strategic materials: technologies to reduce u.s. import vulnerability

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Strategic Materials: Technologies To Reduce U.S. Import Vulnerability

May 1985

NTIS order #PB86-115367



Recommended Citation:Strategic Materials: Technologies to Reduce U.S. Import Vulnerability (Washington,DC: U.S. Congress, Office of Technology Assessment, OTA-ITE-248, May 1985).

Library of Congress Catalog Card Number 84-601153

For sale by the Superintendent of DocumentsU.S. Government Printing Office, Washington, DC 2 0 4 0 2



Foreword

This report presents the findings of OTA’s assessment of Strategic Materials:

Technologies to Reduce U.S. Import Vulnerability. The study was requested bythe House Committee on Science and Technology and the Senate Committee onCommerce, Science, and Transportation.

The United States imports w ell over $1 billion wor th of chromium , cobalt, man -ganese, and platinum group metals annually. Many of the uses of these metals areessential to the industrial economy and the national defense. The United Statesimpor ts virtually all of its requirements for these metals; their p roduction is highlyconcentrated in two regions of the world: the Soviet Union and southern Africa.The potential for interruption of supplies from these sources has heightened con-gressional interest in alternatives to continued import dependence,

This study assesses the technical alternatives to continued reliance on south-ern Africa and the U.S.S.R, for strategic metals. Promising opportunities for do-mestic and diversified foreign production and for conservation and substitutionare identified for each metal. Technical, economic, and institutional barriers tothe implementation of the alternatives are reviewed and governmental options toovercome those barriers are identified and analyzed.

We are grateful for the assistance of the project advisory panel, workshop par-ticipants, contractors, and the advice of many government agencies in the UnitedStates and Canada. As with all of our studies, however, the content of the reportis the sole responsibility of the Office of Technology Assessment.

JOH N H. GIBBON S Director



Technologies to Reduce U.S. Import VulnerabilityAdvisory Panel

Walter S. Owen, Chairman*Professor of Materials Science,

Massachusetts Institute of Technology

Arden Bement William A. Owczarski

Vice President, Technical Resources Manager, Technical PlanningTRW, Inc. Pratt & Whitney Aircraft Group

Edwin Clark R. Byron PipesSenior Associate Director, Center for Composite MaterialsConservation Foundation University of Delaware

Tom CloughDirector of TechnologyAtlantic Richfield Co.

Robert G. DunnSenior Vice PresidentAMAX Metals Group

Michael E. Fisherprofessor of Chemistry, Physics, andMathematics

Cornell University

Herbert H. KelloggProfessor of Extractive MetallurgyColumbia University

Hans LandsbergSenior FellowResources for the Future

Ernest K. LehmannpresidentE. K. Lehmann & Associates

Jessica Tuchman MatthewsVice PresidentWorld Resources Institute

R. K. PitlerSenior Vice President and

Technical DirectorAllegheny-Ludlum Research Center

Dennis ReadeyHead, Department of Ceramic EngineeringOhio State University

James K. SebeniusAssistant ProfessorJohn F. Kennedy School of GovernmentHarvard University

Albert SobeyDirector, Energy EconomicsGeneral Motors Corp.

Alex ZuckerAssociate DirectorOak Ridge National Laboratory

qRobert Ellsworth resigned as panel chairman in August 1983, when he became Chairman of the Board of Howmet “1’urbine Components CorfIWalter S, Owen became chairman in September 1983.

iv



—

OTA Project Staff on Strategic Materials:Technologies to Reduce U.S. Import Vulnerability

Lionel S. Johns, Assistant Director, OTA Energy, Materials, and International Security Division

Audrey Buyrn, Industry, Technology, and EmploymentProgram Manager

Lance N. Antrim, Project Director

Wendell Fletcher John Newman* Kirsten U. Oldenbu rg

Katherine Gillman Margaret Hilton

Karen Larsen Patti Litman *

Richard Parkinson Diana Rowen

Nick Sun dt* Paula Wolferseder*

Contractors

Charles River Associates, Inc.

INCO Research and Development Center

Earth Resource Associates Sierra Research

J. K. Tien Massachusetts Institute of Technology

George St. Pierre James A. Broadu s

Kathryn Van Wyk David Stauffer Susan Stauffer

DMEA, Ltd. Jud ith Bolis Iris Goodman Greg Shuey

Administrative Staff

Patricia Canavan Carol Drohan Andrea Amiri

* lmhouw (.ontra(. tor



CHAPTER 1

Summary



Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Identification of Strategic Resources . . . . . . . . . . . . . . . .Essential Uses of Strategic Materials . . . . . . . . . . . . . . . .

Chromium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cobalt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Manganese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Platinum Group Metals . . . . . . . . . . . . . . . . . . . . . . . . . .Outlook for the Future . . . . . . . . . . . . . . . . . . . . . . . . . .

Production of Strategic Materials . . . . . . . . . . . . . . . . . . .Historical Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Technological Approaches to Reduce Materials Import

Summary of Technological Approaches . . . . . . . . . . . .Implementation of Technological Approaches . . . . . .Mineral Production and Metal Processing . . . . . . . . .Substitution Alternatives . . . . . . . . . . . . . . . . . . . . . . . . .Conservation Approaches . . . . . . . . . . . . . . . . . . . . . . . .

List of Tables

Table No.

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

..,,... . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

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. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . ...*.., . . . . .

Vulnerability. . . . . .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . ...*.., . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .

5

’1112

12

13

13

13

13

14

15

17

17

29

31

33

36

A.B.

1-1.

1-2.

1-3.

Domestic Consumption and Production of Strategic Metals . . . . . . . . . . 7U.S. Imports of Strategic Materials–1982 .. .,. ,~, . . . . . . . . . . . . . . . . . 10Summary of Most Promising Technological Approaches to theReduction of Strategic Materials Import Vulnerability. , . . . . . . . .......18Substitu tion for Chrom ium in Meta llurgical Applications. . . . . . .......22Potential New Foreign Cobalt Production . . . . . . . . . . . . . . . . . . . .......23

l-4. Current and Projected Manganese Consumption in U.S. SteelProduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......27

l-5. Outlook for Development of Known Domestic Deposits of StrategicResources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......31

List of FiguresFigure No. Page

l-1. Regional Distribution of Strategic Material Production . . . . . . . . . . . . . . 121-2. PGM Demand vs. Potential Supply From Recycling . . . . . . . . . . . .......29



4 q Strategic Materials: Technologies to Reduce U.S. Import Vulnerability

There is a wide range of actions that the Gov-ernment may draw from to implement someor all of these approaches. These actions varyin cost, degree of Government involvement,probability of success, and contribution to theoverall strategy for reducing vulnerability. The

actions include:Collection and analysis of data and the dis-

semination of results to industry. Governmentalready p lays a key role in prov ision of essen-tial information about strategic materials, Anexpanded role, including more emphasis onidentification of foreign investment oppor-tunities for U.S. firms abroad, sponsorship of a substitution information “bank,” develop-ment of better data about domestic mineraloccurrences, and periodic reexamination of trends in strategic materials recycling andconservation, would help Government policy-makers adjust strategies to changing circum-stances, and encourage private actions to re-duce vulnerability,

Sup port for research and d evelopm ent and formineral exploration. Implementation of anytechnical approach to reduce import vulner-ability will assume a continuing R&D effort,most of which will continue to need Govern-ment support. Strategic materials R&D pro-grams, decentralized among many agencies,need better coordination if common objectives,goals, and purposes are to be met.

Federal funding of strategic materials R&Din the areas of recycling, substitution, and ad-vanced materials appears adequate to keeppace with the changing materials mix in theeconomy. In the area of mineral exploration,prospects for a major domestic discovery of one or more of these materials are not prom-ising, but could possibly be enhanced throughgreater support of public and private explora-tion research, includ ing basic research on geo-logical theories of mineral occurrence, im-proved geophysical, geochemical, and drilling

equipment, and more intense stud y of the re-source potential of Federal lands.

Assistance for education and training. Ad-vanced materials, now in their infancy, holdpromise of altering the mix of basic materials

used in many applications now dependent onstrategic materials. International competitionfor supremacy in these emerging markets isstrong, with some other countries, includingJapan, placing greater emphasis than the UnitedStates on technical education and training of

workers in these fields. Increased Governm entsup port to U.S. educational institutions in conjunction with the advanced materials industrymay be needed to ensure the long-term com-petitiveness in these fields.

Development of alternative technologies andmaterials. In cases where the principal barrierto commercialization of a technology is the costof demonstration and pre-commercial develop-ment, or where benefits arise from having thetechnology or material “on-the-shelf,” the Gov-ernment could support the construction and

operation of demonstration plants or the test-ing and evaluation of substitute m aterials. Thiswould reduce industry response time in anemergency,

Financial assistance for domestic industry.The economics of nearly all opportunities fordomestic mineral development are discourag-ing to potent ial investors. If the benefits of do-mestic mineral production are desirable fromthe public’s perspective, however, assistancecould be provided in the form of subsidies, pu r-chase commitments, loan guarantees, tax in-centives or other Government financial aid.Such programs need not be limited to mineralproduction: processing of ores and metals, pro-duction of substitute materials, and operationof recycling facilities could a lso be encouragedby similar p rograms. Financial assistance pro-grams could be expensive, however, so thattheir cost effectiveness, compared to otheralternatives and to reliance on the free market,needs to be carefully considered.

Role of Government in reducing materials im-port vulnerability. The degree to which the Gov-ernment should actively support activities toreduce materials import vulnerability ultimatelydep ends on the perceptions of policymakers asto the degree of harm that could result fromsupply interruptions, the probability that suchinterruptions may occur, and the role policy-



6 qStrategic Ma te r/ a / s : Technologies to Reduce U.S. Import Vulnerability

Box A.-The Strategic Materials Stockpile

For over four decades, the strategic and critical materials stockpile has been seen as a kindof insurance policy for safeguarding the United States against the effects of a supply emergency.The stockpile, how ever, is only intend ed to safeguard m ilitary, indu strial, and essential civilianneeds in times of war or declared national emergency, and is not a general-purpose source in an

emergency.First established in 1939, the stockpile was bu ilt up rapid ly in the post-World War II and Ko-

rean War era, when the goal of the stockpile was to accum ulate a 5-year supply of critical materials.Many of the materials now in the stockpile date from th is period, and maybe antiquated d ue tochanges in material specifications. During the Vietnam War period, substantial amounts of stock-piled material were declared excess to stockpile needs and sold by successive administrations—acircumstance that led to charges that the stockpile was being used to keep metal prices stable dur -ing the Vietnam War. (Stockpile goals had been reduced from the initial 5 years to 3 years in 1958,and to 1 year in 1972, before being raised back to 3 years during the Ford Administration.)

In 1979, Congress reaffirmed its commitment to stockpiling through enactment of the Strate-gic and Critical Material Stockpiling Revision Act (Public Law 96-41). The law stated that the stock-pile “should be sufficient to sustain the United States for a period of not less than 3 years in theevent of a national emergency. . . “ and “is to serve the interest of national defense only and is

not to be used for economic or bud getary purp oses.” The 1979 law also established a stockpiletransaction fund, under which materials can be purchased for the stockpile from sales of excessmaterials. At the time the law was passed, stockpile inventories in excess of the 3-year require-ment were valued at $4.9 billion. Acquisition need s were estima ted to be $12.9 billion. In March1981, President Reagan an noun ced a m ajor new stockpile acquisition program , aimed at meetingstockpile goals for 15 priority materials. For fiscal year 1985, the Ad ministration is seeking to sell$78 million in excess materials and to purchase $120 million for the stockpile. However, the re-quest is significantly below the amount required to meet stockpile goals. At present spend ing rates,it would take 100 years to meet stockpile goals.

The Federal Emergency Management Agency (FEMA) oversees the stockpile, and submits toCongress the Ann ual Materials Plan (AMP) for the buying and selling of materials for the stockpile.An AMP steering committee, comprised of 12 agencies and chaired by FEMA, develops the an-nual plan. Actual management of the stockpile sites, which are dispersed throughout the UnitedStates, is conducted by the General Services Administration.

Alternatives to acquisition and sale of stockpile materials are under consideration, includingthe potential for technology to upgrade stockpiled materials to today’s standards. For example,most of the cobalt in the stockpile does not m eet current indu stry requirements, and therefore mayneed replacement. The American Society of Metals, in a recent report to FEMA, suggested thatU.S. firms be given stockpile samples to demonstrate whether the out-of-date materials could beprocessed to meet curren t stand ards. If so, some materials already in th e stockpile could be readiedfor use in an emergency, and some materials may n ot need to be replaced through pu rchase.

Barter is an alternative mean s of obtaining materials for the stockpile. The U.S. Governm entoperated a barter p rogram und er the Departm ent of Agriculture from 1950 to 1973, which disposedof surp lus agricultura l comm odities and acquired stra tegic mater ials for the stockpile. The totalvalue of agricultu ral exports un der th is program was $6.65 billion. The barter p rogram wassuspended in 1973 when agricultural surpluses were drawn down, and stockpile goals werechanged. In 1981, the U.S. Government again became involved in barter on a limited basis when

it concluded three Jamaica bau xite-dairy barter agreements worth $47 million, but a formal barterprogram has not been reestablished. Ap proximately 20 barter bills have been introduced in the98th Congress. The Administration has established a working grou p on barter to review proposalson a case-by-case basis.



Ch. 1—Summary q 7

Table A.— Domestic Consumption and Production of Strategic Metals

Price

— .—

Apparent Domestic production

consumption p r i m a r y scrap

Chromium: (tons x 1,000)1979 . . . . . . . . . . . . . . . . . . . . . . 586 0 671980 . . . . . . . . . . . . . . . . . 567 0 721981 . . . . . . . . . . . . . . . . . . 533 0 701982 . . . . . . . . . . . . . . . . . . . . . . 333 0 631983 . . . . . . . . . . . . . . . . . 334 0 78

Cobalt: (pounds x 1,000)1979 . . . . . . . . . . . . . . . . . . . . . 18,806 0 1,1701980 . . . . . . . . . . . . . . . . . . . . . . 17,054 0 1,1831981 . . . . . . . . . . . . . . . . . 12,532 0 9721982 . . . . . . . . . . . . . . . . . . . . . . 11,452 0 8711983 . . . . . . . . . . . . . . . . . . . . 15,712 0 724

Manganese: (tons x 1,000)1979 . . . . . . . . . . . . . . . . . . . . 1,250 31 01980 . . . . . . . . . . . . . . . . . . . . . . 1,029 23 01981 . . . . . . . . . . . . . . . . . . 1,027 24 01982 . . . . . . . . . . . . . . . . . . . . . . 672 4 01983 . . . . . . . . . . . . . . . . . . . . . . 730 4 0

Platinum group metals: (troy oz x 1,000)1979 . . . . . . . . . . . . . . . . . . . . . . 2,992 9 3091980 . . . . . . . . . . . . . . . . . . . . . 2,846 3 3311981 . . . . . . . . . . . . . . . . . . . . 2,445 7 3921982 . . . . . . . . . . . . . . . . . . . . . . 1,822 9 3441983 . . . . . . . . . . . . . . . . . . . 2,464 9 287

aAP~a~~nt ~OnSUmptlon eqUalS total Imports minus exports plus domestic production PIUS Increases of stocks and Inventoriesbchromlum ~rlce ,s for metric tonnes of Transvaal ore. fob South AfricaCLTU (long to n unit) IS th e metal content of one long ton of one percent grade ore It IS equivalent to 224 pounds of contained metal

NA—nol available

SOURCE US Department of the lnterior, Bureau of Mines

$/ M.T.b

54-5854-5851-5548-5248-52

$/pound24.5825.0019.7312.9012,50

$/LTUC

1,401.701.721,58NA

$/troy ouncePlatinum Palladium

352 113439 214475 130475 110475 130

—

supply disruptions that result from economicor foreign political disturbances. The concen-tration of supply of important minerals in a fewcountries, combined w ith anxieties aroused bythe success of the oil producers’ cartel in the1970s, has led to calls for materials policies thatprotect the N ation against sup ply d isrup tionsin a wider range of scenarios than those con-templated under Defense Stockpile policies.

Two general approaches have been proposedto redu ce materials import vu lnerability in n on-war scenarios. One is to establish u neconomicstockpile, similar to the defense stockpile, butwhich maybe used in times of economic dis-ruption rather than military conflict. The pur-pose of such a stockpile would be to reduce the

impacts to the U.S. economy from peacetimemarket and supply disruptions. However, thereis considerable skepticism on the part of indus-try that an economic stockpile could be man-aged without causing market disruptions itself.

The advantages and disadvantages of varioustypes of economic stockpiles have been the subject of much study. (See, e.g., OTA’s, An As-sessment of Alternative Economic Stockpiling

Policies, OTA-M-36, August 1976.)

The second approach is technological. Througha combination of technical advances in mineralproduction, conservation, and materials sub-stitution, the requirements for imported stra-tegic materials can be lessened and the reli-ability of supplies can be increased.

This assessment concentrates on the role of technology in red ucing the vu lnerability of theUnited States to interruptions of supply of stra-tegic materials. The technical approaches m ay

be directed either toward developing alterna-tive sources of supp ly and alternative technol-ogies for use in cases of supply interruption or,in the longer term, toward developing newmaterials and processes that significantly re-




Distribution of Mine Production of Cobalt, Ch

CanadaCobalt 8%PG M 6 %

Cuba

Cobalt 6%MexicoManganese 2%

BrazilCh ro m i u m 4 %M a n g a n e s e 1 1 %

Finland Turkey PhilippinesCh ro m i u m 4 % Ch ro m i u m 6 % Ch ro m i u m 5 %

Cobal t 3%0China

Cobal t 4%

USSR M a n g a n e s e 6 % Australia

Chro miu m 3 3 % India Cobal t 5 %Cob al t 8 %

Ch ro m i u m 3 %M a n g a n e s e 8 %

M a n g a n e s e 3 2 %PG M 4 9 %

M a n g a n e s e 6 %

AlbaniaCh ro m i u m 5 %

SOURCE Office of Technology Assessment, from U S Bureau of Mines data



.

Ch. 1—Summary q 9

m, Manganese and Platinum Group Metals—1981

Zaire South AfricaCobal t 4 7 % Chr omi um 3 4 %

Gabon M a n g a n e s e 2 3 %

M a n g a n e s e 9 %PG M 4 4 %

Botswana Zimbabwe

Cobal tChromium

1 % 5 %

ZambiaCobal t 15%

Philippines




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12 q Strategic Materials: Technologies to Reduce U.S. /report Vulnerability —

Platinum

Diamonds

Cobalt

BerylliumChromium

Manganese

Vanadium

Graphite

Rutile

Bauxite

Tin

Tantalum

Columbium

Figure 1-1 .—Regional Distribution of Strategic Material Production

10 20 30 40 50

Legend

Communist bloc Oceania

Africa Western Europe

AsiaN

Latin America

60 70 80 90 100

u North America

Other marketc 1

n

economy countries

SOURCE Off Ice of Technology Assessment from U S Bureau of Mines data

Essential Uses of Strategic Materials

The first-tier strategic materials have manyuses, a number of which are considered to beessential. The essential uses of the first-tier stra-tegic materials are discussed below.

Chromium

Chromium is used in a variety of app licationsthroughout the economy, the most essential of which are superalloys, stainless steel, and asan alloying element in tool, spring, and bear-ing steels.

As an alloying element, chrom ium raises thehard ness of steel, increases its strength and ox-idation resistance at elevated temperatures,

and increases its wear resistance. These prop-erties make chromium alloy steel essential insprings, bearings, and tools, as well as in com-ponents of automobile engines.

In stainless steel, the formation of a tenaciouschromium oxide film on th e surface of the ma-terial provides a barrier to corrosion and ox-idation. This corrosion and oxidation resist-ance is essential in chemical processing plants,oil and gas production, power generation, andin automobile exhaust systems, principally inthe catalytic converter.

Chromium is combined with nickel, cobalt,aluminum, and titanium to give superalloytheir exceptional corrosion and oxidation re-



Ch. 1—Summary q 1 3

sistance at temperatures above the useful rangeof steel. For example, superalloys are used inthe high-temperature regions of the aircraft gasturbine engine in parts such as turbine bladesand vanes, turbine disks, and combustor liners.

Chromium in its mineral form of chromiteis used in insulating liners in boiler fireboxes,steel and ferroalloy furnaces and vessels, andin foundry sands used for casting molds. In achemical form it is used in pigments, metaltreatments, leather tanning, and a variety of other applications. Although some of these usesare essential, the quantity of chromium re-quired to meet them is small relative to theamou nt consum ed in m etallurgical app lications,

Cobalt

Although U.S. deman d for cobalt is less than2 percent (by tonnage) of that for chromium,it is essential in many of its applications. Themost critical are as an additive in some super-alloy, as a bind er for tungsten carbide tool bits,and as a constituent of some magnetic alloys.It is also desirable, but not irreplaceable, as analloying element in some tool steels, hard fac-ing alloys, and high-strength steels. Cobalt iscontained in catalysts used in certain essentialsteps in the refining of petroleum and the man-ufacturing of chemicals. Other nonmetallurgi-cal applications include pigments and paint

dryers, but only a very small portion of theseapplications are essential.

Manganese

Although manganese is used in a variety of applications, ranging from an alloying agentin aluminum alloys and bronzes to nonmetal-lurgical uses in batteries and chemicals, itsprincipal use—about 90 percent—is as an alloy-ing and processing agen t in steel. As an alloy-ing element, manganese prevents the forma-tion of iron su lfides w hich adversely affect the

properties of steel. In addition, manganese isthe most cost-effective method of increasingthe hardness of steel, leading to its use in cer-tain impact-resistant steels and in the high-strength low alloy (HSLA) steels. As a process-

ing agent in steelmaking, manganese is instru-mental in removing oxygen from steel and inimproving slag characteristics.

Platinum Group Metals

Platinum group metals (PGMs), which com-prise platinum, palladium, rhodium, iridium,osmium, an d ruthenium , are essential in catalyt-ic app lications in p etroleum refining, chemicalprocessing, and automotive exhaust treatment.They are also used as contacts in telecommu-nication switching systems and as electrodesin ceramic capacitors, but in m any of these ap -plications gold is a satisfactory, albeit expen-sive, substitute for some of the platinum groupmetals. Other applications include jewelry andmedical and dental equipment.

Outlook for the Future

Domestic production of stainless and alloysteel accounted for 237,000 tons of chromiumin 1981. Requirements for these steels are projected to grow substantially for the rest of thecentu ry. Sup eralloy, which require high pu ritychromium metal or low carbon ferrochromium,accounted for less than 7,000 tons of chromiumin 1981. Demand for chrom ium in this ap plica-tion may nearly double by the year 2000.

Domestic cobalt consum ption was 5,800 tons

in 1981. Superalloys, the largest consumer, ac-counted for 2,100 tons or 36 percent of domes-tic consumption. Magnetic alloys used about800 tons (14 percent of domestic consumption);chemical and petroleum catalysts accountedfor about 600 tons (10 percent of domestic con-sumption); and cemented carbide tools anddies consumed about 500 tons (almost 9 per-cent of domestic consumption). Growth of co-balt demand is expected to be slow over thenext decade, increasing somewhat after 1995.

In 1981, 775,000 tons of manganese con-

tained in ore and ferroalloys were used in theprod uction of carbon, stainless and alloy steel.If current steelmaking practices continue,manganese requirements for the domestic pro-du ction of steel would be expected to rise sig-



14 qStrategic Materials: Technologies to Reduce U.S. Import Vulnerability

nificantly. However, changes in steelmakingpractices could result in a significant d ecreasein the amount of manganese required per unitof steel production, causing a major drop infuture manganese consumption per ton of steel(see p. 27).

U.S. demand for platinum group metals was1,92 million troy ounces in 1981. Of this total,607,000 troy ounces, or 32 percent, were usedin catalytic converters of automobiles. Othercatalytic uses in the chemical and petroleumindustries accounted for 342,000 troy ounces(18 percent of domestic consumption). Electri-cal applications accounted for almost 500,000troy ounces (26 percent of domestic con-sumption).

PGM demand for catalytic converters maymore than dou ble by 1995 as au tomobile sales

increase and as larger vehicles, such as heavytrucks and buses, are required to use conver-ters. Demand for PGMs in the petroleum in-du stry will probably grow at roughly the samerate as the economy, unless there is a sharp in-crease in demand for domestic fuels that wouldrequire large qu antities of PGM catalysts in th eexpansion of refinery capacity. Growth of de-man d for PGM catalysts in the chem ical indu s-

try is d ifficult to predict. Increased dem and for“specialty” chemicals (e. g., pharmaceuticals,agricultural pesticides an d h erbicides, and bio-catalyst) could push PGM consumption in thechemical industry to as much as 400,000 troyounces in 1990 and to over 800,000 troy ou ncesby 2000, PGM demand in the electrical indus-try is likely to increase slowly, although a sharpincrease in palladium demand for ceramiccapacitors is likely in the near future and de-mand for this use will remain high for severalyears until high prices and tight supplies en-courage the use of substitute materials in thisapplication.

These projections must be taken with cau-tion. They are based on extensions of currentpatterns and trends, and do not fully reflect theeffects of advances in materials productiontechnology, nor do they reflect technical ad-

vances in end uses that may result in signifi-cant increases or decreases in consumption of these materials, However, the projections doprovide a starting point for the evaluation of the importance of the various technical alter-natives to materials import reliance that arediscussed below.

Producti on of Strategic Materials

Chromium is found in many parts of theworld, but world mine production is domi-nated by several large, high-grade d eposits. In1982, South Africa accounted for 27 percentof the total world chromium production of about 2.6 million short tons. The Soviet Unionproduced 36 percent of the world total; sixother countries, Albania, Brazil, Finland, the

cent from the Soviet Union, 11 percent fromthe Philippines, and the rest from a variety of sources. The rest of chromium imports wereferrochromium and chromium metal, with 35percent coming from South Africa, 26 percentfrom Zimbabwe, 12 percent from Yugoslavia(produced, in part, from Albanian chromite),and the balance from diverse sources,

Philippines, Turkey, and Zimbabwe, each ac-In 1982, Zaire produced 45 percent of thecounted for between about 3.6 and 6 percent

of world production. world supply of cobalt, while neighboring Zam-bia prod uced 13 percent, The Soviet Union an d

In 1982, the United States imported 227,000 Cuba together produced 15 percent of theshort tons of chromium contained in ore and world’s cobalt, Canada accounted for 6 percentmetal. About half of the imports were as chro- and Australia 8.7 percent, with lesser amountsmite ore: 59 percent from South Africa, 6 per- being produced in Finland, Morocco, the



Philippines, New Caledonia, and Botswana.Principal suppliers to the United States wereZaire, 36 percent of imports; Zambia, 8.5 per-cent; Canada, Norway, Finland, and Japan be-tween 6 and 11 percent each; and Belgium / Lux-embourg, 4.5 percent, Belgian cobalt originated

from ore obtained from Za ire, wh ile Australia,Canada, and the Philippines supplied cobaltore to other processes,

Manganese ore supplies are more diversifiedamong major producers than are supplies of chromium or cobalt. The Soviet Union ac-counted for 41 percent of 1982 world produc-tion and South Africa accounted for 23 per-cent. Australia, Brazil, Gabon, India, and Chinaeach accounted for between 5 and 7.1 percent.

Ch. 1—Summary Ž 15

U.S. impor ts of ore came from Gabon (19 per-cent), South Africa (55 percent), Australia (16percent), and Brazil (3 percent). Manganesewas also imported as ferromanganese, withSouth Africa providing 40 percent and Franceproviding 21 percent.

Production of platinum group metals is con-centrated in the Soviet Union and in SouthAfrica, accounting for 54 percent and 40 per-cent of 1982 world production, respectively.U.S. imports were from South Africa (48 per-cent), the Soviet Union (16 percent), and theUnited Kingdom (14 percent, processed frommaterial imported into the United Kingdomfrom South Africa and Canada).

Historical Perspective

In the past 25 years, the United States hashad at least four major disruptions in thesupply of materials critical to the economy andthe national defense. The first of these occurredin 1949 when , in a Cold War exchange of traderestrictions with the United States, the SovietUnion stopped the export of manganese andchromium ore to the United States. The sec-ond interrup tion was the U.S. boycott of chro-

mium from Rhodesia (now Zimbabwe). Thethird was a many month hiatus in the importof nickel from Canada as workers carried ona prolonged strike, Most recently, politicaldisturbances in Zaire, while not actually reduc-ing cobalt production, triggered major disrup-tions in supplies, inventories, and prices forcobalt.

The Soviet Union embargo on chromium andmanganese exports to the United States in 1949was a political action. It was a response to aU.S. clampdown on exports of machinery,

tools, trucks, and scientific equipment to theSoviet Union—which, in turn, was a responseto the Soviet blockade of Berlin in 1948. Anotherpolitically motivated supply cutoff was the em-bargo on imports of Rhodesian chromium from1966 to the end of 1971. The U.S. embargo con-

formed with a United Nations resolution whichcalled on all members to refrain from tradewith Rhodesia after it declared independencefrom Great Britain and set a course of con-tinued white minority rule.

In neither of these cases were there seriouseffects on the economy or any interruption of defense production. The response in both in-

stances was, essentially, to find other foreignsources of supply. After the 1949 Soviet em-bargo, the U.S. Government was active in find-ing alternative supp liers and in up grading theinfrastructure of these suppliers by providingsteel to improve India’s rail transport system,sending railcars to South Africa, and helpingto improve rail and p ort equipment in Ghana.

With the U.S. embargo on pu rchases of Rho-desian chromium in 1966 , the Government soldexcess chromium from the national stockpilebut otherw ise took little active part, leaving in-dustry to find alternate suppliers, That indus-try was able to do so quite readily with littleevidence of shortage was due to several fac-tors, besides the stockpile sales. The Sovietspromptly volunteered to serve as alternate sup-pliers of chromium to the United States, even




ing opening up new types of ore for exploita-tion, as the argon-oxygen decarburization proc-ess did for South African chrome ore afterRhodesian supplies were embargoed. TheCanad ian nickel strike and , to a lesser d egree,the d isrup tion in cobalt markets resulting fromthe Zairian disturbances, showed that interrup-tions in m etal supp lies could hav e financial ef-fects much greater than might have been ex-pected, on the basis of the dollar value of imports of these metals,

These four diverse historical examples illus-trate two important points. First, interruptionsor even complete cessation of sup ply from m a- jor producers of strategic materials are possi-

ble, whether as a result of international poli-tics, internal rebellion, labor difficulties orother causes. Second, technology provided ameans to respond to interruptions of sup ply ineach of the examples. Thus, a basic questionto be answered in considering the full rangeof possible elements in a Government policyfor strategic materials is the extent to whichtechnology can protect the U.S. economy fromthe ad verse effects of possible interrup tions inthe future. The first step toward answering thisquestion is to identify the technological alter-natives to the current state of reliance on im-ports of strategic materials.

Technological Approaches to ReduceThere are many technological app roaches to

reduce U.S. materials import vulnerability, andthey may be combined in many different ways.For the strategic materials policy maker, it maybe best to group these various approaches intoa materials technology triad. The componentsof this triad are minerals produ ction and metalprocessing, conservation, and substitution.

The production leg of the triad includes do-mestic produ ction, diversified foreign p rodu c-

tion, and production of minerals from regionsbeyond national jurisdiction, The processingof these minerals into forms used by industry,particularly ferrochromium and ferromangan esefor the steel industry, is also included in theproduction leg. The conservation leg includesimproved manufacturing technologies that usematerials more efficiently, such as improvedcasting methods, more efficient forging tech-niques, and the manufacture of parts frompow dered metals. It also includ es the recyclingof scrap generated during the manufacture of components and of obsolete scrap retrievedfrom discarded products. The third leg of thetriad, substitution, involves the use of materialswith reduced strategic materials content inplace of traditional materials. An example isthe use of 9 percent chromium steel in place

of

Materials

stainless steel

Import Vulnerabil it ycontaining 18 percent chro-

mium in certain powerplant applications. Sub-stitution also includes the displacement of strategic materials by new materials such asadvanced ceramics or composites.

Individu ally, no on e technological approachcan meet all of the varied problems that mightarise with regard to the security of supply of the four first-tier strategic materials; the ap-proaches must be combined to improve their

effectiveness. Further, each provides oppor-tunities that differ for the various materials.Thus, the most effective combination of tech-nological approaches for dealing with materi-als import vu lnerability varies from on e mate-rial to the next,

Summary of Technological Approaches

In reviewing the outlook for technological ap-proaches to reduce materials import vulner-ability for the four first-tier strategic materials,several points become apparent. First, there isno single solution. For example, as is shownin table 1-1, substitution is extremely impor-tant to reducing chromium vulnerability, buthas little contribution to make in the case of manganese. Recycling, w hich is imp ortant for




Table 1-1 .—Summary of Most Promising Technological Approaches to the Reduction of

Strategic Materials Import Vulnerability

Approach Potential benefitsa Barriers to implementation

Chromium: Substitution Direct substitution could now reduce U.S.

chromium needs by one-third. Another one-

third reduction may possibly be achievedthrough a 10-year R&D program.

Advanced materials may displace chromiumalloys in certain aerospace and industrial ap-plications.

Conservation Expanded recycling of scrap and waste couldprovide at least 20,000 tons of chromiumbeyond current recycling levels.

Production Development of alternative foreign sourcescould provide about 30,000 to 60,000 tons,about 10 to 20% of current U.S. demand.

Cobalt: Conservation Recycling could recover much of the cobalt in

scrap and waste that is currently lost ordowngraded.

Substitution

Production

Process improvements now being adopted maymake significant reductions in the amount ofcobalt used to make jet engine components.

Direct substitutes under development couldreduce the need for cobalt by 50°/0 or morein some critical superalloy applications.

Advanced materials may displace cobalt insome aerospace and industrial applications.

Domestic production from three sites could pro-duce up to 8 million pounds of cobalt peryear.

New foreign production could provide almost 15million pounds of cobalt per year.

Manganese: Conservation Process improvements could reduce needs for

imported manganese in steel by 45% by year2000.

Production Alternative suppliers to South Africa and theSoviet Union could increase productionafter 2 to 3 years to expand facilities.

Platinum group metals (PGMs): Conservation Recycling of catalytic converters could recover

500,000 troy ounces of PGM annually by1995.

Product ion Development of the Stillwater deposit could pro-duce 175,000 troy ounces of PGM in the nearterm; additional development is possible.

Low cost of chromium alloys deters use ofsubstitutes; lack of information on

substitutes slows their use in times of short-age; need for further tests and experiencelimits near-term potential for substitution toone-third of consumption.

Basic and applied research is needed to im-prove properties and reliability of advancedmaterials. Designers and engineers need bet-ter understanding of properties and limita-tions of advanced materials. Tests andstandards need to be developed for thesematerials.

Barriers to chromium recycling are economic,not technical.

At current prices for chromium, there is noeconomic incentive to diversify suppliers.Government assistance would be required tomake development of alternative suppliersmore attractive.

Principal barrier is economic; however, exten-sive recovery of superalloy scrap may requireuse of technology that is now limited tolaboratory testing.

Economic factors favor the adoption of processimprovements.

Industry has little or no incentive to expend thetime and money needed to qualify alternativealloys except when there are significant per-formance advantages.

Barriers to adoption of advanced materials toreduce cobalt consumption are the same asfor chromium, as described above.

Current prices for cobalt and/or co-productmetals are too low to justify investmentwithout Federal subsidies.

Investments are being postponed until cobaltprices rise. Lead times of 2 to 5 years areneeded to bring deposits into production,

Adoption of improvements will depend on in-cremental upgrading of domestic steelmak-ing facilities.

Assured market for increased production isneeded to justify investment in productionand transportation facilities: U.S. would be incompetition with other consumers for newproduction; facilities for processing ore intoferromanganese must also be available.

No significant barriers; several years will beneeded to develop collection and processinginfrastructure.

Domestic production will require slightly higherprices for platinum and palladium andevidence of increased demand.

aThe benefits accruing from the various approaches are not cumulative. For example, as scrap generation in manufacturing IS reduced through improved processingtechniques, the potential benefits of recycling are also reduced

SOURCE Office of Technology Assessment




would be less than 3 percent of U.S. annualconsumption of chromium.

Although only low-grade deposits of chro-mium have been discovered in the UnitedStates, the possibility remains that better de-posits exist. High-grade chromite deposits,

wh ere they exist, are norm ally associated w iththe Precambrian rock such as that whichunderlies much of North America. Unfortu-nately, only small areas of this rock are ex-posed. Conventional mineral reconnaissancetechniques, which rely heavily on the iden-tification of surface features associated withthe desired mineral deposits, are limited tothese exposed areas. In other areas, the pre-cambrian rock is covered by thick layers of sediment or glacial debris, precluding the useof surface features to disclose the nature of sub-surface deposits. Advances in exploration tech-nology, how ever, may impr ove the outlook forthe discovery of more d eposits. Improved geo-physical techniques, such as arial gravimetricand magnetic analyses targeted specifically atchromium , could red uce the depen den ce of ex-plorationists on surface geology. Improved geo-chemical and core drilling technology couldencourage the exploration for chromium (andother minerals) by reducing exploration costs.In the long term, improved scientific under-standing of the processes that form depositscould assist explorers to identify regions inwhich to concentrate their efforts.

Diversified Foreign Produ ction.— Unless major newdeposits of chromite are discovered, the oppor-tunities to diversify supplies of chromium arelimited to minor expansion of small producers,such as Albania, Turkey, and the Philipp ines, andthe exploitation of known, but undeveloped,chromite resources in the laterites and beachsands of New Caledonia and the Philippines,

The deposits in Albania, Turkey, and thePhilippines are small and discrete, and it islikely that many deposits remain undiscovered,Production from these countries might be in-creased if techniques for identifying scattereddeposits of chromite can be improved.

Technologies have been developed for theproduction of chromite from nickel laterites

and beach sands, but the ore grades of such de-posits generally range from 2 to 5 percentchromic oxide. With the major producerssupplying ore that contains 35 to 48 percentchromic oxide, the lateritic and sand depositswould require substantial concentration to pro-

du ce a marketable prod uct, and the estimatedcost of producing such a product is two to threetimes the current market price.

Ferrochromium Processing Capacity.—Before 1970,

the United States had sufficient capacity tomeet its needs for ferrochromium, the form of chromium used in the production of steel.Since that time, how ever, imports of ferrochro-mium have reduced the domestic industry’sshare of United States demand and, with time,the capacity to produce ferrochromium domes-tically is also decreasing as furnaces and p lantsare decommissioned. As domestic processingcapacity declines, the United States loses itsflexibility to turn t o alternative sou rces of orefrom countries that do not have their own fer-rochromium facilities.

The decline of the domestic industry is di-rectly related to the cost of operation. Costs of power, labor, and transportation are, in gen-eral, lower for the producers in countrieswhere chromium ore is mined than for U.S.firms, In ad dition, national policies in th e pr o-du cer countr ies often p rovide economic incen-tives for local processing of ferroalloys.

The advantages enjoyed by producing coun-tries are not insurmountable. The growingneed to blend togeth er ores that have differentchemical and physical properties means thatall producers will need to import ores, so thatall producers will pay the additional cost of transporting ore rather than th e more concen-trated ferroalloy. Labor rates in many producercountries are now quite low, but are likely toincrease more rapidly than in the UnitedStates, thereby na rrow ing the cost d ifferences.Improvements in the technology for measure-

ment and automatic control of processing oper-ations should provide gradual improvementsin domestic plants. In the longer term, ad-vanced furnaces may provide means to r educeenergy consump tion, further redu cing ad van-




tages held by some foreign producers. Eco-nomic and trade agreements may also help nar-row the economic gap. With the advantage of proximity to consumers, wh ich gives U.S. pro-ducers an advantage in responding to specialorders placed by the steel industry, technical

impr ovements in ferroalloy facilities could im -prov e the potential to maintain a dom estic fer-rochromium industry capable of processingore from a variety of foreign sources,

In the long term, with wise adoption and ap-plication of technology, the industry may beable to keep a significant share of the domes-tic market for ferrochromium, ferromanga-nese, and other ferroalloys. In the near term,however, there is little technology can do; so,during this period, the domestic industry islikely to need economic and political assistance

if it is to preserve a market presence againstforeign competition.

CONSERVATION

Chromium-bearing manufacturing and ob-solete scrap are marketable products that ac-count for about 10 to 15 percent of U.S. con-sumption of chromium, Because recycling of manufacturing scrap is already at a high level,there is little opportunity to increase chromiumrecovery in this area. There are, however, sig-nificant opp ortun ities to increase the recovery

of chromium from obsolete stainless steel scrapand from w aste produced by steelmaking andchemical processing plants.

Recycling of obsolete stainless steel scrap isdifficult because of the long lifetime of stainlesssteel products, the wide dispersion of the prod-ucts through the economy, and the difficultyof separating the stainless steel from othermaterials in discarded products. The mostpromising prospect is in the automotive area.About one-third of all obsolete stainless steelscrap is obtained from junked automobiles;

even so, only 30 to 40 percent of the chrom iumcontained in the cars is recovered. The best op-portunity for increasing chromium recoveryfrom automobiles lies in the catalytic converter.The shell of the converter, wh ich is m ade fromType 409 stainless steel, contains 1,8 to 2.6

pounds of chromium—over half of the totalchromium content of the automobile. Since thistype of stainless steel is magnetic, it is noteasily separated from other magnetic parts ei-ther before or after the cars are shredd ed. How -ever, interest in recycling of the platinum in

the converters is increasing (see “PlatinumGroup Metals” below) and the converters arestarting to be removed for separ ate processing,wh ich makes the stainless steel shell availablefor recycling. If recycled separately, the con-verter shells could produce about 5,000 to 7,000tons of chromium per year, or up to 3 percentof the 1981 U.S. demand for chromium in stain-less and alloy steels,

Opportunities for recovery of chromiumfrom industrial wastes are d ifficult to quan tifybecause of a lack of up-to-date information. In

1974, the most recent year in w hich data werecompiled, chromium lost in industrial wastewas estimated to be over 28,000 tons, includingover 17,000 tons from various metallurgicalprocesses. Since that time, several firms haveinstituted both internal and commercial wasteprocessing programs. For example, Inmetco,a subsidiary of Inco, processes flue dust, millscale, and grind ing sw arf containing 3,100 tonsof chromium with chromium recovery rates of about 90 percent. Oth er facilities have been de-veloped to process other forms of scrap andwaste.

Chemical and metal finishing indu stry w asteswere estimated to contain over 3,000 tons of chromium in 1974, which was then almost en-tirely lost. Although recycling or regeneratingthe chromium from these wastes is expensive,the cost of meeting strict standard s for the dis-posal of waste in land fills could encourage therecovery of metals, Furthermore, the value of the metal could help lower the costs of proc-essing the w aste for d isposal. Several recoverytechnologies, includ ing closed-loop systems toextend the life of acid baths, have been underdevelopment and hold promise to reduce chro-mium losses in the future.

SUBSTITUTION

Direct Substitutes.—The most important use of

chromium is in metallurgical applications,




wh ere it provid es properties of hard ness, wearresistance, high-temperature strength, and re-sistance to oxidation and corrosion. It is inthese uses that substitution offers the greatestopportunities to reduce the requirements forimported chromium.

Because of its relatively low cost, availabil-ity, history of satisfactory performance, andfamiliarity to designers, chromium-containingsteels, particularly stainless steels, are widelyused, even in applications that do not requirethe superior performance provided by the highchromium content. There are many oppor-tunities to use materials with reduced chro-mium or no chromium at all, but there is nosingle substitute material that can serve in allof the applications w here stainless steel is nowused. Appropriate substitute materials must beselected for specific applications. Some of themore promising substitutes for stainless steelare summarized in table 1-2.

It is important to note that there are few in-centives to replace stainless steel in most ap-plications. As a result, most potential substi-tute materials remain at the laboratory stagebecause, withou t economic incentives to adop talternative materials, private industry will notspend the money required to move the mate-rials to commercial use.

Advanced Materials. —In the long term, nonme-tallic and unconventional metallic materialsmay p rovide alternatives to chrom ium -bearingstainless and alloy steels and superalloys.Ceramics are being developed for possible usein engine comp onents, power p lants, and bear-

ings—all applications that now use stainless oralloy steel—and in gas tu rbine engines in p laceof superalloys. Advanced composites may beused in applications that require high strengthand light weight. New metallic materials, in-cluding rapidly solidified metals and long-range ord ered intermetallics may p rovide alter-native materials for use at high-temperature ap-plications, such as turbine components in jetengines, that otherwise require alloys withchromium contents of 20 percent or more.

However, advanced materials must over-

come substantial barriers before they can sig-nificantly reduce the need for chromium orother strategic materials, With few exceptions,these materials are still in early stages of de-velopment. Considerably more work must bedone in th e laboratory to improve the p roper-ties of the materials, and processing and man-ufacturing methods must be developed to ac-commodate their special properties. Even then,the materials must gain acceptance by design-ers, who will evaluate them not only on eco-

Table 1-2.—Substitution for Chromium in Metallurgical Applications

Application material Current material Alternative Developer Status

Boiler tubes in con- Type 304 stainless Modified 9°/0 Oak Ridge National In process of cer-ventional and nuclear steel (18% chromium) chromium/1% Laboratory tification by ASMEpowerplants molybdenum steel code committees

General use in Type 304 stainless Manganese-alumi- Diverse locations in Laboratory stage inmoderately corrosive steel num steels U.S. and other U.S. Minor practicalor oxidizing countries applications in Chinaenvironments

High-temperature ox- Type 304 stainless 8°/0 aluminum/6% Bureau of Mines Laboratory stageidizing environments steel molybdenum steel

Corrosive environ- Type 304 stainless 9°/0 chromium alloy Bureau of Mines/ Laboratory s tagements (chemical steel steel Incoprocessing)

General use (moderate Type 304 stainless 12°/0 chromium NASA Lewis Laboratory stagecorrosion and oxida- steel stainless steel Research Centertion uses)

Automotive exhaust Type 409 stainless 6-12°/0 chromium ARMCO Laboratory stagesystems and catalytic steel (1 2°/0 chromium) alloy steelconvertersSOURCE Office of Technology Assessment.



—

nomic grounds but on the familiarity thatgrows with practical experience,

Cobalt

PRODUCTION

Cobalt is generally produced as a byproductof nickel or copper mining, its sales supple-menting the revenues from these other prod-ucts. Only rarely is it mined for its own sake.The largest cobalt producers, Zaire and Zam-bia, produce cobalt from their copper mines.Canada and Botswana produce it from nickel-copper mines, and Cuba and the Philippinesrecover it from nickel laterites. Less commonly,cobalt may also be found in deposits of lead,iron, and manganese. Only in Morocco has co-balt been produced as a principal product. Asa result of the wide distribution of cobalt-bearing ores, diversified production, both do-mestic and foreign, is a more prom ising op tionfor the reduction of import vulnerability forcobalt than for chromium, manganese, or plat-inum group metals.

Domestic.—In the aftermath of the Korean war,the United States obtained cobalt from d omes-tic sources, largely by granting Federal sub-sidies to the mine operators. Three deposits,the Blackbird mine in Idaho (a copper-cobaltmine), the Madison mine in Missouri (lead-cobalt) and the now-depleted Cornwall mine

in Pennsylvania (an iron deposit with smallamou nts of cobalt), provided the bulk of dom es-tic cobalt. In addition to these proven depos-its, several other deposits are known and havebeen studied as possible domestic sources.These are the copper-nickel deposits of theDuluth Gabbro in Minnesota and the cobalt-containing nickel laterites in northern Cal-ifornia.

At current and projected prices for cobaltand other metals that can be produced fromthe Blackbird mine, the Madison mine, the

Duluth Gabbro, and the nickel laterite depositat Gasquet Mountain in California, domesticcobalt production is economically unattractive,Unless prices for cobalt, nickel, lead, and cop-per show major and prolonged increases, pri-vate indu stry will not develop any of these de-


posits. Increases on the order of 50 percent fornickel and copper, or 100 percent or more forcobalt would be necessary to encourage privateinvestment. At these higher prices, domesticproduction of cobalt could be significant, De-velopment plans for the Blackbird mine call for

the p rodu ction of 3.7 million pounds of cobaltper year, for the Madison mine 2 millionpoun ds, and for the Gasquet Mountain deposit2 million pounds. The lives of these mines varyfrom 10 to 20 years, based on proven reserves.Potential cobalt production of hypotheticalmines in the Duluth Gabbro is estimated to befrom 1 million to 2 million pounds annually,

Diversified Foreign Produ ction.--The high marketprices that are required for domestic produc-tion of cobalt have led developers to look fordeposits in foreign countries that offer more

attractive economics. With long-term price in-creases less extensive than those required tomake U.S. deposits economic, cobalt produc-tion from nickel mines in Canada and Aus-tralia, which accoun ted for 10 percent of wor ldproduction in 1980, can be increased substan-tially.

Increases in cobalt and nickel prices wouldalso imp rove the prosp ects for the d evelopm entof cobalt deposits in Indonesia, New Guinea,New Caledonia, and Peru. These four depos-its are summarized in table 1-3. The total po-

tential cobalt production of these four depos-its could be 14.7 million pounds per year if theywere all to enter production. As with the do-mestic deposits of cobalt, however, these fourare un likely to be d eveloped und er current eco-nom ic cond itions. In fact, developm ent at GagIsland was recently halted due to poor eco-nomic outlook and partnership d isagreements,

Table 1-3.—Potential New Foreign Cobalt Production

Estimated production Leadtime toSite (million pounds/year) start production

Gag Is land, Indones ia 2 8 2 to 3 yearsRamu River, New Guinea 5 9 5 + yearsGoro, New Caledonia 20 3.5 to 5 yearsMarcona Mine, Peru 4.0 2 years

Total 147SOURCE Off Ice of Technology Assessment




and development of the other three depositsawaits improved markets for nickel and cobalt.

Ocean Resources.—For over 100 years it hasbeen known that in the depths of the oceanthere are deposits of nodules and crusts of man ganese that contain copper , nickel, and co-balt, sometimes in concentrations that wouldbe very attractive in land-based deposits. Ad-vances in the technology for ocean resourceexploration and d evelopment d uring the 1960sand 1970s raised the possibility of recoveringthese minerals from the seabed. Commercialinterest centered on the manganese nodules of the east centra l Pacific ocean w here th e nickel,copper, and cobalt contents w ere at their high-est. After a peak of interest in the late 1970s,however, interest in the development of theseresources declined sharply, Although uncer-tainties about the legal right to mine the re-sources contributed to the decline in interest,more significant w ere the increases in the pro-

jected cost of exploitation (based on the anal-ysis of data from prototype tests conducted in1979 and 1980) and the realization that assum p-tions of future increases in the price of nickeland copper were overly optimistic, The highcost of building and operating an ocean min-ing system is compounded by the legal uncer-tainties arising from U.S. abstinence from theseabed mining provisions of the Law of the SeaConvention, and by the cost of development

and testing remaining to be done on miningsystems. With time, as higher grade land-basedresources are depleted, the resources of thedeep sea floor may well become a major sourceof cobalt and other metals. At this time, how-ever, land-based sources of cobalt, whether for-eign or domestic, appear more attractive forcommercial development.

CONSERVATION

There are a number of conservation alterna-tives to reduce U.S. requirements for cobalt.The manufacture of superalloy components is

a particularly attractive area for improvemen t.A considerable amount of machining is per-formed on jet engine comp onents, resulting inlarge quantities of man ufacturing scrap . Ratiosas high as 10 to 1 for pu rchased m etal to metal

used in the engine are seen, with ratios of 6to 1 being common. Less than 50 percent of thissup eralloy manu facturing scrap is recycled foruse in superalloy; the rest is used in steel forits nickel and chromium content, is exportedto foreign consumers, or is disposed of as

waste. Obsolete parts made of superalloys arecontaminated with carbon and sulfur, and gen-erally are not r ecycled for pr odu ction of jet en-gine components. Past failure to utilize scraphas been based, in part, on engine manufac-turers’ standards that limited the use of scrapand , in some cases, prohibited its use altogeth-er, due to concern that contaminants would notbe removed in refining processes and the re-sulting alloy wou ld be u nsuitable for use in crit-ical applications, With experience, it has beenpossible for manufacturers to relax the speci-fications to allow the use of superalloy that

contain up to 50 percent recycled materials(principally from manufacturing scrap) in air-craft applications,

Recent advances in remelting and refiningtechnology have led to the development of processes that could refine manufacturingscrap, and even some obsolete scrap, to pro-duce new alloys that can meet the strictest of standards required by aircraft engine manufac-turers, Processes have also been developed torecover individual elements from mixed alloyscrap. The usefulness of these processes is

limited, how ever, because th ey have on ly beentested in the laboratory or in small pilot plants.Further time and effort are needed to deter-mine their technical and commercial feasibil-ity as full-scale facilities.

A second conservation measure that couldredu ce imp ort vu lnerability for cobalt is the useof more efficient manufacturing technologies,Particularly imp ortant am ong these, for super-alloy, are near-net-shape technologies, Theseinclude powder metallurgy, in which pow-dered metals are pressed under high pressureand temperature into a form close to the final

shape of the desired component; hot isother-mal forging, in which materials are deformedunder extremely plastic or superplastic condi-tions to near final shape; and advanced preci-sion casting methods that allow the production



Ch. 1—Summary q 25

of complex shapes as a single part, eliminat-ing many machining steps that would other-wise produ ce scrap, mu ch of which w ould bedowngraded or lost.

An example of the benefits of these advancedmanufacturing processes is the production of

the tu rbine d isk for the Pra tt & Whitney F-100 jet engine. When first designed, this 15-poundpart was forged from a 250-pound billet of Astroloy (17 percent cobalt), which resulted in235 pounds of chips containing 40 pounds of cobalt. With isothermal forging, the billetweight is reduced to 126 pounds and the ma-terial used is IN-100 (18.5 percent cobalt) in-stead of Astroloy; the result is 110 pounds of chips containing 20.5 pounds of cobalt—almosta 50 percent saving in cobalt. Futu re improve-ments are expected to reduce chip formationto 35 pounds of material containing less than7 percent cobalt; the result will be a net cobaltsavings of over 80 percent, compared with theoriginal manufacturing process,

Improvements both in recycling and in m an-ufacturing efficiency act to reduce U.S. depen-dence on imports. How ever, the econom ic fac-tors that may impel manufacturers to adoptthem are different. Manufacturing improve-ments are likely to continue because the im-provements result in overall cost savings andperformance benefits, not because they red ucecobalt consumption, per se. Advances in re-

cycling technology are much more dependenton a specific interest in conserving cobalt; theyare likely to occur slowly, if at all, unless priceincreases or supply uncertainties provide in-centives for further development in the reuseof superalloy scrap for critical applications,

SUBSTITUTION

Owing largely to the uncertainty of cobaltsupplies following the 1978-79 disturbances inZaire, the U.S. Government sponsored researchinto the potential to reduce strategic materialrequirements in jet aircraft, Results of labora-tory tests indicate that cobalt content of somesuperalloys currently used in aircraft enginescould be red uced by 50 percent or m ore throughthe use of new alloys, Some steps along thisline were taken by jet engine manufacturers

throu gh the substitution of nickel-based sup er-alloy containing little or no cobalt for cobalt-based superalloys and cobalt nickel-based su-peralloys with high cobalt content. Furthersteps along these lines are more d ifficult, how-ever, The certification of a new alloy for use

in critical aircraft applications is an expensiveand time-consuming process, one that com-panies will not carry out unless the substituteprovides clear performance benefits or unlessfaced with high metals prices or extreme andprolonged un certainty abou t the availability of cobalt.

As with chromium, long-term opportunitiesto d evelop substitutes for cobalt-bearing alloysare enhanced by the development of advancedmaterials, Ceramic cutting tools are already be-ing used in place of high-temperature toolsteels or cemented carbide tool bits that con-tain cobalt. Ceramics and carbon-carbon com-posites have shown some potential for high-temperature applications that now requiresuperalloy. Advanced metallic materials, in-cluding rapidly solidified materials and long-range ordered alloys, also have high-tempera-ture characteristics that may lead to theirfuture app lication in place of conventional co-balt and chromium-bearing superalloys.

Manganese

About half of the manganese consumed in

the p roduction of steel is contained in iron oreand scrap, Since these materials are availabledomestically or from Canada, this supply of manganese is relatively secure from interrup-tion. The remainder of the manganese in steelis provided in the form of manganese ore andferromanganese that the United States mustimport.

PRODUCTION

World manganese production is dominatedby a limited num ber of very large deposits that,because of their large reserves and high man-ganese content, are very economical to oper-ate. The major producers, South Africa, theU. S. S. R., Gabon, Aust ralia, China, and Brazil,accounted for all but 5 percent of world pro-du ction in 1982. In add ition, Mexican prod uc-

38-844 0 - 85 - 2 : QL 3



26 Strategic Materials: Technologies to Reduce U.S. Import Vulnerability

tion accoun ted for 2 percent of total world p ro-duction. Production is concentrated in theU.S.S.R. (4 I percent of 1982 production) andSouth Africa (23 percent).

Domestic Production. —The United States is en-dow ed w ith only relatively small and low-grade

deposits of manganese. Although these depos-its were exploited during World War II, theyare not economically competitive with theworld class deposits now in p rodu ction. Pricesbetween $8 and $35 per long ton unit (equiva-lent to 22.4 pounds of manganese) are esti-mated to be required for domestic deposits tobecome economic. With the current marketprice ranging between $1.45 and $1.75 per longton u nit, it is dou btful that dom estic manganesewill be developed, although some productionof low-grade ferruginous manganese ores (de-fined as ores containing less than 35 percentmanganese) is possible.

Undiscovered dep osits of mangan ese of com-mercial or near-commercial grade m ay exist inthe United States. However, manganese can-not be detected by airborne methods, so ex-ploration must be conducted on the ground,raising the cost of initial reconnaissance. Widedistribution of manganese in rock and soilmakes it d ifficult to d istingu ish traces of man-ganese associated with ore deposits from thegeneral background concentration, reducingthe usefulness of geochemical exploration

methods. If exploration for mangan ese is to beencouraged, improved theories of formationmu st be developed so that prom ising locationsfor deposits can be identified and geochemi-cal and geophysical methods can be concen-trated in these m ore prom ising areas. Given theavailability of manganese at low cost from avariety of suppliers, it is unlikely that privatefirms will conduct research aimed at locatingdomestic manganese deposits since the bene-fits, if any, would occur far in the future.

Diversified Foreign Production.—Increased produc-

tion of manganese at the Groote Eylant minein Australia offers the best opportunity fordiversification aw ay from South Africa. High-grade ore and proximity to ocean transportmake expansion of this deposit relatively easy.

Mexico also could expand its production, butMexican ore is lower in qu ality than th at of themajor producers. Expansion of this depositwould be more costly than expansion of theAustralian deposit because, in addition to thecost of expan ding mine capacity, add itional in-

vestment to increase the capacity of the ore up -grading equipment would be necessary. Pos-sibilities for diversification are also limited inGabon, where a long transportation line thatinclud es an aerial tramw ay limits the potentialto increase the production rate, In Brazil andChina, a large share of manganese productionis dedicated to the current and future needs of their domestic steel industries. Although ex-pansion of manganese production for exportis possible in these countries, it is not curr entlyplanned,

Ocean Prod uction.—Certain areas of the oceanare favorable to the formation of crusts ornodules containing up to 30 percent manga-nese. Manganese contained in these depositsis finely d isseminated th rough the m aterial andnot easily processed into a conventional man-ganese ore. With furth er developm ent of oceanmining technology, the nodules located on theBlake Plateau off the coast of Florida could be-come a new dom estic source of man ganese butcosts of production would be similar to thoseof other domestic ores and much higher thanmany foreign ores. Similarly, manganese could

be recovered as a byp rodu ct of deep ocean min-ing in the Pacific for nodules rich in nickel,copper, and cobalt. However, mining of the Pa-cific nodules appears to be far in the future.

Manganese Processing Capacity .-For its largest

and most important application—as a process-ing and alloying agent in the manufacture of steel—manganese ore must be processed intoferromanganese. As is the case with chromium,the United States has become dependent onforeign processing of manganese ore to meetmu ch of its demand for ferromanganese. Since

the equipment and processes for ferroman-ganese production are similar to those for fer-rochromium (in fact, the facilities are some-times converted from one product to the other,although at a reduction in efficiency), the tech-



Ch. 1—Summary q 27

nical approaches to maintain a domestic proc-essing capacity are also similar. Technologi-cal advances offer little help to the domesticindustry in the immediate future. However, im-proved technology for monitoring and control-ling ferromanganese furnaces could raise the

productivity of domestic facilities to a limiteddegree. Over a longer period, the development,refinement, and adoption of new high-voltageand plasma arc furnaces may give domesticproducers an edge in efficiency over foreignproducers whoand allow themwho do.

do not adopt the technologyto be competitive with those

CONSERVATION

Improvements in steel production technol-ogy pr ovide the best prosp ect for the reductionof manganese import vulnerability. Careful

measurement of sulfur levels and manganeseadditions, resulting in manganese contentsnear the lower level allowed by steel specifica-tions, can result in reductions of manganeseconsumption per ton of steel by about 8 per-cent. External desulfurization, which reducesmanganese requirements, may provide evenmore d ramatic savings and so may u p-to-datesteelmaking techniques such as continuouscasting, which keep to a minimum internal, or“home” scrap that in each cycle through thesteelmaking process contributes to inevitablelosses of manganese in slag.

As shown in table 1-4, 35.6 pounds of man-ganese are used on average to produ ce one tonof steel, 17.8 pounds of which is provided byimported m anganese ore and ferromanganese.Only 13.8 poun ds remain in the steel while theother 21.8 pounds is lost in slag, dust, andwaste. By the year 2000 , the average manga-nese conten t of steel is likely to d ecline slightlyto 12.2 pounds per ton of product, but majorredu ctions are expected in the amount of man-ganese lost. The net result will be a reductionin total manganese consump tion per ton steel

from 35.6 to 24.8 pounds. Even more striking,and more important from a security of supp lyviewp oint, the consumption of imported m an-ganese ore and ferromanganese is estimatedto decline from 17.8 poun ds p er ton of steel to

Table 1.4.—Current and Projected Manganese

Consumption in U.S. Steel Production

(pounds of manganese per ton of steel product)

Current Projected–2000

(1981-82) Expected Best Worst

Inputs:Manganese products:

Manganese ore 1 9 1,2 1,0 1.5Ferromanganese 159 8.3 5 5 1 2 2

T o t a l 17.8 9 5 6 , 5 1 3 , 7Iron and steel products:

I r o n o r e a n d s i n t e r 129 8.5 7.1 10.1Purchased ferrous scrap 5.0 6.8 6.9 66

Total 17,9 15.3 14,0 167

outputs:Retained in steel products 13,8 1 22 1 1 2 1 3 4Losses (slag, dust, waste) 21,8 1 26 9.4 170

Total manganese use 35,6 24 8 2 0 , 6 3 0 4


9.5 pounds per ton, a decline of over 45 per-cent from current levels.

SUBSTITUTION

The bulk of manganese consumption is insteelmaking, and in this application there isno satisfactory alternative, with the exceptionof the use of rare earths in a limited group of app lications that can justify the sharp ly highercost,


PRODUCTION

The Soviet Union and South Africa accountfor over 90 percent of world PGM production,with most of the remainder coming from Can-ada. Prod uction in all other coun tries accountsfor only 1 percent of world production. Cana-dian production results from byproduct recov-ery from copp er-nickel ores and cannot be ex-panded substantially without correspondingincreases in the production of these metals.Since economics do not favor increases in cop-per or nickel production, Canada cannot beconsidered an important d iversification opp or-tunity.

The United States offers the only significantopportunity to affect, even slightly, the domi-




nating role of South Africa and the U.S.S.R. inPGM production. While minor amounts of PGM are obtained as a byproduct from threeU.S. copp er mines an d, in th e past, from p lacerdep osits such as Goodnew s Bay, AK, there areplans under consideration to develop resources

of platinum group metals in th e Stillwater Com-plex in Montana. This deposit could produce175,000 troy ounces of platinum group metalsannually, or between 2 and 3 percent of cur-rent world p rodu ction. This operation is und erevaluation and review, and the decision to goahead w ith development w ill rest on assump -tions of stable or increasing metal prices,

Und iscovered d omestic dep osits of platinumgroup metals are almost certain to exist, mostlikely as placer deposits such as Goodnews Bayand as byproducts of copper-nickel sulfides, Al-though less likely, another major domesticPGM deposit, similar to the Stillwater Com-plex, could exist, Exploration for such a depositwould face problems similar to those describedfor chromium and for cobalt-bearing copper-nickel sulfides. As with those metals, prospectsfor success in exploration for PGMs would beenhanced by improvements in geophysical,geochemical, and drilling technology and byadvances in the understanding of the geologicprocesses that formed PGM deposits,

CONSERVATION

As with manganese, conservation technologyprovides the greatest opportun ity for the redu c-tion of materials import vulnerability in plati-num group metals. Platinum contained in in-dustrial catalysts is already extensivelyrecycled, but the recovery of platinum groupmetals from electronic scrap and from obsoleteautomotive catalytic converters is less exten-sive. There are no major technological barriersto recovery of platinum group metals from ei-ther type of scrap. Instead, the principal bar-riers are in th e collection of scrap from wid elydispersed locations for processing at central

facilities, Scrap from electronic manufactur-ing plants is the easiest to collect, and recyclingoperations are well underway in this area. Ob-solete electronic components are also proc-

essed, but this is hampered by the high laborintensity required to identify and separateplatinum-bearing components. Catalytic con-verters are now beginning to enter the scrapyards in sufficient quantities to interestplatinum recyclers, and a number of firms are

showing interest in processing the convertersto recover the contained platinum group metals.Platinum metal available annually from cata-lytic converters, which was about 115,000 troyounces in 1982, is projected to grow to over800,000 ounces in 1995 (fig. 1-2), Actual re-covery will probably not exceed 500,000 troyounces, since only about 70 percent of obsoletecars and trucks reach automotive dismantleswhere converters may be removed for recy-cling, and some PGM is lost in processing.

It is also possible that new engine designs

may allow the redu ction of pollutants w ithoutthe n eed for catalytic converters. However, thewide-scale adoption of any significantly newautomotive engine is not likely until the nextdecade, and long-term prospects will dependon price and performance factors, not on po-tential savings of platinum group metals.

SUBSTITUTION

Substitution op portu nities for platinum groupmetals are g reatest for electronic compon ents,Gold is a substitute for platinum in electric and

commu nications relays, with substitu tion deci-sions being based on the relative prices of goldand platinum, Silver and palladium alloys maybe used in place of pu re platinum in many ap -plications, although platinum may offer su-perior performance and reliability. Palladium,now used in ceramic capacitors in rapidly in-creasing amounts, may be subject to substitu-tion in 5 to 10 years as technologies usingsilver, nickel, and lead electrodes are im-proved. In catalytic app lications, however, theoutlook for substitution is dim. Unless new de-velopments arising from ad vances in the stud y

of surface science and chemistry lead to newcatalytic systems, the high efficiency and longlifetime of platinum catalysts make them vir-tually irreplaceable.




1500

1000

500

0

Figure 1-2.— PGM Demand vs. Potential Supply From Recycling

—

PGM needed for new vehicle production

PGM available from scrapped vehicles

75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95

Model year

SOURCE Sierra Research

Implementation of Technological Approaches

There are many technological approaches toreducing import vulnerability for each of thefour first-tier strategic materials. These aresummarized in the preceding section. Theyvary in the potential contribution they couldmake to the reduction of vulnerability, in thecost of carrying them ou t, in the period of time

when they are effective, and in the assurancethat they will fulfill their potential. These fac-tors, as well as the interrelationships amongthe app roaches, mean that it is importan t to di-rect and coordinate the implementation of technology toward specific goals, As a result,the management of strategic materials policyis critical to the successful implementation of the var ious approaches. The following sectionsaddress alternatives available to the UnitedStates, both in the general management of materials policy, and in the implementation of the technologies.

Legislative Guidance for Strategic Materials Policy

The 1980 National Materials and MineralsPolicy, Research and Development Act (Pub-lic Law 96-479] provides a basic policy frame-work that could be used to develop and eval-

uate various technological approaches forreducing U.S. import vulnerability. The lawemp hasizes the imp ortance of research and de-velopm ent activities related to all stages of thematerials cycle (from exploration and mineralextraction through recycling and disposal) inadd ressing materials pr oblems, The law app liesto all materials, not just those for which theUnited States is import dependent, but many

of its provisions apply to strategic materials inparticular,

The Critical Materials Act (Public Law 98-373) requires the Administration to establisha Critical Materials Council, reporting to theExecutive Office of the President. The Coun-cil is required, among other things, to preparea critical materials report and assessment, tobe reviewed and updated on a biennial basis,and also to p repare a Federal program plan foradvanced materials, to be annually reviewed.The Council is also to review annual authori-

zation and bud get requests related to Federalmaterial activities, so as to ensu re close coordi-nation of goals and directions of such p rogramswith Council policies.

In addition, several other laws, already inplace, could be employed should Congress



30 ŽStrategic Materials: Technologies to Reduce U.S. Import Vulnerability

wish to encourage private industry to adopttechn ical alternatives to redu ce imp ort vu lner-ability. Title III of the Defense Production Act(DPA) of 1950 authorizes direct Federal sub-sidies, purchase commitments, loan guaran-tees, and other instruments to assu re availabil-

ity of essential defense materials and industrialprocessing capabilities. The main use of TitleIII has been to encourage d omestic produ ctionof strategic materials, especially during the Ko-rean war and its aftermath, but DPA also couldbe used to encourage other private sector ac-tions, such as developm ent of processing tech-nologies and substitute m aterials. Congress, inApril 1984, authorized th e app ropriation of upto $100 million to the Department of Defensefor Title III projects for fiscal years 1985 and1986, and provided new criteria for Presiden-tial review of proposed projects before they are

undertaken. Other measures of potential rele-vance to implementation of these technicalalternatives include Federal stockpiling law(comprehensively amended in 1979 as the Stra-tegic and Critical Materials Stock Piling Revi-sion Act), the Minerals Policy Act of 1970, andthe Stevenson-Wydler Technology InnovationAct of 1980, which emphasized transfer of fed-erally developed technological innovations tothe private sector.

Structure and Information for Strategic Materials Policy

The 1980 materials act required the Execu-tive Office of the President to assume a moreactive role in coordinating and formulatingmaterials policy, beginning with preparationof a materials prog ram p lan to be subm itted toCongress by the President on a one-time basis.The plan, submitted in Ap ril 1982, emp hasizeddomestic production and stockpile issues. Itdid not encompass the full range of technologi-cal issues (including substitution and recycling)emphasized in the 1980 act.

In spite of strong statements of interest in

strategic materials issues, the Administrationhas yet to carry ou t all of the provisions of the1980 act. Specific reports requ ired of the WhiteHouse Office of Science and Technology Pol-icy (OSTP) have not been submitted to Con-

gress, and a Departm ent of Defense report (dueto Congress in late 1981) has not yet receivedAdministration clearance. Although a policy-making structure, based in the Cabinet Coun-cil on Natu ral Resources and the Environm entand the renewed Committee on Materials, was

established by the Administration, there isstrong evidence that materials policymakingprocedures remain relatively uncoordinated,both among agencies and among technologi-cal approaches.

It was the goal of the 1980 act to r equire th ecoordination of agencies over the range of materials technologies. Since this goal has notbeen fulfilled, Congress may wish to considerfurther action to assu re compliance, for exam-ple by establishing sp ecific reporting d ates forthe OSTP and the Depar tment of Defense, andby requiring submission of a revised programplan, with the explicit requirement that theplan includ e evaluation of the role of substitu-tion and conservation technologies in U.S. stra-tegic materials policy.

Another alternative to improve the coordi-nation and direction of Federal strategic ma-terials policy would be to require the Admin-istration to prepare, on a regular basis, amulti-year strategic materials program planthat would establish long-term goals and objectives for materials policy, Such a plan couldbe submitted on a 4-year schedule, reflecting

the long-term goals of each Administration,

Goals, Objectives, and Coordination ofFederal Materials R&D

The Federal Government is the principalsponsor of research related to strategic mate-rials. This research is cond ucted th rough manyagencies in the Government, with the Depart-ments of Defense, Energy, Interior, andCommerce and the National Aeronautics andSpace Administration being major sponsors. Inthe past, this research has succeeded in devel-

oping many of the technological alternativesidentified in this report. How ever, goals of thisresearch are often narrowly directed towardsproblems of specific interest to the sp onsoringagency.




There are three major opportunities for theGovernment to imp rove the m aterials vulner-ability status of the United States through su b-stitution:

1 .

2 .

3 .

by making information about substituteswidely available to consumers, thus pro-moting and sp eeding the adoption of sub-stitute materials;by developing, testing, and, where re-quired, certifying new materials lower inchromium and cobalt content for use ina limited num ber of indu strial app licationsthat account for large fractions of the crit-ical applications for these materials; andby supporting the development of ad-vanced - materials, including ceramics,composites, and unconventional metalliccomp ound s, through basic and ap plied re-

search, education, and the development of design and testing methods appropriatefor the new materials,

Substitution Information Systems

During times of chromium or cobalt supplyinterruptions, interest in substitute materialsrapid ly increases. How ever, the period of timerequired to identify possible substitute mate-rials, test them for particular applications, andmodify production techniques for the substi-tute materials can be quite long. During this

period of adjustment, consumers continue todemand these metals, drawing down the avail-able supp lies, and resulting in high p rices anddepletion of producer and consumer inven-tories. If the shortage is severe, the Governmentmay be forced to allocate sup plies to essentialapplications to the detriment of other indus-tries and consum ers. A system that helps u sersquickly identify and adop t substitutes could re-duce the need for strategic materials, particu-larly in nonessential app lications, thereby free-ing materials from suppliers and in consumerinventories for use in essential applications.

To be useful, a substitution information sys-tem m ust reflect the needs and concerns of in-dustrial consumers, but, because of its impor-tance to the Nation as a whole as a means of reducing materials supply vulnerability, the

Government has a major interest in establish-ing it. The system w ould describe current u sesof strategic materials, identify the promisingalternative materials, and maintain informa-tion on the performance of the substitutes andother information users need to determine how

to adopt the substitutes.Although supported by the Government, ma-

jor elements of the system could be cond uctedby private sector participants (materials andtesting professional societies, trade associa-tions, universities, and individual industries)under Government-established guidelines,

Commercialization of Alternative Alloys

During World War II, the Government estab-lished a system of National Emergency Steelsfor use by industry when shortages of raw

materials made it impossible to meet demandfor the alloys then in use. Now, laboratory re-search has identified a number of promisingalloys that could become substitutes for thehigh chromium and cobalt alloys in u se today.These alloys are not read y for commercial usebecause they require further testing in the lab-oratory, evaluation of production techniques,and evaluation of performance in actual oper-ating cond itions, Since these testing and evalu-ation p rocedures m ay take a nu mber of yearsand several million dollars to complete, thealloys are not “on the shelf, ” ready to be u sed

in times of emergency. These alloys do holdpromise for reducing the need for chromiumand cobalt in critical applications, however.The Bureau of Mines, the National Labora-tories of the Departm ent of Energy, NASA, theDefense Department, and the National Bureauof Standards could direct efforts toward testingand evaluation of a limited number of alterna-tive alloys where the potential for strategic ma-terial substitution is greatest. To be effective,such an effort would need to have the partici-pation of industry to identify the alternativealloys to be evaluated. This approach is mostpromising for a number of applications thatnow use stainless steel. Alternative alloys, lowin cobalt, are also possible in superalloy ap-plications, but the high cost of testing and qual-ification could push costs of a comprehensive



program to d evelop alternatives to the d ozensof cobalt-containing superalloy now in useinto the hundreds of millions of dollars.

Encourage Development of Advanced Materials

Ceramics, composites, and unconventionalmetallic materials have pr operties that suggestthey might serve as substitutes for conventionalmaterials that require strategic metals. Basicand applied research is still needed to over-come un desirable characteristics present in thematerials and difficulties in the processing of raw materials and the manu facture of compo-nents. In addition, design methodologies foruse of the materials must be developed to em-phasize their advantages and minimize theirdisadvantages. Finally, up-to-date knowledgeof the materials and the associated design andmanufacturing technologies must be dissemi-nated to potential users, Three separate activ-ities could further these efforts:

1. Coordinate Federal Advanced Materials

R&D: Research and development on ad-vanced materials is conducted in manyparts of the Government, but coordinationis achieved largely through personal con-tacts and professional societies. Programsare developed in response to individualagency objectives, resulting in fragmenta-tion and overlap of research efforts, Al-though it wou ld be detrimental to attemp t

to control rigidly all research in ad vancedmaterials, increased interagency coordina-tion tow ard common goals could improvethe effectiveness of Government researchand speed advances in understandingthese new materials. Coordination of Gov-ernmen t research is a responsibility of theexecutive branch, but Congress could fur-ther the coordination of Federal researchon ad vanced materials through oversightof the progress of the Administration inpreparing its report on the status of Gov-ernment R&D in advanced materials. Sucha report could also raise the visibility of Federal work on advanced materials, re-sulting in improved coordination with pri-vate industry and academic research.


2 .

3.

Improve Understanding of Advanced Ma-

terials: Unlike direct substitutes, whichmay be used in place of current materialswith little mod ification of designs or m an-ufacturing processes, advanced materialswill require designs and processes to be

developed around their specific prop erties.This means that academic institutions,professional organizations, and individu alfirms need to develop programs to trainengineers and designers in the properselection and use of advanced materials.The Federal Government can assist in de-veloping these education programs by pro-viding grants for the hiring of new faculty,acquisition of new laboratory equipment,and design of curricula emphasizing ad-vanced materials.Develop Testing and Certification Proce-

dures for Advanced Materials: Reliabilityand predictability are essential for anyengineering material. Until a large bodyof information on the properties of ad-vanced materials is developed in the lab-oratory and in the field, industry will notadopt the materials. The same is true forany new material; but in the case of ad-vanced m aterials the barriers are likely tobe greater and the delays longer becausetesting methods and certification proce-dures that reflect the special qualities of the materials, and the new design and

manufacturing processes that will developaround them, do not yet exist. These bar-riers could be lessened if Governm ent, in-du stry, and academ ia focus on developingdata on the prop erties of advanced m ate-rials, establish appropriate testing meth-ods, and direct attention to certificationprocedures to ensure that advanced ma-terials are not restricted from some ap-plications unnecessarily. One approachcould be the establishment of a nonprofitcenter associated with a testing society,professional organ ization, or academic in-stitution under partial Federal sponsorshipfor the purpose of overcoming barriers tothe use of advanced materials resultingfrom lack of data as to material properties.




Conservation Approaches

Conservation offers a number of ways to re-duce U.S. dependence on foreign sources of supply of chromium, cobalt, manganese, andplatinum grou p m etals. In many cases, conser-vation opportunities are already being imple-mented, and others are under evaluation by pri-vate industry. In the case of manganese, it islikely that improvements in steelmaking tech-nology w ill continue so that U.S. requirementsfor imported manganese will decline sharply.Recycling of catalytic converters is just begin-ning, and several major firms are consideringopportunities to expand into this area. Re-covery of chromium and cobalt from steelmak-ing, industrial, and chemical waste has begunto rise in the past few years, driven in part byFederal laws and standards on air and waterquality and disposal of waste. Other oppor-tunities are less likely to go forward under nor-mal conditions. Superalloy scrap from obsoleteaircraft compon ents, a significant and reliablesource of cobalt and chromium, is not likelyto be used in the p rodu ction of new su peralloysso long as low-priced metal from foreign sour cesmakes it economically u nattractive to invest inthe development of new recycling systems.

The promise of conservation of strategicmaterials—even from those practices alreadyunderway—is not assured. The strategic ma-terials recycling industry is new, and our

understanding of it is incomplete. Three ap-proaches to improve the prospects for conser-vation of strategic materials are discussedbelow.

Update Information on the Recycling ofStrategic Materials

Data on the generation and flow of scrap con-taining strategic materials is incomplete andout of date. The United States is poorly pre-pared to utilize scrap as a source of strategicmaterials in times of emergency. With more

comp lete and detailed information, the Govern-ment could develop more effective R&D pro-grams to enhance scrap recovery. Congresscould direct the Bureau of Mines to conduct,and update on a regular basis, surveys of the

generation and disposal of scrap containingchromium, cobalt, manganese, and platinumgroup metals. Information from these surveyswou ld be useful in plann ing Government R&Defforts, in updating requirements for the na-tional defense stockpile, and in identifying in-

vestment opportunities for private businesses.Identify Specific Government Actions to Support

Recycling of Strategic Materials

In recent years, a number of Federal actionsaffecting air and water quality and waste dis-posal have encouraged increased recycling.The poten tial effects of Government actions onrecycling are beginning to receive considera-tion by policy makers, For example, Govern-ment-established freight rates on scrap—pre-viously set at a level higher than the rates forshipping raw material—have been reduced.

The 1980 National Materials and MineralsPolicy, Research and Development Act di-rected the Administration to assess the effectsof Federal policies that affect all stages of thematerials cycle, including recycling and dis-posal. A number of recycling activities are newand their econom ics have not been tested com-mercially. In some cases these activities maybe affected substantially by Government pol-icies. These recycling activities include the re-covery of PGMs from catalytic converters, re-covery of chromium and cobalt from indu strial

and chemical wastes, recovery of cobalt fromspent hydroprocessing catalysts, and recoveryof cobalt and other m etals from cemented car-bide scrap. Because these recycling industriesare small or nonexistent, the effects of Govern-ment actions on the recovery of strategic ma-terials from waste or scrap is generally ignored,Yet these sources, combined, could be impor-tant supplements to imports of chromium, co-balt, and platinum.

Congress could improve the outlook for con-servation of strategic materials by requesting

that the Administration identify opportunitiesto p romote the recycling of strategic materials,identify barriers to new or increased recycling,and recommend to Congress ways to structuretaxation, procurement, environmental, and



—.—.


other policies to encourage increased recycl-ing. Such a study could be conducted by theDepartment of Commerce as part of its seriesof evaluations of strategic materials issues andU.S. industries.

Develop Recycling Technology for Superalloy ScrapScrap from processing of superalloys and

from obsolete aircraft engine componentscould p rovide a secure source of material con-taining cobalt and chromium metal, At present,only a portion of this sup ply is reused in sup er-alloy. The remainder is either downgraded toless demanding uses (often completely wast-ing the cobalt content), exported for use inother countries, or disposed of as waste. Sev-eral technical processes to recover individualmetals from superalloys have been developed,but so far have only been tested in the lab-oratory.

The capacity of the Un ited States to respondto cobalt sup ply d isruptions could be enh a-needif the Government were to put “on-the-shelf”one or more of the new superalloy recyclingtechnologies by scaling the process up to ademonstration plant. Although relatively costly,

on th e order of $10 million, such a p lant couldmake available the technology to recover high-quality cobalt from nearly all forms of super-alloy scrap. This source was estimated to con-tain 4 million pounds of cobalt in the year 1980,making it equivalent to several opportunitiesfor domestic mineral production, Estimates of the cost of metals prod uced from these recycl-ing systems are proprietary, but are said to bein the ra nge of $15 to $25 per p oun d of cobalt,which is in the same price range as domesticcobalt production.



CHAPTER 2

An Introduction toMaterials Import Vulnerability



Contents

Page

The Importance of Nonfuel Minerals Imports . . . . . . . . . . . . . . . . . . . .......42Changes in Amount of Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Definition and Selection of Strategic Materials . . . . . . . . . . . . . . . . . . . . . . . . . 45criticality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Vulnerability .,.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Selecting Strategic Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Overview of Selected Strategic Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Chromium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Cobalt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Manganese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Platinum Group Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

A Perspective on Strategic Materials Selection . . . . . . . . . . . . . . . . . . . . . . . . . 57

Table

2-1.

2-2.

2-3.

2-4.2-5.

2-6.

2-7.

2-8.

2-9,

2-1o.

2-11.

2-12.

