in het tegengaan van klimaatverandering. Zo spelen kritische materialen bijvoorbeeld een belangrijke rol in het ontwikkelen van nieuwe ‘groene technologieën’. Uit Duitse hoek is er ook kritiek gekomen op het feit dat in het RMI II energie, voedsel en mineralen samengevoegd zijn, terwijl alleen voor mineralen beleidsaanbevelingen zijn uitgewerkt. Dit is het gevolg van het feit dat landbouwproducten en energiegrondstoffen pas op het laatste moment, op dringend verzoek van Franse President Sarkozy, in de strategie zijn opgenomen. Dit leidde tot irritatie aan de kant van de Duitse Minister van Economie, Brüderle, die deze samenvoeging contraproductief noemde. Tevens vond Duitse Europarlementariër van de Groenen Reinhard Bütikofer dat er te weinig aandacht in het document is besteed aan samenwerking met China, ondanks dat dit land bijna de volledige markt van zeldzame aardmetalen beheerst en samenwerking dus urgent is.
  • In the last Raw Materials Initiative (2011) the European Commission has announced to examine the possibility of setting up a stockpiling programme. Probably encouraged by the French since Germany and the UK have expressed their reservations against stockpiling.

Hcss material scarcity PMI event NEVI 31 mei2011 Presentation Transcript

  • 1. NEVI PMI Jubileumevent 2011 31-05-2011 www.hcss.nl [email_address] Lange Voorhout 16 2514 EE The Hague The Netherlands
  • 2.
    • Strategic Futures
    • Comprehensive Security
      • National Security and Intelligence
      • Defence Transformation
      • Conflict Management
    • Sustainable Growth
      • Security
      • Sustainability
      • Welfare
      • Innovation
  • 3. Strategic Futures Comprehensive Security Sustainable Growth Opportunities & Threats Economic Prosperity Physical Safety Ecological Sustainability Territorial Integrity Social & Political Stability Cultural Identity
  • 4.
    • US less dominant
    • Rise BRICS etc
    • Emerging informal Groupings (G-20)
    • Powershift towards non-state actors
    • Population growth (+1.2 billion 2025)
    • Youth bulges become dangerous
    • Collaboration world community
    • Development regional hegomons and regional stability
    • Speed of transition towards sustainable energy
    • Speed & impact climate change
    • Certain
    • Uncertain
  • 5.
    • The emergence of non-Western countries can lead to:
    • Instability, because multipolarity not stable per definition
    • Declining ‘shaping power’ of the West, weaker legal framework and effectiveness of institutions
    • More black holes in (regions of) failed states
    • Growing instability as consequence of struggle over minerals, energy and effects of climate change.
    • Soft power of China: autocratic, resource rich countries and against resource poor democracies
    • Question: How will emerging powers handle geopolitical aspects of scarce resources, how will the West react and what is the relation between scarcity and local/regional stability?
  • 6.
    • SCARCITY: AGE OLD FEAR & FASCINATION
    I looked, and there before me was a black horse! Its rider was holding a pair of scales in his hand. Then I heard what sounded like a voice among the four living creatures, saying, "A quart of wheat for a dinares, and three quarts of barley for a dinares”
  • 7.
    • WHY COMMODITIES MATTER AGAIN…
    • “ new economy” (1995-2001) >> revenge of the old economy (2004)
    • “ revenge of the old political economy” (2008) >> new normal (2009-?)
    • Commodities key part of the story, with
      • high price levels and strong volatility
      • tight markets and supply-side constraints
      • states and their proxies (SWFs, SOEs, regulatory bodies) as key actors in markets
      • added factor climate change debate
    • Intense politicization and securitization of commodity markets
    • Commodities as key strategic issue in a multipolar world
    • Emerging nexus of environmental, economic & security policy
  • 8.
    • Examples: Africa according to UNEP 2009
      • Angola (1975-2002): oil, diamond
      • DRC (1996-2008): copper, coltan, diamond, cobalt, wood, tin
      • Congo (1997-?): oil
      • Ivory Coast (2002-2007): diamond, cacao, cotton
      • Liberia (1989-2003): wood, diamond, iron, palm oil, cacao, coffee, rubber, gold
      • Senegal: wood, cashew nuts
      • Sierra Leone (1991-2000), diamond, cacao, coffee
      • Sudan (1983-2005): oil
  • 9.
