Welcome everyone to the Critical Issues
webinar series. My name is Cassaundra Rose
and I'll be moderating today's Critical
Issues webinar, "Underpinning Innovation:
the Science and Supply of America's
Critical Minerals and Materials." This
webinar is based on a congressional
briefing organized by AGI on behalf
of the Mineral Science and Information
Coalition on March 3rd 2016.The webinar
will address the efforts being
taken at the US federal level to ensure
a steady supply of critical minerals and
materials. We'd like to thank the many
co-sponsors of our webinar today - the 
American Chemical Society, American
Exploration and Mining Association,
American Physical Society, Critical
Materials Institute, Geological
Society of America, Industrial Minerals
Association, Society for Miningn
Metallurgy and Exploration, Society for
Economic Geologists, and the US
Geological Survey. In today's webinar
will be having three speakers discussing
the science and supply of America's
critical minerals and materials. Larry
Meinert, Program Coordinator of the
Mineral Resources Program at the USGS
will discuss critical minerals in the
context of global mineral resources. Next,
we'll hear from Steve Fortier, Director of
the National Minerals Information Center
at the USGS, who will discuss critical
minerals - the USGS National Minerals
Information Center perspective. We'll then
hear from Rod Eggert, Professor at the
Colorado School of Mines and Deputy
Director of the Critical Materials
Institute, Ames Laboratory, who will talk
about critical materials and the
Critical Materials Institute. The
presentations will be followed by a panel
discussion where questions from the
audience will be addressed by the
speakers. Now we'll turn the slides over
to Larry. Hello, I'm glad to be part of this
information session on mineral resources.
We'll start by addressing critical minerals in
the context of global mineral resources,
so I will take the very general view to
set the stage for the more detailed
information that the subsequent speakers
will provide.
So if we think about mineral resources the first question that we could ask is,
"Why are minerals important?" For some of you this will be old news but for others
they tend not to think a lot about the mineral resources that are necessary for
all of the equipment that makes modern life so wonderful. This slide is an
example of one of those technologies - the cell phone that everybody has in
their pockets has changed dramatically
over the last 20, 25 years. On the left
shows the old cell phones that you more or less had to lug around in a briefcase,
and they used roughly thirty elements to make them function, and a modern cell phone,
not picking on any particular
manufacturer, uses almost the entire
periodic table, in excess of 75 elements. And what's important about this is that even
though the total amount of mineral
resources in a modern phone is small,
each and every one of those elements is
critical for the functionality of that
device. This will be true whether we're
talking about a phone, a television set,
or a jet fighter, so this is one way of
thinking about the importance of mineral
resources. Another way of thinking about
this is in terms of the total amount of
resources that are used by modern
civilization. This is a rather startling
infographic illustrating that China in
the last three years has used more
cement then the United States did in the
previous 100 years. This is a rather
amazing fact when you think about
building the entire US interstate
freeway system, the huge growth cities
like Los Angeles, Houston, Miami, that were
a fraction of their size a century ago, and in
three years China has used more cement
than the United States did in 100 years, so we have not only the importance of individual
elements but we have the total amount of
material being used growing very very
quickly. One of the reasons for this - the
underlying driver - is the change in world
population, and this graph shows for the
previous century that world population
has increased more than four times over
that time period, from less than 2
billion people on earth to about 7
billion at present, and projected to get
to about 9 billion by 2050, so this is a
huge increase in the number of people
who are consuming, and then we've also
got an increase in per capita
consumption. What that means is that each
individual is consuming more material,
largely due to rising standards of
living and the reduction of poverty on a worldwide scale. And when you put these things
together - the increase per capita and
increased population - you've got more
than 25 times increase in production of mineral resources. This particular
graph is for copper but I could do it
for almost any element in the periodic table.
So these are fundamental drivers for the
need for mineral resources. And that
leads to several fundamental facts the
world needs to wreste with. First, as world
population and standards of living increase, we need new resources. This word, "new" is
important - recycling, even if it was 100% efficient, cannot supply
the entire need because we have more
people who are consuming more stuff, and
a lot of the mineral resources are
sequestered for periods of years to
decades to centuries in buildings and cars
so they're not available for recycling no
matter how efficient it is. This is not
an argument against recycling - we should
do as much and as intensely as we can -
but the underlying point is that
recycling by itself cannot supply the
need of society for new mineral
resources. Similarly, more efficient or
innovative manufacturing and technology
can help, but they also cannot supply the entire need because the need
itself is growing, so we need to look at
a complete life cycle analysis that
includes the upstream exploration,
discovery, and production, as well as the
downstream - manufacturing, recycling, disposal - all these
together in the life cycle of mineral
resources.