List of Tables

No. Page

U.S. Dependence, Selected Minerals, 1950-82. . . . . . . . . . . . . . . . . . . . . 42Materials To Rescreened . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Materials for Which the United States is Self-Sufficientor a Net Exporter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

U.S. Strategic Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52U.S. Consumption of Chromium, 1978-82 . . . . . . . . . . . . . . . . . . . . . . . . 53Sources of U.S. Chromium Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54U.S. Consumption of Cobalt, 1978-82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Sources of U.S. Cobalt Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55U.S. Consumption of Manganese, 1978-82 . . . . . . . . . . . . . . . . . . . . . . . 56Sources of U.S. Manganese Imports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56U.S. Consumption of Platinum Group Metals, 1978-82 . . . . . . . . . . . . . 56Sources of U.S. Platinum Group Metal Imports . . . . . . . . . . . . . . . . . . . 57

List of Figures

Figure No. Page

2-1. Net Import Reliance As a Percent of Consumption, 1982 . . . . . . . . . . 43

2-2. U.S. Imports of Chromate Ore and Chromium Alloys . . . . . . . . . . . . . . 442-3. U.S. Imports of Manganese Ore and

Manganese Alloys and Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44



CHAPTER 2

An Introduction to Materials Import Vulnerability

The United States, despite its wealth of re-sources, is a substantial importer of materialsfor industry. To some observers, the Nation’sreliance on these imports constitutes a dan-gerous dependency, threatening a “materialscrisis” more devastating than the recent energycrisis, Others see the U.S. position as quitemanageable, though not without dangers anddifficulties.

U.S. reliance on foreign sources for a num-ber of important nonfuel minerals is not newnor, in itself, a cause for alarm. What reallymatters is whether import dependence makesthe United States vulnerable to a cutoff of sup -ply and whether that cutoff could have very

damaging effects. In the past few years, thesepossibilities have raised a wave of concern. Un-doubtedly, one factor in the crescendo of con-cern was the success of the OPEC cartel in con-trolling oil production during the 1970s, raisingthe world oil price to unh eard of heights, and —at least temporarily—reducing oil exports to theUnited States for political reasons.

Today, many people believe that the UnitedStates is vulnerable to disruptions at least asserious as the oil crisis because of the nature,level, and sources of U.S. materials imports.

Some fear that worse times are in store: theyare persuad ed that the Soviet Union is condu ct-ing a “resource war ” against the Un ited Statesand its allies, with the threat of shutting off sup-plies of minerals from central and southernAfrica that are vital to U.S. national defenseand basic industries.

Others familiar with minerals issues believe,on the contrary, that the interdependence pol-icy for minerals supply has served the Nationwell over the years and that the costs of self-sufficiency would be extremely high. Thosewho take this view concede that the sup ply of some imported m aterials could be interrupted,

but count on flexible responses of the marketeconomy—e.g., alternate suppliers, substitu-tions in use, and shifts from less to more es-sential uses—to compensate tolerably well forsupply cutoffs or dislocating price increases.

There is some common grou nd in the opp os-ing views. Both sides favor stockpiling im-ported materials that are vital to national de-fense and essential supp orting industries as aninsurance against supply interruptions. Bothagree that, for at least a few imported minerals,continuity of supply is a serious question de-serving a carefully considered government re-sponse.

The short list of these generally agreed u pon“strategic” materials includes chromium, co-balt, mangan ese, and the platinum grou p m etals(which comprise platinum , palladium , rhodium ,iridium, osmium, and ruthenium). All of thefour have essential uses, including militaryuses, for which there are no readily availablesubstitutes—or in some cases, no substituteseven in sight, For all of them, prod uction fromdomestic mines is negligible at best. Instead,these minerals are imported, mainly from avery few countries in the politically unstableregion of central and southern Africa, an areathat, along with the Soviet Union, holds mostof the world’s known resources of these impor-tant minerals.

Thus, for a few specific materials at least,most observers agree that the United States isin a vulnerable position. To shed light on thedimensions of this vulnerability, this chapterlooks at the significance of imported materialsin general to the United States and its allies anddiscusses those factors that led to the selectionof chrom ium , cobalt, manganese, and the plat-inum group metals for in-depth assessment inthis report.

41



42 Ž Strategic Materials: Technologies to Reduce U.S. Import Vulnerability

The Importance of Nonfuel Minerals Imports

In terms of dollar value in world trade, U.S.reliance on imports of nonfuel minerals is mod-erate. The United States is still a leading worldminerals producer as well as the world’s largest

minerals consum er. In 1981, as the d ollar roseagainst other currencies, U.S. imports of non-fuel minerals (raw and processed) amountedto $17.6 billion, expor ts w ere $28.8 billion, andthus net imports were $11.2 billion, a moder-ate sum w hen compared to U.S. net energy im-ports, which were $75 billion.1

The overall figures, however, aggregate agreat many unlike materials, from scrap steelto gem and industrial diamonds to fertilizers.It is particular kinds of minerals—materialsneeded for basic indu stry and v ital ingredients

for military hardware—that are the center of concern, Figure 2-1 shows the extent of U.S.reliance on imports of 34 important nonfuelminerals and metals as of 1980. Nearly all of the manganese, bauxite, cobalt, tantalum, andchromium used in the United States is minedin foreign countries. Imports of other impor-tant minerals—the platinum metals group, as-bestos, tin, nickel, zinc, cadmium, and tung-sten—range from 85 to 50 percent of U.S.consumption. 2 Even iron ore, once suppliedwholly by domestic mines, now comes in sub-stantial amounts from foreign mines. As table

2-1 shows, import dependence was high 30years ago for much the same list of mineralsthat is the focus of concern today: In 1952, for-eign mines provided 70 to 80 percent of the Na-tion’s bauxite, manganese, and tungsten, and90 to 100 percent of its platinum, cobalt, nickel,and chromium. a

I Unless otherwise noted, data on production, consumption,and imports of nonfuel minerals comes from the Bureau of Mines, Department of the Interior. Energy data was providedby the Department of Energy.

“’Consumption” here means apparent consumption, which

is domestic primary production, plus recycled materials and netimports, adjusted to reflect releases from or ad ditions to indu s-try or government stocks.

3The President’s Materials Policy Commission, Resources forFreedom (Washington, DC: U.S. Government Printing Office,1952), vol. 1, pp. 6 and 157.

Table 2-1.–U.S. Dependence, Selected Minerals, 1950-82(net imports as percent of apparent consumption)

1950 1970 1979 1980 1981 1982

Bauxite a . . . . . . . . . . . 71 80 93 94 94 96Chromium . . . . . . . . . 100 100 90 91 90 85Cobalt . . . . . . . . . . . . . 92 96 94 93 92 92Copper . . . . . . . . . . . . 35 8 13 16 6 1Iron ore. . . . . . . . . . . . 5 30 25 25 22 34Lead . . . . . . . . . . . . . . 59 40 5 O b 1 3Manganese . . . . . . . . 77 94 98 98 99 99Nickel . . . . . . . . . . . . . 99 91 75 76 75 76Platinum . . . . . . . . . . . 91 98 89 88 84 80Tungsten . . . . . . . . . . 80 40 58 53 50 46Zinc . . . . . . . . . . . . . . . 37 60 63 60 64 58a1979-82, Includes aluminabNet exportNOTE: Net imports = imports exports + adjustments for government and in-

dustry stock changes

SOURCE 1950, 1970: Report of Nat/orra/ CornrrJIssIon on Material Policy, June1973, pp 2-23 1979-82: U S Deptiment of the Interim Bureau of Mines,M/nera/ Comrnod/ty Summaries 1984

It is worth noting the modest dollar value of many of the materials for which the UnitedStates is most imp ort dep endent. For example,the en tire year ’s bill for 1981 imp orts of cobalt,chromium, and manganese was between $230million and $300 million apiece—equivalent to1½ days (at most) of oil imports. The fact thatthe quantities involved are relatively small andtotal costs low does not imply that imports of these materials are insignificant; some are vi-tal. It does imp ly that even a shar p rise in pricefor the materials might have n o great effect on

the economy as a whole (a point to keep inmind later, in th e d iscussion of possible cartelcontrol). It also indicates that stockpiling thesematerials, as a way of assuring a reliable sup-ply, can be practical and relatively inexpensive.

Changes in Amount of Imports

U.S. minerals imports increased from 1950to the 1980s, but at a m odest p ace overall, andnot uniformly for all minerals, (Import depen-den ce as a percentage of U.S. consump tion forplatinum, nickel, and chromium declined,mostly because of recycling.) In general, thegradu ally rising flow of imp orted m inerals intothe United States reflects lower prices of for-eign materials, often because the ores being



Ch. 2—An Introduction to Materials Import Vulnerability q 4 3

Figure 2-1.— Net Import Reliance As a Percent of Consumption, 1982

Columbium

Industrial diamond stones

Natural graphite

Mica sheet

Strontium

Manganese

Bauxite and aluminum

Cobalt

Tantalum

Chromium

Fluorspar

PGM

Nickel

Asbestos

Tin

Ilmenite

Potash

Cadmium

Rutile

Gallium

Silver

Zinc

Selerium

Tungsten

Antimony

Mercury

Gold

Iron ore

Iron and steel

Silicon

Vanadium

Titanium sponge

Copper

Aluminum

1

, 1I

I Ik

r JI Ir 1, 1

I

Major foreign sources, 1978-81and percent supplied, 1982

Brazil (73) Canada (6) Thailand (6)

S. Africa (61) Zaire (14) Bel-Lux (8) UK (6)

Mexico (60) Korea (12) Madagascar (5) China (5)

India (83) Brazil (11) Madagascar (4)

Mexico (99)

Ore: Gabon (32) S. Africa (24) Australia (18) Brazil (15)Ferro Mn: S Africa (42) France (25) Mexico (7)Jamaica (40) Guinea 28 Suriname (13)

6Alumina: Australia (7 ) Jamaica (15) Suriname (8)

Zaire (38) Zambia (13) Bel-Lux (11) Finland (6)

Thailand (38) Canada (11) Malaysia (8) Brazil (7)

Chromite: S. Africa (44) USSR (18) Philippines (17)FeCr: S. Africa (71) Yugoslavia (11) Zimbabwe (6) Brazil (?)

Mexico (60) S. Africa (30) Italy (4) Spain (3)

S. Africa (56) USSR (16) UK (11)

Canada (44) Norway (11) Botswana (9) Australia (8)

Canada (97) S. Africa (3)

Malaysia (39) Thailand (21) Bolivia (17) Indonesia (?)Australia (59) Canada (34) S. Africa (6)

Canada (94) Israel (3)

Canada (27) Australia (18) Mexico (11) Korea (9)

Australia (77) S. Africa (8) Siera Leone (7)

Switzerland (65) Canada (12) Germany (10) China (?)

Canada (37) Mexico (24) Peru (23) UK (5)

Ore & core: Canada (59) Peru (17) Mexico (8)Metal: Canada (51) Spain (8) Mexico (6) Australia (?)

Canada (44) Japan (17) Germany (8) UK (8)

Canada (21) Bolivia (19) China (14) Thailand (7)

Metal: Bolivia (38) China (34) Mexico (10) Belo Lux (7)Ore & core: Bolivia (36) Canada (19) Mexico (19) Chile (8)Oxide: S. Africa (44) China (15) France (14) Bolivia (11)Spain (34) Japan (21) Italy (12) Algeria (10)

Canada (52) USSR (20) Switzerland (17)

Canada (64) Venezuela (16) Brazil (9) Liberia (?)

Europe (37) Japan (34) Canada (14)

Canada (25) Norway (22) Brazil (14) S. Africa (?)

S. Africa (58) China(10) Canada (8)

Japan (81) China (10) USSR (8) UK (1)

Chile (32) Canada (22) Peru (14) Zambia (11)

II I Canada (62) Ghana (11) Norway (4) Japan (4)u J

NOTES Net Import reliance IS figured as percent of apparent consumption, except for rutlle, for which net import reliance IS figured as percent of reported consumptionNet Imports = Import exports + adjustments for government and industry stock changesApparent consumption = U S primary and secondary production + net imports

SOURCE U S Department of the Intenor, Bureau of Mines



44 q Strategic Materials: Technologies to Reduce U.S. Import Vulnerability .

mined abroad are richer, although other fac-tors such as lower labor costs or governmentsubsidies may also be important. The U.S.minerals economy is managed, on the whole,by a great man y private bu sinesses looking forthe best deal they can get.

Changes in Use of Imports

While nonfuel minerals imports of the UnitedStates have slowly risen, significant changesin the uses of imports have taken place. Growthhas occurred in selective dem and for specialtysteels using chromium, for high-strength, high-temperature superalloy using cobalt and chro-mium, and for cobalt catalysts. Also, in the 10years from 1970 to 1980, annual consumptionof cobalt for sup eralloy (wh ich are particularlyimportant for aerospace applications, military

and civilian) rough ly tripled, rising from about2 million to over 6 million pounds. Use of co-balt in catalysts quadrupled. Platinum groupconsumption jumped from 1.4 million troyounces in 1970 to 2,2 million in 1980, of wh ichmore than 700,000 troy ounces went for cata-lytic converters to control pollution from au to-mobile exhausts. Use of platinu m a s a catalystin petroleum refining has also grown, risingfrom less than 40,000 troy ounces in 1960 to171,000 in 1980. In the severe w orldwide 1981-83 recession, U.S. consu mp tion of all these me-tals declined, but recovery is now in evidence.

Changes in Form of Imports

Nonfuel mineral imports are no longer mostlyin the form of raw ores. Instead, minerals-prod ucing countries like South Africa are nowtaking advantage of their lower wages, prox-imity to raw materials, cheaper energy, andmodern new processing facilities, to exportprocessed materials such as ferroalloys 4 ratherthan chromite and manganese ores, Figures 2-2and 2-3 show how rapid this change to imp or-tation of ferroalloys has been. The United

States now imports 35 to 50 percent of its chro-mium in ferroalloy form, compared with 8 to12 percent a d ecade ago. Ferromangan ese andrefined manganese metal now account for 60

4Alloys of iron and other elements, used as raw material inthe production of steel; e.g., ferromanganese and ferrochromium.

Figure 2-2.— U.S. Imports of Chromite Ore andChromium Alloysa

600

IYears

aTOn~ of contained chromium.

SOURCE: U.S. Bureau of Mines data.

Figure 2-3.—U.S. Imports of Manganese Ore and

Manganese Alloys and Metalsa

1969 1971 1973 1975 1977 1979 1981

YearsaTon~ of contained manganese.

SOURCE: U S Department of the Interior, Bureau of Mines data

to 75 percent of manganese imp orts; at the be-ginning of the 1970s they amou nted to only 20percent of the total. As part of the same proc-

ess, the domestic ferroalloy industry hasshrunk remarkably, from production levels of 2.6 million to 2.8 million tons in the peak yearsof 1965 to 1970, to 1.5 million tons in 1981 andan estimated 800,000 tons in the recession yearof 1982.




This has led to concern that if international Similarly, if a major high-grade deposit of chro-trade were restricted or disrupted, it might be mium or manganese were discovered, wedifficult to replace lost supplies of ferroalloys might not have the p rodu ction capacity to p ro-with imp orts of chromium or mangan ese ores du ce ferroalloys u ntil facilities were expanded ,from other sources, because of the lack of U.S. which could take several years.facilities to process the ore into ferroalloys.

Definition and Selection of Strategic

One of the greatest difficulties in assessingimport vulnerability lies in defining what ma-terials are strategic. There is no fixed, univer-sally accepted definition of the term “strate-gic material, ” Much depends on the purposeof the definition. For purposes of a nationalstockpilers present U.S. law defines “strategicand critical materials” in the context of ahypothetical, complete cutoff of foreign sup-plies during a 3-year national emergency, TheStrategic and Critical Materials Stock PilingRevision Act of 1979 (Public Law 96-41) says:

The term “strategic and critical materials”means materials that (A) would be needed tosup ply the military, industrial, and essentialcivilian n eeds of the United States du ring anational emergency, and (B) are not found orprod uced in th e United States in su fficientquantities to meet such need. The term “na-tional emergency” means a general declarationof emergency with respect to the national de-fense made by the President or by the Congress.In the context of broader materials policy,

former Secretary of the Interior James B. Wattgave the term “strategic” a more elastic mean-ing. In 1981 testimony before the House Sub-committee on Energy and Mineral Resources,he said:

It is not my intention to limit the word “stra-tegic” to its former definition of mineralswholly or substantially from foreign sources.We must acknowledge, as an element of min-

5Current stockpile planning is based on the military, indus-trial, and essential civilian requirements of the first 3 years of a major conflict, assuming that austerity measures are taken tosustain defense production.

erals policy, that

Materials

all minerals are strategicallyimportant in a complex industrial society, B

By this definition, however, every elementof production—land, energy, labor, capital,technology—is also essential and therefore stra-tegic, and the term becomes so broad as to loseany practical meaning. Moreover, a definition

of strategic materials as all those that are“wh olly or substantially from foreign sou rces”is not widely accepted, First, it leaves out theelement of critical needs for particular mate-rials. Then, it seems automatically to equateimport dependence with vulnerability. Manymaterials analysts do not accept this equationas a guide to policy decisions.7 Moreover, itruns counter to a major shared conclusion of the materials commissions that have reportedto three American Presidents over the past 30years; that is, that the Nation should seek ma-terials wherever they may be found, at the least

cost and consistent with national security andthe welfare of friendly nations,

8U . S. Congress, Senate Committee on Energy and Natural Re-sources, Subcommittee on Energy and Mineral Resources, Hear-ings on Strategic Minerals and Materials Policy, 97th Cong., 1stsess., Apr. 1, 1981, p. 4.

7See, for example, Congressional Research Service, A Congres-

sional Handbook on U.S. Materials Imp ort Dependency/ Vul-nerability, Report to the Subcommittee on Economic Stabiliza-tion, Committee on Banking, Finance, and Urban Affairs, Houseof Representat ives, 97th Cong., 1st sess., September 1981, p. 7,

p. 341 ff; Hans Landsberg and John E. Tilton, “Nonfuel Min-erals , ” in Curren t Issues in Na t u r a i Resource Policy, Paul R. Por t -

ney with Ruth B. Haas (eds . ) [Baltimore: The Johns HopkinsUniversity Press, 1982); Robert Legvold, “The Strategic Impli-cations of the Soviet Union’s Nonfuel Minerals Policy, ” paperprepared for the School of Advanced International Studies, TheJohns Hopkins University, May 1981.




In its 1981 Preliminary Assessment of stra-tegic metals, the Materials Forum of the UnitedKingd om d iscussed th e term “strategic” in thisway:8

The term “strategic minerals” has trad ition-ally been used in the United Kingdom to refer

to those minerals which are vital to the nationaldefense and yet h ave to be procured entirelyor in large part from foreign sources. However,in this country , “strategic” no longer has amere d efense connotation wh en attached tominerals; it has come to have a w ider mean-ing, somewhat obscure, and A. A. Archer of the Institute of Geological Sciences in Londonhas recently shown how this can be clarified.

He believes it is useful to distinguish som eminerals from others by disengaging two mainstrands. One is, that some minerals are moreimportant, vital, essential or critical than othersbecause they make a demonstrably greater con-tribution to th e national well-being, so that in-terrup tion or cessation of sup plies, from what-ever source, would have graver consequences.This can be described as the degree of “crit-icality” of a mineral. The other strand is the“vulnerability y“ of supplies to interruption;some minerals have sources which may be

judged to be more vulnerable than others. Al-though the concept of vulnerability is mainlylinked with imports, the possibility of the dis-ruption of domestic supply cannot be entirelyoverlooked.

The concepts set forth above are used in this

report as the basis for a definition and selec-tion of strategic materials,

Not surprisingly, both the selection of criteriaand the screening of materials against the cri-teria involve a good deal of qualitative judg-ment. OTA’s assessment uses quantitativemeasures as much as possible. Also, it buildson th e earlier efforts of others to d efine and liststrategic materials. (See app. A.) In the end,however, any list of strategic materials mustreflect the judgment of its authors.

— . — —8The Materials Forum, Strategic Metals and the United King-

dom: A Preliminary Assessment, published by the Institution of Mechanical Engineers, July 1981, p. 3.

Criticality

The criticality of materials has to do withhow they are used . Three main factors are partof the concept:

• Essential use for national defense.q Essential use for industry.q Lack of suitable substitutes.

Essential use for national defense means that,without the material, the Nation’s capacity todefend itself could be seriously comp romised.Examp les of material uses tha t are vital to na-tional defense are cobalt in superalloy for jetengine turbine blades and discs, where resis-tance to heat under conditions of high stressis necessary; or chromium for jet engines, towithstand hot corrosion and oxidation; or themanganese used industrywide in steelmaking

to eliminate faults in steel that arise from sulfurcontent.

Essential use for industry is another main fac-tor. Use of the materials must fill such an im-portant need that without it, industries that arebasic to the Nation’s economic well-being andto military production could be crippled.

Materials vital to na tional d efense are likelyto be essential for industry, as well, in the sameor other applications, Industrial machinery isa prime example. The machine tools that shape,stamp, cut, and drill all metal goods, military

and civilian, are made of manganese-bearingsteel. The best bind er for carbide cutting toolsand drill bits is cobalt, Another example is inthe aerospace indu stry, where jet airplanes forcivilian use have much the same material re-quirements as do military planes.

Industrial uses for some critical materialscover a broad spectrum, ranging from virtu-ally indispensable to nonimportant. Chromiumis an example: stainless steel cannot be madewithout it. Of the hundreds of industrial usesfor stainless steel, some—e.g., automobile bum-

pers or hub-caps—are easily replaceable; forothers—e.g., corrosion-resistant pipes in oilrefineries—nothing else now available servesas w ell.



Ch. 2—An Introduction to Materials Import Vulnerability q 4 7 ——-

f

Photo credit Arner/can Petro/eurn /nst/tufe and Exxon CorLJ

Petroleum refiners are major consumers of strategic materials in steel, stainless steel, and processing catalysts

Closely related to the concept of essential use

is the lack of suitable substitutes. This impliesthat substitutes, if available at all, either costmuch more or involve important sacrifices of prop erties or performance. In a few cases (e.g.,chromium for corrosion resistance) there maybe no r eal alternative at present levels of tech-nology in some critical industrial and defenseapplications.

One aspect of substitution is simply the re-placement of one m aterial for another—nickelfor cobalt, for example, in some superalloys.Some of these substitutions replace one criti-

cal metal with another. Of obviously greatervalue is the replacement of a scarce materialwith an abundant one—advanced ceramics forinstance, may be a long-term replacement formetal superalloys.

The economic dependence of the Nation on

particular materials is sometimes mentionedas a factor in criticality. One of the conven-tional measures of economic importance—thedollar value of the material consumed or im-ported per year—is not a useful criterion forcritical function. Several materials that haveessential uses but no substitutes readily avail-able are quite low in d ollar value; for examp le,net imports of cobalt, chromium, and manga-nese each ran about $230 million to $300 mil-lion in 1981–a drop in the bucket in a $3trillion-per-year economy. Yet even a partialloss of supplies of these materials could haveserious effects on production, jobs, and the sur-vival of business firms in the many industrieswhere their uses are essential (e. g., steel, aero-space, and automotive industries).



48 • Strategic Materials: Technologies to Reduce U.S. Import Vulnerability

Exactly how much the economy as a wholewould suffer from a sudden drop in the sup-ply of specific critical materials is hard to cal-culate. Cranking figures on supply loss throughan economic input-output model may appearto be systematic and objective, But such models

can produce highly unrealistic results if theymake no allowance for compensatory movesby users of the material in question.9 Studiesof chromium and cobalt shortages are worthnoting at this point.

The National Materials Advisory Board(NMAB) (of the Nationa l Academ ies of Scienceand Engineering) in its 1978 study of chro-mium conservation opportunities, concludedthat about one-third of U.S. chromium usecould be quite promptly replaced in an emer-gency. Without specifying any dollar figures,

the study observed that replacing a chromiumshortfall of this magnitude would “not haveserious economic consequences on industrialdislocations.” 10 The study also refrained fromestimating the economic costs of a greatershortfall cutting into uses which could not bequickly replaced; obviously the effects of sucha shortfall would be greater.

In its 1982 study of cobalt, the CongressionalBudget Office reported cost estimates of a co-balt supply cutoff that took into account thebuffering effects of private stocks, materialssubstitution, scrap recovery, and alternativesuppliers.11 The Departmen t of the Interior pro-vided a range of cost estimates, depending onvarious political assessments. The most ex-treme case (considered highly imp robable) in-volved a 2-year shortfall (in 1985-86) from bothZaire and Zambia. In this extreme case, U.S.cobalt consumption was expected to drop 20percent in 1985 and 35 percent in 1986—butwith little loss in economic outp ut, m ainly be-cause of substitution. Extra costs to the econ-

‘Hans H. Landsberg, “Minerals in the Eighties: Issues and Pol-icies: An Exploratory Survey, ” paper prepared for the Oak Ridge.National Laboratory, Oak Ridge, TN, 1982, pp. 30-31.

IONationa] Materials Advisory Board, Contingency Plans forChromium Utilization, NMAB-335 (Washington, DC: NationalAcademy of Sciences, 1978].

IICongressiona] Budget Office, Cobalt: Policy Options for a Stra-tegic M;neral (Washington, DC: U.S. Government Printing Of-fice, 1982), pp. 21-24.

omy (in term s of higher p rices) were estimatedas $1 billion for 1985 and $1.8 billion for 1986(in 1980 dollars). A Commerce Departmentstudy, which assumed a 75-percent reductionin output in Zaire and Zambia in 1985, cameto similar conclusions: 23 percent lower cobalt

consumption, forced substitution, little lost out-put, Extra cost to the economy of high cobaltprices was estimated at $2.5 billion—assum inga cobalt price of $112 per pound (more thantwice as high as the top price during the co-balt price spike of 1978-79, and over 20 timesthe 1982 price). The inflationary pressure of this price increase was reckoned as no morethan 0.1 percent in the economy as a whole,

Analysis of the effect of material shortfallson the economy as a wh ole is at an early, un re-fined stage.12 In addition, because these eco-

nomic effects are a reflection of the essentialnature of the material’s uses and the lack of substitutes, it seems needlessly comp lex to add“econom ic effects” as another criterion of criti-cality. Thus, for the purpose of this chapter,which is to select a list of strategic materialsfor study, no attempt was made to quantify theeconomic effects of losing a part or all of thesupply of candidate materials. Rather, eco-nomic effects were simply kept in mind as apart of the meaning of criticality,

Vulnerability

Among the conditions that affect sup ply vu l-nerability, a most important factor is lack of diversity of supply. Reliance on a sole supplier,even a highly reliable one, can be risky. Of thefew significant interruptions in U.S. materialssupply in the past 30-odd years (described inch. 4), the most disruptive was probably the lossof nickel from Can ada du ring the 4-month n ickelstrike in 1969. Canada was at that time thesource of 90 percent of new (nonr ecycled) U.S.nickel supplies.

12A recent attempt to quantify economic effects Of materia]Ssupply disruptions, using a neoclassical econometric model of the primary metals industry is reported by Michael Hazilla andRaymond J. Kopp, “Assessing U.S. Vulnerability to Mineral Sup-ply Disruptions, An Application to Strategic Nonfuel Minerals, ”paper prepared for Resources for the Future, Washington, DC,draft May 5, 1982.




+--..... *..*.+---

Photo credit U S Air Force

Chromium and cobalt are essential in jet engines of high-performance military aircraft such as this U.S. Air Force F-16

minerals production and export, Cuba, for ex-ample, was considered a potential supplier of nickel for the United States, as a supplement

to Canadian supplies. When the Communistgovernment was installed in Cuba, access tothis source was lost due to a U.S.-imposedembargo.

Another possible source of vulnerability islong-distance transportation by sea. The UnitedStates imports large tonnages of a number of important materials from distant countries bysea, For example, in 1981 the United States im-ported 3 million tons of alumina from Austra-lia; some 640,000 tons of manganese ore, main-ly from Gabon, South Africa, and Australia;and 800,000 tons of ferromangan ese and ferro-silico-manganese, largely from South Africa,France, and Brazil. If sea lanes were blockedin a war, it is difficult to conceive how these

large tonnages could be airlifted to the Un itedStates from the producer countries.17

Although import dependency does not equatewith vulnerability, and domestic supplies arenot an ironclad guarantee against disruption,the lack of adequate domestic supplies countsas a most important factor in vulnerability. Lag-ging investment and labor troubles have, on oc-casion, limited production from U.S. mines.Yet, at the very least, domestic supplies can berelied on in a national emergency, to meet partof domestic requirements, assuming the gov-ernment would exercise special powers to keepproduction going.

“Lack” of domestic supply can be a relative

term, ranging from resources that look prom-17 The ~aY,]oad of a C5A, our largest cargo aircraft, is about

100 tons. At that payload, it has a range of 2,500 miles.



Ch. 2—An Introduction to Materials import Vulnerability q 5 1

ising now or in the near future (platinum in theStillwater Complex in Montana) to subeco-nom ic deposits (cobalt in th e Blackbird dep ositof Idaho) to resources of such poor quality(manganese in Minnesota and Maine) that theymay never be economical to mine.

Combini ng Both Strands: Defi ning “ Strategic ”

When the strands of criticality and vulner-ability are combined, a definition somethinglike this emerges: If a material’s essential uses,for which there are n o available economic sub-stitutes, exceed the reasonably secure sourcesof supply, the material is “strategic. ” However,neither “essential uses” nor “reasonably securesources of supply” can be defined with quan-titative precision. The following section screensparticular materials against the criteria de-

scribed in this section, with the aim of select-ing a few materials that nearly everyone canagree are “strategic” and th at exemplify theproblems and opportunities presented by thesematerials.

Selecting Strategic Materials

The group of materials chosen for screeningfor this report included the 86 nonfuel mineralsfor which the Bureau of Mines regularly pub-lishes statistics.18 The Bureau reports data foreach material on the structure of the domestic

indu stry; consump tion (overall and by end useor industry); imports and exports, includingsources of imports and how much each sourcesupplies; purchased scrap recycling; events,trends, and issues relevant to the material;world production, reserves, and resources; andsubstitutes and alternatives. These kinds of data (drawn from the Bureau of Mines andother sources) were the basis for fittingmaterials against th e criteria d escribed earlier,defining which materials are strategic, and se-lecting them for further study. Table 2-2 liststhe 86 materials that comprised th e group cho-

sen for screening,

1 B[J n]ess ~therw~ls~ rlotecl the i n formation presented is fromthe Bureau of Mines.

Table 2-2.—Materials To Be Screened

AluminumAntimonyArsenicAsbestosBariteBauxite

BerylliumBismuthBoronBromineCadmiumCementCesiumChromiumClaysCobaltColumbiumCopperCorundumDiamond (industrial)DiatomiteFeldsparFluorspar

GallilumGarnetGem stonesGermaniumGoldGraphite (natural)GypsumHafniumHeliumIlmeniteIridiumlodineIron oreIron and steelIron and steel scrapKyanite and related

materials

LeadLimeLithiumMagnesium metal

ManganeseMercuryMica (natural), scrap and

flakeMica (natural), sheetMolybdenum

NickelNitrogen (fixed) ammoniaPeatPerlitePhosphate rockPlatinum group metalsPotashPumice and volcanic

cinderQuartz crystal (industrial)Rare-earth metalsRheniumRubidiumRutileSaltSand and gravelSelenium

SiliconSiIverSodium carbonateSodium sulfateStoneStrontiumSulfurTalc and pryophylliteTantalumTelluriumThalliumThoriumTinTitanium dioxideTitanium spongeTungstenVanadium

VermiculiteYttriumZincZirconium

Magnesium compounds

SOURCE Off Ice of Technology Assessment, drawn from U S Department of theInterior Bureau of Mines data

One of the leading criteria for vulnerabilitywas the sufficiency of domestic supplies of amaterial. The United States is a net exporteror is self-sufficient for 22, or approximatelyone-quarter, of the materials on the list (table2-3), As a first cut in the screening, all thesematerials were eliminated from further consid-eration as strategic. In addition, 50 of the 86materials on the original list are importedmostly from countries judged to be stablesources of supply—i.e., countries presently free




Table 2.3.—Materials for Which the United States is

Self-Sufficient or a Net Exporter

Boron Magnesium compoundsBromite Mica (natural), scrap andClays flakeDiatomite MolybdenumFeldspar Perlite

Garnet Phosphate rockHelium Quartz crystal (industrial)a

Iron and steel scrap Sand and gravelKyanite and related Sodium carbonate

minerals StoneLithium Talc and pyrophylliteMagnesium metal VermiculiteaLaSCa IS One of the three commodities reported in this category It IS imported,

but the net import reliance is not avatlable

SOURCE Office of Technology Assessment, based on U.S Department of thelnIertor, Bureau of Mines data

from threats of internal disturbances or outsidepressure from forces hostile to the U n i t e dStates. These “stable” sources range from in-dustrialized countries such as Canada andAustralia to advanced developing nations, par-ticularly Latin American ones such as Brazil,Chile, and Mexico. For m ost of the 50 mater ialsin this group, there was either considerablediversity in sources of supply, or stability, orboth. For these reasons, the vu lnerability of theUnited States to disruption of the supply of these materials was jud ged to be relatively low ,However, dependable allies or even the UnitedStates itself cannot be considered totally im-mu ne from interrup tion in m inerals and m etalprodu ction, as shown by the p reviously men-

tioned Canadian nickel strike.The primary end uses of this group of mate-

rials were also scrutinized, to see whether theuses should be considered critical. For mate-rials with significant military or important in-dustrial uses, the availability of substitutes to

replace these uses was checked. Combiningqualitative judgments with quantitative infor-mation on both the vulnerability and criticalityfactors, it appeared that the critical uses of materials in this group did not exceed theamount imported from stable sources. Thus,they were screened out of the list of strategicmaterials cand idates, Append ix B shows these50 materials and their import sources.

It was not possible to eliminate as a groupthe remaining 14 materials. They requiredmore detailed individual scrutiny. As the fol-lowing discussion shows, at least four of them–chromium, cobalt, manganese, and the plat-inum group metals—clearly met all of the cri-teria set forth in the first part of this chapterand were definitely strategic:

They are essential for the national d efenseand other important industries.For some of their essential uses no satis-factory substitutes are available,There is little or no production of any of these materials in the United States (al-though for some, recycling is significant).They are supplied largely by a very fewcountries in a politically unsettled region(central and southern Africa), and thissame region, plus the Soviet Union, holds

most of the world’s known resources.These four minerals form a “first tier” of stra-

tegic materials that have been selected fordetailed treatment in this report. The remain-ing 10 materials share some characteristics of criticality and vulnerability with the first tier(as detailed in the discussion below), but in lessdefinitive ways. While the materials in this sec-ond tier may be thought of as strategic to somedegree, they are less so than those in the firsttier. Table 2-4 shows the 14 materials grou pedby first and second tiers.

Table 2-4.—U.S. Strategic Materials

First tier —

Second tier

Chromium B a u x i t e / a l u m i n a —

Cobalt BerylliumManganese ColumbiumPlatinum group metals Diamond (industrial)

Graphite (natural)RutileTantalumTin

Titanium spongeVanadiumSOURCE: Office of Technology Assessment




Overview of Selected Strategic Materials

Agreement that chromium, manganese, co-balt, and the platinum group metals are stra-tegic materials is widespread. The selectionsof strategic materials made by other authors,as described in the first part of this chapter,all includ e these m etals. A brief explanation of the reasons for selecting these four materialsfollows, with an emphasis on the vulnerabil-ity strand. Chapter 3 summarizes in more de-tail the essential uses of the first-tier materials,probable trend s in their consump tion over thenext 10 to 25 years, and the current status of substitutes for their uses. The discussion belowpresents d ata for each of the m aterials on U.S.consump tion over the p ast 5 years and on sev-eral factors related to vulnerability: U.S. net im-

port reliance, import sources, world produc-tion and reserves. Similar information aboutsecond-tier materials can be found in appen-dix C.

Chromium

Chromium (Cr) is a lustrous, hard, steel-gray m etallic element found prim arily in chro-mite, a black to brow nish-black chromium or e(FeCr 2O 4). It imparts unique properties of cor-rosion resistance, oxidation resistance at hightemp eratures, and strength to other metals. An

important ingredient in many steels and alloys,chromium is irreplaceable (at p resent levels of technology) in stainless steels and high tem-perature-resistant su peralloys. And many of theuses of stainless steels and superalloy areessential, such as in jet engines, in other mili-tary applications, and in vital nondefense pro-duction.

Besides its metallurgical uses, chromium isessential in the chemicals industry, where itis used in making pigments and chromiumchemicals. Chrom ite is used in m aking refrac-tory bricks to line metallurgical furnaces; suchbricks retain their strength and stability evenwhen subjected to rapid, extreme changes intemperatur e, and are resistant to acid and alkalienvironments. Additional uses of chromium

are in leather tanning, in wood treatment, andas additives to oil-well drilling mud.

Table 2-5 shows chromium consumption in

the United States from 1978 to 1982, includ-ing the chromium contained both in chromiteore and in the sem i-processed alloy ferrochro-mium. The sharp decline in 1982 reflects thatyear’s recession, with the steel industry espe-cially hard hit.

In the 1979-82 period, imports accoun ted for85 to 91 percent of U.S. chromium consump-tion, Recycling of scrap amounted to 12 per-cent of apparent consum ption in 1982. As table2-6 shows, the largest supplier to the UnitedStates for both chromium ore and ferrochro-

mium is South Africa. The Soviet Union is ac-tually the world’s largest producer of chro-mium, and once played a significant role insupplying the United States with chromiumore. Since the mid-1970s, however, its contri-bution to U.S. supplies has declined signifi-cantly. Other U.S. suppliers of chromium ore—e.g., the Philippines, Finland, and Turkey—have limited production capacity compared toSouth Africa’s,

The recent trend among a number of oreproducers has been to process the ore intoferrochromium. Zimbabwe presently exportsmost of its chromium as ferrochromium.

U.S. chromium resources are mostly in theStillwater Complex in Montana, podiform de-

Table 2-5.–U.S. Consumption of Chromium, 1978.82

Apparent consumption(thousand short tons Net import reliance

b

Year chromium content) (percent)

1978 . . . . . . 590 911979 . . . . . . 610 901980 . . . . . . 587 911981 . . . . . . 510 901982 . . . . . . 319 85aAppa~ent ~onsumptlon = u s primary and secondary (recycled) producf{on and

ne t Import rellancebNef lrnport rellarrce = (irnms exports + changes In government and Indus.

try stocks) apparent consumption

SOURCE U S Department of the Interior, Bureau of Mines, Mlnera/ Commodity Summar/es, 1983 and 1984



Ch. 2—An Introduction to Materials Import Vulnerability Ž 55

Table 2-8.—Sources of U.S. Cobalt Imports.

1979-82 1982Country (percent) (percent)

Zaire . . . . . . .-.:. . . . . . . . . 37 39Zambia . . . . . . . . . . . . . . . . . 13 9Canada . . . . . . . . . . . . . . . . . 8 12Belgium-Luxembourg a . . . 8 5

Finland ... . . . . . . . . . . . . 7 6Japan a . . . . . . . . . . . . . . . . . . 7 8Norway a . . . . . . . . . . . . 7 7Botswana . . . . . . . . . . . . . . . 3 3France a . . . . . . . . . . . . . . . . . 3 3Other . . . . . . . . . . . . . . . . . 7 8a proc esses cobalt ore orlgrnatlng from other counlrles

NOTE Major world producers of primary cobalt and their contribution to worldsu ppl Ies i n 1982 were Zal re (45 percent), Zambia (13 percent), Australia(9 percent), Sov!et Un!on (9 percent), and Canada (6 percent) See table5-16 of ch 5 for more detail and for information on reserves

SOURCE U S Department of the Interior, Bureau of Mines, M/nera/s Yearbook.1980 1981 1982, and 1983

substantially the largest and richest cobalt oredeposits. Due to these reserves, these two coun-

tries promise to continue to dominate cobaltsupply far into the next century.

The United States has sizable cobalt depos-its, particularly at the Blackbird Mine in Idah o,the Madison Mine in Missouri, and GasquetMountain in California. Substantial cobalt isalso associated with copper-nickel deposits inthe Duluth Gabbro of Minnesota. But the worldprice of cobalt (except during the panic) hasbeen significantly less than what is needed tomake U.S. cobalt mining economically feasi-ble without government assistance.

Manganese

The dominant critical use of manganese, agray-white or silver m etallic elemen t, is in steel-making which accounts for about 90 percentof domestic manganese consumption. The ad-dition of manganese prevents steel frombecoming brittle. Normally, iron and sulfurcomp ound s in steel tend to form at grain bound -aries and weaken the steel at high tempera-tures. When manganese is added, the sulfurbond s with it instead of the iron, forming a sta-

ble compou nd and avoiding w eakness at grainboundaries. Manganese also has uses as an al-loying element to impart strength and hardnessto all grad es of steel. For examp le, manganese-alloy steel is used for armored vehicles thatwithstand impacts.

Only 10 percent of U.S. manganese con-sumption goes into nonsteel applications. Man-ganese dioxide is used in batteries for its oxy-

gen content, wherein the oxygen combineswith hydrogen, which would otherwise slowthe cell’s action. Manganese dioxide is also

used in making chemicals, in the leaching of uranium ores, and in the electrolytic produc-tion of zinc.

For these smaller uses, mangan ese has somesubstitutes. Although no satisfactory materialreplacements for manganese exist in iron andsteel production (see ch. 6), there are functionalsubstitutes for manganese in steelmaking: ex-ternal desulfurization is reducing the man-ganese requirement for sulfur control and sev-eral other process modifications in steelmakingalso reduce manganese requirement or im-

prove manganese recovery.Domestic consumption of manganese has de-

clined slightly in recent years (table 2-9). Th ebig drop in 1982 is due to the recession in thesteel industry.

There is no domestic production of “manga-nese ore” (defined as ores containing morethan 35 percent m angan ese). The Un ited Statesrelies on import sources for 99 percent of itssup ply, with the remaining 1 percent recoveredfrom domestic production of manganiferousores that contain less than 35 percent manga-

nese.19

Ferromanganese and silicomanganese—alloys used in steelmaking—are also highly im-ported.

The largest suppliers of manganese materialsto the United States are Gabon and SouthAfrica, as shown in table 2-10. The U.S.S.R.and South Africa have by far the largest man-ganese deposits in the world. However, Aus-tralia and Gabon are well-endowed with re-serves which could last a century or more at

18The iron an d Steel i r l~u ,s t r}~ derives a significant quantity Of mangan ese from iron ores charged to the blast furnace, This in-pu t accounts for ap proximately one-third of total consump tion,but i t is not included in mangan ese import statistics. The qu an-tity of m anganese contained in these iron ores has been d eclin-ing. Based on George R, St, Pierre, et al., Use o,f Manganese inStcelrnaking and Steel Products and Trends in the Use of hlan-gunrsc as an Al)o~ing Element in Steels, report prepared for theOffice of Technology Assessment, 1983.




Table 2-9.–U.S. Consumption of Manganese, 1978-82 Platinum Group Metals

Apparent consumption(thousand short tons Net import reliance b

Year manganese content) (percent)

1978 . . . . . . 1,363 971979 . . . . . . 1,250 981980 . . . . . . 1,029 98

1981 . . . . . . 1,027 991982 . . . . . . 672 99aA~~arefltConsumption = U.S primary and secondary (recycled) production and

net tmport rellancebNet import reliance . (lrnpOrts exports + changes in government and tndus.


SOURCE U S Department of the Interior, Bureau of Mines, Mineral Comrnod/tySummaries, 1983 and 1984

Table 2-10.—Sources of U.S. Manganese Imports

Country —

Manganese ore: South Africa. . . . . . . . . . . . .Gabon . . . . . . . . . . . . . . . . . .Australia . . . . . . . . . . . . . . . .Brazil . . . . . . . . . . . . . . . . . . .Mexico . . . . . . . . . . . . . . . . .Morocco . . . . . . . . . . . . . . . .Other . . . . . . . . . . . . . . . . . . .

Ferromanganese: South Africa . . . . . . . . . . . . .France a . . . . . . . . . . . . . . . . .Mexico . . . . . . . . . . . . . . . . .Brazil . . . . . . . . . . . . . . . . . . .Australia . . . . . . . . . . . . . . . .Other a . . . . . . . . . . . . . . . . . .

1979-82 (percent)

30272213

44

—

43 26

6 3 2

20

1982(percent)

52 2117 3 1

42

4921

761

16aprocesses mangmese ore originating from other count rres.

NOTE Major world producers of primary manganese ores and their contributionto world suppltes in 1982 were: Soviet Union (41 percent); South Africa(23 percent); Gabon (7 percent); China (7 percent), Brazil (6 percent), Aus.tralia (5 percent); Mexico (2 percent). See table 5.22 of ch 5 for further

details, and for information on reserves.SOURCE U S Department of the Interior, Bureau of Mines, Minera/s Yearbook,

1980, 1981, 1982, and 1983.

the current rate of prod uction, and other coun-tries also have significant reserves—all of which perhaps implies that supply vulnerabil-ity for manganese is somewhat less than thatfor other materials in the first tier. Nonethe-less, the only large manganese reserve in theAmericas is in Brazil. All sources of U.S. man -ganese imports (except a small amount com-ing from Mexico) require long-distance trans-portation by sea, which adds an element of vulnerability to U.S. supply. The tonnages re-quired by U.S. industry rule out any othermethod of transport. Unclaimed resources arethe manganese nodules which are found inlarge areas of the ocean floor (see ch. 5).

Platinum group metals (PGMs) refer to sixmetals which have similar properties: plat-inum, palladium, rhodium, iridium, osmium,and ruthenium. They have the ability to cata-lyze many chemical reactions and withstandchemical attack, even at high temperatures.Their leading u se in the United States is in au -tomobile catalytic converters, which u se smallamounts of platinum , palladium, and rhodiumin each car, At present, there is no satisfactorysubstitute for this use of platinum group me-tals. Other catalytic applications are in petro-leum refining, to produce high-octane gasoline,and in chemical manufacture of acids (e. g., ni-tric acid for fertilizer) and other organicchemicals.

The great strength, high melting points, and

resistance to corrosion and oxidation of PGMsmake them the material choice for electricalcontacts and relays in teleph one systems. PGMalloys are also used as crucible materials (e. g.,for the grow th of single crystals of oxide com-pou nd s, used for semicond uctor substrates), inglass fiber manufacture, in dental and medi-cal applications, and in jewelry. Most uses of PGMs as catalysts and in electronics are highlyimportant to U.S. industry. 20

U.S. consumption of PGMs declined in the1981-83 recession but is now recovering (table

2-11),ZONationa] Materia]s Advisory Board, Suppl~F and USe Patterns

for the Platinum-Group Metals, NMAB-359 (Washington, DC: Na-tional Academy of Sciences, 1980).

Table 2-11. —U.S. Consumption ofPlatinum Group Metals, 1978-82

Apparent consumption Net import reliance b

Year (thousand troy ounces) (percent)

1978 . . . . . . 2,635 901979 ... , . . 2,995 891980 . . . . . . 2,859 881981 . . . . . .

2,411 841982 . . . . . . 1,787 80a Apparent Consumption = u s prlm~ and seconda~ (recycled) product~on and

net import reliance,bNet impo~ reliance . (imports exports + changes in government and indus-


SOURCE U S Department of the Interior, Bureau of Mines, Mineral Commodity Summaries, 1983 and 1984




per production rose so much over 25 years thatnet imports fell to about 10 percent of con-sumption in the 1970s, rather than to the pro-

jected 40 percent, and were well below the 35percent of 1950.23

The position of copper may change again in

the future, American mines were closing inlarge numbers in the recession year of 1982,with some industry officials predicting that themines would never reopen because high wagesand pollution control costs had made theAmerican copper mining industry—the world’slargest—uncompetitive with foreign producers.Even if this prediction proves true, copper’sdesignation as a strategic material will dep endon many factors, including the nature of its use,the availability of substitutes, and the numberand character of foreign suppliers.

The continu al developmen t of new m aterialsand uses also tends to make lists of strategicmaterials out of date. For example, natural rub-ber was a strategic material of great concernto the United States before World War II. Butduring the war, when imports of natural rub-ber from Southeast Asia were cut off, U.S.production of synthetic rubber expanded enor-mously. The displacement of natural rubber formost uses proved to be permanent.

ZsData on prod uction, reserves, and imports of m i nera ]s come

from the Bureau of Mines, Department of the Interior.

Perhaps it is most useful to look at the stra-tegic materials selected for careful analysisherein as indicative of a set of problems andpossible solutions, not as fixed or exhaustive.

The brief discussion above—much amplifiedin chapters 3 and 4—indicate why cobalt, chro-

mium, m anganese, and PGMs are jud ged to behighly strategic materials. Because they meetall, or near ly all, of the criteria for critical usesand vulnerability of supply, they have beenselected for detailed examination in this report.The essential functions of these materials,present and anticipated, potential substitutes,and technologies that can reduce dependenceon uncertain supplies are discussed at lengthin the chapters that follow.

The second -tier materials, which shar e somestrategic characteristics with those of the firsttier, are described in app end ix C. These mate-rials, though judged to be less strategic thanthe first four, are still worthy of attention andstudy. As a practical matter, this report mustconfine its assessment to a manageable num-ber of materials. The four first-tier materialsare judged to be most strategic, and theypresent the problems of import vulnerabilityand possible solutions in th e most striking w ay,Thus, the assessment here may serve as a use-ful model for studying other materials which,though judged less strategic, may be of someconcern because of combined factors of vul-

nerability and criticality,



CHAPTER 3

Critical Materials Consumption:Current Patterns and Trends



ContentsPage

Chromium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Transporta tion Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Construction Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Machinery Applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chromite Refractories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Electrical and Chemical Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cobalt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transporta tion Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Machinery Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chemicals an d Catalysts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Electrical Ap plications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other Cobalt Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Manganese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Platinum Group Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transporta tion Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Construction Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chemical Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Electrical Application s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Refractory Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Future Applications for Strategic Materials .....,, . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nonconven tiona l Energy System s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Critical Metals in Automobiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Summary: Essential Uses of Strateg ic Mater ials .,...,. . . . . . . . . . . . . . . . . . . . . . . . .

Superalloy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .., ,. ... ... .....,O . . . . . . .Stainless Steel for Construction .. .. .. .. .. .. .. .$ . . . .......0. . . . . . . . . . . . . . . .Automobiles. , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cemented Carbides . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Industrial Catalysts.,.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Mangan ese in Steelmaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Pallad ium in Electronic Components. .,, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6262656566

6666

676769697071

.7272

74

74

74

77

77 77

77 7878

79

808080808080

Table

3-1.3-2.

3-3.

3-4.

3-5.

3-6.

3-7.

3-8.

3-9.

3-1o.

List of TablesNo.Strategic Metal Consumption by Industrial Sector, 1980 . . . . . . . . . . . . . . . . .Chromium Usage in U.S.-Built Passenger Cars, 1980 . . . . . . . . . . . . . . . . . . . .Typical Structural Alloys Used for H ot-Section Com pon ents of the AircraftGas Turbine Engine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Estima ted Requirem ents for Chrom ium for Energy-Related Facilities,1977-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Uses of Cobalt, 1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cobalt Consumpt ion in Tool Steels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Com position of Maraging Steels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.S. Manganese Con sumption, 1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Annu al Consump tion of Platinum Group Metals in Domestic AutomotiveCatalytic Converters .. .. .. .. .. .. .. ... .., ... ...$. . . . . . . . . . . . . . . . . . . . .U.S. Bureau of Mines Estimates of Probable Demand for Strategic Metalsin the Year 2000 . . . . . . . . . . . . ..., . . . . . . . . . . . . . . . . . . . . . . . . . . . ..., ...,

List of Figures

Figure No.3-1. Current and Projected Cobalt Consum ption in Magn ets (1981-90) . . . . . . . . .3-2. Distribution of Platinum Group Metal Consu mp tion by Ap plications . . . . . .3-3. Estimated Future Vehicle Sales in the Un ited States . . . . . . . . . . . . . . . . . . . .3-4. Estimated PGM Requirements in Catalytic Converters for Dom estic

Automobile Production, 1984-95, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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CHAPTER 3

Critical Materials Consumption:

Current Patterns and Trends

The metals that form the p rincipal subject of this report—chromium, cobalt, manganese, andthe platinum group—serve throughout theeconomy in applications that range from theessential, such as structural applications inhigh-performance aircraft, to the decorative,as in trim and jewelry, These metals are stra-tegic because they are necessary in a numberof essential ind ustrial and defense app licationsand because the major sources of supply areconsidered to be vulnerable to disruption, Thischapter identifies the major essential uses of these metals, describes the properties that

make them irreplaceable at present, and dis-cusses the trends in their use.

As discussed in chapter 2, the strategic natureof these materials is not static. In time, alter-natives may be found to replace the metals inessential functions, or changing conditionsmay mean that the functions are no longer es-sential, It is also possible that changes in tech-nology will cause these metals, or other mate-rials, to increase in importance beyond theircurrent status, Such changes are slow in com-ing, however, and are likely to take a number

of years before they have a major effect,Table 3-1 shows the distribution of consump-

tion of the four metals over the major indus-trial sectors in the United States.

The transportation sector consists of the avia-tion, automotive, railroad, and maritime indus-tries, These ind ustries together accoun t for 19to 41 percent of the consum ption of each of thefour strategic metals,

The construction sector includes facilities forthe pr odu ction and processing of fuels; produc-tion of electricity; equipment for metallurgical,chemical, and food processing; and structuralmaterials in buildings.

Examples of the uses of the strategic mate-rials in the machinery sector are tools for metalcutting and forming, drill bits, ball and rollerbearings, and other machinery components.

Important equipment in the electrical sectorincludes transformers, switchgear, motors, in-strum ents, batteries, generators, cooling equ ip-

ment, and household appliances. Major appli-cations for strategic metals are in magnets,contacts and electrodes, shafts and bearings forrotating machinery, tubing and conduits, anddecorative trim.

Refractory u ses of strategic metals and min-erals are those in which the materials mustoperate in an extremely high-temperature envi-ronment without chemical change or loss of desirable properties. An example is liners forboilers and furnaces. Materials for the pr odu c-tion of ceramics and glasses are also in this

category.Chemical uses of chromium, cobalt, manga-

nese, and platinum grou p metals are quite var-ied. They include dyes and pigments, preserv-atives, food additives, and catalysts for theproduction of other chemicals.

The listing in table 3-1 provides only a s tart-

ing point for the analysis. Furth er detail on theuses of the metals is provided below.

61



Ch. 3—Critical Materials Consumption: Current Patterns and Trends q 6 3

percent chromium in place of the 21 percentchromium alloy now in use could n ot be madewithout additional testing to ensure that thematerial would behave as expected when inservice.

The principal structural use of chromium al-

loys in automobiles is in the AISI 5160 steelused for springs in the suspension. A relativelynew, but grow ing, use is in the main structuralmembers of the chassis where high-strength,low-alloy steels that contain about 1 percentchromium are gaining acceptance.

In 1982, General Motors (GM) introduced afiber composite leaf spring into the rear sus-pension of the Chevrolet Corvette. In 1983,similar springs were introduced into otherlightweight cars in the GM line,

Unlike the case with engine parts, there isa strong incentive to redu ce the u se of conven-tional steels in the stru ctural parts of cars, Thatincentive is weight redu ction, wh ich resu lts inreduced power requirements and lower fuelconsumption. However, the development of the high-strength, low-alloy (HSLA) steels hasprovided an alternative to other lightweightmaterials such as aluminu m and fiber comp os-ites. These steels, which obtain their strengththrough the use of small additions of chro-mium, manganese, molybdenum, and othermetals, combine high strength and low weightwith conventional metal-forming techniques.The overall economics of HSLA steels have led,and are expected to continue to lead, to increas-ing use of these alloys in automobiles, Althoughthese steels are not essential to the design of cars, once incorporated into a design, anyreplacement of materials—e.g., in response toa reduction in the supply of chromium—willbe difficult to make.

Aviation

Aviation, with its demands for high strength,low weight, and oxidation- and corrosion-

resistant materials with long fatigue lives andresistance to high temperature, is another major consumer of chromium. Chromium con-sumption by the aviation industry accountedfor 3,250 short tons in 1978, of which approx-

imately 80 percent was used in jet engines asa constituent of superalloy and of other heat-,corrosion-, and oxidation-resistant alloys. Chro-mium-containing steels are used in other high-temperature components of jet engines, wherethe exceptional heat resistance of superalloy

is not required.Superalloy, containing substantial amounts

of chromium, nickel, and, in some cases, co-balt, have exceptional resistance to high tem-peratures. These alloys retain their strength athigh temperature and stress, whereas alloysteels would fail owing to creep (a gradualdeformation of a material wh en it is subjectedto stress at high temperature) or to rapid cor-rosion by the hot exhaust gases of a jet engine.These materials are essential in th e current d e-signs of aircraft gas tu rbine engines as well asmany land- and sea-based gas turbine engines.

The manu facture of superalloys accoun ts fora majority of the total domestic consumptionof chromium metal. In 1981, consumption of metallic chromium in superalloy was 2,500short tons or 64 percent of the total domesticconsum ption of chrom ium m etal. Ferrochromeis also used in the production of superalloy,in 1981, 4,300 tons of chromium containedin ferrochrome were used in superalloy pro-duction,

Already, hundreds of superalloys are used inaircraft engines, with more being developed allthe time. Some of these alloys are in wide-spread use, while others have become obsoleteor have been su perseded by new er alloys. Table3-3 identifies some of the typical alloys usedin the most severe applications in the jet en-gine, With regard to the metals under exami-nation, the table shows a range of chromium(Cr) content, from a low of 8 percent to a h ighof almost 26 percent, and a range of cobalt (Co)content from zero to 56 percent.

Substitu tion of know n alternative alloys is asimple method of reducing critical metal con-

sumption in times of a shortage of raw mate-rials. During the d isturbances in Zaire in 1978-79, the cobalt-free alloy IN-718 was used as adirect substitute for Waspaloy (13.5 percent co-balt). The alloy IN-718 may be used in place




Table 3-3.—Typical Structural Alloys Usedfor Hot-Section Components of the Aircraft

Gas Turbine Engine

Composition(percent by weight)

Alloy Ni Co Cr Fe-——.Combustor liner:

Hastelloy X . . . . . . . . . . . . . . . . . . 48 1.5 22 18,5HA-188 . . . . . . . . . . . . . . . . . . . . . . . 22 41 22 —

Turbine vane: MA-754 78 — 20 1

MAR-M200 . . . . . . ... . . . . . . . . 60 10 9 —MAR-M247 . . . . . . ... . . . . . . 60 10 8 –MAR-M509 . . . . . . . . . . . . . . . . . . . 10 55 23.5 –X-40 . . . . . . . . . . . . . . . . . . . . . . . . . 10.5 56 25.5 –IN-713 . . . . . . . . . . . . . . . . . . . . . . . 72,5 — 13.5 —Rene-77 . . . . . . . . . . . . . . . . . . . . . . 55 15 15 —

Turbine blade: Alloy 454 . . . . . . . . . . . . . . . . . . . . . 62.5 5 10 —MAR-M200 . . . . . . . . . . . . . . . . . . . 60 10 9 –MAR-M247 . . . . . . . . . . . . . . . 60 10 8 —B-1900 . . . . . . . . . . . . . . . . . . . . . . . 65 10 8 —Rene-80 . . . . . . . . . . . . . . . . . . . . . . 60.5 9.5 14 —

IN-713LC . . . . . . . . . . . . . . . . . . . . 72.3 — 12 —Rene-77 . . . . . . . . . . . . . . . . . . . . . . 55 15 15 —

Turbine disc: IN-100 . . . . . . . . . . . . . . . . . . . . . . . 56 18.5 12.5 —MERL-76 . . . . . . . . . . . . . . . . . . . . . 54.1 18.5 12.4 –Astroloy . . . . . . . . . . . . . . . . . . . . . 55.5 17 15 —Waspaloy . . . . . . . . . . . . . . . . . . . . 58 13.5 19.5 —Rene-95 . . . . . . . . . . . . . . . . . . . . . . 61.3 9 14 —IN-718 . . . . . . . . . . . . . . . . . . . . . . . 53 — 19 18IN-901 . . . . . . . . . . . . . . . . . . . . . . . 45 — 12.5 34A-286 . . . . . . . . . . . . . . . . . . . . . . . 25,5 — 15 55

Case: Waspaloy . . . . . . . . . . . . . . . . . . . . 58 13.5 19.5 —IN-718 . . . . . . . . . . . . . . . . . . 53 — 19 18IN-901 . . . . . . . . . . . . . . . . . . . . . . 45 — 12.5 34A-286 . . . . . . . . . . . . . . . . . . . . . . . . 25.5 – 15 55SOURCE Of f i ce o f Techno logy Assessment –

of other alloys, such as MAR-M200 (10 percentcobalt) in tu rbine vane and blade applications.Savings of chromium are more difficult toachieve through substitution than savings of cobalt. Chromium contents of most superalloysare in the range of 8 to 22 percent, and thoselowest in chrom ium contain 10 percent cobalt.The substitution of IN-718 (19 percent chro-mium) for MAR-M200 (9 percent chromium)offset cobalt savings by increased chromiumconsumption.

A substitution of cobalt-free IN-713 for alloyX-40 (56 percent cobalt) in the turbine vanesof the JT- 9 engine used for wide-body commer-cial aircraft also occurred as a result of the co-bait price increases that followed the Zairian

distur bances. This substitution also resulted ina 47-percent savings in chromium consump-tion, although that was not the object of thesubstitution. Normally X-40, with its longerservice life, would be the preferred alloy, butat the higher cost and uncertain supply of co-

balt, the substitution was justified.The potential to reduce critical metal con-sumption in the near term is limited. Chro-mium is an essential component of all super-alloy, and most of the easy substitutions forcobalt have been identified as a result of theprice increases that followed the Zairian dis-turbances. Opportunities for further substitu-tions are known (and will be discussed in ch.7), but the time required to complete the qual-ification and certification process for u se in air-craft engines precludes their use as a short-term response to shortages.

It is clear that chromium will remain essen-tial in superalloy for the aircraft gas turbineengine. predicting future material needs can-not be d one with confidence because of inher-ent inaccuracies resulting from factors thatvary from the general state of the national econ-omy to advances in engine design and materi-als processing, How ever, some sense of futurematerial requirements is obtained by evaluat-ing alternative scenarios for the growth of theU.S. aviation industry. Thus, it is estimatedthat in 1995 the United States w ill consum e for

the production of superalloy 3,700 tons of chromium metal and 6,500 tons of chromiumin low-carbon ferrochrome for an increase of 50 percent over 1981. Similar estimates for su-peralloy production for the year 2010, basedon current technology and trends, are 6,800tons of chromium metal and 11,600 tons of chromium in ferrochrome, an increase by afactor of 2.7 over 1981 demand,

Other Transportation Applications

Other uses of strategic metals in the trans-

portation sector include heat-resistant chro-mium steels in gas turbines, in steam genera-tors and turbines for railroad and maritimeapplications, and in stainless steel containersfor transportation of dairy products and cor-rosive materials.



Ch. 3—Critical Materials Consumption: Current Patterns and Trends Ž 65

Construct ion Applic ations

Almost 20 percent of U.S. chromium con-sumption is accounted for in the constructionsector, with th e most essential app lications be-ing in the corrosive environments associated

with oil and gas production and refining andthe high-temperature environment of energyproduction facilities. Chemical processing fa-cilities also constitute essential uses of chro-mium in the construction sector.

Energy Production Facilities for Fossil Fuels

The annual chromium requirements for theconstruction of energy-related facilities, includ-ing oil and gas wells, coal mines, electricitygenerating plants, and other energy facilitieswere estimated in a 1979 report to the Depart-ment of Commerce. Reported consumption of chromium in 1977 by the energy industry was20,400 short tons. When taken with the scrapgenerated during processing and fabricationof energy-related equipment, this sector aloneaccounts for 3 to 5 percent of U.S. chromiumconsump tion. Similar estimates w ere mad e forchromium usage in a 1978 study by the Na-tional Materials Advisory Board (NMAB).These estimates are reported in table 3-4.

In its 1978 study, the NMAB estimated that90 percent of the chromium consumption of the energy sector should be considered essen-

tial. Of the consumption in 2000, approxi-mately 60 percent will be for stainless steel,with another 25 percent being for alloy steels.The remainder will be used in a variety of ap-plications, including superalloy, plating, andnonferrous alloys.

Table 3-4.—Estimated Requirements for Chromium forEnergy-Related Facilities, 1977-2000

(thousand short tons)

Department ofCo mm er ce NMAB low NMAB h i g h

1977. , ... , . . - 20.4 — —1985 ..., ... , 24.7 — —

1990 . . . . . . . . . 27.3 — —

2000 ...., ... 33.2 — —

A v e r a g e . . . . 27.2 19.5 33.7 ——. .SOURCES U S Department of Commerce, 1979 Nat!onal Materials Adwsory

Board 1978

Chemical and Process Applications

Production facilities of the chemical andprocess indu stries, manufacturers of acids, or-ganic comp ounds, alkalies, and other corrosivematerials, are major consumers of chromium,principally in the form of stainless steel. Thesesteels are used because they combine strengthwith exceptional resistance to corrosion andoxidation. They are also used in applicationswhere it is essential to prevent contaminationof products by the process equipment.

The bulk of chromium consumption in chem-ical and process applications is accounted forby a few popular alloys: the wrought alloys;AISI types 304, 316, and 430; and the castalloys, ACI types CF-8, CF-8M, and CN-7M. Allof these steels contain approximately 18 per-cent chromium. In many cases, it appears pos-

sible to develop substitute steels with chro-mium content as low as 12 to 14 percent,although users would have to accept a lowerresistance to corrosion unless additions of molybdenum were mad e to counteract the ef-fects of chromium reduction, This class of steel, how ever, is not curr ently available, andseveral years of effort will be required beforesuch steel could be ready for widespread use.Even if such substitutions were mad e through -out the indu stry, however, no more than one-third of the chromium consump tion in this sec-tor would be saved. Substitution by surface-treated materials, including coated, clad, andplated steels, could also be used in some ap-plications, but limitations of cost, abrasion re-sistance, and corrosion resistance at welds andother joints restrict the opportunities to usethese materials in the chemical and p rocess in-dustries.

Machinery Appli cati ons

Machinery applications of chromium in-clude tool steels, spring steels, and alloy steels

for gears, shafts, and bearings, Chromium isused largely for its contribution to hardness

and wear resistance. The chromium contentranges from as low as 0.5 percent in somesteels used for gears and bearings to as highas 12 percent in some tool steels.




Opportunities for reduction of chromiumconsumption in machinery applications in-clude the use of sintered carbides in place of tool steels and alternative alloys containingmanganese and m olybdenu m for the manu fac-ture of gears, shafts, and bearings. Barriers to

the use of these substitutes are economic ratherthan technical; in particular the high cost of sintered carbides relative to tool steels suggeststhat this would be an unlikely area of substi-tution except in extreme emergency.

Chromite Refractories

Chromium, in the form of chromite, is usedin refractory applications such as liners forsteam generator fireboxes and ladles for mol-ten steel because of its ability to provide ther-

mal insulation, resist stresses resulting fromsudden changes of temperature, and remainchemically inert in metallurgical applications.The chromite used in refractories differs fromthat used as a raw material for the p rodu ctionof ferrochrome because of its higher alum inumcontent. While the high aluminum contentmakes chromite undesirable for ferrochromeproduction, it improves the refractory charac-teristics. Chromite sand is also used in moldsfor ferrous castings.

Refractories account for about 7 percent of U.S. chromium demand. Current data are notavailable but perhaps as much as 19,000 tonsof chromium were lost in spent, unrecycledrefractory bricks in 1974; additional chromiteis contained in accumulated refractory waste-

piles around steel mills, copper smelters, andother refractory-using facilities,

Steelmaking continues to account for mostuse of chromite-containing refractories, al-though its consumption has declined precipi-

tously since 1965. Phase-out of open hearthsteelmaking with basic oxygen furnaces thatuse virtually no chromite refractories is the pri-mary cause. This decline was moderated, andpartially offset, in the early 1970s by usingchromite-containing refractories in electricsteelmaking fur naces and in ar gon-oxygen-de-carburization (AOD) vessels for stainless steelproduction. However, since the mid-1970s,chromite refractories have been replaced rap-idly by water-cooled panels in electric furnaces.In addition, dolomite, which is readily avail-able domestically, now accounts for about two-

thirds of the refractory material used in AODvessels, according to the major U.S. producer.

Electrical and Chemical Uses

In the electrical sector, chromium is used inshafts, bearings, and oth er app lications requ ir-ing wear resistance and in decorative applica-tions, Requirements for chromium are similarto those of the machinery sector.

Chemical app lications accoun ted for 15 per-cent of total U.S. chromium consumption in1980, principally in pigments, metal treat-ments, and leather tanning, Based on data com-piled in 1976, the National Materials Ad visoryBoard estimated 40 percent of the chromiumuse in chemical applications to be essential.

Cobalt

In contrast to the bread th of app lications for achieve. The principal uses of cobalt are inchromium, uses of cobalt are limited. This is sup eralloy (for the beneficial p roperties cobaltdue, in part, to the availability of alternative imparts at high temperatures), magnets, ce-

metals that prov ide similar properties at lower mented carbides, and catalysts in petroleumcost, The current uses of cobalt are, therefore, refineries. Other uses include tool and alloythose in which substitutions are difficult to steels, and salts, driers, and other chemicals,



Ch. 3—Critical Materials Consumption: Current Patterns and Trends q 67

In 1982, the NMAB surveyed the uses andmad e estimates as to the essential needs of co-balt, in comparison to actual consump tion. Theresults of these estimates are reported in table3-5. The overall estimate of the NMAB was that50 percent of the cobalt now consum ed is es-

sential, with over 58 percent of the essentialconsumption being accounted for in super-alloy and another 14 percent of the essentialuses going into cemented carbides.

Transportation Applications

The aviation industry accounts for the majority of cobalt consumption in the transpor-tation sector. As shown in table 3-3, cobalt isan important constituent in many alloys in the jet engine. Superalloy may contain anywherefrom no cobalt to 65 percent cobalt. The selec-

tion of a particular alloy is based on a rangeof properties, including yield strength, creepresistance, oxidation resistance, formability,and cost,

The beneficial prop erties that cobalt can im -part to superalloys and its availability at rea-sonable prices (until the market disruptions of 1978-80) led to the current level of use of co-balt. The F-100 engine, used in F-15 and F-16aircrafts, contains approximately 150 poundsof cobalt. The JT9D comm ercial aircraft enginecontains approximately 165 pounds.

New engines may be designed to use cobalt-free alloys. The new Genera l Electric F101 andF404 engines use Inconel MA 754, a mechan-ically alloyed, cobalt-free alloy, for the turbinevanes.

Sup eralloy accoun ted for 6.3 million p oun dsor 41 percent of the 1980 reported domestic co-balt consumption. Under current trends, it isanticipated that 8.3 million pounds of cobaltwill be used in the production of superalloyin 1995 (for all app lications, not the aircraft en-

gine alone), and 12.9 million pounds of cobaltwill be required for these uses in 2010.

Cobalt use in other parts of the transporta-tion sector is small. App lications include hard -facing alloys used on the surface of exhaustvalves in automobile engines.

Machinery Applic ati ons

Cobalt use in the machinery sector includesdrill and cutting bits made for high-speed andhigh-temperature applications, surface coat-ings for hardness and wear resistance, and

high-strength steels for rocket motor casings,and dies and structural uses in large machin-ery. These applications are met primarilythrough the use of three materials: cementedcarbides, tool steels, and maraging steels.

Cemented Carbides

Cutting tools used for m achining of steel andcast iron, mining and drilling bits, small- andmedium-sized dies, cutoff tools, and screw-machine tools, all of wh ich r equire qu alities of abrasion resistance, hardness, impact resis-

tance, and heat resistance, depend on cementedcarbides for their demanding properties. Ce-mented carbide tools may accoun t for as mu chas 75 percent of the metal removed in domes-tic metal-cutting operations and for over 50

Table 3-5.—Uses of Cobalt, 1980 (thousands of pounds)

Reported Essential EssentialCategory consumption consumption fraction

Superalloys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,300 4,500 71%Magnets . . . . . . ., , ... , . . . . . . . . . . . . . . . . . . . . . . . 2,300 400 17Cemented carbides , . . . . . . . . . . . . . . . . . . . . . . . . . 1,300 1,100 85Hardfacing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600 300 50Steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400 200 50Other metallurgical. . . . . . . . . . . . . . . . . . . . . . . . . . 400 200 50Catalysts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700 100 6Salts, driers, and other chemicals . . . . . . . . . . . . . . 2,200 200 41

Total ., ... , . . . . . . . . . . . . . . , . . . . . . . . . ... , . . 15,300 7,700 50%SOURCE National Materials Advisory Board, Coba4t Cortserva//on Through Tec/rno/og/ca/ A/terna//ves, NMAB-406, p 2




percent of the cutting and crushing functionsin mining, oil and gas drilling, and construc-tion activities.

Cemented carbides are formed from a mix-ture of tungsten carbide powder, which pro-vides the hardness and wear resistance, and

cobalt powder, which acts as the cement thatholds the carbide particles together. The cobalt,carbon, and tungsten produce a synergistic ef-fect that allows relatively easy production bysintering (heating the powder shape) to thepoint where the surface of the cobalt powdermelts, dissolving some of the tu ngsten carbideto form an exceptionally strong bond,

Materials other than cobalt, notably iron an dnickel, with some chromium when needed forcorrosion resistance, have been used with somesuccess as substitutes for the cobalt binder, bu t

only with some sacrifice in performance. Sincethe applications of cemented carbides are inuses essential to the economy, and since thereare no satisfactory substitutes for either the car-bide tools or for the cobalt used in the binder,the use of cobalt in this application must beconsidered to be critical to the United States.

Tool Steels

Tool steels are used in a va riety of metal cut-ting and forming app lications, but it is only inthe high-speed, high-temperature applicationsthat cobalt-containing tool steel is of particu-lar imp ortance. These steels are classed as M-type and T-type. Past consumption of cobaltin these classes of tool steels is summarized intable 3-6,

Table 3-6.—Cobalt Consumption in Tool Steels(short tons)

1979 1980 1981

Domestic production:M-Type . . . . . . . . . . . . . . . . . . . . . . . 2,905 2,941 2,344T-Type. . . . . . . . . . . . . . . . . . . . . . . . 639 552 479

Subtotal . . . . . . . . . . . . . . . . . . . . 3,544 3,493 2,820Imports. . . . . . . . . . . . . . . . . . . . . . . . . 815 559 1,042

Total . . . . . . . . . . . . . . . . . . . . . . . . . 4,359 ‘4,052 3,892Approximate cobalt content

(8°/0 average) . . . . . . . . . . . . . . . . . . 349 324 311

SOURCE Off Ice of Technology Assessment, based on data In Naiional Mater!.als Advisory Board, Cobalt Conservation Through Techno/ogica/ 4/fernatives, NMAB 406, p 107

Cobalt-containing tool steels have been a tar-get for substitution research, which has pro-du ced alternative alloys w ith little or no cobaltthrough the use of powder metallurgy. For ex-ample, a new alloy, CPM Rex 20, is a replace-ment for the high-speed tool steel M42, and

CPM Rex 25 may replace alloy T15.Cobalt-based, hardfacing alloys have been

used as wear-resistant materials for over 60years. Applications include cutters, knives, andsurfaces of unlubricated bearings, Represent-ative hardfacing alloys include Stellite 1, 6, 12,

and 21, all from Cabot Co., which range from53.5 percent to over 67 percent cobalt content.A substitute alloy containing less than 14 per-cent has reportedly been developed, but it isnot yet in commercial use.

Maraging Steels

Maraging steels are high-strength alloys thatmay be heat-treated in large sections and thick-nesses to increase their strength further. Theyrun from a low of 7.5 percent to a high of 12percent cobalt. The major maraging steels aredesignated as 18 Ni200, 18 Ni250, 18 Ni300, and18 Ni350. The composition of these alloys arelisted in table 3-7, The last three digits of thespecification (200, 250, 300, and 350] refer tothe st reng th level of the steel, i.e., the 18 Ni250has a yield st reng th of 260,000 psi. These steelsare noted for their ultrahigh strength with high

tough ness. The steels were developed for aero-space app lications, but they are now also usedin structural applications. Maraging steelsachieve full strength and toughness throughsimple aging treatment (3 hours at 9000 F or480° C). Hardening and strengthening do notdepend on cooling rates, so properties can bedeveloped uniformly in massive sections withalmost no distortion. Exact figures on con-sumption of maraging steels are unavailable,but during the 1976-78 period, annual con-sumption was in the range of 1,000 to 2,000tons per year of steel, requiring 180,000 to

360,000 pounds of cobalt, Of this consumption,only part is included in the machinery sector.The remainder is consumed in aviation appli-cations and is included in the transportationsector.




conventional Alnico and Fe-Cr-Co magnets ac-count for 90 percent of the market for magnets,with the remainder being accounted for by therare earth-cobalt magnets.

The price increases of the 1978-79 period ini-tiated major efforts at substitution of noncobalt

magnets (principally ceramic-hard ferrites) inmagnetos and loudspeakers. These efforts werelargely successful, to the point that even thoughthe price of cobalt declined, the ferrite mag-nets retained control of their newly capturedmarkets.

Most substitutions that could be mad e weremade during the period of high cobalt prices,and further substitutions are unlikely, exceptin the event of an extremely severe shortageor major price increase.

The outlook for the future use of cobalt in

magn ets is for an extend ed p eriod of relativelylow growth, as shown in figure 3-I. The total

Figure 3-1.- Current and Projected Cobalt

Consumption in Magnets, 1981.90

2,000I

1,500

1,000

500

01981 1990

Year

Other El Motors

Loudspeakers

growth for the 9-year period 1981-90 is esti-mated at 18 percent, or an annual rate of 1 .9

percent. Most striking is the precipitous de-cline in cobalt magnets in the telecommunica-tions area. This decline is due to increasingminiaturization, digital signaling, and large-

scale integration.The importance of cobalt in its present ap-

plications is indicated by Bureau of Mines’ esti-mates that a threefold increase in cobalt pricewould only produce a lo-percent reduction inconsumption, to about 1 ,8 million pounds in1990. A much more drastic increase, a factorof 10, could cause a mu ch more significant d e-crease, to approximately 400,000 p o u n d s ,wh ich w ould be m ostly in the loudsp eaker andmotor applications. This fraction (20 percent)of the normal consumption is viewed by theNMAB as the essential requirement for cobalt

in magnetic applications,

Other Cobalt Applications

There are two p rincipal uses of cobalt in theproduction of refractory and ceramic products.First, cobalt is used to prepare the surface of metals for binding by ceramic layers. In thisapplication, cobalt, in the form of cobalt ox-ide, is added to the glasses that are applied tothe steel base. Second, cobalt oxide is used asan intense blue pigment in ceramic productsand as a decolorizer to offset the effects of ironand chromium in glass.

Organic salts of cobalt, which can be manu-factured from any variety of cobalt metal or ox-ide, are used as driers in inks, varnishes, andoil-based paints. Inorganic salts and oxides areused in pigments, animal feed, and a varietyof other applications, all of which consumerelatively minor amounts of cobalt.

Em Telecommunications

c1 IndicatorsSOURCE” U S. Bureau of Mines, 1982



.

Ch. 3—Critical Materials Consumption: Current Patterns and Trends Ž 71

Manganese

Over 90 percent of manganese is consumedin the pr odu ction of metals, mostly by the steelindustry. The remainder is used within the

chemical industry and the battery industry, andfor various other u ses, Table 3-8 shows the d is-tribution of consumption among the metal-lurgical industries.

Manganese is used by the iron and steel in-dustry in two forms: ore and ferroalloy. Oreis generally added during the ironmaking proc-ess, while ferroalloys may be added to the la-dle after crude steel has been produced.

The fun ction of mangan ese in the p rodu ctionof steel is to improve the high-temperaturecharacteristics of steel by replacing harmful

iron sulfide by the m ore benign manganese sul-fide. When allowed to form, iron sulfide mi-grates to the boundaries between grains in thesteel, where it remains liquid or extremely plas-tic after the rest of the steel has solidified. Asthe hot steel is rolled into useful forms, crack-ing results along grain boundaries, a charac-teristic known as “hot shortness. ” To controliron sulfide formation manganese is generally

added at a ratio of 15 or 20 times the contentof sulfur. In “resulfurized” steels, where sul-fur is added to improve the machining prop-

erties, a minim um ratio of 7.5 parts m angan eseto I of sulfur may be acceptable.

Manganese is also added to steel to improvethe steel’s strength , hardness, or tough ness. Al-though other elements may be capable of im-parting the same properties, manganese isoften preferred because of its low cost and thepast experience with manganese in similaruses,

One steel product with a high percentage of manganese as an alloying agent is the impact-and abrasion-resistant steel known as “had-

field” steel. This use accounts for approxi-mately 70 percent of all high man ganese steel.Total production of these steels is about 100,000tons per year. The had field steels are noted forthe property of work hardening where thestrength of the material increases as it is used .Hadfield steels are extremely useful in appli-cations where equipment is repeatedly sub-

jected to high impact, such as earth-movingand excavation equipment.

Another steel with a high proportion of man-ganese is the 200 series of stainless steels.

These steels were developed in the 1950s and1960s in response to uncertainties over theavailability of nickel. The addition of about 6percent manganese to the 300 series of stainlesssteel allows the reduction of nickel contentfrom 8 to 4 percent. The resulting steel hasperformance characteristics similar to the 300series and enjoys a slight price advantage.However, compared with the widespread ex-perience with the 300 series, satisfactory dataon the performance of the 200 series in ex-tended use is lacking, Moreover, producershave not promoted the 200 series. Thus, the use

of the 200 series has been limited, and thereis no expectation for any change in this pattern.

Manganese is also used in nonferrous appli-cations. The largest of these is the 3000 seriesaluminums, which contain about 1.5 percent




manganese. Estimated manganese consump- teries. Manganese ore is used to produce po-tion by the aluminum industry is between tassium permanganate, drying agents for inks,10,000 and 15,000 tons per year, possibly grow- paints, and varnishes, and as fuel additives.ing to 20,000 by 1990. Manganese use in cast Manganese is also used to a small extent in fer-and wrou ght copper alloys is mu ch less, on the tilizers, animal feed, ceramics, and uraniumorder of 1,500 tons per year. processing.

Manganese, in the form of manganese di-oxide, is u sed in conventional carbon-zinc bat-


The platinum group metals (PGMs) are notedfor their stability in extreme environments.Resistant to high temperatures and to chemi-cal attack, PGMs are used in furnaces for grow-ing single crystals of oxide compounds, in the

manufacture of glass fiber and high-quality op-tical glass, and in thermocouples and elec-trodes in electrical applications, PGMs areused as catalysts in the production of nitricacid, in the refining of petroleum, and in thetreatment of exhaust gas from automobile en-gines. Contacts of both low- and high-voltageswitches employ PGM alloys, as do integratedcircuits and resistors. Other u ses are in jewelryand in medical and dental applications.

The consumption of PGMs grew by a factorof 2.7 between 1950 and 1970. Consumption

in the chemical industry more than doubled,petroleum refining grew to account for one-tenth of consum ption, the electrical uses quad -rupled, dental and medical uses doubled, andglassmaking became another important con-sum er. In th at 20-year period, the on ly declinewas in the jewelry and decorative sector. Thiswas the single largest end user in 1950 account-ing for 35 percent of consumption; in 1965 itaccounted for only 5 percent.

With the p assage of the Clean Air Act in the1970s (Public Law 91-604 and amendments), a

new use for PGMs developed: the automobilecatalytic converter, The catalytic converter wasfirst used nationwide in 1975. Annual con-sumption of PGMs almost doubled within adecade. By 1980, the mix of end uses hadshifted so that autos accounted for 33 percent

of consumption,ical, 13 percent;

electrical, 24 percent; chem-dental and medical, 12 per-

cent; petroleum, 8 percent; and glass and jewelry, 3 percent each (see fig. 3-2].

Consumption patterns of PGMs differ amongthe m etals. While the major use of platinum isin the automotive catalytic converter, the ma-

jor uses of palladium are in the electrical andden tal/ med ical sectors. The other metals areused largely in the chemical and electricalsectors.

Transportation Applications

The imposition of standards for automobileemissions resulted in the u se of catalysts in au-tomobiles, starting with the 1975 model year.As a result, the automotive industry quickly be-came the major consumer of platinum , the keyelement in the catalytic converter. In 1975, ap-proximately 80 percent of all new cars wereequipped with the converter. This converter,intended to promote the complete combustionof carbon monoxide and unburned hydrocar-bons in the hot exhaust gas, averaged approx-imately 0,062 troy ounces of PGMs per car, of wh ich about 70 percent was p latinu m and theremaining 30 percent was palladiu m. By 1983,virtually all new gasoline-powered cars and

light trucks were equipped with catalytic con-verters, Tighter restrictions on the emissions,includ ing oxides of nitrogen, lead to the d evel-opment of a new three-way catalyst that usesmore PGMs, including rhodium, an elementnot found in earlier converters. A typical con-




Figure 3-2.— Distribution of Platinum GroupMetal Consumption by Applications

2,000

0

0

Elq a Decorative

Glass

172if Petroleum

u Dental/medical

SOURCE U S Bureau of Mines

E

1950 1955 1960 1965 1970 1975 1980Year

Miscel laneous

Automot ive

E!is Chemical

Electrical

verter on a 1983 car contains, on the average,0.079 troy ounces of PGMs, of which about 70percent is platinum, 22 percent is palladium,and the remaining 8 percent is rhodium. Thehistorical consumption of PGMs by the auto-motive industry is reported in table 3-9.

