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Oakdene Hollins

Opportunities in Recycling “Critical Raw Materials”

Peter Willis 17th March 2011

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Disclaimer Oakdene Hollins Ltd believes the content of this presentation to be correct as at the date of

writing. The opinions contained in this presentation, except where specifically attributed, are those of Oakdene Hollins Ltd. They are based upon the information that was available to us at the time of writing. We are always pleased to receive updated information and opposing opinions about any of the contents.

The listing or featuring of a particular product or company does not constitute an endorsement by Oakdene Hollins, and we cannot guarantee the performance of individual products or materials. This presentation must not be used to endorse, or suggest our endorsement of, a commercial product or service.

All statements in this presentation (other than statements of historical facts) that address future market developments, government actions and events, may be deemed "forward-looking statements". Although Oakdene Hollins believes the outcomes expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance: actual results or developments may differ materially. Factors that could cause such material differences include emergence of new technologies and applications, changes to regulations, and unforeseen general economic, market or business conditions.

We have prepared this presentation with all reasonable skill, care and diligence within the terms of the contract with the client. Although we have made every reasonable effort to ensure the accuracy of information presented in this presentation, Oakdene Hollins cannot expressly guarantee the accuracy and reliability of the estimates, forecasts and conclusions herein. Factors such as prices and regulatory requirements are subject to change, and users of the presentation should check the current situation. In addition, care should be taken in using any of the cost information provided as it is based upon specific assumptions (such as scale, location, context, etc.). Clients should satisfy themselves beforehand as to the adequacy of the information in this presentation before making any decisions based on it.

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Oakdene Hollins’ Work

Study into the feasibility of protecting and recovering critical raw materials through infrastructure development in the South East of England (European Pathway to Zero Waste, 2011)

Assessing rare metals as supply chain bottlenecks in priority energy technologies (European Commission Institute of Energy, 2011)

Lanthanides resources and alternatives (Department for Transport, 2010)

Materials security: Ensuring resource availability for the UK economy (Resource Efficiency KTN, 2008)

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Agenda

What are the EU “Critical Raw Materials”?

Best Opportunities for Investors:AerospaceRE MagnetsFlat Panel DisplaysBatteries

Gap Analysis of Opportunities Conclusions

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Defining “Critical Raw Materials”

European Commission (2010) study “Critical Raw Materials for the EU”

41 metals and minerals assessed Combination of 2 factors:

Economic Importance Main applications Substitutability

Supply Risks Stability of producing countries Diversity of supply Recycling

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14 “Critical Raw Materials”

Source: mostly USGS for 2009; includes recycling where available

Large Volumes Small Volumes

Fluorspar – 5,100,000 Indium – 1,200

Graphite – 1,130,000 Tantalum – 1,160

Magnesium – 760,000 Platinum Group – 445

Antimony – 187,000 Beryllium – 140

Rare Earths – 124,000 Germanium – 140

Tungsten – 94,000 Gallium – 118

Niobium – 62,000  

Cobalt – 62,000  

Production Volumes (tonnes)

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Current Importance of China

China as leading producer of 9 materials: Germanium (71%)

Fluorspar (59%) Indium (50%)Gallium (32%)

Tantalum: Australia (48%)

Congo Kinshasa: Cobalt (40%)

Brazil: Niobium (92%)

US: Beryllium (86%)

Platinum Group: South Africa (61%)

Rare Earths (97%)

Antimony (91%)Tungsten (81%)Magnesium

(77%)Graphite (71%)

Source: USGS for 2009

Other Leading Producers:

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Demand for “Critical Raw Materials”

Galli

um

Nio

biu

m

Rare

Eart

hs

Magnesi

um

Indiu

m

Tanta

lum

Tungst

en

Anti

mony

Fluors

par

Germ

aniu

m

Bery

llium

Gra

phit

e

Pla

tinum

Grp

Cobalt

0

2

4

6

8

10

12

10.2 10.1 9.8

7.36.5

5.3 4.94.2

3.4 3.4 3.0 3.0 2.7 2.5

Forecast CAGR for 2010-2020 (%)

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Forecasts for “Critical Raw Materials”

-25

-20

-15

-10

-5

0

5

107 7

53 2 1 0

-1

-6-7

-9-10

-21

Forecast Surplus (Deficit) - 2020 (%)

Pla

tinum

Grp

Indiu

m

Anti

mon

y Fluors

pa

r

Germ

aniu

m

Cobal

t

Tungst

enN

iobiu

m

Gra

phit

e

Galli

um

Magnesi

um

Rare

Eart

hs

Tanta

lum

10

Prices of “Critical Raw Materials”

Pla

tin..