This will be explored in more detail later
but the world is interconnected for all
these mineral resources. This is a graph
that's very widely used around the world -
it's been shown on the floor of the US
Congress several times. It illustrates
that the United States is dependent on
many many countries for many many
different mineral resources. The top bars, 100% blue all the way to the right, are
things that we are 100%
dependent on other countries for our
modern manufacturing and lifestyle.
Another way of looking at this same
graph is to look at it spatially, so this
shows the same thing, and illustrates what
countries we import many of our mineral
resources from, and it's color-coded, with
the darkest red colors being
countries that supply a very large number
of commodities to the United States, in
other words we are very dependent upon
them, and all of this gets into the
concepts of criticality and mineral
supply robustness, and the ability of us
to keep our manufacturing and our way of
life going.
This was illustrated graphically by a
study from the National Academy of
Sciences in 2008 with an XY plot showing
the impact of a supply restriction on
the y axis and the supply risk,
vulnerability to disruption, on the x
axis, so basically anything to the upper
right of this diagram is more critical,
is more important, the impact of any sort of
supply disruption.
Information is also critical. We need to
know about the materials that we depend
on, and in subsequent talks people will go into more detail about this. The mineral
commodities summary that we publish
annually is probably the best example of
this. The entire world relies upon this
information to inform decisions about
manufacturing and criticality. Our other
main function at USGS is research, so
we do research on the availability of
various critical minerals such as rare
earth elements. This was a publication during the
crisis with rare earth elements,
illustrating that the United States in fact
has fairly abundant mineral resources
that have yet to be developed, okay, more than
30 different deposits have substantial
amounts of rare earth elements in them. So
this is part of the research function
that we do - exploring where these
deposits occur and how abundant they might be.
So I will summarize with
several main takeaway points. First, world reserves of
almost all the elements that we are
discussing as critical or important are
adequate, but that production is limited
and/or dominated by a few sources, such
as China, where we get almost all of our
rare earth elements from. Thus the essential
question is the
possibility of supply disruption, which is possible due
to a variety of factors, including
natural hazards - earthquakes and tsunamis
such as occurred in Japan, political
activity - wars and other things that
could cause some disruption. There are
several bills currently concerning
critical minerals before Congress and it's
unknown how those will work their way
through the legislative process. There's
also work at the executive level - there
are several ongoing studies on critical
minerals through the White House Office
of Science and Technology Policy dealing
with not only criteria for identifying
criticality, sources of information, the
research strategy the nation needs, and
we have a lot of cooperation with other
international groups including the
European Union, European Commission, a
trilateral
commission involving Japan and now Korea to try to coordinate our various efforts
for information and research. In terms of
research that's going on right now, the
USGS is focused on the genesis and
resources of earth element deposits and
other critical minerals, we provide
information, both in terms of mineral commodity
summaries and minerals yearbook, and
another federal initiative is the DOE
Critical Materials Institute that will be discussed further by Rod Eggert. And
at that
point i'll conclude, and I'll be happy to answer questions later on.
Thank you so much Larry. We'll go ahead
and move on to our next presenter Steve
Fortier. All right. Thank you Cassy and thanks AGI and the other sponsors for
making this opportunity available to us.
I'm going to talk about critical
minerals from our perspective in the
National Minerals Information Center. I
will start with a bit about who we are
and what we do. Many of you may be
familiar with the National Minerals Information Center, others not. Our
mission is very clear and very simple: we
collect, analyze, and disseminate
information on domestic and
international supply and demand for
non-fuel minerals and materials
essential to the US economy and national
security. We do this to provide
decision-makers with information
required to ensure that the US has an
adequate supply of minerals and materials to
meet US needs at an acceptable cost with
regard to environmental, energy, and economic
factors. Our data are all all publicly
available - everything we publish is on
our website - but our focus,
principally, is for providing information
to other government agencies, so some of
those are shown on the bottom of the
screen - the House and Senate, the Office
of Science, Technology and Policy,
the Department of Defense, particularly the Defense Logistics Agency, the CIA,
Department of Energy, Departments of
State and Commerce, and the Federal
Reserve Board are among the other
government agencies that use our data
routinely. We have a very broad scope of coverage in our mission. Mineral
criticality studies are impossible
without data, and our data are as, I think,
broad and as comprehensive as any
available in the world. In the upper left
there's a picture or a graphic of the
periodic table and the elements
highlighted in green are ones that we
cover in some way shape or form, these
are either as minerals, elements, metals
or compounds, and as you can see we cover
most of the periodic table.