The future consumption of PGMs in the cata-lytic converter will be determined by two fac-tors. First is the outlook for domestic produc-tion of cars and trucks. Forecasts of autoprodu ction are dependent on a n um ber of fac-tors, including the price of fuel, the generalstate of the economy, and the competitiveness

of dom estic prod ucers with foreign prod ucers.As a basis for estimating future PGM require-ments, a range of forecasts, based on projec-tions made for the Department of Energy, havebeen made and the baseline results are pre-sented in figure 3-3.

Table 3-9.—Annual Consumption of Platinum GroupMetals in Domestic Automotive Catalytic Converters

Sales of gasoline PGMcars and trucks (1,000s of

Year (1,000s) troy ounces)— —1975 . . . . . . . . . . . . . . . . . 9,346 4431976 . . . . . . . . . . . . . . . . 11,202 5021978. , . ... . . . . . . 11,979 4911979 . . . . . . . . . . . . . . . . . 13,255 6181980 .., . . . . . . . . . . . . . . 10,431 7041981. , . . . . . . . . . . . . . . . 9,827 7221982, ... ... , . . . . . . 9,512 6851983 .., ... , . . . . . . . . . . 10,715 770SOURCE Sierra Research

The second factor to affect critical metal con-sumption is the design of the catalytic con-verter itself. Despite predictions made at theconverter’s introduction, neither improvementsin engine design nor research into alternativecatalysts have resulted in the d ecline in imp or-




Figure 3-3.— Estimated Future Vehicle Sales in the United States

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Model year

tance of the PGM-containing converter as theprincipal means of meeting air quality stand-ards. This will probably continue to be the casefor some time. While it appears p ossible to d e-sign an engine that could meet the air qualitystandards, it seems unlikely that any new de-sign w ill soon be able to compete econom icallywith the gasoline or diesel powerplant.

Based on the m edium -growth p rojections forfuture sales of cars and trucks, and on theassumption that the catalytic converter willremain essentially unchanged, the projectedannual consumption of PGMs in 1995 is esti-mated to be 1.4 million troy ounces. Consum p-tion estimates for 1995 based on th e high au tosales forecast are 1.7 million troy ounces of PGM, and the low forecast results in 1.1 mil-lion tr oy ounces of PGM. Estimated metal con-sumption for the period 1984-95 is shown infigure 3-4.

Construction Applications

Petroleum production accounts for approx-imately 9 percent of U.S. platinum consump-tion as measured by sales of new m etal and re-fined scrap to industry. PGMs are used by thepetroleum industry in two processes: reform-

ing and hydrocracking. Unlike the case of co-balt catalysts, these metals are subject to tightmonitoring and control, with the result that lessthan 10 percent of the annual consumption of these metals is lost in the petrochemical in-dustry,

Chemical Applications

Chemical industry applications include themanufacture of nitric acid from a mm onia. ThePGMs contained in catalysts in these applica-tions are largely recovered for reuse, New ma-terial is required for increases in processingcapacity and to make up losses in recycling.

Electrical Applications

For many years, PGMs, particularly palla-dium, have been used in telephone switchingsystems, a use which is declining as a resultof the rapid introduction of solid-state switches.In tur n, the increased u se of integrated circuitsis resulting in increasing demand for PGMs.In integrated circuits, PGMs are used as con-tacts between the circuit itself and its outerpackage.



Ch. 3—Critical Materials Consumption: Current Patterns and Trends q75

Figure 3-4.—Estmated PGM Requirements in Catalytic Converters forDomestic Automobile Production, 1984.95

-- ----1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Year

I u flhodi.rn u Palladium q platin.rn I

SOURCE Sierra Research, 19&3

Electrical Contacts

An essential property of electrical contactsin mechanical switching systems is low con-tact resistance, or low resistance to the flowof electricity through the surfaces of the con-tacts. This property is greatly influenced by thecondition of the surfaces. Resistivity is in-creased either th rough the w ear of the sur faces

or through the creation of insulating films,If contacts are to have high reliability and

long life, they must be resistant to adhesive andabrasive wear. Adhesive wear occurs wherethe mating surfaces adhere to one another d ur-ing sliding, resulting in the transfer of metalto the opp osite contact, the edge of the contactarea, or to debris. Adhesive wear is determinedby the material’s hard ness and d uctility and bythe strength of the adhesive bond s which formbetween surfaces.

Resistance to corrosion is critical in electri-

cal contacts. Most metals form insu lating poly-mer or oxide films on their surfaces. Generally,although not always, these films have lowercondu ctivity than the su rface metal. Even filmsonly a few angstroms thick can cause substan-

tial increases in contact resistance, so the selec-tion of a surface material for contacts mustconsider the corrosive elements in the operat-ing environment, the chemical products thatmay be formed by the contact metal, and thephysical and electrical properties of thoseproducts.

Of the total consumption of PGMs in the elec-

trical and electronics industries in 1981 , ap -proximately 50 percent went into the produc-tion of electrical contacts, mainly in devicesfor opening and closing circuits in telecom-munications systems. Although gold contactsgenerally offer superior performance, cost con-siderations have resulted in the use of palla-dium and palladium-silver alloys. As a resultof the increasing use of solid-state switchingby the telecommunications industry, the con-sumption of palladium in this application willbe declining for the rest of the century.

Ceramic Capacitors

Ceramic capacitors now constitute the major m arket for p alladium in the electronic sec-tor. The ceramic capacitor ind ustry alone con-




sumed approximately 500,000 troy ounces of palladium in 1983, which is expected to havedou bled to 1 million troy ounces in 1984, Unitshipments of multilayer ceramic capacitors(MLCs), the largest and fastest growing classof ceramic capacitors, are expected to grow at

nearly a 20-percent annual rate through the1980s.

Multilayer ceramic capacitors are rapidlyreplacing the single-layer capacitor, MLCs arebuilt of many thin layers of ceramic material,with electrodes made of gold, silver or PGMalloys separating each of the several thin layers.The electrodes exit on alternate ends of the ca-pacitor, so the plates act in parallel, giving alarger effective area and a h igher capacitance.The manufacturer controls the final capaci-tance of an MLC by varying the area, the th ick-ness of the ceramic layers, the number of layers, and the dielectric constant of the ce-ramic. The end result is a sturdy, highly com-pact capacitor.

In creating MLC conductive layers, manu-facturers use a metallic ink to print electrodeson a tape of ceramic material, which is thenassembled into a capacitor prior to baking orfiring into the finished component. The firingtemperature necessary for the typical ceramicmaterial (alkali-earth titanates)—about 1,3500C—is too high for silver alone to serve as theelectrode material, Gold or platinum could be

used but their high cost, several hundred dol-lars per troy oun ce, leads m anu facturers to u sepalladium or a palladium-silver alloy as theelectrode material.

Driven by a need for lower costs, manufac-turers have advanced MLC technology fromthe use of platinum electrodes in the early1960s, to gold-platinum-palladium electrodes(which are still the most desirable, but most ex-pensive, electrode material) in the late 1960s,to pure palladium in the 1970s, and most re-cently to silver-palladium , Even w ith this sav-

ings, however, the electrodes still account for40 percent of the total material cost in the ca-pacitor, In moving to the 70 percent silveralloy, manufacturers accepted some compro-mise in the properties of capacitors, The use

of the high-silver electrodes, which have alower melting point than the pure palladiumelectrodes they replace, requires a lower firingtemperature to prevent oxidation of the silverduring processing and to avoid reactions be-tween the electrodes and the dielectric layers.

The silver also tends to migrate into the ce-ramic during firing, which can lead to variouselectrolytic reactions, causing inconsistenciesin p erforman ce and, p ossibly, failure of the ca-pacitor.

With a higher melting point, nickel appearsto have greater potential as a substitute mate-rial in the MLC electrode. Prod ucers currentlyfind nickel’s properties difficult to control, butthe Japanese are starting to use nickel in limitedapplications. The use of nickel requires expen-sive processing in an oxygen-free atmosphere,but the lower cost of nickel may p rovide incen-tive for further development.

A developing alternative to palladium elec-trodes is a lead alloy, In this process, knownas the advanced Corning electrode, or ACE, theceramic is printed with an ink made of a mix-ture of carbon-like pow der and d ielectric pow -der. During firing, the carbon material burnsaway, leaving the layers of ceramic separatedby pillars of the dielectric powder, After fir-ing, lead is injected into the voids left by thecarbon powder. This process was introducedin 1983 by Corning [the sixth largest U.S. ce-ramic capacitor manufacturer), with encour-aging results. If this pr ocess is able to prod uceconsistently high-quality products, the lowercost of lead relative to palladium and silver willprovide th e dr iving force to encourage its wid e-spread use.

Acceptance of new manufacturing technol-ogies is often a long process. However, in theMLC ind ustry, which is pressured by Japanesecomp etition and by a growing d emand for pal-ladium that is certain to force prices upward,new processes may be accepted as quickly as

they can be shown to provide the essential highreliability with reduced materials cost. Al-though the growing consumption of palladiumin ceramic capacitors w ill continu e for the n extseveral years, technical advances spurred on



Ch. 3—Critical Materials Consumption: Current Patterns and Trends . 77

by limited supplies of this metal are likely toprovide lower cost alternatives that will even-tually be accepted by the electronics industry,resulting in a slow, but long-term decline in pal-ladium consumption in this sector.

Refractory Applications

PGMs are used as crucibles in the produc-tion of single crystals of certain oxide com-pounds that can only be manufactured atextremely high temperature, The high-tempera-ture resistance, combined with the chemicalstability, allows the production of crystals with-out danger of contamination by the crucibleand tools used in the growth process.

PGMs are also used in the melting tanks,stirrers, and crucibles for m elting high-quality

glass and as d ies and forming d evices for glassfiber.

As with the catalytic uses of PGMs, the re-fractory and glass applications are largely re-covered for reuse.

Other Applications

A variety of chemical compounds are usedin cancer chemotherapy. In addition, PGMsare used in dental app lications in dental crownsand bridges. These are all considered un recov-erable applications of PGMs.

Use of PGMs in jewelry has been relativelylimited in the United States, but it is quite popu-lar in Japan. Platinum alloys make good jewelrymaterial, but they are easily replaced by gold.

Future Applications for Strategic Materials

Nonconventional Energy Systems

In recognition of the limited domestic re-serves of petroleum and the limitations on theuses of coal in its natural form, the UnitedStates has devoted considerable effort to tech-nological approaches to make efficient use of its energy resources and facilities. Some of thiswork h as resulted in new energy systems thatmay have significant effect on U.S. needs forstrategic materials. Several of the technologiesthat may have major requirements for strate-gic materials (particularly the PGMs) are dis-cussed below.

Large-Scale Fuel Cell Stations

In order to make most efficient use of elec-trical generating capacity, a number of powerstorage systems have been examined. In onesystem now in u se, electricity generated in off-peak hou rs moves w ater above a hyd roelectricplant, allowing additional generation duringpeak hou rs without th e need for expensive ad-ditional capacity. Another system being con-sidered for the futu re is based on the fuel cell.The fuel cell is an electrochemical device that

directly converts chemical energy into electricpow er, It can also reverse th e pr ocess, convert-ing electrical energy into chemical energy, stor-ing it, and then converting it back into electri-city when needed.

An example of current fuel cell technologyis the phosphoric acid cell, In this system,hydrogen, which is obtained from methane ornaphtha, is reacted with oxygen from theatmosphere to produce electricity and water.The phosphoric acid, which serves as the elec-trolyte in the cell, is kept at about 350° F. Inorder for the reaction to proceed, a platinumcatalyst is necessary. Demonstration mod els of the fuel cell now require approximately 6.3grams of platinum per kilowatt (kW) of pow eroutput. At a production level of 750 to 1,000megawatts (MW) per year, as suggested by onedeveloper as a target for 1995—in 2000, the an -nual platinum requirement of fuel cells couldbe as high as 6.3 metric tons (tonnes). Thiswould be reduced to 1.9 tonnes per year if de-velopers reach their target for reduced plat-inum loading of 1.9 grams per kW. The needfor platinum may be eliminated if current re-search leads to development of alternative




catalysts or alternative fuel cell designs that donot require platinum catalysts.

Synthetic Fuels

Currently, there is little synthetic fuel produc-tion from coal, oil shale, or biomass. Over the

next 25 years, production of synfuels is ex-pected to increase. Cobalt and PGMs will playa role in the d evelopment an d growth of theseenergy sources,

Liquid and gaseous fuels from coal are ex-pected to be the first large-scale synthetic fuels.Two processes for liquefaction of coal areknown: direct and indirect. In the direct proc-ess, coal is hydrogenated to form a liquid inthe presence of a catalyst, usually containingiron, although one process, the H-Coal proc-ess, uses a cobalt-containing catalyst. In any

case, the liquid products obtained from coaland from oil shale will require substantialhydroprocessing of a type similar to that usedwith petroleum.

In the indirect process, coal is reacted withsteam and oxygen to produce syngas, a mix-ture of carbon monoxide and hydrogen gas.

The syngas is converted catalytically to meth-ane (using a nickel catalyst) or to gasoline(using an iron or a cobalt-containing catalyst).

Critical Metals in Automobiles

The automobile of the future will certainlydiffer from those of today. With the large cap-ital investment required to manufacture themillions of au tomobiles sold every year, it canbe assumed that changes in design will not beradical, but even grad ual changes may h ave sig-nificant effects on the consumption of strate-gic metals. One example is dual-fuel vehicles.These vehicles use a mixture of gasoline andmethanol (from 3 percent up to 10 percentmethanol). The methanol content requires amore corrosion-resistant material for the fueltank, fuel line, and carburation system than is

now used in automobiles. Stainless steel nowoffers the best performance characteristics formu ch of the fuel system w hen a gasoline/ meth-anol mixture is used. However, auto manufac-turers hope to develop alternative materialsthat will have lower raw material and fabrica-tion costs.

Summary: Essential Uses of Strategic Metals

Attempts to predict future requirements formaterials are fraught with difficulties, owingboth to the uncertain growth of industrial andconsumer needs and to unforeseen changes inmanufacturing technology. Discussions of fu-ture essential requirements for specific ma-terials are even more difficult since essential-ity is not a simple yes-or-no characteristic. Theneed for a material in a particular applicationdepends on the cost and performance of alter-native materials and on the time available toreplace the material, to redesign the compo-nent in which the material is used, or even to

eliminate the need for the application al-together.

Despite the difficulties, however, it is neces-sary to estimate future materials requirementsand to identify the applications in which chro-

mium, cobalt, manganese, and PGMs are mostessential. As a starting point, it is helpful toconsider extrapolations of current m aterials re-quirements. The U.S. Bureau of Mines hasmad e statistical p rojections of futu re m aterialsrequirements based on current patterns andtrends; these are presented in table 3-Io.

While these projections are u seful as a start-ing point, there are a number of importantmodifications and clarifications that arise froma detailed study of the major uses of strategicmetals. The major points are as follows:

q Chromium consump tion for m ost applica-tions, other than chemical and refractoryuses, will require high-carbon ferrochrome.In the aviation industry, however, the re-quirement for low carbon content and high




Table 3-10.–U.S. Bureau of Mines Estimates of Probable Demand for Strategic Metals in the Year 2000

NOTE 1 Statistlcson useof cobalt in glass and ceramics were combined wflh thoseon paint and chemical uses In 1983

SOURCE U.S Bureau of Mines, Mineral Commodity Profdes, 1983

purity will mean that the industry willneed substantial amounts of low-carbonferrochrome (6,500 tons of contained chro-mium in 1995) and chromium metal (3,700tons in 1995).

Requ irements for PGMs in the electronicssector are likely to be considerably higherthan projected by the Bureau of Minesowing to the rapid increase in palladiumconsumption in ceramic capacitors. Esti-mated consumption in 1983 of 500,000troy ounces of palladium already exceedthe Bureau of Mines’ forecast of 300,000troy ounces in 2000. Anticipated consump-tion of 1 million ounces in 1984 and a p rojected annual growth rate of 20 percent perannu m ind icate that estimates of PGM re-

quirements for the electronic sector arelow and in need of further study.q Requirements for platinum, palladium,

and rhodium in the automotive sector donot include PGMs contained in the cata-lytic converters of imported automobiles,Other factors, including the use of plat-inum-containing particulate traps will alsoresult in higher consumption of PGMs.Estimated requiremen ts for PGMs in cata-lytic converters in 1995, made by SierraResearch for OTA, are for 1.4 million troyoun ces, almost 50 percent greater than the

Bureau of Mines’ forecast.q Estimated consumption of cobalt, chro-

mium, and PGMs do not distinguish be-tween primary metal, produced directlyfrom mined ore, and secondary metal ob-

q

tained from prompt industrial and obso-lete scrap.Estimates of future manganese require-ments are based on the assump tion that theratio of manganese to iron used in steel-making will decline by only 10 percent bythe year 2000.

Although it is difficult to estimate the spe-cific quantities of strategic metals that can bedeemed to be essential, it is possible to iden-tify the principal applications that are essen-tial to the United States and th at use chromium ,cobalt, manganese, and PGMs to fulfill theirfunctions. These applications, and their stra-tegic materials requirements, are summarizedbelow,

Superalloy

Chromium, in the form of both chromiummetal and low-carbon ferrochromium , is an es-sential element in superalloy. In addition, co-balt is currently used in a number of super-alloy, particularly in the applications of highest temperature and stress. To meet futu rerequirements for superalloy in gas turbineengines, jet aircraft, and other app lications, thechromium requirements for 1995 are estimatedto be 3,700 tons of chromium metal, 6,500 tons

of low-carbon ferrochrome, and 8.3 millionpounds of cobalt. Similar estimates for the year2010 are 6,800 tons of chromiu m metal, 12,000tons of chromium in ferrochrome, and 13 mil-lion pounds of cobalt.




Stainless Steel for Construction

Stainless and other alloy steels are used inthe energy and chemical process industries toprovide resistance to high temperature, corro-sion, and oxidation and to limit contam ination

of chemicals that could occur from the use of less resistant materials in tanks, piping, andprocess vessels. In 1979, the Department of Commerce estimated chromium requirementsfor the energy industry at 27,000 tons in 1990and 33,000 tons in 2000. NMAB estimates w erelower (see table 3-4). The bulk of the chromiumwill be used as high-carbon ferrochrome, buta small percentage of the applications will bein special alloys that require low-carbon ferro-chrome or chromium metal.

Automobiles

In au tomotive ap plications, the catalytic con-verter accoun ts for about 85 percent of the es-sential uses of chromium and all of the usesof PGMs. The estimated essential requirementsfor chromium in automotive applications willbe 15,000 short tons in 1990 and 16,000 shorttons in 1995. Requirements for PGMs are 1.3million troy ounces in 1990 and 1.4 million troyounces in 1995. Estimates for both chromiumand PGMs are for all automobiles sold in theUnited States. Direct U.S. requirements forchromium and platinum metal will be reduced

by the d egree of market penetration m ade byforeign automobiles.

Cemented Carbides

Cemented carbides are one of the most essen-tial applications of cobalt. There are no accept-able alternatives to cobalt for binding the car-bide particles together, so virtually all cobalt

in this use is essential. Estimates for 1995 co-balt requirements in cemented carbides areabout 1.3 million pounds, rising to about 2. Imillion pounds in 2010.

Industrial Catalysts

The use of catalysts in the petroleum andchemical industries is expected to grow at ahigh rate, more than doubling by the year 2000.Although in some cases there are alternativesto the processes that utilize cobalt and PGMcontaining catalysts, once facilities are con-structed there is little opp ortun ity to substitutean alternative process that reduces cobalt orPGM demand unless large investments aremade to modify plant designs.

Manganese in Steelmaking

Manganese is essential to the manufactureof steel. The amount that is essential to theUnited States depends on the essential needsfor steel, the mix of steel products (i.e., carbonsteel; alloy steel; high -strength , low-alloy steel;and stainless steels), the sulfur content of theraw steel, and the efficiency of the steelmak-ing process.

Palladium in Electronic Components

Over the next few years, the use of palladiumalloys as electrodes in ceramic capacitors will

cause palladium consump tion in the electronicsector to increase to a level substantially greaterthan indicated by the Bureau of Mines’ esti-mates. However, the development of new tech-nologies, wh ich w ill be spu rred by the limitedavailability of palladium relative to the needsof the manufacturers of ceramic capacitors,will then cause a d ecline in the d emand for pal-ladium,



CHAPTER 4

Security of Supply



Page

Factors That Affect Security of Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84Depletion of World Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84Demand Surges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . + . . . . . . . . . . . . . . . . . . . 85Cartels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86Political Embargoes and the Resource War. . . . . . . . . . . . . . . . . . . . . . . . . . . 87Civil Disturbances, Local Wars, Internal Troubles . . . . . . . . . . . . . . . . . . . . . 90

Materials Sup ply Inter ru ptions Since Wor ld War II . . . . . . . . . . . . . . . . . . . . . 91Soviet Embargo of Manganese and Chromium, 1949 . . . . . . . . . . . . . . . . . . 91U.S. Embargo on Imports of Rhodesian Chromium, 1966-72 . . . . . . . . . . . . 92Canadian Nickel Strike, 1969 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94The Cobalt Panic, 1978-79 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

The Effects of Supply Interruptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..102Materials Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................104

Self-Sufficiency v. Interdependence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...105Commission Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............106Congressional Actions and Government Policies . . . . . . . . . . . . . . . . . . . . . .112

The Range of Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............119

List of Tables

Table No. Page 4-1. World Reserves of Selected Materials, 1950 and 1981.. . . . . . . . . .......844-2. Mine Production of Cobalt in the Non-Communist World . ...........1004-3. U.S. Consumption of Cobalt by Use . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . .100

List of Figures

Figure No. Page

4-1. Selected Mineral Resources of Central and Southern Africa . . . . .......894-2. Transportation Routes for Minerals in Central and Southern Africa ....984-3. Estimated Price Effects on U.S. Cobalt Demand . . . . . . . . . . . . . . . . . . . .101



CHAPTER 4

Security of Supply

Import dependence—i.e., the proportion of dem and sup plied by foreign sources–is not the

same as imp ort vu lnerability. The stability andreliability of foreign sources of supply, plustheir number and diversity, are major factorsin gauging whether or not this Nation is vul-nerable to disruptions in the supply of a givenimported material.

The prep ond erance of U.S. minerals importscomes from reliable sources—allies and closeneighbors. Canada is this country’s leading pro-vider of nonfuel minerals, accounting for one-third of the total value of U.S. minerals imports.Of the 34 minerals shown in chapter 2 (fig. 2-1), Canada is the largest sup plier of 12, includ -ing iron, nickel, zinc, tungsten, selenium, cad-mium, asbestos, and potash. Australia is by farthe United States’ biggest source of rutile orefor making titanium (one of the essential me-tals for airplane parts and engines) and is a sig-nificant supplier of alumina and cadmium,Mexico is a dominant or major supplier of adozen minerals, including strontium, fluorspar,natural graphite, silver, cadmium, and zinc;and Brazil sells the United States large amountsof manganese. Venezuela is a major providerof rich iron ore.

For a few specific minerals, however, theUnited States is highly depend ent on a limitednumber of sources that could prove unstable.It may fairly be said that vulnerability of sup-ply for some of these materials has increasedover the past 30 years. Suppliers that were oncecolonial dependencies of Western Europeancountries and reliable hosts to internationalmining comp anies are now struggling n ew na-tions. Many of them are experiencing difficul-ties in running their own n ationalized m ineralsindustries, and some are quite vulnerable tocivil disorder and local wars.

Sup plies even from sou rces regarded as reli-able can be interrupted. Such was the case in1969, when a months-long strike of the Inter-national Nickel Co. in Ontario sent nickel

prices soaring and users scrambling for sup-plies. In add ition, the security of imports from

a friendly trading partner like Australia maybe called into question because the supply linesare so long. Nor is domestic production proof against interruption of supply. For example,molybdenum was in short supply, here andabroad, from 1974 to 1979, even though theUnited States is the world’s largest producerand exporter of this mineral. The shortagecame about because of a world depression incopper production, of which molybdenum isoften a byproduct, and because the large newHenderson mine in Colorado was not yet inoperation. Moreover, in 1979, after the Hen-

derson mine was producing, a 9-month strikeat Canada’s Endako mine kept w orld prod uc-tion of molybdenum flat. That year, spot mar-ket prices shot up to triple the mining compa-nies’ contract price.

It should be noted that the decline of theAmerican steel industry may be said to in-crease the vulnerability of the entire U.S. econ-omy, and to make the Nation less self-sufficientin defense. This troubling problem goes to theheart of U.S. economic strength and interna-tional competitiveness, and it is receiving

sustained attention from analysts and policy-makers. However, it involves many issues thatare outside the scope of this report. Readersinterested in these issues are referred to a priorOTA assessment, Technology and Steel Indus-try Competitiveness.

1

Altogether, security of minerals supply hingeson a broad variety of factors. One concern, verymu ch to the fore in the early 1970s but less sonow , is the dep letion of world resou rces in theface of escalating demand. An impermanentbut recurring difficulty for many minerals isboom-and-bust cycles, with surges of demandcoming from the most volatile parts of the

IOffice of Technology Assessment, Technology and Steel In- dustry Competitiveness, OTA-M-122 (Washington, DC: US. Gov-ernment Printing Office, June 1980).

83




economy during the time when users of theminerals are experiencing t ight sup plies, short-ages, and high prices. In the bust side of thecycle, minerals investments in everything fromexploration to modernization may declineprecipitously, and some mines and plants that

are closed down may never reopen.

Recently, concerns about security of supplyhave centered around the possibility of a car-te l gaining control of cr i t ical ly neededminerals, of a Soviet-inspired squeeze onminerals from central and southern Africa, orof unplanned, unpredictable civil disturbances

or local wars.

Factors That Affect Security of Supply

Depletion of World Resources

The Earth’s resources are, of course, finite,But the minerals that underpin industrial so-ciety seem to be in no immediate danger of “running out” in the physical sense, at leastfor the next 30 to 50 years. Technology has con-

tinually extended both reserves—the id entifiedinventory that can be mined profitably underpresent economic and technical conditions—and the larger body of known or potential re-sources, Table 4-1 shows the changes in provenworld reserves of 13 minerals over 30 years.Most of them increased by at least 100 percent,and several by more than tenfold, even whileworld d emand shot up ward , especially in Ger-many and Japan.

The reason for the continued growth in re-serves of the world’s minerals is that the means

Table 4-1 .—World Reserves of Selected Materials,1950 and 1981 (tonnes unless otherwise stated)

Material

Bauxite . . . . . . . . . . ~¥ Î•¦ Î• .Chromite a . . . . . . . . . . .Cobalt . . . . . . . . . . . . . . .Copper . . . . . . . . . . . . . . .Iron . . . . . . . . . . . . . . . . . .Lead . . . . . . . . . . . . . . . . .Manganese . . . . . . . . . .Molybdenum . . . . . . . . . .Nickel. . . . . . . . . . . . . . . .Platinum groupb . . . . . . .Tin ., . . . . . . . . . . . . . . . .Tungsten . . . . . . . . . . . . .Zinc . . . . . . . . . . . . . . . .

1950

1.4 x 1 09

1.0 x 10 8

7.9 x 105

1.0 x 108

1.9 x 1010

4.0 x 107

5.0 x 108

4.0 x 106

1.4 x 107

2.5 X 107

6.0 X 106

2.4 X 106

7.0 x 107

1981 1981/1950 — ——2.2 X 10 10 163.4 x 109 343.1 x 106 45.1 x 108 52.7 X 1011 141.7 x 108 44.9 x 109 109.8 X 106 25.4 x 107 41.2 X 109 481.0 x 107 2

2.9 X 106 12.4 X 108 3

~hromlum orebTroy ounces

SOURCES For all 1950 figures except platinum group, John E Tilton, The Future of Norrfue/ Minera/s (Washington, DC Brooklngs Institution,1977), p 10 For 1981 f!gures and 1950 figures for plat!num group,U S Department of the Interlot, Bureau of Mines

of discovering them, mining them, and proc-essing them have steadily improved. For exam-ple, through technological advances, manylower qu ality ores are now just as usable as thericher ones were before them. An importantinstance is chromium, where the distinctionbetween the metallurgical grade of chromiteore, with its higher chromium content, and thelower chemical grade has lost most of its sig-nificance just in the last 10 years, Thanks toa steelmaking ad vance (called the argon-oxygen-decarburization or AOD process), high-carbonferrochromium (mad e with the chemical grad eof chromite ore) can be used in place of low-carbon ferrochromium (made with the metal-lurgical grade) in the production of stainlesssteel.

Another point about physical depletion isthat nonfuel minerals, unlike fuels, are gener-

ally not consumed with u se, Many can be recy-cled. In some instances, recycling may not beeconom ical because the m ineral ingredients infinished products are widely scattered, de-graded, or inconveniently combined with othermaterials. Yet recycling is already an impor-tant source of supply for many minerals andcould become more so with advances in tech-nology.

How long technology can extend the life of the Earth’s resources is, of course, a seriousquestion. Just because it has done so satisfac-

torily in the past is no guarantee that it will inthe future, especially when world populationis growing at a staggering pace and soaring de-mands for resources may follow. Mineralseconomists generally argue that depletionwou ld m ake itself felt as a persistent long-term



Ch. 4—Security of Supply q 8 5

rise in materials costs rather than an abruptphysical running out of stocks.2 This expecta-tion may be too optimistic. According to onegeophysical theory, most metals have a “min-eralogical barrier” beyond which the energyneeded to release them from the rocks in which

they are bound leaps 100 to 1,000 times. Thebarrier may be reached for all “geochemicallyscarce” metals—which is to say, all but five—within a century. 3

The Earth’s crust contains just 12 “geochem-ically abundant” elements, which account forover 99 percent of the mass. Five of these ele-ments are metals: aluminum, iron, magnesium,titanium, and manganese, A steadily increas-ing amount of energy will be needed to pro-duce even these metals from progressivelyleaner ores. But for all the other metals, amineralogical barrier may exist, usually atore concentrations of about one-tenth to one-hundredth of 1 percent, past which the metalis no longer concentrated in an ore body. In-stead, it is dispersed as atoms, isomorphicallyreplacing atoms of the abundant elements incommon rocks. Once the mineralogical barrieris reached, the energy needed to release thescarce metals will be so great, and the pricesso high, that according to the theory, new sup-plies of these metals will no longer be pro-duced. According to this theory, a “SecondIron Age” will begin when “it will be simply

cheaper to substitute iron and aluminum andput up with penalties, such as lower efficien-cies in machines, that we do not now coun-tenance.” 4

Analysts of the “cornucopian” persuasionconcede that minerals depletion is in fact oc-curring, but they do not regard the loss as cru-cial. 5 The ultimate raw material, they say, isenergy. Assuming that world popu lation stabi-

2See, for example, Hans H, Landsberg and John E, Tilton, with

Ruth B. Haas, “Nonfuel Minerals, ” in Current Issues in Natu-ral Resource Polic~r, Paul R. Portney with Ruth B, Haas (eds. )

(Baltimore: The Johns Hopkins University Press, 1982), pp. 83-84.3For a succinct statemen t of the th eory, see 13 ria n J. Skinner,

“A Second Iron Age Ahead?” American Scientist, May-June 1976,pp. 258-69.

41 b]d,, p . 267.5 H, E. Goeller and Alvin M. Weinherg, “The Age of Sub-

s t i tu t ahi l ity, ” Science, Feb. 20, 1976, p. 688.

lizes, decent standards of living can be sus-tained indefinitely “provided man finds an in-exhaustible nonpolluting source of energy.” 6

They envision a new “Age of Substitu tability,”in which society would be based largely onglass, plastic, wood, cement, and the “inex-

hau stible” minerals: iron, alum inum , and mag-nesium. Whether societies have the capacityand foresight to plan a smooth transition fromthe present age of fossil fuels and materialsabundance to the Age of Substitutability is aharder question. But, from the cornucopianpoint of view, there are no technical bars inthe way so long as energy is available.

Demand Surges

Temporary shortages and price spikes formaterials in response to peaks of dem and h ave

sometimes been interpreted as signs of re-source depletion, Two major studies of mate-rials policy were started, in fact, at a time of demand surge and materials shortages, one inthe early 1950s during the Korean war, andanother in 1973-74, when all the w orld’s ind us-trial countries were riding a wave of prosper-ity together. In both cases, the shortages provedshort-lived. With a d ownturn in business activ-ity, minerals indu stries foun d th emselves withexcess capacity, as they typically do after aboom is over.

Copper is an example.7 Like many minerals,it is used in construction, transportation, cap-ital equipment, and consumer durables, all of which react in exaggerated form to the peaksand valleys of economic activity. In 1973 andearly 1974, with the economies of the UnitedStates, Japan , and Western Europe on a simu l-taneous upswing, there were serious coppershortages, aggravated by attempts of industrialusers to build up inventories for security of sup-ply, Within 2 years, the situation reversed.

——.61bid. , p. 688.

‘Copper is not generally regarded as a strategic material t oda j ’because the United States is a large prod ucer, and sup plies arecurrently more than ample, The copper indu stry d oes clearlyill ustrate th e cyclical nature of minerals ?]roduction, whetherof strategic minerals or ]CSS critical ones In genera], througtl-out this chapter, minerals that ma~ not be strategic are used forillustrative pu rposes.




Prices slumped. Copper mines and smelters inthe United States, the world’s largest producer,were shut down. As industry revived in 1976-77, copper followed. With the recession of 1982, copp er once more h it bottom, w ith p ricesdrop ping 30 percent in 2 years and mines clos-ing throu ghou t the American West. At the endof 1982, all of Anacond a’s* mines and smelter sin Montana were closed down or scheduled forclosing. The hu ge Phelps Dodge op en pit m inein Morenci, AZ, was shut down for severalmonths in 1982—the first such closing due toa business slump since the Great Depression.9

Instability in the minerals industries is an oldstory, but some forces in recent years may bemaking it worse. One detailed study of fluctu-ations of industrial production in the UnitedStates, Japan, and several European countriesconclud ed that the u ps and dow ns of business

cycles are now more pronounced than theywere in the 1950s and 1960s, and that th ey arealso more synchronized among the world’s in-dustrialized nations.10 Other recent evidencesuggests that stocks of copp er held by U.S. in-dustry are smaller than they were 20 or 30years ago, and are not being used to counterswings in the business cycle as they oncewere, *l The same may be true of other min-erals. Another possible factor: U.S. coppermines and smelters seem to have suffered morethan a proportionate share of the loss in timesof low world demand in recent years, becausenationalized mines in some developing coun-tries have been kept open to save jobs and pre-cious foreign exchange even when prices didnot cover the costs of production.

Related to the surges and drastic drops in de-mand that are typical of minerals industries islagging investment in mines and processing fa-cilities. Inad equate inv estment w hile prices are

‘3 Now owned by The Atlantic Richfield Co,@’Arco Unit to End Copper Mining in Butte, Mont.” Wall Street

Journal, Jan. 10, 1983; Jay Mathews, “U.S. Copper Industry, Besetby High Costs, Low Prices, Losing Out to Foreign Producers,”

Washington Post, June 22, 1982,IODa~d Chjen, “Bwjness Cycles and Instability in Metal Mar-

kets,” Materials and Society 5(3), 1981, pp. 257-265.llTirnOthY J. GrUbb, “Metal Inventories, Speculation, and Sta-

bility in the U.S. Copper Industry, ” Materials and Society 5(3),1981, pp. 267-288,

low an d facilities idle sows th e seeds of futu reshortages. To be sure, such shortages tend tocorrect themselves, because the high pricesthey bring induce the needed investment. Butlead times for opening new mines, processingplants, and support facilities are from 2 to 7years, and meanwhile, industries dependent onthe minerals may suffer hardship and disloca-tions for several years.

Cartels

The success of the Organization of PetroleumExporting Countries (OPEC) cartel convincedmany people that producers of other raw ma-terials—bauxite, chromium, copper, phosphates,and perhaps tungsten—would get together toseize control of their markets. So far, it has nothappened. One of the classic conditions formonopoly control does exist for quite a fewnonfuel minerals; that is, a limited number of suppliers. In addition, some minerals are es-sential for certain industries with, at least forthe present, no very good substitutes, Often,these same minerals account for a very smallshare of total pr odu ction costs. These two fac-tors make for inelasticity of deman d an d favorthe success of cartel control of produ ction an dprices, at least in the short run.

There are several reasons why these condi-tions have not been enough to create a mineralcartel like the oil cartel. As noted earlier, the

total costs of U.S. nonfuel minerals imports,compared with oil imports, are small. Also,most nonfuel minerals are far less bulky thanoil and therefore much easier to store. Min-erals-using industries generally keep a stock onhand, and the U.S. Government (although notEuropean or Japanese governments) has a 1-to 3-year reserve of many critical materials tomeet national defense needs in an emergency,

Significantly, markets for most nonfuel m in-erals have been soft since mid-1974. And formany p rodu cer coun tries (e.g., Zaire, Zambia)

minerals exports are the m ainstay of the econ-omy. Considering the state of the market, theexistence of government and private stocks, theexistence of substitutes for man y m aterials, thepotential for development of substitutes for




others, and the threat of new, alternate sup-pliers to any cartel, these producers could notrisk supply stoppages. Most importantly, pro-ducer countries as diverse in ideology andgoals as Zimbabwe, South Africa, and the So-viet Union m ight find it d ifficult indeed to co-operate in an OPEC-like organization that setsproduction controls and prices.

Producers of copper and bauxite did takesteps to restrict supply an d raise prices in 1974and 1975. The copper effort, undertaken bymembers of the International Council of Cop-per Exporting Coun tries (CIPEC) was a failure,The CIPEC agreement to reduce copper ex-ports by 15 percent had no effect on prices,Copper exporters thus turned to urging pricestabilization agreements, which require theconsent of purchasing countries. These efforts,mad e through the United N ations Conference

on Trade and Development, also failed.More successful was Jamaica’s imposition of

sharply higher taxes on bauxite. U.S. aluminumproducers tolerated the higher price resultingfrom the tax because they had no alternativesup plier as convenient as n earby Jamaica, andthe cost of bau xite is a small fraction of the costof finished alum inum . Non etheless, du ring thealuminum recession of 1974-76, Jamaican out-pu t of bauxite dropped 30 percent, while baux-ite production expanded in Australia, Guinea,and Brazil, none of which had imposed high

taxes.Because producer countries in the develop-

ing world had little success in the 1970s in cre-ating minerals cartels does not guarantee thatcartels will never succeed, Arguing against suc-cess is the distinct lack of common goals amongproducing countries and the deterrence ex-erted by stockpiles and substitutes. Arguing forit, in the short run at least, is the fact that afew important minerals are produced in a veryfew coun tries, It is worth keeping in mind thatmost minerals cartels in the past have fallenapart because consumers conserved or foundsubstitutes, other sup pliers got into p rodu ction,and cartel members were tempted to cheat,raising ou tput or lowering prices in the attemp tto maintain their own income or foreign ex-

change. OPEC itself has been under severestrain for several years as a result of thesefactors.

Another point to consider is that monop-olistic control of the m arket for economic pu r-poses does not necessarily imply shortages or

price leaps. Monopolies are certainly not un-known in minerals history. Past examples in-clude Canada’s Inco, formerly preeminent inworld nickel produ ction, and the Un ion Miniereof Belgium for cobalt in the days before Zaire’sindependence. In these instances, monopolycontrol resulted in rather reliable levels of production and prices that remained stable, al-though prices probably w ere higher than theywould have been under competitive conditions.

Political Embargoes and the Resource War

As fears of cartel control over nonfuel min-erals have faded somewhat, a new fear hasgrown that th e supp ly of critical materials maybe choked off for political reasons. Govern-ments, including that of the United States, re-strict both imports and exports to serve politi-cal goals. From 1966 to the end of 1971, theUnited States cooperated w ith United Nat ions’sanctions against the former British colony of Rhodesia, refusing to buy Rhodesian chromebecause the colony resisted greater participa-tion by blacks in the government. The UnitedStates has also proh ibited nickel and other im-

ports from Cuba since the 1960s.Now, some analysts believe that the Soviet

Union is carrying ou t a grand , long-term strat-egy to gain control of both Mideastern oil andAfrican minerals, and to threaten the Westwith the loss of these critical materials. Theybelieve that the Soviet invasion of Afghanistan,Soviet influence and the presence of Cubantroops in Angola and other African nations,and the buildup of the Soviet navy are all piecesof the strategy.12 In their view, “state domi-

IzSome publications expressing this view are Council on ECO-

nomics and National Security, Strategic MineraIs: A ResourceCrisis (Washington, DC: 1981); and World Affairs Council of Pitts-burgh, The Resource War in 3-D–Dependency, Diplomacy, De-

fense (Pittsburgh: 1980).




nance," rather than commercial ownership, of mineral resources in Third World countriesgives the Soviet Union access to these mineralsthrough political agreement, backed up by So-viet military power.13 Figure 4-1 shows themineral-rich part of Africa which has promptedthe greatest concern abou t possible Soviet con-trol of resources.

A variation of the resource war argument isthat the traditional Soviet self-sufficiency inminerals is crum bling, and that the Soviet Un-ion plans to rely on political and military d omi-nation of Africa rather than on costly economiccompetition with Western nations to get the re-sources it needs, Proponents of this idea pointto Soviet and Eastern bloc purchases, begin-ning in 1978, of chromium, cobalt, manganese,tantalum, titanium, and vanadium, togetherwith halts or large cutbacks in exports of plati-

num, gold, and titanium.14

Other observers of this situation find the p ic-ture of a full-scale resource war un persu asive.15

While not discounting “the desire and abilityof the Soviet Union to create mischief for theUnited States and its allies,”16 they see little evi-dence so far that Soviet activities in Africa arepart of a grand design to grab minerals forthemselves and deny them to the West. If theSoviet Union wanted to mount a direct chal-lenge to the Weston resou rces, these observerssay, it would be far more likely to choose the

—.—lawilliam casey, Director, Cent ra l Intelligence Agency, Speech

to U.S. Chamber of Commerce, Apr. 28, 1981, reprinted in Con-

gressional Record, June 23, 1981, S6779.1

4Daniel 1, Fine, “Mineral Resource and Dependency Crisis:

Soviet Union and United States” in World Affairs Council of Pittsburgh, The Resource War in 3-D, cited in note 12. For a moremoderate view of increasing Soviet dependency on minerals im-ports, with n o conclusions d rawn as to the consequences fora “resource war, ” see Daniel S. Papp, “Soviet Non-Fuel MineralResources: Surplus or Scarcity?” paper prepared for the Schoolof Advanced International Studies (SAIS), The Johns HopkinsUniversity, May 1981.

IsSee for examp]e, Hans H. Landsberg, et al., “Nonfuel Min-erals, ” cited in note 2; and Robert Legvold, “The Strategic Im-plications of the Soviet Union’s Nonfue l Minerals Policy”; Her-bert Howe, “The Soviet Union and Southern Africa: APatron-Client Relationship?” Michael Moodie, “The Soviet Navy:A Weapon in the ‘Resource War’?” Robert E. Osgood, “The Secu-rity Implications of Dependence on Foreign Nonfue l Minerals, ”papers prepared for the SAIS, cited in note 14,

16Hans H. Landsberg, “Minerals in the Eighties: Issues andPolicies, An Exploratory Essay,” paper prepared for the OakRidge National Laboratory, Oak Ridge, TN, 1982.

Mideast than southern Africa. The Mideast isnearby and has the oil that is the West’slifeblood.

The actual behavior of African nations withMarxist governments and stron g ties to the So-viet Union so far has not resulted in efforts to

disrupt minerals supply to the West. All of them maintain economic relations with theWest. They are keenly aware of their need forincome and foreign exchange from mineralsexports. Angola, for example, even with itsthousands of Cuban troops, protects Gulf Oilfacilities and encourages further foreign invest-ment. Likewise, Zimbabwe is trying to expandits minerals exports, and Mozambique hasgrowing American investment. One contribu-tor to a series of scholarly papers on the So-viet Union and the resource war, prepared forthe School of Advanced International Studies

of the Johns Hopkins University, said:The vocabulary of the resource war, when

add ressing Southern Africa, mentions p ossibleSoviet desires; often it neglects to examine So-viet abilities to realize their desires , . . Today,despite sizable military aid for the region fromMoscow, probably all of the states harbor ahealthy d istrust of Soviet tactics and meth-ods . . . Along with Soviet economic and polit-ical failings, [the region’s] growing dependencyupon Western economic institutions shouldpreclude sou thern African states from becom-ing Soviet clients .17

This analyst believes the dan ger from Sovietinfluence will be greatest if South Africa con-tinues its sup port of insu rgent group s in neigh-boring black African states, including non-Marxist Zambia as well as Angola and Mozam-bique. The danger is that, to repel the insur-gents, these nations m ight become increasinglydependent on Soviet military aid and mightthen be forced into a client-state relationship.18

Several observers report that they see littleevidence of rapidly increasing Soviet depen-dence on imports of strategic materials. They

believe that the recent Soviet bu ying forays forsome minerals and the cessation of the sale of

17 Herbert Howe, “The Soviet Union and Southern Africa, ”cited in note 15, p p . 2, 5.*eIbid., pp . 17-19.




Figure 4-1 .—Selected Mineral Resources of Central and Southern Africa

GABON:Manganese

ZAIRE:Copper

CobaltIndustrial diamonds

Chromium

BOTSWANA:Industrial diamondsCobaltNickel

Copper

SOUTH AFRICA:

ChromiumManganesePlatinum group metalsVanadiumIndustrial diamondsNickel

SOURCE ~ff!ce of Technology Assessment, based on U S Department of the Inter! or, Bureau of Mines data

38-844 0 - 85 - 4 : QL 3




others signify “the consequences of poor So-viet planning, shoddy maintenance of facilities,and low production efficiency, ” not an “emerg-ing minerals shortage that could lend a com-mon rationale to these actions.” 19

Indeed, as the qu ality of Soviet ores declines,

and as new minerals exploration moves northand east into the forbidding Siberian environ-ment, Soviet leaders may gradually abandonself-sufficiency as a top priority goal and maylook to the outside world for cheaper, moreconvenient sup plies of some minerals. But thisdoes not necessarily imp ly that they w ill resortto strong-arm methods or a resource war to getthose supplies.

One Soviet specialist asks: “Even were theSoviet Union shortly forced to import 5 to 10percent of its lead, zinc, or titanium needs,

what in that circumstance would begin to justify the risks of plundering Western sourcesof supply?”20 Instead, he suggests, Soviet leaderswishing to buy a greater share of mineralsabroad would use the conservative commercialapp roach they already u se in foreign trad e, pos-sibly relying heavily on barter arrangements,or on d evelopm ent aid in w hich they are repaidin minerals.21

In sum , this school of though t holds th at So-viet actions affecting the price and availabil-ity of African minerals is a matter of seizing

opportunities rather than carrying out a stra-tegic plan. They do agree, however, that the So-viet Union will go on trying to gain politicalpower and influence in Africa by exploitingtribal conflicts, strong anticolonial feelings,and the opposition of black majorities to therule of white minorities. Furthermore, theyagree that mineral imports to this country andits allies from the richly endowed but tr oubledregions of central and southern Africa are d ef-initely vulnerable.

——leLandsberg, “Minerals in the Eighties, ” cited in note 16. See

also, William R. Severin, “Soviet Non-Fuel Minerals: RecentTrends and Prospects, ” prepared for the SAIS cited in note 14 ,

and Legvold, cited in note 15.ZOLegvold, cited in note 15, p. 17 .

ZIIbid. , pp. 18-21

Civil Disturbances, Local Wars, Internal Troubles

Civil strife, insurrections, d ifficulties of man-agement, and breakdowns in m ine produ ctionhave, in the past, threatened the security of minerals sup ply from Africa. In m any p eople’s

judgment, these are the kind of events mostlikely to cause interruptions of minerals im-ports in the foreseeable future.

The supply of Zairian cobalt, never actuallycut off, has been threatened by insurrectionand civil war in central and southern Africa.Angola’s Benguela railway was the major routebetween central Africa’s copper and cobaltmines and the rest of the world until the civilwar shut it down in 1975. Zaire and Zambiahad to scramble to find other exit routes fortheir minerals, including throu gh South Africa,and are still relying on these less satisfactory

routes, If the Angolan railway had shut d ownat a time of strong demand for minerals, theinterrup tion m ight well have driven up pricesand disrupted markets, In fact, the 1978 inva-sion of Zaire’s Shaba province, with a brief oc-cupation by the insurgents of the mines andprocessing facilities, had more serious conse-quences for the world cobalt market, as de-scribed later in this chapter.

In the futu re, the state of domestic peace andstability in central and southern African na-tions such as Zaire, Zambia, Zimbabwe, and

Gabon, will strongly affect minerals productionand export. Nor is South Africa exempt fromthe possibility of trouble. It is unknown howlong South Africa can resist pressure for changeand a possibly difficult transition to a new formof government with black participation. Evennow, with white minority rule still firmly inplace, the potential for disruption exists, asshown by the 1980 bombing of SASOL, SouthAfrica’s synthetic oil project.

A general war w ould, of course, be more pro-foundly disruptive than any of the circum-

stances described here. This report does notexplicitly consider the contingency of generalwar. However, as a part of preparedness, theU.S. Government’s stockpile goals are set witha 3-year conventional war in mind. Advanced



Ch. 4—Security of Supply q 97

technologies that reduce import vulnerability— fense in peace, but will not obviate the needthe main focus of this report—are as valuable to fulfill stockpile goals as a means to assureto the national interest in wartime as they are adequate supplies in the event of war.protective of U.S. economy and national de-

Materials Supply Interruptions Since World War II

In the years since World War II, supplies of several critical materials have actually been cutoff quite abruptly on a few occasions. It is in-structive to look at the reasons why th e cutoffsoccurred, how the economy and defense indus-tries coped with shortages, and how the im-balance of supply and demand was eventuallyrighted.

Soviet Embargo of Manganese and

Chromium, 1949

When the Soviet Union blockaded Berlin in1948, cutting th e city’s land links with the West,the United States clamped dow n on exports of industrial goods to the Soviet Union. Amongthe goods embargoed were machinery, tools,trucks, and scientific instruments. In retalia-tion, the Soviet Union cut off shipm ents to theUnited States of raw materials critically neededby U.S. ind ustry, mainly m anganese, and chro-mium.22

The loss could have been serious. The Sovietsat that time were supplying one-third of U.S.manganese consumption and one-quarter of U.S. chromium. Soviet exports of manganeseore to the Un ited States dropped from 427,229tons in 1948 to 81,459 in 1949, and their chro-mium ore exports dropped from 393,966 tonsto 107,131 tons, In both cases, much of the orewas shipped early in the year, Within a fewmonths of the embargo, however, the UnitedStates had made up the loss with supplies fromother countries.

For manganese, substitute supplies camemainly from the Gold Coast (now Ghana), In-

dia, and the Un ion of South Africa. These sub-stitute sup plies came from th e expansion of al-ready producing mines. Enough capacity of this kind was available so that U.S. imports of manganese in 1949 actually increased 23 per-cent over 1948, despite the embargo,

Actual use of manganese dropped in 1949,a recession year, but demand remained strongbecause industries added 45 percent to their

inventories, probably as insu rance against anypossible shortages from the embargo. In fact,manganese prices rose about 15 percent in1949 (compared with 8 percent the year before)despite the recession. At the same time, therecession probably softened any additionaldamage the embargo might have caused.

The U.S. Government, together with indus-try, swung into action to encourage the open-ing of more manganese mines outside the So-viet Union. India got steel from the UnitedStates to impr ove her rail system for transport-

ing ore, Canada and the United States sent orerail cars to South Africa, and the Gold Coast’srailway and port equipment were improved.With the help of loans from U.S. banks and theWorld Bank, South Africa improved railwaysto mines and improved harbors for shippingore. India got a World Bank loan to build anelectric power project in the Damodar Valley,where manganese and other minerals wereproduced. 23

The answer to the Soviet embargo of chro-mium was the same as for manganese: alter-nate suppliers, Turkey and the Philippines in-

creased their chromium ore exports to theUnited States, and the Union of South Africa

ZzCon t empor a ry accounts of the Soviet cutoff of manganeseand chromium include Bureau of Mines’ publications; BusinessWeek, Sept. 10, 1949, p. 125; and U.S. News and World Report,Dec. 16, 1949, p. 26.

ZsThe President’s Materials Policy Commission, Resources forFreedom (Washington, DC: U.S. Government Printing Office,1952), VO]. 1, p. 74,




remained a major supplier. At the same time,because of the recession, U.S. chromium con-sumption fell by nearly one-quarter. Chromiumimports d ropp ed as well, prices fell, and ind us-tries added 20 percent to their inventories,

In the aftermath, the Un ited States continued

to diversify its suppliers of manganese andtoday buys none from the Soviet Union. Theprincipal suppliers of manganese ore to theUnited States are South Africa, Gabon, Brazil,Australia, and Mexico. These countries are alllarge producers of manganese, and importantsup pliers in the w orld free market. While man-ganese ore producers are today quite diverse,the Soviet Union and South Africa togetherhold the great bulk of the world’s reserves(known deposits, commercially minable) andof its identified (but subeconomic) resources.

As for chromium , U.S. imports from the So-viet Union resum ed in the 1960s and for a timethe Soviets were am ong th e principal U.S. sup-pliers. That story is told next.

U.S. Embargo on Imports of Rhodesian

Chromium, 1966-72

The British colony of Southern Rhodesia(now Zimbabwe) unilaterally declared its inde-pendence in November 1965, setting a courseof continued white minority rule. The nextyear, the United N ations (U. N.) passed a reso-

lution prohibiting member nations from buy-ing any of a dozen export commodities fromRhodesia. On the embargoed list was chro-mium ore.

Before the ba n, Rhodesia was one of the bigfour suppliers of chromium ore to the UnitedStates, second to South Africa and ahead of thePhilippines and the Soviet Union.24 Together,these four countries contributed five-sixths of chromium ore imported by the United States,Rhodesia and the Soviet Union each suppliedabout 35 percent of this country’s imports of

high-grade metallurgical ore, and South Africasupplied 17 percent. At that time, the metal-

%onternporary accounts of the Khodes ian chromium embargoinclude Bureau of Mines’ reports and Business Week, NovF . 27,1971, p . 23.

Photo credit” George C Coakley, US. Bureau of M!nes

An aerial tramway is one link of the transportation systemthat carries manganese ore from mines in Gabon to

deepwater ports on the West Coast of Africa

lurgical grade of chromium ore was essentialfor making stainless steel. (In the last decade,as mentioned above, technological advanceshave blurred the distinction between the metal-lurgical and chemical grades of chromium orein stainless steel production.)

When the United States complied with theU.N. ban on buying Rhodesian chromium, theNation could have felt a real shock. Nothingso dramatic happened. First, the shock wascushioned by large sales from the U.S. Govern-ment stockpile. A long-range plan to rid thegovernment stockpile of 1.9 million tons of ‘‘excess” metallurgical grade chromium orehad already been authorized before the man-




at a premium. By 1981, metallurgical-gradeores amounted to only 17 percent of chrom iumore imports to the United States, compared to50 percent or more 10 years earlier. Anotherchange is that U.S. imports of chromium oreare giving way to imports of ferrochromium,

just as ferromanganese is displacing manga-nese ore. South Africa led in changing its ex-ports to the United States from chromium oreto ferrochromium alloys. Also, all of recentU.S. imports of chromium from Zimbabwehave been in the form of ferrochromium. AsU.S. demand for raw chrom ium ore d eclined—particularly for the high-grade ore that was aRussian specialty—the Soviet Union no longercommanded preferential buying by Americanpurchasers.

Today, South Africa is the United States’dominant supplier, contributing 55 to 60 per-cent of all U.S. chromium imports (includingalloys as well as ore). The Soviet port ion (of al-loys plus ore) was 8 percent in 1981, with thePhilippines supp lying a like amoun t. Other sub-stantial suppliers are Yugoslavia, Zimbabwe,Finland, Turkey, and Brazil.

Canadian Nickel Strike, 1969

Strikes in Canada’s nickel mines in 1969 hada brief but jolting effect on nickel-using indus-tries in the Un ited States and Great Britain. Un-

like the politically inspired embargoes de-scribed above, the 4-month strike at Canadiannickel mines caused actual shortages and acuteprice hikes. Yet military and essential civilianprod uction w ere never interrup ted in the UnitedStates, which was then at war in Vietnam. Atthe height of the shortage, scrap nickel was th emain substitute for Canadian supplies, supple-mented by larger nickel imports from Norwayand the Soviet Union and ferronickel fromNew Caledonia (a French Territory in the Pa-cific) and Greece. A month after the strike wasover, a large release of nickel from th e govern -

ment’s stockpile helped refill the pipelines,while Canadian production geared up again.

Within a year, prices and supplies were backto normal.25

The reasons for the acute effects of the cut-off of Canadian nickel supply were twofold:first, Canada’s commanding position as a pro-ducer and exporter of nickel, especially to the

United States; and second, tight supplies of nickel worldwide before the strike. In 1968Canada supplied half the nickel for the non-Communist world, and was overwhelminglythe largest supplier of U.S. nickel imports, con-tributing over 90 percent. Imports were then90 per cent or mor e of U.S. nickel consum ption.In addition, world demand for nickel hadgrown stead ily from 1966 through 1969, wh ilesupplies lagged behind. The industrializedcountries, increasingly prosperous, were de-manding more nickel for stainless steel, alloysfor jet engines and space hardware, long-lifebatteries, and dozens of uses requiring hard,strong, corrosion- and heat-resistant m aterials.Furthermore, the United States increased itsnickel demands to satisfy military needs, Inseveral countries, especially New Caledoniaand Australia, mining compan ies were d iggingnew mines and building new processing plants,but world production was only beginning torise. There was practically no slack.

The big Internationa l Nickel Co. (Inco) minesin the Sudbury district of Ontario were struckin July 1969, and a month later strikes closed

the mines of Canada’s second largest producer,Falconbridge Nickel Mines Ltd. Immediately,prices on the dealer market (as opposed to pro-ducer prices charged by the mining companies]soared, rising from Inco’s producer price of $1.03 per pound to $7 and even $9 per pound.

Nonessential industrial users without a readysubstitute for nickel suffered real hardship. Inparticular, small electroplating companiesusing nickel for trim had to scramble for ma-

ZsContemporary accounts of the nickel shortage include Bu-reau of Mines’ reports; Business Week, Oct. 25, 1969, pp. 42-44;

Anthony F. W. Liversidge, “The Beguiling N ew Economics of Nickel,” Fortune, Mar. 1970, pp. Iooff.



.-

Ch. 4–Security of Supply q 9 5

terial and p ay the high p rices or stop prod uc-ing. Cobalt is an ad equate substitute for nickelin electroplating, bu t u sually sells at tw ice theprice. During the shortage it was hard to findbecause most cobalt was sold by producersunder contract to their regular customers.

Nickel-using indu stries that were able to use

substitutes did so. For example, phosphorbronze was used in place of 12 percent nickelfor electric powerplant hardware, and steel-

makers offered chrome-manganese stainlesssteel instead of nickel-bearing stainless steel,The manganese stainless steel technology wasalready on the shelf. Steelmaker had devel-oped it in response to fears of nickel shortagesthat arose in World War II and the Korean War;another motive was to have a substitute onhand in case nickel prices rose prohibitively.

The shift to high-man ganese stainless steel d idnot last past the nickel shortage, partly becausenickel stainless steel has some superior prop-




erties (greater corrosion resistance) and part lybecause, at the time, the process of makinghigh-manganese stainless steel was exactingand hard to control.26

The British, also 90 percent dependent onCanada for nickel, suffered shortages at leastas severe as those in the United States. Look-ing back in 1982, spokesmen for the British In-stitute of Geological Sciences called the 1969nickel shortage “p erhaps the gravest m etal cri-sis in the United Kingdom since the SecondWorld War.” 27 British steelmaker, like theirAmerican counterparts, offered customers avariety of steels in place of nickel steel.

Use of scrap nickel jum ped 64 percent in th eUnited States during 1969. Of the 23,300-tondrop from the previous year in Canadian im-ports, recycled nickel made up more than 9,000

tons. Everyone scrounged for scrap. Even newnickel products lying idle in inventories, suchas pipes and fittings, were sometimes melteddown for reuse. Some desperate electroplatescollected ferronickel scrap and swapped it forpure nickel, trading with foundries which hadassured allocations from producers. z*

As Canada’s production slid nearly 20 per-cent from its 1968 level, several countriesstepp ed u p their nickel produ ction, with NewCaledonia, Australia, the Soviet Union, SouthAfrica, and Rhodesia the leaders. The main

substitute suppliers for the United States wereNorway, which sold us 1,700 tons of nickelprocessed from ore obtained earlier from Can-ada, and the Soviet Union, which continuedits expansion of nickel mining and increasedexports to the United States by 700 tons. TheSoviets also sup plied ad ditional nickel to hard -pressed Britain. The Soviets were reported to

z6To eliminate nickel completely in high-manganese stainlesssteel, nitrogen m ust be ad ded as an alloying element. With thetechnology in use in 1969, it was difficult to add controlledamounts of nitrogen, Today, the argon-oxygen-decarburization

(AOD) process is used almost universally in stainless steelmak-ing, and w ith this process it is easy to ad d controlled amou ntsof nitrogen.

ZTIns t i tu t e of Geological Sciences, Strategic Minerals, memo-randum submitted to the Parliament, House of Lords, SelectCommittee on the European Communities (Subcommittee F),Feb. 18, 1982.~8Liversidge, op. cit., p. 100.

be the source of three-quarters of the high-priced dealer market nickel sold during theshortage.

The blow to the United States from the dropin Canadian imports was also softened by alarge increase in ferronickel imports (fromabout 9,500 to 15,700 tons). Most of this camefrom Greece and New Caledonia. New Cale-donia had a growing nickel minerals industrybased on laterite ores.

Altogether, with additional imports fromother countries and w ith the rapid rise in recy-cling, consumption of nickel in the UnitedStates dropped only 5 percent from 1960 to1969, down from 173,700 tons to 165,400. How-ever, it must be remembered that supplies hadbeen tigh t since 1966. A better ind ication of thedegree of shortage migh t be the U.S. consump -

tion of prim ary and scrap nickel in 1970, whichwas 182,500 tons.

Throughout the shortage, defense industriescontinued to get nickel supplies. Three yearsbefore the strike, with nickel already in shortsupply, the government ordered the three prin-cipal U.S. nickel importers to set-aside 25 per-cent of their shipments for defense-relatedorders. The set-aside was continued after thestrike, with the proviso that defense industriesmust use these supplies for current production,not for hoard ing in inven tories. Also, the gov-

ernment embargoed nickel exports. Most im-portan tly, President N ixon d irected th e releaseof 10,000 tons of nickel from the governmentstockpile at the end of 1969. The strikes wereover in November, but by this time the nickelsupply pipeline was depleted, Without thestockpile release, shortages might have con-tinued for several months.

By the end of January 1970, U.S. civilian aswell as defense industries had all the nickelthey needed. In fact, with rapidly risingproduction in several countries, nickel short-

ages d isappeared entirely in 1970. Dealer m ar-ket prices plunged from over $6 per p ound atthe first of the year to $1.33, the same as theproducer price, at the end.

A lasting effect of the 4-year period of tightsupplies in the late 1960s was to encourage



.— . -—.


more nickel production and greatly expand thenu mber of sup pliers. In the classic mod e of theminerals industries, demand for nickel droppedoff in the late 1970s, and some of the new ca-pacity lay idle. Nearly half of Canada’s min-ing capacity was unused in 1978, and New

Caledonia, another big producer, had onlyabout 60 percent of its mines in production.

The world’s reserves and identified resourcesof nickel are not nearly so concentrated asthose of chromium and manganese. Some of the Pacific islands (New Caledonia, parts of In-donesia) appear to be very w ell endowed , andthere are also large deposits remaining inNorth America, the Soviet Union, Cuba, andAustralia. Thus, the present diversity of producers can be expected to last for manyyears.

The Cobalt Panic, 1978-79

During the cobalt “shortage” of 1978-79,there was never any real interruption of sup-ply. On the contrary, production in Zaire andZambia—by far the largest cobalt producers forthe world market—rose 43 percent during 1978and 12 percent in 1979.29 But the combinationof rapidly rising world demand and fears of asupply cutoff, triggered by a rebel invasion of Zaire’s mining country, set off a wave of buy-ing that sent cobalt prices through the roof. Co-

balt users turned to cheaper substitutes andrecycling w herever they could, relieving someof the pressure. By 1982, with worldwide reces-sion, cobalt prices plunged below the 1978price.

Zgun]ess otherwise noted, data on cobalt production, consump-tion, uses, recycling, and prices in this section are drawn fromCharles Ri\ er Associates, Inc., Effects of the 1978 Katcmgese Re-bellion on th e V$’orld Cobalt Market, final report to the Office of Technology Asies s rnent , December 1982. The data in the CharlesRi\ er Associates’ report are largely based on 13ureau of Mines’figures, but with some adjustments. The account of events inZaire and Zambia from 1975 on and of the cobalt panic of 1978is also largely drawn from the Charles River Associates’ report.Other sources were Bureau of Mines’ publications, officials of th e Amax Mining Co., and Patti S. Litman, “The Impact of Minerals Scarcity on Technological Innovation: Cobalt, A CaseStudy,” an unpublished M.S. thesis presented to the Sever in-

stitute of Technology, Washington University, St. Louis, MO,1981.

Cobalt is a specialty metal, produced in smallquantities (only about 27,650 tons worldwidein 1982),30 but h as a num ber of specialized usesfor which it is highly suited , or even irreplace-able, at current levels of technology. Cobalt iscritical for making certain h igh-strength, heat-

resistant superalloy used in jet engines, andhas highly desirable properties as a materialfor permanent magnets, wear-resistant tools,and catalysts for refining oil and making pe-trochemicals.

The threat of interruption of world cobaltsupply surfaced in 1975 when the civil war inAngola shut down that country’s Benguela rail-way. The Angolan railway had been the major artery for transporting copper, cobalt, andother minerals out of central Africa to the in-dustrialized world. Central African cobalt is

pivotal. In a typical year, Zaire accounts for60 percent of cobalt production in the non-Commu nist world ; Zambia, usually the secondlargest free world producer, contributes 10 to15 percent. Thus, if cobalt cannot get out of Zaire and Zambia, world supply is in trouble.This situation of extreme world dependence oncentral African cobalt is aggravated by th e factthat cobalt is a byproduct of mining for otherhigher volume minerals, mainly copper andnickel. In case of a supply cutoff in centralAfrica, it might be uneconomical in the shortrun, at least, for prod ucers in other parts of the

world to expand cobalt mining as such.Because the Angolan railway shutdown of

1975 occurred during a world business reces-sion, with demand low and industry stocksfairly high, Zaire and Zambia w ere able to findalternate routes for shipping metals from theirmines without causing immediate distress. Asof mid-1984, the Benguela railway was stillclosed because of guerrilla attacks (related tocivil war in neighboring An gola and N amibia),and the makeshift exit routes were still beingused . They are not very depend able. One alter-

nate route to the port of Beira in Mozambiquewas closed w hen Mozambique shut its borderto what was then white-ruled Rhodesia. (Nowthat Zimbabwe has a largely black, elected gov-

— . . ———sOThe figure cited is from Bureau of Mines’ data.




ernment, negotiations may reopen this route,although it too has been subjected to guerrillaattacks.) Meanwhile Zaire and Zambia shiptheir minerals out through the inadequate,backed-up port of Dares Salaam in Tanzania,or take a long, expensive route through Zam-

bia, Zimbabwe, and South Africa. Zaire usesits own western port of Matadi at the mouthof the Zaire River for some copper and cobaltshipments, but getting th ere requires arduou stransshipment by rail and river, and the riveris not always navigable. Figure 4-2 shows theroutes and location of ports.

With economic recovery in 1976 and 1977,U.S. and world demand for cobalt rose mod-erately, but not enough to cause real pressureon prices. In fact, Zaire was stockpiling cobalthydroxide, an intermediate material produced

in the processing of copper, to avoid building

up unsalable inventories of cobalt. In 1977, abrief invasion of Zaire by insurgents based inneighboring Angola caused some concern forcobalt supply because Zaire’s copper mines,from which cobalt is a byproduct, are in thesouthern Shaba province where the invasion

took place. The rebels were emigres who hadfled Zaire after losing a bid in the 1960s to cre-ate an independent state of Katanga in Shabaprovince. The invaders were quickly routed.The incident had no effect on cobalt produc-tion or prices,

In 1978 , the situation was different. Withworld business activity on the upswing, andthe market for new jet planes particularlystrong, demand for cobalt began to heat up rap-idly. Unable to expand production as fast asdemand was climbing, Zaire announced in

April 1978 an allocation scheme by w hich cus-

Figure 4-2.—Transportation Routes for Minerals in Central and Southern Africa

SOURCE: U.S. Department of the Interior, Bureau of Mines, Mineral Perspective: Zimbabwe, 1981



Ch. 4–Security of Supply q 9 9

tomers would be limited to 70 percent of theirpurchases of the previous year.

Aggravating the tight world supply was a re-cent turnabout in U.S. policy for stockpilingcobalt. For 8 years, until 1976 , the U.S. Gov-ernment sold 6 million to 9 million pounds of

cobalt each year from its strategic stockpile be-cause holdings in th e stockpile were far abovewhat was then the official goal of 11 millionpounds. During the years of the stockpile sales,these sales amounted to as much as one-half of U.S. cobalt consumption and 10 percent of consumption in the non-Communist world.

In 1976 , after the Angola civil war cut theBenguelan railway, U.S. stockpile sales of co-balt came to a halt. With cobalt holdings thendown to about 40 million pounds, the govern-ment set a new stockpile goal of 85 million

pounds. Overnight, the United States wentfrom being a m ajor sup plier of the world ’s co-balt to a potential major purchaser. Zaire, Zam-bia, and other cobalt-producing countries wereunp repared for the change and had not gearedup to higher production levels. But it was notuntil demand sud denly boomed in 1978 that theloss of U.S. stockpile sales began to pinch.

Shortly after Zaire announced its allocationscheme, insurgents from Angola reinvadedShaba province. This time they succeeded intaking the mining headquarters town of Kolwezi,

but after 2 weeks they were once again drivenout. The only da mage d one to m ining facilitieswas the flooding of one mine. But the p ublicitysurrounding the invasion, the reported killingof 130 foreign workers, and the subsequentflight of several hundred skilled mineworkersand professionals raised the alarm about con-tinued availability of cobalt. Around the w orld,industries tried to stock up, buying all the co-balt they could find.

Prices skyrocketed from $6.85 per pound (theproducer price) in February to $47.50 per pound(dealer market spot p rice) in October. The p ro-ducer price reached $25 per pound in early1979. With this kind of demand and at theseprices, Zambia airlifted its cobalt out, and Zairealso sent some out by air.

The typically slow response by the mineralsindu stries to a surge in d emand was aggravatedin the case of cobalt because it is usually a by-produ ct, Nonetheless, produ cers responded tothe cobalt price spike, as shown in table 4-2.

Zaire raised output by producing from its

stockpiles of cobalt hyd roxide. Zambia op eneda new refinery that was already under con-struction, improved cobalt yields, and pushedahead with plans for new mines and refiner-ies, Zaire and Zambia accounted for most of the add ed cobalt p roduction in 1978 and 1979,but small increases occurred elsewhere. TwoCanadian nickel companies added capacity totheir cobalt refineries, and others made plansto recover cobalt from nickel slag. Recentlyopened nickel-cobalt mines in Australia andthe Philippines raised their output as theysolved technical problems and responded to

demand.The more remarkable response to high prices

and tight supplies came from the industriesthat consume cobalt. A switch to substitutesor recycled materials swept some industries.By 1980, use of cobalt in the United States wasestimated to be 19 percent below w hat it wou ldhave been without the price rise.31 Demand forcobalt continued to drop in 1981, partly be-cause of the weak economy and high interestrates. Consumption in 1981 was 11.7 millionpounds—41 percent below the 1978 high of 20

million pou nd s. According to another informedestimate, 1981 consumption would probablyhave been 13 million to 15 million pounds if there had never been a “shortage.” 32 Figure 4-3 depicts this estimate of the effect of the pricerise in U.S. cobalt demand.

Where effective substitutes were ready on theshelf, the decline in cobalt use was steep. Astable 4-3 show s, cobalt use in p ermanent m ag-nets dropped by one-half in 3 years. Probablyfour-fifths of this reduction was due to the pricespike. ’s Before the shortage, permanent mag-

SICongressiona] Budget Office, CobaJt; POLC}F OPfjons f o ~ (I %u-

tegic h4ineraJ (Washington, IX: U.S. Government Printing Of-fice, 1982), p. x.Szchar]es River Associates, Jnc., op. cit., p.1-6.asIbid. , p. 3-I 2.



—. . .


Figure 4-3.— Estimated Price Effects onU.S. Cobalt Demand

— Reported demand--- Adjusted demand

I I I I I I I I

1972 1973 1974 1975 1976 1977 1978 1979 1980 1981

YearsSOURCE Charles River Associates, Inc , Effects of the 1978 Katangese F?ebe///onon the World Cobalt Market, report prepared for the Off Ice of Technol.

o9Y Assessment December 1982

nets for such items as television, radio, andphonograph loudspeakers, telephone receiversand ringers, electrical meters, and automobilespeedometers were an important u se of cobalt,accounting for 20 percent of U.S. consumption.By the end of 1979, ceramic magnets had re-placed 70 percent of cobalt-bearing Alnicomagnets in loudspeakers. Moreover, the Bellsystem announced in 1979 that it was chang-

ing to alloys with lower cobalt content fortelephone equipment, with savings of 100,000pou nd s of cobalt per year. Much of the changein material for magnets is probably irrevers-ible. Ferrite (ceramic) magnets are cheaperthan cobalt, and n ow that the redesigning andretooling for the change has been done, thereis little reason to change back.

On the other hand, demand for cobalt forsup eralloys in jet engines did not d ecline at all.Despite the high prices, superalloy demandcontinued to rise for 2 years until dampened

by the recession in 1981. The boom in aero-space had led the 1978 surge in d emand for co-balt, and jet engine manufacturers led thescramble for sup plies when fears of a shortagerose. These manufacturers could do little in the

short run to substitute other materials for co-balt sup eralloys in gas turbines for jet engines.Only after the most exacting, expensive qual-ification p rogram can new alloys be used in jetengines. In some cases, however, different al-loys had already been tested, and w ere adopted.

For stationary gas turbines (e.g., for electricalpower and pumping engines) the requirementsare not so stringent, and some manufacturerswere able to use other alloys for turbine parts.These substitutions, adopted over 3 years, prob-ably saved about 10 percent of the cobalt thatwould otherwise have been used for super-alloy, and the changes were probably perma-nent .34

Another leading use of cobalt in the UnitedStates is for hardfacing material, which, weldedto a base material, provides a layer resistantto corrosion and wear (e. g., in engine valves,chainsaws, and earth-moving equipment). Someusers of cobalt for hardfacing switched tonickel alloys. In Europe, where cobalt is usedmuch more extensively in tool steels than it ishere, users changed to cobalt-free tool steels.Consumption of cobalt for driers of inks andpaints dropped 10 to 30 percent as users switchedto manganese and zirconium as partial substi-tutes for cobalt. Substitutions for cobalt as abinder for carbide cutting materials were notvery successful, but recent technological ad-vances had made recycling more feasible, and

these users did recycle. No replacements wereimmediately available in the short run for co-balt catalysts, although nickel-molybdenumcatalysts may eventually displace some cobaltconsumption for catalysts in the future. 35

Recycling rose dramatically during the co-balt shortage. Everyone in the superalloy pipe-line, from alloy producer to gas turbine man-ufacturer, began to recycle cobalt. This meantcarefully segregating scrap by alloy specifica-tion, sending it back to the alloy melter and re-using it in the same grade. Possibly 10 to 25percent of cobalt used in superalloys was re-cycled in th is fashion. At the sam e time, meth-ods for recycling all the materials in cemented

341bid,, pp. I-4 and 3-10.aSIbid. , p. 1-6.




carbide cutting materials (including cobalt) had just been brou ght to a state of econom ic feasi-bility. Methods w idely ad opted in 1978-79 con-tinue to be used. It is estimated that most“new” carbide scrap (recovered from fabrica-tors) is now recycled, and more old scrap (re-

covered from used products) is reused.36

Altogether, according to Bureau of Mines’data, recycling of cobalt increased 100 percentin the year 1978, and quickly rose from 4 per-cent of consumption in 1977 to nearly 11 per-cent in 1980, before tapering off to the 1982level of about 8 percent. These figures under-state the real extent of recycling, because theyare limited to scrap that is purchased, and notall recycling is reported.

The U.S. Government never released cobaltfrom its stockpile throughout the period of high

prices and tight su pp lies, since defense and es-sential civilian industries were getting whatthey needed and the stockpile, by law, can beused only to aid these industries during anational emergency. Cobalt-using industriesadd ed to their stocks d uring th e 1978 panic andbegan drawing them down the next year.

—.———t61bid. , pp. 3-14 to 3-16.

The cobalt bubble burst in 1981. World pro-duction, spurred by high prices, continued torise for the third year in a row in 1980. But withthe 1981 recession, world cobalt demand felldrastically; in the United States, consumptiondrop ped 24 percent. The p rodu cer p rice, pegged

at $25 per pound in January 1981, was cut to$12.50 per pound in early 1982. Meanwhile,Zaire had contracted to sell the U.S. Govern-ment 5.2 million pounds of cobalt, for replenish-ment of the stockpile, at $15 per pound. Six-teen other producers had vied with Zaire tosupply the government’s stockpile purchases.By the end of 1982, the dealer market pricesank below $5 per pou nd —considerably belowthe price in 1978 when the boom began. Co-balt prices stayed in the $5 to $6 per poundlevel until early 1984, when the p roducer pr icewas increased to $11 to $12 per pound.

A modicum of diversity had entered the mar-ket between 1978 and 1982. A number of sup-pliers with new or expanded operations nowstand ready to compete with Zaire. The bulkof world cobalt reserves are still in Zaire andZambia, but Cuba, the Soviet Union, the Philip-pines, New Caledonia, and Australia all holdimportant reserves that are currently knownand economic to mine. The United States alsohas substantial resources that are not now prof-itable to mine without a production subsidy.

The Effects of Supply interruptions

These accounts of the few instances whenU.S. imports of critically needed materials haveactually been interrupted or threatened are in-teresting in their variety. The causes of inter-ruption were different in each case, and thecoping reactions, both by indu stry and by gov-ernment, were varied enough to illustrate awide gamut of responses to abrupt deprivation

of supply.The Soviet cutoff of manganese and chro-

mium exports in 1949 was a Cold War politi-cal action, a response to the U.S. clampdownon export of manufactured goods, which in

turn was a response to the Soviet blockade of Berlin. The Rhodesian chromium embargo in1966, also political, was imposed by the UnitedStates in conformance with a United Nationsresolution. The nickel strike of 1969 shut downsupplies from the quintessentially “safe” for-eign source—Canada—at a time when worldnickel supplies had already been straightened

for 3 years and Canada was then almost thesole U.S. sup plier. The cobalt sh ortage of 1978-79 was a superheated case of a world surge indemand , combined w ith the abrupt removal of an important source of world supply (salesfrom the U.S. stockpile), which was aggravated




by fears of insurrection and collapse of Zaire’smines (which never happened).

The response in the first two cases was, es-sentially, to find other foreign sources of sup-ply, After the 1949 Soviet embargo, the U.S.Government actively sought alternate sup-pliers, offering loans for mine development,sending rail cars and providing steel for im-proved transportation. With the Rhodesianchromium embargo of 1966, the governmentsold excess chrom ium from the national stock-pile, but otherwise took little active part, leav-ing industry to find alternate suppliers. Thatindustry was able to do so quite readily, withlittle evidence of shortage, was due to severalfactors besides the stockpile sales: The Sovietspromptly volunteered to serve as alternate sup-pliers of chromium to the United States (despite

the Vietnam w ar wh ich they opp osed) and theUnited States was willing, for a time, to buyfrom them. Prices rose, drawing other sup-pliers like Turkey and the Philippines intoproduction. The rapid adoption of the argon-oxygen-decarburization (AOD) process in stain-less steel production allowed the substitutionof South African chromium ore for Rhodesianore. Finally, the Rhodesian embargo leaked, If France, Japan , Switzerland , and oth ers had notbought what was probably Rhodesian chro-mium from South Africa and Mozambique, thealternate suppliers might have been hard put

to provide the whole industrialized world withchromium.

The acute shortage of nickel that followed theCanadian strikes necessitated changed behav-ior from U.S. nickel users, They substitutedother m aterials wh ere they could, for example,replacing nickel stainless steel with chrome-manganese stainless steel (a technology that al-ready existed). Users turned to nickel recycledfrom scrap, and they paid high p rices for “graymarket” nickel—once more supplied largely bythe Soviets, despite the continuing Vietnam

war. (In both the Rhodesian chromium andCanadian nickel episodes, it will be noted theSoviets behaved much more like enterprisingcapitalists than like ideological resource war-riors.) An important factor in stopping theacute nickel shortage was the U.S. Govern-

ment’s release of a large quantity of nickel fromthe stockpile. The government had also re-sponded to 3 years of tight nickel supplies byallocating what was needed to military users,and the set-asides were continued during theacute shortage.

As for the cobalt “shortage,” users turnedvery quickly to substitutions and recycling, Un-der the spur of high prices, nonessential usesmade way for essential, Government allocationwas not needed to reserve cobalt for superal-loys for military jet engines. Superalloyprodu cers and users paid high prices and theyrecycled, while use of cobalt in magnets d roppedby half. Ceramic magnets, for which the tech-nology was ready, were substituted.

In all four cases, a long-lasting effect of the

supply interruption was that new producersentered the market, and supply became morediversified. In the case of manganese, the U.S.Government and the World Bank deliberatelyencouraged new producers. In the other cases,shortages, rising prices, and eager buyers pro-vided enough market incentive to draw newsources into production, Some substitutions(ceramic magn ets) and some recycling (carbidecutting materials) adopted during the shortagesappear to be permanent.

Another conclusion is worth noting: Thereis no one single answer to import vulnerabil-ity. In the episodes described above, multipleresponses—some by government and some byindustry—helped avoid a crisis or end short-ages. On the governm ent’s part, there were ac-tive assistance to alternative suppliers, stock-pile sales, and allocations to defense needs. Onthe private side, there were substitutions of materials (based on previous research and de-velopment [R&D]), recycling (also based in parton previous R&D), and a search for new sourcesof supply. In some cases, government and pri-

vate actions w ere not so helpful—in fact, theywere contributing causes, not solutions to theproblems. The obvious example is the govern-ment’s abrupt halt to sales of cobalt from thestockpile, and industry’s panic buying of cobaltafter the invasion of Zaire’s Shaba province.




One response to import vulnerability that hasrarely been used, except when begun in war-time, is government subsidies to high-cost do-mestic minerals produ cers. During the Koreanwar , wh ich began just a year after the 1949 So-viet embargo of chromium and manganese, the

government subsidized U.S. production of anumber of minerals, including the two embar-goed by the Soviets and cobalt. The last of thesubsidies expired in the early 1960s. No oneseriously suggested reviving subsidies for do-mestic producers of chromium in the late1960s, when U.S. imports of Soviet chromiumwere once again rising following the Rhode-sian embargo. The reason was the low-qualityand limited supplies of domestic chromium oreand the high cost of produ cing it. Then, as now,even the best deposits of U.S. chromium wouldprobably have cost two to th ree times as mu ch

as chromium mined abroad, with less favora-ble U.S. deposits still more costly.37

sTInformat ion p rov i ded by John Morgan, Bureau of Mines, U.S.Department of the Interior. See also C.C. Hawley & Associates,Inc., subcontractor to Charles River Associates, Strategic MineralMarkets and Alaska Development Potentials, Policy Analysis Pa-per No. 82-12, prepared for the State of Alaska, Office of theGovernor, Division of Policy Development and Planning (Juneau:1982), vol. II, p. 1. This study estimated that the world chromiumprice would have to rise sixfold to stimulate production fromknown deposits in Alaska.