.

Germ

...

Indiu

m

Galli

um

Bery

l...

Tant.

..

Nio

biu

m

Tung..

.

Rare

E..

.

Cobalt

Anti

...

Magne..

.

Gra

phit

e

Fluor.

..

$0

$1

$10

$100

$1,000

$10,000

$100,000 31,847

1,151506 499

16589

40 31 3012

6.63.3

1.16

0.42

Price – 3 year Average ($/kg)

Source: mostly Metal Pages

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Dominant Applications

Source: European Commission (2010)

Seven raw materials have over half their consumption in a single application: Antimony (Flame Retardants – 72%) Fluorspar (Chemicals - 60%) Gallium (Integrated Circuits – 66%) Germanium (Optics – 55%) Indium (Flat Panel Displays – 74%) Magnesium (Casting Alloys – 50%) Niobium (Steel Alloys – 83%) Platinum Grp (Catalysts – 60%) Tungsten (Cemented Carbides – 60%)

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Screening Methodology

Selection Criteria: Include all dominant applicationsAnalyse markets using multiple raw

materials Rank economic value of raw material

containedExamine carbon impacts of markets

Selected 12 markets for further analysis:Supply chain mapsExisting practice infrastructureTechnical feasibility & economic viabilityStakeholder consultation

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High Opportunities – Aerospace

Up to 12,000 aircraft to retire by 2020

Move away from ‘wild destruction’

Smart dismantling can recover 85% of weight

Reuse superalloys in engines (Co, Nb, Ta) & landing gear (Be)

Recycle (Al-Mg alloys) Implementation by

accreditation & standards Source: Airbus

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High Opportunities – RE Magnets

Hard disk drives (HDD) as current opportunity

Hitachi with process to cut HDD & remove RE magnets for recycling

Need to segregate, not shred with WEEE

Wind Turbines & (H)EVs as long term opportunity due to long lifetimes

Source: Hitachi

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High Opportunities – Flat Panel Displays

80% of In used to make ITO (mostly for FPs)

Recycling of In process waste common

Easy to separate FPs from WEEE as easily recognisable

Pilot scale technologies being developed to remove ITO to recycling

Medium timeframe for FPs in waste stream

Solar PV for long term

Source: ValpakSource: WRAP

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High/Med Opportunities – Batteries

800 t of NiMH, 600 t of Li-ion in UK waste

Low collection rates for portable batteries: NiMH (2%) & Li-ion (1.5%)

Need for better collection & labelling

Co recovered but RE & Graphite lost in slag

Optimise recycling (H)EV batteries as

long term opportunity Possible (cascaded)

reuse

Source: Valpak

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Other Opportunities Identified

Improve collection: Beverage Cans (Magnesium) Catalytic Convertors (Platinum Groups)

Medium Opportunities: Cemented Carbide Tools (Cobalt,

Tungsten) Catalysts (Rare Earths) Flame Retardants (Antimony) Steel Production (Graphite, Fluorspar)

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Gap Analysis on Recycling

Indiu

m

Anti

mony

Magnesi

um

Tungst

en

Cobalt

Pla

tinum

Grp

Rare

Eart

hs

Bery

llium

Nio

biu

m

Gra

phit

e

Tanta

lum

Galli

um

Fluors

par

Germ

aniu

m

0

10

20

30

40

50

60

70

80

90

100

7672

6860

54 5243

158 6 5 2 1 0

Consumption in High & Medium Opportun-ities

Raw

Mate

rial C

on

sum

pti

on

(%

)

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Conclusions

Recycling not enough: High demand growth Long product lifetimes Problem of dispersive usage

Recycling can contribute to supply: Improve collection Advanced sorting techniques Implement new technology Design for disassembly & reuse

Some raw materials with little opportunity: Dispersive applications Consumed in process

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Peter Willis

peter.willis@oakdenehollins.co.uk

www.oakdenehollins.co.ukRead the full report, available shortly on our website!