Likewise, we have a very broad global
coverage - we cover more than 180
countries globally for the simple reason
that not all minerals are produced in
the U.S., in fact increasingly many are
not. We produce more than 700
publications annually on
monthly, quarterly, annual product cycles.
Some of those are shown on the right of
this slide. Mineral Commodity Summaries
are probably our most famous publication,
the Mineral Yearbooks are also widely
used, as are our other standard work products
that make up the 700 publications that we
produce annually. Any of these can be
accessed at the web address at the
bottom of the slide in case you're
interested in getting more detail or
accessing individual publications.
So critical minerals. Just a few
observations. I know there's a lot of
words here but I think it's worth going
through this. There have been a
number of evaluations of mineral
criticality have been done in the past
few years. This has resulted in a whole
variety of lists and indexes and
methodological refinements,
but from our perspective criticality
really is something that depends on who's asking the question, so if you're
somebody in industry you're likely to come to a different conclusion
and a different list
depending on what applications you are using
materials for and what market sectors
you're selling into, you're likely to
come to a different conclusion than a
government agency that has a different
mission and a different set of
objectives. So just some examples: the USGS
did a ShakeOut scenario a few
years ago where they simulated a 7.8 earthquake in
Southern California and one of the
things that came out of that was that
the critical minerals in that scenario
were aggregates - construction
sand and gravel, concrete, asphalt - things
that people don't normally think of as being
critical but in that situation that was
what was most needed. Another example
that is not necessarily a classical
critical mineral in many people's view
are things like barite and frac
sand, so if you're into in oil and gas
exploration and production you might
view those as critical
where others may not. The Department
of Energy has a focus on green energy, so
this is part of their mission, and so they tend to focus on
materials that support green energy. The Defense Logistics Agency focuses on the
strategic stockpile so again they have a
different mission, a different set of
objectives. They're likely to come to
very different conclusions about what is
critical and what's not, so that's an
important aspect of this. Also
criticality is not static but it changes
over time as the availability of
minerals change and as new technologies
develop that increase consumption and
result in new applications. So you
really have to look at this as
something that changes over time, and
criticality studies require reliable,
regularly updated mineral production and
consumption data for a broad spectrum of
applications and stakeholder needs, and
this is exactly what we do. This is
our mission at the National Minerals Information Center so it fits very well
with supporting critical minerals as a topic, As a working definition we
use the seminal work from the National
Academy of Sciences published in 2008.
Professor Eggert who will speak later
was essential in the
conception and publication of this work.
They defined mineral criticality as
"performing an essential function for
which few if any substitutes exist and an
assessment indicates high probability of
supply being disrupted, resulting in
physical unavailability or
significantly higher price," right, so
it's basically supply risk and impact
of disruption of supplies defined on two
axes. So our questions from the NMIC
perspective is, okay, how do we measure
these? What kind of data are required to
quantify these measures of
criticality? What kind of attributes are
important for the data that you use to
quantify these aspects of criticality?
So if I can go to a specific example of
data that is useful, this is the Defense Logistics Agency definition for
criticality, and I won't read the whole
thing but I would draw your attention to
the part that's highlighted in red. This
comes out of the statute and the second
component of their definition is that
they're materials that are not found or
produced to the United States in
sufficient quantities to meet such need.