During the cobalt panic, subsidies for U.S.cobalt production were considered by Con-gress.38 U.S. cobalt resources are considerablybetter than chromium resources, though theyare still subeconomic. At congressional hear-ings in 1981, representatives of firms owning

the most promising domestic sites estimatedthat cobalt prices ranging from $20 to $25 perpoun d w ould be needed to stimu late domesticprodu ction throu gh government p urchase con-tracts. Before any subsidies were decided on,the cobalt bubble had burst. By the end of 1982 ,

the w orld cobalt price of $6 per p ound (or less)was far below the estimated cost of producingU.S. cobalt. World prices have subsequentlyrisen again (to $11 to $12 per pound in 1984),and one company has revised downward itsestimate of the price needed for it to producecobalt to about $16 per pound. Further discus-

sion of subsid ies for U.S. minerals p rodu ction,in the context of broader materials policy, ap-pears in the following section, as well as inchapters 5 and 8.

SBU. S. Congress, Senate Committee on Banking, Housing, andUrban Affairs, Hearing on the Defense Produ ction Act and theDomestic Production of Cobalt, 97th Cong,, 1s t sess., Oct. 26,1981 (Washington, DC: U.S. Government Printing Office, 1982);Congressional Budget Office, Cobalt: Policy Options for a Stro-

tegic Mineral, cited in note 31.

Materials Policy

Over the past three decades, as episodes of tight supplies and high prices have come andgone, concern about a national materials pol-icy has risen and ebbed. Three major commis-sion studies, many other scientific and policystudies, three Federal laws stating materialspolicy, and several other relevant laws have ad -dressed the question of how to assure a relia-ble supply, at reasonably stable prices, of thematerials needed for this Nation’s economy

and defense,All of the commissions recommended that

the Nation seek materials wherever they maybe found , at the lowest cost consistent w ith na-tional security and the welfare of friendly na-

tions. A policy of self-sufficiency was consid-ered and rejected, most emphatically by thePaley Commission in 1952, and again qu ite ex-plicitly by the Commission on Supplies andShortages in 1976.

On the whole, the commissions’ counsel infavor of interdependence has been heeded. TheUnited States has, by and large, adhered to th e“least cost” principle for materials supply for35 years, The government has not only toler-ated, but encouraged, US. consumption of minerals produced abroad. With low-costloans, tax credits for taxes paid to foreign coun-tries, and insurance against expropriation, ithas helped U, S.-based firms to open mines in



foreign countries, such as Australia, Brazil, andPeru. It has usually resisted proposals to pro-tect the domestic mining industry by importquotas or other restrictions on trade and hassubsidized domestic mining only rather briefly,

For security of supply, U.S. policy has beento rely mainly on stockpiles rather than on p er-manent subsidies of domestic production—again, a course which was urged by the com-mission reports. The first Federal law author-izing stockpiling of critical materials goes backto 1939, but actual accum ulation of stocks w asput aside during World War II and began inearnest during the Korean war. Large-scalepurchases continued through the 1950s. De-spite changes back and forth since then instockpile policy, the Nation still has substan-tial amounts of many critical materials stored

away.Another recurring recommendation in the

past thr ee decades of stud ies, reports, and lawson materials policy has been to establish a fo-cal point in the Federal Government for mak-ing comprehensive materials policy. This ad-vice has been difficult to follow. One reasonmay be that m aterials shortages have been qu itefleeting, and supplies are usually availablewhen needed. Another is that materials policyis connected with other important policies—foreign, defense, taxation, environment, en-

ergy—wh ich it is part of but d oes not dom inate.Moreover, it is difficult to establish an overall“materials” or “nonfuel minerals” policy wh enthe m aterials it is meant to cover are so num er-ous and so different from one another in theneeds they meet, in critical importance, inavailability of substitutes, and in the diversityand security of supply,

With th e rising level of concern over U.S. im-port vulnerability, Congress (in 1980 and againin 1984) called on the Executive Office of thePresident to develop a coordinated materialspolicy, Questions of interdependence, self-sufficiency, and stockpile policy are also be-ing reexamined. The following sections brieflysurvey th e find ings of the three major commis-sions on materials policy in the past 30 yearsand outline the main features of government

Ch. 4—Security of Supply Ž 10 5

policy and congressional actions on materialsduring the period.

Self-Sufficiency v. Interdependence

Many of those who believe that self-suffi-

ciency is desirable subscribe to a broad-scaleremedy of materials ind epend ence. They favorintensive exploration of most of the federallyowned public lands, including wilderness, forminerals; tax breaks and government su bsidiesto encourage U.S. mining and minerals proc-essing; and relaxation of strip mine controls,mine health and safety regulations, and cleanair and water standard s, which they blame forputting U.S. mining industries at a disadvan-tage vis-à-vis foreign competitors. On the oth erhand , critics of minerals ind epend ence say thatan effort to replace imports with high-priced

domestic minerals would raise the cost of fin-ished goods, escalating prices at home, andmaking it harder for American products suchas steel and autos to compete with foreigngoods.

Despite the low qua lity of some U.S. mineralresources, the Nation could probably achievesignificant domestic production in most min-erals if it were willing to pay a high enoughprice, Part of the price might be greater envi-ronmental degradation and higher energy u se,as well as higher dollar costs. Another cost

might be a greater d egree of government man-agement of the minerals market and strainswith European and Japanese allies, whose im-port dependence for 36 important nonfuelmaterials is considerably greater than that of the United States.

U.S. import dependence is often comparedunfavorably with the Soviet Union’s high de-gree of self-sufficiency in minerals, The SovietUnion has long followed a deliberate policy of supplying its own resource needs and, whenforced to rely on foreign sou rces, has imp orted

mainly from allies and neighbors. The result

s~The office of Technology Assessment ana]yzed some aSpeCts

of the U.S. steel indu stry in its 1980 report, Technolog~ an d Steel

lndustr~ Competitiveness, OTA-M-122 [Washington, DC: U.S.Government Printing Office, June 1980].



106 . Strategic Materials: Technologies to Reduce U.S. Import Vulnerability

is that the Soviets are net impor ters of only 11of 35 imp ortant n onfuel minerals, and for onlyfour—bauxite and alumina, barium, fluorine,and cobalt—is import dependence as high as40 to 60 percent.

If the United States opts for a policy of minerals self-sufficiency instead of the tradi-tional one of interdependence in a world freemarket, such a p olicy could require the Un itedStates to isolate itself from that market. Unlessthe government imposed export controls tokeep domestic supplies inside the United States,U.S. trading partners could bid up the priceand buy “U. S.” minerals in times of shortages.In times of minerals abund ance and low w orldprices, either U.S. mines wou ld have to be sub-sidized or import controls imposed (like thepre-1973 oil import qu otas) or both . In all these

cases, economic and political stresses can beforeseen,

Commission Studies

President’s Materials Policy Commission(Paley Commission)

The President’s Materials Policy Commis-sion, named for its chairman, William S. Paley,was established by President Truman in Janu-ary 1951 during the early months of the Koreanwar. It was a time when a precipitate rise inmilitary demands, added to an expanding post-World War II civilian economy, had causedtight supplies and shortages. The realizationhad dawned that materials usage worldwidewas on an upward spiral. Reflecting a senseof crisis about th e continued su pp ly of enoughmaterials to sustain the N ation’s military secu-rity, civilian welfare, and economic growth,President Truman said in his charge to theCommission:

By wise planning and determined action wecan meet our essential needs . . . We cannot al-low shortages of materials to jeopardize our na-

tional security nor to become a bottleneck toour economic expansion.40

The Commission’s report, Resources for Freedom , published in June 1952, was colored

~he President’s Materials Policy Commission, op. cit., p. IV.

with the same tone of strenuous response toa serious challenge. The Commission set foritself this question: “Has the United States thematerial means to sustain its civilization?” Al Itnoted that the United States had already out-grown its resource base and had become a

“raw materials deficit” Nation. At the core of the mater ia ls problem it put “growth of demand”—growth not only in the United Statesbut also amon g the free world allies and in th eformer colonies seeking to ind ustrialize ratherthan export raw materials.

To assure the m aterial basis for secur ity andgrowth the Paley Commission saw interdepen-dence as the best answer. “The United Statesmust reject self-sufficiency as a policy, ” theCommission said, “and instead adopt the pol-icy of the lowest cost acquisition of materials

wherever secure supplies may be found: self-sufficiency, when closely viewed, amounts toa self-imposed blockade. . . “ 42

The Commission emphasized policies thatwould encourage investment by Americanbusiness in mineral development in foreigncountries and wou ld remove barriers to trade.It also urged U.S. loans and technical assist-ance, in addition to international help, for in-digenous investment in mining, especially inpoor countries. Besides these policies to pro-mote “least cost” production worldwide, theCommission also stressed the value of greaterefficiency of use, substitution of more abun-dant materials for scarce ones, and the expan-sion of dom estic sup plies by “pushing back thetechnological, physical, and economic bound-aries that presently limit supply.” 43

Even to protect national security, the Com-mission regarded a quest for self-sufficiency as“fallacious and dangerous. ” For many mate-rials, the Commission said, “self-sufficiency iseither physically impossible or would cost somuch . . . that it would make economic non-sense.” 44 Instead, the Commission suggested

a range of policies to raise the Nation’s pre-

tllbid., pp. 1, 6, and passim.

tZIbid., p. 3.4sIbid., p. 8,

t’Ibid., p. 157.



Ch. 4—Security of Supply . 107

paredness against a possible cutoff of materialscritical to the Nation’s defense.

To assure supply, the Commission stronglyurged stockpiling, Also, it recommended sev-eral measures to prepare emergency sourcesof prod uction, includ ing: setting aside “in-the-ground” domestic reserves of key minerals,especially limited or low-grade deposits; devel-oping and maintaining ready-for-use technol-ogy to produce low-grade deposits; and prepar-ing p rocessing facilities and transp ortation forthe in-the-ground reserve. On the demand side,the Commission recommended the design of military produ cts to use abund ant rather thanscarce materials, and the preparation of “stand-by” designs for use in extremity, substitutingavailable materials for scarce ones that wouldotherwise be preferred. As

The Paley Commission report noted the lackof a coordinating body for materials policy, andsuggested that t he N ational Security ResourcesBoard , in the Executive Office of the President,undertake the role.46 However, the Board wassoon abolished by Congress as fears of “run-ning out” of material, wh ich had promp ted theestablishment of the Paley Commission, dieddown. No other body was given the policy co-ordination task.

Indeed , after a brief burst of public attention,the Commission’s report fell into obscurity.

True, the interdependence policy stronglyurged by the Commission has generally guidedthe government’s actions since then. One ad-ministration after another has followed theCommission’s advice in such matters as nego-tiation of treaties to support freer trade andprovision of government insurance for privatebusinesses investing in resource developmentabroad . But for the most p art, the detailed rec-ommendations of the Commission’s reportwere ignor ed. One of the very few concrete re-sponses by anyone was the creation of a non-government institution to monitor materials

supply and demand—Resources for the Future,which is largely funded by the Ford Foun-dation.——.———

islbld., ~h . xT.30,

i61bid., p. 171,

Photo credit U S Navy

One mission of U.S. Navy frigates such as the USS Antrim(FFG-20) is to protect the flow of strategic materials to

the United States

The reasons for the report’s neglect are nothard to find. First, the party in p ower changed ;

President Eisenhower won the 1952 election,and the Republicans took control of Congressfor the first time in 20 years. More important,wartime shortages of materials turned to glutwith the end of the Korean war. When Presi-dent Eisenhower appointed a Cabinet commit-tee in 1954 to examine minerals policy, thequestion was not how to assure enough supply,but h ow to help rescue the ailing d omestic min-ing ind ustries, (As d iscussed below, the Eisen-hower Administration’s response was to guar-antee purchases of minerals for an expandedstrategic stockpile,)

Nati onal Commission on Mat erials Policy

For most of the 1950s and 1960s, adequacyof materials supply was a quiescent issue, de-spite some bottlenecks and shortages as Viet-




nam war needs expanded. Supplies of mineralsrose comfortably with dem and , and real pricesgenerally remained stable or fell throughoutmost of the period. Production of aluminumrose enormously (over fourfold) relieving pres-sure on other structural and electricity-con-

ducting materials, and petrochemical-basedplastics replaced a nu mber of the conventionalmetals.

Toward the end of the 1960s, Congress andthe public began to look at materials issues ina new perspective —i. e., in relation to conser-vation of resources and env ironmental qu ality.In 1970, Congress created a new materials pol-icy commission as a direct outgrowth of itswork on recycling of materials and recoveryof energy from waste. Former Senator J. CalebBoggs was a sparkplug of the renewed congres-

sional interest in materials policy and its con-nections with energy and the environment. Aseries of biennial National Materials PolicyConferences was begu n in 1970 at his requ est,and he introduced the legislation creating anew materials commission.47

The background of the commission’s forma-tion was th is: While considering an innovativeFederal law on solid waste (The Resource Re-covery Act of 1969), the Senate Committee onPublic Works asked for a study on a nationalpolicy for handling materials, from extractionto disposal. The ad hoc committee doing the

study recommended a fresh look at materialsproblems as a whole and a new national com-mission. 48 The next year, Congress amendedthe Resource Recovery Act, incorporating init the National Materials Policy Act of 1970 andcreating the National Commission on MaterialsPolicy (NCMP) with this objective:49

4TIn response to a request by Senator Boggs, the late Dr. Frank-lin P, Huddle, Senior Specialist with the Congressional ResearchService of the Library of Congress, organized a series of bien-nial National Materials Policy Conferences. The conferences,under the auspices of The Engineering Foundation, were held

at New England College, Hemiker, NH . They are widely knownas “the Henniker Conferences. ”

MU .s. Congress, Senate Committee on Public Works, Towarda National Materials Policy, committee print, 91st Cong. , Ist sess .@Tifle II of the Resource Recovery Act of 1970 (Public Law

91-152), entitled the National Materials Policy Act of 1970, sec.202.

., . to enhance environmental quality and con-serve materials by developing a national ma-terials policy to u tilize present resour ces andtechnology more efficiently, and to anticipatethe future materials requirements of the Nationand the world, and to make recommendationson the su pp ly, use, recovery and disposal of

materials.The Commission’s report, Material Needs

and the Environment Today and Tomorrow, is-sued in 1973, recomm ended striking a balancebetween the need to produce goods and theneed to protect the environment. In particular,it urged that environmental costs be includedin reckoning the costs and benefits of materialsproduction. While calling for “orderly” devel-opment of resources, the Commission alsostrongly urged conservation through recyclingand greater efficiency of use. To carry out these

policies, the NCMP made 198 detailed recom-mendations in 10 major areas.50

The “traditional U.S. economic policy” of buying materials at least price was reaffirmedby this Commission, The policy was givencredit for providing reasonably priced goodsto consum ers and keeping U.S. goods competi-tive in world markets. However, the Commis-sion qualified its support of the least-cost in-terdepend ence policy to a d egree, It argued thatsome U.S. minerals industries might need alimited amou nt of protection from competitionwith “subsidized” foreign producers.51

As for national security, the Comm ission r ec-ommend ed that w here problems of supp ly areforeseen, the United States should foster do-mestic produ ction, d iversify sources of sup ply,develop special relations w ith r eliable foreignsources, increase the dep endence of sup plyingcountries upon continuing U.S. goodwill, andfind substitute materials.52 The Commissiongave little attention to stockpiling, possibly be-cause the imported material of greatest con-cern at the time was oil, and stockpiling oil isfar more expensive and cum bersome than stor-

sONa t i ona l commission on Materials Policy, MateriaIs Needsand th e Environment Today and Tomorrow (Washington, DC:U.S. Government Printing Office, 1973), pp . 1-4, 1-5, and ch, 6,SIIbid., pp. %8 through 9-10.

bZIbid . , p, 9-26,




ing most nonfuel minerals, (The NCMP’s chargeinclud ed energy; it defined materials as all nat-ural resources intend ed for use by indu stry, ex-cept for food.)

Like the Paley Commission 20 years earlier,the NCMP urged that a high-level governmentbody oversee Federal materials policy. It pro-posed a Cabinet-level agency—possibly a n ewDepartment of Natural Resources—to plan andexecute comprehensive policy for materials,energy, and the environment. 53

While the Department of Natural Resourceswas not created, the report of the NCMP re-ceived considerably more official attentionthan its predecessor had. At the time the re-port came out, interest in materials issues hadquickened. A world economic boom was on theupswing, and some shortages of materials hadbegun to appear. The Club of Rome’s widelyread report The Limits to Growth (published in1972),

54 suggested that world demand for ma-terials, increasing expon entially, wou ld ou trunthe p lanet’s finite sup plies, leading to a devas-tating collapse of world economies in the 21stcentury. In this atmosphere, interest in theCommission’s report ran high.

The Commission’s report was the spring-board for hearings before the Senate Subcom-mittee on Minerals, Materials, and Fuels,55 an dmaterials issues were th e subject of other con-

gressional hearings and reports;56

the Office of Technology Assessment added a program toassess materials issues. Other congressionalagencies—the General Accounting Office andthe Congressional Research Service—under-took stud ies on materials issues.57 The National

~slbid,, p, I% an d ch . 11.sqDone]]a H, Meadows, et al., The Limits to G r o w th [New York:

Universe Books, 1972).55u, s. Congress, senate, Committee on Interior and Insular

Affairs, Subcommittee on Minerals, Materials and Fuels, Hear-ings, Oct. 30, 31, and Nov. 1, 1973, committee print.‘See, for example, U.S. Congress, Senate, Committee on Public

Works, Resource Conservation, Resource Recovery, and Solid

Waste Disposal, committee print, 1973.sTSee, for example, the reports of the biennial Henniker con-

ferences, which were organized by the Congressional ResearchService, and U.S. Congress, House of Representatives, Commit-tee on Science and Astronautics, Industrial Materials: Techno-logical Problems and Issues fo r Congress, committee print, 1972,

prepared by Dr . Franklin P. Hudd le of the Congressional Re-

Academy of Sciences issued nu merou s reportscommenting on and related to the NCMP re-port.58 Finally, a most concrete result was thehearings and work done by the Senate Commit-tee on Public Works on resource recovery andrecycling, 59 which eventually led to passage of

the Resource Conservation and Recovery Actof 1976.

National Commission on Supplies and Shortages

When the National Commission on MaterialsPolicy issued its repor t in mid -1973, OPEC wasa name known only to specialists. Oil priceshad just begu n to r ise as a result of cartel con-trol. Within a year, OPEC had not only quad-rupled prices, but for a time had denied itsmembers’ oil to the United States and TheNetherlands. In addition, the world economic

boom, by then 2 years old, had created short-ages of many industrial materials. Prices of commod ities from ru bber and oil to scrap steeland copper bounded upward, and industrieshad real difficulty in getting the aluminum,copper, chemicals, petrochemicals, steel, andpaper that they needed. The influence of The Limits of Growth, with its projections of worldresource exhaustion and economic collapse,was at its height, To some people, the short-ages of 1973-74 seemed early indications of justsuch a collapse.

search Service. The General Accounting Office und ertookstudies that led to such reports as Federal Materials Researchand De~’elopment: Modern ia”ng Institutions and Nlanagemtmt(Washington, DC: U.S. Government Printing Office, 1975). TheOffice of Technology Assessment Materials Program undertooka broad ran ge of studies too numerous to cite.

s8RepOr tS prod uced by the National Academy of Sciences andaffiliated organizations included: National Academy of Sciences/ National Academy of Engineering, National Minerals Polic}r,Proceedings of a Joint Meeting, Oct. 25-26, 1973 (Washington,DC : The Academy, 1975); National Academy of Sciences, Man,Materials, and th e Environment, report of the Study Com mitteeon Environmental Aspects of a National Materials Policy (Wash-ington, DC: The Academy, 1973); National Academy of Sciences,Committee on the Survey of Materials Science and Engineer-

ing, Materials and Man’s Needs (Washington, DC: The Acad-emy, 1974); National Academy of Sciences, Committee onMineral Resources and th e Environment (COMRATE), MineralResources and the Environment [Washington, DC: The Acad-emy, 1975).WU. S, Congress, senate Committee on Public Works, Hear-

ings, June 11-13, July 9-11, 15-18, 1974, committee print.




In this crisis atmosphere, national attentionagain fastened on the ad equacy of material sup-plies. While two House committees were pre-paring reports on the subject—one on Ameri-ca’s resource needs and import dependenceand the other on world resource “scarcities” 60

–former Senators Mike Mansfield and HughScott formed a joint Executive CongressionalLeadership group to discuss threatened short-ages of natural resources, raw materials, andagricultural commodities. Out of this groupemerged legislation (an amendment to the De-fense Production Act of 1950, in September1974) creating the National Commission onSupplies and Shortages.

The Commission was instructed to look atfour principal issues: the possibility of resourceexhaustion, the consequences of the Nation’sgrowing dependence on imported materials,the ability of the free market to deal with short-ages, and the adequacy of government mech-anisms for handling materials problems.

The Commission’s report, Government andthe Nation’s Resources, issued in 1976, con-cluded that the country’s ability to meet its ma-terial needs was in no imminent danger.61 Itsaid that:

q

q

q

resource exhaustion was not a seriousthreat to economic growth for the nextquarter century “and probably for gener-

ations thereafter”;U.S. dependence on imported materialsother than oil was grow ing only gradu allyand manageably;cartel control of nonfuel m inerals was un-likely and embargoes directed against theUnited States “only remotely conceivable, ”and that neither was any real threat to theAmerican economy; and

—.——eou,s. Congress, House of Representatives, Ad H OC Commit-

tee on the Domestic and International Monetary Effect of Energyand Other Natural Resource Pricing, Meeting America’s ResourceNeeds, a report to the Committee on Banking and Currency(Washington, DC: U.S. Government Printing Office, 1974); U.S.Congress, House of Representatives, Committee on Foreign Af-fairs, Globa l Commodity Scarcities in an Interdependent World(Washington, DC: U.S. Government Printing Office, 1974].

61Nationa] Commission on Supplies and Shortages, Govern-ment and the Nation’s Resources (Washington, DC: U.S. Govern-ment Printing Office, 1976).

q the widespread severe shortages of 1973-74 were a temporary phenomenon due tothe world su rge in demand , to lagging in-vestment in materials industries for a fewyears before the boom, and to a “shortagementality” that led to panic buying and

hoarding of materials by industries inmany countries.

These conclusions added up to strong, con-tinued support for the principle of free tradeand interdependence.62

The Commission stated that it found no in-stances of import dependence that would

justify the costs and rigidities of placing restric-tions on imports. Instead, to cope with inter-ruptions of supply that might result from civildisorders in producing regions or, possibly,from price-gouging by producers, the Commis-

sion recommended stockpiling as “the univer-sal antidote.” 63 The Commission supported astrictly limited u se of the stra tegic stockpile foreconomic purposes during a sudden disruptionof supply of critical materials to keep the ci-vilian economy as well as defense industrieson an even keel. However, the Commissionsaid, stocks should not be sold simp ly to influ-ence prices in the absence of a supply disrup-tion (as the Johnson Administration had donein the 1960s—see the discussion below). 64

Underlying many of the Commission’s con-

clusions was confidence in the ability of mar-ket forces to bring forth ad equate m aterials forthe world’s econom ies and to right im balanceswithin a reasonable time. Many of the recom-mend ations amoun ted to “hand s off” the mar-ket. For example, in its consid eration of recycl-ing, the Commission suggested the removal of depletion allowances for minerals, which fa-vor virgin ore over recycled materials-but nosubsidies for recycling either. es In a similarvein, the Commission was cautious about rec-ommending government funding for R&D foralternative supplies, conservation, and substi-

tute materials. Recognizing that government

@Z1bid., pp . x-xii, chs. z, 3, and 4, especially pp. 22-23 and 38-39.6sIbid., p. 39.841 bid., ch. 7.6SIbid., p. 166.




does h ave a role to play [especially in basic re-search), the Commission suggested that moreknowledge is needed of what motivates indu s-try to commit R&D funds before governmentrushes in to fill the breach. 66

The Commission recognized political ob-stacles to private investments in the world’sminerals, such as the threat of expropriation,but called attention to existing measures tolessen the obstacles—measures such as govern-ment insurance for foreign investment, inter-national disputes settlement and investmentcodes, and World Bank investments in devel-oping coun tries. The Comm ission also expressedconfidence “that private investors and Govern-ments will find ways to adjust to political andeconomic realities.” 67

The Commission noted that complicatedproblems, like the rapid grow th of world p op-ulation, the unequal distribution of world re-s o u r c e s , a n d t h e s o m e t i m e s u n e x p e c t e d a n dunwanted byproducts of technological advancemight require an increas ing degree of govern-ment sophis t icat ion and management . I t foundroom for improvements in the adequacy of theU.S. Government institutions to deal withmaterials issues. It also proposed practicalc h a n g e s i n d a t a c o l l e c t i o n a n d a n a l y s i s a n ds ugges ted the c r ea t ion o f a s mal l , h igh - leve lco rps o f p ro fes s iona l s to mon i to r s pec i f i c in -dus tr ies and economic sectors and to d e v e l o pa comprehensive picture of how governmentpolicies combine to affect basic industry andthe national interest. However, the Commis-s i o n r e c o m m e n d e d a g a i n s t s e e k i n g a “ c o o r d i -nated mater ia ls pol icy” as an end in i tself , be-

cause materials policy affects and is affectedby many other policies on matters of equal org r e a t e r i m p o r t a n c e .68

By 1976 , when the Commission published itsrepor t , the m a t e r i a l s s h o r t a g e s t h a t w e r e s oworr isome at the t ime of i ts creat ion had dis -a p p e a r e d . M i n e r a l s a c t i v i t y h a d s l i d f r o m t h e

p e a k o f h i g h p r i c e s a n d t i g h t s u p p l i e s o f t h efirst half of 1974 to the trough of a world busi-

—.—

661bid., pp. 182-184.6

71 bid., p. 46.

eEIbld, , ~h~ . 5 and 6.

ness recession, following the OPEC oil pricehike.

Under the circumstances, the Commission’smore astringent suggestions for “hands off themarket (e.g., remova l of the percentage d eple-tion allowance for new minerals) were coollyreceived. In fact, there was some sentiment inCongress (especially among mem bers from thewestern mining States) for much more activegovernment support of the now-depressed andalways volatile domestic mining industry thananything suggested by the noninterventionistreport of this Commission, Some were also dis-satisfied w ith the limited backing the Comm is-sion had given to the idea of “comp rehensive”or “coordinated ” materials policy.69 Altogether,the report got little official response. Changesin the Com merce Departm ent’s econom ic anal-

ysis toward stronger analysis by the industrialsector was perhaps the principal result.

Once again, a Commission report on mate-rials coincided with a change of the party inpower, Within a month of President Carter’staking office, former Representative James San-tini and 42 other members of the House of Rep-resentatives wrote to the President expressingconcern that the Nation’s policies were ad-versely affecting nonfuel minerals p rodu ction,asking for a “balanced” national minerals pol-icy, and proposing a special minerals advisorin the Executive Office of the President. In De-cember of that year, the President ordered agovernm ent review of nonfuel minerals policy.The results, as noted below, were minimal; thepolicy review was never completed. At the endof the Carter presidency, demands by the in-du stry and interested members of Congress fora “national minerals policy, ” support for theminerals indu stry, and a special minerals advi-sor to the President were stronger than ever.

As the brief history outlined here suggests,Commission reports on materials policy andgovernment actions have n ot always meshed.

This is perhaps predictable, given the cyclicalnature of the minerals industry. When commis-—.-—e9FOr this point of view, see U.S. Congress, House of Repre-

sentatives, Committee on Interior and Insular Affairs, Subcom-mittee on Mines and Mining, U.S. Minerals Vulnerability: Na-tional Policy Implications, committee print, 96th Cong., 2d sess .




sions are formed, one set of problems may bedom inant (e.g., shortages and high p rices); buteconomic conditions may be quite different ayear or two later when the report is issued, sothat the problems may look quite different (e.g.,idle dom estic capacity, inadequate investment,

“unfair” foreign competition). Also worthnoting is that commissions may be rather in-sulated from political concerns, while the gov-ernment that responds to them is not.

Thus, it is not too surprising that of the hun-dreds of detailed recommendations made bythe three major materials commissions, Con-gress and the various administrations of thepast three decades have specifically adoptedonly a few. By and large, both the executivebranch and the Congress have steered a course—from tax laws to international trade treaties—

that is consistent with the interdependence pol-icy recommended by the commissions. Butthere have been exceptions. And in general,congressional and other government actionshave followed their own agendas, rather thanresponding directly to commission recommen-dations. Thus, government actions on materialsissues over the past 30 years are discussedseparately from the story of the commissionsreports.

Congressional Actions and

Government Policies

Two strands in materials policy, besides thegeneral sup port for free world trade, have wonconsistent backing from Congress over a num-ber of years. One is the building of a strategicstockpile, a policy that is now nearly 45 yearsold. The other is high-level government over-sight of a “comprehensive” materials policy,an idea at least as old as the Paley Commission,but insistently put forward by Congress sinceabout 1970.

A program that promoted and subsidized d o-

mestic minerals industries—an exception to theleast-cost, interdependence p olicy—began du r-ing the Korean w ar and was actively pu rsuedfor a few years thereafter. The program diedout in the 1960s, but the law that authorizedit, the Defense Production Act of 1950 , re-mained on the books and interest in the pro-

gram has been revived as a means to reduceimport d ependency. TO Congress has repeatedlyextended the law, most recently in 1984. Pro-duction subsidies for cobalt were consideredin deliberations about this extension, but areconsidered unlikely in fiscal years 1985 and1986 . (See chs. 5 an d 8 for further discussion.)

Stockpiling and Subsidies

Stockpiling originated in 1939, when, on theeve of world war, Congress passed the Strate-gic Materials Act, The Act au thorized the gov-ernment to list materials essential for indus-try and defense and to buy them for a strategicstockpile. Wartime needs soon overwhelmedthe stockpiling program. The postwar Strate-gic and Critical Materials Stock Piling Act of 1946 restated the goal of preparing for an emer-

gency by building stockpiles, and by 1950 some$1.6 billion wor th of stocks had been acquired.This was less than halfway to the objective thenin effect of $4.1 billion. With the outbreak of war in 1950, Congress provided funds for fur-ther major additions to the stockpile.

The Korean war prompted the passage of theDefense Production Act of 1950. Besides au-thorizing government priorities and allocationsof materials, the Act provid ed financial assist-ance for expanding domestic productive capac-ity, including facilities to produce critical non-fuel minerals. During and after the Korean war,purchase agreements, floor prices, and loansor loan guarantees under the Act promoted adoubling of U.S. aluminum production, a 25-

percent increase in U.S. copper mining, anda fourfold expansion of tungsten mining. As-sistance under the Act also encouraged thestartup of U.S. nickel mining and titaniumprocessing and fostered domestic productionof other minerals, including manganese, cobalt,and chromium . The gross outlay of the govern-ment for these programs was $8.4 billion; w iththe payback of loans, the ultimate direct cost

has been estimated as $900 million.71

—Tocertain pads of th e la w that were tailored specifically to war-

time needs (authorization for price, wage, and credit controlsand for settlement of labor disputes) lapsed in 1951.

71U.S. congress, senate Committee on Banking, Housing, andUrban Affairs, Defense Production Act Extension of 1981, repor tto accompany S.1135 (Washington, DC: U.S. Government Print-ing Office, 1981), p. 3.




law th at stockpiles shou ld be su fficient to sus-tain the country’s military, industrial, and es-sential civilian needs for at least 3 years, andthat goals based on this requirement cannot bechanged without prior notice to Congress. Fi-nally, Congress set up a stockpile transaction

fund, so that the proceeds from the sale of ex-cess materials can be used to buy materials thatare needed, rather than going back into the gen-eral Treasury funds.

A “ National Materials Policy”

Meanwhile, at the end of the 1960s, Congressalso turned its attention to the question of abroad Federal responsibility for materials pol-icy, acting initially in the area of minerals pol-icy. The Mining and Minerals Policy Act of 1970 was inspired by the National Environ-

mental Policy Act of 1969, and was intendedto provide similar guidance and goals in itsown area.75

The Act declared it the n ational policy to fos-ter and encourage: 1) the development of eco-nomically sound and stable domestic mining,minerals, and minerals reclamation industries;2) the orderly and economic development of domestic mineral resources, reserves, andreclamation of minerals to help satisfy indus-trial, security, and environmental needs; 3)mining, mineral, and metallurgical research,includ ing use and recycling of scrap; and 4) thestudy and development of methods for dis-posal, control, and reclamation of mineralwaste products and mined land to lessen ad-verse impacts. The Secretary of the Interiorwas put in charge of advancing national min-erals policy, as set forth in the law. He was re-quired to report each year on the state of thedomestic mining and minerals industry, andto recommend any laws needed to carry outthe n ational policy. Beyond that, the law calledfor no specific actions.

TSHouse subcommittee on Minerals and Mining, U.S. MineralsVulnerability, pp . 18-18. See the Committee’s comparison of envi-ronmental laws with the Mining and Materials Policy Act of 1970, which it viewed as the victim of neglect by the executivebranch.

Few identifiable actions were undertaken inresponse to the act. The Bureau of Mines u sedthe language of the law to sup port fund ing re-quests for research in recycling and safe dis-posal of mine wastes, but no remarkable changesin fund ing p riorities resulted. The Secretary of

the Interior’s first two annual reports (in 1972and 1973) viewed with alarm problems of theU.S. minerals industry and the increasing U.S.import dependence on fuel and nonfuel min-erals, but made few recommendations forchanges in the law to carry out a nationalminerals policy. (One of the few changes rec-ommend ed was to amend the antitrust laws toallow joint ventures for mineral research.)Later annual reports took a less alarmist viewof the rising import dependence for fuel andnonfuel minerals, most of which was actuallydue to oil imports. The 1975 report, for exam-

ple, said that problems arise from increasingimports “only when foreign sources becomeunreliable. ” Especially in 1978 and 1979, thedocument failed to advocate the strong govern-ment su pp ort of the domestic minerals indu s-try that sponsors of the law had evidently en-visioned.

By the mid-1970s strong supporters of themining industry in Congress had become con-cerned about w hat they saw as continuing ne-glect of national minerals policy by the ex-ecutive branch. Displeased with the rather

laissez-faire conclusions of the Commission onSupplies and Shortages, they urged the newCarter Administration to undertake a fresh re-view of national nonfuels mineral policy, Presi-dent Carter responded in December 1977, ap-pointing Secretary of the Interior Cecil B.Andru s chairman of an interdepartmental pol-icy review committee.

The nonfuel minerals policy review gaveeven less satisfaction to advocates of a “na-tional minerals p olicy.” The review u ltimatelyfoundered, going no further than a partial draft

report in 1979.

76

It had suffered a fate commonfor interdepartmental task force efforts—con-

T13u. s. Depafiment of the Interior, “Report on the Issues Iden-tified in the Nonfuel Minerals Policy Review, ” draft for publicreview and comment, August 1979.



Ch. 4—Security of Supply 115

signment to lower rungs of the bureaucraticladder and a watering down of controversialissues, In hearings held around the country ondraft portions of the report, the d ocum ent w ascriticized by all sides—industry, environmentalgroups, and consumer organizations.

A number of congressional and industrycritics criticized the document on nationalsecurity grounds. They linked together the is-sues of import dependence, the health of thedomestic minerals industries, the Nation’sneed for strategic materials, and the threat of a “resource war.” 77

Aside from mining and minerals, Congresshad yet to d eclare a statutory national materialspolicy. The Paley Commission, in 1952, hadspoken of “a national materials policy for theUnited States” with an overall objective of in-

suring “an adequate and dependable flow of materials at the lowest cost consistent with na-tional security an d with the w elfare of friendlynations. ” But the difficulties entailed in trans-lating such recommendations into meaningfulpolicy were formidable—given the diverse rolethat materials play in all aspects of society.When Congress, in 1970, enacted a NationalMaterials Policy Act, it w as for the p urp ose of developing such a policy (through Commissionrecommendations) rather than articulating one.

Nonetheless, throughout the 1970s, materials

advocates both inside and outside the Congresshad been laying the groundwork for a materialspolicy that w ould encompass a broad range of concerns—yet not be so broad as to be all in-clusive. Some material policy concerns thatwere prominent in the early part of the dec-ade became th emselves the subject of separatelegislation, thus making the task of what to em-ph asize in an overall national m aterials policymore manageable. Solid waste disposal—adominant materials policy issue in the early1970s—was p erhap s the m ost conspicuou s ex-ample. It still attracted considerable attention,

‘T~u.s . COng~SS, House of Representatives, Committee on In-terior and Insular Affairs, Subcommittee on Mining and Min-erals, Hearings, Oct. 18, 1979 (Washington, DC: U.S. Govern-ment Printing Office, 1979), statement of Representative JamesD. Santini, Chairman. See also the testimony of E. F. Andrews,Vice-President, Allegheny I.udlum Industries, Inc,

but with enactment of the Resource Conserva-tion and Recovery Act of 1976 its earlier prom-inence in the h ierarchy of material policy con-cerns began to decline. Other concerns, suchas import vulnerability, and the competitive-ness of basic U.S. industry, had moved to the

forefront.Meanwhile, the House Committee on Science

and Technology was working on legislationwhich emphasized the role of research and de-velopment in resolving material problems.Since the early 1970s, the Committee had be-come increasingly involved with the issue, re-leasing a series of background reports andholding hearings on various legislative pro-posals which had a science and technologycomponent in implementing materials policy.

By the 95th Congress, these legislative con-

cepts had begun to crystallize, so that one mem-ber of the comm ittee could speak, in m id-1977,of acting in “concert with other committees of both H ouses” to begin “to establish an ord erly,effective national materials policy.” 78 Severalmembers of the committee had introduced billswh ich, wh ile differing in d etail, had themes incommon. 79 First, the bills proposed a statutorymaterials policy. Second, implementation of the policy would be achieved through focus-ing Federal materials R&D activities. Third,they emphasized the need for greater involve-ment of the Executive Office of the President

(through the Office of Science and TechnologyPolicy (OSTP) or a new organization in theEOP) in materials decisionmaking.

None of these bills passed th e 95th Congress,but the hearing process helped to furth er refinethe basic legislative concepts and build a greaterdegree of consensus about components of na-tional materials policy legislation. While ex-pressing agreement with the overall objectiveof these bills, the Carter Administration was

TLIU. S. Congr ess, House Committee on Science and Technol-

ogy Subcommittee on Science, Research and Technology, Hear-ings on a National Policy for Materials; Research and Resources,95th Cong., 1st & 2d sess., June 29, July 13, 14, 1977; Feb. 28,

Mar. 1, 2, and 6, 1978 [Washington, DC: U.S. Government Print-ing Office, 1978], pp. 1-2.

~Mater i a l policy bills introduced in the 95th Congress includedH.R. 10859, H.R, 11203, and H.R. 13025.




not convinced that new legislation was neces-sary. OSTP, it said, already had the authorityto achieve those goals, and moreover its non-fuel mineral policy review, and other initiativesin areas of basic innovation and improved co-ordination of R&D would provide the needed

direction for Federal policy without additionallegislation.

The Administration’s position became lesspersuasive in the 96th Congress, when its draftnonfuel mineral policy review came und er con-siderable congressional criticism. With thereverberations of the cobalt price spike stillshaking U.S. industry, the issue of import de-pendency was very much on the minds of legis-lators. Sponsors of materials legislation in theHouse saw an emphasis on science and tech-nology as an important step toward reducingimport vulnerability. At the end of 1979, theHouse, by a 398 to 8 vote, passed H.R. 2743,called the Materials Policy, Research and De-velopment Act. The bill, originally introducedby Representative Don Fuqua, Chairman of theHouse Science and Technology Committee,reflected many of the basic concepts consid-ered by th e Committee in the 95th Congress—including a broad-based material policy, to beimplemented through an improved executivebranch decisionmaking process in regard toR&D activities.

After it was sent to the Senate, the House

bill’s basic framew ork w as mainta ined, bu t itsscope was enlarged as the bill moved throughtwo Committees (Commerce, Science, andTransportation; and Energy and Natural Re-sources) to the Senate floor. New provisionswere add ed w hich p laced greater emphasis onmaterials imp ort vulnerability, and the Depart-ments of Defense, Commerce, and Interiorwere given important sup porting roles in iden-tifying vulnerability problems. In general, theSenate bill placed greater emphasis on miner-als—thu s bringing together in on e piece of leg-islation the sometimes disparate concerns of the materials and minerals communities.

The bill was signed by President Carter onOctober 21, 1980, in the closing days of the 96th

Congress. 80 The National Materials and Min-erals Policy, Research and Development Actof 1980 (Public Law 96-479) declared:

. . . it is the continuing policy of the Un itedStates to promote an adequate and stable sup-ply of materials necessary to maintain national

security, economic well-being and industrialprod uction w ith approp riate attention to along-term balance between resource produc-tion, energy use, a healthy environment, natu -ral resources conservation, and social needs.81

The law spelled out a number of activitiesin furtherance of this national materials pol-icy, to be undertaken by the President, his Ex-ecutive Office, and various departments. Itdirected the Presiden t to submit a plan to Con-gress that would assure: policy analysis anddecisionmaking on materials in the ExecutiveOffice of the President; interagency coordina-

tion of material policy at the Cabinet level; con-tinuing long-range analysis of the use and sup -ply of materials to meet national needs; andcontinuing consultation with the private sec-tor on Federal material programs.

The law d esignated the Office of Science andTechnology Policy, in the Executive Office of the President, to coordinate Federal materialsR&D, emphasizing R&D to meet long-range ma-terial needs through annual assessments. Re-sponsibility for several specific tasks wasplaced in various departments: Commerce, to

do case studies of material needs (the aerospaceindustry was selected for the first study andthe steel industry the n ext); Defense, to assessmaterial needs critical to national security; andInterior, to imp rove the assessment of interna-tional minerals and to make better mineralsdata and analysis available for decisions onFederal land use, and to report on its activi-ties in these areas,

e O F O r legislative history o f Public Law 96-479, see Hou se Re-port 96-272, Nov. 29, 1979 (House Science and Technology Com-mittee); Senate Report 96-897, Aug. 13, 1980 (Senate Commerce,Science and Transportation Committee); Senate Report 96-937,

Sept. 12, 1980 (Senate Energy and National Resources Commit-tee; House debate and passage, Congressional Record, Dec. 4,1979; Oct. 2, 1980; Senate debate and passage, Congressional Rec-ord, Oct. 1, 1980.Blpub]ic Law 96-479, sec. 3.




In April 1982, President Reagan submittedthe p lan called for by th e Act.82 Dominating theplan was its emphasis on opening more of thefederally owned public lands to m inerals pros-pecting and development in order to “achievea proper balance between wilderness and

mineral needs of the American people, ” Anothermajor theme was renewed and improved stock-piling. The President took credit for the firstmajor stockpile acquisitions in 20 years—pur-chases of cobalt and acquisition of Jamaicanbauxite by purchase, barter of agriculturalproducts, and swap of excess stockpile mate-rials. The President’s report promised a thor-ough review of the quality of stockpiled m ate-rials, some of which are decades old.

Despite efforts by Congress to assure high-level coordinat ion of national materials p olicy,the plan offered little that was new in this re-gard. National materials policy, it said, wouldbe coord inated thr ough the Cabinet Council onNatu ral Resources and Environm ent (as it hadbeen since the early days of the Reagan Admin-istration). No budget for a coordinated mate-rials program w as presented (even though thelaw requires one); the Cabinet Council needsonly a “minimum ad ministrative staff, ” saidthe report. For coordination of government-sponsored R&D, the plan proposed to resurrectthe interagency Committee on Materials(COMAT). COMAT had been disband ed in the

early days of the Carter Administration, thenresurrected before Carter left office, and thenwas again disbanded in the early days of theReagan Administration.

The President’s report had little discussionof the potential for smoothing materials supplyproblems by developing advanced technologiesfor more efficient use of materials, recycling,or substitution of abundant materials for scarceones—themes emphasized in the 1980 Act andits legislative history. While the Administrationactually proposed to fund strategic materialsR&D at a fairly high level, the President’s plan

offered few specifics, stating that “favorabletax incentives” in th e 1981 tax law w ould stim-ulate private R&D of essential materials activ-—.—

aZl~u~ iOnu ] ~la~~rjajs and Minerals Program Plan and Repor tto Congress, submitted hy President Reagan, Apr. 5, 1982.

ity. Any governm ent-financed R&D, the reportsaid, “will concentrate on high-risk, high po-tential payoff projects w ith the best chance forwid e generic app lication to materials problemsand increased p rodu ctivity. ” The exception tothis policy was mission-specific projects of the

Department of Defense.Although the President’s plan was seen by

many as an im portan t first step, its lack of em-phasis on materials issues other than thoseassociated with mining and the public lands,as well as the choice of the Cabinet Council onNatural Resources and the Environment to co-ord inate policy, drew strong criticism from theHou se Committee on Science and Technology,By mid-August 1982, the Committee had re-ported a bill—the proposed Critical MaterialsAct of 1982—to establish a Council on CriticalMaterials “under and reporting to” the Execu-tive Office of the Presid ent. “It is no acciden t, ”the Committee report said, “that the CabinetCouncil on Natural Resources and Environ-ment, headed by the Secretary of Interior,placed primary emphasis on minerals, miningand related pu blic land p olicies with almost noattention to basic material processing, conser-vation, substitution, or new materials develop-ment."83 Only an entity within the ExecutiveOffice of the President, the Committee reportreasoned, wou ld be able to transcend “normalinteragency competitiveness and provide thenecessary balance in m aterials policy consider-ations.” The Administration disagreed, argu-ing that a new layer of bureaucracy wouldimpede—rather than enhance—materials andmineral policy coordination,

Although the hill did not pass in the 97thCongress, the House Science and TechnologyCommittee continued the push for a criticalmaterials council in the 98th Congress. Its Sub-committee on Transportation, Aviation, andMaterials held hearings in May and June of 1983, focusing on implementation of the 1980Materials Act.84 Administra t ion witnesses,

e sHOUS e Report 97-761, Part 1, Aug. 18, 1982, p. 9.84u .s. congress, House Committee on Science and Technol-

ogy, Subcommittee on Transportation, Aviation, and Materials,Hearings on Material Research and Development Policy, 98thCong. 1st sess., May 17, 18, 19; June 24, 1983 (Washington f D C:U.S. Government Printing Office, 1984),




wh ile sup porting the need for effective coordi-nation, maintained that the Cabinet Coun cil onNatural Resources and Environment andCOMAT would fulfill this need. However, theU.S. General Accounting Office, which hadbeen asked by full Committee Chairman Fuqua

to monitor implementation of the 1980 Act,identified several areas in which additional at-

tention would be needed to meet the goals of the 1980 Act, including more effective coordi-nation. 85 While its final report was not r eleaseduntil March 1984,86 GAO’s preliminary find-ings (as reflected in its testimony) supportedthe contention of those who held that imple-mentation of the 1980 Act was not adequate.

GAO pointed out th at the Cabinet Council onNatural Resources and the Environment didnot include all agencies with important mate-rials responsibilities, such as the Department

of Defense and the Federal Emergency Man-agement Agency, which coordinates stockpileplanning. COMAT, assigned R&D coordinationby the President’s plan, had apparently notbeen involved in determining the need for amajor new materials research initiative pro-posed in the President’s budget for fiscal year1984. The Act called on OSTP to prepare andannually revise an assessment of national ma-terial needs related to scientific and technologi-cal changes over the next 5 years; while no datewas specified for the initial assessment, nonehad been prepar ed. Finally GAO noted that th e1980 law did not require the administration to

periodically revise and resubmit to Congressits overall materials program plan. Hence, thePresident’s material plan would not necessarilybe revised. (Key find ings from th e GAO reportare summarized in box 4-A.)

Another issue taken up at the hearings con-cerned the poten tial role of adv anced materialsin U.S. indu strial comp etitiveness, and in eas-ing import vulnerability. In 1981, Japan had an-nounced a 10-year program giving consider-able prominence to advanced ceramics and

@slbid., p. 23.‘U.S. General Accounting Office, imp lementation of the Na-

tional Minerals and Materials Policy Needs Better Coordinationand Focus, GAO—RCED-84-63 (Gaithersburg, MD; Mar. 20,1984).

other “high technology” materials in its indus-trial goals. Concern had been mounting thatU.S. primacy in advanced materials researchwas in danger of being supplanted as thesematerials increasingly found commercial ap-plication.

By late October 1983, the subcommittee hadreported a measure (H. R. 4186) to the fullScience and Technology Committee whichcalled for the establishment of a national crit-ical materials coun cil and for increased emp ha-sis on advanced materials R&D. When a Senate-passed arctic research measure that had beenendorsed by the Administration was referredto the Committee, it emerged from mark-upwith a new Title II, the National Critical Ma-terials Act of 1983, The measure was signedinto law by Presiden t Reagan on July 31, 1984.

The National Critical Materials Act (Title IIof Public Law 98-373) has three major compo-nents. First, it establishes a National CriticalMaterials Council in the Executive Office of the President, to advise the President on ma-terials policy, and define responsibilities andcoordinate critical materials policies amongFederal agencies. The Council, to be composedof three presidentially appointed members whowill need Senate confirmation if they do notalready serve in a Senate-confirmed office, isto pr epare a rep ort on critical materials inven -tories, and projected use, including a long-

range assessment of p rospective critical mate-rials problems.

Second, it calls for the establishment of a na-tional Federal program for advanced materialsresearch and technology, with the Councilassuming key responsibilities for overseeingand collaborating with other agencies on theprogram. The Council is directed to establisha national Federal program plan for advancedmaterials R&D, and to review authorizationand budget requests of all Federal agencies toensure close coordination with policies de-

termined by the Council. The Office of Man-agement and Budget, in turn, is to considerFederal agency authorization requests in thematerials area as an “integrated, coherent,multiagency request” to be reviewed with the



Ch. 4–Security of Supply Ž 119

Council for ad herence to the Federal materials technology, authorized by the Stevenson-Wydlerprogram plan then in effect. Technology Innovation Act of 1980 (Public

Third, the law seeks to promote innovation Law 96-480), as a means to encourage such in-

and improved productivity in basic and ad- novation . It is also called on to establish an “ef-fective mechanism” for efficient and timely dis-vanced materials industries. The Council is to

evaluate possible use of centers for industrial semination of materials property data.

The Range of Solutions

Thirty years of debate have drawn attention bly less attention. That is the purpose of thisto a very wide range of political responses to report. Chapters 5, 6, and 7 present in detailmaterials supp ly problems. The pr omise of ad- the principal subjects of this report—supplyvanced technologies, both in expand ing sup ply alternatives, conservation, and substitution.and in promoting more efficient, more flexi- Chapter 8 discusses policy issues and optionsble use of materials, has received considera- related to these subjects.



120 q Strategic Materials: Technologies to Reduce U.S. Import Vulnerability —

Box 4-A.-GAO E valua tion of E xecutive Bra nch Implemen tat ion of the Nationa l Ma teria lsand Min eral Policy, Resear ch and Development Act of 1980

Soon after passage of the National Mate-rials and Minerals Policy, Research and De-velopment Act of 1980, the U.S. General Ac-

counting Office (GAO) was asked to monitorand review the Administration’s implementa-tion of the Act by the Chairman of the Hou seScience and Technology Com mittee. GAO’sfinal report, issued in April 1984, draws thefollowing conclusions:

q

q

q

The President assigned overall responsi-bility for coordination of materials policyto the Cabinet Coun cil on Natura l Re-sources and Environment, but the coun-cil has not provided the “continuous de-cision and policy coordination required”by the Act. The Cabinet Council is re-stricted to Cabinet members; therefore,representatives from the Federal Emer-gency Management Agency (FEMA),which oversees stockpile policy, and theEnvironmental Protection Agency (EPA),wh ich regu lates the activities of miningand mineral processing ind ustries, arenot included. The Council cannot com-pletely address minerals and materials is-sues w ith this lack of membership. Infact, several material-related decisionshave been made by independent agenciesor individuals with little or no coordina-tion w ith the Cou ncil or sister agencies.The President’s program plan focused onone of the three policy goals included inthe Act—national security. However,almost no attention was given to the Act’sother two policy goals-economic well-being an d indu strial prod uction, exceptto address domestic minerals extractionproblems. No consideration was given tothe long-term implications of th e d eclinein domestic minerals processing capac-ity for the U.S. economy and industrialbase.The Act required the Office of Scienceand Technology Policy (OSTP) to preparean assessment of national materials needsrelated to scientific and technologicalchanges over the next 5 years and to re-

q

q

q

vise such assessment on an annual basis.The Act, however, did not specify areporting date, Agency officials told GAO

that they consider this a low-priority task,and have not prepared the report.The Department of Defense was to pre-pare a report assessing critical materialsneeds related to national security and toidentify steps to meet these needs. Thisreport was to be made available to Con-gress on October 21, 1981. According toofficials in the Defense Department, thereport had been sent to the Cabinet Coun-cil on Material Resources and Environ-ment in time for it to be used in the prep-aration of the President’s material plan inApril 1982. However, the report was still

under review within the Administrationas of February 1984, and had not beensent to Congress.Similarly, the Department of the Interiordid not submit a report due to Congresson October 21, 1981, until November 10,1983. The report was submitted only af-ter the Chairman of a House subcommit-tee indicated that “legislative action”would be pursued if the report were notsubmitted. (The Interior report summa-rizes actions to improve the capacity of the Bureau of Mines to assess interna-tional mineral supplies, to increase the

level of mining and metallurgical re-search by the Bureau in critical and stra-tegic minerals, and to improve the avail-ability of mineral data for Federal land usedecisionmaking.)The only Federal agency to comply con-sistently with the Act’s requirements isthe Department of Commerce. (Commercehas completed two materials case studieson critical materials requirements of thesteel industry and of the aerospace indus-try; a third dealing with domestic min-erals industries is in progress.)

GAOconcluded that the Executive Officeshould develop an expanded program plan

which takes into account Congress’ three pol-




icy goals of national security, economic well-being, and industrial production. Specific rec-ommendations were:qThe plan should clearly define the terms

“strategic” and “critical” to focus atten -

tion on those mineral and material mar-kets where the United States is mostvulnerable to price increases or supplydisruptions and should d evelop a p lan tomeasure the m agnitude of the potentialproblem in a given market. The benefitsand costs of various alternatives such asstockpiling, expand ing domestic produc-tive capacity and sup ply, and d evelopingsubstitutes should be weighed in thislong-term p lan wh ich shou ld be gearedtowards specific minerals or materials.

qThe program plan should reach beyondthe goal of national security and include

issues affecting the law’s goals of eco-nomic well-being and industrial produc-tion, wh ich are now being addr essed inan uncoordinated fashion by the Depart-ments of Interior, Commerce, Defense,and others.

The program plan should ad dress the fu-ture role of high technology materialsR&D. This alternative should be devel-oped within the rep ort that OSTP is re-quired to prepare under the 1980 Act, andthe recommend ed redirection resultingfrom COMAT’s inventory of Federal ma-terial R&D programs.

GAO offered the opp ortun ity for the var-ious agencies to comm ent on th eir conclu-

sions and recommendations. The agency re-sponses are as follows:

The Department of the Interior d isagreedon the need to develop an approach tomeasure U.S. minerals and materials vul-

nerability. Interior felt it was not neces-sary to quantify the magnitude or degreeof vulnerability in a given nonfuelminerals or m aterials market.The Department of Defense agreed withGAO that the rep ort assessing critical na-tional security materials needs and thesteps necessary to meet those needs re-quired by the Act should be made avail-able to Congress. Defense was in ag ree-ment w ith the Department of the Interiorregarding measuring U.S. vulnerability.The Office of Science and Techn ologyPolicy did not comment on the GAO pro-

posal that it prepare the assessment of na-tional materials needs related to scientificand technical changes over the next 5years as required by the Act. Interior,however, stated that the adm inistrationintended that COMAT would constitutethe primary means through which OSTPwould carry out the Act’s reporting re-quirements. In the opinion of GAO, nei-ther the program plan or COMAT’s activ-ities to date assess national materialsneeds related to scientific and technologi-cal changes over the next 5 years; there-fore, this requirement has not been met.

38-844 0 - 85 - 5 : ~1, 3



— . —.

CHAPTER 5

Strategic Material Supply

Page

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..........................125Summary of Supply Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............125

Factors Contributing to Change in Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..126Technological Advances in Mine Production and Processing . . . . . . . ...........127

Strategic Material Environments, Mineral Activity, and Technology . ............128Geology of Strategic Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..........128Prospecting to Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Exploration Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................131Mining Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....................131Poten tial for Ch ange in the Supply of Strateg ic Materia ls . . . . . . . . . . . . . . . . .. ...132Processing of Strategic Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......135Production and Processing of the First-Tier Materials . .......................136

Chromium Production and Processing . . . . . . . . . . . . . . . . . . . . . . . ...............,137Foreign Production of Chromium . . . . . . . . . . . . . . . . . . . . . ....................139

Domestic Production of Chromium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........148Foreign and Domestic Chromium Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154Cobalt Production and Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ...159

Foreign Production of Cobalt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............160Potential Sources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..........................166Domestic Production of Cobalt . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................167Domestic and Foreign Cobalt Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....174

Manganese Production and Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ....177Foreign Production of Manganese . . . . . . . . . . . . . . . . . . . . . ....................178Domestic Production of Manganese. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....184Domestic and Foreign Manganese Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .187

Platinum Group Metals Production and Processing . . . . . . . .....................190Foreign Production of Platinum Group Metals . .............................192Processing of Platinum Group Metals . . . . . . . . . . . ...........................201

Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..201Land-Based Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................201Ocean-Based Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................209



_

Contents–continued

Table

5-1.

5-2.5-3.

5-4.

5-5.

5-6.5-7.

543.

5-9.5-10.

5-11.5-12.

5-13.5-14.5-15.

5-16.5-17.

5-18.

5-19.5-20.5-21.5-22.5-23.5-24.5-25.

5-26.5-27.5-28.

5-29.

5-30.5-31.5-32.

5-33.5-34.

5-35.

5-36.5-37.

5-38.

List of Tables No. Page

Deposit Types and Locations of First-Tier Strategic Materials . . . . . . . . . . . . 129Mineral Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130First-Tier Strategic Mater ials Sup ply Prosp ects . . . . . . . . . . . . . . . . . . . . . . . . . 134World Chrom ate Reserves and Prod uction by Coun try. . . . . . . . . . . . . . . . . . . 139Ferrochromium Prod uction by Cou ntry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

Chromate Mining Industry by Country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140Historical Production—Chromite, 1960-80, by Country. . . . . . . . . . . . . . . . . . . 141Chrom ate Mine Cap acity and Usage in 1981 by Country . . . . . . . . . . . . . . . . . 142U.S. Chrom ate Dep osit Resou rces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149U.S. Chr omate Laterite Deposit Resou rces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149Proposed Mining and Processing Methods U.S. Chromate Deposits . . . . . . . . 150Potential U.S. Chromate Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151Composition of Chromium Ferroalloys and Metal.... . . . . . . . . . . . . . . . . . . . 154Ferrochromium Cap acity , 1979. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158Produ ction Capacities for Chromium Metal in th e Non -Comm unistCountries—1981. ....., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158Chrom ium Ferroalloys and Metal: Imp orts an d Con sum pt ion . . . . . . . . . . . . 158World Cobalt Reserves and Prod uction by Cou ntry . . . . . . . . . . . . . . . . . . . . . 160Cobalt Mining Ind ustry by Country. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

World Refined Cobalt Production, 1982, by Cou ntry . . . . . . . . . . . . . . . . . . . . 162Historical Production—Cobalt, 1960-80, by Country . . . . . . . . . . . . . . . . . . . . . 162Potential Foreign Cobalt Sources, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163Potential U.S. Cobalt Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169U.S. Cobalt Processin g Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176World Manganese Ore Reserves and Prod uction by Coun try . . . . . . . . . . . . . 178Manganese Mining Industry by Country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179Ferromanganese and Silicomanganese Production by Country. . . . . . . . . . . . 180Historical Manganese Ore Production, 1960-80, by Country . . . . . . . . . . . . . . 181Manganese Mine Capacity and Usage in 1981, by Country . . . . . . . . . . . . . . . 181Definition of Manganese-Bearing Ores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185U.S. Mangan ese Resources and Poten tial Production. . . . . . . . . . . . . . . . . . . . 186Composition of Manganese Alloys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188Manganese Ferroalloys and Metal Production Capacity—1979 . . . . . . . . . . . . 189

Manganese Ferroalloys and Metal: U.S. Imports and Consumption . . . . . . ,. 190Distribution of Platinum Group Metal Production by Metal and Coun try,1981. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192Platinum Group Metals: World Reserves and Production by Country . . . . . . 192PGM Mining Industry by Country, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193Potential U.S. PGM Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196Outlook for Development of Ocean-Based Resources of Strategic Materials. 210

List of FiguresFigure No. Page

5-1. Simp lified Flowchar t, Chromium Ore to Ind ustr ial Use . . . . . . . . . . . . . . . . . . . 1555-2. Subm erged Arc Furnace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1555-3. Total U.S. Cobalt Prod uction , 1945-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1675-4. Simp lified Flowchart for the Prod uction of Cobalt . . . . . . . . . . . . . . . . . . . . . . . . 175

5-5. Simp lified Flowchar t, Mangan ese Ore to Industry Use . . . . . . . . . . . . . . . . . . . . 1885-6. Comparative PGM Production, 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1915-7. PGM Processing, Simplified Flowchart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2025-8. Time Chart of Some First-Tier Strategic Material Deposits . . . . . . . . . . . . . . . . . 2035-9. Exposu re of Pr ecambrian Rock in N orth America. . . . . . . . . . . . . . . . . . . . . . . . 205



CHAPTER 5

Strategic Material Supply

Introduction

Strategic material supp ly vu lnerability couldbe reduced by developing domestic sources of ores and maintaining domestic processing ca-pability or by sufficiently diversifying foreignsuppliers to reduce the likelihood that any sup-ply d isruption wou ld ad versely affect U.S. na-tional security or ind ustrial stability. Prospectsfor changes in the existing distribution of mineral supply sources depend primarily onwhether future demand for various commod-ities encourages expansion by current sup-pliers or the opening of new mines in new

areas. Other factors includ e shifts in consump -tion patterns in the developing nations—e.g.,a growth in internal use of resources that re-sult in fewer or higher processed forms of exports—and the decline of production as re-serves are depleted. Although market forcesand, increasingly, government action in min-eral-rich developing countries determine whichmineral deposits are chosen for exploitation,neither has contributed or w ill necessarily con-tribute to a lessening of vulnerability bypromoting either domestic or diversified for-eign production.

This chapter discusses the existing lack of diversity of sup ply and the corresponding lackof adequate domestic supply of the first-tierstrategic materials. It also presents an overviewof the technology employed in strategic mate-rials supply. (International political factors,which relate to the likelihood of disruptionsand their possible du rations, are not d iscussed.)The first section of the chapter considers min-ing and processing in general and is followedby sections on the specific ore production andprocessing environments and supply patternsof each of the first-tier strategic materials. Theprospects for reduction in vulnerability areassessed. The last section discusses, in termsof U.S. lands and the ocean floor, the possibil-

ities for new mineral finds and improved ex-ploration technology and their effects on ex-panding the knowledge and availability of strategic materials.

Summary of Supply Prospects

While today’s pattern of supply for chro-mium, cobalt, manganese, and platinum groupmetals (PGMs) will not change in any appre-ciable way in the near and, most likely, long-term future, there are some opportunities for

direct and targeted government action to di-versify foreign sour ces of these m aterials awayfrom politically sensitive areas. A concentratedpush to diversify foreign sources of supply,however, would inevitably open marginallyeconomic deposits and, in the long run, mightdo nothing more than simply delay an evengreater reliance on the abundant deposits—e.g.,those in southern Africa.

Of the first-tier strategic materials, onlyPGMs are now p roduced from d omestic ores;and in 1982 the amou nt p rodu ced representedless than 1 percent of that year’s consum ption.Other domestic PGM and some cobalt resourceshave been und er consideration for commercialexploitation. Known chromium and manga-nese ore resour ces in the United States are con-sidered improbable candidates for commercialproduction at any time in the near or long-termfuture. Without Federal subsidies, productionmay be possible for larger amounts of PGMs,but is less likely to initiate production of co-balt, and appears unlikely for chromium andmanganese even un der sup ply disruption con-ditions when market prices can rise dramati-cally. In all cases, only a portion of U.S. needscould be supplied by domestic production. Allof these resources, though, represent importantin-place stockpiles of strategic materials.

125




Chromium

Foreign alternatives to the major chromiumprod ucers, South Africa and the Soviet Union,are limited in number and in the amount of chromium they could provide. Prospects in-clude the expansion of output from p roducing

deposits in the eastern Mediterranean and thePhilipp ines and the d evelopm ent of laterite andbeach sand deposits in the Western Pacific re-gion. These sources might provide an addi-tional 10 to 20 percent of U.S. needs.

Domestic resources could provide up to 50percent of needs (in a low consumption yearsuch as 1982) for 11 years if four d eposits weresimu ltaneously developed at costs about d ou-ble prevailing rates. One of these deposits,which could supply up to 4 percent of U.S.chromium consumption, has been under re-

cent consideration by a private firm, butproduction would be contingent upon signifi-cant increases in the prices and demand fornickel and cobalt.

Cobalt

If foreign production of cobalt is to diversify,it will most likely result from the opening of cobalt-containing nickel laterite deposits insuch countries as New Caledonia and PapuaNew Guinea, possible expansion of outputfrom the Philippines, and production of cobalt

as a byproduct from iron ore mining in Peru.Four cobalt deposits in the United States

could supply up to 10 million pounds annually,if producing simultaneously; this productionrate would decline after about 20 years, Privatefirms investigating three of these propertieshave suggested that Federal subsidies in theform of price guarantees could assist them inovercoming a prime barrier to production—low and volatile market prices for cobalt. Thefourth deposit is not under consideration forproduction.

Manganese

The greatest opportunities for diversifyingthe foreign supply of manganese lie in increasedproduction of manganese ore in Australia andMexico. Mexico’s ores require more extensive

processing than Australia’s and would repre-sent a larger investment to promote increasedprod uction. Neither prod ucer will decide to in-crease prod uction withou t clear market signalsof increasing and sustained demand. Increasesfrom these producers plus Gabon (with trans-portation improvements) might be able to meetU.S. needs.

The cost of producing ores from known do-mestic manganese deposits ranges from 2 to18 times the market price; commercial activ-ity is nonexistent. Simultaneous developmentof eight domestic deposits could theoreticallycover most of U.S. needs over a 10-year per iod.


There are no known foreign alternatives toPGMs. South Africa, the Soviet Union, and to

a mu ch lesser extent, Canad a, will continu e tosupply the world.

Private development of and prod uction fromthe Stillwater Complex in Montana appearspossible given slight increases in mar ket p ricesfor platinum and palladium and evidence of increased, sustained demand. Initial produc-tion would supply about 9 percent of domes-tic needs, based on 1982 consumption of PGMs.

Exploration

The relatively low economic value of many

strategic materials and ample foreign suppliescombine to inhibit any domestic commercialexploration for new deposits of these materials.Advances in exploration technology are notspecifically directed at finding strategic mate-rials, but general improvements could increasethe likelihood of locating d eposits, if they exist.

Processing and the Ferroall oy Industry

U.S. ferroalloy production capacity has de-clined over the last decade. This erosion is ex-pected to continue at a slower pace, resulting

in a lean domestic industry that can supply aportion of domestic needs.

Factors Contributing to Change in Supply

It is a consequence of the economics of min-ing that there are no known “world class”



Ch. 5—Strategic Material Supply . 127

mineral deposits that are not produ cing. Knowndeposits that are not producing, whether for-eign or domestic, are small in size and / or con-tain low-grade material. These factors, plusothers such as labor and energy costs, acces-sibility, the effect of perceptions of political risk

on investment, and environmental concerns,contribute to these deposits’ marginal eco-nomic value. Some producing deposits are notconsidered to be economic by free marketstandards. The less developed nations that ownmany of the known deposits consider themsuch critical sources of jobs and foreign ex-change that they are often exploited even if operations must be subsidized.

Mineral activity encompasses a time-con-suming, sequential chain of activity: explora-tion, mine development, ore production and

processing, and international trade. Normalchanges in supp ly patterns evolve slowly. Dra-matic changes, wh en they d o occur , are the re-sult of perturbations to the system, Two ongo-ing evolutions in international mineral tradeare now affecting mineral supp ly and the w aysin which vulnerability is measured, The firstis a shift from export production to domesticconsumption. Many producer countries (e.g.,Brazil and India) are increasingly using theirmineral resources, just as the United States did,as a contribution to their own ind ustrial devel-opment. Internal demands for these resources

affect the trading relationship these nationsmaintain with their mineral customers by thereduction of market supplies during high in-ternal growth periods and th e du mp ing of ex-cess supplies on the world markets duringrecessionary times.

A second and related factor is that produc-ing nations are deciding that it is in their ownbest interests to promote the export of proc-essed ores rather than raw materials. Sincetheir new er facilities appear to h ave a competi-tive edge over traditional processing facilitiesin industrialized centers, the vulnerability of the West to imp orted materials is shifting fromores to higher processed forms of strategicmaterials.

This shift in trade from ores to ferroalloysand from semiprocessed ores to cobalt andPGMs is accomp anied by a change in transpor-tation requirements. Ferroalloys contain dou-ble to triple the chromium or manganese con-tent of the mined ores, so that shipping the

same amount of chromium or manganese asferroalloys rather than as ores requires lessspace, fewer ships. While prior processing al-lows the shipm ent of a greater amou nt of chro-mium or m anganese in fewer vessels, PGM andcobalt metal products can be shipped by air atno great increase in cost to the consumer, Thegrowth in cobalt and PGM refining capabilityin mining countries increases the flexibility of transportation systems (and reduces the over-all processing time), resulting in a lowering of the vulnerability of cobalt and PGMs to sea andland transportation problems,

Concern about the vulnerability of transpor-tation routes from prod ucing to consuming n a-tions usually focuses on the problem of opensea lanes in time of war. Consideration mustalso be given the less dramatic problem of whether land transportation services are andwill remain adequate. Mines are often locatedfar inland, in isolated areas. Transportation of ores to a shipping p ort usu ally involves an ini-tial overland route (by railroad, truck, aerialtramway). The costs of developing and oper-ating such systems can be a significant factor

in the economics of a potential source of min-erals. Transportation bottlenecks could provethe most time-consuming aspect of any rapidexpansion required in a supply emergency. Inaddition, land transport is a weak link betweenproducer and consumer in terms of possibleterrorist operations,

Technological Advances in Mine

Production and Processing’

Into the 1990s, the overall picture for min-ing technology applicable to first-tier strategic

‘See the following section for a description of various explo-ration, ore mining, and processing procedures and technologies.



Ch. 5—Strategic Material Supply Ž 129

ble 5-1 identifies by deposit type and location Moreover, the degree of information and com-the major worldwide known deposits of the mitment to maintaining current estimates of first-tier m aterials. The significance of the resources and reserves varies greatly amongdifferent deposit types is explained in each of nations. Countries with limited m ineral assess-the individual mineral sections below. ment programs may, for instance, not distin-

A troublesome aspect of any discussion of guish between resources and reserves, estimate

mineral supply is in establishing agreement only from operating mines, or fail to conductover the meaning and use of the basic terms,

economic analyses.—“resources” and “reserves. ” Reserves include Reserves and resources are often given indeposits that were known and were technically terms of ore tonnage. An important qualifierand economically feasible to mine at a profit is the “grade” of the desired m ineral, theat the time the data was analyzed. Reserves are amount of that mineral that is estimated to bethe only deposits that are immediately avail- contained within the ore. Grades are usuallyable to be developed to meet the need for presented in percentages or parts per millionmaterials. Resources, on the other hand, in- (ppm).elude reserves and deposits that are known butare not cur rently economic to mine, as well asdep osits that are merely inferred to exist from

geologic evidence. Numbers for both are esti-mates and should be used only with caution.The Bureau of Mines and the U.S. GeologicalSurvey, which calculate and report the num-bers, rely on their own research, the reportingof private data that is often purely voluntary,and data from various publicly available sources.

Table 5-1 .—Deposit Types and Locations ofFirst-Tier Strategic Materials

Chromium:Stratiform . . . . . . . . . . South Africa (Bushveld Complex),

Zimbabwe (Great Dyke), Finland,Brazil, U.S. (Stillwater Complex)

Podiform . . . . . . . . . . Albania, New Caledonia,Philippines, Turkey, Zimbabwe

Laterite . . . . . . . . . . . U.S. (Gasquet Mountain),Philippines, New Caledonia

Cobalt: Stratabound . . . . . . . . Zaire, ZambiaLaterite . . . . . . . . . . . .Australia, New Caledonia,

Philippines, CubaHypogene. , . . . . . . . .Australia, Botswana, Canada

(Sudbury), Soviet Union (Noril’sk),U.S. (Duluth Gabbro)

Hydrothermal . . . . . . . U.S. (Blackbird, Madison)

Manganese: Sedimentary . . . . . . Australia, Brazil, Gabon, India,

Mexico, South Africa (Transvaal)Platinum group metals: Strati form . . . . . . . . . . South Africa (Bushveld), Soviet

Union, Canada (Sudbury), U.S.(Stillwater)

Placer . . . . . . . . . . . . .Colombia, U.S. (Goodnews Bay)SOURCE Off Ice of Technology Assessment

Prospecting to Production

Mineral activity4 can be divided into succes-sive mineral exploration, development, andproduction phases, all accompanied by ongo-ing analysis of information accumulated dur-ing these phases. The full sequence of activityoccurs for only a few projects, as a project willbe shelved or abandoned at an y stage if the re-sults are not encouraging or if economic con-ditions become u nfavorable. The full sequence,subd ivided into six stages, is shown in table 5-2. Although there may be some overlap be-tween stages, they each involve a decision bymining companies or other investors to expend

time and resources that grow significantly witheach stage. Revenue is not generated until theactivity reaches the production phase.

Exploration involves the identification andinvestigation of target areas with the intent todiscover an economic mineral deposit. Ananalysis of exploration findings of the m ineraldeposit, combined with a determination of theapplicability of mining procedures and capa-bility of ore processing techniques, and mar-keting studies will determine the initial eco-nomic viability of a mineral project. After this

qFor more inform ation on th is subject, see U.S. Departmentof Agriculture Forest Service, Ana tom~’ of a Nfine From Pros-

pect tO ProductJon, General Technical Report INT-35, June 1977;and U.S. Congress, Office of Technology Assessment, A4anage-

m e n t of Fuel and Nonfuel Mjnera l s in Federal Lands , OTA-M-88 (Washington DC: U.S. Government Printing Office, April1979).



130 qStrategic Materials: Technologies to Reduce U.S. /report Vulnerability

Table 5-2.—Mineral Activity

Phase ‘- Stage Activity

ExplorationTarget identification

1. Regional appraisal2. Reconnaissance of region

Target investigation

3. Detailed surface investigationand chemical analysis ofsamples

4. Detailed 3-dimensional analysisof site by drilling, testing ofsamples. Project feasibilitystudies

Development 5. Drilling to block out deposit.Construction of mine workings,ore processing plants, supportfacilities

Product ion 6. Operation of mine, oreprocessing, and shipment ofmaterial to market

SOURCE: US. Congress, Office of Technology Assessment, Wma g e r n e n t ot F u e /

and Nonfue/ Mlnera/s in Federa/ Larrds, (Washington, DC: U.S.Government Printing Office, April 1979), p. 47.

determination has been made, developmentwork p roceeds to bring a dep osit to the p ointof production —the actual mining, ore p rocess-ing, and shipment of material to market.

During target identification (stages 1 and 2),a large area is surveyed to locate areas of prom-ise. Research is based largely on previously col-lected indu stry and government d ata and geo-logic theory and is supplemented by fieldinspection by air or on the grounds Success-ful conclusion is marked by a d ecision, usu ally

made by the exploration experts, to focus onparticular areas of high potential,

The objective of target investigation (stages3 and 4) is to locate a deposit of a desiredmineral that has potential for commercial ex-ploitation. This involves the gathering of datafrom the region selected during the previousstages and proceeding with sampling and map-ping of geologic features, geophysical surveys(usually conducted from the air), limited d rill-ing to determine the nature of the layers be-low the surface, and laboratory analysis of sam-

ples obtained in the region. If a promising

‘Remote sensin g (exploration by satellite), wh ile it has not yetlocated ore deposits, is a tool which provides basic scientificdata which can be coordinated with geologic concepts to assistin the process.

dep osit is found du ring stage 3, then a d ecisionis made as to whether the potential of the de-posit justifies the expenditure of further fundsfor stage 4. If so, a process begins to define thegrade and extent of the deposit and to deter-mine the detailed composition of the minerals

in the deposit. It is at this stage that su fficientinformation is obtained to determine whetherthe deposit is of commercial value and whetherdevelopment activities are advisable. Three-dimensional mapping of the deposit, withdrilling samples taken at close intervals, pro-vide detailed maps of the ore and the surround-ing rock. This information and analysis of mineral content of the ore are used to developmine plans. Samples are used to test prospec-tive ore processing systems. In ad dition to p ro-viding the information for the design of themine and the ore processing plants, feasibil-

ity studies during this stage provide the basisfor the final company decision to commit fundsto a mining project and provide investmentgroups with the information they need to jus-tify loans for or equity involvement in a project,

M i n e r a l a c t i v i t y t h e n m o v e s i n t o t h e d e v e l -o p m e n t s t a g e d u r i n g w h i c h t h e m i n e a n d o r eprocess ing p lant are cons tructed and t ranspor-ta t ion and other suppor t faci l i t ies are ins ta l led .This stage is the greatest expense of the minerala c t i v i t y p r o c e s s . O n c e t h e f i n a l p r o d u c t i o ns tage commences , i t con t inues fo r a s long as

t h e p r o j e c t c a n p r o d u c e o n c o m m e r c i a l t e r m s .S h o u l d e c o n o m i c c o n d i t i o n s c h a n g e , p e r h a p sdue to depressed market pr ices or deplet ion of h igh-qual i ty ore , the faci l i t ies are c losed ei thertemporar i ly (“placed on care and maintenance”)o r pe rmanen t ly . I n add i t ion , the min ing indus -t r y i s q u i t e a c c u s t o m e d t o d e l a y i n g p a r t i a l l yc o m p l e t e d p r o j e c t s w h e n m a r k e t c o n d i t i o n schange. There can be a cons iderable t ime gapbetween the end of the explorat ion and the be-g i n n i n g o f t h e d e v e l o p m e n t s t a g e s .

This process of mineral act iv i ty is long- term,r i s ky , and expens ive . In genera l , each s ucces -s i v e s t a g e i s m o r e e x p e n s i v e a n d t a k e s m o r et ime than pr ior s tages . The cos ts and t ime in-v o l v e d v a r y a n d a r e d e p e n d e n t o n a n u m b e ro f f ac to r s . F o r in s tance , bo th w i l l inc reas e i f a deposit is buried rather than exposed on the



Ch. 5—Strategic Material Supply q 13 1

surface. In 1977, according to an earlier OTAr e p o r t ,6 es t imates o f average U .S . exp lo ra t ioncos ts per mineral project ranged f rom $1.7 mil-l ion to $5.4 mil l ion and took up to 5 years tocomplete; mine development cos ts var ied f rommil l ions to several hundred mil l ions of dol lars

with t imes ranging f rom less than 1 up to 13year s . A 1980 r epo r t 7 s t a t e d t h a t m a j o r i n t e r -na t iona l min ing p ro jec t s t ake a t l eas t 7 to 8years af ter the t ime of d iscovery and of ten cos tup to $1 b i l l ion to reach the product ion s tage.Once production begins, mining ventures mayneed years of continuou s operation to show anadequate return on the capital investment.

Exploration Technology

The geologist’s search for a specific mineralis aided by knowledge of the environment in

which it is likely to be found. Thus, expectedhost rock, trace metal, and gangue8 mineralassociations, wall rock alteration occurrences,and the age of a mineralization can all be keysto discovery. Exploration technologies whichhelp to identify these environments as well asthe mineral itself include three types: visual,geophysical, and geochemical. Visual methodsare the oldest, simply being the surveying of an area for geologic formations and featuresknow n to be favorable to the desired minerals,Such methods are still used in the first stageof mineral activity in the search for regionsdeserving of more detailed study.

Technology has now taken the explorer be-yond the powers of eyesight to advanced geo-physical methods. Physical properties of min-eral formations such as density, magneticbehavior, electrical conductivity, and radioac-tivity provid e characteristic patterns wh ich canbe used for identification. Some of these meas-urements are taken on the ground, some “downhole” and others can be cond ucted by air. Geo-chemistry involves trace metal an alysis of air,

f iManagement of Fuel an d No n f u e lMinerals in Federal Lands,op. cit.

7The Brandt Commission, North-South.” A Program for Sur-vival (Lond on: Pam Books, 1980), p, 156.‘Gangue is that part of an ore body which contains the un-

desirable minerals–i.e., waste material.

water, soil, and rock materials in the region of mineral exploration.

Mining Technology

The mining method selected for a particular

project will vary according to the size, type,and position of the deposit; the grade of the ore,its strength and the strength of the surround-ing waste rock; and the unit value of the de-sired mineral.

There are two general classes of mineral de-posit: surface and vein. Vein deposits areformed by the deposition of minerals by mol-ten rock as it moves upw ard from d eep belowthe su rface throu gh cracks in th e surface rock.As the m olten rock cools, the contained m etals(under the action of pressure and heat) can con-

centrate in particular locations to form veinsof minerals. Althou gh some vein d eposits maybe accessible by removing the surface rock,generally such deposits must be mined byunderground methods.

Surface deposits are foun d at or n ear the sur-face. Some, known as placer deposits, occuras concentrations of mineral or metal p articlesthat have washed away from an exposed de-posit to mix with sand and gravel in river bedsor ocean beaches. (Placer deposits have beenan important source of PGMs and gold.) Themetals are recovered by d redging river beds orbeaches and using flowing water and gravityto separate the heavier precious metals fromthe lighter sand and gravel.

Another important class of surface depositis formed by the weathering of surface rockthat contains dispersed metals such as nickeland chromium. Through a continual processof changing temperatures and rainfall, thesemetals are washed to lower levels of the rockformation where they concentrate in amountsthat are attractive for commercial exploitation.(Deposits of nickel, known as nickel laterites,

are formed in this way. Such d eposits may alsocontain concentrations of chromite, the min-eral from which chromium is obtained.) Lat-erite dep osits are generally m ined from th e sur-face by open pit methods.




Mining processes thus fa l l in to two generalc l a s s i f i c a t i o n s : u n d e r g r o u n d a n d s u r f a c e m i n -i n g . I n u n d e r g r o u n d m i n e s a c o m p l e x s y s t e mo f s h a f t s a r e s u n k a n d t u n n e l s b o r e d w h i c hs e lec t ive ly fo l low the o re ve ins o r pocke t s o f minerals with h ighes t grade mater ia l . Blas t ing

t e c h n i q u e s m u s t b e u s e d t o r e m o v e t h e o r e ,w h i c h i s o f t e n c r u s h e d w i t h i n t h e m i n e p r i o rt o h a u l i n g a b o v e g r o u n d , U n d e r g r o u n d m i n -i n g m e t h o d s ( c a l l e d “ s t o p i n g ” b y A m e r i c a nminers) are age old and highly varied. They in-c l u d e o p e n s t o p i n g ( r o o m a n d p i l l a r , f o r i n -s tance , i s a fo rm o f open s top ing ) , s h r inkage ,cut and f i l l , and square-set s toping and blockcaving. Today, underground mining is becom-i n g i n c r e a s i n g l y m e c h a n i z e d i n o r d e r t o i m -p r o v e p r o d u c t i v i t y .

P lacer and open pi ts are surface mining tech-

niques , both of which take advantage of largeand ef f ic ient ear thmoving machinery . In dredg-i n g o p e r a t i o n s , a f o r m o f p l a c e r m i n i n g , t h eg r a v e l c o n t a i n i n g m i n e r a l s i s s c o o p e d u p b ybucket l ines or a dragl ine onto a f loat ing p lantwhich separates the gravel in to a mineral con-c e n t r a t e a n d t a i l i n g s ( w a s t e p r o d u c t ) . I n a nopen pi t mine access to the ore body is accom-p l i s h e d b y r e m o v a l o f t h e w a s t e o v e r b u r d e n(upper layer of ear th lacking in economic con-cen t r a t ion o f meta l s ) . The mate r ia l in the o rebody is then removed, as the pit is formed, topto bottom by sequentially blasting (in hard rock 9

m i n e s ) a n d t h e n m e c h a n i c a l l y l o a d e d i n t oe q u i p m e n t f o r h a u l i n g u p o u t o f t h e p i t f o rp r o c e s s i n g , A c h o i c e w h e t h e r t o u s e o p e n p i to r u n d e r g r o u n d m i n i n g m e t h o d s i s b a s e d , i np a r t , o n t h e c o s t o f r e m o v i n g t h e o v e r b u r d e na n d w h e t h e r t h e w a s t e r o c k c a n s u s t a i n t h es lop ing s ides o f the p i t .