    • Sudan: 40% of its oil goes to China
    • Guinea: negotiations over 7 billion investments in infrastructure-for-minerals (oil, bauxite, iron ore)
    • Liberia: treaty of 2.6 billion iron ore exploitation
    • Nigeria: negotiations for 15% of oil reserves exploitation ($30-50 billion)
    • Niger: loan of $95 million for uranium mine
    • DRC: $9 billion deal for infrastructure-for-minerals
    • Angola: 40% van oil goes to China
    • Rwanda: loan of $250 million for infrastructure-for-minerals
    • South Africa: biggest trade partner. Part: 20% in Standard Bank.
    • Zimbabwe: loans ($950million), weapon deals and MOU for nickel, copper and cobalt
  • 10.
    • Since 1990, at least 18 violent conflicts have been fuelled by the exploitation of natural resources.
    • All of UNEP’s post-crisis environmental assessments are conducted in an equally neutral, impartial and scientific basis.
    • 40% of all intrastate conflicts since 1960 have a link to natural resources.
    • Intrastate conflicts linked to natural resources are twice as likely to relapse to conflict in five years.
    • Less than a quarter of peace negotiations aiming to resolve conflicts with links to natural resources have addressed resource management mechanisms.
  • 11.
    • GOVERNMENT INTERVENTION IN RARE METAL MARKETS
    • Rare metals are especially prominent in the resource debate due to:
      • Western import dependence & crucial role of China
      • indispensability for high- & green-tech applications
      • inelasticity & concentration of supply
      • fast-growing & highly volatile demand
    • This creates supply security concerns and makes (some) metals into “strategic” resources!
    • The strategic value & political economy of each metal is unique, evolving rapidly, and …
  • 12. Element Main Applications DYSPROSIUM (DY) PERMANENT MAGNETS: ELECTRICAL VEHICLES; WIND TURBINES LANTHANUM (LA) NICKEL-METAL HYBRID BATTERIES: ELECTRICAL VEHICLES NEODYMIUM (ND) PERMANENT MAGNETS: ELECTRICAL VEHICLES; WIND TURBINES GALLIUM (GA) SEMICONDUCTORS; SOLAR ENERGY CELLS; LEDS; DEFENSE APPLICATIONS GERMANIUM (GE) SEMICONDUCTORS; SOLAR ENERGY CELLS; LEDS; FIBER-OPTICS; INFRA-RED INDIUM (IN) LIQUID CRYSTAL DISPLAYS (LCD); SEMICONDUCTOR; SOLAR ENERGY CELLS; LEDS ANTIMONY (SB) SOLDER, SEMICONDUCTORS TUNGSTEN (W) HIGH-PERFORMANCE STEEL (STRENGTH, HEAT RESISTANCE); E.G. INDUSTRIAL CUTTING TOOLS MAGNESIUM (MG) HIGH-PERFORMANCE STEEL ( LIGHT-WEIGHT, MALLEABILITY ); E.G. CAR-BODIES, AIRPLANES VANADIUM (V) HIGH-PERFORMANCE STEEL (ANTICORROSION, HEAT/SHOCK/VIBRATION RESISTANCE); E.G. JET ENGINES MOLYBDENUM (MO) HIGH-PERFORMANCE STEEL (ANTICORROSION, HEAT/WEAR RESISTANCE); E.G. ROCKET ENGINES
  • 13.
    • Sudan: 40% of its oil goes to China
    • Guinea: negotiations over 7 billion investments in infrastructure-for-minerals (oil, bauxite, iron ore)
    • Liberia: treaty of 2.6 billion iron ore exploitation
    • Nigeria: negotiations for 15% of oil reserves exploitation ($30-50 billion)
    • Niger: loan of $95 million for uranium mine
    • DRC: $9 billion deal for infrastructure-for-minerals
    • Angola: 40% van oil goes to China
    • Rwanda: loan of $250 million for infrastructure-for-minerals
    • South Africa: biggest trade partner. Part: 20% in Standard Bank.
    • Zimbabwe: loans ($950million), weapon deals and MOU for nickel, copper and cobalt
  • 14.
    • GOVERNMENT INTERVENTION IN RARE METAL MARKETS
    • In response to supply security concerns, importing countries
      • designate particular rare metals as “critical”
      • actively monitor supply and demand
      • create stockpiles & develop domestic supply
      • diversify & secure supply
      • regulate trade and consumption
    • Authorities of exporting countries seek to
      • increase profits through taxation, licensing, nationalization
      • control valuable downstream industries through preferential supply or export restrictions
      • use rare metals as strategic bargaining chips.