This leads directly to our net import
reliance data that we publish every year
in the Mineral Commodity Summaries, so on the right is our iconic graphic - a bar
chart of materials for which the U.S. is
net import reliant in various
percentages with various countries, and
then to the left is a new graphic that
we've included in the MCS for the first
time this year that shows the geographic
distribution of these
materials in a global graph - a graphic - so
the numbers of of commodities that we
are greater than 50 percent dependent
on are shown in a geographic
distribution here, and you can
immediately see that we are heavily
dependent on Canada in North America and
China in particular in Asia, but
generally that the distribution of the
sources of these materials is very much
global. If you'd like to access this
publication the web address is at
the bottom. Another measure that people
often use to quantify particularly
supply risk is the country concentration
of production, and a recently released report from the OSTP NSTC
Subcommittee on critical and
strategic mineral supply chains contains
this kind of analysis, and there's a
graphic from that publication shown on
the right basically using the Herfindahl-Hirschman index - I won't take
the time to define that here but it is a
commonly used metric that people use to
evaluate supply concentration. The
critical aspect of this, if you'll pardon
the expression, for us is that the data
that go into making this calculation are
data that we report every year in our
publications,
from our world production
tables we produce quantitative estimates
of all of the mineral commodities we
cover, country-specific, updated annually,
the Mineral Commodity Summaries are
very timely, they come out in January
the first month after the reporting year, they are
authoritative, our Mineral Yearbook
series is our permanent repository for
this information, and it is a time series - we have data for commodities
going back to the beginning of the 20th
century and we have comprehensive
coverage over an extended period of time
for almost everything we track. Again, if
you are interested in the publication
itself you can go to the website at the
bottom of the slide and access the
OSTP report that was was produced
largely by folks in our center in
cooperation with Department of Energy
and others and relied very heavily on
our data. Just another example to
illustrate the point about the time
series nature of these kinds of data.
This is for tantalum, we call it the
conflict - critical mineral nexus. This is
a graph that shows the primary
production of tantalum going back to the
year 2000, and so what you see as you
move forward in time is that we've
shifted from production being dominated
by Australia and Brazil in the blue and
the red to present-day where
production is dominated by Rwanda
and the DRC, which of course are our
Dodd-Frank countries by definition, and
now Rwanda, the DRC, and surrounding
countries make up up to two-thirds of
global supply of tantalum. This geographic
shift has been
accompanied by a shift from industrial
mining techniques to artisanal mining, so
from highly mechanised to highly
labor-intensive mining techniques. We've
also shifted from countries that have
very low governance risk and transparent
trade flows to countries that decidedly
do not. The governance risk and transparency
of trade flows from the DRC and Rwanda are much less
clear than they are for Australia and
Brazil. So again, criticality is dynamic, we
need to use time series to analyze for
emerging risks. If you combine this kind
of information with world governance
indicators to capture the governance
risk you get a pretty robust metric for
measuring supply risk and that is in
fact what we used to quantify that in
the OSTP report that I just referenced.
Just one more mention of the
conflict minerals issue: conflict
minerals are not necessarily critical
minerals but they can be, so we produced
a series of conflict mineral fact sheets
last year in work that we did in support
of the State Department and the
Department of Commerce, and of the three
T's - tungsten, tantalum, and tin, the only one that people would really consider
critical in the most widely accepted definition of the term
would be tantalum, simply because so
much of the supply comes from the DRC and
other Dodd-Frank countries. Tungsten and tin might be critical in some people's
estimation depending on what their own objectives were but they're
not critical because of supply
concentration in the DRC.
The amounts that those countries contribute to the global supply chain are a percent
or two at most. So the fact that there's
governance risk there doesn't make them
critical, but they are still conflict minerals.
And so I think just to sum up, the
components and characteristics of our
approach to mineral criticality - we
believe that it's essential that we have
broad coverage of mineral commodities;
that that coverage be global, it needs to
be country specific; we need to be
flexible enough in our evaluation
of criticality to meet the needs of a
variety of different stakeholders,
because as I said everybody has their
own idea about what criticality means to
them;
they should be authoritative - and as a US government agency we believe our data
are the most reliable and best out there. I think a lot of people share
that view, and they are authoritative. They should be dynamic; they shouldn't be
static one-year snapshots, they should be
ongoing, annually updated data
collections. We focus on trends, not on lists. Lists have their use, but
they're pretty specific for whoever's
asking the question. We look at trends
and we use metrics that try to balance
the need to be rigorous - that is, get a
signal that is telling us something
significant - balanced with availability of
data. There are lots of things you can
use to measure criticality but if you
can't get data you can't do it in a
timely way that would allow you to
anticipate potential risk coming into
the supply chain or
potential emerging criticality issues. So some examples that
I've mentioned here that I would just
recap: net import reliance, production
country concentration, growth in world
production, and price volatility, all of
these we report in our publications
annually. In some cases we are collecting
the information directly, others we are
collecting it and publishing it, and
then world governance indicators, which
are produced by World Bank and others.