Solut ion mining techniques are now used forextract ing soluble mater ia ls such as potash ands a l t i n s i t u a t i o n s w h e r e c o n v e n t i o n a l m i n i n gm e t h o d s w o u l d n o t b e e c o n o m i c . T h e r e a r etwo general vers ions . In the f i r s t , “heap leach-

ing,” ores are mined and spread on the surface.

9Ha rd rock refers to material that has a strong bond ed stru c-ture and must be excavated by using blasting techniques in whichan explosive charge is placed in a hole bored in the rock anddetonated, Most first-tier strategic materials are mined fromhard-rock ore bodies.

A solvent is then applied and the resultant so-lution of minerals is collected and processed,T h e s e c o n d v e r s i o n — “ i n s i t u l e a c h i n g ” - -involves the introduction of the solvent into theorebody in p lace, fo l lowed by pumping out of the resul tant mineral so lu t ion . The appl icat ion

of in situ leaching in hard-rock mining requiresa n i n i t i a l f r a c t u r i n g o f a n o r e b o d y b e f o r eleaching solvents can ef fect ively produce a so-lu t ion of the des ired minerals to be extractedf r o m t h e g r o u n d . T h e s e t e c h n i q u e s f o r h a r d -rock mining are under act ive research but haven o t y e t b e e n a t t e m p t e d o n a n y v i r g i n d e p o s -i t s . They may o f f e r a pos s ib le s o lu t ion to thep rob lem o f the poor economics o f low -g radedomest ic depos i ts i f they can reduce the over-a l l r e c o v e r y c o s t s o f p r o d u c i n g a h i g h - g r a d em a t e r i a l . R e s e a r c h a r e a s i n c l u d e e q u i p m e n t ,s o lven t s , t echno log ies fo r f r ac tu r ing o re bod-

ies in p lace and for contro l l ing the movementso f f l u i d s t h r o u g h t h e m .

B i o e n g i n e e r i n g m a y p r o v i d e m i n i n g w i t h atechnique to recover metals f rom ores too lowin grade to process convent ional ly or f rom ex-i s t i n g t a i l i n g s d u m p s .10 C e r t a i n b a c t e r i a w i l ll i b e r a t e a n d c o n c e n t r a t e s m a l l g r a d e s o f m e -tals , and natural bacter ia l leaching is used cur-rent ly to recover copper and uranium from sul-f ide depos i t s . A majo r d raw back o f bac te r i a ll each ing i s the s low ra te o f the p roces s com-p a r e d w i t h c h e m i c a l e x t r a c t i o n . T h e h o p e i s

that genet ic manipulat ion can enhance the nat-u ra l l each ing p roper t i e s o f bac te r i a .

Potential for Change in the Supply

of Strategic Materials

Once a mineral activity moves into the de-velopment stage, its details are generally widelyk n o w n . G i v e n t h e t i m e - c o n s u m i n g d e v e l o p -ment process, it is not difficult to project worldo r e p r o d u c t i o n ( a t o t a l o f e x i s t i n g a n d d e v e l -oping new sources) a t leas t a decade in to thef u t u r e . E v e n b e y o n d 1 0 y e a r s , p o t e n t i a l n e w

IOSee U.S. Congress, Office of Technology Assessment, Com-mercial Biotechnology: An International Analysis, OTA-B-218

(Washington DC: U.S. Government Printing Office, January1984), pp. 226-228; Joann Dennett, “Microbe Miners, ” AMA4

Magazine, July 2, 1984; and Joseph Alper, “Bioengineers AreOff to the Mines, ” High Technology, April 1984.



-—

Ch. 5—Strategic Material Supply q 133

sources can be readi ly ident i f ied because thereare only a l imited number of known depos i ts ,undergoing inves t igat ion , that could be openedor expanded to capture a share of the ore mar-ket. Discoveries of major, new deposits are pos-s ib le bu t unpred ic tab le . Thus , p ro jec t ions o f

product ion beyond about 20 years become un-re l i ab le .

Any change in the exis t ing mine product iono f s t r a t e g i c m a t e r i a l s w i l l b e d e t e r m i n e d b ym a r k e t d e m a n d a n d b y t h e e f f o r t s o f m i n e r a lp r o d u c e r g o v e r n m e n t s t o p r o v i d e e m p l o y m e n tfor their c i t izens , obtain foreign currency, andp r o m o t e i n d u s t r i a l d e v e l o p m e n t . E x t r a o r d i -n a r y c o n d i t i o n s , s u c h a s a p r o l o n g e d s u p p l ydis rupt ion of a subs tant ia l por t ion of any onem i n e r a l , c o u l d a l s o e n c o u r a g e i n c r e a s e dp r o d u c t i o n f r o m e x i s t i n g o r t h e d e v e l o p m e n t

o f new s ources o f s upp ly .Table 5-3 presents a summary of the supply

p ros pec t s o f the f i r s t - t i e r s t r a teg ic mate r ia l s ,a p icture of the geographic d is t r ibut ion of theU ni ted S ta tes ’ majo r s ou rces o f the f i r s t - t i e rs t r a t e g i c m a t e r i a l s a l o n g w i t h t h e r e l a t i v ep r e s e n t a n d e s t i m a t e d f u t u r e c o n t r i b u t i o n o f the producers . (The ranking sys tem is based onthe magnitude of each producer’s output com-b i n e d w i t h t h e e x t e n t o f i t s p a r t i c i p a t i o n i nWestern trade.) The table also identifies the major bar r iers to expans ion of product ion and in i-t i a t ion o f new s ources o f s upp ly .

cons train ts include l imited knowledge aboutthe extent of the resource base; the equipmentand ski l led labor needs to mine, process , andref ine the ores ; and the l imits of suppor t sys -t e m s s u c h a s e n e r g y s o u r c e s a n d t r a n s p o r t a -t ion f ac i l i t i e s . D i r ec t economic cons t r a in t s in -c l u d e t h e n e e d f o r m a s s i v e c a p i t a l t o f i n a n c ed e v e l o p m e n t w o r k a n d u n c e r t a i n t y a b o u t f u -tu re marke t s . P o l i t i ca l r i s k ( con t r ac tua l in s ta -b i l i t y , t h r e a t o f n a t i o n a l i z a t i o n w i t h o u t c o m -p e n s a t i o n , u n c e r t a i n t y o v e r g u a r a n t e e s o f s u f f i c ien t mine l i f e to a t t a in expec ted r a te o f

re turn) is a component of the economic analy-s is of any mining project located in a develop-i n g c o u n t r y .

A va i lab le mine capac i ty fo r ch romium, co -b a l t , m a n g a n e s e , a n d P G M s h a s b e e n h i g h l y

underused in the ear ly 1980s , the ef fect of sev-e r a l y e a r s o f w o r l d w i d e e c o n o m i c r e c e s s i o n .While the for tunes of the mining indus try haveh i s to r ica l ly been cyc l i ca l , the r ecen t s us ta inedo v e r s u p p l y a n d l o w p r i c e s h a v e a d v e r s e l y a f -f e c t e d n e w i n v e s t m e n t i n t h e s e c o m m o d i t i e s .

Although some new mining ventures for thesem a t e r i a l s a r e b e i n g e v a l u a t e d , f e w a r e g o i n gforward. I t i s expected that any increase in de-mand in the near future will be supplied by cur-r e n t m i n e s o p e r a t i n g a t c a p a c i t y a n d t h e r e -o p e n i n g o f r e c e n t l y s h u t m i n e s .

E v e n u n d e r h e a l t h y m a r k e t c o n d i t i o n s , t h eample reserves and resources of the South Afri-can mines for chromite , manganese, and PGMsa n d o f t h e Z a i r ia n / Z a m b i a n m i n e s fo r c ob a l ts e rve as imped imen ts to inves tmen t in the de -velopment of new mining areas . All new ven-

t u r e s m u s t c o m p e t e f o r m a r k e t s a g a i n s t t h es t r e n g t h o f t h e e x i s t i n g p r o d u c e r s a n d t h e i rab i l i ty to inc reas e p roduc t ion eas i ly to mee ta n y n e w m a r k e t d e m a n d s .

The immed ia te r es pons e capab i l i ty o f ex i s t -ing p roducer s to a s upp ly d i s rup t ion dependson the status of mining at the time and the cor-responding extent of development needed. Fori n s t a n c e , d u r i n g s u c h p e r i o d s a s t h e e a r l y1980s , when mining operat ions general ly wereoperat ing at as l i t t le as 50 percent of capaci ty ,an expans ion to fu l l capaci ty could be s implya matter of h ir ing personnel for more shif ts ina mine or for reopening mines . This could bedone in a matter of weeks, or at most, in a fewm o n t h s . O n t h e o t h e r h a n d , a m i n e a l r e a d yopera t ing a t fu l l o r c lo s e - to - fu l l capac i ty du r -ing a t ight market would require subs tant ia l lymore t ime to expand product ion , even thought h e p l a n s f o r e x p a n s i o n w o u l d b e a v a i l a b l e .A n y p r o d u c i n g m i n e i s c o n t i n u a l l y u p g r a d i n gi ts reserves and blocking out fu ture product ionareas to open, g iven a change in market con-d i t i o n s . I n a n u n d e r g r o u n d m i n e , h o w e v e r ,n e w s h a f t s m i g h t h a v e t o b e p r e p a r e d b y e x -

tens ive b las t ing and bor ing, a t ime-consumingp r o c e s s . A n o p e n - p i t m i n i n g o p e r a t i o n w i t hs i m p l e o r e c o n c e n t r a t i n g e q u i p m e n t c a n i n -c r e a s e o u t p u t m u c h m o r e r a p i d l y b y a d d i n gb l a s t i n g a n d h a u l i n g e q u i p m e n t . U l t i m a t e l y ,however, limitations could be imposed by avail-




Table 5-3.—First-Tier Strategic Materials Supply Prospects

Country Importance b

Primary constraints toRegions Minerals producers Now Potential increased availabilityc

North America. . . . . . ChromiumCobalt

ManganesePGM

South America . . . . . ChromiumCobaltManganesePGM

Australia andOceania . . . . . . . . . Chromium

Cobalt

ManganesePGM

Eurasia . . . . . . . . . . . . Chromium

Africa . . . . . . . . . . .

Eastern Bloc . . . . .

CobaltManganese

PGM

Chromium

Cobalt

Manganese

PGM

ChromiumCobalt

ManganesePGM

NACANADAUnited States

MEXICOCANADAUnited States

NAPeruBRAZILNA

PHILIPPINESPacific rimPHILIPPINESAUSTRALIANew CaledoniaPapua New GuineaAUSTRALIAPacific rim

FINLANDALBANIAGREECETURKEY

INDIA

FINLANDINDIA

NA

SOUTH AFRICAZIMBABWEMADAGASCARZAIREZAMBIA

MoroccoBOTSWANASOUTH AFRICAGABONSOUTH AFRICA

SOVIET UNIONSOVIET UNIONCUBASOVIET UNIONSOVIET UNION

2 —

33

—

—

2

2 —

22

——

2—

3233

3

2-33

1

231

1

—31

21

23331

nickel demand, refinery limitshigh cost deposits, demand for various

primary metalscustomer acceptance of qualitynickel/copper demand, refinery limitsdemand for PGMs, competition

processing facilitieslocal demand

infrastructureproof of feasibilitydemand for nickeldemand for nickeldemand for nickeldemand for cobalt/chromiumhauling equipmentproof of feasibility

possible resource limitsunknownresource limitsimproved knowledge of resources and

technologyresource limits, infrastructure, local

demandpossible resource limitsresource limits, infrastructure, local

demand

transportationtransportationseasonal operation, infrastructureprocessing, refinery limitsprocessing, refinery limits

resource evaluationtransportationtransportationtransportationrefinery limits

unknownunknownunknownunknownunknown

NA—Not applicable.aUppERCASE indicates a current producer.bKey: 1 = major

2= medium3 = minor7 = unkno~

Based on assessment of relatlve production levels and contributions to Western trade.CAny expansion/d@elopment would require capital investment, to a varying degree, in mining, Processing, and refinin9 infrastructure.

SOURCE: Office of Technology Assessment, 19S4.




able processing facilities, such as smelting andr e f i n i n g o p e r a t i o n s ,

Processing of Strategic Materials

Once removed from the ground, all ores

u n d e r g o s o m elevel of processing. Technol-

og ies chos en w i l l be bas ed on the ex ten t o f process ing required due to the condi t ion of theo r e ( e . g . , t h e a m o u n t o f u p g r a d i n g n e c e s s a r yt o p r o d u c e a s a l a b l e p r o d u c t a n d t h e l e v e l o f d i f f i c u l t y i n v o l v e d i n s e p a r a t i n g o u t t h e u n -w an ted minera l s ) and the in tended end us e o f t h e m i n e r a l .

At the mine s i te , prel iminary process ing wil lt a k e p l a c e i n o r d e r t o s e p a r a t e t h e d e s i r e d

minera l s f rom the unw an ted rock (gangue) tha ta c c o m p a n i e s t h e m , t h e r e b y , i n c r e a s i n g t h eg r a d e a n d v a l u e o f t h e s o u g h t - a f t e r m i n e r a l .

T h e s e “ b e n e f i c i a t i o n ” t e c h n i q u e s t o p r o d u c e“ o r e c o n c e n t r a t e s ” i n c l u d e s i m p l e h a n d - s o r t -i n g , m e c h a n i c a l c r u s h i n g , a n d g r a v i t y c o n c e n -t r a t i o n m e t h o d s , A m o r e s o p h i s t i c a t e d a n dw i d e l y u s e d m e t h o d i s f l o t a t i o n . C r u s h e d o r eis passed through vats of water contain ing rea-g e n t s w h i c h m a k e o n e o r m o r e o f t h e o r eminerals water repel lent . These par t ic les a t tachto air bubbles and f loat to the top of the vatsw h e r e t h e y c a n b e s e l e c t i v e l y r e m o v e d .

Even af ter the minerals are concentrated , fur -ther process ing s teps are required to a l ter their

f o r m . M a n g a n e s e c a r b o n a t e m i n e r a l s , f o r i n -s t a n c e , m u s t b e h e a t e d t o c o n v e r t t h e m i n t om a n g a n e s e o x i d e s . M a n g a n e s e o x i d e s a n d

chromite (chromium ores ) are smelted in to fer -r o a l l o y s .11 C o b a l t a n d P G M s , o n c e i n m e t a lform, mus t be h ighly pur if ied before they areus e fu l fo r ce r ta in app l ica t ions . F ina l ly , me ta la l l o y s s u c h a s s t a i n l e s s s t e e l s a n d s u p e r a l l o yare manufactured f rom fer roal loys or re la t ivelyp u r e m e t a l s a n d u s e d i n a p p l i c a t i o n s s u c h a sh u b c a p s a n d j e t e n g i n e s .1 2

I I Ferroa]]oys, a]]oys of iron, contain a sufficient amount of oneor more other chemical elements (in this case, chromium or man-

ganese metal] to be used as an agent for introducing these ele-ments into molten metal, usually steel. Ferroalloys are producedby smelting ores in electric arc furnaces. See the chromium andmanganese sections that follow for more discussion on proc-essing.IZFor a discussion of metal processing, such as steelmaking,

see U.S. Congress, Office of Technology Assessment, Technol-ogy a n d S t ee l Industry Competitiveness, OTA-M-12Z (Washing-ton, DC: U.S. Government Printing Office, June 1980).

This multistep processing of ores into use-ful forms of metals takes a variety of paths; thea p p r o p r i a t e c h o i c e d e p e n d s o n t h e n a t u r e o f the ore and the type of product des ired . Proc-ess ing faci l i t ies are of ten ta i lored to a par t icu-lar ore body or type, production rate, and metal

product ion . Other than the in i t ia l benef ic ia t ions t e p s , p r o c e s s i n g d o e s n o t n e c e s s a r i l y t a k eplace at the mine site. However, there is an in-creas ing tendency to combine mine product iona n d d o w n s t r e a m p r o c e s s i n g o f m i n e r a l s . T h i stendency and the consequences to U.S . impor tvulnerabi l i ty is d iscussed more fu l ly below andi n t h e a p p r o p r i a t e m i n e r a l s e c t i o n s w h i c hfol low.

Processing Technology

Extractive metallurgy involves the recoveryof metals and metal compounds f rom ores andm i n e r a l c o n c e n t r a t e s . E i t h e r a p y r o m e t a l l u r -g ical or hydrometal lurgical method is used, fo l-low ed in s ome cas es by an e lec t ro ly t i c r e f in -i n g p r o c e s s .

I n p y r o m e t a l l u r g y , h e a t i s u s e d t o m e l t t h ec o n c e n t r a t e a n d , i n s o m e c a s e s , t o p r o m o t e ac h e m i c a l r e a c t i o n t h a t w i l l c h a n g e t h e o r em i n e r a l i n t o a n a l t e r n a t e c h e m i c a l c o m p o u n d .Metals are separated out in gaseous form, col-lected as they r ise f rom the “melt” or in theirliquid state, by differences in densities . Smelt-i n g — t h e t e c h n i q u e u s e d t o p r o d u c e f e r r o a l -

loys —is a py rometa l lu rg ica l p roces s .

H y d r o m e t a l l u r g y i s c h e m i c a l p r o c e s s i n g i nwhich metals are selectively leached (dissolved)from ores and concentrates. The variety of minerals to be separated determines whetheran acid or alkaline solvent is applied. Hydro-metallurgical processes are increasingly se-lected over pyrometallurgical processes be-cause they use considerably less energy andproduce less air pollution.

In an electrolytic process, a metal is “won”(separated out) from a solution and depositedon a cathode (the negative side of an electri-cal flow) in a relatively pure form.

No technology ever completely recovers allthe desired metal contained in the ores inwhich they are found. Recovery rates (theamount of contained metal that is liberated)




can range from about 25 to 95 percent and de-pend on both the physical limits of the proc-essing methodology and value attached to eachspecific metal in an ore body.

Production and Processing of the

First-Tier Materials

The United States is not a producer of chro-mium, cobalt, manganese, or PGM 13 ores, al-though this has not always been the case. Atsome stage, however, domestic plants still en-ter the processing chain of such ores.

The worldwide chromium industry is char-acterized by a large number and variety—bigand small, public and private sector—of oreproducer firms. Chromite deposits also varywidely in size and are mined by un dergroundand surface methods and concentration meth-ods range all the way from simple manual sort-ing to flotation systems.

Manganese deposits are fewer in numberand the producing industry is more concen-trated than that for chromium. The deposits aregenerally abundant and can be relatively easilyexpand ed in bu lk terms. Often their expansioncapabilities are restricted by equipment andtransportation systems, rather than the size of their reserves. The m ajority of the w orld’s pro-ducing manganese deposits are oxide, ratherthan carbonate minerals, and are mostly mined

by surface methods. Oxide ores need only tobe concentrated ; while carbonate ores m ust bereacted with oxygen to form manganese oxidecompounds prior to the ferroalloy stage of processing.

Most of the chromium and manganese minedis consumed by the steel industry. Manganeseis a processing agent, and both are used asalloying agents. Producers of these ores havetraditionally engaged in the initial processingof the ores they m ine —sorting and concentrat-ing them by grades of mineral, chemical con-

tent, and physical condition—and leaving thedownstream processing to the steel industry.

Iacurrent domestic production of PGMs evolves from the refin-ing of copper ores.

World trade in both chromium and manganese,however, has been shifting in the past decadefrom concentrated ores to ferroalloys.

The growing ferroalloy production capacityof ore producers (and the steel industries of de-veloping nations) competes with rather than

supplements traditional ferroalloy plants in theUnited States, Western Europ e, and Japan . Im-portant factors identified as contributing to thisshift are lower labor and energy productioncosts and lower transp ortation costs for highermetal content ferroalloys. It is not clear whetherthe competitive edge of new producers offer-roalloys is due to free market economics orwh ether government subsidies have p romotedeconomically unsound competitors, In anycase, as ore producer countries receive the ben-efits of exporting a higher value product, theshift in production away from the indus-trialized West is forcing adjustments (due tounemployment from plant closings, and re-du ced availability of capital for mod ernizationwh ich further diminishes competitiveness) andresulting in a reduction in U.S. ferroalloyproduction capability.

It is not clear w hether trend toward the im-portation of higher processed material increasesthe import vulnerability of the United States.At the same time this pr ocessing shift is occur-ring, Western Europe and the United States areimporting increasing amounts of final steel

products from ore producer nations and others,and their needs for raw and semiprocessedforms of chromium and manganese are de-creasing. It is true that, as integration increasesin ore-producing countries, system dependen-cies increase—i.e., concern now must includenot only the assurance that a foreign mine w illcontinue to produce and concentrate ores, butalso maintain the operation of a smelting plant,Lack of ad equate dom estic ferroalloy process-ing capacity could complicate and add con-siderably to the costs involved in efforts to copewith any emergency ore supply disruption andwould probably increase the response time toan emergency, On the other hand, the highervalue of processed ores means that an overt actof a supply interruption becomes more costlyto producers and a growing number of proc-



.


essors and might affect such an event’s likeli-hood, In addition, processed ores containhigher amounts of metal per unit volume thanore concentrates and therefore larger amountscan be transp orted at a tim e. It is economicallyfeasible to airship refined cobalt and PGMs and

avoid supply disruptions caused by surfacetransport interdictions. Ferroalloys, like oreconcentrates, are still confined to ocean ship-ment due to their weight and volume.

Cobalt is only a secondary product of anycurrent mining operation, therefore, its supplyis tied to the demand for the nickel and cop-per with which it usually occurs. The oreproducers control a substantial amount, but notall, of the downstream processing of cobalt,PGMs are primary products, coproducts, or by-products; and the industry is highly concen-

trated an d is expected to rem ain so. Almost theentire downstream processing of PGM ores iscontrolled by the ore pr odu cers, As cobalt andPGMs often occur in the sam e ore bod ies, theirprocessing paths are often the same.

Cobalt and PGMs are consumed in metal orchemical form. The ores for both materials usu-

ally contain a variety of metals in either oxideor sulfide forms, and their processing p aths arecomplex and tailored to the mineral content of the ind ividual m ines, The United States has al-ways had a limited ability to process cobalt andPGM ores, relying instead on importing these

materials in their usable forms. (An increasinginterest in recycling catalytic converters, how-ever, is promoting the development of domes-tic refining capacity for platinum that may beusable for virgin PGM ores. ) Europe, the firstconsumer of these metals, was also the homeof companies that controlled most mining oper-ations during the colonial era; semiprocessedforms of the ore were physically transferredfrom the ore-producing countries to northernEurope for the final refining processes. Thisflow still occurs, but mining countries are grad-ually d eveloping refining capability. This new

capacity does not yet appear to be replacingthe existing refining capacity, but is absorbinggrowth in d emand, Meanwhile, more d iversi-fied sources of refined cobalt and PGM prod-ucts are being created and the overall time re-quired to process the ores and produce themetal forms is being shortened.

Chromium Production and Processing

The chromite industry is concentrated in theEastern Hem isphere and includes a large num-ber and variety of firms–big and small, pub-lic and private sector. These producers are nowshifting from simply mining and trading chro-mium ore to produ cing and trading ferrochro-mium as well.

The only mineral form of chromium ore ischromite. Most of the chromite resources of theworld occur in stratiform deposits—layered,long continuou s seams that are often visible onthe surface. Podiforms are the second majorgeologic deposit type for chromite. They aresmall in comparison with stratiform depositsand are discrete, lens-shaped, and usually un-detectable without the u se of soph isticated ex-ploration tools unless a portion of the deposithappens to appear on the surface. Lesser de-

posits of chromite are found in laterite forma-tions and alluvial (placer) deposits. Laterites areprincipally found in tropic or warm temper-ate zones and are not exploited today as asource of chromite due to general low gradesof contained chromite and its granular form.

Any analysis of chromium production iscomplicated by the multiplicity of ways inwhich the commodity is reported: chromite,chromite concentrates, contained chromic ox-ide or chromium, recovered chromic oxide orchromium, etc. Chromite is primarily iron,chromium and aluminum oxides with varyingamounts of silica and magnesium.14 Chromiteore is usually defined in terms of its chromic

14Natu ra]]}. occu rr j ng ch rorn ite is a combination of m inera]s

described bj the chemical formula (Fe, Mg)Os(Cr,Al, Fe), O,.




oxide (Cr2O3) content (rarely m ore than 50 per-cent), as well as its chrom ium-to-iron ratio andaluminum oxide content. Once mined, chro-mite is usually concentrated to increase itschromic oxide (or, chromium) content. These“chromite concentrates” are sold, in part, on

the basis of their chromic oxide content. Thechromium content of chromic oxide is 68 per-cent by weight, and the Bureau of Mines de-fines its chromite data as 22 to 38 percent con-tained chromium.15 Throughout the followingdiscussion, an attempt has been made–wher-ever possible—to convert data into chromium

units so that comparisons can easily be madeby the reader. In addition, the reader shouldnote that the chromium contained in chromiteores and concentrates (“chromium content”)is greater than that which will ever be extractedfrom the ores by any metallurgical process.

Thus, “recovered chromium” is the true esti-mate of the amount that would be available foruse.

Each chromite mine differs in the type of product it offers: the ore grade and its chemi-cal composition and physical characteristics.Historically, the ores have been classified intothree groups, reflecting primary end uses:“metallurgical” (minimu m 46 percent chromicoxide with a chromium-to-iron ratio greatertha n 2:1), “chem ical” (40 to 46 percent chromicoxide and chromium -to-iron r atio of 1.5:1), and

“refractory” (high aluminum content). Otherconsiderations affecting end use feasibility of various ores are their other chemical charac-teristics (e.g., silica conten t) and ph ysical char -acteristics (e.g., size and cond ition). South Afri-can ores are of both refractory and chemicalgrades, and tend to be friable (i.e., breakup eas-ily). The Philippine deposits are principallyrefractory grad e, but its ores are used for otherapplications by blending. Turkey’s and Zim-babwe’s deposits primarily provide metallur-gical ores.

The distinction betw een chemical and metal-lurgical grades has become less important dueto the adoption of the argon-oxygen-decarburi-

lsu.s. Department of the Interior, Bureau of Mines, hfinerdCommodity Summaries, 1984.

zation (AOD) process for producing stainlesssteel. This process allows the use of high-carbon ferrochromium (made from chemicalores) rather than low-carbon ferrochromium(from metallurgical ores) and has boosted theimportance of the South African deposits at the

expense of higher priced metallurgical oresfrom Zimbabwe and Turkey.

Foreign sources supply all of the U.S. re-quirem ents for chrom ite (there has been no d o-mestic mine production since 1961) and sup-ply an increasing share of its ferrochromiumneeds at the expense of the d omestic ferroalloyindustry. In 1971 the United States obtained87 percent of its chrom ium imports in the formof chromite and 12 percent in the form of ferro-chromium; by 1981, the imports were roughlyequal.16 Because no Western Hemisphere oreproducer supplies chromite or ferrochromiumin substantial quantities to the United States,most imports must transit the Atlantic or Pa-cific Oceans.

While 19 countries contributed to the produc-tion of chromite in 1982, almost 75 percent of the w orld’s total was p rovided by South Africa,Zimbabwe, the Soviet Union, and Albania.Table 5-4 lists 12 major p roducers and their re-serves and production for 1982. South Africais the principal source of ore for the UnitedStates, Western Europe, and Japan. Other ma-

jor suppliers to the United States are the So-

viet Union, the Philippines, and Albania. Turk-ish and Greek ores are shipped primarily toWestern Europe. France is Madagascar’s major customer. Brazil, the only substantial West-ern Hemisphere producer, exports mainly toJapan.

The Soviet Union long played a significantrole as chromite supplier to the world. In themid-1970s, however, its exports to areas out-side the Eastern bloc began to d ecline, until by1982 they were a fraction of those a decadeearlier. Decreasing reserves, increased costs of

production, and political control over exportpolicies are the major reasons that have beensuggested for this change.

l eu . s , Depa r tmen t of the Interior, Bureau of Mines; iVfineralCommodity Profiles 1983: Chromium, p. 4.




Table 5-4.—World Chromite Reserves and Production by Country(thousand short tons, gross weight)a

Produ cer countries curr ently export between35 and 100 percent of their chromite as oreswith ferrochromium production taking an in-creasing share for consumption by local steelindustries, as well as export. From SouthAfrica, exports of chromite ore, as opposed toferroalloys, were 76 percent of production in1969 and only 35 percent in 1980. South Africais now the major supplier of ferrochromiumto the free world m arket and p rovided 49 per-cent of U.S. imports in 1982. Of the ore pro-du cers listed in table 5-4, only Madagascar andNew Caledonia have not yet developed ferro-

chromium production capability. The majorityof Zimbabwe’s ores are now converted to fer-rochromium before export to the United States,Europe, and Japan. In 1982, Yugoslavia—whichmust import most of its chromite feed—sup-plied 11 percent of the United States’ ferrochro-mium imports, placing it a distant second toSouth Africa. Soviet exports of ferrochromiumproducts, like those of ores, are primarily tothe Soviet bloc countries.

Extending this vertical integration trend, sev-eral South African firms and one Finnish firm

now mine ores, process ferrochromium, andproduce stainless steel. Greece’s recent ore ex-pansion and ferrochromium plant develop-ment is aimed at achieving a similar verticallyintegrated industry, Table 5-5 shows how theferrochromium industry has shifted over 6

years between 1974 and 1980. For the mostpart, the traditional centers of ferroalloyproduction in the industrialized West have de-clinedshares

in total output and have lost marketto vertically integrated ore producers,

Foreign Production of Chromium

In market economy countries, as shown intable 5-6, chromite production is spread amongmany private and some public sector firms.Central economy countries (the Soviet Union,

Albania, and Madagascar) operate their minesand market production through a central agency.In South Africa, Turkey, and Zimbabwe thereis considerable multinational firm involve-ment. South Africa’s ore is produced by 10companies, operating some 20 mines alongparallel seams in the Bushveld Complex, Thecombined production of Transvaal Mining,Transvaal Consolidated, and Samancor domi-nates South African output, and the majorityinterest in these firms is held by four of the sixlocal investment houses (“groups”). U.S. firmsengaged in South African chrom ite mining are

Union Carbide, Metallurg, and InternationalMineral & Chemical. Great Britain is repre-sented in South Africa by investors with long-term interests in the group houses, while WestGermany’s Bayer Group owns and operatesone mine. Eighty percent of Zimbabwe’s out-




put is generated from two mines east of theGreat Dyke deposit by a firm ow ned by UnionCarbide. Albania’s government operates morethan a d ozen mines located in four areas alongits eastern bord er with Greece and Yugoslavia.

Among the middle-level producers, Turkeyhas three major firms with eight mines, alongwith numerous smaller (many one-person)operations. Half of Turkey’s output, however,comes from mines operated by a state-ownedfirm. U.S. (Metallurg) and West German (Met-allgesellschaft) firms are involved in the othertwo im portan t Turkish ventu res. There are 125chromite deposits scattered among the islandsof the Philippines, but only 12 mines were oper-ating in 1980. The majority of these are locallyowned and operated; two are considered ma-

jor p roducers. (Japan’s Kawasaki Steel has a mi-

nority interest in a recently initiated beachsand operation on Palawan Island in the Ph ilip-pines. An American firm op erates the mine forKawasaki.) Madagascar’s government firm hastwo op en pit mines, one of wh ich is a primitiveoperation accessible only in the dry season.Finland’s government-controlled firm producesfrom a m ine along a stratiform d eposit. Greecehas one major, primarily government-ownedoperation. Three of India’s four firms are pri-vate and locally owned; the fourth is a stategovernm ent firm. Canada’s Inco has a control-ling interest in New Caledon ia’s new chrom ite

mining firm, Societe de la Tiebaghi.

In the past 20 years, there have been shiftsin the relative output among chromite producercountries, as shown in table 5-7. Overall, thegroup of 12 major producers has steadily in-creased its share of the world market. By 1980it was providing 98 percent of the world’s to-

tal prod uction of chrom ite, up from 90 percentin 1960. During this period, two new producers(Finland and Mad agascar) app eared; they nowhold 5 percent of the world market. WhileAlbania, Brazil, South Africa, and the SovietUnion have increased their production shares,the shares of the Philipp ines, Turkey, and Zim -babwe have decreased. The shift from Turkeyand Zimbabwe to South Africa is due to th e ad-vent of the AOD process and to the accom-panying development and aggressive sales bySouth African firms of “charge chrome, ” aform of high-carbon ferrochromium particu-larly suited to South African ores.17

The major producer and exporting countriesare likely to maintain their current positionsin world production for the near future and canbe expected to continue reducing the exportof ores in favor of ferroalloys. The integrationof ore mining with ferroalloy production andthe accompanying decline of independent fer-roalloy producers may force the remainingnonintegrated ore prod ucers, witnessing shrink-

1 TSee tab]e 5.13 for a compa risen of various ferroc hrom iu m

products.

Table 5-7 .—Historical Production—Chromite, 1960-80, by Country(thousand short tons, gross weight, percent of world total)

1960 1965 1970 1975 1980

Producer country Tons Percent Tons Percent Tons Percent Tons Percent Tons Percent

Albania. . . . . . . . . . . . . . . 319 7 342 6 516 8 859 9 1,190 10Brazil . . . . . . . . . . . . . . . . 6 <1 19 <1 30 <1 191 2 919 7Finland. . . . . . . . . . . . . . . 0 0 0 0 133 2 365 4 376 3Greece . . . . . . . . . . . . . . . 38 1 56 1 29 <1 39 <1 47India . . . . . . . . . . . . . . . . .

<1110 2 66 1 299 4 551 6 354 3

Madagascar. . . . . . . . . . . 0 0 3 <1 144 2 214 2 198 2New Caledonia . . . . . . . . 43 1 0 0 0 0 2 <1 2 <1Philippines . . . . . . . . . . . 810 17 611 12 624 9 573 6 547 4

South Africa . . . . . . . . . . 851 17 1,038 20 1,573 24 2,288 25 3,763 30Turkey . . . . . . . . . . . . . . . 531 11 625 12 572 9 790 9 431 3Soviet Union , . . . . . . . . . 1,010 21 1,565 30 1,930 29 2,290 25 3,748 30Zimbabwe . . . . . . . . . . . . 668 14 646 12 400 6 650 7 608 5

Subtotal . . . . . . . . . . . . 4,386 90 4,971 94 6,250 93 8,812 96 12,183 98Other . . . . . . . . . . . . . . . . 499 10 330 6 422 6 3,324 4 203 2

Total . . . . . . . . . . . . . 4,885 100 5,301 100 6,672 100 9,136 100 12,386 100SOURCE U S Department of the Interior, Bureau of Mines, kfirterals Yearbooks 1964, 1968, 1972, 1977, and 1982




ing markets, to integrate. Turkey, India, Greece,Albania, and Madagascar, among other coun-tries, are currently expanding or planning toexpand or introduce ferrochromium capacity.While some construction has been held up byweak worldwide demand for ferroalloys, ex-

pansion will probably resume as the steel in-dustry recovers from the early 1980s recessionperiod. Given chromium’s primary use in steel-making, certain prod ucer coun tries with grow -ing domestic and export-oriented steel indus-tries—e.g., India and Brazil—may reduce theirparticipation in both ore and ferroalloy exportmarkets.

The 1981-82 worldwide recession causedlow-capacity usage in chromite mines (see table5-8) and ferroalloy plants, and low worldprices. These market conditions and the com-

petitive strength of the South African pro-du cers inhibit the p ursuit and developm ent of new sources of chromite ore. In addition, theonly known, nonproducing deposits of chro-mite are considered marginally economic evenunder more favorable market conditions dueto low grades and/ or smallness of overall deposit.

In 1982 one new chromite source entered th eworld market when a firm resumed productionat a previously abandoned area in New Cale-donia. A project in Papua New Guinea hasbeen fully explored and evaluated by an inter-national mining firm bu t is not considered eco-nomically viable and will not be developed in

the near futu re. Together, these new prod ucers,wh ile diversifying th e world’s sour ces of chro-mium, will add only about 5 percent, at maxi-mum output, to the world’s total production.More important, perhaps, is that new sourcesof chrom ite will be unconventional u nless new

stratiform or podiform deposits are discovered.The Papua New Guinea project, for instance,may undertake mining from a sand and lateritedeposit.

In the long term, two developments couldalter the current pattern of chromite produc-tion. Almost 90 percent of the world’s knownreserves of chromium are contained in strati-form, as opposed to podiform, deposits. Thisis explained in part by the fact that stratiformchromite deposits are continuous over largeareas, making estimation of reserves relatively

easy and the exploration costs to prove largetonnages of reserves small compared to thosefor podiform deposits. Scattered, discontinu-ous p odiform d eposits, on the other han d, aredifficult and therefore expensive to locate, evenusing the most sophisticated geophysical ex-ploration techniques.18 This implies that areas

lau.s. International Development Cooperation Agency, Trade

and Development Program, The Ch rmn i t e Project DefinitionMission of the Philippines , February 1983; Charles J. Johnson andJean A. Brady, Chromi te Potential of the South w es t Pacific, asummary of research in progress at the Resource Systems In-

stitute of the East-West Center, Honolulu, Hawaii. August 1982,p, 13.




of podiform deposit concentration—e.g., inTurkey, Albania, and the Philippines—thathave not been systematically surveyed are po-tential locations for increased reserves. Loca-tion of these podiform deposits could benefitfrom developments in the use of geochemistry

as a prospecting tool and an infusion of fund-ing to finance exploration efforts.

The other possible development is exploita-tion of two deposit types found in the south-west Pacific Basin area—the Philippines, In-donesia, New Caledonia, New Guinea; that is,nickel laterite deposits overlain by low-gradechromite, and alluvial deposits of chromitesands in shallow offshore areas. No lateriteshave yet been exploited for chromite, and onlyone beach sand operation has been opened (inthe Philippines). The mining and extraction of

chromium from either type of deposit is pre-vented not by a lack of technology, but by eco-nomics. An American mining company stud-ied the possibility of joining in the Philippinebeach sand op eration and d ecided th at the eco-nomics, based on South African competition,did not warrant the investment. The U.S. Bu-reau of Mines has conducted successful researchup to the pilot plant stage on processing later-ites ores (from U.S. sources) and concludedthat existing technologies, with adjustments forthe different minerals encountered in foreignores, could be applied. Analyses at the East-

West Center concluded19

that economic min-ing of some known laterite resources would re-quire a chromite concentrate price of $100 to$150 per tonne, f.o.b. 20 (The 1984 price forSouth African 44 percent chromic oxide chro-mite ore was $40 to $55 per ton, f.o.b., or $44to $60 per tonne.)21 Ongoing work by the U.S.Geological Survey on PGMs contained in later-ites (see the PGM section) offer a possibility of changing the economics of laterite deposits if PGMs could be mined as a primary or coproduct.

While expansion of chromite production

awaits increased steel industry production,~gchar]es J. Johnson, personal communication, August 1983.zOFree on board, means price at embarkation—i. e., without

transportation charges,2]’’AMM Closing Prices, ” American Metal Market, June 21,

1984.

many ore producers have announced plans toadd ferrochromium capacity. In some coun-tries, such as Zimbabwe, this wou ld require ad -ditional ore production, but in many it couldsimply mean a greater diversion of ore produc-tion from exports into ferroalloy production.

Some of the constraints to increased produc-tion, such as lack of energy sou rces and trans-portation facilities, are given below in brief country-by-country reviews.

Albania

Chromite is one of Albania’s chief exportcommodities and most important sources of foreign exchange.” Since 1976, Albania’s pro-duction has been steadily increasing. The na-tion now ranks as the world’s third largest pro-ducer. The last completed 5-year plan period

(1976-80) called for an output of 1.25 milliontonnes (1.14 tons) by 1980, a goal that was notquite met. The 1981-85 plan calls for a 9.7-percent annual increase in chromite output.Albania has one ferrochromium plant in oper-ation, with total estimated capacity of 30,000tons per year.

Albania’s chromite trade patterns have shiftedover the past 30 years. Its production onceserved as a supplemental source for EasternEuropean nations that relied primarily on ex-ports from the Soviet Union. China bought half of Albania’s ou tpu t from the m id-1950s to 1978,when relations were broken due to ideologicalconflicts. Since then, an increasingly large por-tion of Albania’s exports have gone to West-ern countries, Recently, relations with Chinahave improved, and renewed ties could bringresumed chromite trade. Yugoslavia has beenan important buyer of Albanian ores for con-version into ferroalloys for the world market.

While Albanian ore reserves and resourcesare not known with great certainty, currentestimates are considered too low to supportcurrent and planned production levels. The

possibility of finding new deposits is likely be-cause large areas have yet to be explored for

ZZU. S. Department of the Interior, Bureau of Mines, MineralsYearbook, 1981, VO]. 111, p. 42.




nationalized in 1976. Its ores must be processedto reduce an unacceptably high phosphoruslevel. The newer mine, Befandriana, is a primi-tive setup consisting of several small open p itsand no concentrator, Ores from this mine donot have a high p hosphorus level and are sim-

ply screened to p rodu ce two separate grades,During monsoon season, December to April,the Befandriana pits cannot be operated.Transportation from Adriamena is by truckand railroad to the port of Toamasina (Tamatave).From Befandriana, ores are trucked about 100miles to Narinda Bay for shipment, Due to theshallowness of the bay, ores must be trans-ferred by small vessels to ocean freighters;loading of one shipment can take 3 weeks.

The area has th e potential to expand prod uc-tion easily by 50 percent due to the extent of

the reserves. Transportation is the weakestlink; lack of sufficient railroad cars, poor roads,and the und eveloped p ort at Narinda Bay im-ped e expansion. Wh ile France is Madagascar’smajor customer for chromite, one U.S. ferroal-loy firm, Interlake, had a 2-year contract, end -ing in 1982, to take all of the annual output of the Befandriana mine. The contract has notbeen renewed d ue to the w eak market for fer-roalloys.

New Caledonia

All of New Caledonia’s lateritic nickel depos-its contain chromite. Much of the chromite,how ever, occurs in low grad es and is currentlyconsidered uneconomical. Two firms operatemines from podiform deposits in New Cale-donia. Societé de la Tiebaghi started full-scaleproduction in 1982, with an output of 50,000tons of chromite concentrates (containing 51percent chromic oxide), eclipsing Calmine’s2,000 tons-per-year operation. Capacity of theTiebaghi mining operation is 85,000 tons peryear of concentrates. The new mine, for whichdevelopment work began in 1976, underlies a

Union Carbide operation that closed in 1962.The island has no dom estic energy sou rce, cre-ating a potential barrier for any expansion.Societe le Nickel (SLN), the large nickel pro-ducer on the island, already consumes 85 per-cent of the country’s industrial electricity in its

mining and smelting operations. A hydroelec-tric powerplant has been considered but is notyet planned.

Philippines

The Philippines is the principal source of refractory grade chromite for the Westernworld. The Coto deposits in the Zambales dis-trict on the main island of Luzon are the largestsuch group in the world. Reports on the Philip-pines continually predict reserve depletion, butfurther exploration has always extended minelife by another 10 years. Two major firms con-duct operations at Zambales. Consolidated’sMasinloc mines are operated by the BenquetCorp. and contribute 95 percent of the coun-try’s refractory ores; Acoje Mining is the coun-try’s major metallurgical ore prod ucer. A third

firm, Trident Mining & Industrial Corp., hasproduced metallurgical ores from mines on thesouthern Palawan Island. Its operations havebeen shut down since 1981 due to financialproblems. Representatives from Trident werein the United States in 1983 seeking new capi-tal to resume production and reportedly se-cured it. In late 1983, Acoje was seeking debtrelief from the Philippine government and theprivate sector in order to maintain operations.These financial difficulties will delay plans forexploration and new mine development.

Two ferrochromium plants in the Philippinesproduce primarily for the Japanese market. Thenewest plant began operating in 1983, andsome startup problems caused by erratic powersupplies and ore quality were reported.

Theoretically, the extensive ultramafic for-mations of the Philipp ines could hold u p to 105million tons of 32-percent chromic oxide inlaterite formations.24 Extensive, systematic geo-logical field and exploration work, however,mu st be comp leted in order to p rove the theory.

South Africa

The Bushveld Complex in the TransvaalProvince is the largest known chromite d eposit

Z4The Chrom j te Project Definition Alission of the Phili / ]pines ,

op . cit.




in the w orld. Most of the chrom ite is prod ucedin two districts within the complex: the East-ern Belt (Lydenburg district, five mines) andWestern Belt (Rustenburg district, eight mines).Competition among the m any firms and minesfor increased market shares is strong. The

slackness in world chromite markets, risingcosts, and stable prices in recent years havecaused some of the least efficient mines to beplaced on “care and maintenance” status.

The UG2 (up per grou p seam of the Bushveld)chromium-platinum reef in Rustenburg is cur-rently mined for PGMs by Western Platinumand has chromite resources estimated by SouthAfrica to total 650 million ton nes. Tapp ing cer-tain sections of this reef for chrom ium requiresnew metallurgical and smelting techniques inorder to separate and recover the individual

minerals. The South African government’sMintek (Council for Mineral Technology, a re-search arm of the Ministry of Mines and En-ergy) has conducted research and developmentand plasma technologies, which provide high-temperature processing, have been tested.Western Platinum has reportedly opened asmelter in 1984 capable of processing thesecomplex ores and is considering the additionof a ferrochromium plant.

As in many areas, transp ortation bottleneckscould limit any effort to rapidly increase out-put from the Bushveld. Ores from the minesare currently trucked 5 to 10 miles to a rail-head. Once there, the ores are moved to theheavily used port of Maputo in Mozambique(480 miles from the Western Belt and 350 milesfrom the Eastern Belt). Perennial congestionat the port has been relieved by recently in-stalled mechanized facilities. The p ort can nowhandle 2,500 tonnes of chromite per hour andstore up to 1.1 million tonnes. Alternate portsin South Africa, at Durban and Richards Bay,could be used if Maputo w as not available (forinstance, due to transborder conflicts) although

significant lead-time would be required to ac-commodate chromite at these ports. It has beenestimated that for a typical underground SouthAfrican mine, 50-percent expansion would re-quire little more than 1 year; how ever, port ex-

pansions to handle such increased outputcould take 4 years.25

Soviet Union

The Soviet Union is still the world’s secondlargest chromite producer, although its ore ex-ports have declined during the past decade.Most of its deposits are podiform and locatedin the Ural Mountains. Virtually all its metal-lurgical-grade ores originate in the WesternKazakhstan (southern Ural region). Ninety per-cent of production comes from the Donskoyemining and concentration complex in Khrom-Tau. A new underground mine there startedprodu cing in 1982 with an expected or e capac-ity of 2 million tons per year by 1985.

Turkey

Exports of ore from Turkey have declined inrecent years as a result of increasing internalconsumption, world market oversupply, andan inability to meet price competition. Turk-ish podiform deposits are widely scattered(occurring in 40 of the coun try’s 67 provinces),limiting the output and mechanization poten-tial of many mines. The presence of podiformrather than stratiform deposits, however,makes the total resource picture uncertain be-cause such pockets are difficult to locate. Witheconomic incentives, a 50-percent increase inproduction (a return to the 1975 production

level) could take p lace in 3 to 12 month s. Anyfurther increase would be limited by availableand willing investment and would require anincrease in reserves. Constraints would includelack of mining equipment and transportationbottlenecks. The m ain ports (Mersin an d Isken-derun, on the Mediterranean Sea) are 400 milesfrom the m ineheads and have maximu m load-ing capacities of 3,000 tonnes per day, each.

Several ferrochromium plants are now on-line in Turkey, and additional capacity (to atotal 150,000 tons per year) is expected by 1986.

Etibank, the state-owned m ining comp any that

Zschar]es River Associates, Processing Capacity for Crjtjca!Materials, contractor report prepared for the Office of Technol-ogy Assessment, January 1984.




sources. One deposit, considered the mostlikely candidate if development plans arise, isBird River in Manitoba, Resources for the fourBird River properties total 4 million tons at 18to 25 percent chromic oxide and 15 milliontons at 5 to 7 percent chromic oxide.

The low grade and chromium-to-iron ratioof these deposits have mitigated against theirdevelopment in the past. Research into tech-nologies to process the ores has determinedthat only with high-cost chemical treatmentcan a sufficiently high-grade product be at-tained to meet conventional specifications. Re-cent research by the Ontario Research Foun-dation has prod uced a chromium carbide thatcould be used to produce chromium metal orbe used as an alloying agent.

Domestic Production of Chromium

Known resources of domestic chromite arethe stratiform deposits in the Stillwater Com-plex of Montana and the small podiform bod-ies in n orthern California, Oregon, and Alaska.Chromite is also associated with nickel-cobaltlaterite ores of northern California and south-ern Oregon and found in placer beach andstream sands located in Oregon, Maryland, andPennsylvania.

As tables 5-9 and 5-10 show, the UnitedStates has an estim ated 337 million tonnes (371million tons) of identified resources28 of chro-mite with chromic oxide grades ranging from1 to 25 percent (or, 13.8 million tons of con-tained chromium). Of these identified re-sources, 80.4 million tonnes (88.6 million tons)of chrom ite are considered to be demon stratedresources (a subd ivision of identified resourceswith the highest degree of geologic certainty)containing 3.9 million tons of chromium. Asa comparison, South Africa is credited with a“reserve base” (total demonstrated resourcesbut excluding the subeconomic tonnages) of ———— ——.——‘“’’Identified” resources are those for which location, grade,

quality, and quantity are known or estimated from specific ge-ologic evidence. Identified resources include economic, mar-ginally economic, and subeconornic components. To reflect ~ary-ing degrees of geologic certainty, identified resources are dividedinto “demonstrated” [both measured and indicated) and “in-ferred” resources.

910 million tons of shipping grade chromiteores normalized to 45 percent chromic oxide,or 279 million tons of chromium.

In a Minerals Availability Appraisal29 pub-lished in 1982, the U.S. Bureau of Mines con-cluded that none of the U.S. identified re-

sources of chromite in stratiform or podiformdeposits w ere economically recoverable at Jan-uary 1981 market prices ($128 to $144 pertonne for a metallurgical grade product, CIF30

in the Eastern United States), Instead, prod uc-tion at that time would have required a mini-mum price of $237 per tonne, almost doublethe prevailing market price.

Laterite deposits were not analyzed in theBureau of Mines’ study in terms of potentialproduction because of “technological and costuncertainties.“ 31 Unlike laterite deposits, theother deposit types have p revious p rodu ctionhistory in the United States.

The mining and beneficiation methods uponwhich the study was based were those meth-ods used in past domestic production of chro-mite ores; no new technologies were consid-ered. For each d eposit includ ed in th e app raisal(table 5-11), the engineering and cost (capitaland operating) analyses were followed by aneconomic evaluation using a 15 percent rateof return on th e capital investm ent. Some costswere not considered—e.g., the time lags in-volved in filing environmental impact state-

ments, receiving necessary permits, financing,etc., as it was felt that such delays “would beminimized in consideration of strategic avail-ability.” 32

Up to 235,000 tons per year (table 5-12) of contained chromium could theoretically beproduced from the most probable U.S. sources.This assumes simultaneous production andwould most likely require government incen-tives, Mine lifetimes range from 3 to 46 years.

28Jlm Lemons, Jr., et a]., U. S. Department of the Interior, Bu-

reau of Mines, Chromium Avai lab i l i t~~—Domest ic: A MineralsAvailabiliteV S y s t em Appraisal, Information Circular No, 8895,1982, p. 1.Socost, insurance, and freight paid by the shipper.3] Ibid., p. 1.szIbid., p. 7.




Table 5-11 .—Proposed Mining and Processing Methods U.S. Chromite Deposits

AnnualMinimum capacity

Type of lead time tonnes Mining BeneficiationProperty State deposit years of ore method method

Claim Point . . . . . . . . . . . . . . AlaskaRed Bluff Bay . . . . . . . . . . . .AlaskaRed Mountain . . . . . . . . . . . .Alaska

Bar Rick Mine . . . . . . . . . . . . CaliforniaMcGuffy Creek . . . . . . . . . . . CaliforniaNorth Elder Creeka. . . . . . . .CaliforniaPilliken Mine. . . . . . . . . . . . . CaliforniaSeiad Creek/Emma Bell. . . .CaliforniaLouise Chromite. . . . . . . . . . Georgia

West Placer Areab . . . . . . . . Maryland-Pennsylvania

Stillwater Complex:Mouat/Benbow . . . . . . . . . MontanaGish Mine . . . . . . . . . . . . . Montana

North Carolina Areaa . . . . . . North Carolina

Southwest Oregon BeachSands . . . . . . . . . . . . . . . . . Oregon

Renshaw Placer . . . . . . . . . . Pennsylvania

Casper Mountain . . . . . . . . .Wyoming

PodiformPodiformPodiform

PodiformPodiformPodiformPodiformPodiformPlacer

Placer

Strati formStrati formPlacer

Placer

Placer

Strati form

422

221

231

1

321

2

1

3

18,0009,000

18,000

350,000787,00025,000

2,100,000562,50025,000

50,000

525,000175,00025,000

1,000,000

50,000

377,260

Open pitOpen pitOverhand shrinkage

Sublevel slopeOpen pitOpen pitOpen pitOpen pitOpen pit

Placer mining

Shrink slopeShrink slopeOpen pit

Strip

Open pit

Open pit

GravityGravityGravity

GravityGravityGravityGravity-magneticGravityGravity-

electrostaticGravity-

electrostatic

GravityGravityGravity-

electrostatic

Gravity-magnetic-electrostatic

Gravity-electrostatic

Gravityalncludes 3 deposits combined in the analysisblncludes 13 deposits combined in the analYsiS.

SOURCE: US Department of the Interior. Bureau of Mines Information Circular No. B895. 1982, Chromium Avai/abi/iW-Domestic: A hf/riera/s Avai/ab//ifv Svstem AD- .praisal, ’tables 1 and 2, pp. 4 and 5.

All of these areas, with the exception of Gas-quet Mou ntain in California, have been minedpreviously, prov iding a backlog of informationand infrastructure upon which to base oper-ating decisions. Gasquet Mountain has bene-fited from considerable recent commercial

evaluation.The most r ecent U.S. prod uction of chromite

was from the Gish and Mouat/ Benbow Minesat Stillwater from 1953 until 1961, subsidizedby the Federal Government under the DefenseProduction Act. The contract with the Ameri-can Chrome Co. called for 900,000 tons of chromite ore (36 to 38 percent chromic oxide)over an 8-year period (an average annual rateof 113,000 tons), dur ing w hich the governm entadvanced $1.8 million for machinery andequipment and guaranteed the company a

price of $34.98 per ton of ore (about $140 perton of chromium). (During the period 1954-61,the weighted average yearly price ranged from

$124 to $147 per ton.)33 Approximately 400,000tons of the ore produced—half of the contract—remained u nused and was sold by the govern-ment to Metallurg, Inc., in 1974 for $7.64 perton. In 1984, this “stockpile” sat in the townof Columbus, nearby the Stillwater mine site.

Chromite was also mined from Stillwater andfrom podiform deposits in Alaska under WorldWar II prod uction subsidies. At Stillwater, d e-velopmen t efforts began in 1941 und er the Re-construction Finance Corp. ’s Metals ReserveCo. After spend ing $15 million on th e develop-ment of two mines (only one of which actuallystarted producing), all operations were closeddown in 1943 when foreign trade routes be-came more secure. Domestic chromite prod uc-tion reached a historic peak of about 140,000tons in 1943, and consumption that year was

—.-s su .s . Department of the Interior, Bureau of Mines, ~jnera]

Facts an d Problems , 1975 edition, p. 248.




Table 5-12.—PotentiaI U.S. Chromite Production

Demonstrated resources Estimated annual production

Chromium ChromiumOre content Ore content Estimated

Known resources by Grade (thousand (thousand (thousand (thousand minelifedeposit type (percent Cr2O3) tonnes) tonnes) tonnes) tonnes) (years)

Stratiform:Stillwater Complex:

Mouat/Benboe . . . . . . . . . w w w 525 72a 46Gish . . . . . . . . . . . . . . . . . . 15.0 500 51 175 16 3

Pod/form: California:

Bar Rick Mine . . . . . . . . . 7.6 5,065 262 350 16 13McGuffy Creek. . . . . . . . . w w w 788 NA 4Pilliken Mineb. . . . . . . . . . 5.0 30,975 1,053 2,100 65 4Seiad Creek/Emma Bell . . . 5.0 4,546 155 563 17 9

Beach Sands: Southwest Oregon . . . . . . . 5.6 10,827 412 1,000 35 11

Proven ChromiteGrade reserves concentrates

(percent (thousand (thousandLaterite chromium) tonnes) tonnes)

Gasquet Mountain. . . . . . . . 2.0 16,000 320 50 14 18aEStim’ted assuming Is percent wadeblnferred resources onlyW—information withheld for proprietary reasonsNA—Date not available

SOURCES Resources, ore grades, proposed mining rate, mlnelifes from US Department of the Interior, Bureau of Mines, Chromium Avai/abi/ify–Domestic, lC8895/1982Gasquet Mountain data provided by California Nickel Corp; balance calculated by OTA.

Chromium data 1979 1982

Reported chromiteconsumption (tons) (22 to38 percent chromium) . . . . . 1,209,000 545,000

Apparent chromiumconsumption (tons) . . . . . . . . 610,000 319,000

SOURCE U S Department of the Interior, Bureau of Mines, M/nera/ Commodity Summaries, 1984

965,000 tons. More than 200,000 tons has beenreported as domestic “shipments” for 1956, butsome 45,000 tons of this amount came fromgovernment stockpiles.

Before 1958, scattered small chromite depos-its were mined in California, Oregon, andWashington. The Pilliken Mine near Sacra-mento, CA, for instance, was operated inter-mittently from 1950 to 1957. Total productionfrom these mines was, however, never morethan 45 percent of the Stillwater Comp lex pro-duction in the same years.34

sqFor more information about past domestic production see,Silverman, et al., op. cit., and The S t iHwa t e r Citizen-Sun, Apr.26, 1974, sec. 2, p, 8.

Stillwater Complex

The chrom ite deposits at the Stillwater Com -plex in Montana are the largest known, singlepotential U.S. source of chromium. Althoughthere are no current plans to resume commer-cial pr odu ction of chrom ite at Stillwater, thesedeposits would most likely be the first to beconsidered for production during any emer-gency situation. Several companies, includingAnaconda Minerals Co., which has patentedmineral holdings on the Mouat/ Benbow Mine,have been involved in the area since the late

1960s in investigating various Stillwater p rop-erties for their potential mineral values. (Seethe domestic PGM section, p. 196 for details.)

Available resource data for the tw o chromitedeposits, the Gish and Mouat/ Benbow mines,



152 ŽStrategic Materials: Technologies to Reduce U.S. Import Vulnerability

are not complete since for proprietary reasonsonly the numbers for the Gish mine have beenpu blished (see table 5-9). The Mouat/ Benbowdeposit is reportedly the much larger of thetwo. This is evident from the fact that the Bu-reau of Mines projected a mine life for the

Mouat/ Benbow d eposit of 46 years with aproduction rate of 525,000 tonnes (477,000tons) of ore per year; whereas, production atthe Gish mine was projected at a third of thatrate for only 3 years.

Combined potential output of 65,000 tons of contained chromium (table 5-12) from theseStillwater mines amounts to about 11 percentof U.S. needs when compared with a p eak con-sumption year such as 1979 or 20 percent whencompared with 1982.

Gasquet Mountain Project

California Nickel Corp. has prop osed to p ro-duce nickel, cobalt, and chromium from alateritic dep osit at Gasquet Mou ntain in nor th-ern Californ ia, The project’s econom ic viabilityis dependent on the market prices of all threemetals, and in 1982 the firm was using a chro-mite p rice of $40 per ton in its economic evalu -ations, The estimated output (50,000 tons peryear of chromite concentrates with 14,000 tonsof contained chromium) would be small rela-tive to the other m etals involved in the p rojectand in relationship to Stillwater as analyzed

by the Bureau of Mines. However, this is theonly domestic mining project which includeschromium that has been under recent scrutinyby a mining firm, Perhaps of greater impor-tance is the processing technology that thisfirm is developing for recovery of m etals fromlaterite ores, Such ores have the possibility of being a future w orldwide source of metals suchas chromium, nickel, cobalt, PGMs, etc. (TheGasquet Mountain Project is discussed in mor edetail in the cobalt section on p. 170, See alsothe following chromium mining and process-ing technologies section on p. 153.)

Lateritic deposits generally offer one of thelowest metal grades, and chromite at Gasquetis thou ght to be extremely erratic. Exploitationthu s requires considerable movem ent of ore in

order to reclaim any substantial tonnages of thedesired metal.

Other Potential U.S. Sources

Other chromite deposit types in the UnitedStates are the podiform bodies in northern Cali-fornia, southern Oregon and Alaska and beachsands in Oregon, Maryland, and Pennsylvania.Table 5-12, using the Bureau of Mines’ analy-sis, shows the estimated production from themost likely candid ate areas, California’s p odi-forms and Oregon’s beach sands.

Although the chromium content of the pos-sible output of the Pilliken Mine was calculatedas the largest, the information base is theweakest since all resources fall into the “in-ferred” category. Except for the Bar Rick Mine,these podiform properties have short mine lifes

which reduces their economic viability,The Oregon beach sands contain a compara-

tively large amount of identified resources.These resources are dispersed over a large area(some 5,000 acres) which is now either publicbeaches or land used in Oregon’s forestry in-dustry, The low grades present means that alot of material would need to be displaced inorder to acquire the contained chromite, dis-turbing not only the beaches but an establishedOregon economic base.

The Alaskan podiform deposits are consid-

ered the most expensive to mine, due to theirlocation, low grad es and short m ine lifes. Onearea of podiform deposits, stretching southfrom Anchorage through the Kenai Peninsulaalong the Chugach Arch, may contain suffi-cient chromite for several years supply, but isnot of commercial interest du e to the high costof production. as Anaconda Minerals exploredone such d eposit area, Red Mou ntain n ear Sel-dovia, as a possible PGM resource but resultshave p roved disapp ointing. Conceivably, chro-mite might be a byproduct of any future PGMproduction there, Other potential occurrencesof chromite in Alaska are at Kanuti River, RedBluff Bay, Baranof Island, in southeastern

ssrohn Mulligan, Chief, Alaska Field Operations Center, Bu-

reau of Mines, persona] communication, July 9, 1984,




Alaska, and the western Brooks Range depos-its. Present information on these occurrencesis inadequate to suggest any level of expecta-tion.36 After surface occurrence investigationsin the Kanuti River area, the Bureau of Minesrecommend ed in 1983 that subsu rface explora-

tion be employed to establish the extent of chro-mite occurrences .37

Domestic Mining and Processing Technology Prospects

Rather straightforward mining and beneficia-tion technologies are ap plicable for the exploi-tation of U.S. chromite deposits, and theircomposition —while prim arily chemical grade—is suitable for a variety of current uses.Future breakthroughs in beneficiation andsmelting technologies might lead to the possi-bility of mining of lower grade ores commonto the United States. Plasma arc furnace tech-

nology (see the following processing section),for instance, uses finely grou nd chromite as isfound in laterite deposits. Successful applica-tion of new methods would not necessarilymake U.S. deposits more competitive withother world deposits, unless innovations canbe selectively applied to U.S. deposits.

Improved mining technology offers severalpossible app lications for chromite ore m ining,In hardrock ore bodies, open pit and under-ground mining systems would be similar tothose used in other ore bodies; the trends

toward increased mechanization and to con-tinuous m ining systems would apply, The newvertical crater retreat system for undergroundmining would be especially applicable in nar-row and steeply dipping veins and podiformbodies, In shallow lateritic material and beachplacer type sands, open pit mining wou ld verylikely involve continuous mining by bucketwh eel machines or by shovels without th e needfor drilling and blasting,

Solution mining of chromite is only in theconceptual stage, but could provide an ap-—.

3GU.S, ~eI)a~ment of the Interior, Bureau of Mines, Criticaland Strategic Afinerals in Alaska, Information Circular No. 8869,

1981.sTjeffrek, y, Foley and Mark M. McDermott, U.S. Department

of the Interior, Bureau of Mines, Podiform Chromi te Occur-rences in fh e Caribou Mountain and Lower Kanu f i River Areas,Cen t r a l Alaska, Information Circu]ar No. 8915, 1983.

preach to the mining of hardrock chromitewith explosive fracturing or to the mining of lateritic deposits that are inaccessible by openpit mining.

The minimum grades required for metallur-gical use (at least 46 percent chrom ic oxide and

a chromium-to-iron ratio greater than 2.5:1)have not ordinarily been obtained from theprocessing of domestic chromite deposits.Low-cost methods of beneficiating domesticdeposits to an acceptable concentrate havebeen studied for a number of years by the Bu-reau of Mines, The methods have involvedcombinations of gravity and electrostatic sep-aration plus flotation to obtain a higher chro-mium content, and leaching to reduce the ironcontent, The Bureau of Mines has recently in-troduced a chromite beneficiation programthat has provided encouraging results, Re-search has not yet provided for an economicmethod of upgrading, however, A direct smelt-ing process for Stillwater Complex ore hasbeen investigated; this would provide a high-iron alloy, but still not comparable in grade andcost with imported ferrochromium.

The Albany Research Laboratory of the Bu-reau of Mines has been exploring the recov-ery of chromite from the residue of lateritesthat have been chemically processed to recovercobalt and nickel. Lateritic ores containingchromium are ordinarily roasted and leached,

An experimental plan by the Bureau of Minesfor the recovery of chromium from lateriteores, as at Gasquet Mountain, involves roastingand leaching after gravity beneficiation, withfinal electrowinn ing for n ickel and cobalt an dfinal recovery of chrom ium from the leach res-idu e. The concentrate prod uced contains about35 percent chrom ic oxide. Future research andexperimentation in chromite recovery andchromium extraction will most probably in-volve such hydrometallurgical processing.

Another Bureau of Mines project is evaluat-

ing the low-grade podiform deposits of Califor-nia, These ores range from 3 to 10 percentchromic oxide and contain tonnages that canpotentially be mined by open pit and under-ground methods. Preliminary results suggestthat these podiform ores can be concentrated

38-844 0 - 85 - (5 : QL 3




to a range of 37 to 45 percent chromic oxide;and with improved gravity process techniques,a marketable concentrate might be producedif smelter facilities were located nearby andlocal steel markets were accessible to theproduct.

Foreign and Domestic Chromium Processing

The major use of chromium is as an alloy-ing agent in chromium and stainless steels andin superalloy. In steels, chromium is con-sum ed p rimarily in the form of a chromium fer-roalloy, principally high-carbon ferrochromi-um or “charge chrome. ” In the production of superalloys with little or no iron content, ametallic form of pure chromium is consumed.The various types of chromium ferroalloys andmetals and their compositions are show n in ta-

ble 5-13.Figure 5-I provides a simplified flow chart

of chromium from ore to industrial use. Ore,as produced from today’s mines, contains from35 to 48 percent chromic oxide. An exceptionis Finland which has the lowest grade eco-nom ic dep osits at 27 percent Cr2O3. Where nec-essary, mined chromite is concentrated (grav-ity or magnetic separation is usu ally emp loyedto increase the chromic oxide or red uce the sili-con content), sized, and classified at the minesite. This concentrate, typically 40 to 46 per-cent chromic oxide (27 to 31 percent containedchromium ), is then p rocessed by sm elting intoferrochromium products or begins a multistepprocess for conversion into pure metal.

Table 5-13.—Composition of ChromiumFerroalloys and Metal (weight percent)

Type Chromium Carbon Sil icon

Ferrochromium: High carbon . . . . . . . . . . . . . 52-72 4.0-9.5 3-14Charge. . . . . . . . . . . . . . . . . . 58-60 6-7 4-5Low carbon, . . . . . . . . . . . . . 60-75 .025-.75 1-8Silicon . . . . . . . . . . . . . . . . . . 34-42 .05-.06 38-45

Metal:

AluminothermicVacuum melting grade . . 99.5 .05 .04Carbothermic (chrome 98) . z98.5 NA NAElectrolytic , . . . . . . . . . . . . . 99.1 .02 .01

NA—Not available.

SOURCE: Ferrochromlum content, U.S. Department of the Interior, Bureau ofMines, L41nerals Commodity Profile 1983.’ Chrormurn.Metal content, appropriate manufacturers.

Ferrochromium

High-carbon ferrochromium is usually pro-duced in a submerged arc electric furnace.These furnaces, shown in figure 5-2, use ver-tical electrodes that are suspended into thecharge material (principally chromite and coke,

a form of coal). A pass of electric currentthrough the charge provides the heat to sustaina reaction in which the oxygen content of thechromite is removed (by combining with thecarbon in the coke) and an iron-chromium al-loy is produced.

Low-carbon ferrochromium can be producedfrom high-carbon ferrochromium or from chro-mite ores. In the Simplex process, an oxide ma-terial is mixed with the ferrochromium andheated in a vacuum furnace, where the carbonand oxide combine and are driven off, reduc-

ing the carbon content of the ferrochromium.In another process, silicochromium (a silicon-chromium alloy) is first produced in a sub-merged arc furnace and then used to reducethe carbon content of ferrochromium in anopen arc furnace. (In open arc furnaces theelectrodes are not suspended deep within thecharge).

Ferromanganese (see manganese processingsection) is produced in electric submerged arcfurnaces similar to those used for ferrochro-mium, and there is a degree of convertibilitybetween chromium and manganese ferroalloyfurnaces. The Un ited States has, consequently,some flexibility in prod uction capacity for bothferroalloys. Ferromanganese production re-quires a w ider electrode sp acing th an that usedfor ferrochromium, which has a less conduc-tive slag. Other importan t d ifferences in designparameters of the furnaces include electrodediam eter, hearth d iameter, crucible dep th, andvoltage range of the transformer. A ferroman-ganese electric furnace could technically beused to produce ferrochromium. By techniquessuch as modifying the composition of the slag

to decrease its resistance, the furnace wouldbe operating at less than optimum conditionsand would probably not be economic. Modifi-cation of these furnaces for alternative usesmay be physically and process constrained bythe existing pollution abatement equipment.



*SOURCE: Charles River Associates, Processing Capacity for Critica/ Maferia/s, OTA contract report, January 1984

Figure 5-2.—Submerged Arc Furnace

Reaction Chargegases material

t

4

SOURCE Charles River Associates, Process/rig Capacify for Crltica/ Materia/s,

OTA contract report, January 1984

t +Sodium

chromate

Sodiumbichromate

4

I

ADVANCED TECHNOLOGY

While the submerged-arc electric furnaceprocess predominates in the production of fer-

roalloys, other methods are being explored.Most attention is directed at the developmentof plasma furnaces.38 This furnace is basicallyan electric arc furnace in which carbon elec-trodes are replaced by metallic electrodes andthe electric arcs by plasma arcs. 39 An essentialdifference in design is the installation of plasmatorches in the wall of the furnace, rather than

SeCharles River As~ciates, Processing CapacitJr fOr critical Materials, contractor study prepared for the Office of Technol-ogy Assessment, January 1984.

39A P]asma is a gas of sufficiently high energy content thatmany of its molecules split into atoms, which then become

ionized and electrically conducting. Such a gas can develop anddeliver heat as high as ZO,OOOC C. Fossil fuels, on the other hand,limit combustion processes to z,0000 C, See “The Promise of Plasma, ” 33 Metal Producing, February 1984.



156 q Strategic Materials: Technologies to Reduce U.S. /report Vulnerability

the roof as with carbon electrodes. A plasmafurnace used for the production of ferrochro-mium can be used to produce ferromanganeseor other ferroalloys.

The major ad vantages claimed for the plasmafurnace process are: increased economy dueto longer life electrodes, fewer environmentalproblems (e.g., less dust and waste gas are gen-

erated, noise level is extremely low), reducedcost of charge material (e. g., use of small par-ticle–’’fines” –feed material rather than lum ps,eliminating th e need for pr eliminary processesto compact such material, and fine coal rathert h a n m o r e e x p e n s i v e c o k e ) , h i g h e r p r o d u c tqual i ty (e .g . , a lower carbon content) , and in-creased product y ield due to lower losses in tot h e w a s t e m a t e r i a l .

In the product ion of fer roal loys , the p lasma

f u r n a c e c a n e i t h e r b e u s e d f o r t h e r e d u c t i o nof ore (as in the submerged arc furnace) or formel t ing meta l l i c f ines . S uch a mel t ing opera -t ion has been ins tal led by Voes t-Alpine of Aus-tr ia a t Samancor (a major manganese ore andfe r roa l loy p roducer ) in S ou th A f r ica , M idde l -bu rg S tee l & A l loys , a majo r f e r roch romiump r o d u c e r i n S o u t h A f r i c a , h a s b e e n i n v e s t i -g a t i n g p l a s m a f u r n a c e t e c h n o l o g y f o r a n u m -ber of years and in la te 1983 ins tal led a Swe-d i s h - d e s i g n e d 2 0 m e g a w a t t ( M W ) r e d u c t i o nfurnace at i ts p lant in Krugersdorp . This is thef i rs t commercial appl icat ion of p lasma technol-

ogy in the fer roal loys f ie ld , 40 a n d M i d d e lb u r gexpec t s to t ake 2 year s to eva lua te the e f f i -c iency o f the opera t ion be fo re commi t t ing toa convers ion of i ts o ther furnaces (which couldresul t in a doubl ing of i ts output capaci ty) top l a s m a o p e r a t i o n . S o u t h A f r i c a a p p e a r s t o b ei n a n e x c e l l e n t p o s i t i o n t o a d o p t t h e p l a s m at e c h n o l o g y s i n c e i t s c h r o m i t e o r e s t e n d t ob reak up in to f ine mate r ia l , i t s coa l i s gener -al ly of the lower grade appl icable , and electr icpower is the main energy source. P lasma tech-nology does not yet appear to be able to com-pe te in a r eas w here fo s s i l f ue l i s ava i l ab le .——

40SKF Stee] of Stockholm announced i n June 1984 intentionsof building a 78,000tonne per year ferrochromium plant insouthern Sweden using plasma technology. Overall savings of SKF’S Plasmachrome process compared to costs of conventionalferrochromium production in Sweden has been estimated at 15

to 20 percent.

Relative to Western Europe, South Africaand the Soviet Union, the United States hass een l i t t l e ac t iv i ty in p las ma techno logy fo rp r o c e s s m e t a l l u r g y ( r e d u c t i o n ) . W e s t i n g h o u s ei s one U .S . f i rm invo lved in deve lop ing thetechnology, especial ly the in i t ia l torch sys tems

w hich w ere a s p ino f f o f the U .S . s pace p ro -gram. 41 Foster Wheeler Corp. holds a U.S.

l icense for European plasma furnaces and wasinvolved in set t ing up the Middelburg furnace.I ts es t imates have shown that capi ta l cos ts fort h e s y s t e m w o u l d b e 4 0 p e r c e n t l e s s t h a n f o ra conven t iona l e lec t r i c a r c fu rnace and oper -a t ing cos t s , abou t 25 pe rcen t low er . 42 A m a j o rinhibiting factor to U.S. interest in plasma tech-nology is the relatively high cost of electricalpower compared with foss i l fuel in mos t par tso f the coun t ry .43 H ow ever , s ince f e r roa l loyp r o c e s s i n g i s a n e l e c t r i c p o w e r c o n s u m e r ,

p lasma technology has the potent ia l to be eco-nomical ly v iable in th is par t icular appl icat ion .

P las ma a rc r educ t ion p roces s es have occa-s i o n e d a g o o d d e a l o f i n t e r e s t , b u t t h e y h a v eye t to be p roven in fu l l s ca le fo r f e r roa l loyproduc t ion , I t i s no t know n , fo r in s tance , i f they can compete with submerged arc furnaceso n t h e b a s i s o f e n e r g y c o n s u m e d p e r t o n o f fer roal loy produced. They would seem to mer i ta t t e n t i o n , h o w e v e r , i f t h e h i g h - i n t e n s i t y h e a ts o u r c e u s e d w o u l d p e r m i t e c o n o m i c a l o p e r a -t i o n o f s m a l l e r s c a l e u n i t s ( a s c o m p a r e d w i t h

t h e l a r g e , 5 0 M W , s u b m e r g e d a r c f u r n a c e s ) .Small-scale , adaptable uni ts could provide f lex-ible production capacity for a new, lean domes-t i c f e r roa l loy indus t ry .

Chromium Metal

Aluminothermic, carbothermic, and electro-lytic processes ar e used to produce metallicchromium. Each process results in a differentq u a l i t y o f p r o d u c t , w h i c h d e t e r m i n e s i t s p o s -s ib le va lue to indus t ry . E lec t ro ly t i c ch romiumis the pu res t and us ed in the mos t demand ing

4’K. J, Reid, “Plasma Tech Potential Best in High-Value Goods,” American Me ta l Market, May 15, 1984, p. 22. Excerpts from aspeech “Plasma Metallurgy in the 80s” given at an internationalsymposium—Mintek 50—in Johannesburg, South Africa, in April1984.4ZChar]es River Associates, op. cit., p. 78.qaReid, op. cit., p. 22 .



Ch. 5—Strategic Material Supply . 157 —

appl icat ions . The mos t widely used method isthe a lumino thermic (A -T) p roces s . The s ameequipment can be used to produce o ther a l loys— e . g . , f e r r o v a n a d i u m , f e r r o c o l u m b i u m , o rf e r r o m o l y b d e n u m — p r o v i d i n g a w i d e r a n g e o f furnace flexibility, but also making it difficult

t o e s t i m a t e t o t a l a l u m i n o t h e r m i c c a p a c i t y .The A -T p roces s i s r e la t ive ly s imp le . H igh -

pur i ty a luminum pow der i s mixed w i th Cr 2O 3,charged in to a react ion vessel , and igni ted , Ther e a c t i o n o f a l u m i n u m a n d o x y g e n p r o d u c e sc h r o m i u m m e t a l a n d a s l a g t h a t c o n t a i n s t h eo x i d i z e d a l u m i n u m . T h e m e t a l i s s e p a r a t e df r o m t h e s l a g , c o o l e d r a p i d l y , a n d c r u s h e d t os pec i f i ed s i zes fo r s a le .

Two products are made by the A-T process ,One, known as Chrome 99, is su i table for proc-e s s e s u s i n g o p e n v e s s e l s i n c o n t a c t w i t h a i r ,

b u t r e s i d u a l o x y g e n a n d n i t r o g e n i n C h r o m e99 l imit i ts use to less demanding end-use ap-p l i c a t i o n s . T h e o t h e r p r o d u c t , c a l l e d v a c u u mmelt ing grade ( for use in vacuum furnaces) , isp roduced w i th exces s a luminum to d r ive dow nthe levels of oxygen. This h igh pur i ty grade isi n t e r c h a n g e a b l e w i t h e l e c t r o l y t i c c h r o m i u m i nal l but the mos t s t ress ful appl icat ions , e .g . , thero ta t ing ho t s ec t ions o f the j e t eng ine .

The A -T p roces s r equ i r es h igh -pu r i ty ch ro -mic ox ide as f eed mate r ia l . Th i s ch romic ox -i d e i s p r o d u c e d b y r o a s t i n g c h r o m i t e . C a r e

must be taken dur ing th is process to minimizethe sulfur , oxygen, and ni t rogen content of theend product . producing th is oxide is the capi-t a l - i n t e n s i v e p h a s e o f c h r o m i u m m e t a l p r o -d u c t i o n ,

Another chromium product , Chrome 98, a lsou s e s C r 2O 3 a s t h e i n p u t m a t e r i a l . C a r b o n i smixed with the oxide to form br iquet tes , whicha r e t h e n h e a t e d i n a v a c u u m f u r n a c e a t c l o s eto the melt ing point for several days . The car -b o n a n d o x y g e n f o r m c a r b o n m o n o x i d e g a s ,w h i c h l e a v e s b e h i n d b r i q u e t t e s o f c h r o m i u mmetal , The vacuum furnaces used for th is car -bothermic process are used for the product iono f o t h e r a l lo y s ( e. g ., l o w - c a r b o n f e r r o c h r o -mium) so that to ta l product ion capaci ty is d if -f i cu l t to meas u re . Chrome 98 competes w i thA - T c h r o m i u m f o r u s e i n s u p e r a l l o y .

C hr om ium metal of the highest purity, con-s u m e d i n t h e m o s t d e m a n d i n g s u p e r a l l o y a p -p l i c a t i o n s , i s p r o d u c e d b y t h e e l e c t r o l y t i cm e t h o d . T h i s p r o c e s s , b a s e d o n d e v e l o p m e n t sby the U.S. Bureau of Mines in the 1950s, usesferrochromium as a feed material. Chemical

processing removes the iron content of theferrochromium, and this “chrom alum” (chro-mium aluminum sulfate) is then dissolved inwater to prov ide th e feed for electrolytic cells.Chromium, deposited on cathodes, is periodicallyremoved . This prod uct is sold as regular grade(99.1 percent chromium) or further purified.

Production Capacity and Distribution

The worldwide distribution of production ca-pacity for ferrochromium and chromium metalis shown in tables 5-14 and 5-15. In 1979, the

United States had more than 225,000 tonnes(205,000 tons) of ferrochromium capacityamong seven firms, Of the six firms nowcredited with capacity, only two were operat-ing in 1983, fun ctioning at low levels of produ c-tion or only intermittently, Early in 1984, tem-porary respite was provided to one bankruptfirm with the award of a contract from the Gen-eral Services Administra t ion to upgrade121,173 tons of chromite in the national de-fense stockpile to ferrochromium. Table 5-16shows the increasing U.S. reliance over thepast decade on imports of both chromium fer-

roalloys and metal.In the p ast, the West’s sup ply of chromic ox-

ide, the precursor for aluminothermic chro-mium metal production, was supplied almostentirely by a single firm, the British Chrome& Chemical Co., which has an annual capac-ity of 12,700 tonnes of chromic oxide. In 1982,however, a subsidiary of the British firm, theAmerican Chrome & Chemical Co., began oper-ating a plant in Texas that produces chromicoxide, along with various chromium chemicals.Shieldalloy Corp. has been p roducing chromicoxide in the United States, but has used it forinternal consumption in the production of A-T metal. It has an annual output capacity of 1,400 tons of chromium metal, with the possi-bility of expanding capacity to 1,800 tons, if equipment normally used in the p rodu ction of




Table 5-14.—Ferrochromium Capacity, 1979 (in tonnes)

Charge High Medium Low Ferro-Country chrome carbon carbon carbon silico

Brazil . . . . . . . . . . . . . . . . . . . . . . 90,000 – — — —

Canada . . . . . . . . . . . . . . . . . . . . 50,000 – — — —Finland . . . . . . . . . . . . . . . . . . . . 50,000 – — — —France . . . . . . . . . . . . . . . . . . . . — — — — 2,000

West Germany. . . . . . . . . . . . . .q

q q q

35,000India . . . . . . . . . . . . . . . . . . . . . . 10,000+ qq 5,000 + 1,000

Italy, . . . . . . . . . . . . . . . . . . . . . . — 40,000 — 15,000 —(incl.

charge)Japan . . . . . . . . . . . . . . . . . . . . . 172,000 344,100 12,000 106,000 81,400Mexico . . . . . . . . . . . . . . . . . . . . — — — 6,000 –Norway . . . . . . . . . . . . . . . . . . . . — 20,000 18,000 — —Philippines . . . . . . . . . . . . . . . . . — q q q —South Africa . . . . . . . . . . . . . . . 270,000 30,000 – 10,000 55,000Spain . . . . . . . . . . . . . . . . . . . . . . — 28,000 – 10,000 —Sweden . . . . . . . . . . . . . . . . . . . . — 240,000 – 33,000 53,000Turkey. . . . . . . . . . . . . . . . . . . . . — 50,000 – 15,000 –United States. . . . . . . . . . . . . . . q 136,000+ q 36,000+ 53,000+Yugoslavia . . . . . . . . . . . . . . . . . — 68,000 – 15,000 5,500

Total . . . . . . . . . . . . . . . . . . . . 642,700+ 956,100+ 30,000 251,300+ 285,900+q —Capacity notavallable.