  • 15.
    • EUROPEAN POLICY RESPONSE TO RARE METALS DEBATE
    • Raw Materials Initiative (RMI) led by DG Enterprise & Industry resulted in the 2008 Communication with focus on non-energy mineral resources:
      • Ensure equal access for European industry globally
      • Promote supply expansion from European sources
      • Boost resource efficiency and recycling
    • Follow-up EU criticality study released June 2010:
      • Examines 41 minerals and metals with 14 labeled as “critical”
      • Recommends to tailor policy responses for each critical material
      • Extensive consultation process has just been wrapped up
  • 16.
    • EUROPEAN POLICY RESPONSE TO RARE METALS DEBATE
    Source: European Commission, DG Enterprise and Industry “ Critical Raw Materials for the EU” Brussels, 2010.
  • 17.
    • COMMISSION RESEARCH INTO RARE METAL SUPPLY CHAIN BOTTLENECKS
    • EU 2020 strategic targets:
      • 20% less carbon emissions
      • 20% energy savings
      • 20% green energy supply
    • The Joint Research Commission (JRC) is examining rare metals supply chain bottlenecks that might prevent realization of 2020 targets
    • (HCSS, Oakdene Hollins, and Namtec in the lead)
    • Will list metals that provide serious obstacles to deploying high-priority energy technologies
    • Includes concrete recommendations how to ensure adequate supply
  • 18.
    • The 2011 Communication (RMI II) fits into the framework of the Europe 2020 Flagship Initiative entitled “A resource-efficient Europe”
    • Proposes three new pillars based on new developments in demand and supply, and excessive price volatility:
      • Fair and sustainable supply of raw materials from global markets
      • Fostering sustainable supply within the EU
      • Boosting resource efficiency and promoting recycling
    • Focus on technology development and international cooperation & monitoring; few concrete policy measures
    • Critique from Germany: joint discussion of agricultural commodities and raw materials counterproductive, and strategy for China lacking
    • RAW MATERIALS INITIATIVE II
  • 19.
    • CONCLUSION: WHERE DOES EUROPE STAND ON RARE METALS?
    • EU is stepping ahead with member states’ responses still fragmented:
      • Germany is in the lead
      • Strong French response has been somewhat delayed
      • UK is still looking to develop a coherent policy
    • Compared to US and Japanese efforts to ensure supply security:
      • No stockpiling; no establishment of domestic / Western supply chains for rare metals
      • Little government investments as of yet
  • 20.
    • No immediate depletion in short term expected
    • Picture for longer term is worrisome for a number of important materials
    • Friction effects can be expected well before actual depletion
    • Need to formulate balanced message:
      • High prices for some materials
      • Need to Reduce, Reuse and Replace
      • Foreign Direct Investment
    • Need to distinguish between
      • production capacity shortage and reserve depletion
      • trade conflicts and physical shortage
    • Need for National Research Programme
  • 21.
    • National Research Programme
      • Monitoring & Analysis
        • Contextual developments: resources, scarcity, policy
        • Analysis of solutions: technology & policy
      • Innovation & Transition
        • High-tech materials & energy
      • Policy & capacities
        • Policy to influence context and develop perspectives
        • Context-dependent solutions, technology driven
  • 22.
    • Platform Mineral Scarcity
    • http://www.materialscarcity.nl/default.aspx
    •  
    • There is a LinkedIn for the platform on material scarcity on
    • http://www.linkedin.com/groups?mostPopular=&gid=3660608
    • Reports
    • http://www.hcss.nl/reports/rare-earth-elements-and-strategic-mineral-policy/5/
    • http://www.hcss.nl/reports/resource-scarcity-in-the-21st-century-conflict-or-cooperation/7/
    • http://www.hcss.nl/reports/scarcity-of-minerals/14/
    • http://www.hcss.nl/reports/schaarste-en-noodzaak-van-regie-en-handelingsperspectief/12/
    • http://www.hcss.nl/events/conference-rare-earths-europe-and-australia-trade-security-and-sustainability/10/
  • 23. J.G.M. (Michel) Rademaker MTL Deputy Director, Market and Operations   T: +31 (0)70 3184842 E: michelrademaker@hcss.nl M: +31 (0)6 24686023 : hcssnl   Visiting and Postal Address: Lange Voorhout 16, 2514 EE Den Haag, The Netherlands