We use the WGI indicators from World Bank. The ultimate goal of our approach to mineral
criticality is to develop a practical,
simple, early warning screening tool that
alerts us to changes in the supply chain
that should prompt us to ask more
questions about what's happening with
that particular commodity and identify
candidates for deep dive analysis in the
subsequent analysis cycle, and so this
tool. the first iteration of which is
reported in the OSTP publication, is
something that we will update annually
and in each annual cycle we will be
examining commodities that we have
identified through this process
for further study and clarification.
So with that I will stop - I think I have used
up my time.
Thank you so much Steve. Next we are
going to hear from Rod Eggert.
Thank you very much for the opportunity to
participate in this webinar. I'd like to
talk about two topics - critical materials
in general, and then the Critical
Materials Institute more specifically.
And I like to begin discussing critical
materials through the use of three
images at the top of this
slide. Various commentators have
described critical materials as the
vitamins of modern engineered materials
or the salt and pepper of these
materials, or spices that add special
properties to modern materials,
and used in small quantities these
materials provide essential properties.
But critical materials have a second
characteristic and that is that they are
subject to supply risk, so it's the
combination of providing essential
properties with the risks associated
with supply chain that makes a material
critical in any particular application.
That leads then to the question of, well
what to do? What should we do to
assure supply chains? And fundamentally
there are three solutions to supply
chain risks: produce more; use what we do
produce more efficiently - in other words
waste less - and use less by developing
substitute materials. I think just as
important a question is, how should
we do this and who should be responsible?
What are roles and responsibilities for
undertaking these three types of
actions? And I
say at the outset that these are my
personal views, these are not the views
of the Department of Energy, which funds
a significant portion of the work that
I'm involved in. So my personal views are,
first of all, being a card-carrying
economist I believe in the
power of market forces, so rely largely
on market forces but recognize there are
time lags in developing additional
supplies, reducing wastes, using less. Now
this is not I would say a cartoon
version of markets that we often hear
in popular discussions, but rather a view
of the power of markets that
recognizes that government has important
functions it serves, and therefore in
terms of how and who, government
initiatives should focus primarily on
efforts that serve to facilitate
well-functioning markets. And I divide
these into four types of government
activities. First of all, international
trade and trade policy. When the
sources of supply chain risk are
distortions to international trade then
trade policy has an important role. Second,
development of domestic resources. When
there are opportunities for domestic
resource development, facilitate, not
incentivize, but rather facilitate this
sort of domestic resource development.
Third, information and strategic analysis.
Really echoing the comments that Steve Fortier
made a few moments ago, and Larry Meinert did as well, Information and strategic
analysis - many of the emerging
materials and elements in the periodic
table that have not seen significant use
in the past are opaque markets -
information is scarce and it's difficult
to make rational decisions whether
you're in the public or private sector
without information, so a third important
role for government, in much the same way
that government
plays a crucial role through its
national income and product accounts.
Fourth and finally, research and
education throughout the entire supply
chain. Even though the private sector
carries out significant research
development activities, it's widely
recognized that the private actors by
themselves are likely to under-invest in
research and education from the
perspective of society as a whole, particularly in the area of basic research. And this then
provides the context - this fourth
function for government - the context for
the Critical Materials Institute, about
which I'd like to devote the rest of my
presentation. So the Critical Materials
Institute - a very busy slide so
let's focus attention on specific parts
of this slide - the essential purpose or
goal of the Critical Materials Institute
is to innovate, to carry out technical
research that will create technological
options for assuring supply chains, so
technologies that will allow us to
produce more, waste less, and use less of
the critical materials. A second point to
note from this slide, the Critical
Materials Institute is one of four
Department of Energy-funded energy
innovation hubs, in particular we are
funded by the advanced manufacturing
office within the Energy Efficiency and
Renewable Energy Office of DOE. A third
important thing to note about the
Critical Materials Institute is that we
are a consortium of
companies, universities, and National
Laboratories. We are led by the
Ames Laboratory affiliated with Iowa
State University, one of the DOE
national labs, and the idea with the
consortium is that there are skills and
talents and perspectives that are
somewhat different from industry to
national labs to universities, and we
want to force in some sense these
different perspectives to interact in ways
that might not occur as easily or as
naturally left to our own devices. Here's
a slide with words that says much
of what I just said. An additional piece
of information - it's a five-year
initiative with a budget of up to 120
million dollars in total over five years.