SOURCE: Charles River Associates, Processing Capacity for Critical Materials, OTA contract report, January 1984

Table 5-15.—Production Capacities for ChromiumMetal in the Non-Communist Countries-1981

(tonnes per year)

Table 5-16.—Chromium Ferroalloys and Metal:imports and Consumption (gross weight, short tons)

Ferrochromium Metala

Country Electrolytic Aluminothermica

France . . . . . . . . . . . . . . . . . . 900-1000Japan . . . . . . . . . . . . . . . . . . . 3,000-4,000 300-1,000West Germanyb . . . . . . . . . . 600,1,200Luxembourg . . . . . . . . . . . . . 0- 500Great Britain . . . . . . . . . . . . . 2,000-4,000United States . . . . . . . . . . . . 2,800-3,000 0-1,800aA.T~apaCity isdifficulttoestirnateSince wmefacilitim that are used forhe

production of otheralloys can beused forthe production of A-Tchromium Thewide range of capacity estimates reflecls this difficulty.bTheTO is an addit~onal “captive” producerof AT chromium in weSt Germany.

Its substantial production is sold directly to two or three companies within WestGermany

SOURCE: Charles River Associates, Processing Capacity for Cri!ical Materia/s,

OTA contract report, January 1984.

other alloys is employed. In addition, ElkemMetals, wh ich p roduces Chrome 98 at its plantin Marietta, OH, offers variable capacity be-cause it uses its vacuum furnaces for otherproducts, e.g., vanadium carbide and low-

carbon ferrochromium. But briquetting equip-ment for preparing the furnace feed materiallimits production to 1,400 tonnes (1,300 tons)of chromium metal per year. A small invest-ment in ad ditional briquetting equipment couldeasily double output.

1971: Imports . . . . . . . . . . . . . . . . . . . . 85,187 NAConsumption . . . . . . . . . . . . . . . 253,193 NAImports as percent of

consumption . . . . . . . . . . . . . 34 —

1974:Imports . . . . . . . . . . . . . . . . . . . . 161,573 1,960Consumption. . . . . . . . . . . . . . . 472,379 5,479

Imports as percent ofconsumption . . . . . . . . . , . . . 34 36

1980:Imports . . . . . . . . . . . . . . . . . . . . 297,218 4,075Consumption . . . . . . . . . . . . . . . 388,639 5,635Imports as percent of

consumption . . . . . . . . . . . . . 76 72aMetal irnpofl data Include unwrought metal, waste, and SCraPNA—Not available.

SOURCE: U S. Department of the Interior, Bureau of Mines, Minerals Yearbook,VOI 1, 1971, 1974, and 1980.

Western production of electrolytic chromiummetal comes from two plants, one each in Ja-pan and the United States. Toyo Soda h as a ca-pacity of 4,000 tonnes (3,600 tons) per year, andElkem has a 2,800-tonne capacity (2,600 tons).Plans to expand capacity to 4,500 tonnes atElkem were considered but shelved owing tolack of prospective markets.




The United States still has domestic capac-ity for all types of ferrochromium prod ucts, al-thou gh “p ractical” (in operating cond ition) ca-pacity no longer covers its needs. For instance,estimated pr actical capacity (1984-85) for high -carbon ferrochromium is placed at 130,000

tonnes (118,000 tons),44

while 1982 consump-tion totaled 215,000 tons.45 Imports are ex-

44Char]es River Associates, op. cit., p. 58.ASU.S. Department of the Interior, Bureau of Mines, Minerals

Yearbook 1982, vol. 1, p. 205.

pected to continue to erode U.S. production ca-pacity. Firms that appear to be able to remainviable—e.g., Globe Metallurgical Division of In-terlake, Inc.—have small, flexible furnaceswhich can handle special orders and producepremium grades. In terms of chromium m etal

production, the United States has the abilityto han dle all stages of both th e electrolytic andaluminothermic processes and produce a sub-stantial portion of domestic needs.

Cobalt Production and Processing

State-controlled mining operations producemore than 90 percent of the world’s cobalt sup-ply. The industry is dominated by one suchAfrican producer, Zaire, which directly sup-plies nearly 40 percent of U.S. imports. Unlikethe oth er first-tier strategic materials, the nu m-ber of producer countries has grown in the past20 years; and these four countries now hold 9percent of overall output. In addition, a num-ber of cobalt-containing ore deposits—includ-ing some in the United States—have beenevaluated in the past decade, but all await im-proved p rospects for primary ores and/ or co-balt before any operations will be considered.

Cobalt minerals are oxides, sulfides, or ar-

senides, and they occur in a number of geologi-cal environments. The majority of the world’scobalt production comes from a particulargeologic combination (stratabound copper de-posits associated with sedimentary rock) thathas only been found in Zambia and Zaire.Other geological types in which cobalt is lo-cated are laterite, hyp ogene, and h ydrotherm aldeposits. Hypogene deposits are formed dur-ing the crystallization of m olten rock in w hichminerals separate and accumulate. Hydrother-mal dep osits are formed when water contain-ing metals circulates through rocks, solidify-ing along fractures to produce vein deposits.The principal product derived from cobalt-bearing laterites is nickel in combination withiron; from hypogenes, nickel, and / or copp er.

Cobalt is only a secondary product of cur-rent mining operations; therefore, its mining

and refining is tied to the primary metals nickeland copper, Thus, normal market fluctuationsfor cobalt do not u sually directly influence de-cisions to alter production rates. Only twocountries have had the capability to producecobalt as a primary product: Zaire, partly be-cause of its high cobalt content ores (0.35 per-cent); and Morocco, whose cobalt arsenide oreswere mined until 1983. For other producers,increasing cobalt production in the absence of increased demand for copper or nickel meanseither bearing the cost of stockpiling copperor nickel or running a risk of depressing prices

by creating an oversupply in those markets.

Although 12 countries reported mine produc-tion of cobalt in 1982, Zaire supplied 45 per-cent of the world’s total output (table 5-17).Zambia contributed another 13 percent. Thesetwo African countries are the major sourcesof cobalt for the free world market, the prin-cipal consumers being the Un ited States, West-ern Europ e, and Asia. The United States is de-penden t on imp orts for all of its primary cobaltneeds. (Eight percent of consumption in 1982was provided by the recycling of purchasedscrap.) The Eastern bloc’s cobalt needs are sup-plied by the Soviet Union an d Cuba. Little co-balt is consumed by p rodu cer countries, exceptthe Soviet Union.




Table 5-17.—World Cobalt Reserves and Production by Country(million pounds of contained cobalt)

Average Percentgrade Production a of world

Producer country Reserves percent 1982 production

Australia. . . . . . . . . . . . . . . . . . . 50 0.10 4.8 9Botswana . . . . . . . . . . . . . . . . . . 20 0.06 0.6 1

Canada . . . . . . . . . . . . . . . . . . . . 100 0.07 3.3 6Finland . . . . . . . . . . . . . . . . . . . . 50 0.20 2.2 4Morocco b . . . . . . . . . . . . . . . . . . 0 1.20 1.5 3New Caledonia . . . . . . . . . . . . . 500 0.05 1.1 2Philippines . . . . . . . . . . . . . . . . . 300 0.08 1.1 2South Africa . . . . . . . . . . . . . . . 40 NA NA —

Soviet Union . . . . . . . . . . . . . . . 300 NA 5.2 9Zaire . . . . . . . . . . . . . . . . . . . . . . 3,000 0.35 24.9 45Zambia . . . . . . . . . . . . . . . . . . . . 800 0.25 7.2 13

Subtotal . . . . . . . . . . . . . . . . . 5,160 51.9 94Others. . . . . . . . . . . . . . . . . . . . . 840 3.4 6

Total . . . . . . . . . . . . . . . . . . 6,000 55.3 100aMine outpui.boperations suspended in December1982.NA—Not available,

SOURCE: U.S. Department of the Interior, Bureau of Mines. Reserve base: inera/ Commodity Prof//e 1983 Coba/tProduction: Minerals Yearbook 1982, vol. 1, p. 258

Foreign Production of Cobalt

The cobalt industry is divided into two groups:vertically integrated firms, which mine oresand process them into cobalt products, andmine p roducers, wh ich sell semipr ocessed oresto refiners. Mining is singly controlled in eachprod ucer coun try, except in Canad a, Australia,and South Africa. As table 5-18 shows, a tangleof multi-national firms produce cobalt. U.S.firms h ave interests in Au stralia (Freeport an d,indirectly, Asarco), Botswana (Amax), Canada(Newmont Mines and Superior Oil), the Philip-pines (indirectly, Superior Oil, through Sher-ritt Gordon), and Zambia (Amax).

Cobalt flows w orldwide in a n um ber of formsun til final prod ucts such as m etal (electrolytic)cathodes and powder, cobalt salts, and oxidesare prod uced for sale to ind ustrial users. Evenwithin integrated firms, intermediate productsare often shipp ed from the m ining country else-where for final processing. However, there isa growing trend toward complete processing

in the country of origin.In an emergency, one advantage of vertically

integrated processing in the producing coun-try is that final cobalt products—principallypure metal—can be air shipped at no great in-

crease in cost. Intermediate products, on theother hand, have few metal units per pound,and shipping them other than by sea is costly.During the Shaba up rising in Zaire in 1978 and1979, air transpor tation p roved to be a su ccess-ful export method.

Because of cobalt’s varied and complex proc-essing flows (see the following section on co-balt processing), mine production cannot bediscussed independently from final processing.

Cobalt prod uction and import d ata often referto both the mine producer and the downstreamprocessing countries. When integrated mineproducers and independent refiners are bothconsidered, the world’s sources of refined co-balt products appear to be diverse, althoughZaire still dominates. As table 5-19 indicates,the flow of semiprocessed ores is toward theconsuming nations. Zaire, Zambia, and Fin-land have integrated firms which can com-pletely process their ores into cobalt cathodeand powder forms. South Africa now exportsboth cobalt chemicals (sulfate) and metal p ow-ders. Some South African intermediates, how-ever, are still shipped to England and Norwayfor processing. Canada’s Inco now has the ca-pability to produce metal from its ores butmaintains the option to ship intermediates to



Ch. 5–Strategic Material Supply Ž 163

Table 5-21 .—Potential Foreign Cobalt Sources

Estimated cobalt content,million pounds

Production Estimated IeadtimeSite per year Deposit to production

Gag Island, Indonesia. . . . . . . . . . . . . 2.8 400 2 to 3 yearsKilembe, Uganda . . . . . . . . . . . . . . . . . NA 784 1 to 3 yearsWindy-Craggy, Canada . . . . . . . . . . . . NA 982Musongati, Burundi . . . . . . . . . . . . . . . NA 160 NARamu River, New Guinea . . . ., , ... , 5.9 NA +5 yearsGoro, New Caledonia . . . . . . . . . . . . . 2.0 NA 3.5 to 5 yearsMarcona Mine, Peru . . . . . . . . . . . . . . 4.0 NA =2 yearsAlbania refinery . . . . . . . . . . . . . . . . . . NA NA z 1985NA—Data not available.


Following is a brief discussion of each major cobalt mine producer’s operations and theprocessing route of the ores. The industry ex-perienced a cutback in mine production anddelay in expansion plans because of the 1981-82 worldwide recession. In 1984-85 future pros-pects have been regarded cautiously.

Australia

Only intermediate cobalt products are pro-du ced in Australia. The major prod ucer, West-ern Mining, is also the third largest nickel pro-ducer in the world. For cobalt recovery, thecompany processes nickel sulfide ores from de-posits in western Australia into mixed nickel-cobalt sulfides, which are shipped to SherrittGordon in Canada for processing into cobalt

powder. Queensland Nickel in northeasternAustralia also produces a mixed nickel-cobaltsulfide, but its ores are nickel oxides fromlaterite deposits. The intermediate product isshipped to Nippon Mining’s refinery in Japanunder a life-of-mine contract. Agnew Mining’snickel sulfides ar e smelted by Western Miningin Australia and refined by Amax at PortNickel in Louisiana. Although a minor worldsource of cobalt, Agnew is one of Am ax’s tw ocurrent sources of cobalt intermediates. In-ternally, Australian producers rely on rail fortransportation between mining, smelting, andexporting phases of production.

Botswana

The two mines in Botswana, Selebi andPikwe, are operated by BCL Ltd. (15 percent

government owned). The smelting furnace atthe mining comp lex had a produ ction peak of 47,000 tonnes of matte (nickel and copper at38.5 percent each and cobalt at 0,56 percent)or, 479,000 pound s of contained cobalt in 1981.The matte is sent by railroad through SouthAfrica to the port of East London or throughMozambique to Maputo for sea shipment toAmax’s refinery in Port Nickel. The SouthAfrican route is preferred because the loadingfacilities at East London are more efficient.Botswana RST has been reevaluating its cop-per-nickel sulfide ore d eposits in recent years.Preliminary indications are that the reservescould be increased significantly, but an invest-ment in extensive drilling is needed for con-firmation.

Canada

Canada has two integrated mine producers,Falconbridge and Inco, and one independentrefiner, Sherritt Gordon. Most of Canada’s co-balt deposits are located in the Sudbury areaof Ontario and are classified as nickel/ coppersulfides. Falconbridge smelts its ores into amixed metal matte containing nickel, copper,and cobalt (1 percent). This material is thenshipped to Falconbridge’s refinery in Kris-tianstad, Norway, where cobalt cathodes are

produced. Inco has produced cobalt oxide atits own plants in Port Colborne and Thomp-son, Canada, Recently, an electrolytic plantwith a design capacity of 900 tonnes (1.6 mil-lion pounds) of metal per year began operationat Port Colborne to complete domestic proc-




Photo credit Inco, f.td

Cobalt is recovered from nickel and copper ores in theInco processing pIant at Port Colborne, Ontario

essing of the ores. Cobalt oxide will still be pro-du ced at Thompson, with some being shipp edto Inco’s refinery in Wales for final process-ing. Inco and Falconbridge together normallyhave the capacity to mine ores containing 9million pou nd s of cobalt per year. Inco’s smelterhas a maximum output capacity of 4 millionpounds of cobalt per year. However, worldmarket conditions have red uced actual outpu tby half in the past few years. Sherritt Gordonstated in 1983 that if the price of cobalt roseto $10 per pou nd (signaling improved markets),the company would triple its output of cobalt

powder . 47

aTAmerjcan Metal Market, Oct. 27, 1983.

Finland

The integrated firm Outokumpu Oy, Fin-land’s sole producer, derives cobalt from cop-per sulfide ores containing copper, zinc, andcobalt; the ores are from the firm’s Keretti andVuonos m ines in eastern Finland. A cobalt con-

centrate is subsequ ently pr ocessed at th e Kok-kola refinery on the west coast. Products in-clud e both cobalt pow der and salts. Outokump ohas been conducting exploration and processdevelopment work (a new concentration tech-nique based on leaching technology) at theTalvivaara deposit near Sotkamo in order toimpr ove the firm’s reserve figur es and developa new source of cobalt, as well as nickel, zinc,and copper. Total resources have been esti-mated at 300 million tons of ore which, witha cobalt grade of 0.02 percent, represents60,000 tons (120 million pounds) of cobalt. If

the p rocessing technique p roves feasible, about10 million tons of ore (containing 4 millionpou nd s of cobalt) could be produced ann ually.

Morocco

Cobalt production in Morocco was discon-tinued in December 1982 because declining re-serves and increased mining costs made thefirm’s cobalt production noncompetitive. Abetter worldwide economic climate could en-courage broaden ing of the reserve base and re-opening of the mines. Morocco’s ores are

cobalt-iron-nickel arsenides, and Morocco isthe only world producer for which cobalt hasbeen the primar y prod uct. The ores were proc-essed in France by Metaux Speciaux, a subsidi-ary of Pechiney Ugine Kuhlmann, the state-owned metals group. The oxide and metalproducts were consumed internally. (MetauxSpeciaux now receives cobalt intermediatesfrom SLN in New Caledonia for processinginto salts.) Amax considered using Moroccanores and ores in the tailings at the UgandaKilembe copper mine as a feed for its U.S.plant. Neither source presents any technical

problems, bu t it is difficult an d costly to trans-port the ores from either spot in northernAfrica to the Botswana smelter for initial proc-essing.



—.


In 1982, the Trade and Development Pro-gram of the U.S. International DevelopmentCooperation Agency completed a study of theprospects for Moroccan cobalt production.48

The study reported that, although the reserveswere approaching exhaustion, the potential fordiscovering new cobalt deposits in the BouAzzer region (site of the closed mines) was veryhigh, suggesting that extensive geologicalstudies be undertaken.

New Caledonia

Only 8 percent of the cobalt in SLN’s oresis recovered because most of its nickel oxideores are smelted directly into ferronickel. (Seediscussion of cobalt losses due to ferronickelproduction in the following processing sec-tion.) The cobalt intermediates that are pro-duced by SLN’s smelter are processed in

France by Metaux Speciaux. Cofremmi, S. A.,a firm controlled by Amax, BRGM (France),and Patino N.V. (Netherland s), has studied thefeasibility of mining the nickel laterite depos-its containing cobalt at Goro, estimating a co-balt output of 1,000 tons (2 million pounds) peryear. A deposit at Tiebaghi has been investi-gated by Amax. Both deposits could be ex-ploited u sing existing technology, but eventu alproduction from either source will depend onthe nickel market.

The Philippines

Some 20 nickel laterite deposits, with vary-ing cobalt content, have been identified in thePhilippines, although only one is in p rodu ction.Marindu que d erives cobalt from a large depositwith 0.10 percent cobalt content at Surigao onNonoc Island. A mixed nickel-copper sulfideis shipped to Japan for refining into cobaltcathodes by Sumitomo Metal Mining. Marin-duque planned a cobalt refinery with a ratedoutput of 1,200 tons (2.4 million pounds) peryear, but current financial problems have pro-hibited any action. It is estimated that th e plant

would take about 18 months to complete.

48u .s. I Hternatlona] r)e~~e]opment Cooperat ion Agenc }’, Tradeand I)e\’elopment Program, Aforocco Cobalt hf i ss ion , Februar~r1982,

South Africa

Cobalt from the Union of South Africa is pro-duced from nickel products separated duringplatinum ore beneficiation. Data on actual co-balt production became available only recently.Production in 1981 has been estimated at

475,000 pou nd s of recovered cobalt. Two p ro-ducers, Rustenburg and Impala, are now fullyintegrated within South Africa. Rustenburgprocesses nickel mattes into cobalt sulfate ata plant jointly owned with Johnson-Matthey.Impala’s mattes are p rocessed into cobalt pow -der at its refinery at Springs in the TransvaalProvince, A third (minor) producer, WesternPlatinum Ltd., ships mattes to the Falconbridgeplant in N orway for processing. (Falconbridge,a Canadian firm, is part owner of WesternPlatinum.)

Zaire

The copper oxide and mixed oxide-sulfidedep osits of Zaire have one of the world’s high-est concentrations of cobalt (average 0.3 per-cent). Gecamines (the government mining firm)recovers cobalt after the last step of the copperores pr ocessing. This m akes cobalt p rodu ctionrelatively inexpensive, but because the opera-tions seek to m aximize copp er recovery, over-all cobalt recovery from the m ined or es is onlyin the 30-percent range. Mine-to-metal cobaltproduction is integrated at the mining area,

Gecamines’ two refineries produce cobalt metalcathodes.

Metallurgic Hoboken Overpelt in Belgiumhas an a greement w ith Zaire to process refinedcobalt into cobalt chemicals and extra-finepowder. During the depressed markets of thepast few years, Gecamines has stockpiled co-balt rather than substantially curtail its produc-tion rate. Estimates are that, by the end of 1982,Zaire and its sales agents were holding morethan 20,000 tonnes (36 million pounds) of co-balt produ cts off the world market. This amou nt

exceeds Zaire’s 1980 production rate of 17,090short tons (34 million pounds),

Zaire was granted $360 million in loans bythe International Monetary Fund in 1984 tohelp compensate for the decrease in export




Indonesia/Gag Island

After 10 years and a $50 million investment,further investigation on th e nickel laterite proj-ect at Gag Island, Indonesia, was halted in 1981by P.T. Pacific Nikkei Indonesia. The partner-ship of U.S. Steel, Amoco Minerals, and IjmuidenHoogovens BV of The Netherland s was su bse-quently liquidated. The reasons given for aban-doning the project were the depressed state of the nickel and cobalt markets and the uncer-tainty of the futu re, along w ith interference bythe Indonesian government, A production rateof 60,000 tons of nickel and 1,400 tons (2.8 mil-lion pounds) of cobalt for the first 10 years of operation had been projected,

(See also the Ramu River, Papua New Guinea,project discussion in the chromium section.)

Domestic Production of Cobalt

Currently, cobalt is not produced from do-mestic mines, but this has not always been thecase. U.S. mine production (fig. 5-3) reacheda high point in 1958, when about 4.8 millionpounds of contained cobalt were produced.(U.S. consumption of cobalt in 1958 was 7.5million pou nd s.) In th e 1948-1962 period, a totalof approximately 14 million pounds were ac-quired by the government through stockpilepurchases and Defense Production Act subsi-dies, Federal purchases included about 6 mil-

lion pou nd s of cobalt from the Blackbird Minein Idaho, and about 2.9 million pounds frommines in the Missouri Lead Belt (including theMadison Mine). There has been no p roductionfrom these mines since the Federal purchasecontracts expired more than two decades ago,During the period 1940-72, approximately500,000 pounds of cobalt were produced eachyear from iron ore pyrite concentrates takenfrom Pennsylvania’s Cornwall Mine.50

Since 1980, Federal subsidies for domesticcobalt production have again been proposed

as an alternative to stockpiling, These propos-

SOThe hlstoryr of domestic cobalt production, through 1968, isdiscussed in James C. Burrows, Cobalt: An industry Analysis, ”Charles River Associates Research Study (Lexington, MA: HeathLexington Books, 1971], pp. 103-113 and 185-189.

Figure 5-3.— Total U.S. Cobalt Production, 1945-71(cobalt content of mined ores)

50

48 .

1945 1950 1955 1960 1965 1970 1975

Years

SOURCE W!lllam S Kirk, Commodity Spec!allst, Bureau of Mines, Departmentof the Intenor, 1984

als are discussed later in this section, and alsoin chapter 8.

Domestic deposits that may yield cobalt tomeet national needs tod ay are the Blackbird d e-posits, the Madison Mine of Missouri and asso-ciated cobalt in the Missouri Lead Belt, the Gas-quet Mou ntain p roject in California, and in theDuluth Gabbro of Minnesota. Older, smallermines primarily located in the Eastern UnitedStates, such as Pennsylvania’s Cornwall Mine,are not considered potentially economic sources

by the Bureau of Mines.Fluctuating metal prices have made it diffi-

cult to assess domestic cobalt developmentprojects, In 1981, spokesmen for the Blackbird,Madison, and Gasquet Mountain projects all




stated that sustained market p rices of from $20to $25 per pound would be required to warrantproduction. 51 At that time, the market price forcobalt was $15 per pound, by 1983 it haddrop ped to $5 to $6 per p ound , and in 1984 wasbeing quoted at $10 to $12 per pound.

Although large deposits containing amountsof cobalt too sm all to be mined for cobalt aloneoccur throughou t the w orld, the Madison andBlackbird deposits could—according to theirproponents —supp ort the mining of cobalt asa prim ary ore. Other d omestic cobalt resourcescan be produced only as byproducts and wouldtherefore be unlikely to respond solely tochanges in the price of cobalt. The California-Oregon laterite deposits are primarily nickel,but the Gasquet Mountain project in northernCalifornia is dependent on nickel, chromium,

and cobalt prices for success. The Missourilead and zinc mines may have only a small rela-tive incremental cost for producing smallamounts of cobalt, but production at thesemines is dep endent on the base metals market.Moreover, cobalt recovery from these Missouriores may require changes in lead and zincprocessing practices and, in some cases, in enduse standards. With present technologies, it isthought that increased cobalt recovery wouldresult in higher iron concentration in recov-ered lead an d zinc, wh ich m ay not be satisfac-tory for consumers of lead-zinc products.52

The development of deposits in part of theDuluth Gabbro depend s on copper and nickelmarkets. At copper and nickel prices at leastdouble 1983 levels, these Minnesota depositscould become an attractive venture. Values of precious metals may also contribute to pros-pects for development of this area. However,the considerable excess prod uction capacity of U.S. copper mines and of Canadian copper andn ickel oper a tions da m pe n p r ospect s fo rproduction from these deposits...—

shearings before the U.S. Senate, Committee on Banking,

Housing, and Urban Affairs, Oct. 26, 1981, p. 145, Noranda Min-ing, the Blackbird Mine owners, now believe that a sustainedcobalt price of $16 per pound would make it feasible to bringthe mine into production due to improved mine planning andthe discovery of higher grade ores. The other mine owners havenot revised their 1981 figures.Szsi]verman, et al., Op . cit.

Given the proper economic incentives (sus-tained, higher market p rices for primary metalsand / or Government subsidies), dom estic sources(table 5-22) that have seen recent commercialactivity could annually supply 7.7 millionpounds of cobalt. Another 800,000 to 2 million

pou nds per year might be recovered from theDuluth copper-nickel sulfide deposits. (U.S.consum ption of cobalt in 1982 totaled abou t 10million poun ds.) At curr ent estimated resourcelevels, production from these deposits wouldrange from 12 to 25 years.53

Blackbird Mine

The Blackbird Mine is located in the SalmonRiver Mountains of Lemhi County, ID. TheCaldera Co. acquired claims to the BlackbirdDistrict in 1943 after investigations by the Bu-

reau of Mines revealed the presence of com-mercially feasible deposits of cobalt. Produc-tion began in 1950 with subsidies under theDPA running from 1952 through 1959, whenproduction ceased.54

Blackbird is now managed by Noranda Min-ing of Canada, which has proposed reopeningthe Blackbird Mine and concentrator to pro-duce 1,200 tons of copper-cobalt ore daily.55 Afinal environmental impact statement (EIS)was pu blished in 1982. Permits current ly allowprod uction of 300 tons d aily for a “p ilot” oper-ation. However, in 1981 Noranda began lay-ing off emp loyees, and wh en the final EIS wasissued, only a few workers were still on site.The project is on hold awaiting improvementin cobalt demand and p rices. The comp any hassealed off the mine at the 6,850-foot level, andthe mine is filling with water.

Ore reserves at Blackbird are now given at7.5 million tons of 0.72 percent cobalt (108 mil-lion pounds of contained cobalt) with 1.4 per-cent copper and 0.01 percent gold. The esti-

Saproduction ]evels at Blackbird, Madison, and Gasquet Moun-tain were stated in testimony during U.S. Senate hearings be-fore the Committee on Banking, Housing, and Urban Affairs onOct. 26, 1981. They were also confirmed to OTA in telephoneconversations with each mining firm in July 1984. Data forDuluth Gabbro is taken from the Minnesota study cited in note67.SqBurrows, op. cit., p. 187.Sssilverman, et al., op. cit., P. 67.




these mine wastes. The State of Idaho filed apre l iminary su i t under the Resource Conserva-

t ion and Reclamat ion Act against Noranda andp r e v i o u s o w n e r s f o r e n v i r o n m e n t a l d a m a g e .

Madison Mine and Missouri Lead Belt Deposits

Mines in the sou theast Missour i lead d is t r ic t

p r o d u c e d 5 . 2 m i l l i o n p o u n d s o f c o b a l t f r o m1 8 4 4 t o 1 9 6 1 . I n 1 9 7 9 , A n s c h u t z M i n i n g a c -qu ired the inac t ive Madison Mine , loca ted nearF r e d e r i c k s t o w n i n p a r t o f t h e o l d M i s s o u r iLead Bel t , an area where most o f the lead andz i n c m i n e s h a v e b e e n d e p l e t e d . T h e M a d i s o nMin e p r o d u ced 2 .8 m i l l i o n p o u n d s o f co b a l tf rom 1954 to 1961 , before i t was c losed . Them i n e a l s o p r o d u c e d l e a d , c o p p e r , a n d n i c k e l .T h e co b a l t m in e r a l i za t io n i s r ep o r t ed ly h ig henough in one zone in the mine to suppor t co-

b a l t p r o d u c t i o n a s a p r i m a r y o r e .I f r e o p e n e d , t h e m i n e c o u l d h a v e a n e s t i -

m a t e d a n n u a l p r o d u c t i o n o f 2 m i l l i o n p o u n d sof cobalt . Recoverable geologic (as opposed toeconomic) cobalt reserves at the Madison Mineare given as 37 mill ion pounds ( in 5.6 mill iontons of ore and 3.4 million tons of existing tail-ings) . 59 The depressed wor ld p r ice o f cobal t andlack o f Go v e r n m en t ac t io n o n p r o p o sed p r i ce

s u p p o r t s u n d e r t h e D e f e n s e P r o d u c t i o n A c th a v e l e d A n s c h u t z t o p o s t p o n e o p e n i n g t h e

m in e . I n 1 9 8 1 , co m p an y o f f i c i a l s sa id an e s t i -mated guaranteed price of about $25 per pound

w o u l d b e n e c e s s a r y t o p r o m o t e p r o d u c t i o nf r o m M a d i s o n .60 E c o n o m i c s t u d i e s h a v e n o tbeen rev ised to ref lec t any changes in min ingc o s t s s i n c e t h e n .

C o b a l t i n t h e M a d i s o n M i n e i s a s u l f i d e

m i n e r a l . A n s c h u t z M i n i n g h a s r e p o r t e d l yf o u n d a p r e v i o u s l y u n r e c o g n i z e d c o b a l t o r eb o d y t h a t d o e s n o t c o n t a i n t h e l e a d a n d z i n ccu s to m ar i ly a s so c ia t ed w i th co b a l t d ep o s i t s i nth e Misso u r i L ead Be l t . T h i s d i sco v e r y co u ldprove to be s ign i f ican t wor ldwide in iden t i fy -ing an add i t ional geo log ic env ironment fo r co-

b a l t o c c u r r e n c e s .

S’JJOhn Spisak, vicepresident for Operations for Anchutz Min-ing, persona] communication, ]uly 1984.

‘U.S. Senate, Committee on Banking, Housing, and UrbanAffairs, hearings, Oct. 26, 1981, p. 145.

A n u n d e r g r o u n d a n d s u r f a c e m i n i n g o p e r a -t ion has been p roposed fo r the Madison Mineinc lud ing a smel ter to re f ine i t s own ores andprocess ex is t ing ta i l ings f rom prev ious min ingper iods , as wel l as the ta i l ings f rom o ther leadb e l t p r o d u c e r s . P e r h a p s 3 0 0 , 0 0 0 t o 4 0 0 , 0 0 0

pounds of cobalt is recoverable from these tail-ings g iven the cur ren t technolog ies used by ther e g i o n ’ s l e a d m i n e s t o p r o d u c e l e a d a n d z i n cf r o m t h e i r o r e s .61 U p t o 1 . 5 m i l l i o n p o u n d s

might be avai lab le , g iven changes in lead andz i n c r e c o v e r y p r a c t i c e s .

A n o t h e r a n a l y s i s 62 of ex t rac t ing cobal t f romthe byproducts o f lead-z inc min ing in Missour ies t imates tha t 2 mi l l ion pounds cou ld be p ro-d u c e d p e r y e a r , b a s e d o n t h e r e c o v e r y o f 6 5p e r c e n t o f t h e c o b a l t c o n t e n t i n c u r r e n t l ymined ores . Cap i ta l requ irements would be in

the range of $40 mill ion to $65 mill ion to in-

s ta l l equ ipment to t rea t the raw mater ia ls (mi l lt a i l i n g s , sm e l t e r s l ag s , m a t t e s , co p p e r co n cen -trates and copper-cobalt cakes) , This is substan-

t i a l l y l e s s t h a n w o u l d b e r e q u i r e d t o f i n a n c ea new min ing ven ture and would l ike ly y ie ldan acceptable return if the price of cobalt were$ 2 0 to $ 2 5 an d i f r aw m a te r i a l s f r o m sev e r a lf i r m s o p e r a t in g in t h e L ead Be l t we r e p o o led

to p r o v id e eco n o m ies o f sca l e . Su ccess f u l im -

p l e m e n t a t i o n w o u l d a l s o r e q u i r e w o r k , i n a d -d i t i o n t o t h a t a l r e a d y d o n e b y t h e B u r e a u o f Min es Ro l l a Resea r ch Cen te r , o n t ech n o lo g ie s

to r eco v e r co b a l t f r o m m i l l t a i l i n g s an d b l a s tf u r n a c e s l a g .

Gasquet Mountain Project

Cobalt resources are contained in nickell a t e r i t e d e p o s i t s i n n o r t h e r n C a l i f o r n i a a n d

O r e g o n .

Cal i fo rn ia Nickel Corp . , a whol ly owned sub-s id iary o f Ni-Cal Development Ltd . o f Canada ,h a s p r o p o s e d d e v e l o p m e n t o f t h e G a s q u e tM o u n t a i n m i n e o n u n p a t e n t e d m i n i n g c l a i m sit controls in the Six Rivers National Forest in

nor thern Cal i fo rn ia . The mine , a long wi th asso-

elsilverrnan, et a],, Op . Cit., P. 111.eZThiS preliminary analysis was provided to OTA by Amax,

which has extensive holdings in the Missouri Lead Belt fromwhich it produces lead and zinc.




ciated milling and processing facilities, asproposed would annually produce 2 millionpounds of cobalt (cathode), 19.4 million poundsof nickel (cathode), 50,000 tons of chromiteconcentrate (42 to 43 percent chromic oxide),and 100 ,000 tons o f magnes ium ox ide , M ine

l i f e h a s b e e n c a l c u l a t e d a t a p p r o x i m a t e l y 1 8years .63

California Nickel has sought product ion sub-s id ies f rom the government for the operat ion , 64

one of several factors that have made the pro-p o s a l c o n t r o v e r s i a l . V i a b i l i t y o f t h e p r o j e c th inges on the economics o f mu l t ip le ( coba l t ,n ickel , chromium) metal product ion and proc-ess ing, on success ful mit igat ion of several ad-v e r s e e n v i r o n m e n t a l i m p a c t s , a n d o n d e m o n -s t r a t i o n t h a t m i n e a r e a s c a n b e r e c l a i m e d , Adraf t EIS was publ ished in March 1983, but the

p r o j e c t a p p e a r s t o b e i n s u s p e n s i o n ,Bas ed on a K a is e r Eng ineer s ’ mine f eas ib i l -

ity study for the project, estimated total ore re-s e rves a t G as que t M oun ta in a r e 23 .6 mi l l iontons (16.0 mil l ion of which are proven reserveswith grade of 0.75 percent nickel, 0.07 percentcoba l t , and 2 pe rcen t ch romium) , K a i s e r e s t i -m a t e d a n n u a l o r e p r o d u c t i o n o f 1 . 3 2 m i l l i o nt o n s w o u l d b e r e q u i r e d t o g e n e r a t e 2 m i l l i o np o u n d s o f c o b a l t p e r y e a r .

K a i s e r a l s o e x a m i n e d s e v e r a l p r o s p e c t i v ep r o c e s s i n g t e c h n i q u e s . I t c o n c l u d e d t h a t w i t h

t h e u s e o f a h i g h - p r e s s u r e a c i d l e a c h p r o c e s s( a w e l l - e s t a b l i s h e d 2 0 - y e a r o l d h y d r o m e t a l -l u r g i c a l t e c h n o l o g y ) m a x i m u m e x t r a c t i o n o f b o t h n i c k e l a n d c o b a l t w o u l d o c c u r . I n a d d i -t ion , use of th is process would make i t poss i-b le to recover mos t of the chromite in the oresu s i n g e x i s t i n g g r a v i t y c o n c e n t r a t i o n m e t h o d sa n d , “ m i g h t y i e l d a n o t h e r c o m m e r c i a l p r o d -u c t . ” 6 5

The operat ion would be a surface mine oper-ating at the crest of 2,000- to 3,000-foot moun-t a i n s . T h e m i n e r a l i z a t i o n o f t h e G a s q u e t d e -

pos i t i s s ha l low , dow n to abou t 25 f ee t ; and8sDOCUrnentS provided to OTA by California-Nickel, March

1983.134u.s. Senate, committee on Banking, Housing, and urban

Affairs, hearings, Oct. 26, 1981, p. 185.5~KaiSer Engineers, Interim Report for the Ga sq u e t ~omtain

Project, March 1982, p. 5-10.

m i n i n g w o u l d c o n s i s t o f s c o o p i n g u p t h e s o i lw i th backhau le r s . Cos t to bu i ld the p ro jec t in1 9 8 2 w a s p r o j e c t e d a t $ 3 0 0 m i l l i o n .6 6

California Nickel has now spl i t i t s operat ionsin to two separate uni ts . One oversees the min-ing p ro jec t i t s e l f and the o the r , N i -Ca l Tech-nology Ltd . , i s pursuing the development andpromotion of a modif ied acid leach process ingt e c h n o l o g y t h a t w a s i n t e n d e d f o r t h e G a s q u e tmine . S ix pa ten t app l ica t ions have been f i l edso far, and Ni-Cal intends to build a pilot plantto test the process on ores from various sources.M a r k e t i n g o f t h e p r o c e s s i s a i m e d a t l a t e r i t emining operat ions in the Pacif ic r im area. Nod o m e s t i c p r o s p e c t s a r e i n s i g h t .

Duluth Gabbro

T h e D u l u t h G a b b r o , i n n o r t h e a s t e r n M i n -

n e s o t a , h a s b e e n s u g g e s t e d a s a p o t e n t i a lsource of cobalt, as well as PGMs. Cobalt pro-duct ion would only be as a byproduct , depen-d e n t o n t h e p r o d u c t i o n o f c o p p e r a n d n i c k e l .The area contains an es t imated recoverable re-s ou rce o f 20 mi l l ion tonnes o f copper , 5 mi l -l ion tonnes of n ickel , 80 ,000 to 90,000 tonneso f coba l t ( 145 mi l l ion to 164 mi l l ion pounds ) ,and lesser amounts of t i tanium, p lat inum, gold ,a n d s i l v e r .67

A R e g i o n a l C o p p e r - N i c k e l S t u d y w a s r e -leased by the State of Minnesota in 1979. 68 T h e

s tudy , conduc ted f rom 1976 to 1979 , a s s es s edt h e t e c h n i c a l a s p e c t s o f t h e d e v e l o p m e n t o f m i n i n g a c t i v i t i e s i n t h e D u l u t h G a b b r o a n dr e s u l t a n t e n v i r o n m e n t a l , e c o n o m i c , a n d s o c i a limpacts . Mining schemes were developed witht h e g o a l o f g e n e r a t i n g r e p r e s e n t a t i v e m o d e l s ,r a t h e r t h a n f o r p r e d i c t i n g o r r e c o m m e n d i n gt h e c h o i c e s t h a t m i g h t a c t u a l l y b e m a d e b y acompany deve lop ing a s pec i f i c o re depos i t . I tw a s d e c i d e d t h a t t e c h n o l o g y a n d e c o n o m i ccond i t ions r equ i r ed l a rge - s ca le opera t ions fo rM innes o ta ’ s low -g rade r es ou rce to compete inlate 1970s markets . Thus , the models provided

f o r a m i n i m u m a n n u a l p r o d u c t i o n o f 1 0 0 , 0 0 0

661bid., p. 18.eTMinnesota Environmental Quality Board (State planning

Agency), The Minnesota Regional Copper-Nickel S t u d& y , 1976-1979 , vol. I, Executive Summary, August 1979, p. 10,6aIbid.




tonnes of metal (85 percent copper and 15 per-cen t n icke l ) . Th ree hypo the t i ca l mine- s mel te rc o m p l e x e s w e r e c o n s i d e r e d , o n e e a c h w i t h a nu n d e r g r o u n d , o p e n p i t o r c o m b i n a t i o n u n d e r -g r o u n d / o p e n p i t m i n i n g o p e r a t io n . A ss u m i n gsimultaneous development of these three models ,

an annual production of 254,000 tonnes (231,000t o n s ) o f c o p p e r c o u l d b e g e n e r a t e d o v e r ap e r i o d o f a p p r o x i m a t e l y 2 5 y e a r s .

A repor t prepared for OTA es t imated poten-tial overall cobalt recovery of 25 to 30 percentf rom Duluth ores , with s ignif icant amounts of the cobal t los t to mil l ta i l ings and dur ing re-f i n i n g .69 F o r e v e r y 1 0 0 , 0 0 0 t o n n e s o f c o p p e rp r o d u c e d , a s s o c i a t e d c o b a l t r e c o v e r y w o u l dbe abou t 4100 to 450 tonnes o r abou t 800 ,000p o u n d s . 70

O p e r a t i o n o f c o p p e r - n i c k e l p r o d u c t i o n a t

Duluth would be marginal ly economic at metalp r ices o f $1 .50 pe r pound fo r copper and $4per pound for n ickel , in January 1983 dol lars . 71

(In 1 9 8 3 , the U.S. producer delivered price forcopper cathodes averaged 77 cents and the spotp r ice fo r n icke l averaged $2 .20 . ) 7 2

Other Domestic Cobalt Deposits

P e n n s y l v a n i a ’ s C o r n w a l l M i n e p r o d u c e d c o -balt for many years, yielding 400,000 to 600,000pounds annua l ly as a byproduc t o f min ing i ronore. From 1940 until operations ceased in 1972,

the mine produced 100,000 tonnes (182 millionpounds ) o f coba l t o r e . The G ap N icke l M inein Lancas ter County , PA, has 1 mil l ion tons of r emain ing o re a t g r ades o f 0 .1 to 0 ,3 pe rcen tcobal t . Al though these small cobal t depos i ts arepotent ia l resources , there has been no thoroughexaminat ion of the economic and technical v ia-bi l i ty of mining them. They have usual ly beenomit ted f rom Minerals Avai labi l i ty Sys tem Ap-p ra i s a l s tud ies conduc ted by the U .S . Bureau

—.--————eesi]verman, et al., Op. cit., P. 181.TOThe Mjnnesota Re@ona] Copper-Nickel Stud y, Op . cit., p. 10.Plsi]verman, et a]., Op. cit., p. 182. These data are based on

conclusions from a 1975 study, Mineral Bene f ic ia t ion Studiesand an Economic Evaluation of Minnesota Copper-Nickel De-

posit From the Duluth Gabbro by 1. E, Lawver, et al,, for the U.S.Bureau of Mines.

7ZU s Department of the Interior, Bureau of Mines, Minera l s. .and Materials; A B imon th l~ Survey, December 1983/January1984, pp. 25 and 29.

of M ines becaus e the i r p robab le coba l t y ie ldi s n o t c o n s i d e r e d s i g n i f i c a n t .7 3

Proposed Federal Subsidies for Domestic

Cobalt Producti on

As i s d i s c u s s e d i n c h a p t e r 8 , p r o p o s e d r e -

n e w a l o f F e d e r a l s u p p o r t f o r d o m e s t i c c o b a l tp r o d u c t i o n h a s b e e n t h e s u b j e c t o f c o n s i d e r -a b l e d e b a t e i n C o n g r e s s a n d t h e A d m i n i s t r a -t i o n . M o s t o f t h i s d e b a t e h a s f o c u s e d o n p r o -p o s e d F e d e r a l s u p p o r t f o r d o m e s t i c c o b a l tp r o d u c t i o n , u n d e r T i t l e 1 1 1 o f t h e D e f e n s eProduction Act. (Title 111 authorizes purchasec o m m i t m e n t s , l o a n s , a n d l o a n g u a r a n t e e s f o rmater ia ls , services , and faci l i t ies cons idered es -s e n t i a l f o r d e f e n s e n e e d s . ) p r e s i d e n t R e a g a n ,in h is Apr i l 1982 nat ional mater ia ls p lan sub-m i t t e d t o C o n g r e s s u n d e r t h e N a t i o n a l M a t e -r i a l s P o l icy , Res earch , and D eve lopmen t A c tof 1980, indicated that analyses were ongoingto determine whether DPA incent ives might bemore cos t e f f ec t ive than s tockp i le pu rchas esi n s o m e c i r c u m s t a n c e s .

The g rea t f luc tua t ion in coba l t p r i ces s ince1978 in fact has made i t very d if f icul t to makec o st - b en e f it c o m p a r i s o n s a m o n g s t o ck p i l e / d o -m e s t i c p r o d u c t i o n o p t i o n s , a s w a s m a d e c l e a rin hearings held in early 1983 about an Admin-is t ra t ion proposal to provide federal ly guaran-teed pr ice suppor ts for domes t ic cobal t produc-t i o n .74 In A ugus t 1982 , the F edera l Emergency

M a n a g e m e n t A g e n c y ( F E M A ) i s s u e d a r e p o r tc o m p a r i n g f o u r a l t e r n a t i v e c o m b i n a t i o n s o f T i t l e I I I s ubs id ies and s tockp i le pu rchas es fo rc o b a l t — r a n g i n g f r o m e x c l u s i v e r e l i a n c e o ng o v e r n m e n t s t o c k p i l e p u r c h a s e s o n t h e w o r l dmarket to extens ive rel iance on a government-g u a r a n t e e d m i n i m u m p r i c e t o d o m e s t i c c o b a l tproducers—which might be used to real ize them a t e r i a l s a v a i l a b i l i t y e q u i v a l e n t o f t h e s t r a t e -gic s tockpile goal of 85 million pounds of co-b a l t .7 5

——.—Tssl]Verrnan, et al., OP. cit.

T4U.S. senate, committee on Banking, Housing, and urbanAffairs, Extension of the Defense Production Act, hearing onMar. 21, 1983, 98th Cong. , 1st sess . , Senate Hearing 98-66 (Wash-ington, DC: U.S. Government Printing Office, 1983).

psFedera ] Emergency Management Agency, Alternative U.S.

Policies for Reducing the Effects of a Cobalt Sup plyDisruptiox]—

Net Economic Benefits a nd Bud getary Costs, August 1982, asreproduced in its entirety in ibid,, pp. 15-1oo.




For each scenario, cobalt prices, budget ex-penditures, and overall economic costs wereprojected over a 10-year period (1981-90) underboth a “no disruption” assumption and a peace-time disruption assumption affecting 50 per-cent of normal U.S. supplies. The disruption

was assumed to occur in 1985. Each of thesescenarios, wh ich add ressed th e 1981-90 period,were intended to provide an equal degree of supply security. FEMA recommended, as themost cost-effective option, a so-called “hybrid”alternative entailing a 5-year program of gov-ernment-stimulated production of 10 millionpounds of cobalt annually from domesticmines, supplemented by stockpile purchasesof 1,42 million pounds for 10 years. The domes-tic production would be stimulated through afederally guaranteed minimum price of cobaltof about $15 per pound.

When hearings were held on the FEMA pro-posal in March 1983, cobalt prices had fallento about $6 per p ound on w orld markets. TheU.S. General Accounting Office (GAO), whichtestified on the FEMA report,76 found tha tFEMA’s “stockpile only” analysis in a nondis-ruption scenario assumed cobalt prices wouldrise to over $36 per poun d by 1990, more thandouble the price projections made by other gov-ernment agencies. In its hybrid scenario,FEMA assumed that Federal price guaranteesfor domestic production would only be neces-

sary for a 5-year period. This would only bethe case if FEMA’s p rojected cobalt price is as-sum ed to be accurate. GAO foun d that, at 1983prices, buying cobalt on the world market forthe stockpile would be far cheaper than sub-sidizing domestic production.

Another Defense Production Act issue thathas received considerable attention concernsa Department of Defense (DOD) proposal forpilot plant p rodu ction of dom estic cobalt in or-der to evaluate the qu ality of this cobalt for de-fense applications, In 1983, the Air Force is-

sued a draft Request For Proposal (RFP) topotential domestic producers concerning sucha project. According to DOD, the draft RFP was

T~Statt}m ent of J, Dexter peach, Director, Resources corn mu-nitj’ and Economic Iii\’ision, U ,S. General Accounting Office,as reproduced in ibid., pp. 3-6.

issued for two reasons: 1) to secure “definitivedata through legal contracting procedures fora cost/ benefit analysis of dom estic cobalt pr o-du ction”; and 2) “to determine if domesticallyprod uced cobalt will meet national secur ity re-quirements.” 77 DOD maintains that the issu-

ance of the draft RFP was simply to evaluatethe costs and benefits of the proposal, in or-der to support activities of its DPA Title IIIsteering committee, which has been set up toevaluate candidate DPA projects. However, thecobalt pilot plant became an issue in congres-sional debate about am endm ents to the Defenseproduction Act in April 1984. (The DPA amend-ments are discussed in chapter 8.)


Lateritic deposits containing cobalt are suited

to open p it mining and to the continuous sys-tems of excavators and conveyor belts that w illgradually become more common in steep pits.Open p it mining in hard er rock wou ld be prac-ticable in the copper-nickel-cobalt deposits of the Duluth Gabbro, with un derground miningat depths involving open stoping and room-and-pillar methods. In the steeper hard-rockbodies of cobalt ore such as at Blackbird, cut-and-fill mining and the new ramp-in-stope sys-tem underground methods could be appro-priate.

Process technology has been developed forrecovering cobalt from the Blackbird andMadison deposits, and preliminary pilot-scaletesting has been completed for both propertiesand byproduct cobalt production from Missouri’slead mines. Commercial facilities have notbeen designed or tested, however. Ore process-ing systems could be d esigned for these dep os-its, plus Duluth Gabbro, that would allow ship-ment to the existing Amax Nickel refiningplant at Port Nickel for final processing.

The Bureau of Mines has condu cted researchinto reclaiming the cobalt from Missouri lead

ores wh ich is currently n eglected (an estimated77As discussed in U.S. senate, Committee on Banking, HO Us-

ing, and Urban Affairs, hearing: Reextension of the DefenseProduction Act, Hearing on S. 1852, Sept. 15, 1983, Senate Hear-ing 98-400 (Washington, DC: U.S. Government Printing Office,1983), p. 159.




2 .5 million pounds of contained cobalt per yearis lost) during lead, zinc, and copper process-ing.78 In other research, the Bureau investi-gated the extraction of cobalt from the liquidwhich remains after dilute acid solutions haveleached copper from its ore. One U.S. copper

mine might be able to contribute 1.3 millionpounds of cobalt per year through this proc-ess, wh ich h as not y et been economically evalu-ated.79

Research on Blackbird complex arsenicalcopper-cobalt ores is attempting t o find the ba-sis for less costly extraction technology thancurrently exists. Investigations have centeredon methods for improving hydrometallurgicaltechnology because severe sintering and atmos-pheric pollution problems occur with an alter-native roasting procedure. Selective solvent ex-traction processes are being compared withconventional precipitation processes for re-moving iron and recovering cobalt, nickel, andcopper from the resultant leach liquids.80

A comprehensive plan to recover all of themineral values in Duluth Gabbro ores (nickel,copper, cobalt, silver, gold, and PGMs), ratherthan concentrate on the primary metals, hasundergone investigation by the Bureau of Mines Twin Cities Research Center in Min-nesota. The approach is a combined pyrometal-lurgical-hyd rometallurg ical p rocess to recovera maximum amount of the byproduct metals

without sacrificing energy or metallurgical effi-ciency.81

Laterite ores containing cobalt could bene-fit from a commercial hydrometallurgical proc-ess developed by N i-Cal Technology Ltd. as aspin-off of the Gasquet Mountain project innorth ern California. After separating out chro-mite from the mined ores, a slurry of the re-sidual nickel-cobalt-iron minerals is leached,producing separate nickel-cobalt sulfide and

WI. s. Depaf l rnen t of the Interior, Bureau of Mines, Research83, p. 89.

mU . S. Department of the Interior, Bureau of Mines, hfinera]Zndustry Survey : “Cobalt in February 1984. ”

~Resea rch 83 , op . cit., p. 91.@lNational Materials Advisory Board, A Review of the Minerals

and Materials Res earch Program s of the Bureau of Mines, p.53; Research 83, op. cit., p. 83.

iron concentrates. Nickel and cobalt are thenproduced by standard selective precipitationand solvent extraction methods, and furtherrefining is accomplished by electrowinning.

Domestic and Foreign Cobalt Processing

The primary industrial uses of cobalt are insuperalloys, magnetic alloys, catalysts for thepetroleum and chemical industries, and as abinder in tungsten carbide cutting tool mate-rials. While catalyst producers use chemicalforms of cobalt, superalloy and tungsten car-bide makers use pure metal in cathode andextra-fine powder forms, respectively. Mag-netic alloy produ ction uses powd er metallurgytechniques, and fabricators purchase eithercathodes or powder forms.

Cobalt is produ ced from a variety of ores, and

the processing, tailored for each deposit, de-pends on the type of ore in which the cobaltoccurs, as figure 5-4 shows. Processes can begrouped into two general categories, pyro-metallurgical and hydrometallurgical. Thepyrometallurgical process is usually conductedin three stages. First, the minerals in the oreare concentrated. Second, a smelting or roast-ing process is used to p rodu ce a matte contain-ing cobalt, with associated su lfur and the n ickeland/ or copper of the original ores. In the thirdstep, the matte is treated chemically or elec-trolytically to separate the cobalt as metallicpow der or cathod es, or as cobalt chemicals. Inhydrometallurgical processes, the concentratedore can be chemically processed without theintermediate smelting step but does require theapplication of heat and pressure.

Much of the cobalt content of mined ores isnever recovered, owing to processing technol-ogies and economics or to excessively lowcobalt grades. Processes are such that a highrecovery of the primary metal is often detri-mental to the recovery of cobalt. In Zaire, forinstance, the recovery of the cobalt content in

the mined ores is only 30 percent, and in Zam-bia, 25 percent. (Cobalt is lost into tailingswhen the ores are initially concentrated andagain when the concentrates are processed.)Yields of cobalt could be increased somewhat



.


Figure 5-4.—Simplified Flowchart for the Production of Cobalt

Nickelsulfide

concentrates

I

Convertednickel matte

I

Nickeloxide

ore

by improving the efficiency of producing co-balt from the concentrates,

Nickel laterite ores tend to have cobalt asso-ciated with them in very low (0.02 to 0,11 per-cent) grades. These ores can be leached toseparate out both nickel and cobalt, The eco-nom ics of nickel prod uction, if energy sourcesare available and competitively p riced, usu allydemand, however, that the nickel ores be smeltedinto ferronickel. The cobalt contained in the

smelted ores is either lost into the ferronickelor the slag. New Caledonia, for instance, pro-duces limited amounts of cobalt from nickellaterite deposits, because its main effort is con-centrated on prod ucing ferronickel. The cobaltthat is produced is a byproduct of some orediverted into nickel metal production. Substan-tially higher amounts of cobalt are producedby one n ickel mining firm in Australia as a re-sult of its ore-matte-nickel metal processingsteps. Other copper and nickel producers to-tally neglect the cobalt units in their deposits.In this category are the Hanna Mining opera-tion at Cerro Matosa in Colombia, the Larcooperations in Greece, Bonao in the DominicanRepublic (Falconbridge), and the now-moth-balled Inco operation in Guatemala.

Ferronickel was originally developed by NewCaledonia’s SLN and is used in lieu of nickelmetal in the steel industry for the productionof iron-nickel steels. Use of nickel metal is lessenergy-intensive than ferronickel, but ferro-nickel is not so much more expensive that steel-maker will alter their traditional methods.Nickel metal, how ever, mu st be used wh en thecobalt in ferronickel would be detrimental tothe final product.

Domestic Processing Capacity

The United States has the operating capac-ity only to refine imported cathodes and proc-ess nickel-cobalt mattes or recycled materialsinto cobalt powder (table 5-23). In 1980, onlyone-tenth of the 10,825,000 pounds of cobaltmetal consumed in the United States was pro-duced domestically. The United States has nocapacity to produce superalloy-grade cobalt,This material is all imported.

At its refinery in Louisiana, Amax Nickelproduces cobalt powder, which is sold for ap-plications other than superalloys. The plant,which mainly produces nickel, was originallydesigned with a 5 million to 6 million pound




Table 5-23.—U.S. Cobalt Processing Capacity

SourceProduct material Firm Annual operating capacity

Superalloygrade . . . . . . . none

Powder . . . . . . . . Imported smelted Amax Nickel 1 million pounds

ores (matte) Capable of production expansionto about 3 million pounds; canadd electrolytic circuit to producesuperalloy grade

Extra-finepowder . . . . . . Cathodes (Zaire) Carol met 2 million pounds

Domestic scrap GTE 32,000 pounds (pilot plant operation)Salts

(chemical) . . . Recycled Hall Chemical 1 million poundscatalysts and Plus 3 million to 4 million poundsscrap from projected plant; could add

circuit to produce superalloy gradeSOURCE Office of Technology Assessment.

U.S. Cobalt Consumption, 1982

Thousand pounds

End usecontained cobalt

Superalloys. . . . . . . . . . . . . . 3,319Steel alloys. . . . . . . . . . . . . . 326Other alloys . . . . . . . . . . . . . 2,829Chemical . . . . . . . . . . . . . . . . 2,846Other ... , . . . . . . . . . . . . . . . 148

Total . . . . . . . . . . . . . . . . . 9,468SOURCE: U.S. Department of the Interior, Bureau of Mines. Minera/s Yearbook

1982

annual output capacity for cobalt. Availablefeed an d markets, however, have restricted th eplant to a m a x i m u m of just over 1 m i l l i o npounds. Estimates ar e that output could beraised to some 3 million pounds in a very shor ttime, provided feed was available. In addition,all plans and design work have been completedfor adding an electrowinning operation thatwould produce cobalt cathodes suitable for su -peralloy use. This plant modification wouldtake approximately 2 years to complete. Feedfor the p lant is current ly impor ted f rom Bots -wana and Australia in the form of mixed metalmat tes . O ther s ou rces —e.g . , M orocco , U ganda ,a n d P e r u — h a v e b e e n i n v e s t i g a t e d a n d , w h i l ed e e m e d t e c h n i c a l l y p o s s i b l e , h a v e b e e n d i s -c a r d e d a s e c o n o m i c a l l y u n f e a s i b l e . A m a x ’ s

operat ion is a l ikely candidate to process andr e f i n e a n y d o m e s t i c n i c k e l - c o b a l t o r e s t h a tm i g h t o n e d a y b e p r o d u c e d .

A t C a r o l m e t , I n c . , i n N o r t h C a r o l i n a , a nextra- f ine powder for use in tungs ten carbidesi s p r o d u c e d f r o m c o b a l t c a t h o d e s i m p o r t e d

f rom Zaire. The p lan t capac i ty i s 1 ,000 tonnes( a b o u t 2 m i l l i o n p o u n d s ) a n n u a l l y . T h e o t h e rd o m e s t i c s o u r c e o f e x t r a - f i n e p o w d e r i s t h eG TE Chemica l and M eta l lu rg ica l D iv i s ion a tT o w a n d a , P A . E m p l o y i n g t h e i r o w n p r o c e s s ,tungs ten carbide scrap is used as the feed ma-ter ia l , and a p i lo t p lant now in operat ion hasa c a p a c i t y o f 1 7 5 t o n n e s ( 3 2 , 0 0 0 p o u n d s )annua l ly . Th i s p roces s cou ld a l s o be us ed top u r i f y s u b s t a n d a r d g r a d e s o f c o b a l t a n d , i f equ ipmen t w ere added to compac t the pow derp r o d u c e d , c o u l d p o s s i b l y p r o v i d e a s o u r c e o f coba l t f o r s upera l loy us e .

H a l l C h e m i c a l h a s p l a n t s i n O h i o a n d A l a -bama to recycle catalys ts and scrap metals , in-c lud ing coba l t , in to chemica l p roduc t s fo r r e -us e . (S ee a d i s cus s ion abou t the p ros pec t s fo r

cobal t recycl ing in chapter 6 .) A new plant hasb e e n p l a n n e d b y H a l l t h a t w o u l d m o r e t h a nt r i p l e i t s c a p a c i t y , b u t t h e p r o j e c t h a s b e e nhal ted by the recent recess ion, A large por t ionof th is new capaci ty could be used exclus ivelyfor cobalt refining (from ore concentrates) with



—


a lead time of 3 to 4 months . Ins tal la t ion of an above. Still , operational domestic capability re-

e lec t ro ly t i c c i r cu i t to p roduce coba l t ca thodessui table for superal loy would require about 18m o n t h s .

U n l ike the dec l ine in domes t ic capac i ty fo r

process ing manganese and chromium, U.S . co-b a l t p r o c e s s i n g c a p a c i t y h a s i n c r e a s e d i n t h epast 5 years with the addition of the two extra-f i n e p o w d e r p r o d u c t i o n f a c i l i t i e s m e n t i o n e d

mains a t the las t s tages of process ing only . In i-t i a t i o n o f d o m e s t i c o r e p r o d u c t i o n w o u l d r e -quire the development of smelt ing and ref in ingfac i l i t i e s , a s w e l l . Th i s cou ld be accompl i s hedby upgrad ing the s t and ing p lan t s in o rder fo r

the United S tates to have the greates t f lexibi l -ity and ability to use the cobalt produced in themos t c r i t i ca l app l ica t ions ( e . g . , s upera l loy ) .

Manganese Production and Processing

The bulk of the world’s manganese ore is pro-duced in a few countr ies where large, d iscretedepos i ts of h igh-grade ore are mined by mult i -nat ional f i rms . These depos i ts of fer the poss i-

b i l i ty for expans ion on a large scale , but sub-s t a n t i a l m i n e e x p a n s i o n w o u l d h a v e t o b ea c c o m p a n i e d b y e x p a n s i o n o f p r o c e s s i n g a n dt r a n s p o r t a t i o n f a c i l i t i e s , T h e W e s t e r n H e m i -s p h e r e h a s t w o s o u r c e s o f m a n g a n e s e o r e s ,Mexico and Brazi l . One new depos i t may comeo n t o t h e w o r l d m a r k e t s o o n — p a r t o f t h eG r a n d e C a r a j a s p r o j e c t i n B r a z i l . H o w m u c hthis operat ion wil l provide in terms of net gaini n t h e w o r l d ’ s e x p o r t s u p p l y o f m a n g a n e s e i s

u n k n o w n o w i n g t o B r a z i l ’ s g r o w i n g d o m e s t i cs t e e l i n d u s t r y .

The l a rges t occu r r ences o f w or ldw ide eco -n o m i c m a n g a n e s e d e p o s i t s a r e s e d i m e n t a r y i nor ig in , formed f rom ei ther volcanic or weather-i n g a c t i v i t y . R e s i d u a l o r e s , w h i c h m a k e u p as mal l pa r t o f the economic bas e , a r e fo rmedin a concen t r a t ion p roces s s imi la r to tha t fo rl a t e r i t e d e p o s i t s . M a n g a n e s e i s a l s o f o u n d i nh y p o g e n e d e p o s i t s a n d w i t h m e t a m o r p h i crocks , pr imary sedimentary ores that have beensubjected to changes in mineralogy and textured u e t o p r e ss u r e a n d / o r h e a t . Ma n g a n e se i sm i n e d a s a n o x i d e a n d / o r c a r bo n a t e m i n e r al ,and both minerals are of ten present to varying

d e g r e e s i n e a c h d e p o s i t ,T h e b u l k o f t h e o r e m i n e d t o d a y , h o w e v e r ,

is an oxide mineral . In i t ia l process ing of theseores involves only sor t ing by s ize and concen-t r a t i n g t o i n c r e a s e t h e m a n g a n e s e c o n t e n t o f

the ores to 40 and 48 percent. (U.S. industrys t a n d a r d i s 4 8 p e r c e n t f o r f e r r o a l l o y p r o d u c -t i o n ) , M a n g a n e s e c a r b o n a t e m i n e r a l s , o n t h eother hand, mus t be conver ted to an oxide by

r o a s t i n g . C u r r e n t l y , o n l y M e x i c o m i n e s c a r -b o n a t e m i n e r a l s , b u t t h i s m i n e r a l t y p e m a yeventual ly become a more impor tant source asthe h igher grades of oxide ores are exhaus ted .

M a n g a n e s e o r e s a r e c l a s s i f i e d a s m e t a l l u r -g ica l , chemica l , o r ba t t e ry g rades . F o r meta l -l u r g i c a l g r a d e ,82 the i ron , s i l i ca and es pec ia l lyphos phorus con ten t a r e impor tan t , In ba t te rygrades the manganese content is expressed interms of manganese dioxide, and these orestypically contain from 70 to 85 percent MnO2

(44 to 53 p e r c e n t m a n g a n e s e ) .

The U n i ted S ta tes impor t s 99 pe rcen t o f i t sc o n s u m p t i o n o f m a n g a n e s e o r e a n d m e t a l . I n1980, manganese ore accounted for 41 percentof U.S . impor ts of manganese, but an ongoingtrend in producer countr ies to in tegrate fer ro-a l l o y p r o d u c t i o n w i t h o r e m i n i n g i s d e c r e a s -i n g t h e r a t i o o f m a n g a n e s e o r e t o f e r r o a l l o y sin U.S . impor ts and throughout wor ld markets .

In 1982, manganese ore was produced in 26countries . Of these, 8 accounted for 98 percentof to tal wor ld product ion . As indicated in table5 -24 , the S ov ie t U n ion and S ou th A f r ica p ro -

duced 64 percent , while f ive countr ies (Gabon,Aus tral ia , Brazi l , India , and China) each madea s u b s t a n t i a l c o n t r i b u t i o n o f o v e r a m i l l i o n

azAbout 9C I ~rcent of the world’s manganese ores are destinedfor metallurgical uses,




Table 5-24.—World Manganese Ore Reserves and Production by Country (thousand tons)

Reserves(recoverable metal Product ion Estimated man- Percent of world

Country producer content) 1982 ore output ganese content product ion

Australia . . . . . . . . . . . . . . . . . . . . . . . . 51,600 1,248 37-53 5Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,900 1,433 38-50 6China ... , . . . . . . . . . . . . . . . . . . . . . . . 15,000 1,760 20+ 7

Gabon . . . . . . . . . . . . . . . . . . . . . . . . . . 110,000 1,667 50-53 7India. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,500 1,596 10-54 6Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . 3,500 561 27+ 2South Africa . . . . . . . . . . . . . . . . . . . . . 407,000 5,750 30-48 23Soviet Union. . . . . . . . . . . . . . . . . . . . . 365,000 10,140 30-33 41Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,500 599 2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 24,754 100SOURCEU.S Department of the lnterioL Bureauof Mines

Resemes—Minera/ Cornrnodltv Profi/e 1983” Manganese, D 8,table3

Production–Minerals Yearbo6k 1982, voI l ,tabl;9, p.587

short tons of ore. Mexico is the smallest pro-ducer of the eight at half a million short tons.Major exporters to market economy countriesare South Africa, Gabon, India, Brazil, andAustralia. India’s exports are controlled by agovernment quota system and are destined pri-marily for Japan ; the other four nat ions are theprincipal sup pliers to the United States, Japan ,and Western Europe.

Foreign Production of Manganese

In general, the manganese mining interestsof each prod ucer coun try are controlled by oneor two firms, reflecting the concentrated natureof the deposits in these coun tries. Two p rivate

firms with primarily local, but also interna-tional, investors dominate South African pro-duction. Their deposits in South Africa occurin its northern Capetown Province in the Post-masbur g and Kurum an (Kalahari) districts. Thelatter provides 75 percent of the total output.

The Soviet Union’s government-controlledoperations produce mainly from two areas inwestern Russia: the Nikopol Basin deposits,wh ich contribute high-volum e production; andthose in the Tchiatura Basin, which prov ide thehighest grade ores. Mexico and Gabon eachhave one privately operated firm in which thegovernment holds a minority interest. Brazil’sproducing firms are a mixture of private andpublic sector interests. Brazil’s manganese de-posits in the Grande Carajas Development Proj-ect are being developed along with iron ore

mines by Cia. Vale do Rio Doce (CVRD), a cor-poration jointly owned by the Brazilian gov-ernment and local, private shareholders.

By contrast, manganese production in Indiaand China is supplied by numerous small- ormedium-sized operations scattered throughouteach country . China’s prod uction is run by th enational government, while India’s ores aremined by a mixture of local private and stateor national government firms.

U.S. firms participate in a number of foreignmanganese mining operations (table 5-25).United States Steel has interests in Gabon’sComilog and South Africa’s Associated Man-ganese; International Minerals & Chemical of

New York has a minority interest in SouthAfrica’s Samancor. Bethlehem Steel owns partof Brazil’s ICOMI and until the late 1970s wasa partner in Mexico’s Autlan. British investorsare heavily involved with South African pro-du cers through trad itional ties with the Anglo-American Corp., Ltd., Anglo Transvaal-Con-solidated Co. Ltd., and General Mining UnionCorp. Ltd (Gencor). These investment h ouses,or groups, hold interests in Samancor andAssociated Manganese.

Historically, ores have been exported fromprod ucer countries after relatively minor bene-ficiation. The ore is ultimately moved to con-sumers by sea, which, along with transporta-tion from a mining area to a shipp ing port, canaccount for a major portion of the cost of theproduct to consumers. Approximately two-




Table 5-26.—Ferromanganese and Silicomanganese Production by Country(thousand short tonnes, gross weight)

Countrya

Argentina. . . . . . . . . . . . .AUSTRALIA . . . . . . . . . . .Belgium . . . . . . . . . . . . . .BRAZIL . . . . . . . . . . . . . .Canada. . . . . . . . . . . . . . .CHILE . . . . . . . . . . . . . . .CHINA . . . . . . . . . . . . . . .France . . . . . . . . . . . . . . .Great Britain . . . . . . . . . .INDIA . . . . . . . . . . . . . . . .ITALY . . . . . . . . . . . . . . . .JAPAN . . . . . . . . . . . . . . .North Korea . . . . . . . . . .SOUTH KOREA . . . . . . .MEXICO . . . . . . . . . . . . . .Norway. . . . . . . . . . . . . . .Peru . . . . . . . . . . . . . . . . .Poland . . . . . . . . . . . . . . .SOUTH AFRICA . . . . . . .Spain . . . . . . . . . . . . . . . .SOVIET UNION . . . . . . . .United States . . . . . . . . .Venezuela . . . . . . . . . . . .West Germany . . . . . . . .YUGOSLAVIA . . . . . . . . .Zimbabwe . . . . . . . . . . . .Other C . . . . . . . . . . . . . . .

1974Percentof total

Percent1980 of total

Percent change1974-80

3469

108124100

12NA587

91163133

1,18200

70577

0138400211

1,075740

0353

440

13

0.51.11.7

2.01.60.2

9.41.52.62.1

19.0

1.19.3

2.26.43.4

17.311.9

5.70.7

0.2

3912494

30395

6390551

57193141969

7760

172496

1

183650239

1,644377

4248

733

334

0.51.71.3

4.01.30.15.27.30.82.61.9

12.91.00.82.36.60.02.48.63.2

21.85.00.13.31.00.04 .4

1580

–13144 – 5

–50

– 6 –37

186

–18

146 –14

336313

53 –49

–3066

2,469Total . . . . . . . . . . . . . . . 6,224 100.0 7,523 100.0 16

auPPer ~a~e lndlcates Countv Was ore producer in both years, but did nOt necessarily cover its needsbproduced o r e i n 19740niy.

Cln 1974 ,ncludes Thailand and Sweden; In 1980 includes BuLGARIA, Czechoslovakia, East Germany, and portugal All Were

ferroalloy producers in 1974butamountof manganese ferroalloys unknown; thus,total shown for 1974 production ls notaccurate

SOURCE: U.S, Department of the Interior, Bureau of Mines, Minera/s Yearbook. 1976and 1981

Tasmania, south of the Australian mainland,

where hydropower is available, is it economicto produce ferroalloys. However, ore must beshipped approximately 3,000 miles from thenorth coast of Australia by sea, reducing someof the cost advantage of integrated ore and fer-roalloy production. New manganese ferroalloyproduction is being added in Brazil and India.During recessionary periods this productionappears on the export market instead of beingconsumed in domestic steel industries.

As indicated by table 5-27, there have beenshifts over the last 20 years in the r elative ou t-put of ore producer countries. Most notably,world production has been increasingly con-centrated in the eight producer countries listed.From 79 percent in 1960, they now supply 97percent of the world’s total ore needs. The mostrecent prod ucer to enter the world m arket was

Australia’s Groote Eylandt in 1966. There is

one new manganese mining project now underdevelopment; Carajas in Brazil may add exportproduction by 1986.

Between now and 2000, virtually all of thegrowth in total world output of manganese orewill come from the expansion of existing minesrather than the opening of new mines. A de-crease or cessation of production from onesource would force expansion of productionfrom the remaining suppliers, Current worldmining capacity is substantially greater thandemand, as shown in table 5-28. In 1981 only73 percent of existing capacity w as used, Thatunused capacity was 1½ times South Africa’stotal output. Under such conditions, rapid ex-pansion of production from existing mines isquite feasible. In times of tighter markets, thereis potential for expansion of current mine ca-



———. ..—


Table 5-27.—Historical Manganese Ore Production, 1960-80, by Country(thousand short tons, gross weight)’

(percent of world total)

1960 1965 1970 1975 1980

Producer country Tons Percent Tons Percent Tons Percent Tons Percent Tons Percent

Australia . . . . . . . . . . . . . 68 <1 112 1 828 4 1,714 6 2,226 8

Brazil . . . . . . . . . . . . . . . . 1,101 7 1,539 8 2,071 10 2,376 9 2,515 9China . . . . . . . . . . . . . . . . 1,323 9 1,102 6 1,100 5 1,100 4 1,750 6Gabon . . . . . . . . . . . . . . . 0 0 1,411 7 1,602 8 2,444 9 2,366 8India . . . . . . . . . . . . . . . . . 1,321 9 1,815 9 1,820 9 1,688 6 1,814 6Mexico . . . . . . . . . . . . . . 171 1 144 1 302 2 473 2 493 2South Africa . . . . . . . . . . 1,316 9 1,738 9 2,954 15 6,359 23 6,278 22Soviet Union . . . . . . . . . . 6,473 43 8,351 43 7,541 38 9,324 34 10,750 37

Subtotal . . . . . . . . . . . . 11,773 79 16,212 83 18,218 91 25,478 94 28,192 97Other . . . . . . . . . . . . . . . . 3,216 21 3,345 17 1,866 9 1,598 6 869 3

Total . . . . . . . . . . . . . 14,989 100 19,557 100 20,084 100 27,076 100 29,061 100aores Vary widely In contained manganese, see table 22

SOURCE U S Department of the Interior, Bureau of Mines, M/nera/s Yearbooks, 1961, 1966, 1971, and 1981

Table 5-28.—Manganese Mine Capacity and Usage in 1981, by Country

(thousand short tons, contained manganese)

Estimated annual PercentProducer country

Estimated unusedcapacity in use capacity

Australia . . . . . . . . . . . . . . . . . . . . . . . . 1,300 580/o 550Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . 1,350 76 320China . . . . . . . . . . . . . . . . . . . . . . . . . . . 550 96 22Gabon . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300 64 470India. . . . . . . . . . . . . . . . . . ... . . . . . 800 72 225Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . 300 81 60South Africa . . . . . . . . . . . . . ... , . . . 3,000 72 840Soviet Union . . . . . . . . . . . . . . . . . . . . 3,800 80 760Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 485 63 178

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 12,885 73 3,610SOURCE US Department of the Interior, Bureau of Mines, &finera/s Cornrnodify Profr/e 1983 Manganese

pacity, especially in South Africa, Gabon, andAustralia. Given a year or more extra lead time,Brazil and Mexico could increase their p rodu c-tion, as well.

Caracas in Brazil and a site at Tambao in Up-per Volta are the only deposits of manganeseore that might alter future supply patterns. TheTambao deposit suffers from its location, farfrom existing transportation facilities. Activ-ity there was halted at the end of the explora-tion phase. Although the Carajas project isproceeding, obtaining capital for development

of such d eposits is difficult because they mu stprod uce ore for markets that are alread y filledby sup pliers with large reserves. Thus, the cur-rent ore producer countries will be the majorproducers of the future. Among these, the ma-

j o r expor te r s a r e expec ted to be S ou th A f r ica ,G a b o n , a n d A u s t r a l i a , a l l o f w h i c h h a v e s u b -s tant ia l resources in re la t ionship to their ownd o m e s t i c n e e d s .

In contras t , India’s ore product ion is increas-ingly t ied to i ts expanding domes t ic s teel pro-duction. India is also limited in the export mar-ket by the low grade of i ts manganese depos i tsand the ine f f i c iency o f i t s overa l l opera t ions .Braz i l ’ s fu tu re as a majo r s upp l ie r to the ex -por t market is uncer ta in , Facing the deplet ionof its most productive deposit in the 1990s, Bra-

z i l h a s i n s t i t u t e d a p o l i c y o f r e s e r v i n g m u c hof its ore, including 50 percent of Carajas’ fu-ture product ion , for fer roal loy product ion andthe domes t ic s teel indus try . I f the Carajas de-p o s i t r e a c h e s i t s p l a n n e d o u t p u t o f 1 m i l l i o n




tons of ore per year and is the sole source of exports, this policy will result in an export levelof about 50 percent less than current exportsfrom Brazilian manganese mines.

The Soviet Union w as once a major supp lierof manganese ore to world markets, but sincethe 1970s, it has concentrated on trade withinthe Eastern bloc. Historically, this provided forself-sufficiency am ong this group . In th e 1980s,however, some Eastern bloc countries (e.g.,Romania, Czechoslovakia, and Poland) havebegun satisfying a portion of their ore needsby importing from the sam e sources as the m ar-ket economy countries. The Soviet Union ne-gotiated w ith Gabon for supplies of ore in 1984and has purchased from Gabon, India, andAustralia in the recent past. The assumptionin the West is that, since the ore productiontonnages being reported from the Soviet Unionare not declining, they are experiencing adepletion of higher grade material. Chinaproduces for internal consumption, and thispolicy is expected to continue a s the coun try’sdomestic needs increase.

Following is a brief description of the oper-ations of the producer countries of interest,with discussion of major factors that may af-fect future development and production of oreand ferroalloys.

AustraliaGroote Eyland t Mining Co., a wh olly owned

subsidiary of the Broken Hill Proprietary Co,(BHP)-–Australia’s sole integrated steelmaker–-produces from open pit mines located on anisland 50 kilometers off the coast of the North-ern Territory. Beneficiated ore is hauled 16kilometers to Milner Bay for ocean shipping.Capacity has recently been increased to 2.6 mil-lion tons per year with the installation of aplant to upgrade ore fines (which were previ-ously discarded). Further expansion plans toincrease capacity to 3 million tons per yearhave been delayed because of unfavorable mar-ket conditions.

Barriers to expansion are the concentrationplants and loading facilities at Milner Bay.

Company officials have stated that, given anemergency, significant expansion in theseareas would take an estimated 3 years to com-plete. With government financial assistanceand guar antees of long-term markets, facilitiescould be in place in 2 years. Australia is cur-

rently heavily reliant on Japan as an export cus-tomer because of high shipping costs to othermajor consumers. Its one manganese ferroalloyplant is located in Tasman ia and was originallyconstructed to sup ply BHP steelmaking needs.Recent expan sion, however, has been based onthe export market.

Brazil

There are two principal ore-producing areasin Brazil, one in the Federal Territory of Amapaand the other in the Matto Grosso state. Theexisting mines’ location, remaining life, or orequality limit their attractiveness. The Amapa de-posits, owned by ICOMI, are located in north-ern Brazil, produce half of Brazil’s output, andare operated mainly for exports because of thehigh cost of transporting the ores to the steel-making center in southern Brazil. The steelplants are supported by the Matto Grosso oper-ations of Urucum Mineraco S. A., and a smalloperation in Minas Gerais. ICOMI’s reservesare expected to be dep leted by the 1990s. Pro-duction by Urucum (about 100,000 tons of man-ganese ore in 1980) is hampered by the qual-

ity (high alkali content) of the ores andaccessibility of the deposits, which lie 2,000kilometers from the nearest port. Future in-creases in production at Urucum could comefrom an underground deposit if manganeseprices were to double.

The Grande Carajas Development Project,some 900 kilometers from the Atlantic coastin the state of Para, is a mineral developmentthat includes iron ore, manganese, copper,nickel, gold, tin, and bauxite. The project isfinanced by national and international loans.Participants have included the EEC, Japan,West Germany, and the World Bank.

Three manganese deposits have been identi-fied: Azul, Buritirama, and Serene. Develop-ment of the Azul deposits (with reportedly 16




million to 24 million tons of manganese)83 isthe second phase of the project. The initialphase has included the preparation of iron oremines, along with the construction of the nec-essary infrastructure. A railroad to Sao Luizon the coast and new ocean port facilities at

Ponta d a Mad eira are expected to be completedin 1986, when m anganese production of metal-lurgical grade ores will begin,

The deposit is currently being exploited forbattery-grade ores w hich, because of their highvalue (grades up to 75 percent MnO 2), can beeconom ically transported by truck to the coastfor shipment, The metallurgical ores will behauled from an open pit mine 20 kilometers tothe railhead at the iron ore mine area. Proc-essing will consist of washing and crushing,using existing facilities originally constructedas a p ilot plant for the iron ores, It is expectedthat the outp ut from the m anganese mine willeventually total 1 million tonnes (900,000 tons)of about 48 percent manganese ores per year.With additional beneficiation equipment, thedeposit could support up to 2 million tonnesper year.84 This extension of facilities, however,mu st await favorable market conditions, An on-site ferroalloy plant was included in the orig-inal concept but lack of financing has shelvedthese plans.

U.S. Steel was involved in the discovery of the Carajas dep osit, but its interest was bou ght

out by CVRD in 1976. Utah International (pre-viously own ed by General Electric but in Ap ril1984 transferred to Broken Hill Proprietary of Australia) holds the rights to the developmentof the Bur itirama mangan ese deposits at Carajas;however, there are no development plans be-ing considered for the near future . 85 T h e

BsIJ{luis Fuchs of theCVRD office in New’ York, personal com-

munication, December 1983. Total reserves were placed at 65million tonnes of ore at about 48 percent manganese. Of thisamount, 10 million tonnes consists of battery grade material at74 to 75 percent Mn02. The National Materials Advisory Board,in Manganese Reserves and Resources of the World and Their

Industrial Implications, 1981, reported a crude ore resource of 65 million tonnes that woul{j wash 44 million tonnes of prod-uct grading 46.5 percent manganese. Thomas Jones, commodityspecialist at the Bureau of Mines, reports 45 million tonnes of ore at 40 percent manganese.

r341Jou is Fucbs, op. c it.

85Jean Goity, ~ub]ic Relations, Utah 1nternationa], San Fr an-

cisco, persona] communication, Februar]’ 1984.

Sereno deposits are currently u nexploited. To-gether, these deposits have considerably lessidentified reserves and resources than doesAzul.

Brazil has five firms involved in producingvarious types of manganese ferroalloys for both

domestic and export purposes.

Gabon

Market conditions now hold output fromGabon’s Moanda mines well below the 1979peak of 2,5 million tons. These mines are ca-pable of supporting up to 4 million tons peryear but shipments are limited to 3 m illion tonsper year via the available transportation sys-tem.86 This involves the use of a 76-kilometeraerial ropeway connection to the Congo’s railsystem, followed by a 560-kilometer rail trip to

the port of Pointe Noire. An alternate route,the Trans-Gabon railway, has been under con-struction since 1974. Completion to the minesite near Franceville (500 more km) plus up-grading of the timber port at Ow endo, Gabon,would make possible the shipping of the max-imum of 4 million tons p er year from Moanda,although current market conditions wou ld notmake increased shipments economically fea-sible, Development of ferromanganese facilitiesare under discussion, but no firm plans haveyet been made.

Mexico

The Molango d istrict d eposits in Mexico aremined by the Cia. Minera Au tlan S.A. de C.V.and represent significant reserves and re-sources which could support a substantial in-crease in production if the market and invest-ment funds were available. 87 The depositsconsist of two types, carbonates and oxides.The carbonate ores represent the bulk of theminerals present, and Autlan has reportedmeasured reserves of 28.4 million tons of car-bonate ore at 27.5 percent manganese (from a

total estimated resource of 1.5 billion tons at25 percent).

—.—————B6ROhert 1,’esperance, U.S. Steel Corp., Pittsburgh, pA, Per-

sona] communication, August 1983.E7NMAB 81, p. 39.




After mining and beneficiation, these car-bonate ores are converted to nodules of man-ganese oxide (39 to 40 percent manganese) ina rotary kiln near the mines, One of the difficul-ties that Autlan manages to overcome is therugged terrain of the Sierra Madre Oriental in

which their mines (open pit and und erground )are located. In these precipitous and denselyvegetated m oun tains, elevations vary from 200to 2,600 meters above sea level. The export ores(50 percent of Autlan’s production) must behauled 260 kilometers to Autlan’s maritimeterminal at Tampico on the Gulf Coast forshipment.

The quality of Autlan’s ores has been ques-tioned because of their high silica content an drelatively low grad es. The general commercialstand ard for ores used in ferroalloy produ ctionis 48 percent manganese. Although Autlan pro-du ces ferromanganese with its 40 percent ores,its customers blend the ores with higher gradeores in order to produce 78 percent ferroman-ganese, the U.S. industry standard for a high-carbon product. The high silica content makesthe ores most suitable for the production of sili-comanganese.