We are in the middle of the third year
of operation. Because we are funded by
the Department of Energy, we are focusing
specifically on those materials that
play essential roles in selected
clean energy technologies, and
specifically we are concerned about the
supply chains for the raw materials that
are important in wind turbines, in
photovoltaic materials, in fluorescent
and LED lighting, and in advanced
vehicles. And in turn what that means is
that we are focusing primarily at the
moment on certain of the rare earth
elements that provide important
functionality to magnets and to
phosphors and lighting. And we're
focusing on lithium because of its
essential role in at least what are now
state-of-the-art lithium
batteries. We follow a three-pillared
research strategy that mirrors
the strategy articulated in the DOE
2011 Critical Materials Strategy. It's
essentially the three "what to do" answers
that I presented at the beginning of my
presentation. Innovation to diversify our
sources of supply, to make better use of
existing supplies through recycling and
reuse, and to develop substitute
materials that either do not use
the materials at risk or at least use
less of them. The Critical Materials
Institute has a number of goals but at
the highest level and most fundamentally,
we are committed to developing at least
one technology adopted by US companies
in each of our three major areas of
research, so technology to diversify and
expand production, develop substitutes, and
reduce waste. At present, we're in the middle of our third year of operation, we
have 40 invention disclosures that in
turn have led to 13 patent applications
that in turn have led to one licensed
technology: a technology that involves
membrane solvent extraction applied to
rare earth elements. I have a couple of
slides here that I'm not going to go
through in detail; they simply list our
invention disclosures. I will say that all
three of the areas of research - process
engineering for primary production,
process engineering for recycling and
reuse, and material science and
engineering for developing substitutes -
are represented in our invention
disclosures, so here are the first ten,
here are the second ten, the third ten, and
the fourth set of ten invention
disclosures, the starting point for
licensing and commercializing technologies. So
that's a little bit about critical
materials it's a little bit about the
Critical Materials Institute, the
Department of Energy funded energy
innovation hub. I would say the key story
line that I hope everyone would remember
from this presentation is the idea of
innovation to create technological
options for assuring material supply
chains. And with that I will stop and I
think all three of us are happy to
entertain questions. Thank you so much
Rod. We're going to go ahead and start
taking questions from the audience at
this point. And I'll begin with our first
question: can you describe how USGS is
working with federal
land management agencies to inventory
areas of known or suspected occurrences
of critical minerals so that this
information can be used to protect
access to such potential mineral
deposits? So the USGS works with a
variety of federal partners to meet
their land management needs. The USGS
itself has no regulatory function, we
just supply the basic science for them. We
have an ongoing project with the Bureau
of Land Management to help them with
their statutorily required need to do
assessment for the lands they are proposing to withdraw relative to sage-grouse
management, and so we are doing an
assessment of roughly the 10 million
acres that they are proposing for withdrawal, looking
at the abundance, presence, and quality of
resources on those lands using a modified
version of the assessment protocol that
BLM normally uses for their evaluation.
And our scientists are using the best
available published information to pull
all that together, including geochemistry
and geophysics, to make the best possible
assessment of the potential of those
lands. Thank you so much Larry. The second
question is: what does the price of
critical minerals really reflect? It
seems more artificial than base
precious metals that follow supply-demand
pricing. And maybe this would be a
good question for Rod.
Well fundamentally a price for any raw
material represents some sort of balance
between supply and demand, it's a market
price. Now clearly there are different
types of markets, some markets are
deeper have more and more frequent transactions
and for those materials
any particular price
that we observe comes closer to
reflecting what you might call the
fundamental underlying features of
supply and demand. For markets for many of what people
identify as critical minerals, these are
smaller markets, fewer transactions,
actions are more opaque, and as a result
not just the availability but the pricing
is more fragile and it's more
difficult to first of all know what the
price is and even if you see a price
reported in the trade price it's
difficult to know exactly what underlies
that price. I wouldn't call that an
artificial price but these are
small markets, small number of
transactions, where interpreting the
price is more difficult, understanding
what might be the correct price is more
difficult, and that's one aspect of
criticality. Thank you so much Rod. The
next question is: critical or strategic
minerals are supplied through more of a
diamond than a pyramid. Who is
researching or monitoring the middle of
a diamond - processing, traders and
subcomponent manufacturers?
Perhaps I can address that
it's a kind of a mineral information
question. I think there are various
sources of information about trade flows
between the information that we collect
on mining and first stage mineral
processing and end-use, and in some cases those data are very good and there are a
number of sources that you can access
for these kinds of information -
UN Comtrade database and others - what
we encounter as an issue in this aspect
of what we do is that for materials that
are not as common and as large a
market, as Rod Eggert was just referring to,
that we don't always have good
visibility on flows, particularly for
countries where reporting is not
complete or in some cases even available,
and in many many cases we don't get
the kind of granularity we need and the
trade data, in the sense that oftentimes
materials are combined into categories
that doesn't really allow you to
deconvolute the information to the level
you would like to, so for example
tantalum and niobium are often reported
together in a single category, so you
can't really tell how much of each is in
a particular trade flow, so there are
those kinds of issues that you encounter
when looking at trade data. The other
thing about the middle of the
diamond, if you will, to use your
analogy is that we feel on the mining
and mineral processing end that we have
pretty good visibility, comprehensive
data. There are data for trade flows but
it is in fact the case that as you move
further down the supply chain to
intermediate compounds and precursor
compounds for making specific kinds of
components, that the data are much less
available, much less comprehensive, much
less quantitative. This is something that
a number of our agency partners struggle
with and that we believe has to be
fundamentally improved. This is Rod
Eggert, I might jump in as well, to
indicate that the research
activities at the Critical Materials
Institute I think primarily focus on the
middle of diamond in that we are not
involved in geoscience research but to
use the example of rare earths we are
carrying out research that focuses o
what to do with the raw ore, so we have
research activities related to
beneficiation, separations, separating one
individual rare earth from another and then
once you get the oxide, reducing it to
metal. Thank you. The next question is: how
can the state geological surveys best
support the USGS national efforts and
programs focused on minerals? I can start with that, Larry may want to
weigh in as well. We have memoranda
of understanding with virtually all of
the state geological surveys and rely on
them for information from producers and
activity and mineral mining and
processing at the state level. And it is
essential that that cooperation continue and be strengthened.
I think it is a mutually beneficial
function that we perform and that the
state surveys and other government
organizations perform, in place for
many years and needs to continue and
we need to look for ways to add
additional value to the information that
we feed back to our state co-operators
from the information that they give to
us. And on the research side of the
equation we also work closely with the
state geologists, particularly to try to
leverage the work that they're doing at
the state level with what we contribute
at the federal level. As examples of this,
we do a variety of geophysical and
remote sensing surveys, and we try to
coordinate those with ongoing mapping at
the state level by state geologists. We
have one such project going on in Alaska
another one in Iowa and
Missouri, and all of these are very
carefully coordinated with the state
geologists, and their support of our work
and our support of their work is an
excellent example of state-federal
cooperation. That was a great question,
thank you. The next question is: we have
seen the price of rare earth elements,
particularly light rare earths,
decreased substantially over the last
year. Could you address some of the
reasons for this decrease? I can answer
that question or at least provide an
answer to that question - this is Rod Eggert. I mean it's I would say largely due to
significant production in China. The
Chinese national government has
established production quotas of
something like a hundred and five
thousand tons and yet the actual
production is something like 130 or 140
thousand tons, so there's a lot of
unsanctioned production, some of which
was motivated by the higher prices of
2010/2011 that in effect have swung the
market from one that was perceived as
significant scarcity to one of over-
abundance and over-supply. A second part
of the answer is that some of the price
spike associated with rare earths I
think in retrospect can be explained
through either speculative activities or
panic buying on the part of customers
of rare earths that were
witnessing price rises, who would
normally inventory maybe two or three
weeks or two or three months of rare
earth materials, were, it was reported,
accumulating stockpiles of you know two
to three years as opposed to two to
three months of rare earth materials,
which drove prices even higher and at
some point consumers started using stockpiled material rather than making new
purchases, which contributed greatly to
the dramatic fall in rare earth prices. Thank
you Rod. Next question: what is the
potential for undiscovered critical
minerals in the US? This is Larry, I can
probably answer that one the best. We do
a variety of assessments of undiscovered
minerals and as you might guess this is
not a straightforward matter. It starts
with using basic geologic data, such as
geologic maps, geophysics, geochemistry.