Several projects are currently being studiedby Autlan to enable them to expand their pro-duction. Among them are the opening of a newopen pit mine at Noapa, the installation of asecond r otary kiln, and a new water sup ply sys-

tem. Physically, the resources could support adoubling of production, but manganese pricesand dem and in the 1980s will not sup port su cha change in policy. The Trade and Develop-ment Program in the U.S. International Devel-opment Cooperation Agency has been activein studying the manganese deposits in Mexicoand in attempting to interest U.S. investors in

joint ventures with Autlan to expand its pro-duction. 88

South Africa

Associated Manganese and Samancor eachown m ines in both the Postmasburg and Kuru-

man (Kalahari) districts. The capacity of thesemines has been estimated to be greater than 9million tons of ore per year. Even at currentoperating rates, the reserves are sufficient tolast hundreds of years, and South African pro-duction is capable of rapid expansion. Trans-

portation, however, could be a limiting factorbecause ores must be shipp ed south from bothmining districts by rail to either Port Elizabeth(950 km directly south) or to Saldanha Bay,north of Capetown (800 km southwest).

South Africa has four firms engaged in pro-ducing various manganese ferroalloys, plustwo producing manganese metal. Ferroalloyproduction is integrated within mine produc-ing firms, either directly or through “group”investment houses.

Potential Source

At Tambao, Upper Volta, a remote area 350kilometers from a railhead, some 13 milliontonnes (12 million tons) of 52 percent oxideores have been identified. Extensive explora-tion work w as done an d feasibility studies werecompleted d ur ing the late 1970s wh ile the p roj-ect wa s being considered by a consortium con-sisting of a number of international firms in-clud ing Union Carbide, The group subsequentlyfell apart owing to the divergent goals and con-flicting interests of its members.” It would takeabout 5 years to bring the area into p roduction

and provide the infrastructure needed to ex-port the ores (the construction of a railroad anda port). Since Upper Volta is a landlocked coun-try, arrangements would have to be made w iththe Ivory Coast for rail transiting and the de-velopment of port facilities.

Domestic Production of Manganese

Domestic manganese has made some contri-butions to U.S. needs, especially in wartime.During the latter part of the 19th century, theUnited States produced sufficient manganese

from domestic dep osits to meet its needs. Withthe growth of the U.S. steel industry since 1900,

Sesee U.S. International Development Cooperation Agency,Trade and Development Program, Th e Molango Area (Mexico)

Mangan ese Deposits of Compa nia Minera Au t l an—The Largest Known Manganes e Ore Reserve in North Am erica, June 1983.

8gBenjamin Brittain, Union Carbide Corp., persona] commu-nication, August 1983.




The NMAB study stated that, while there wereno known deposits in the United States of man-ganese ores that could be exploi ted at currento r e v e n s u b s t a n t i a l l y h i g h e r p r i c e s , t h e b e s ts u i t e d d e p o s i t s f o r d e v e l o p m e n t i n a n e m e r -gency on a s ignif icant scale were those of the

C u y u n a R a n g e a n d i n A r o o s t o c k C o u n t y .9 8

The Bureau of Mines’ appraisal resul ts concur .In i t s e s t imates o f min ing capac i ty , a s s um-marized in table 5-30, these deposits could con-tr ibute the h ighes t levels of product ion and beab le to opera te f rom 14 to 61 year s .

In analyzing the impact of d if ferent var iables(e.g., beneficiation and transportation costs , by-product prices, State severance taxes), the Bu-reau of Mines determined that technologic im-provements leading to a reduct ion in the cos t———

Q13NMAB.323, p. 14 and p. 1.

of beneficiation methods would be the singlemost significant factor for improving the eco-nomic s ta tus of these depos i ts . Subs tant ia l in-c r e a s e s i n b y p r o d u c t p r i c e s , f o r i n s t a n c e ,w o u l d b e n e c e s s a r y t o s i g n i f i c a n t l y d e c r e a s et h e i n c e n t i v e p r i c e n e e d e d f o r d o m e s t i c m a n -

ganese. A 9-percent increase in i ron ore pr icesw o u l d p r o d u c e a 4 - p e r c e n t d e c r e a s e i n t h em a n g a n e s e i n c e n t i v e p r i c e a t C u y u n a R a n g e ,fo r in s tance . ( I ron i s a l s o a byproduc t o f theAroos toock area; s i lver a t Hardsel l in Ar izona;a n d s i l v e r , l e a d , a n d z i n c a t M o n t a n a ’ s B u t t eD i s t r i c t . ) 99


Manganese deposits in the United States arein a var ie ty of environments ranging f rom rela-

‘Kilgore, et al., op. cit., pp. 9-10.

Table 5-30. U.S. Manganese Resources and Potential Production

Demonstrated resource Estimated annual mine capacity

Contained ContainedManganese Ore manganese Ore manganese Estimated

grade (thousand (thousand (thousand (thousand minelifeProperty name by State (percent) tonnes) tonnes) tonnes) tonnes) (years)Arizona:

Hardshell Mine. . . . . . . . . 15.0 5,896 804 536 73 11

Maggie Mine(Artillery Peak) . . . . . . . 8.8 8,441 671 328 26 26

Colorado:Sunnyside Mine . . . . . . . . 10.0 24,909 2,264 635 58 39

Maine—Aroostock County:

Maple Mtn/Hovey Mtn . . . 8.9 260,000 20,965 4,263 344 61North District . . . . . . . . . . 9.5 63,100 5,472 2,620 227 24

Minnesota:Cuyuna North Range

(SW portion) . . . . . . . . . 7.8 48,960 3,490 3,570 254 14Montana:

Butte District(Emma Mine). . . . . . . . . 18.0 1,232 202 400 65 3

Nevada:Three Kids Mine . . . . . . . 13.2 7,230 868 1,050 126 7

Total . . . . . . . . . . . . . . 419,768 34,737 —

13,401 1,174SOURCES: Resources, ore grades, proposed ore mining capacity from U.S. Department of the Interior, Bureau of Mines, Manganese .4v&V/abi/ity-Dorrrestic, lC8889/1982.

Balance, calculated by OTA using that data

Apparent U.S. Manganese Consumption

Tons Contained metal

1979 . . . . . . . . . . . . . . . . ., . . 1,250,0001982 . . . . . . . . . . . . . . . . . . . . 672,000SOURCE: U.S. Department of the Interior, Bureau of Mines, &firrera/ Commodity

Summaries, 1984, p. 98.




t ively sof t depos i ts to s teeply d ipping veins inh a r d r o c k . T h u s , s t a n d a r d m i n i n g m e t h o d sw ou ld inc lude bo th underg round and open p i to p e r a t i o n s .

S o l u t i o n m i n i n g o f m a n g a n e s e o r e h a s b e e np r o p o s e d . T w o v a r i a t i o n s a r e p o s s i b l e . I n o n e

t h e o r e i s m i n e d , s p r e a d o n t h e s u r f a c e , a n da solvent is applied. This “heap leaching” proc-e s s p r o d u c e s a s o l u t i o n o f m a n g a n e s e w h i c hcan be co l l ec ted . In ano ther p roces s , “ in s i tuleaching, ” a hard-rock ore body is b las ted toinduce permeabi l i ty and the solvent is pumpedinto the f ractured ore body, The leached solu-t ion is then pumped out of the mine, These so-l u t i o n m i n i n g t e c h n i q u e s f o r m a n g a n e s e10 0

were under evaluat ion by the Bureau of Minesfor 2 years but the project was el iminated f romthe f i s ca l yea r 1984 budge t , P re l iminary eco -n o m i c a n a l y s i s i n d i c a t e d t h a t l e a c h e d m a n g a -

n e s e c o u l d c o m p e t e f a v o r a b l y w i t h f o r e i g nm a n g a n e s e o r e s f o r c h e m i c a l ( b a t t e r y ) i n d u s -t ry markets but not for the fer romanganese in-dustry. 101 Conventionally mined metallurgicalo r e s b o u n d f o r f e r r o m a n g a n e s e p r o d u c t i o n r e -qu i r e l i t t l e p roces s ing a f t e r min ing ; s o lu t ionm i n e d o r e s a r e u n c o m p e t i t i v e . A n o t h e r c o n -clus ion of the s tudy was that so lu t ion mininga p p l i e d t o d o m e s t i c m a n g a n e s e - s i l v e r o r eb o d i e s w o u l d p e r m i t t h e s e p a r a t i o n o f t h e s eminerals not poss ib le by o ther techniques . Thep r i v a t e s e c t o r h a s e x p r e s s e d s o m e i n t e r e s t i nthe process in order to obtain the silver values.

M a n g a n e s e c o u l d b e a b y p r o d u c t o f a n y s u c hoperat ion . A pi lo t p lant is apparent ly in oper-a t i o n i n t h e A r t i l l e r y P e a k a r e a o f A r i z o n a ,f u n d e d b y m a j o r m i n i n g c o m p a n i e s , t o t e s t ah e a p l e a c h i n g p r o c e s s o n m a n g a n e s e o r e s ,

M o s t o f t h e U . S . m a n g a n e s e r e s o u r c e s a r enot amenable to normal benef ic ia t ion methodsof gravity and flotation alone owing to their low

. ——.100S ~e ~,a rlous B u reau of Mines papers including ‘‘ Arizona’s

Artillery Peak Manganese Deposits and Their Potential for InSitu Leaching” (1981) by Peter G. Chamberlain; “Recovery of Silver From Manganese Ores” (1984] and “Recent Research onLeaching Manganese” (1983) b} Peter G, Chamberlain, John E.l~ah]rnan, and Charles A. Rhoades.

101 u ,s, Department of th e Interior, Bureau of Mines, R e s e a r c h

83 , op. cit., p. 5. Also National Materials Advisory Board, A Re-

~’ie~~ of the Atincra]s anti hlaterials Research Programs of theBureau of ,lfines, op. cit., 1984.

grad es. Chemical and roasting p rocesses (e.g.,the ammonium carbamate l each and s u l fu r d i -oxide roas t processes ) have been developed forbenef icia t ing domes t ic manganese. These proc-es s es have s o f a r p roved to be too cos t ly fo re x t e n d e d u s e . G r i n d i n g a n d f i n e - p a r t i c l e c o n -c e n t r a t i o n p r o c e s s e s m i g h t i m p r o v e t h e e c o -

n o m i c s . 102 A s t u d y t o i d e n t i f y t h e t h r e e m o s tpromis ing processes for recover ing manganesef r o m l o w - g r a d e d o m e s t i c s o u r c e s w a s u n d e r -w ay by the Bureau o f M ines in 1984 .

Domestic and Foreign Manganese Processing

Manganese is used as a processing and alloy-ing agent of steel and an alloying agent in non-fer rous mater ia ls . Although manganese is usedt o s o m e e x t e n t i n t h e m i n e r a l f o r m i n w h i c hit occurs in the ore, for the most part it is use-fu l only af ter several process ing s teps conver t

it to a metal or metal alloy. Steelmaking requiresmanganese fer roal loys with h igh- , medium-, orlow-carbon content , and s i l icomanganese. Alu-minum a l loys a r e made w i th add i t ions o f pu remetal l ic manganese. The compos i t ions of thesemate r ia l s a r e s how n in t ab le 5 -31 . F igu re 5 -5is a s implif ied f lowchar t for the product ion of these al loys showing the close re la t ionship thatex i s t s be tw een the p roces s es fo r the va r iousfo rms o f f e r roa l loys .

T h e U . S . s t e e l m a k i n g i n d u s t r y h a s a s t a n d -ard of 78 percent manganese content for h igh-

c a r b o n f e r r o m a n g a n e s e , a n d t h i s p r o d u c t i st radi t ional ly made f rom 48 percent manganeseores, I t is technically possible to produce steelf rom a lower grade fer romanganese, and in ter -nationally this s tandard is not as r igorously ap-pl ied . This is a poss ib le area wherein d ivers i tyof supply of manganese could be broadened byturning to lower grade depos i ts such as thosein M ex ico i f the need s hou ld a r i s e .

Manganese Ferroalloys103

Th e m a j o r m a n g a n e s e c o m m o d i t y i s h i g h -

carbon fer romanganese, used in the product ionof steel. It is now commonly produced in sub-

lozsil~.erm~n, et a l . , 0p . c i t . , P. 159.

IOsTh is disr;ussion of manganese ferroallo}’ processes is t ak~: II

p r i m a r i l y f r o m ~har le s R i\ e r A s s o c i a t e s , ;p . cit.




Table 5-31 .—Composition of Manganese Alloys

Manganese Carbon Silicon

Ferromanganese:High carbon . . . . . . . . . . . . . . . . . . . . . . . . . . . 74-82 7.5 1.2Medium carbon . . . . . . . . . . . . . . . . . . . . . . . . 80-85 1.5 1.2Low carbon . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80-90 0.7-0.75 1.2

Silicomanganese . . . . . . . . . . . . . . . . . . . . . . . . . 65-68 1.5-3.0 12.5-21

Ferromanganese-silicon . . . . . . . . . . . . . . . . . . . 63-66 .08 28-32Manganese metal . . . . . . . . . . . . . . . . . . . . . . . . 99.5 .005 .001SOURCE: U S Department of the Inter! or, Bureau of Mines, Mlrrera/s Cornrnodlfy Profile 1983: Manganese,

SOURCE: Charles River Associates, Processing Capacity for Cr/fica/ Materia/s,

merged arc electric furnaces, similar to thoseused for ferrochromium, rather than the orig-inal blast furnace method. (See the previous

chromium processing section for a general dis-cussion on ferroalloy produ ction in subm ergedarc furnaces, the degree of convertibility be-tween ferrochromium and ferromanganese fur-naces, and the ap plicability of new technologyto ferroalloy production.)

In the United States the blast furnace hasbeen entirely supplanted by the electric furnacefor the prod uction of ferroman ganese. The lastferromanganese blast furnace was shut downin 1969 by Be th lehem S tee l a f t e r be ing dam-aged by the Johnstown, PA, flood. Limited blastfurnace capaci ty s t i l l exis ts in Western Europeand South Afr ica , but a l l n e w f u r n a c e c a p a c -i t y w o r l d w i d e is of the e lec t r i c type .

Pig iron blast furnaces can be considered asalternative capacity for ferromanganese pro-du ction. As the ferromangan ese blast furnaces

OTA contract study, January 1984,

were generally adapted from old pig-iron fur-naces, they are smaller than current pig-ironfurnaces, and the hot blast temperatures are

lower (about 1,0000 to 2,0000 F) than for mod-ern iron furnaces. The main disadvantage of using the blast furnace for the production of ferromanganese is that the coke requirementis almost twice that for the electric furnace,since coke must be used both as a reducingagent and to supp ly the thermal energy for thereaction. Both furnace types require a blendof manganese ores and dolomite or limestoneas a fluxing agent. Existing small, pig-iron blastfurnaces could readily be converted to produceferromanganese at minimal capital cost. Oper-ating costs would be higher than for electric

furnaces.

Silicomanganese is produced in an electricfurnace similar to that used for ferromanga-nese production. The manganese content in theslag from a standard ferromanganese furnace



Ch. 5—Strategic Material Supply q 1 8 9 ——

o p e r a t i o n n o r m a l l y r a n g e s f r o m 3 0 to 40 per-cent an d is used as feed for the product ion of s i l i comanganes e . Ef f i c ien t p roduc t ion r equ i r esthat both s tandard fer romanganese and s i l ico-m a n g a n e s e f u r n a c e s b e l o c a t e d in the sameplant.

The silicomanganese furnace has a smallercrucible with smaller electrode diameter andcloser electrode spacing than does a standardferroman ganese furnace. If a furnace d esignedfor ferromanganese production has the capac-ity in its environmental control (gas-cleaning)system, it can be operated at higher powerlevels (to compensate for the charge propertydifference) to produce silicomanganese.

Medium- and low-carbon ferromanganese isproduced by refining various high-carbon fer-romanganese products in open arc furnaces.

These furnaces are different from submergedarc furnaces in that the electrodes are not sus-pended deep within the charge.

tion of manganese ore. South Africa,and the United States are manganeseproducers.

Processing Distribution and Capacity

The worldwide distribution of processing

Japan,metal

c a -

p a c i t y f o r f e r r o m a n g a n e s e , s i l i c o m a n g a n e s e ,and manganese metal is shown in table 5-32.Although having dramatically declined in ca-pacity in the last decade, the Un ited States stillhas the capability to produce all types of man-ganese ferroalloys and electrolytic manganesemetal. Table 5-33 shows th e growth of importsover the last decade that have eroded the U.S.industry, ferroalloys having made the greatestinroads.

Of the six firms in the United States stillcredited with the capacity to produce manga-

nese ferroalloys (out of 10 in 1979), three haveshut down their plants, and the others are oper-ating at very low rates. A contributing factorto this demise—other than import penetra-tion—was the steel indu stry depr ession du ringthe early 1980s. Elkem Metals plant at Marietta,OH, for instance, in early 1984 had only 3 fur-naces of an original 14 in operation; by mid-

Manganese Metal

M e t a l l i c m a n g a n e s e is c o m m o n l y p r o d u c e dby an electrolytic process from an acidic s o l u -

Table 5-32.—Manganese Ferroalloys and Metal Production Capacity—1979(tonnes, gross weight)

Ferromanganese

High Medium Low Silico- ManganeseCountry carbon carbon carbon manganese metal

2,000Argentina . . . . . . . . . . . . . . . . . .Australia. . . . . . . . . . . . . . . . . .Belgium . . . . . . . . . . . . . . . . . . .Brazil . . . . . . . . . . . . . . . . . . . . . .Canada . . . . . . . . . . . . . . . . . . . .Chile . . . . . . . . . . . . . . . . . . . . . .France . . . . . . . . . . . . . . . . . . . .West Germany. . . . . . . . . . . . . .India . . . . . . . . . . . . . . . . . . . . . .Italy . . . . . . . . . . . . . . . . . . . . . . .Japan . . . . . . . . . . . . . . . . . . . . .Mexico . . . . . . . . . . . . . . . . . . . .Norway . . . . . . . . . . . . . . . . . . . .Peru. . . . . . . . . . . . . . . . . . . . . . .Portugal . . . . . . . . . . . . . . . . . . .

South Africa . . . . . . . . . . . . . . .Spain . . . . . . . . . . . . . . . . . . . . . .Taiwan . . . . . . . . . . . . . . . . . . . .Great Britain . . . . . . . . . . . . . . .United States. . . . . . . . . . . . . . .Yugoslavia . . . . . . . . . . . . . . . . .

40,000135,000150,000117,00090,0005,000

580,000298,000229,000130,000700,800135,000370,000

3,600150,000

493,00060,0004,200

80,000453,000

40,000

50,000600 61,600

50,0001,000

60,000

30,00061,000

50,00035,000

3,00015,000

205,820

13,0005,000 4,000

535,200 6,000

50,000 5,000 220,000

10,00035,000 122,000 35,00010,000 45,0003,000

30 0125,000 11 ,000+

5.00036,000

Total . . . . . . . . . . . . . . . . . . . . 4,263,900 530,820 20.900 1.296.800 52,000,SOURCE Charles River Associates Processing CapacltY for Crltlcal Materia/s, OTA contract report, January 1984




Table 5-33.--Managanese Ferroalloys and Metal:U.S. Imports and Consumption

(gross weight, short tons)

Ferroalloys Metal

1970:Imports . . . . . . . . . . . . . . . . . . . . 290,946 NAConsumption . . . . . . . . . . . . . . . 1,000,611 NA

Imports as percent ofconsumption . . . . . . . . . . . . . 29 –1974:Imports a . . . . . . . . . . . . . . . . . . . 421,222 2,506Consumption . . . . . . . . . . . . . . . 1,115,395 34,748Imports as percent of

consumption . . . . . . . . . . . . . 38 71980:Imports b . . . . . . . . . . . . . . . . . . . 605,703 7,508Consumption . . . . . . . . . . . . . . . 789,076 25,092Imports as percent of

consumption . . . . . . . . . . . . . 77 30aMe@l inlports include unwroughtmetal, waste and SCraP.bMetalS irnpofls is unwought metal only; waste and scrap total AOT tonsSOURCE: U.S. Department of the Interior, Bureau of Mines, Minera/s Yearbook,

vol. 1, 1970, 1974, and 19S0

1984 the picture was somewhat brighter owingto the steel industry revival. (Of the 14 furnacessome have been permanently decommissioned.)Elkem was awarded a contract by the GeneralServices Administration (GSA) in the spring of 1984 to convert 48,476 tons of manganese orein the national defense stockpile into ferroman-

ganese.104 This GSA plan to up grade stockpiledores was developed in late 1982 by the ReaganAdministration to give financial relief to thedomestic ferroalloy industry. The contractamount will, however, only provide about 6months work for one Elkem furnace. (See thechromium processing section for details on asimilar chromite conversion contract.)

Manganese metal, sufficient to cover d omes-tic needs, can be produced in the United States,although the feedstock is imported manganeseores. In 1982 domestic production of manga-nese metal (18,600 tons) was greater than theconsumption rate (17,100 tons),105 while an ad-ditional 30 percent was imported. Due to gen-eral economic conditions, in 1983 two metalproducing firms were operating at reducedlevels of production and the third had shutdown its facilities.

104’ I Maca]]Oy sets Reorganization, American Me ta ] Market,

Jan. 5, 1984, p. 1.IOEU. S. Department of the Interior, Bureau of Mines, Minerafs

Yearbook 1982,

Platinum Group Metals Production

PGMs have always come from few locations.Colombian placer deposits were the originaland only suppliers of PGMs until 1824, whenRussian placer deposits were discovered. Pro-duction from Canadian nickel mines followedin 1919, and South African deposits were dis-covered in 1924. South Africa, the SovietUnion, and Canada are today the w orld’s sup-pliers of these metals (see fig. 5-6).

The major deposits of this group of metalshave been found in layered formations of ig-neous rocks among chromite, nickel, and cop-per, Only in South Africa and, it has been esti-mated, the United States (Stillwater, MT) cansuch vein dep osits be mined p rimarily for theirPGM content. Canada prod uces PGMs as a by-product of nickel and copper production; theSoviet Union’s prod uction may be a coprodu ct

rather than

VO]. 1, pp . 579 -580 .

and Processing

a byproduct. Chemical and physi-cal weath ering can separate p latinum m ineralsfrom these primary ores, creating placer depos-its in high enough concentrations to provideminable ore grades. Such a PGM deposit ex-ists in Goodnews Bay, AK, but it has not beenin production since 1975.

Each PGM deposit produces platinum andpalladium and some of the other four metals(rhodium, ru thenium, iridium , and osmium) of the group. Among the similar sulfide depositsin the three producer countries, there are dif-ferences in the proportion of PGMs that eachcontributes to the market, as shown in table 5-34. Platinum an d p alladium are considered themost important metals of the group owing totheir predominance and end uses in industry.While Canada produces roughly an equal



Ch. 5—Strategic Material Supply

100

90

80

70

60

20

10

01

Pt

Figure 5-6.–Comparative PGM Production, 1981

By metal and country

1 I I I 1

PdI

R ha

South Afr icaSoviet Union

aLess than 1 percent produced by other sources

Ilr a

Canada

Ž 191

IRu’

Other

1

0s

SOURCE: Bureau of Mines, Mmera/s Commodity Prof~/e 7983 P/atmurn-Grouo Meta/s, figures 1 through 6.

amount of platinum and palladium , the Soviet from a variety of ores. The United States is in-Union’s output is principally palladium (67 per-cent), with platinum secondary (25 percent), InSouth Africa, platinu m accoun ts for 61 percentof production, and palladium, 26 percent. Forall three countries, the balance of output is insmall amounts of the minor metals of thegroup. The proposed Stillwater mine is ex-pected to prod uce almost 80 percent p alladium ,20 percent platinum. Colombia has long beena relatively small prod ucer from placer depos-its. Its output is over 90 percent platinum, Verysmall amounts of the metals are produ ced bya number of other countries as byproducts

eluded in this group with a contribution fromcopper mining and refining,

The world now depends on South Africa fortwo-thirds of its platinum and on the SovietUnion for tw o-thirds of its palladium. In 1982,99 percent of the world’s primary PGM sup-ply was produced by five private firms and onegovernment firm. Mines in South Africa andthe Soviet Union provide 95 percent of theworld’s needs, while Canadian mines provideanother 6 percent (table 5-35). Little change inthis pattern is likely in the future. The most




Table 5-34.—Distribution of Platinum Group Metal Productionby Metal and Country, 1981 (percentage)

Producer country Platinum Palladium Rhodium Iridium Ruthenium Osmium

Canada . . . . . . . . . 6 6 8 6 5 10 —

South Africa. . . . . 64 24 44 60 74 38

Soviet Union . . . . 29 69 49 34 21 51Other . . . . . . . . . . . 1 1 <1 <1 <1 <1

Total . . . . . . . . . 100 100 100 100 100 100SOURCE U S Department of the Interior, Bureau of Mines, Minerals Commodity Profl/e 1983” P/atinurn-Group Meta/s, figures

1 through 6.

Table 5-35.—Platinum Group Metals: World Reserves and production by Country(thousand troy ouncesa)

Reserves Production Percent of -

Producer country 1981 1982 world production

Australia . . . . . . . . . . . . . . . . —

14.0 0.22Canada . . . . . . . . . . . . . . . . . 9,000 269.8 4.18Colombia . . . . . . . . . . . . . . . 12.0 0,19Ethiopia. . . . . . . . . . . . . . . . . 0.1Finland . . . . . . . . . . . . . . . . . 3.6 0,06South Africa . . . . . . . . . . . . . 970,000 2,600.0 40.28

Soviet Union. . . . . . . . . . . . . 200,000 3,500.0 54.23United States . . . . . . . . . . . . 16,000 8.0 0.12Yugoslavia . . . . . . . . . . . . . . 3.5 0.05Other b . . . . . . . . . . . . . . . . . . 43.3 0.67

Total , . . . . . . . . . . . . . . . . 1,200,000 6,454.3 100.00aThere are 1458 troy ounce?. Per poundbother prOduCt(on>i ref~~Ct~ JaPafle~~ ~efining of Ores originating lfl AU.s~ralla, Canada, Indonesia, F’apua New Guinea, and

the Philippines

SOURCE: Reserve base—U S Department of (he Interior, Bureau of Mines, Mineral Commodity Profile 1983 Platlnum-GroupMetals Production—U S Department of the Interior, Bureau of Mines, Mirrera/s Yearbook 1982, VOI 1

activity underway in investigating new, diver-sifying sou rces is in the United States with theeffort to initiate mining from the deposits at

Stillwater. For possible long-term applicability,the U.S. Geological Survey is conducting re-search on the platinum content of nickel lat-erite deposits in countries along the south-western rim of the Pacific Ocean.

The principal importing nations are theUnited States and Japan, which together con-sum e about two-thirds of the world’s PGM pro-du ction. Western Europ e and the Soviet Unionconsume most of the remainder. The SovietUnion’s position as the important palladiumsup plier to the West prov ides it with one of its

valuable sou rces of foreign exchange, althoughgold sales are more important in this respect,

Foreign Production of Platinum Group Metals

Unlike many other mineral industries today,

PGM production, excluding that of the SovietUnion, is entirely within the private sector,Ownership is a complex interconnection of multinational firms, as shown in table 5-36,

Rustenberg Platinum Mines and ImpalaPlatinum Holdings control over 90 percent of South African production, Ownership of bothfirms is primarily local shareholders, throughthree investment houses. These “group”houses have connections with British industrythat date back to colonial times. They also holdinterests in American operations: Johnson

Matthey—which jointly ow ns a South Africanrefinery with Rustenberg (Matthey-Rustenberg




are normally shipped by air, mitigating poten-tial access problems (on the return journey)during crises.

Platinum group metals are investment aswell as industrial commodities. Accordingly,three levels of trade exist: long-term contractsbetween prod ucers and consumers, the dealermarket for small and spot purchases, and in-vestment and speculative buying of futurescontracts on various metal exchanges, such asthe N ew York Mercantile Exchange (platinumand palladium) and the Japanese Gold Ex-change (platinum). At any one time, stocks of these metals are held by producers, refiners,investors, dealers, fabricators, and govern-ments. The U.S. Bureau of Mines estimatedthat at the end of 1981 there were 900,000 troyounces of PGMs (about a 4 to 5 months’ supply)held by these groups in the United Statesalone. 106 The existence of widespread holdingsof these stocks is one factor used to explainwhy the producer-set price recently gave way—after a 50-year dominance—to a market pricefor PGMs. In effect, the stocks held by a vari-ety of groups serve as an intermediate supply,reducing producers’ ability to set prices or con-trol the flow of processed material.

Any near-term increase in demand is ex-pected to come from current sources. SouthAfrican producers, who tend to tailor produc-tion to their estimates of western consumption,

have proven adep t in draw ing on their vast re-serves to meet increased d emand , In th e 1970s,for example, South African firms greatly ex-panded produ ction to meet demand created byrequirements for automobile catalytic con-verters in the United States. They wou ld likelyrespond similarly in the future, and their am-ple resources should allow them to do so.107

Most of South Africa’s production of PGMs iscommitted to major consumers—including theautomobile industry (for catalytic converters)—through long-term (approximately lo-year) con-tracts. While information abou t contracts is not

IWU, S. Depa r tmen t of the Interior, Bureau of Mines, A4inem)

Commodity Profile 1983: Platinum-Group Metals, p. 10.lozsee for i~tance, the Bureau of Mines’ Platinum Avail-

abiJity—MarJcet Economy Countries, Information Circular No.8897/1982.

made public, Rustenberg reportedly suppliesToyota, Hond a, and Ford; Imp ala is said to sup -ply General Motors, Chrysler, and Nissan; andWestern Platinum reportedly supplies Mitsu-bishi .108

While South Africa’s portion of the world

PGM market has steadily increased, Canada’sprodu ction has not kept pace with growing de-mand. Since the 1960s, its share of the worldmarket has decreased by 84 percent, while ac-tual output has remained level.

The Soviet Union’s production and market-ing techniques cannot be determined accurately;most of its outpu t is marketed through dealersrather than directly. Explanations for short-term changes in the amount of palladium madeavailable for the market have ranged from purepolitical motivations to maximization of long-

term commercial advantage. Over the past 20years, the Soviets have managed to increasesteadily the overall production of PGMs.

The following country-by-country overviewof major producers discusses the current andprojected status of PGM output.

Canada

Inco is the major PGM producer in Canada,with Falconbridge a distant second, Both de-rive PGMs as byp rodu cts of nickel-copper sul-fide deposits near Sudbury, Ontario. Inco also

has lesser deposits at Thompson, Manitoba.PGM processing is tied to recovery of nickel,copper, and cobalt. Inco’s ores are smelted atCopper Cliff, Ontario, with final recovery of PGMs at the firm’s Mend Nickel Co. refineryat Acton, England. Falconbridge smelts oresin Sudbury; ships a nickel-copper matte to itsplant in Norw ay for nickel, copper, and cobaltrecovery; and refines the resulting PGM sludgein Norw ay or at the Engelhard refinery in N ew-ark, NJ.

South Africa

In South Africa, PGMs are considered theprimary product derived from sulfide depos-

108’’ Impala, GM Set Long-Term Pact Huddle, ” AmericanMetaJs Market, June 2, 1983.




Domestic Production of


In contrast to the other first-tier materials,the United States is a producer, albeit minor,of PGMs (8,033 troy ounces in 1982 as a by-

product of copper mining and refining) andmining firms are actively pursuing the com-mercial possibilities of exploiting PGM depos-its at Stillwater in Montana. These depositscould initially supp ly 14 percent of the US. pal-ladium and 4 percent of platinum needs, or 9percent of overall PGM needs (based on 1982consump tion data). Production from Stillwateris considered to be the only possible near-term,worldwide competition for existing PGM pro-ducers such as South Africa and the SovietUnion.

The Goodnews Bay Placer Mine in Alaskais a past produ cer of PGMs and w as to resum eoperations in mid-1981 but did not. There areno immediate plans to do so. Other U.S. PGMresources exist in Alaska (Salt Chu ck Mine andthe Brady Glacier-Crillion-Le Pousse sulfide de-posit) and Minnesota at the Duluth Gabbro.These latter properties have not been the subject of any recent commercial developmentinterest. New U.S. mining activity in the de-velopment and expansion of gold and silverproperties (the ore bodies of which often con-

tain some PGMs) may result in small amountsof PGMs being recovered.

U.S. resources of PGM total 300 million troyounces (less than 10 percent of world resources)and are concentrated in Montana, Alaska, andMinnesota. 110 An estimate of total possible U.S.prod uction of PGMs from the most likely prop-erties—Stillwater, Goodnews Bay, and theDuluth Gabbro—is shown in table 5-37.

Sti ll water Complex, MT

PGM occurr ences in the Stillwater Complexalong the Beartooth Mountains in Montanahave been commercially explored and evalu-ated over the past 15 years. The deposits aregeologically similar to those in the MerenskyReef of South Africa and contain nickel, cop-per and chromite in addition to PGMs. Still-

water is being evaluated on the basis of extract-ing PGMs from sulfide ores as a primaryproduct. The Complex is approximately 28miles long and from 1 to 5 miles wide and isdivided into distinctive mineralized zones withPGMs present at greater-than-normal concen-trations in some bands. Typical PGM gradesat Stillwa ter have been rep orted by the Bur eau

IyOJ. Roger Loebenstein, U.S. Department of the Interior, 13u-

reau of Mines, A4inera] Commodity Profiles 1983.’ P]atin um -Group Metals, p. 3.

Table 5-37.—Potential U.S. PGM Production

Estimated annual production Estimatedcapacity (troy ounces of minelife

Resource/mine contained metal) (years) Production dependent on

Stillwater, Montana . . . . . . . . . 10-25 Combined platinum-palladium price of aboutInitial:

Additional expansion:

Goodnews Bay, Alaska . .

Duluth Gabbro, Minnesota

Palladium . . . .Platinum . . . . .

Total . . . . . . .Palladium . . . .Platinum . . . . .

Total. . . . . . .. . .

Platinum . . . . .. . .

Palladium ., . .Platinum . . . . .Total . . . . . . .

136,000 $220 per troy ounce (1984)a ‘38,000

175,000340,000

97,000437,000

unknown Platinum price of $600-700 per troy ounce (1984)10,000

25 Copper, $1.50 per pound

30,800-92,400 Nickel, $4.00 (1975 data converted to January6,800-20,300 1983 dollars37,600-112,700

aYear of estimate.

SOURCE: Stillwater—Stillwater Mining, June 1984.

Goodnews Bay–Hanson Properties, July 1984.Duluth G*bro—Calculated by OTA using preliminary results of Bureau of Mines research on Duiuth ores, State of Minnesota, Regional Copper-Nickel Study,

1979; Silverman, et al., OTA background study, 1983.




over population influx, overburdening of thepublic service system and environmental issuessuch as location of the mill and tailings pond,the w astewater’s effect on the region’s ground -water, and protection of air, water and wild-life. During an y p ermitting p rocess, Montana’s

Department of State Lands will coordinate theprep aration of the necessary EIS; and the localgovernment and the Montana Hard Rock Min-ing Imp act Board will evaluate socioeconomicissues.

Goodnews Bay and Other Alaska Occurrences

The Goodnews Bay Placer Mine is a dredg-ing operation located on the Salmon River nearthe Bering Sea coastline of Alaska. Productionfrom Goodnews Bay totaled 641,000 troyounces of PGMs (over 80 percent platinum)

from 1934 until 1975, when production washalted.119 Although new owners, Hanson Prop-erties, announced intentions to resume oper-ations in 1981, operational difficulties withdredging machinery, environmental issues,and overall, the costs of production have pre-vented them from doing so.120

While the major component of this placer de-posit is platinum (reserves are estimated at500,000 troy ounces of platinum),121 o t h e rPGMs and precious m etals are p resent. The ap-proximate p ropor tions of metals in the concen-trate produced in the past were 82.31 percentplatinum; 11.28, iridium; 2.5, osmium; 0.17,ruthenium; 1.29, rhodium; 0.38, palladium; and2.24 percent gold.122 The mine could possiblyproduce up to 10,000 troy ounces of platinumper year.123 The high grade concentrate gener-— — .—

Ilelames c. J3arker, d d,, U.S. Department of the Interior, Bu-

reau of Mines; Critical and Strategic Minerals in Alaska: Co-balt, the Platinum-Group Metals and Chrom’te, Information Cir-cu]ar No. 8869, 1981, p. 2.IZORaymond Hanson, Hanson Properties, persona] communi-

cation, July 1984.YZ1 u.S. Depa r tmen t of the Interior, Bureau of Mines, Minerals

Yearbook 1981, p, 668.IZZThese are the weighted mean percentages of the metals

mined from Goodnews Bay from 1936 to 1970 as presented inthe National Research Council, National Materials AdvisoryBoard, Supply and Use Patterns for the Platinum-Group Metals,Nh4AB-359, 1980, p, 17.

U3U. S. Depar tment of the Interior, Bureau of Mines, Minerals Yearbook, 1981, vol. I, p, 668. Mr. Hanson inferred that this fig-ure was high and commented that it was “what the oldtimersin Alaska claim, ”

ated could be shipped directly to a U.S. refin-ery, such as Engelhard in Newark, NJ, for proc-essing.

The Salt Chuck lode m ine has been interm it-tently exploited for various PGMs since 1918with th e latest period of operation hav ing been1935 to 1941. Overall, 14,271 troy ounces of PGMs have been produced from this mine.

PGMs are known to exist in dep osits in Gla-cier Bay National Park in the Crillion-LaPerouse Complex. An unpublished U.S. Geo-logical Survey report in 1980 indicated thatplatinum may be recovered as a byproductfrom the Brady Glacier nickel-cooper ore body.The ore body, which extends under movingglacier ice, has not been extensively evaluatedand could prove expensive to mine.124 In ad-dition, given its location, environmental con-

cerns would weigh heavily on any miningprospects.

In general, there is potential for more lodeand placer deposits in Alaska. The Alaska FieldOperations Center of the Bureau of Mines hasan ongoing program specifically directedtoward improving the available informationabout occurrences of PGMs, as well as chro-mite and cobalt, in Alaska.

Dulut h Gabbro, Minnesota

Copper and nickel sulfide dep osits along theDuluth Gabbro in the Lake Superior region of northeastern Minnesota contain cobalt, PGMsand other precious metals that could be re-covered as byproducts. Production of signifi-cant amou nts of PGMs depend s on copper andnickel mining on a large enough scale to makethese low-grade resources competitive in globalmarkets. Comm ercial prod uction will not evenbe considered until the recovery of both pri-mary metals markets occurs and existingworldwide nickel and copper mines havereturned to full production. (For information

on the economics of Duluth Gabbro and a Re-gional Cooper-Nickel study released in 1979 bythe State of Minnesota, see the domestic co-balt section.)

IZdcritjca] and Strategic Minerals in Alaska, op. cit., p. 3



Ch. 5–Strategic Material Supply q 1 9 9




Industry interest in the area peaked betweenthe late 1960s and 1970s. During that time,Amax Nickel acquired an option from Ken-necott Copper and investigated the possibilityof a combined surface and u nd erground op er-ation (Minnamax) and Inco considered open-

ing an open pit mine (Ely Spruce). Inco’sproject was suspended in 1975, and Amax in-definitely postponed its project in 1981 owingto depressed metal prices. This property hasnow reverted back to Kennecott control. Therehas been no revival of commercial interest inthe area.

These two holdings in the Duluth Gabbrocontain demonstrated resources of less than800,000 troy ounces of platinum.125 PGM valuesof 0.00107 troy ou nces of platin um and 0.00304troy ounces of palladium per ton (0.036 ppmplatinum, 1.03 ppm palladium) were estimatedfrom an Inco samp le by the Bureau of Mines.126

The Minnesota Department of Natural Re-sources extrapolated this data to the rest of thearea and estimated that about 18 million troyounces of platinum resources existed in 4.4 bil-lion tons of ore.127

The Bureau of Mines has recently condu ctedresearch on the processing of raw materialstypical of Dulu th Gabbro ores, and a report onthe results is in preparation. Data from thesestudies indicate that, under optimum condi-tions, the recovery of platinum and palladium

per ton of ore would be approximately 0.0005troy ounce and 0.0022 troy ounce, respectively.This is equivalent to approximately 0.088 troyounces of platinum and 0.40 troy ounces of pal-ladium per ton of copper produced. 128 In the1979 stud y by the State of Minnesota, the max-imum possible annual output from Duluth wascalculated at 231,000 tons of copper metal and,with one mine complex (rather than three) inoperation, 77,000 tons of copper would beproduced per year. This implies that between

125Anstett, et a]., op. cit., p. 7.IZoNationa] ReSea~h Council, National Materials AdvisoryBoard, Supplj’ and Use Patterns for the PlatinumGroup Metals,

NMAB-359, Washington, DC, 1980, p. 16.1271 bid., p. 16.IZU ,S. Depa r tmen t of the Interior, Bureau of Mines, ]etter to

OTA, july 31, 1984.

30,800 and 92,400 troy ounces of palladium andbetween 6,800 and 20,300 troy ounces of plat-inum might be generated as byproducts fromDuluth given the proper economic incentivesfor copper and nickel production.

Although the Duluth Gabbro lacked an y com-

mercial activity recently, this large resource of low-grade m aterial will continue to be viewedas a potential source of metals. The proximityof potential mining areas to the BoundaryWaters Canoe Area and Voyageurs NationalPark, as well as possible damage from sulfuremissions from a smelter operation p rocessingDulu th Gabbro su lfide ores, will ensure an im-portant role for environmental considerationsin mine planning in the area.129

Domesti c Mi ning and ProcessingTechnology Prospects

PGM deposits which occur in hard-rock envi-ronments (Stillwater, for instance) are amen-able to und erground methods such as sublevelstoping and the newer vertical crater retreatsystem. Placer deposits are generally dredgedun less, as maybe th e case in som e areas of theGoodnews Bay deposit in Alaska, the thicknessof the overburden makes the technique un-economic.

Domestic PGM deposits are not unique and,therefore, metallurgical p rocessing technology

is available. The high-grade platinum concen-trates from Goodnews Bay can be sold directlyto existing U.S. precious metal refineries forpurification. Technology for the requiredsmelting and refining of Stillwater’s nickel-copper-PGM ores is well established. The mostqualified North American smelter for the ini-tial refining of its concentrates is the Inco plantat Copper Cliff, Ontario.

Included in current Bureau of Mines re-search is the evaluation of a method for proc-essing of Stillwater ores. It involves flotationof the ores and su bsequent sm elting and leach-ing to recover the various metal values in theores. The flotation concentrate results in 88percent recovery of the PGM values and smelt-

lzgsl]verman, et al., 0p. cit., p. 112.




Figure 5-7.--PGM Processing, Simplified Flowcharta

aTyplcal South African prwess.

SOURCE: Department of the Interior, Bureau of Mines, Platinum Avaihrblllfy–kfarket .Ecorron’rY Countdes, Information Circular U8B97, 1982.



.

Ch. 5—Strategic Material Supply q203

Figure 5-8.—Time Chart of Some First-Tier Strategic Material Deposits

I Paleocene I

EarlyI

02

2

11

25

40

55

65

135

180

225

270

305

350

395

440

500

570

1000

1800

2600

3300

4500

Deposit

KatangaDuluth GabbroSudburyBushveldOutokumpuKemiStillwaterGreat Dyke

Location

Zambia-ZaireMinnesotaOntarioS. AfricaFinlandFinlandMontanaZimbabwe

Approx. Age(million yrs.)

1000-18OO1000-15002OOO-21OO2OOO-21OO

1800-23002400-25002600-27002400-2500

Commodity

CobaltNickel-CobaltNickel-Copper. PlatinumChromite-PlatinumCopper-Nickel-CobaltChromiteChromite-PlatinumChromite-Platinum

SOURCE. Ben F Dickerson Ill and Carol@ A O’Brien, ~xploratlon (or Strategic Materials, contractor study prepared for the Office of Technology Assessment, September1983




strategic metals. In the United States the major exposure of Precambrian rocks (fig. 5-9) isin the Great Lakes region of Michigan, Min-nesota, and Wisconsin, w ith sm aller, scatteredareas in many States, including Montana,Idaho, Colorado, Arizona, South Dakota, Wy-

oming, Texas, and Missouri.The constraints on exploration imposed by

the absence of extensive geological exposurecannot be ignored in assessing the Nation’sstrategic materials outlook. Currently uniden-tified geologic environments in the UnitedStates could p ossibly contain these metals, butthe uncertainties involved in identifying suchenvironments compoun d the already high riskof exploration of regions of known potential.

Metals experts interviewed by OTA gener-ally agree that there is a very low probability

that the Un ited States contains significant, un-discovered economic deposits of chromite, co-balt, or PGMs. (Prospects for manganese aredeemed somewhat better.) Undou btedly, somegeologists disagree w ith this m ajority opinion,asserting that increased geologic knowledge,better technology, and fresh exploration con-cepts can find new, economical deposits. Evenif such deposits do exist, the apparent risk/ reward ratio and the magnitude of identifiedforeign reserves preclude meaningful actionunder current conditions.

Experts w ere unan imous on one point: all be-lieved their companies’ management would reject any strategic metals exploration program,no matter how geologically well-conceived,now and in the near future. 133

Until reliable long-term economic incentives[perception of profits commensurate with risks)are available, there will be no significant ex-ploration for strategic materials in the UnitedStates. A recent estimate gave $290 million asthe cost to find an ore deposit that would sig-nificantly affect the profits of a medium-sizedcorporation. 134 Any find would have to resultin ores of higher than average grades and / orlower than average costs to mine, substantial

1jjIbid., p. 11,lsgIbid., p. 18.

and dependable markets, and an assumptionof long-term stability in the domestic economy.

Explorat ion Technology Today and in the Future

The following briefly reviews present and po-tential near-term technological developmentsin land-based exploration for strategic mate-rials. It is felt that the technology level thatmineral geologists employ today is about 20years behind the level used in oil and gas ex-ploration. This may be a reflection of the valueof national energy versus mineral needs. Forinstance, in 1977 fuel production in the UnitedStates was valued at $56.2 billion and metalsproduction, a tenth of the fuels value at $5.2billion. 135

Most specialists think that a br eakthrou gh inmineral exploration technology is unlikely in

the next 10 years and that the exploration sceneof the early 1990s will probably n ot be greatlydifferent from that of today, except it will bemore expensive. Current tools and techniqueswill be more precise and refined, owing largelyto the application of mineral exploration ad-vances, general scientific knowledge, and elec-tronic technology. Lacking incentives to ex-plore for strategic materials, there will be littleattention to the development of specializedtechnology for that purpose; but any generalimprovements in exploration methodology ortechnology could be of use.

Chrom ite deposits, for instance, have gen er-ally been found by surface prospecting anddr illing in and around identified outcrops (sur-face appearances). There are no unique prob-lems in exploring for most types of cobalt de-posits. Current geophysical methods can beused to detect the presence of copper, nickeland iron sulfide minerals, with which it is asso-ciated. Cobalt can be easily identified by rela-tively simple chemical analysis methods.

GENETIC THEORY

Increased interaction between industry andacademia could lead to better application of new and developing concepts in genetic the-

IOSs~~tl~~iC~] A~~tr~Ct of the (_Jnit~ states, 1982.83 edition, ta.

ble No. 1276, p. 715.




ory. Most currently employed theories of oregenesis are derived from developments in theunderstanding of plate tectonics and conti-nental drift.136 These concepts are definitelyuseful in pred icting areas favorable for certaintypes of mineral deposits and will probably

continue to provide practical information.Advances in this field are expected to call at-

tention to some hitherto ignored, or currentlyunknown, geologic environments for somemetals, particularly gold, silver, and perhapssome base and strategic metals. Explorationistsdo not feel, however, that any lo-year devel-opment of genetic theory will allow them to ac-curately fix the location and app roximate qual-ity of any typ e of mineral dep osit. In fact, thereis strong doubt that this could ever be done.

DATA INTERPRETATION

Data interpretation is the single, biggest prob-lem facing exploration. A substan tial imp rove-ment in this art might far outweigh potentialtechnological improvements.

Both geophysics and geochemistry now candeliver vast amou nts of data that no one com-pletely understands. Fully integrating this in-formation with data from other explorationtechniques is very difficult. While a very few“seat-of-the-pants” ore finders may be able todo this intuitively, most explorationists are not

so gifted. One geologist said, “Better instru-mentation is like giving an encyclopedia to anilliterate—the pictures are neat, but it doesn’thelp him to read. ”

GEOPHYSICS

Geophysical techn iques for locating particu-lar geological structures and compositions areone of the primary screening tools of mineralexploration. The process involves measure-ment of various physical fields in which vari-

— . — — -Ise]n 1912 a German, A. Wegener, suggested that about 200

million years ago the continents were packed together in oneuniversal land mass called “Pangaea.” Wegener called attentionto the “jig-saw” piece matching effect of the South Americanand African continents; similarities in geology, plant and ani-mal life; and in paleoclimates of various continents. This basicconcept received little support until the mid 1950s.

ances in mineral content or ph ysical conditionwill cause anomalies in the data produced.

Current techniques, however, particularlyelectromagnetic methods, are unable to d istin-guish between anomalies caused by variousminerals such as p yrite, chalcopyrite, or grap h-ite. This prevents the explorer from correctlyidentifying, or narrowing down sufficiently,the sought-after mineral environment.

Research programs of a few large exploringfirms are aimed at developing instrumentationto discriminate between various minerals, par-ticularly sulfides. Because the work is propri-etary, very little information is publicly avail-able, Geophysicists interviewed for this reportsaid that such instrumentation w ould p robablynot be developed before the end of the centu ryand, even then, may only compound current

problems of interpreting findings.Other than the major problem of data inter-

pretation mentioned above, instrumentation:

qmust be better able to screen out naturalor human “background noise, ” this im-provement might increase the effectivedepth penetration, a current limitation of the geophysical techniques; and

qneeds additional miniaturization and im-provement for borehole use, also increas-ing depth penetration.

Geophysical techniques are expected to im-prove only slightly, as many methods are ap-proaching absolute barriers imposed by phys-ical laws. (In particular, the decline of signalstrengths by the “inverse of the square of thedistance” effect.) Miniaturization of geophysi-cal instrumentation will be much more highlydeveloped. The subsequent increased employ-ment of dow n-the-hole geoph ysics w ill give, ineffect, greater depth penetration in areas be-ing explored and could cope with the physi-cal law limits, However, this improvement w illbe of little use in the initial or reconnaissance

stages of exploration.Geosatellite imagery and other associated

data will probably be employed cautiously, butmore frequently, particularly if some of the un-certainties of spectral interpretation can be




eliminated and higher spectral resolution ob-tained, Unfortunately, many large, geologicallyfavorable areas of the earth’s crust are h idd enbeneath an alternate environment, preventingsatellite identification despite improved tech-nology.

There are no special geophysical problemsrelated to strategic materials that preclude ap-plication of general improvements in explora-tion technology. For example, an effective bore-hole indu ced polarization (1P) transmitter andreceiver would perhaps be effective in explo-ration for podiform chromite bodies, in areaswh ere they are known to occur. Cobalt is asso-ciated with copper, nickel, and iron sulfideswhich have detectable electromagnetic signa-tures. Chromite and manganese oxide can bedetected by using certain geophysical tech-

niques as well. However, geophysical tech-niques have not been d eveloped to identify eco-nomic concentrations of metals present in theearth’s crust as carbonates and / or silicates (e. g.,manganese carbonate deposits and nickel-cobalt silicate minerals in laterites). Limitedsuccess has been achieved in distinguishingcarbonate and silicate minerals using satelliteimagery but only when they appear on the sur-face. Manganese oxides, as well as sulfides, re-spond to 1P techniqu es but carbonates offer lit-tle, or no geophysical signature. Uncertaintiesabound, however. 1P effects are produced by

graphite, magnetite, certain clays, and otherminerals. In fact, many 1P anomalies have noascertainable cause.

GEOCHEMISTRY

Geochemistry involves the analysis of soils,surface water, and organisms for abnormalconcentrations of minerals. It is one of thebasic tools of modern mineral exploration andis relatively rapid, cheap, and direct. But,faster, more accurate, more sensitive, and morespecific analytical techniques are needed.

Current practice in sample preparation con-sists of crushing, grinding, p ulverizing, and se-lecting a sam ple of app ropr iate size; each stageof this process offers opportunity for error. Theideal methodology would include automatedsample preparation and on-the-spot whole-

rock, accurate, multi-element analyses. An in-strument for onsite analysis of drill-holederived samples, at least semiquant itatively, isalso needed. A technique that would not alterthe physical characteristic of the sample ispreferable.

Since strategic materials are not actively ex-plored domestically, accurate multi-elementanalysis would be highly desirable, no matterwhat type of sample is being analyzed.137 Po -tentially valuable deposits of one element havecertainly been overlooked because analyticalwork was at the time concentrated on locat-ing other elements. Even if no potentially eco-nom ic element is p resent, there would be greatgeologic value in identifying and quantifyingall of the trace elements associated with par-ticular types of m ineralized bodies. In tim e, the

resulting patterns m ight offer d efinite clues tothe presence or absence of economic mineral-ization.

Borehole and handheld instruments, employ-ing X-ray fluorescence analysis methodology,have recently been developed. These are spe-cific for such elements as silver, gold, molybd e-num, and tin, But substantial improvements in6 Compilation procedures for this “unw anted-at-the-time” information would need to be in-stituted, however, sensitivity and analysisreproducibility are needed. ICP (Inductively

Coupled Plasma atomic emission spectrom-etry) is the latest technique and is claimed tobe a multi-element analytical tool. There are,however, substantial problems with inter-element interference and element detectionlevels.

High-precision and sensitive analytical meth-ods—including ICP, neutron activation, laserbombardment, irradiation by radioactive iso-topes—have only limited use in geochemicalwork because of their high unit costs (morethan $50 per sample) and certain physicallimitations of the equipment.

The main advances in geochemical explora-tion are expected to occur in instrumentation

I ~7[jom1)i]ation ~)ro[; ed ~1 res for this ‘‘unwanted-at-the-time iJl -formation would need to be instituted, how’e~’er.




and in analytical techniques. Handheld anddrill hole-adap tive, direct in situ analytical de-vices will be available in exploration for someelements, but probably only for PGMs amongthe strategic metals, since there is little eco-nomic interest in the others. Although semi-

automated wet chemical analytical methodswill be standard, and will increase reproduci-bility and sensitivity, more highly trained andmore costly technicians and analysts will berequired to perform the analyses,

Helicopter-borne spectral reflectance instru-mentation, perhaps a spinoff of satellite re-search, may be used to screen vegetation geo-chemically in large forested areas. Practicalinstrumentation should be available that willdirectly measure gases emitted in decomposi-tion of some economical minerals.

Chromite is a common accessory mineral inmafic/ ultram afic rocks, but geochemical sur-veys have not been successful at identifyingeconomic concentrations of chromite. Wide-spread high, but very variable, background con-centrations of manganese in water, soils, androcks make geochemical techniques very dif-ficult to employ.

DRILLING TECHNOLOGY

Drilling is the ultimate test phase of all ex-ploration, and its costs, direct and indirect, are

one of the most significant limiting factors inminerals exploration today.138 Improved tech-nology which redu ces these costs wou ld allowtesting of more targets, however th ey are iden-tified and defined, and would help improvecurrent ore discovery rates.

Techniques for mineral exploration includecore and rotary drilling. Core drilling physi-cally removes a cylindrical sample of rockwhile a rotary crushes and chips the rock sothat only cuttings are removed by air or water,

Core drilling today is not greatly different

from that of the 1860s, when it was first em-ployed for coal exploration in Pennsylvania.Although overall technology has steadily im-proved, only two significant improvements in

136Dickerson, et a]., Op. Cit., p. 66.

core drilling have been introduced in the past30 years. The first was the introduction of wire-line drilling (allowing the recovery of a sam-ple core inside a drill stem); the second, the ad -vent of long-wearing, impregnated diamonddrill bits.

Rotary drilling techniques for metals havealso generally stabilized. Sampling-relatedproblems prevent rotary drilling from beingemployed to a mu ch greater extent in mineralsexploration.

There has been comp aratively little direct re-search directed at improving mineral explora-tion drilling. The U.S. Bureau of Mines and adrill machine manufacturer and contract drill-ing company, E.J. Longyear, have jointly de-signed a method for replacing worn diamondbits without removing drill rods from bore

holes, eliminating a costly and time-consumingoperation. With the use of impregnated dia-mond bits, however, it has proven more costeffective to stay in the hole with these longerwearing bits than to p urchase the relatively ex-pensive equipment required to change the nowpartly obsolete surface set bits.

Most incremental improvements in drillinghave been developed in oil exploration, Al-though helpful in strategic materials explora-tion, various factors—e.g., the size of target,rock types, dimensions of drill holes, and m ar-

ket size differences–prevent large-scale adap-tation in mineral exploration. Substan tial tech-nical and cost benefits in mineral explorationdrilling techniques may be possible only if along-term, well-conceived, and adequatelyfunded research program is undertaken.

Drilling techniques are not expected to bemuch different from those employed now.Most explorers foresee increased drilling costsand little change in drilling efficiency. If therate of growth in average drilling depth ismaintained, with its attendant increased costs

per hole, it is probab le that fewer holes will bedrilled on any one target.

Research and Development

Mineral exploration technology and method-ology have not been the subject of significant




research an d developm ent (R&D) attention forsome time. Current metal market prices andother problems have led to reductions of pre-vious, modest funding levels in the privatesector.

A precise picture of mineral exploration re-lated R&D, however, is difficult to develop.Most work is spread throughout academia(geology), the U.S. Geological Survey (geology,geophysics, and geochemistry), the Bureau of Mines (drilling, geophysics, and miscellaneouspu rsuits), and mining and oil companies (geol-ogy, geophysics, and geochemistry). Equip-ment manufacturers, with a few exceptions(mainly geophysical contractors), do very lit-tle R&D because their markets are so limited.

There appears to be no reliable figure avail-able for the amount of direct exploration-

related R&D expenditures for any specificperiod. (Guesses range from $10 million to $50million p er year by the p rivate sector in NorthAmerica.) The quantification problem is com-plicated by no agreed-upon definition of workthat sh ould be classified as m ineral explorationR&D, especially within the Federal Govern-ment. Is a U.S. Geological Survey geologiststudying the magnesium content of chromiteengaged in mineral exploration research? Mostpracticing explorationists would say no, but anargument could be made otherwise. One thingis clear to explorationists: R&D in their field,

no matter how defined, is, by comparison tomost other technical fields, very poorly fundedand directed.

Ocean-Based Resources

The floor of the ocean provides a favorableenvironment for the formation of expansive de-posits of minerals containing m anganese, iron,and other metals. Some of these deposits con-tain significant amounts of nickel, copper, orcobalt. As a result, they have gained some at-tention as possible alternative sources of metalsto supplement or replace land-based sourcesof questioned reliability. The m ineral resourcesof the deep seabed gained visibility during the1970s when their status was added to manyother subjects un der consideration at t he Third

United Nations Conference on the Law of theSea.

Three forms of the seabed m angan ese depos-its are of interest from a strategic materials per-spective: the man ganese nodu les and crusts lo-cated on the Blake Plateau off the coast of Florida, the manganese nodules of the east cen-tral Pacific Basin, and the cobalt-rich crusts lo-cated on the slopes of seamounts and islandsin the Pacific. The status and outlook for ex-ploitation of each of these types of deposits issummarized in table 5-38.

The Blake Plateau deposits contain approx-imately 15 percent manganese and 15 percentiron, but their content of more valu able metalsis low. The water depth ranges between 300and 1,000 meters, and they are located on thecontinental slope where they fall under the

jurisdiction of the coastal state (in this case, jurisdiction is principally that of the UnitedStates, although some of the region is underBahamian jurisdiction). In 1976, the NationalMaterials Advisory Board evaluated thesenod ules as a potential domestic source of man-ganese. The nodules fared well against otherdomestic sources, but were still judged to beout of the realm of commercial exploitationsince their prod uction costs were high in com-parison with the large land-based deposits nowin production,

The Pacific manganese nodules differ fromthose of the Blake Plateau in several respects.They have attracted commercial interest be-cause of their content of nickel, copper, andcobalt, which exceed that of many land-baseddeposits; they are located in water depths asmu ch as 10 times that of the Blake Plateau; andthey are located beyond the jurisdiction of anycountry, with their legal status clouded by thelack of widespread acceptance of any legalregime for exploitation.

Interest in the Pacific nodules began to in-crease before the technology for exploitationwas developed and before the legal regime wasdeveloped. The value of the metals containedin the nodu les was high in comparison to land -based ores, and the high value of containedmetals grabbed attention before estimates of




Table 5-38.—Outlook for Development of Ocean-Based Resources of Strategic Metals

Clarion-ClippertonBlake Plateau Nodule Province Cobalt bearing crusts

Depth . . . . . . . . . . . . . .Location . . . . . . . . . . . .

Metal content:Manganese. . . . . . . .Iron . . . . . . . . . . . . . .Nickel . . . . . . . . . . . .Copper . . . . . . . . . . .Cobalt . . . . . . . . . . . .

Form . . . . . . . . . . . . . . .

Status of technology .

Economic outlook. . . .

Legal regime . . . . . . . .

300-1,000 metersEast coast of Florida, Georgia,

South Carolina Bordered toeast by Bahamian jurisdiction

Extremely low-grade man-ganese deposit is not com-petitive with land-basedproducers

Under U.S. jurisdiction on theOuter Continental Shelf

SOURCE: Office of Technology Assessment

Beyond U.S. jurisdiction: rightto license development ac-tivities by U.S. citizensclaimed by U.S. but chal-lenged by supporters of theU.N. Convention on the Lawof the Sea

the costs of the mining and processing equip-ment w ere well developed. It is now app arentthat capital and operating costs of deep oceanmining would be much higher that current

costs of mining on land, and these high costsmore than offset the higher v alue of the metalsthat the nodules contain.

There is little d etailed information availableabout cobalt-bearing manganese crusts. Thesedeposits are similar to the Pacific nodules, ex-cept that they are in the form of thin crustsbonded to the underlying rock on the slopesof seamounts such as the Hawaiian Islands. Insome cases, the crusts have been found to beenriched with cobalt. In some samples, peakcobalt contents of more than 1 percent have

been measured, but average cobalt levels havebeen less than 0.8 percent,

While interest in nodules has declined, thecobalt-bearing manganese crusts of the Pacificseamounts have gained increased attention.

The high cobalt content of some of the crustspresents the same attraction that was once pre-sented by Pacific nodules. The high value of the metal contained in the crusts, whether

measured in price or strategic interest, over-shadows th e high cost of recovering th e metalsfrom their challenging environment and diffi-cult mineral structure. Even though land-baseddeposits may have lower content of cobalt,nickel, or copper, they are more attractive toinvestors because the cost of recovering themetals is significantly lower. For manganese,the case for land-based production is evenstronger since land ores are generally higherin manganese content, easier to mine, andmore familiar to consumers in the metallur-gical industries.

If so d esired, th e U.S. Government could as-sist pr ivate ind ustry in overcoming the substan-tial barriers to exploitation of ocean-based re-sources of strategic materials and therebyencourage indu stry to comm it the major sum s



Ch. 5–Strategic Material Supply • 2 1 1

needed to build and operate an ocean mine. able to physical interference at sea, and, with-Unless there is a major increase in p rices for out a widely accepted legal regime for exploi-nickel, copp er, and cobalt, the cost to the gov- tation of the minerals of the seabed, it couldernment of such assistance would be substan- be the su bject of international legal and politi-tial. Furthermore, an ocean mine would not be cal disputes.secure against interruption; it would be vulner-



CHAPTER 6

Conservation of Strategic Materials



Contents Page

Introduction *e. **s* .*. o**. e#*s***, .+** *soO*** *0** **** *,o. e*. .0. *@*o 215Recycling * s * * * * * * . * e* * * s , * , * * * * * * * * * * * . * * * * * . * * e * * * . . * * * * . * . . * # . * 215Advanced Processing and Fabricat ion Technologies . . . . . . . . . . . . . . . . . . .216Conserva t ion Through Par t Li fe Extens ion and Design. . ...............216Interrelationships of Conservation Approaches . . . e . . . . . . . . . . . . . . .. ...217

Case Studies of Strategic Materials Conservation Opportunities. . .........218

Superalloy. . * *

* , ,* . .

, * * ,* * , . . * * . . * . e . .

o.o* .* e .

, . ,. , o * , * . , * * * , * . ,

219Conservation of Manganese in the Steel Industry . . . . . . . . . . . . . . . . . . . . .227Automotive Catalysts 6., *.** .**, ,.*o, o*oe. .,o, .,. .,o*, **o*, *o*,,,,, 238Other Conservation Opportunities **** 9**m . **********0**.*****.**.*** 245

Prospects for Conservation of Strategic Materials . . . . . . . . . . . . . . . . . . . . . . . 254Recycling Technology q , *. ,*.*******,.******..*.**..***.*.*.,*,**** 257Nontechnical Impediments , ****. .* .***.***. .*****. .* . .*** .* ,** .* ,* . 257Recycling and Conservation Data Base q ***************.**.,.,,***,** 258

L i s t o f T a b l e s

Table No. Page

6-1.6-2.

6-3.

6-4.

6-5.6-6.

Cobalt Consumption in Superalloy, 1980 . . . . . . . . . . . . . . . . . . . . . . . . . 219Manganese Content for Major Grade of Steel.. . . . . . . . . . . . . . . . . . . . . 232

Parameters Affecting Manganese Retention in theSteelmaking Process q **0* *e** **0* **** +8 *****************e****** 238Current and projected Manganese Consumption inU.S. Steel Production q ., ** *,**, . .** *.. @, ********m .*. ,***,***,** 238Cobalt Consumption and Recycling in Catalysts, 1982 . . . . . . . . . . . . . . 246Selected opportunities for Increased Recycling of Chromium, Cobalt,and Platinum Group Metals q * * . . . ., . * ., * * * * *, * * * * * * * * * * ******.*. 255

L i s t o f F i gure s

Figure No. Page

6-i.

6-2.6-3.

6-4.6-5.

Service Life Time of Turbine Blades . *, * * *, . * * * ., . . . . * *, ****,*.*, 226Historical Market Shares for Major Classes of Steel . . . . . . . . . . . . . . . . 231Flow Diagram Showing the Principal Process Steps Involved in

Converting Raw Materials Into the Major Steel Product Forms,Excluding Coated Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234Current Pattern of Manganese Use in Steelmaking . . . . . . . . . . . . . . . . . 235PGM Demand by Vehicle Category q .*. **e w *****..***.************ 239



CHAPTER 6

Conservation of Strategic Materials

Introduction

Past experience has shown conservation tobe an important response to shortages of ma-terials, and strategic materials are no excep-tion. In all of the post-World War II supp ly dis-turbances discussed in this report, industryresponded with increased recycling and, insome instances, adopted new practices whichused materials more efficiently, Conservationalso can be an ongoing strategy to reduce in-du stry dependency on insecure sources of sup -ply, In this chapter, several different conser-vation techniques that can conserve strategic

materials are discussed, Included are recycling,product life extension, trimming of alloy ad-ditions to the low side of acceptable ranges,and improved processing techniques, Substi-tute materials and use of surface modificationtechnologies can also conserve strategicmaterials; these are addressed in chapter 7.

Recycling

Recycling differs from other conservationtechniques in that it directly adds to materialsupplies. Sources of recycled metals include

scrap material generated by the primary pro-ducer, which is called “home” or “revert”scrap, and secondary (or purchased) scrap, Sec-ondary scrap generated by manu facturers andfabricators is called “prom pt indu strial scrap,”while scrap that comes from prod ucts that havebeen used and discarded is called “obsoletescrap. ” Another secondary source is processwaste that can be reclaimed from metal proc-essing plants.

Purchased scrap (comp rised mostly of promp tand obsolete scrap) accoun ted for 8 percent of

domestic cobalt consumption, 15 percent of platinum consum ption, and 12 percent of chro-mium demand in 1982.1 Actual levels of recy-

1 U, S. Department of Interior, Bureau of Mines, Mineral Com -modit~ Summaries 1983 (Washington, DC: U.S. Go\’ernmentPrinting Office, 1982), pp. 32, 36, and 116.

cling are significantly higher ow ing to internalrecycling by industry, toll refining arrange-ments, and incomplete reporting to the Bur eauof Mines. In addition, a substantial amount of man ganese is recycled from ferrous scrap, andthis may grow in the future.

Home scrap, which includes trimmings andends from castings and overflows from ingots,is generally recycled with great efficiency.Since it is clean and its comp osition is kn own ,it can simply be returned to the melt for reproc-

essing.Recycling of prompt scrap is less uniform

than h ome scrap. In large manu facturing op er-ations, where substantial amounts of scrap aregenerated , efforts to separate scrap by typ e, tokeep it free from contaminants, and to main-tain collection and marketing operations areoften justified by the market value of the scrap.In smaller operations, or in processes whereoils or cutting fluids contaminate the scrap,materials may be discarded as waste. Evenwhen recycling offers economic advantages,firms may not want to divert their resourcesto the establishment of a new set of internalprocedures for segregation and collection of scrap.

Collection of obsolete scrap presents evengreater problems. This scrap may be dissemi-nated across wide areas and mixed with a v a-riety of other materials, Imp urities from m etal-lurgical contaminants must be eliminated tomake the scrap reu sable. Owing to the expenseof collecting, identifying, and separating thisscrap, a substantial amount of metal is lost.Even when quantities of known materials are

collected, limitations set by the processingtechnology may result in the scrap being d own-graded to a less deman ding app lication. For ex-ample, superalloy scrap may be downgradedto m ake stainless steel in w hich the cobalt con-tent serves no purpose, and is essentially lost.

215




Significant quantities of strategic materialsare lost in process wastes, because the costsof treatment or handling for recovery exceedsthe valu e of the contained m etals, Technologi-cal development, combined with imposition of high costs on the disposal of wastes contain-ing hazardous materials, have given impetusto research on p rocessing of such wa ste to easedisposal problems and, where possible, to ob-tain saleable products from the processing.

Advanced Processing and FabricationTechnologies

Industry constantly searches for new proc-essing and manufacturing technologies thatcan increase production, decrease costs, saveenergy and materials, or improve performance.Adoption of new technologies sometimes con-

serves strategic materials. The rapid phase-inof the argon-oxygen-decarburization (AOD)process for making stainless steel during the1970s is a dramatic case in point. The AODprocess led to major improvements in chro-mium utilization in making stainless steel, in-cluding the ability to use more high-carbon fer-rochromium (which is cheaper, and requiresless energy to make than low-carbon ferro-chrome) as a raw m aterial, and enhanced chro-mium recovery from scrap ferrochromiumcharges. Nearly all stainless steel producersnow use the AOD process, so that further im-

provements in chromium utilization arisingfrom the process are likely to be modest.

Although it is rare for a new technology tobe adopted as pervasively and quickly as theAOD process, ongoing industrial trends in met-als processing and fabrication may lead to ap-preciable savings in some strategic materialson a per-part or per-unit basis in the years tocome. For the most part, industry investmentin advanced processing and fabrication tech-nologies is driven by concerns about productperformance, reducing costs, and minimizing

reject parts. Material conservation is not oftena primary reason why industry adopts ad-vanced processing technologies, but it is oftenan important side benefit.

The need for U.S. steelmaker to remaincompetitive with foreign producers, for exam-ple, is leading to the replacement of older, lessefficient facilities with new processes whichare more cost effective and produce higherquality steel.2 Furthermore, major savings inmanganese can be achieved as steelmaker up-grade basic steelmaking processes. As newertechnologies and processes are introd uced, im-portant reductions in the amount of manganeseneeded to process each ton of steel can be ex-pected. The pace of this phase-in will dependon indu stry resources comm itted to up gradingof domestic steelmaking capabilities.

Materials conservation is also a side benefitof advanced processing technologies that areincreasingly used in producing and fabricat-ing aerospace parts made from superalloys.Often referred to as “near-net-shape” proc-

esses, these casting and powder metallurgytechniques are used primarily to reduce costsof machining and to improve control over m an-ufacturing reliability. Because less metal is re-moved during processing, product yields areimproved significantly.

Conservation Through Part Life Extension

and Design

Life extension approaches to material con-servation are of primary relevance to very high-value par ts. The overall value of a tu rbine bladeinstalled in a jet engine, for example, may be500 times the r aw material value. Technologiesand maintenance strategies that extend the us-able life of a part, therefore, can result in sub-stantial savings in replacement part costs andmaterials over time.

Some life extension strategies are integrallyrelated to advances in nondestructive evalua-tion or testing (NDE or NDT) of products. Onthe inspection line of manufacturing facilities,NDE can be used to identify flawed products

‘The need for technological adjustments by the U.S. steel in-dustry is discussed in the OTA assessment, Technology and SteelIndustry Competitiveness, OTA-M-122, June 1980.



Ch. 6—Conservation of Strategic Materials q 217

which can be immediately set aside for rework-ing or recycling.

NDE has also been used on the productionline to monitor machine tool conditions in or-der to avoid breakage or other dam age. For ex-

ample, tungsten carbide drill bits have oftenbeen retired prematurely because of concernabout breakage. A process developed by theNational Bureau of Standards for continuousmonitoring of the drill bit allows selectiveretirement of a bit when failure is detected tobe imminent, rather than relying on a statisti-cal average or waiting until the bit actuallybreaks, In addition, since cobalt is used to bindthe tungsten carbide, strategic material usemay be reduced.

NDE’s potential role in monitoring of in-

service parts is expected to grow in the yearsto come as confidence in the reliability of in-spection devices increases. Formal retirementfor cause maintenance programs are beingevaluated by the Department of Defense andmay be implemented in the late 1980s.

It is also possible to conserve strategic ma-terials in the design of products, This some-times happens inadvertently. For example, U.S.automakers, in their effort to downsize cars,have substantially reduced chromium use incars even thou gh stra tegic materials conserva-

tion was not a prim ary objective. Design strat -egies specifically intend ed to m inimize strate-gic materials use (e.g., industry’s effort toconserve cobalt in the late 1970s) are probablyrare. However, in many noncritical applica-tions, designers have a w ide range of materialsthat could be used. Actual choice of a mate-rial may be governed not only by cost and per-formance factors, but also by the designers’ ex-perience and esthetic considerations. In th eory,as computer-aided design technologies andcomputer-aided selection of materials advance,

designers may become more aware of alterna-tive materials that use less strategic materials.

Design of products so that they can be eas-ily recycled is another frequently proposedconservation technique. However, the trend insome industries is toward use of more complexmaterials and products that pose greaterdifficulties for recycling.

Interrelationships of Conservation Approaches

As discussed in subsequent sections of thischapter, the prospects for conserving strategicmaterials in many applications are quite good.However, the extent to which any given ap-proach will be adopted by industry will dependon how well it fits into the overall corporatestrategies of many different firms. Generallyspeaking, strategic materials conservation perse is seldom a primary motive in industrydecisions—although it is sometimes an ancil-lary benefit.

In the future, industry concerns about com-petitiveness, improving product performance,and cutting prod uction costs will lead to adop-tion of new technologies, some of which maylead to conservation of strategic materials. Itis difficult, how ever, to p redict overall impactsof conservation on U.S. import reliance: thesenew technologies will interact in complexways—sometimes simultaneously in a given ap -

plication, For example, increased use of ma-terials-efficient fabrication processes in theaerospace industry will reduce the amount of home and promp t superalloy scrap that wou ldotherwise be available for recycling, The over-all effect of this on strategic materials use, how-ever, is likely to be positive, since some fabrica-tion scrap is difficult to recycle. Life extensiontechniques would reduce demand for replace-ment parts containing strategic materials, butwould also reduce the quantity of obsoletescrap available for recycling.

38-844 0 - 85 - 8 : QL 3




Case Studies of Strategic Materials Conservation Opportunities

Conservation of some strategic materials in-creased du ring the late 1970s and early 1980s,encouraged in part by higher costs for rawmaterials and energy, Government waste dis-posal requirements, and industry investmentin new materials-efficient technology. How-ever, major opportu nities to conserve strategicmaterials are still evident. These vary by ma-terial and application:

1. Despite advances in manufacturing tech-nologies, total cobalt losses in 1980 in unre-covered or downgraded scrap, or in process-ing wastes, amounted to 7.7 million pounds—nearly half of the estimated 16.5 million poundsof cobalt actually consumed domestically thatyears By far, the largest opportunity for in-

creased cobalt recycling lies in the increasedrecovery of obsolete scrap. Of the 6.3 millionpou nds of cobalt in p rodu cts estimated to havebecome obsolete in 1980, nearly three-fourths(about 4.6 million poun ds) was u nrecovered ordowngraded. Potential sources for improvedrecovery include superalloy from obsolete jetengine parts and cobalt-bearing catalysts. Othercobalt recycling opportunities include reduc-tion of downgrading of obsolete scrap and im-proved recovery of processing waste, which to-gether entail cobalt losses of 3.1 million pounds.

2. The steel industry is the country’s domi-nant user of manganese, consuming nearly 90percent of total U.S. requiremen ts. Manganeseconsumption is dependent not only on theamou nt of steel produced, but also on how effi-ciently manganese is used in steel production.Significant future reductions in the amount of manganese needed per ton of steel are ex-pected: greater attention to trimming is ex-pected to red uce the average amoun t of man-ganese in steel by 12 percent , from 13.8 to 12.2pounds per ton by 2000. This, together withadoption of improved steelmaking technolo-

gies, such as external desulfurization, contin-

uous casting, and ladle and secondary refin-ing techniques are likely to decrease theamount of manganese required to produce aton of steel from 35.6 to 24.8 pounds by the year 2000. The consumption of imported manga-nese ore and ferromanganese is estimated todecline from 17.8 pound per ton of steel to 9.5pound per ton, a reduction of over 45 percent.Most of these technologies will be implementedfor product quality and cost competitivenessreasons.

3. Widespread adoption of the AOD processby stainless steelmaker led to industrywideimprovements in chromium use that are notlikely to be repeated soon. H owever, chromiumconservation opportunities, including increased

recycling, and reduced overspecification of materials, could lead to major savings. In the1977-81 period, an average of 64,000 tons of chromium contained in purchased stainlesssteel scrap was recycled each year.4 By con-trast, an estimated 62,000 tons of chromiumcontained in obsolete stainless steel scrap wen tunrecovered or was d owngrad ed in 1977 (thelast year for which detailed estimates have beenmade). The largest single opportunity for en-hanced recovery of obsolete scrap is in auto-motive recycling, where m ost chromium -bear-ing scrap is downgraded. Chromium recoveryfrom industrial processing wastes is increas-ing, owing to adoption of collection proceduresand commercial reprocessing systems,

4. The high price of platinum group metals(PGMs) encourages highly efficient use of thesematerials. Recycling probably accounts forover 40 percent of U.S. PGM consumptionwhen internal (toll refining) recycling by indus-try is taken into account. The key opportunityfor increased recycling over the next 10 to 15years will be recovery of PGMs from automo-tive catalytic converters which could add up

to 500,000 troy ounces annually to U.S. PGM

aNational Materials Advisory Board, Cobalt ConservatbnThrough Techno]ogkal Alternatives, publication NMAB-406(Washington, DC: National Academy Press, 1983), fig. 3 (p. 23)and table 11 (p. 24).

4U. S. Department of Commerce, Critical Materials Require-ments of the U.S. Steel Industry (Washington, DC: U.S. Govern-ment Printing Office, 1983), p. 62,



Ch. 6—Conservation of Strategic Materials . 219

supplies by 1995. Obsolete electronic scrap isalso a promising source for secondary recov-ery of PGMs, even though such scrap is dis-seminated widely throughout electronic equip-ment which, in turn, is spread all across thecountry, making collection and separation of

metals expensive. The Departm ent of Defense,which is a large generator of electronic scrap,and the Bureau of Mines, have cooperated indeveloping improved means for processing thisscrap.

In the pages that follow, prospects for stra-tegic materials conservation in certain specificapplications are discussed.

Superalloy

Superalloy constitute the largest single cat-egory of cobalt u se. They are also the principal

users of high-purity chromium metal and m a- jor users of low-carbon ferrochrome. Typicalcobalt-base superalloy contain up to 65 per-cent cobalt- and nickel-base, alloys may con-tain up to 20 percent cobalt. Chromium con-tent ranges between 10 and 25 percent.

Since 1978, when disturbances in Zaire ledto widespread concern about cobalt supplies,manufacturers of aircraft jet engines and en-gine componen ts and several Federal agencieshave placed increased emphasis on reducingthe need for cobalt in jet engines. One ap-

proach, covered in detail in chapter 7, is thedevelopment and use of substitute alloys thatcontain less cobalt. Other approaches empha-size conservation, through recycling of super-alloy scrap, u se of near-net-shape m anu factur-ing processes to reduce fabrication scrap, andextension of the useful life of components. Asindustry adopts these techniques, the need forcobalt, and for other strategic metals, such aschromium, nickel, and tantalum, will be re-duced on a per part basis.

Substantial amounts of cobalt, chromium,

and other strategic metals used in the produc-tion and fabrication of superalloys do not endup in the final part. Table 6-1, adapted froma 1983 National Materials Advisory Board(NMAB) report on cobalt conservation oppor-

Table 6-1 .–Cobalt Consumption in Superalloys, 1980

Wrought Cast TotalInput: Primary cobalt . . . . , 3.47 1.73 5.20Prompt scrap. . . . . . . 0.26 1.50 1.76Obsolete scrap ., . . . 0,87 0.32 1.19

Total production . . 4.60 3.55 8.15

output:Final parts ., . . . . . . . 2.34 1.24 3.58Total lost ., . . . . . . . . 2.00 0.82 2.82

(Waste) . . . . . . . . . . 0.21 0.28 0.49)(Downgraded) . . . . 1.79 0.54 2.33)

Prompt scrap. . . . . . . 0.26 1.50 1.76SOURCE Adapted from National Materials Advisory Board, Coba/t Conservation

Through Technological Alternatives, Nat!onal Academy of Sciences,1983, pp. 147, 148

tunities, 5 estimates sources and end results of the cobalt used in th e prod uction of sup eralloyin 1980, the most recent year for which detailedinformation is available. Several important

points can be drawn from the table:q

q

q

q

Of nearly 8.2 million pounds of cobalt usedin superalloys in 1980, only 3.6 millionpounds, less than 45 percent, were con-tained in final parts.Almost 55 percent of the consumption of primary metal was lost through down-grading or w aste in the p roduction of su-peralloy parts in 1980.Almost 44 percent of the initial amoun t of wrou ght alloys were lost or downgrad ed;for cast alloys the fraction is lower, about23 percent.

The use of obsolete superalloy scrap wasquite low, accoun ting for less than 15 per-cent of the total cobalt used in processingsuperalloys. NMAB also estimated thatonly half of the cobalt in su peralloy scrapthat became obsolete in 1980 was recov-ered for recycling by the su peralloy indu s-try (1.19 million out of 2.4 million pounds),

hCobait Conservation Through Technological Alternut i~~es, op.cit. Some uncertainty surrounds the estimates sho~vn in table6-1, owing to the inadequacy of the available data on scrap use

and new cobalt requirements of the superallo} industr}. As aresult, various assumptions had to be employed b}’ Nhl AB toapproximate conditions in 1980. While NMAB believed its co-balt material flow model to be “reasonable approximation of re-ality, ’ it noted that further work would be needed to confirmor reject its assumptions (pp. 25-26).




These statistics suggest the tremendous po-tential of conservation techniques to reducerequirements for primary cobalt. In 1980, 2,8million pounds of cobalt were lost throughdowngrading and to waste in fabrication of superalloy parts. In the future, much more of

this ma terial may be recoverable as superalloyrecycling technologies advance. Alternatively,the amount of material lost could also be re-duced through the increased use of near-net-shape manufacturing processes, particularlywith respect to the wrought alloys.

Obsolete scrap is a large potential source of cobalt. Most of the 3.58 million pounds of co-balt used in finished superalloy parts in 1980will eventually be available for recycling, butmu ch of this material may be downgrad ed u n-less jet engine manufacturers are confident thatscrap can be safely recycled for jet engines, Theraw materials for superalloys, whether it is co-balt, nickel, chromium, or ferrochromium,must be of the highest purity in order to avoidfaults in the final part that could cause it to fail,Thus, manufacturers of aircraft engines oftenprohibit use of obsolete scrap unless certifiedprocesses for collecting and processing thescrap have been approved, Rates of obsoletescrap generation in th e future m ay be affectedby techniques that extend the service life of parts.