What you are doing is identifying plots
of ground that have the potential for
having the same types of deposits that
we know from discovered deposits, and you
work your way systematically through
these datasets to cover whatever area of
interest, whether that be a state, a country,
or the entire globe. And there's a fairly
complex process that's been laid out for
how to do this, and it ends up with a
probabilistic estimate of the amount of
undiscovered
resources. In cases where we've done this
in the past it turns out to be fairly
robust and match fairly closely what is
then later discovered, but obviously when
you're talking about things are
undiscovered, they are in fact
undiscovered, so it is an estimate, it's
not an actual inventory of what is there.
Thank you Larry. Next question, which i
think is very interesting: where and how
does the information on upstream use of
selected minerals come from for USGS
commodities summaries and reports? The
asker notes that many manufacturers in
the electronic industry, where a lot of
these metals and minerals are used, are
hesitant to release that information to
outsiders. Yeah we collect information,
this is Steve Fortier, we collect information from a variety of sources and for our
domestic reporting we canvas
directly mining and mineral processing
facilities throughout the US and collect
that information directly. We also
collect information globally in a
somewhat different process that also
includes questionnaire forms that we
send out to co-operators in other
countries, but we rely on a lot of other
sources of information from other
countries including, you know, folks on
the ground there in industry and in US
embassies and other sources, as well as
company reports and other sources of
information. So there there is a wide
variety of information sources that we
access and that our specialists have to
review and consolidate and validate in
some way to get reliable estimates. This
is a fundamental part of what we do but
the principal avenues are direct
canvassing for domestic and questionnaires to
government agencies in other countries,
supplemented by other forms of
information. Thank you Steve. Next question: how are geopolitical
factors put into the risk component of
critical minerals? For example with so
many critical minerals dependent on
supply from China, how is the risk of
conflict with China addressed in that
risk component? For the OSTP NSTC
report that we just issued, the world
governance indicators are in the
concentration of supply factor as a
multiplicative multiplier of the country
concentration to capture the
government's risk as quantified by
the world governance indicators, so we
take that information directly for all
of the countries that are covered by
the World Bank, which is basically
everybody, and then use it in a formula
that addresses country concentration,
weighted by the governance index for the countries where
the supply is concentrated. I'm not sure
that was clear, but that's how we do it.
Thank you. We're going to go ahead and
take one last question, and I think it
wraps up this whole discussion pretty
well. What are the fundamental Earth science
questions and answers that would be
most valuable for helping with the
critical minerals challenge. That could
probably answered on several levels, this
is Larry Meinert from the Mineral Resources Program. One of them is basic research to
understand the geology and occurrence of each of the minerals that might be identified
as critical both now and somewhere in
the future. Steve Fortier has described the metric
that we have developed to identify which elements are most likely to be of concern
somewhere in the future, and part of our
challenge is to do the research in
understanding the geologic occurrences
of those elements once they're
identified as something to be concerned
about. That
research of course takes a fair bit of
time and it's not possible to do
research on the entire periodic table at
once - you have to prioritize - and so
that's where we try to work closely, and
we anticipate working even more closely
in the future, with this ongoing risk
assessment. But the basic geologic
research that needs to be done is
fundamental and it's something that we
rely upon adequate funding from Congress,
the support of the state geologists and
other stakeholders, to make sure that we
can do that fundamental basic research
to answer these applied questions that
will undoubtedly continue to come up in
the future.
Thank you Larry. Rod or Steve, would you
like to address that question as well?
Well from my perspective I would just
reemphasize the importance of
our ongoing ability to collect reliable
information. You really can't address issues
of emerging risk without understanding
where materials are being produced and
whether we are able to get them,
which requires in our view a
robust federal government
involvement in acquiring this
information and continuing to do that. The demands for all of the materials
that we're now using in increasingly
larger quantities is probably only
going to increase in the future,
which makes it essential to ensure that
we can continue to understand where we
are able to get these materials and
whether there are risks in continuing
supply. This is Rod, I don't have anything
to add, I'm quite happy with Larry and
Steve's answers. Thank you very much,
Larry, Steve, and Rod for speaking today.
That's all of our questions for today's
webinar. If you have any questions that
were not answered today you can email them to us at cipinfo@americangeosciences.org
and we'll make sure to send your questions along to the
speakers. This concludes our webinar for
today. Thank you so much for joining us
and we look forward to seeing you at our
next webinar.