Near-Net-Shape ProcessesThe use of high-temperature alloys in a jet

engine is very inefficient in terms of the amountof material consumed to produce a finishedpar t. Ratios of 8 to 1 for inp ut m aterial to finalpar t (also referred to as the “bu y-to-fry” ratio)are common, and ratios of 20 to 1 are not un-heard of. This ratio can be significantly re-du ced by near-net-shap e processes.6 Three gen-eral types of near-net-shape processes are inuse at this time: precision casting, advancedforging, and powder processing.

8These processes are discussed in detail in New Metals Proc-essing Technologies, a report prepared for OTA by Charles RiverAssociates, Inc.

PRECISION CASTING

Casting, the solidification of molten metal inmolds, is a near-net-shape process that hasbeen used for jet engine components since thebirth of the industry. Casting is very efficientin its use of material. Although it is necessary

to use gates and risers to control the flow of metal into the m old, resulting in as little as 40percent of the metal actually ending in the fi-nal casting, large castings are very near to theirfinal shape (only 5 to 10 percent of the mate-rial needs to be removed during the final ma-chining and finishing operations). Further,most of the scrap generated in casting is “im-mediate revert’’—that is, it can be recycledwithout further processing. Since it is recycledin the same shop in which it is generated,segregation and identification are simple mat-ters. Therefore, most m aterial poured from the

melting furnace is eventually used.Recent tr ends in casting technology have re-

sulted in precision castings of up to 500 pounds(typically 10-pound units were produced in thepast). This results in two advantages. First, alarger portion of the engine can be producedby the material-efficient casting method, andsecond, the elimination of numerous steps of component assembly redu ce the cost of assem-bling the engine.

New casting technologies have also resultedin improved material properties. Through theuse of directional solidification, components,principally blades and vanes, can be cast sothat grain boundaries are very long and arealigned with the axis of the component. It isalso possible to cast components as a singlecrystal, eliminating grain boundaries altogether,This allows the elimination of elements that areoften added to strengthen grain boundaries,such as zirconium and hafnium.

ADVANCED FORGING METHODS

Closed die forging is u sed extensively to fab-

ricate gas turbine components ranging fromsmall turbine buckets to large fan blades andvery large disks. In this process, the startingstock is heated to various temp eratures depend -ing on the alloy being forged and is placed be-




tween two dies that are forced together, enclos-ing the stock and deforming it to the shape of the d ie. Usually the starting stock is wrou ght—i.e., it consists of a bar or billet that has beenhot-worked from an ingot. The hot working en-sures that the original casting achieves full den-

sity and chemical homogeneity.The major disadvantage of this process, as

conventionally practiced, is that a large amountof the material must be removed to reach fi-nal shape. It is common for the final part tocontain only one-tenth of the original materials.This large material loss due to forging maybeconsiderably reduced through the use of twoadvanced technologies.

Isothermal Forging.—Isothermal forging is dis-tinguished from conventional forging opera-tions in that the temp erature of the forging d ie

is the same as the piece being worked , approx-imately 1,7500 to 1,9500 F. Through reductionof heat loss from stock to d ie, the p lastic defor-mation of metal is significantly improved . Theoperation is conducted in an inert gas atmos-phere. Parts can be processed to close to thefinal specifications, although the shape mustbe configured to allow nondestructive inspec-tion, usually by acoustic methods (hence theterm “son ic shap e” for the form as it leaves thedie). Further machining is required to reducethe shap e to its final dimensions. Pratt & Whit-ney Aircraft has patented an d licensed a varia-

tion of the isothermal forging process whichit claims can reduce the input material by 50percent, thereby making a large reduction inthe “buy-to-fly” ratio. Isothermal forging is nowroutinely u sed for the forging of turbine disks..

Near-Isothermal Forging.—Also referred to as“hot-die forging, ” near-isothermal forgingdiffers from isothermal forging in that the dieis not heated to the temperature of the stock,but to 1500 to 3000 F below the stock temper-ature. The operation is conducted in air and

can be adapted to conventional presses, mak-ing it more widely available at a lower cost thanisothermal forging. Although the improve-ments are not as great as those for isothermalforging, this process does reduce the amount

of input material required by conventionalclosed die forging,

POWDER PROCESSING

A third process for the manufacture of super-alloy components is based on the processing

of ultrafine powder into billets or parts. Thepowder may be of a single composition or amixture of m aterials. By the latter method , ox-ide dispersion-strengthened alloys, such asMA-754, are produced.

Powder metallurgy is attractive, not just be-cause it can produce new materials, but be-cause it can produce substantial reductions inthe amoun t of scrap generated d uring formingoperations. Powder “pre-forms” are producedby techniques similar to casting p rocesses. Thepre-forms are then compressed at high tem-

peratures and pressures to eliminate voids andinclusions. The comp onents are th en ready forinspection and final machining.

The combination of powder pre-forms andhot isothermal forging has allowed the devel-opment and use of some of the most advancednickel-based alloys in turbine disks, includ ingIN-100, MERL-76, and Rene-95, none of whichcould be reliably formed into components byconventional means.

The advantages of powder metallurgy are notlimited to conservation of strategic metals in

the m ore exotic app lications such as jet enginecomponents. Gears and camshafts, parts w hichnormally require considerable machining, canbe manufactured to n ear-net shape by pow derpre-forms, thereby reducing scrap productionand machining, The need for resulfurized steelin these app lications, normally used for its im-proved machining characteristics, can be elim-inated as well, reducing the requirements formanganese in this type of steel.

Recycling

Until cobalt supplies were seen as threatenedby the 1978 Katangese rebellion in Zaire, re-cycling in the superalloy industry was largelylimited to home scrap. Prompt ind ustrial scrapand obsolete scrap were either downgraded for




stainless steel production or exported out of thecountry. As prices rose and supplies becameuncertain, the importance of recycling of super-alloy scrap became app arent. Alloy pr odu cers,parts fabricators, and turbine manufacturersbegan to segregate fabrication (prompt indus-

trial] scrap by alloy type so that it could beremelted and reused. Some turbine manufac-turers modified earlier specifications to allowgreater u se of prompt industrial scrap an d evensome obsolete scrap, provided that the sourceand type of the scrap was known. The exactamount of the savings provided by recyclingdu ring the period of high cobalt prices ($25 perpound at their producer price high point in1979-80) is not kn own , but d omestic consump -tion of primary cobalt in superalloy was prob-ably 10 to 25 percent less than might otherw isehave been the case.7

Identification and separation of scrap is timeconsuming and expensive. With 1983-84 cobaltprices ranging from $6 to $12 per pound, it isnot clear whether the gains made in the late1970s will continue. Some firms have contin-ued their recycling programs, particularly forprompt scrap, by encouraging suppliers andcustomers to sepa rate scrap by alloy type. Spe-cialized scrap processing firms now have great-er experience with this kind of recycling, whichmay encourage jet engine manufacturers to up-date specifications to allow greater use of scrapin the production of superalloys. Once suchspecifications are established, recycling of superalloy scrap can be increased quickly inresponse to increased metal prices or supplyuncertainties.

PROCESSING OF SUPERALLOY SCRAP

Commercially used technologies for recy-cling superalloy scrap are based on the sameprocesses used in the original production andrefining of the alloy, includ ing vacuu m ind uc-tion melting and vacuum arc remelting, butstrict attention is paid to segregation of scrap

by type.

For production of superalloys, uncontami-nated home scrap of known composition canbe and is reverted directly to the charge. Ad-ditional processing sometimes involving sev-eral steps may be needed if promp t indu strialscrap or obsolete scrap is to be recycled.

Vacuum and air furnace technologies neededto remelt high-quality superalloy scrap intousable master alloys are already in p lace in theUnited States. In-house scrap is now carefullyseparated and routinely added to the alloy meltby many producers of superalloys, and a spe-cialized industry has developed to producemaster alloys from fabrication scrap. Somefirms rep ort that they now r ecover virtually allin-house scrap. Obsolete scrap is also recycledto some extent, although generally not for themost demanding application—rotating parts of

jet engines. As is discussed in box 6-A, instru-ments able to identify comp lex alloys and con-taminants are now being marketed and mayalleviate some technical problems associatedwith scrap sorting. According to recycling in-du stry sources, several million pounds of high-temperature alloy scrap have been shippedfrom scrap p rocessors to m elters in th e last 10years.8

Air-melting processes, involving electric fur-nace melting of the scrap charge and subse-quent refining in an argon-oxygen-decarburi-zation vessel, can produce alloys from scrap

that are suitable for many noncritical superal-loy and super stainless steel applications, butare not appropriate in critical applications suchas gas turb ines used in aviation. Nickel and co-balt recovery is high, but readily oxidizable al-loys are lost in the slag. Air melting of scrapcan also be used to prod uce master melt alloyssuitable for further processing through vacuummelting into superalloys.9

Vacuum melting processes are used to pro-duce superalloy suitable for the most demand-ing applications or superalloys containing

highly reactive elements. Only the highest qual-

7As discussed in Charles River Associates, Inc., E~fects of the1978 Katangese Rebellion on the World Cobah Market, contractreport prepared for OTA, December 1982, pp. 1-6.

‘Information provided by the National Association of Recy-cling Industries.‘J. J. deBarbadillo, “Nickel-Base Superalloy: Physical Metal-

lurgy of Recycling, ” Metallurgical Transactions A., vol. 14A,March 1983, p. 332.



Ch. 6—Conservation of Strategic Materials 223

Box 8-A.-Scrap Sorting and Identification Instruments

Recycling of comp lex materials requires de-tailed knowledge of scrap constituents. N ick-el- or cobalt-based superalloy scrap may con-tain 8 or even 10 separate alloying elements,as well as potentially troublesome tramp ele-

ments and contaminants that need to be re-moved during processing. Concerns aboutscrap quality are not limited to superalloys:in stainless steel produ ction, for example,presence of phosphorus in scrap needs closemonitoring, du e to its adverse effect on work-ing, forming, and du ctility of stainless steel.Very small amounts of titanium in scrap chargesare believed to be harm ful in tool steels andhigh strength steels. Failure to correctly iden-tify and sort scrap is a major reason for theextensive downgrading of superalloy andstainless steel scrap th at is still prevalent.

Certification requirements placed on scrapprocessors by their customers have becomeincreasingly stringent. In some premium uses,scrap processors may have to identify scrapconstituents to an accuracy of a few parts p ermillion. Under these circumstances, conven-tional scrap sorting techniques—entailing vis-ual inspection, magnetic separation, or sparktesting—are not su fficient in th emselves.

Growth in recycling of superalloy and spe-cialty materials dur ing the last decade has ledto increased use of mobile and inexpensive($4,000 to $50,000) sort ing instrum ents. Thesedevices were not d eveloped p rimarily for use

in scrap processing, but most can be used byunskilled operators (or in some cases trainedtechnicians) to identify complex scrap com-ponents m ore accurately.16 Some of these (e.g.,chemical spot testing) are used to confirm thepresence of alloys after preliminary hand sort-ing is carried out. These techniques are qual-itative or semiquantitative in nature. Morecomplex readings can be obtained through X-ray spectrometers, therm oelectric instru-ments and eddy current devices—all of which

I@Xavier Spiege] and E. Horowitz, Instruments for the sortingand Identification oj Scrap Metal, Sponsored by the Institute of Scrap Iron and Steel (Baltimore, MD: The Johns Hopkins Univer-sity Center for Materials Research, Oct. 15, 1981), p. 1.

are now available as portable un its which canbe used in scrap yard s.17

A recent recycling advance has been linkageof scrap identification devices to user friendlycomputers, which provide workers with step-by-step procedu res for classifying scraps.Commercially available programs specificallygeared to the needs of small firms in the re-cycling industry have been marketed for sev-eral years. One such program , used in con-

jun ction w ith a p ortable X-ray spectrometerdevice, reportedly allows rapid identificationof up to 16 elements in a sam ple.18 Initial anal-ysis can be comp leted in 10 to 50 second s; amore complete quantitative analysis requiresseveral minutes, if needed. If properly pro-grammed, the computer will identify the tradename of the alloy or materials which the scrapmost closely approximates. This is especiallyuseful in obsolete scrap identification, wherethe origin of the materials may not be known .

Identification devices are increasingly usedby the scrap industry–with the encourage-ment of the Nat ional Association of RecyclingIndu stries, the Institute of Scrap Iron andSteel, and the Bureau of Mines. Most of theseinstruments were designed for laboratory orscientific use, not the difficult operating envi-ronment of the scrap yard. Portable deviceshave the ability to test a large num ber of sam-ples rapid ly on site, but are not capable of such detailed analysis as laboratory or station-

ary instruments. As instrument manufactur-ers become more aware of the scrap ind ustry,instruments specifically designed for scrap in-dustry u se may be developed.

Likely trends in materials processing sug-gest that scrap classification techniqu es w illneed continuing refinement. Use of morecomplex alloys, and parts m ade from m ulti-ple alloys will increase recycling difficulties.

~zNeWel l , R. E. Brown, I). M. Soboroff, and H. V. Makar, A Re-view of Methods for ldentijjing Scmp Metals, Bureau of MinesInformation Circular 8902 (Washington, DC: U.S. GovernmentPrinting Office, 1982).

I$AS discuss~ in: “Phi]ips PB9500 X-Ray Spectrometer SpeedsRecycling of Critical Materials,” Norelco Reporter, vol. 28, No.1,May 1981, pp. 40-42.




The Bureau of Mines is identifying alloys forwhich current identification and sortingmethod s are not adequate, as a preliminarystep towards development of new methods.19

Another area of government R&D (undertakenby both the Bureau of Mines and the NationalBureau of Standard s) is instrumented sparktesting techniques, which could reduce sub- jectivity in spark analysis by workers,

Ultimately, effective recycling requ ires well-developed linkages am ong p rocessors, meltshops, fabricators, and manufacturers. Dur-IOU.S. ~wtient of tie htarior, Bureau of Mktm AVOn~OJe

Research Center Research Program Fiscal Year IW3, (n.p., n.d.)

ing the last decade, many firms in the super-alloy industry established recycling programs,entailing close coordination of requirementsalong the entire chain of the industry. A prop-erly controlled program to ensure scrap integ-rity entails accurate separation and identifica-

tion of scrap, and ad equate measures to re-duce risk of contamination.20

~A detailed discussion of superalloy scrap processing require-ments can be found in R. S. Cremisio and L. M. Wasserman,“Superalloy Scrap Processing and Traae Elemeht Consideration,”Vacuum Metallurgy: Pmced@a of the 1977 Vacuum MetallurgyConferenm, R. S. Krutenat (ad.) (Princeton, Nl: Science Presa,1977), pp. 353-3S8.

of known composition and history can be vac-uum melted without extensive preprocessing,

In the long term, the potential for recyclingwill depend more heavily on obsolete scrap asthe u se of near-net-shape technologies increases.Where traditional machining of superalloyparts can typically require up to 10 times asmuch material as contained in the final part,new processes can red uce this figur e to as lowas 2 or 3 to 1. This reduces the amount of promp t scrap generated and thus increases theimportance of obsolete scrap.

The technical feasibility of using obsolete su-peralloy scrap to produce investment cast jet

engine turbine blades has been demonstratedby Certified Alloy Products. The companyreportedly has produced a master alloy fromused superalloy turbine blades.10 The processentails oxygen lancing in an electric arc fur-nace, followed by refining in a vacuum induc-tion furnace. Testing of blades made from therecycled alloy showed comparable quality toturbine blades manufactured from virgin ma-terials. The firm developed the process in theaftermath of the 1978 cobalt price spike andhas subsequently discontinued its use.11 Al-

ity of scrap is suitable for vacuum melting.Such scraps are certified by alloy content andmust be free of contaminants and tramp ele-ments. With careful separation and identifica-tion, some in-house scrap and fabrication scrap

— — —IOThis process is described in Michael J. Woulds, “Recyclingof Engine Serviced Superalloy s,” Supera]]oys 1980: Proceedingsof the Fourth International Symposium on Superafloys, John K.Tien, et al. (eds.) [Metals Park, OH: American Society for Metals,1980), pp. 31-41.~lprivate communication between personnel of Certified AIIoY

Products and OTA staff in May 1983.



— -—

Ch. 6—Conservation of Strategic Materials q 22 5

though such techniques may enhance the po-tential for reuse of obsolete superalloy scrap,further w ork to establish p rocess reprod ucibil-ity and results may be needed.

Both vacuum and air melting furnace tech-

nologies continue to evolve. New processes,such as Electron-Beam Refining, Vacuum ArcDouble Electrode Remelting (VADER), andPlasma Arc processes may have considerablerelevance to superalloy recycling. Some of these technologies are in th e early stages of usein the United States.

Several laboratory-scale processes have beendeveloped which separate superalloy scrap intoits constituent metals, but none have been com-mercialized. Such techniques overcome mostconcerns about contaminants. In a laboratoryproject spon sored by the U.S. Bur eau of Mines,Inco developed a process that utilized a com-bination of hydro- and pyre-metallurgical proc-esses to recover 93 percent of the chromium,99 percent of the nickel, 96 percent of the co-balt, and 92 percent of the molybdenum fromclean, solid superalloy scrap.12 Other Bureauof Mines research projects on sup eralloy scrapare underway. In one experiment, the super-alloy scrap is melted with aluminum or zincto form an intermetallic compound which canbe crushed into small particles. The particlesare then dissolved by acid; the resulting solu-

tion would then be treated hydrometallurgi-cally to recover the metals. The process isthought to be especially promising as a meansfor recycling mixed combinations of bulksuperalloy scrap which have not been sorted.13

GTE Sylvania Corp. has a commercial facil-ity for recovering high-pu rity cobalt from sec-ondary sources that include some types of su-peralloy scrap, including grindings. GTE’s—

’21. 1. cie Elarbi~illO, J. K. Pargetter, and H. V. Makar, Processfor Recoloring Chromium and Other Metals From SuperalloJrScrap, U.S. Department of the Interior, Bureau of Mines Report

of Investigation 8570 (Washington, DC: U.S. Government Print-ing Office, 1981),lsJera]d R, Pederson, compiler, Bureau (~ ~ Mines Research ~ ~~.~

(Washington, DC: U.S. Government Printing Office, n.rl.), p. 103:a n d (;. B. A t k i n s o n , I n c r e a s i n g the l,eaching Rote a.f HuJkSuperallo~r Scrap b}’ Nfelting \lrith Aluminum, U.S. Departmentof the 1 nterior, Bureau of Mines Report of Investigations 8833(Washington, DC: LJ.S. Government Printing Office, 1983).

proprietary manufacturing process uses chem-ical means to recover highly purified cobaltpowder that is now used in cemented carbideprod ucts. The firm is considering a larger scalerecovery process which would produce com-pacted br iquettes of cobalt that m aybe suitable

for superalloy production.14

Commercialization of advanced superalloyreclamation processes by industry is impededby the currently low price of cobalt. Plans tound ertake a pilot plant to test the Inco/ Bureauof Mines laboratory process discussed abovewere discontinued when cobalt prices fell inthe early 1980s. Feasibility studies showed thatthe p ilot p lant p rocess, and a small-scale com-mercial facility would have been profitable at1980 metal p rices, but would operate at a defi-cit at cobalt prices in the 1981-84 period. Esti-

mated costs of a pilot plant project able to han -dle 100 pounds of scrap feed per hour wereestimated to be about $5 million in 1980 dollars,assuming no d onation of equipment by indu s-try. Operating costs for such a facility wouldbe in th e neighborhood of $2 million for an 18-month period.15

RETIREMENT FOR CAUSE AND PRODUCTLIFE EXTENSION PROGRAMS

currently, critical components of jet engines,such as turbine disks, are retired from serviceon a predetermined schedule, based on the

number of hours a part has been in operation—not on the basis of actual d etection of flaws ordefects in th e part, This has been necessary be-cause of difficulties in detecting the early stagesof flaws that could lead to a disastrous failureof a part. While the current retirement proce-dures minimize risk of failure, most parts areremoved from service long before actual flawsoccur.

Turbine disks used in the F-100 jet engine,for example, are only kept in service for thenumber of hours in which there is a statistical

probability of a fatigue crack developing in oneout of a thousand disks. As a result, 999 partscan be expected to be removed from service

141 nformation pro~.ided by GTE Products Corp.1s1 nformation provi(]e(~ by the U.S. Bureau Of Mines.




prem atur ely for every single part that is d efec-tive. Subsequent testing has shown that the use-ful life of man y of these retired parts could be10 times longer than th e disk in which the ini-tial crack occurs.21

With the substantial technical advances thathave been m ade in N DE in recent years, it maysoon be possible to evaluate individual partsfrom operating jet engines at prescribed inter-vals in order to determine whether the initialstages of a flaw have appeared. Parts whichhave such flaws could then be retired for cause(RFC); those without flaws could be kept inservice.

Such a strategy underlies the Air Force’sWright-Patterson Aeronautical Laboratory eval-uation of m ethodologies for a m aintenance pr o-gram based on retirement for cause. If imple-

mented, the program will permit parts fromsome jet engines to be used until there is ac-tual evidence of an incipient flaw. An actualdecision about implementing the program willprobably not be made until after 1985. How-ever, early indications are that the program hasthe p otential to redu ce spare-part requirements,and therefore to conserve strategic materials.

The initial Air Force evaluation centers onthe F-100 jet engine. If initiated in 1985, theprogram’s savings in spare parts over the 15-year average engine service life left in the F-

100 fleet could be $249 million. By 2000, a 70percent material savings from requirements forreduced spare parts would also be achieved,according to the Air Force.

A related Air Force initiative is aimed at“stockpiling” retired jet engine p arts un til theycan be returned to service rather than simplydisposing of them as scrap, as is ordinarilydone.22 Many of these parts have been retiredsimply because they have reached the end of the predetermined service life discussed above,and could be returned to service if retirement-

for-cause (RFC) methodologies are implemented.“J. A, Harris, et al,, Concept Definition: Retirement for Cause

of FIOO Rotor Components. Technical Report AFWALTR804118prepared for U.S. Air Force Materials Laboratory at Wright-Pat-terson Air Force Base by Pratt & Whitney Aircraft Group (Wash-ington, DC: U.S. Government Printng Office, 1981).ZZInformation provided by the U.S. Air Force.

These parts are also being used as test speci-mens for the evaluation of RFC methodologies.Other parts in these “holding accounts” maybe capable of rejuvenation through current andprospective technologies discussed in the pre-vious section.

It is possible to extend the lifetime of com-ponents of the jet engine if flaws and defectscan be caught at an early time. Researchers inWest Germany, for example, have reported thatif an engine is dismantled at three-quarters of its normal life and the turbine blades are sub-

jected to hot isostatic pressing to eliminate in-cipient cracks, the overall life of the blad es willextend to 50 percent beyond their normal lifein service, as illustrated in figure 6-1.

Hot isostatic pressing (HIP) has also beenshown to extend the service life of vanes and

blades if it is used as a post-casting treatmentto eliminate all porosity remaining in the ma-terial after casting. The post-casting HIP treat-ment has been shown to increase the averagestress-rupture life by 100 percent and the fa-tigue life by 800 percent in two nickel-base al-loys, B-1900 and IN-792, both modified by theaddition of hafnium.

Figure 6-1 .—Service Life Time of Turbine Blades

Dismantle

For For

SOURCE” H. Huff, R. Grater, and R Frohling, “Measures for Materials Conserva.

tion in Aero.Engine Construct ion,” paper delivered to the NATO Ad-visory Group for Aerospace Research and Development Conference,Vimelro, Portugal, October 1983




A quite different approach toward materialconservation is to design parts for the life of the aircraft. Such approaches may requiremore strategic materials to be used in the ini-tial part, but because these parts have a longerlife expectancy, the end result may be to con-

serve materials. Such strategies are beingevaluated through the engine structural in-tegrity program of the Air Force.

OUTLOOK FOR CONSERVATION OF STRATEGIC MATERIALSIN SUPERALLOYS

All of the factors discussed above—materials-efficient processing, recycling, and life exten-sion—will play a role in determining conserva-tion levels achievable in sup eralloy p roductionand parts manufacturing. More efficient proc-essing and fabrication could reduce input rawmaterials needed for each jet engine by 10 per-

cent by 1990 and 25 percent in the early yearsof the next century, compared to current levels.This is a judgmental estimate, which assumesthat many currently used technologies (whichare less efficient in conserving materials) willcontinue to be used throughout much of theperiod. Ad vanced technologies are likely to beintroduced primarily when new alloys and suc-cessive generations of jet engines are broughtinto production, typically at 5- to 10-year in-tervals.

As fabrication becomes more efficient, home

and prompt scrap—now preferred for recy-cling—will comprise a less important portionof the materials ava ilable for recycling. If pr oc-essing problems are overcome, obsolete scrapwill probably ascend in importance, althoughto what extent is difficult to foresee. Part lifeextension technologies and RFC maintenanceph ilosophies could extend th e material life cy-cle, thus temporarily reducing obsolete scrapproduction levels, even if advanced recyclingtechnologies are implemented.

Development of new alloys and manu factur-ing techniqu es by superalloy prod ucers and jetengine makers can have unpredictable effectson recycling. Increased use of powder metal-lurgy, coatings, multiple alloy components, andph ase-in of advanced ceramics and compositesmay make the job of recycling more difficult.

For example, coated or clad superalloys mayreduce the value of some superalloy scrapowing to ad ded costs of identifying and recov-ering the surface layer. continuing evolutionin scrap processing technologies to keep pacewith rapid changes by producers and compo-

nent manufacturers will be required if thepromise of recycling is to be realized.

Conservation of Manganesein t he Steel l ndustry

23

Nearly 90 percent of the manganese con-sumed in the United States is used in theproduction of steel, either as an alloying ele-ment or as a processing agent.24 Consumptionof manganese in th is indu stry is dependent n otonly on the level of steel production, but alsoon the mix of steel grades produced and proc-

essing technologies used. This section dis-cusses the function of manganese in both steeland steelmaking, and assesses the effects of product and processing trends on the patternof manganese use in the steel industry.

Manganese as an Alloying Element i n Steel

Manganese is second only to carbon in im-portance as an alloying element in steel. Throughits influence on steel chemistry and microstruc-ture, manganese influences an assortment of physical and mechanical properties. As dis-

cussed in box 6-B, manganese provides sulfurcontrol, enhances hardenability, wear resist-ance, and solid solution strengthening, andretards recrystallization. The amount of man-ganese used as an alloying element depends onthe specific property requirements of the par-ticular steel product. Some grades make greateruse of it than do others.

ZaMuch of the analysis in this section was based on G. R. St.Pierre, et al., Use of Manganese in Steelmaking and Steel Prod-

ucts and Trends in the Use of Manganese as an AJloying Elementin Steels, OTA contractor report, February 1983.zqBased on data from Minera]s Yearbook Voiume 1 (Washing-

ton, DC: U.S. Bureau of Mines, Department of the Interior, 1980,1981, 1982). Includes manganese consumed in ores with greaterthan 5 percent Mn, ferroalloys, and metal, but not the manganesecontained in most iron ores



228 q Strategic Materials: Technologies to F/educe U.S. Import Vulnerability

Box 6-B.—The Role of Manganese as an Alloying Element 25

Sulfur Control.--In nearly all grades of steel, sulfur is an unwelcome imp urity. It is a tramp elementthat is picked up from the coking coal, fuel oils, and ferrous scrap used in the production of ironand steel. Iron and su lfur form comp oun ds (FeS) at the grain bound aries within steel, causing adetrimental condition known as “hot shortness.” Problems arise because FeS has very little struc-tural integrity, being either liquid or extremely plastic at the temperatures encountered during many

finishing (hot w orking) operations. The presence of this strengthless phase as a film along the net-work of grain bou nd aries severely weakens steel at high temp eratures and causes cracking d uringfabricating operations, Furthermore, in ferritic grades, FeS causes problems with low-temperaturemechanical properties. To minimize these effects, the sulfur content is typically held below 0.05 per-cent by weight. Manganese is added to react with the remaining sulfur, which would otherwise com-bine with iron. The globular MnS precipitates formed up on the ad dition of manganese are solid attypical hot working temperatures and are structurally amenable to hot forming operations. Althoughit is not a remedy for all sulfur-related problems, manganese generally improves both the high- andlow-temperature properties of steel.

Hardenability.--Heat treatment is the most potent method for optimizing the strength and ductilityof steel. The cooling rate required to form a given martensite profile dur ing the heat treatment qu enchis a very importan t parameter, known as “hard enability,” of steel. Add itions of the common alloyingelements, namely molybdenum, manganese, chromium, silicon, and nickel, facilitate the formation

of martensite, thereby reducing the cooling rate requ irement and increasing the h ardenability of steel.Manganese is a very cost-effective hardenability agent and consequently is one of the most vital alloyingelements for influencing the response of steel to heat treatment.

An allied effect of some alloying elements concerns their influence on the shap e and distribu tionof iron carbides in steel. Weld embr ittlemen t can occur if the iron carbides form a continuous filmat the grain bou nd aries d uring the thermal excursion. Manganese tends to enh ance weldability of steel by inhibiting the development of such film.

Wear Resistance.--Manganese, like nickel, lowers the austenite-to-ferrite transformation temperatureof steel and is termed an austenite stabilizer. High-carbon steels that remain austenitic at room tem-perature can be produced by adding manganese to levels greater than 10 percent by weight. Austeniticsteels as a class are attractive because their strength increases markedly as they are deformed andthey have excellent resistance to fracturing under impact conditions, two properties important forwear resistance. The austenitic manganese grades, called Hadfield steels, display good abrasion andimpact resistance and serve in construction, mining, quarrying, oil-well drilling, steelmaking, cement

and clay manufacturing, railroading, dredging, and lumbering applications. Other austenitic grades(containing 15 to 25 percent manganese) have been developed for their nonmagnetic properties andhigh toughness. These high-manganese austenitic steels are suitable for stru ctural uses in strong m ag-netic fields and at cryogenic temperatures and may replace the stainless steels commonly used inthese applications.

Solid Solution Strengthening.--Steel generally becomes stronger when an alloying element is d issolvedin the iron p hases. This effect is known as “solid solution strengthening.” It is a very important m eansof strengthening ferritic steels, which cannot be strengthened by heat treatment. Alloying elementsvary m arkedly in th eir potency as solid solution strengtheners. In ferritic steels the ord er of decreas-ing effectiveness app ears to be: silicon, mangan ese, nickel, molybdenum , vanad ium , tungsten, andchromium. While silicon is highest on this list, it is not used extensively because of an accompanyingloss of ductility. Thus, manganese has great utility as a solid solution strengthener.

Recrystallization.–When steel is deformed or heavily worked, its microstructure is altered in a way

that is d etrimental to the p roperties of steel. To alleviate problem s, steel in this cond ition is usuallyannealed, whereupon the microstructure is recrystallized. Manganese slows the rate of recrystalliza-tion considerably. This is not a desirable effect and can have negative impacts on the productivityof various steel-treating processes, such as continuous annealing operations.

~~he terms ferrite, austenite, and martensite that appear throughout this discussion refer to the various microstructural phases of steel.




MAJOR CLASSES OF STEEL

Steel is produced in a myriad of composi-tions, and the relative pop ularity of each grad echanges as consumer demands shift. Trendsin manganese use vary among th e four broadcategories of steel: carbon, full alloy, high-

strength low-alloy (HSLA), and stainless. Allfour classes contain manganese, but in differ-ing proportions.

The most widely used systems for designat-ing steels in terms of their chemical composi-tions are those of the Am erican Iron an d SteelInstitute (AISI) and the Society of AutomotiveEngineers (SAE). These cataloging systems arevery similar and are carefully coordinated bythe two groups. In addition to the commongrades listed by these organizations, steel-maker produce proprietary grades, but the

manganese contents of these are comparable.The chemical specifications for a particulargrade of steel vary slightly according to theproduct nature. Specifically, the ranges inplates are a little wider than those for bars, sim-ply because compositional variations due tosegregation are greater in the large rectangu-lar ingots used in p late prod uction than in thesmaller ingots used for bars.

Carbon steel.—The main constituents of carbonsteels are iron, carbon, and manganese, withmanganese present up to a maximum of 1,65percent. The majority of carbon steels havemanganese specifications whose midpoints fallin the range 0.40 to 0.85 percent. The averagemanganese content of the entire carbon steelcategory is estimated to be abou t 0.65 percent,or 13. o pounds per ton of steel.

Manganese is used in carbon steels primar-ily for its sulfur control and solid solution-strengthening characteristics. It also im provesthe heat t reating characteristics (hardenability)of these grades, though this is not a major con-sideration for many uses of carbon steel.

Two types of carbon steel have especiallyhigh manganese and sulfur contents in orderto improve machinability, These resulfurizedand resulfurized-rephosphorized grades typ i-cally contain 0.7 to 1.65 percent manganeseand find service in applications, such as gears

and cams, where considerable machining isneeded. The large number of manganese sul-fide particles in these steels improve surfacefinish, enhance metal removal rates, and in-crease the tool life by facilitating the chip for-mation process.

Full Alloy Steel.—Alloy steels usually containmore manganese and silicon than do carbonsteels and, in addition, may contain other ele-ments such as chromium and molybdenum.The extra alloying additions enhance mechan-ical properties, fabrication characteristics, orother attributes of the steel. In the more com-mon alloy steel grades, manganese is added pri-marily for hardenability and less importantlyfor sulfur control. The average manganese con-tent of alloy steels is estimated to be 0.75 per-cent, or 15. o pounds per ton of steel.

There are experimental alloy steels whichhave not yet been assigned regular AISI-SAEdesignations. In general, these experimentalgrades have higher manganese specificationsthan the standard grades. This suggests thatmanganese is becoming m ore popular as an al-loying element and that the average manganesecontent of alloy steels should be expected toincrease.

Although most alloy steels contain under 2percent manganese, several grades containing

10 to 14 percent manganese are used. Theseare the Hadfield grades, which have excellentabrasion and impact resistance and are usedin construction, mining, and other high-wearapplications. There are also alloy steels withmanganese contents as high as 25 percent thathave been developed for use in strong m agneticfields and at cryogenic temperatures.

HSLA Steel.—HSLA steels have been devel-oped as a compromise, having the convenientfabrication characteristics and low cost of car-bon steels and the high strengths of heat-treated

alloy steels. HSLA steels are generally used inapplications such as energy production and au-tomobiles, where savings in weight can bemade as a result of their greater strength andatmospheric corrosion resistance and wherebetter durability is desired.




HSLA’s derive their superior properties froma variety of alloying elements in relatively lowconcentrations of 0.2 to 1.6 percent, coupledwith controlled rolling and heat treatments.Common alloy additions include manganese,nickel, chromium, columbium, molybdenum,

titanium, and vanadium. In comparison withthe majority of carbon and alloy steels, theHSLA steels contain greater manganese con-tents. The limits in th e 14 alloys designated bythe SAE range from 1 to 1.65 percent manga-nese, with an average of about 1.1 percent, oran average of 22.0 pounds per ton of steel.

Stainless Steal .—Stainless steels are ferrous al-loys that are rich in chromium and sometimesnickel. They are used in a variety of applica-tions requiring good corrosion and oxidationresistance, as well as good strength . Composi-tional specifications for stainless steels usuallydo not prescribe minimum manganese levels,only maximum concentrations. Stainless alloy304, which constitutes roughly 42 percent of the stainless steel produced in the United States,has a manganese specification of 2.0 percentmaximum. On the average, stainless steels con-tain 1.7 percent m anganese, or 34.0 pou nd s perton of steel.

Several stainless steels, however, contain farmore manganese than the average. In part,these alloys reflect the fact that an increase inmanganese levels perm its a reduction in nickel

content. Tenelon steel, containing 14.6 to 16.5percent manganese, was developed by U.S.Steel Corp. following concern over nickelshortages that occurred during World War IIand the Korean conflict.

TRENDS IN THE STEEL PRODUCT MIX AND MANGANESE USE

The average amount of manganese consumedstrictly for alloying purposes is being influ-enced by two major trends. The first is a chang-ing p rodu ct mix. Steel consum ers are using in-creasingly greater proportions of full alloy,

stainless, and HSLA steels, which usually con-tain more manganese than do carbon steels.Figur e 6-2 shows the h istorical produ ct sharesfor each of the major steel classes. The classescontaining the most manganese, namely, fullalloy, HSLA, and stainless steels, are expected

to increase their portions of the market. By2000, the product shares for the various prod-ucts are expected to be app roximately: carbon80 percent; full alloy 9 percent; HSLA 9 per-cent; and stainless 2 percent.

The second contrasting trend is the decreas-

ing manganese composition of carbon steels.This is a result of improvements in the steel-making p rocess, nam ely, better sulfur removaltechniques and more reliable composition con-trol, This effort is driven by economic pres-sures to conserve raw materials and increaseproduct fabricability. New technologies allowsteelmaker to retain the same quality productwith less manganese. They can now afford toreduce manganese content to save on rawmaterials costs and to avoid some of the moreunpleasant attributes of manganese, such as therecrystallization problem alluded to in box 6-B. Two manganese reduction techniques arelikely to be administered: trimming to the lowerend of the specified m angan ese range for eachof the grades and reduction of minimum man-ganese compositions because less is needed forsulfur control.

Trimming.—Most manganese specifications forsteels are listed as ranges. To be on the safeside, steelmaker generally aim for the mid-points of these ranges. Trimming involves aim-ing for the lower end of the specified range.Improved ladle practice is the key to effective

trimming. Better manganese composition con-trol is attainable with improved melt protec-tion, alloy additions packaging, and sensing,analytical, and control instrumentation. Trim-ming practices could be implemented veryquickly in an emergency, especially if opera-tors become better aware of the statistical na-tur e of quality control. The man ganese contentof steel could be reduced by as much as 0,05to 0.10 percent with the use of trimming.26

Reduction in Specified Manganese Range.—Sulfurspecifications of most steels, except for the

resulfurized grades, are usually about 0.05 per-cent maximum. In practice, steels are pro-duced with average sulfur contents of about

ZeJohn R. stubbles, “Conservation Could Cut Steelmaking Re-quirements,” American Metal Market, Oct. 20, 1983.



Ch. 6—Conservation of Strategic Materials Ž 231

Figure 6-2. —Historical Market Shares for Major Classes of Steel

stainless

SOURCE Office of Technology Assessment, based on shipments data from the American Iron and Steel Inst!tute, Washington DC




0.025 percent. Manganese specifications couldbe reduced to reflect this lower sulfur level.

Technologies such as external desulfuriza-tion of blast furnace iron and ladle metallurgytechniqu es allow steelmaker to red uce the sul-fur content of the finished p roduct further still.External desulfurization involves injecting cal-cium carbide or magnesium metal into the hotmetal prior to its introduction to the basic oxy-gen steelmaking units. Lime is sometimes in-

jected as an auxiliary agent with these desul-furization materials. Implementation of thistechnique will become almost universal in thedomestic industry by 1990. This will reduce theneed for desulfurizing during the steelmakingstage and lead to much lower residual sulfurlevels in new steel and, eventually, in recycledscrap. Furthermore, ladle injections of desul-

furizing agents such as lime, calcium, or rareearths just p rior to primary casting redu ces thesulfur content below 0.01 percent, and oftenbelow 0.005 percent. Ladle metallurgy technol-ogies may not be installed p rimarily for sulfurreasons, but once they are in place they willno doubt be used to reduce sulfur levels in ad-dition to providing the other benefits.

By 2000, the average sulfur content of steelmay be as low as 0.01 or 0,02 percent. Thismeans that less manganese is required in thefinished product solely for sulfur control pur-poses. Even though proportionally higher man-ganese-to-sulfur ratios are required at lowerlevels of sulfur, a net reduction in the actual

amount of manganese needed is realized by re-du cing the su lfur content. The manganese con-tent of each grade of steel could probably beredu ced by 0.2 percent with the widespread im-plementation of external desulfurization andladle technologies. For carbon steels, this rep-

resents a 30-percent reduction in the manga-nese content.

SUMMARY OF TRENDS IN THE MANGANESECOMPOSITION OF STEELS

The effects of the product mix and manga-nese composition trends on the average man-ganese content of steel is illustrated by table6-2. Note that even thou gh th e high-manganesealloy products become more pervasive, theaverage manganese composition is likely todrop from 0.69 to 0.61 percent. That is a re-

du ction of 1,6 pounds (from 13,8 to 12.2 pounds)of manganese for each ton of steel.

Manganese in t he Steel making Process

On an industry average, almost three timesmore manganese is added to steel during itsprocessing than ends u p in the finished prod-uct. When the 11 percent of the man ganese ad-ditions that comes from in-house recycling isdiscounted, the overall manganese recoveryrate comes to about 39 percent. This sectionoutlines the major trends in steelmaking prac-tice that affect the efficiency of manganese usein the production process.

Table 6-2.—Manganese Content for Major Grade of Steel

Current (1982) Forecasted 2000a –

Market Manganese Market Manganese –

share content share content

Carbon b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87.6 0.65 80 0.5 -

Full alloy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 0.75 9 0.8HSLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 1.1 9 1.2Stainless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 1.7 2 1.7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 0.69 —

100 0.61aDra~tiC ~h~”~~~ in the bala”c~ of economic activl!y Could shift the market shares in 2000 to: 90 percent carbon, 9 PerCent combined full alloY and HSLA, and 1 Percen~

stainless In the low case; or 70 percent carbon, 27 percent combined full alloy and HSLA, and 3 percent stainless in the high case An average manganese contentof O 67 percent (high case) might arise from a shift In favor of alloy steels caused by a severe reduction in new construction and manufacture of machinery, vehicles,and containers with a relative gain in the construction of new chemical, petrochemical, coal conversion, and powerplants. Similarly, a substantial shift (n favor ofcarbon steels caused by extremely high demand for new buildings, highways, vehicles, and primary machinery might result In a manganese content of 0,56 percent(low case)bTrimming, together with reductions in the specified manganese range, cou ld cu t the manganese content of carbon steels by 0.25 to O.so p3rCent. A COrl SerVat iVe reduc-

tton of O 15 percent is shown here to account for less than full implementation of these practices.

SOURCE: Office of Technology Assessment based on data from the American Iron and Steel Institute, Washington, DC, and G R St Pierre, et al , Use of Manganese in Stee/nraking and Stee/ Products and Trends in fhe Use of Manganese as an A//eying E/ernent In Stee/s, OTA contractor report, February 1983




PATTERNS OF MANGANESE USE IN STEELMAKING

Figur e 6-3 shows the conventional steelmak-ing sequence, from raw materials preparationto casting an d finishing. Manganese enters theprocess flowstream from five d istinct sour ces:iron ore, fines and w aste materials, man ganeseore, iron and steel scrap, and ferromanganese.

On an industry average, iron ore and finesand waste materials contribute approximately36 percent of the man ganese (disregard ing thatpresent in ferrous home scrap] ultimately ad dedto the process stream. Iron ores contain ap-proximately 0.16 percent manganese.27 Al-though this is a small concentration (and hasbeen d eclining in recent years), large qua ntitiesof iron or e are added to the blast furn ace. Finesand waste materials generated by the steel pro-du ction pr ocess contain large amounts of man-ganese. Thou gh cur rently there are n o satisfac-tory methods for extracting manganese fromthe iron and steelmaking slags, dusts, sludges,scales, and other wastes, some plants operatesinter strands to recycle some of these mate-rials, The ore sinter (consisting of partiallyfused limestone, fine iron ore particles, andsteelmaking dust and other waste products)produced in sinter strands can be charged(added) to blast furnaces for hot m etal produ c-tion. Steelmaking slags and dusts consume alarge proportion (approximately 42 percent) of the manganese added to the process stream.Slags from both electric and basic oxygen steel-making fur naces can be charged into blast fur-naces, however, basic oxygen furnace (BOF)slags are more commonly recycled in this man-ner. This is because of the proximity of BOFsto blast furnaces—BOFs are always part of in-tegrated steelmaking facilities, while electricarc furnaces (EAF) are not, Accord ing to a 1976

NMAB stud y, about 40 percent of the BOF slag(containing on average 4.5 percent manganese)produced is recycled to the blast furnace: therest is discarded. 28 No blast furnace slag is

ZpA~~~rding t. the American Iron Ore Association (Cleveland,OH), in 1982, 7(I percent of U.S. iron ore consumption was fromU.S. sources, while 20 percent was from Canadian sources, Onaverage, the U.S. ores contained 0.12 percent manganese andthe Canadian ores contained 0.31 percent manganese.

Z8LN ~tiona] Materials Advisory Board, I?langanesc ~e[:otr[?r}’

Tcchnolog}, publication NMAB-323 (Washington, DC: NationalAcademy Press, 1976].

recycled in this manner, but it does find othercommercial uses in the brick, aggregate, glass,and bedding industries. There are no reliabledata on the overall extent to which manganeseis recovered from steelmaking waste materials,but most likely less than 20 percent of themanganese contained in iron and steel indus-try waste materials is currently recovered forreuse.

Manganese ore charged to the blast furnaceaccounts for 5 percent (industry average) of thetotal input of manganese to the processingstream. Charging this ore is a relatively inex-pensive way of increasing manganese concen-trations to levels beneficial for the processingcharacteristics of ironmaking and steelmaking.

Iron and steel scrap is charged to the steel-

making furnaces and, to a lesser extent; theblast furn ace. The man ganese content of homescrap depends on the stage in the steelmakingprocess at which it is generated. That createdat the steelmaking stage contains roughly 0.2

percent manganese, while that coming fromcasting and finishing reflects the manganesespecifications of the product mix of the par-ticular mill in question. Manganese contribu-tions in pu rchased scrap d epend on the trendsin the manganese content of steel products, dis-cussed in the preceding section.

Ferromanganese is added to the processstream during the ladle refining stage. Approx-imately 45 percent (indu stry average) of the to-tal manganese input is added as ferromanga-nese. This manganese is not intended to besacrificed for the sake of processing improve-ments. Coming late in the steelmaking p rocess,it is intended to bring the level of manganesein the steel up to final product specifications.

Much of the manganese contribu ted by thesefive sour ces does n ot ma ke it into the finishedproduct, but ends up instead in steel scrap andprocessing waste products. The percentage

that does end up in the finished product is afunction of the m anganese recovery factors forthe various process stages. These recovery fac-tors are dependent on process yield rates andmanganese migration characteristics. Pooryield rates result in both large quantities of




Figure 6-3.—Flow Diagram Showing the Principal Process Steps Involved in Converting Raw Materials Into theMajor Steel Product Forms, Excluding Coated Products

1

coal Coalr

mines+

1 1 L J

v ~

Manganeseore

q

Alloyingelements

andadditionagents

‘ea.. FeMnr -, m

e.g. Ferromanganese

I billet frills)~ —Shows manganese

SOURCE The Making, Shaping, and manganese flows.

Sheets Coils

additions.

Treating of Stee/, the United States Steel Corp., Pittsburgh, PA, 1971, adapted by the Office of Technology Assessment to show



-. . - . -. . . . . ---Ch. 6—Conservation of Strategic Materials 235

wastes that cannot be recycled, and sizableamoun ts of home scrap from w hich ad ditionalwastes are produced during recycling. Man-ganese losses are exacerbated because wastematerials such as slags and dusts commonlycontain manganese in concentrations greater

than those in the steel, Manganese, as well asmany other alloying elements, often migratesto the process wastes. Sometimes this segre-gation of elements between the steel and thewastes is intentional, as during the steelmak-ing stage when m anganese is used to react withdissolved oxygen and carry it into the slag.29

In a sense, these are “sacrificial losses. ” Inother instances the segregation is an unw antedconsequence of the p rocess chemistry, Regard-less of the intent, this manganese migration

2Q~xygen disso]tred in mo]ten steel reacts with carbon to Pro-

duce gaseous carbon monoxide, which, when trapped duringingot solidification, causes defects known as blowholes. Thisproblem can be avoided by reducing the oxygen content of thesteel with the addition of elements that react with the oxygenand carry it off to the slag. Manganese, aluminum, and siliconare the most important of the deoxidizing agents. Though a weakdeoxidizer by itself, manganese enhances the deoxidizing ca-pacity of silicon. Moreover, the presence of manganese oxidein the slag helps to develop proper slag characteristics, in partthrough more rapid dissolution of lime, If the manganese con-tent of the steelmaking charge is too low, additional slag fluxescontaining fluorspar, which is considerably more expensive thanferromanganese, must be used.

causes the recovery factors to be lower thanthe yield rates.

TRENDS IN STEELMAKING TECHNOLOGY

Figure 6-4 shows the current pattern of man-ganese use in the pr odu ction of one ton of steelproduct. Of the total manganese consumed inthe steelmaking process, 39 percent is embod-ied in the finished steel product, and 61 per-cent is lost in slags, dusts, and wastes. Note that13 percent of the manganese inputs are recy-cled as home scrap, generated principally dur-ing the casting and finishing steps, The flowsin the figure are indu stry averages and d o notreflect operations in any particular steel plant,They are aggregates based on the current mixof equipm ent and operating characteristics forthe industry. Shifts in this mix of steelmaking

technologies are expected to change the man-ganese flow pattern.

Ironmaking.—From 50 to 80 percent of themanganese charged to blast furnaces is re-tained in the molten pig iron, Typically, theaverage recovery rate is 75 percent. The re-mainder is lost to blast furnace slag, which isnot recycled or processed for its manganesecontent. Although construction and operationof direct redu ction ironm aking plants w ill con-

Figure 6-4.—Current Pattern of Manganese Use in Steelmaking (pounds of manganese of finished steel)Home scrap

Purchased

4.97

I I 0.47

W a s t e2.86 I

1 F i n i s h e d

‘Recovery with respect to ferromanganese additions IS assumed to be 82 percent, while complete recovery of Mn IS assumed for raw steel

SOURCE Office of Technology Assessment; and G R, St Pierre, et al , Use of Manganese in Sfeelmak(ng and Sfee/ Products and Trends in fhe Use of Manganeseas an A//eying E/ernent in Sfee/s, OTA contractor report, Februa~ 1983.




tinue, particularly in certain pa rts of the world,e.g., the Middle East, Mexico, South America,and Soviet Union, where natural gas is abun-dant, the principal source of domestic crudeiron will continue to be the blast furnace,

Over the next few years, the trend to shutdown the oldest and least efficient blast fur-naces and to upgrade the better furnaces willcontinue. Furnaces are upgraded in a nu mberof ways; includ ing m odifications of the charg-ing systems and relining configur ations, adop -tion of improved hot blast, additive, pressuri-zation, and tapping procedures, and installationof better instrumentation and control equip-ment. All of these developments taken togetherwill increase the operating performance of blast fur naces but are u nlikely to have a m ajoreffect on manganese use.

Manganese retention in the blast furnace canbe expected to decrease somewhat from its cur-rent value of 75 percent because of the use of more acidic slags allowed by external desul-furization, However, this should be offset bythe opportunity to include more manganese-bearing steelmaking slag (primarily for its iron,lime, and flux content, but also for manganese)in the blast furnace charge.

Steelmaking.—Currently, manganese recoveryin BOF steelmaking ranges from 20 to 50 per-cent, depending on the final carbon content

and temperature of the melt (manganese re-covery improves with increases in both), Re-covery in electric steelmaking is substantiallygreater, The proportion of steel produced inEAFs is increasing relative to BOFs. The cur-rent ratio of EAF steel to BOF steel, roughly30:70, is expected to increase to 40:60 by 2000.This not only improves the average manganeserecovery rate, but also increases the averageferrous scrap charge rate. Scrap is typ ically 100percent of the charge to EAFs while only 30percent to BOFs. Thus, greater use of EAFs in-creases the recycling of manganese,

Operating practices for both EAFs and BOFsare changing. The basic oxygen processes areundergoing dramatic changes with the incor-poration of bottom blowing and inert gas mix-ing techniques, Manganese recovery will prob-

ably increase to the range of 40 to 60 percentover the next few years as a r esult of these andother changes, such as separate desiliconiza-tion and better control of the charge and slag.Manganese recovery in EAFs is expected to im-prove somewhat over the next few years from

better charge materials, reduced oxidation dur-ing high-speed meltdown, improved end-pointcontrol, and greater use of secondary and la-dle refining.

Based on current operating practices andmix of BOF and EAF steelmaking, the averagemanganese recovery of the steelmaking stageis estimated to be 26 percent. The increasinguse of EAF steelmaking and improvements inoperating characteristics are expected to im-prove this average recovery rate to 42 percentby 2000.

Ladle and Secondary Refining.—The role of ladleand secondary refining has grown rapidly du r-ing the past few years, In stainless steel produc-tion, adoption of AOD processing, which is asecondary refining process, is almost universal.For low-alloy and carbon grades, deoxidationand desulfurization procedures have beengreatly improved with the increased use of ar-gon shrouding of steel surfaces and pouringstreams. In addition to the trimming benefitsmentioned in the previous section, these proc-esses capture the manganese content of ferro-alloy additions to a much higher degree andreduce reoxidation loss during subsequentpouring. These improvements are expected toraise the recovery of manganese from the fer-roalloys from 82 to 90 percent w hich raises theoverall manganese recovery rate of the proc-ess from 87 to 95 percent.

Casting and Finishing .—The benefits of continu -ous casting have been fully established. Con-tinuou s casting leads to overall cost savings aswell as improved product quality (cleanliness,homogeneity), reduction of energy require-ments and decreased metal loss (scaling) dur-

ing ingot reheating. In addition, it gives greateryields of steel products from raw molten steel.30

30 The i ng o t. to-s]ab Yie]d of c o n v e n t i o n a l i n g o t c a s t i n g o p e r a -

tions varies greatly according to the nature of the products.Owing to large shrinkage cavities, the yields for killed grades



Ch. 6—Conservation of Strategic Materials

Direct rolling of hot slabs and billets

Photo credtt Amertcan Iron and Steel lnstttute

Continuous casting of steel is one of a variety ofimproved steelmaking technologiesthat conserve manganese

From the manganese standpoint, increasedyield m eans that less home scrap m ust be recy-cled through processes where there are ir-recoverable losses. In 1982, about 29 percentof domestic steel was continuously cast. Thisrose to about 36 percent in the first half of 1984,and is likely to increase to 70 percent by 2000.Manganese losses are not a major problem atthe casting stage because there is very littlemigration of manganese to the waste products.— —

can be quite poor, even as low as 70 percent. The yields forrimmed products are substantially better. On an industrywidebasis, the average yield of ingot casting operations is estimatedto be approximately 87 percent. Continuous casting, the moremodern and more desirable process, has a yield of approximately96 percent.

. 237

fromcontinuous casters has been demonstrated inseveral plants throughout the world. By elimi-nating the cooling and reheating steps, thistechnology offers potential for further improve-ments in metal recovery as well as energy

savings.Based on the trends toward greater use of

continuous casting an d direct rolling, the yieldrate during casting and finishing operations isexpected to increase from its 1982 value of 75to 85 percent by 2000.

Summary of the Effects of Processing Trends

The current and expected yield rates andmanganese recovery factors for each stage of the steelmaking process are shown in table 6-3. These embody the shifts in technology dis-cussed above. The overall manganese recov-ery rate increases from 39 to 49 percent.

Outlook for Manganese Use in the Steel Industry

The expected impacts of steel product andprocessing trends on the manganese use pat-tern in 2000 are outlined in table 6-4. High andlow cases are included in th e table to illustratethe effects of different product mixes and var-ious schedu les of investment in new equipment.

A 12-percent net reduction in the averagemanganese content of steel (from 13.8 to 12.2pounds per ton) is expected to accompany thecontrasting shifts towards the greater use of high-manganese products and the increased at-tention to trimming. Trends in steelmakingtechnology are expected to cut average man-ganese consumption losses from 21.8 to 12,6pounds per ton of steel, a reduction of 42 per-cent. In ad dition, these technology changes in-crease the role of purchased ferrous scrap(available domestically) as a source of man-ganese.

Most importantly, these product and proc-

ess trends decrease the per-ton-of-steel require-ment for manganese in the form of ferroalloysand manganese ore by 47 percent, from 17.8to about 9.5 pounds. Depending on the prod-uct mix and the rate of adoption of the proc-ess improvements, the requirement could be




converter—about 1.5 percent of U.S. chromiumconsumption, and 3 percent of chromium con-sumption in stainless and alloy steels.

As a result of nearly a decade of using cata-lytic converters, a very large “above-the-ground

mine” of PGM has accumulated in the Nation’sautomotive fleet-some portion of which canbe retrieved each year through collection andrecycling of converters from scrapped cars. Asthe fleet of converter-equipped cars ages, theinventory of PGM available from scrapped carswill grow very rapidly through the 1980s andinto the 1990s. If effective retrieval and recy-cling of catalytic converters from these scrapp edcars occurs, U.S. PGM imports can be reducedappreciably below w hat they w ould be other-wise,

The current level of PGM recovery from cata-lytic converters is low, in part because con-verter-equipped cars are only now appearingat scrapyards in large numbers. This maychange in the near future: the average life of a car is about 9 to 10 years, so post-1975 modelcars (the first year in which production modelcars were equipped with a converter on a na-

tionwide basis) will comprise an increasingproportion of scrapped vehicles.

Figure 6-5, based on p rojections p repared forOTA by Sierra Research and Energy and Envi-ronmental Analysis, Inc., compares the maxi-

mum theoretical potential for catalyst recyclingfrom scrapped cars with projected PGM de-mand for new vehicles through 1995. 31 A sshown, the theoretical potential for recyclingwill grow from about 115,000 troy ounces in1983 to over 800,000 troy ounces in 1995. As-suming a 50 to 60 percent recovery rate, cata-lytic converter recycling could add 400,000 to500,000 troy ounces annually to domestic PGMsup plies by the mid -1990s. This comp ares w ithnew vehicle demand of 770,000 troy ounces in1983, which is projected to grow to 1.4 milliontroy ounces in 1995. Less economic incentive

exists to recycle chromium values from thestainless steel shell of catalytic converters.

Slsierra Research and Energy and Environment Analysis, Inc.,Critical Metal Consumption in Automotive Catalysts, Trends andAlternatives, report prepared for OTA, December 1983, Muchof the analysis and data in this section are derived from thisreport.

Figure 6-5.— PGM Demand by Vehicle Category

Heavy trucks and buses

75 76 77

SOURCE: Sierra Research

90 91

—

~

\ ,,1

III

I I

I I

J

92

——

,,

I II

II I

II

‘ 1 ’ ;

I

‘1~’l I ~~• ,

III I

93 94

Model year




However, if the above recovery rates are as-sumed, 5,000 to 6,000 tons of chromium couldbe provided annually.

It should be noted that considerable uncer-tainty su rround s the p rojections in figure 6-5—

especially those related to PGM requirementsfor new vehicles. The projections for new ve-hicle PGM requirements are for the total U.S.market for vehicles, without assum ption abou tprospective import levels. The projected de-mand is based on medium growth assum ptionsabou t veh icle sales. The pro jections also reflectanticipated new em ission control standard s ex-pected to be applied to vehicles in the 1985-90period. Changes in the timing and nature of these standards would change the projections.Readers are referred to chapter 3 for furtherdiscussion of the projected grow th in PGM use

for vehicle emission control.Somewhat less uncertainty surrounds the

projections of PGM potentially available forrecycling through 1995. Cars already on theroad will constitute the great majority of ve-hicles scrapped during the projection period.Actual recycling levels will be considerablylower than the theoretical potential, due tolosses of PGM while cars are in service, andat each of the several steps entailed in recy-cling. Estimates of PGM losses from catalyticconverters wh ile cars are in service range from

under to well over 10 percent, and this is notreflected in figure 6-5. According to the Au-tomotive Dismantles and Recyclers Associa-tion (ADRA), only 70 to 80 percent of the 10million cars that are “detitled” in a normalscrappage year (1979 was the last such year)actually reach dismantling yards where theconverter can be r emoved for recycling. More-over, not all dismantles remove the converterfrom the car before it is comp acted into a baleor shredded. Some PGM shipped to a refiner(perhaps 10 percent) is lost in refining. Hencepotential addition of PGM to U.S. supplies

from catalytic converter recycling probablywill only be 50 to 60 percent of the levels shownin figure 6-5, Actual levels or recycling w ill de-pend on economic incentives and the effective-ness of the collection networks that are estab-lished.

Struct ure of t he Recycli ng Industry

Among the types of firms that have an inter-est in the growing market in PGM recyclingare primary and secondary PGM producers,manufacturers of emission control devices,

scrap processors and dealers, automotive dis-mantles, muffler shops, collectors and distrib-utors of used automotive parts, and decan-ners—a new sp ecialized bu siness that has aris-en arou nd the catalytic converter. There are nomajor technological barriers to recycling of ei-ther PGM or chromium values from catalyticconverters, and the number of firms involvedin catalyst collection networks is expected toincrease gradually as the market continues togrow. In addition, the industry appears capa-ble of responding quickly to price increases,so that recycling could be greatly expanded if

there were a supply disruption.The industrial refining capacity needed to

recycle PGM from automotive catalysts takenfrom scrapped cars is already in place. Majordomestic PGM refining facilities operated byGemini Industries and Johnson Matthey areavailable for converter recycling. These facil-ities are able to recover PGM values both fromnew catalysts rejected by automakers and fromscrapped converters. Domestic scrap proces-sors are also able to recycle the stainless steelshell of the catalytic converter as a scrap feed.

Steps entailed in recycling spent catalysts aredescribed in box 6-C.

Institutional factors could impede recyclinglevels, however. Three categories of catalyticconverters are potential sources of PGM forrecycling: unused catalysts that fail to meetproduct specifications, rejected and damagedcatalysts from operational vehicles, and spentcatalysts from scrapped vehicles. Of these, thelast category represents the largest future sup-ply of PGM, but also pr esents the greatest col-lection difficulties. Reasons for this includefluctuating PGM prices, the fragmentation of

the automotive dismantling industry, and alack of effective linkages between refiners anddismantles.

The availability of automobile catalysts forrecycling is affected by several factors. Some




Box 6-C.—How Catalytic Converters Are RecycledWith the adven t of the catalytic converter, a new ind ustry h as evolved to recover PGM values

from scrapped automobile catalysts. From a technical standpoint, there are few barriers to refin-ing PGM from spen t catalysts. In the m id- and late 1970s, facilities were set u p to recycle un usedcatalysts that failed to meet product specifications. This gave refiners the experience needed totake advantage of the far greater amount of PGM that can be recovered from scrapped cars. How-ever, the business of organizing effective collection systems has proven surprisingly complex.

Part of the reason for this is that catalytic converters are not uniform products whose valuecan be easily iden tified. In 1982 mod el cars, for exam ple, there is a 10-to-l range in PGM conten tamong different converter models—().33 troy ounces on heavily loaded converters down to 0.03troy ounces on lightly loaded converters. (This wide range in catalyst loadings is probably not ameasure of the efficiency of the converter in reducing emissions; instead the heavily loaded catalystsare probably installed in car models with engines that p rodu ce higher than average emission levelsprior to catalytic treatment.) Many of the converters, especially on older model cars, have catalystpellets (some of which maybe lost in the course of vehicle operation), while others are monolithic,with the catalyst deposited on a secure substrate. Chromium content in the stainless steel shellof converters also varies from 1.5 to 3 pounds. Finally, early model converters contained just plati-num and palladium, but m ore recent “three-way converters” contain rhodium as well.

Before lots of spent catalysts actually arrive at a refiner for reprocessing, several separate firms—

includ ing autom otive disman tles, collectors, decanners, and scrap processors—can be involved .Some of these firms specialize in collection of certain types of converters and do not purchaseother types. Some w ork un der an arrangement w ith refiners. Others are independent.

Preliminary sorting is done by the automotive dismantle after the converter is removed fromthe car by torching or cutting or, in the case of larger shredding operations, popped off with aforklift. Some converter containers contain little or no catalyst. Spent catalysts commonly containat least some lead, which is particularly undesirable to refiners, and moisture, which can also af-fect chemical analyses and reprocess smelting. If the scrapp ed converter is sold to a collector, itmay be visually inspected by the collector for catalyst content. How ever, the disman tle may choosenot to sell the converter to a collector and m ay instead stockpile it, waiting for a p rice increase,or keep it for sale to retail customers.

The decanner (wh o maybe the collector or the the au to dismantle) removes the catalyst sub-strate from the stainless steel container. After it has been removed , the catalyst is placed in d rum s

to prevent furth er moistu re accum ulation, and is sold to a r efiner. The stainless steel shell of theconverter may be sold to a scrap processor, some of whom also may serve as collectors or decanners.Both the quality and quantity of the catalyst play major roles in determining the price paid

to decanners by refiners. Some requ ire a minimu m sh ipment of 3,000 pou nds of catalyst substrate.Bonuses may be paid for shipments that exceed average PGM content, while penalties may becharged for below-average shipments. A partial payment for the catalyst maybe paid u pon receipt,with the balance reserved until actual assay, often 6 to 10 weeks later.

Once the sp ent catalysts are accepted by the refinery, several comm ercialized pr ocesses canbe used to recover the PGM. Two major domestic refiners—Gemini and Johnson Matthey--useproprietary hydrometallurgical processes to separate the substrate from the PGM through an acidor alkaline leach. Final removal of the PGM from the resulting leach liquor or sludge is complex,involving as many as 18 separate steps, but can recover more than 90 percent or more of the PGM.Scrapped catalysts can also be run through copper or nickel pyrometallurgical refining circuitsto recover about 90 percent of the PGM. This approach w as taken by Inco, a large Canadian nickel

and copper producer, in 1980 and 1981, when PGM prices were high, but has been subsequentlydiscontinued.

In addition to recycling PGM, interest is growing in the possibility of “regenerating” spentcatalysts. This wou ld involve leaching out lead and other impu rities and washing ad ditional PGMsas required, while keeping the substrate and shell intact.




cars are simply abandoned; some are takendirectly to a scrap processor for baling orshredding, where the value of the PGM (andchromium in the converter shell) is lost; othersare exported. As a result, about 20 to 30 per-cent of all cars are never ta ken to a disman tle.

Even those cars that reach disman tling yardswill not necessarily have their converter re-moved. According to the ADRA, the majorityof automotive disman tling firms have less than10 employees. With a 1983-84 scrap price of only about $5 to $7 per converter, not all dis-mantles feel it is worth their employees’ timeto remove the converters, while others maybestockpiling the catalysts until prices rise. A1982 survey of some ADRA members and someunaffiliated dismantles by Arthur D. Little,Inc., found that 12 percent of those firms re-

sponding to the survey leave the majority of converters on the car.32 However, ADRA mem-bers and other respondents may not be repre-sentative of the industry as a whole. Smallfirms that lack the resources to participate inthe trade association may be more likely toleave converters on cars.

Providing refineries with a steady supply of scrapped converters has also been a problem.The auto dismantling indu stry is highly decen-tralized, having 11,000 separate firms, accord-ing to ADRA, while only a few large firms areinvolved in refining the catalyst. As more ac-tors have become involved, intermediary firmsspecializing in collection and decanning havearisen either independently or in affiliationwith refiners. Because refiners are trying toassemble economic volumes for recovery, apremium is paid for larger volumes of mate-rial. When a sufficient number of convertershas been collected by a d ismantle they are soldto collectors and / or decanners. Usually a min-imum of 50 to 100 converters is required to dealwith a large collector.

Collectors accumulate small lots of whole

converters within a particular region and selllarger lots at higher p rices to d ecanners. Somecollectors are also decanners. Often, collectors

have regular truck routes to purchase con-verters from dismantles and, in some cases,from shredding yards.

Decanners pu rchase large lots of whole con-verters, and separate the catalyst’s substratefrom the housing or shell, usually by shearingthe canister in half. The pellets and honey-combs are packed separately in 55 gallondrums. Owing to the low nickel content andaccum ulated impu rities, the 409 stainless steelused in the converter shell has a low marketvalu e ($1 10 per ton in late 1983). Neverth eless,the shell represents an additional source of value to the decanner.

The quality of catalyst material sold to re-finers, as well as the volume, plays a major rolein determining the price paid to decanners.Decanners are cautioned not to include con-

taminated units. Pure white catalyst substratesindicate burnout and loss of the PGM coating,Catalysts coated with lead and oil are also un-desirable in the refining process.

Auto d ismantles would prefer to have m orethan one purchaser (collector or core buyer) forused converters to ensure the best price andmost reliable pickup, while refiners prefer topu rchase large quant ities of catalysts from onecollector. During periods of low platinumprices, both dismantles and collectors maystockpile catalysts, waiting for prices to rise.

In the long term, many of the problems appar-ent in the early stages of the industry’s evolu-tion may be overcome, due to the increasednum bers of scrapped cars equipped with con-verters available for recycling an d possible in-creases in PGM prices.

USED AND RECONDITIONED CATALYTIC CONVERTERS

A recent developm ent in the autom otive dis-mantling industry has been the emergence of a market for secondhand catalytic convertersbought as replacement parts. The exact mag-nitude of this market is not known, but a re-

cent survey in California found that about80,000 secondhand converters were used an-nu ally in the State.33 Most of these secondhand

sZAutomotive Dismant]ers and Recyclers Association, profile:

Automotive Dismantling Industry, published in cooperation withArthur D. Little, Inc. (Washington, DC: Automotive Dismantlesand Recyclers Association, 1983), p. 12,

ttMobile Source Control Division, Used Catalytic Converter Sur-vey (El Monte, CA: State of California Air Resources Board, July1983), memo.



Ch. 6—Conservation of Strategic Materials q 2 4 3 —

converters were obtained from parts distrib-utors who purchased them from auto salvagedealers at a somewhat higher price (averaging$7 per unit) than is typically paid by refiners.Auto dismantles also sell converters directlyto retail customers as used parts, often at a

price of $45 to $700

The apparently growing market for second-hand converters concerns some refiners sinceit adds an additional layer of competition intheir efforts to secure a sup ply of catalysts forrecycling. The competition is great because thismarket is an important source of income to dis-mantles, who typically obtain three-fourths of their income from sales of used parts, whilescrap sales form only a small part of theirbusiness.

An emerging issue associated with the appar-

ently growing m arket for second hand catalyticconverters concerns possible reuse of defectivecatalysts in cars. While second hand convertersare substantially cheaper to the motorist thannew replacement converters, which range inprice from $170 to $320, many secondhandconverters are d efective, and will therefore ad-versely affect air quality if they are installedin cars.

It is not possible to determine whether a usedconverter is operating properly without emis-sions inspection and testing. A gradual deterio-

ration in catalyst efficiency occurs over time,and most automakers guarantee the converterfor only 50,000 miles. In addition, leaded gas,which destroys the emissions control capabil-ity and the platinum metal values in the cata-lysts, is often used in converter-equipped carsand trucks. Occasionally this happens inad-vertently, if fuel supplies in a filling station be-come contaminated or are switched. Moreoften, m otorists deliberately and illegally m is-fuel because of lower price and perceived im-proved performance of leaded gasoline.

Currently, overall procedures for testing andcertifying secondhand catalytic converters arenot in place. Although the U.S. Environm entalProtection Agency has issued voluntary after-market p art self-certification regulations, th eserelate primarily to new replacement convert-

ers. However, methods to test used catalyticconverters are under development by a majormuffler firm, using the voluntary self-certifi-cation regulations. The entire issue associatedwith use of secondhand converters is highlycomplex, and is likely to be an increasingly im-

portant concern in both emission control pro-grams and recycling efforts in the years tocome r

ALTERNATIVES TO PGM USE IN THE CATALYTIC CONVERTER

At present, PGM use in the catalytic con-verter is the most effective means for meetingemissions control standards under the FederalClean Air Act. Near-term (before 1995) alter-natives to PGM use in the catalytic converterare not promising, Most currently developedalternatives would entail major loss of fuel

economy and / or a need to relax automotiveemissions standards. These problems could beovercome, given several years lead time, butthere is no persuasive reason at this time forauto makers to pursue these alternatives.

Increased u se of diesel engines could also re-duce the need for PGM catalysts. However,while diesels do not currently require con-verters to redu ce carbon m onoxide an d hydro-carbons, they d o prod uce substantial amountsof particulate. A more stringen t par ticulate na-tional emission stand ard for diesel-fired light-duty vehicles (cars and light trucks) is expectedto take effect in 1987. Some manufacturers areexpected to employ a platinum-catalyzed trapoxidizer to meet the standard. The other mostlikely alternative–a trapping system whichuses onboard dispersing of fuel additives—wou ld not en tail PGM use. A particulate emis-sions standard for heavy duty vehicles, if adopted as expected in 1990, most likely willrequire PGM catalyzed trap oxidizers, becauseadditives are unlikely to prove practical overthe long lifetime of these engines. (In the projections shown in figure 6-5, it was assumedthat half of the light duty diesel vehicles willuse a PGM particulate trap when the standardstake effect—1986 in California and 1987 nation-wide—but that all California light trucks anddiesels would use particulate traps to meet themore stringent State standard expected in 1989.



.—


In a supply disruption lasting 1 to 3 years,recalibration of new vehicles for lower emis-sions without catalyst use would be feasible.This could entail programming of fuel meter-ing systems for leaner operation to reducehydrocarbon and carbon monoxide emissions.

In addition, retarding spark advance to furtherreduce HC and N OXemissions could be under-taken. These changes would not entail substan-tial design changes or development costs. Al-though some fuel economy p enalties wou ld beincurred, average new car emission levels ap-proximately equal to 1977-79 standards couldbe achieved in this way. Since computer con-trolled systems are now u sed in many n ew ve-hicles, retrofitting after the disruption wouldbe comparatively simple, entailing replacementof a computer chip or (more likely) the entireelectronic control unit of the vehicle.

With an intensive program of research anddevelopment (R&D), according to the analysis,alternative emission control systems that donot use PGM but would approach current emis-sions and fuel economy standards could prob-ably be developed. However, this would re-quire at least 5 years and is unlikely to beund ertaken by auto m akers simply out of con-cern about future supply disruptions.

Development of such technology could benecessary in the event of a “worst case” supplydisruption of several years’ duration in which

national emergency requirements could not besatisfied from recycled PGM alone. Under suchdire circumstances, pressures would mount torecover PGM from operating vehicles.

The total current in-service vehicle fleet con-tains roughly twice as much PGM as was con-sumed for all uses domestically in 1982, Thiswill more th an d ouble by 1995—to a total of 9million troy ounces of PGM, some portion of which could be recovered in a dire emergencythrough Government programs aimed at re-moving some catalytic converters from the in-

service automotive fleet.Ultimately, both the objectives of national

preparedness in the event of a supply emer-gency and national air quality objectives couldbest be served if contingency planning were

undertaken to determine under what circum-stances, and in what way, allocation of PGMwould occur in a supply emergency. Such plan-ning could also be used to identify emissioncontrol strategies available to auto makers inthe event that supplies of PGM are not avail-

able for manufacture of catalytic converters,

Other Conservation Opportunities

Petroleum and Chemical Catalysts

Both PGMs and cobalt are extensively usedin the petroleum and chemical industries ascatalysts. PGM use in these catalysts is alreadyhighly efficient so that only limited improve-ments in current patterns of use can be madein the foreseeable future. The PGM containedin industrial catalysts is generally retained inownership by the user firm and is refined or

regenerated on a toll basis by a specializedrecycling firm. This system is highly efficient:Of the 235,000 troy ounces of new PGMs thatwere purchased for petroleum and chemicalindustry catalyst applications in 1982, onlyabout 10 percent was to make up metal lossesduring processing and toll refining; the restwas to meet new production needs. The onlycatalysts that are n ot now recycled contain lessthan 0.05 percent PGMs. Recovery of PGMvalues from these catalysts is technically fea-sible, but the refining costs (including trans-portation costs to and from the refinery) exceedthe contained metal value.

In the case of cobalt-containing catalysts,how ever, major opportu nities exist to increaserecycling levels, particularly in the case of thecobalt contained in spent petroleum refiningcatalysts. Althou gh som e other metals are nowreclaimed from these spent catalysts, cobaltvalues are not.

Overall national trend s in cobalt catalyst u se(exclusive of paint dryers) were extensivelyanalyzed for OTA by the Inco Research & De-

velopment Center, Inc.,

35

and are summarized35F. j. Hennion, 1. J. deBarbadiIlo, j. H. Weber, and G. Alex

Mills, Use of Critica] Materials in Catalysts for the Petroleum andChemical Industries, Cobcdt and Platinum Group MetaLs (preparedfor OTA by Inco Research & Development Center, Inc.]. Muchof the information in this section is derived from this report.




in table 6-5. This information, obtained fromestimates p rovided by ind ustrial sources in late1983, is believed to be the most u p-to-date anddetailed information about these trends that ispublicly available.

As shown in table 6-5, three major processes

dominate cobalt catalyst consumption: petro-leum hydroprocessing, used to remove con-taminants from sour and heavy crude oil; al-cohol production through hydroformulation;and production of terepthalic acids and deriva-tives, used to produce polyester fibers andfilms. Cobalt is also used in catalysts to pro-duce synthetic fibers, solvents, pharmaceuti-cals, and industrial chemicals.

Significant recycling of the cobalt used inchemical catalysts is occurring. According toInco, about 1.5 million pounds of cobalt were

consum ed in both chemical and petroleum cata-lysts in 1982. Of this, 1.1 million p oun ds—about72 percent—was contributed through recy-cling. Fresh cobalt needed to makeup the dif-ference was only about 426,000 pounds. Thisis less than some other estimates which mayunderestimate the extent of recycling by thechemical industry.

However, cobalt from spent petroleum hy-droprocessing catalysts is not now recycled.Since none is recovered, all of the cobalt con-sumed in hydroprocessing was fresh cobalt.Inco estimated that about 270,000 pounds of cobalt was consumed in hydroprocessing in1982. This is less than some estimates for prioryears, due to lower refinery utilization. The

Table 6-5.—Cobalt Consumption andRecycling in Catalysts, 1982

Cobalt New cobaltconsumption for makeup

(thousand Percent (thousandProcess pounds) recycled pounds)

270Hydroformulation . . 700 90 70Terephthalic acid 500 90 50Organic acid . . . . . . 35 0 35Alkyl amines . . . . . . 30 95 1.5

Total . . . . . . . . . . . 1,535 72 426.5SOURCE” F. J Hennion, J. J. de Barbadillo, J. H. Weber, and G. Alex Mills, Use

of Critical Metals in Catalysts for the Petroleum and Chernica/ /n-dustries (Cobalt and Platinum Group Metals), 1983. Report preparedfor OTA by the Inco Research & Development Center, Inc., December1983.

Inco estimate is consistent with a NationalMaterials Advisory Board finding that between200,000 to 300,000 pounds of cobalt were con-sumed in this use in 1982.

Expanded use of hydroprocessing catalystsin the petroleum industry is likely in the years

to come. However, growth in demand willprobably be less than was anticipated in themid and late 1970s, when refineries were rap-idly installing hydroprocessing capacity toprocess heavy sou rce crud e oils obtained fromnon-OPEC sources. The combined effects of energy conservation and the 1981-82 recessionhave resulted in scaling back projected require-ments. While hyd ropr ocessing capacity can beexpected to grow appreciably from the de-pressed 1982 levels, “fresh” cobalt require-ments w ill not necessarily increase prop ortion-ately. According to the National Materials

Advisory Board, future cobalt make up require-ments could be in the range of 200,000 to400,000 pounds a year, assuming that effectiverecycling takes place. Substitution of nickel-molybdenum catalysts could reduce future re-qu irements by another 100,000 poun ds a year,according to NMAB.36

In current practice, hydroprocessing cata-lysts may be regenerated one or more times inthe course of their life cycle (2 to 3 years). Atsome point, however, the catalyst becomes socontaminated that subsequent regeneration is

impossible. These spent (unregenerated) cata-lysts may be stored temporarily on site byrefiners, landfilled, or sent to a processor forrecovery of non-cobalt metal values or for ex-port, The typical spent catalyst will containabout 8 percent molybdenum, 1.5 percent co-balt, 0.5 to 1.5 percent nickel, 1 to 6 percentvanad ium , 10 to 15 percent carbon, 10 percentsulfur, 0,2 percent phosphorus, and the bal-ance, alumina.

During the late 1970s, when molybdenumand cobalt pr ices were very h igh, considerable

effort was made to recover metal values fromthese spent catalysts. However, most of theseefforts were discontinued as prices fell. By

Wobalt Conservation Through Technological Alternatives, op.cit., p. 119.




1982, Gulf Chemical & Metallurgical Co., of Freeport, TX, was believed to be the only do-mestic firm recovering metal values from spenthydroprocessing catalysts. Gulf C&M, whichhas been in the catalyst recycling business forover tw o decades, uses a combination of pyro-and hydro-metallurgical techniques to recover

molybdenum and vanadium values from thespent catalysts but does not currently recovercobalt, nickel, or other metals.

From years of rep rocessing, some 100,000tons of processing residues are reported to haveaccumulated at the Gulf C&M facility, As muchas 7 million to 8 million pounds of cobalt andnickel may be p resent in this residu e, some p or-tion of which could be recovered with adop-tion of adequ ate rep rocessing technology. Thecompany has reportedly developed a pilot-scale

process to recover n ickel, cobalt, and alum inavalues from this residue, but economic re-covery of these metal values at current pricesis not feasible. Because Gulf C&M reprocessesspent catalysts from both foreign and domes-tic sources, more cobalt residues are accumu-lated at the facility each year than are gener-ated from domestic hydroprocessing activitiesalone.

At least two other domestic firms–HallChemical of Wickliffe, OH, and CRI Metals of Baltimore, MD—have an nou nced p lans to con-struct facilities to reclaim cobalt and other met-als from spent hydroprocessing catalysts. HallChemical, which currently produces 1 millionpounds of cobalt salts annually, is construct-ing a facility (at Arab, AL) said to be able toreclaim individual components of spent cata-

Molybdenum and vanadium are recovered from petroleum refinery catalysts at this plant in Texas. Several millionpounds of potentially recoverable nickel and cobalt are left in the waste and slag that is stored in

containment ponds surrounding the plant




lysts, including cobalt, nickel, molybdenum,vanadium, sulfur, and alumina. Hall intendsto purchase spent catalysts from generatorsaround the world.

CRI Metals, a u nit o f Catalyst Recovery Inc.,has announced plans to establish a hydroproc-essing catalyst reclamation facility in theSouth. The CRI process has been evaluatedthrough pilot plant trials, but CRI has yet tocommence construction, owing to depressedmetal prices. Like the Hall process, the CRIplan is to recover several contained metals—cobalt, nickel, vanadium and alumina—fromthe spent catalysts for reuse by the catalyst in-dustry. CRI apparently plans the recycling ven-ture to complement its current catalyst regen-eration activities.

Although the ind ustrial capability to reclaim

cobalt from spent catalysts may soon be inplace, prospects for improved recovery will de-pend on an increase in cobalt prices. Sizablequantities of spent catalysts may continue tobe land filled, with cobalt valu es effectively lostin the interim. From the refinery’s point of view the fastest method of disposal of spentcatalysts is preferred. At current prices, thisoften means paying the freight to ship spentcatalysts to reprocessors, storing the catalystat a temporary site off the premises, or land-filling. While the technology exists to reclaimlandfills, the high cost of such activities meansthat recovery of cobalt values from landfills isunlikely.

An important issue associated with bothrecycling or land filling of spent hyd roprocess-ing catalysts concerns hazardous waste dis-posal requirements. Although spent hydro-processing catalysts are not a listed hazard ouswaste, some spent catalysts may contain traceamounts of lead, arsenic, and other compoundsthat are toxic. For hazardous wastes, refinersmu st decide w ithin 90 days about wh ether thewaste is to be landfilled in an approved site or

recycled. With curren t d epressed m etal prices,there is little economic incentive to recyclethese spent catalysts, so that many refiners maychoose to landfill them.

Stai nless Steel and Steel Process Wastes

Chromium used in stainless steelmaking isobtained from ferrochromium and from scrap.The scrap charge includes home scrap gatheredwithin the plant during various stages of thesteelmaking process, prompt scrap obtained

from mills and fabricators, and obsolete scrapfrom postconsumer products and salvage. Withthe exception of steelmaking wastes, homescrap is generally recycled with a high degreeof efficiency. Stainless steel producers rou-tinely recycle most of the solid scrap generatedin making stainless steel and in forming pri-mary p rodu cts, such as sheets, bars, and wires.An estimated 35 to 45 percent of stainless steelproduction is derived from such home scrap,but since the home scrap cycle is within themill, it is not considered to be a second ary sup-ply source.

Owing to adoption of the AOD process,which cut losses of chromium to slag by morethan half, purchased scrap is an increasinglyimportant source of chromium in stainless steelprodu cts. Prompt industrial scrap and obsoletescrap together form the p urchased comp onentof scrap supplies. An estimated one-fourth of the chromium needed to make stainless steeland heat-resisting steels in the 1977-81 periodcame from purchased scrap.37 Chromium ispresent in other alloy steels and in cast ironscrap, but in low concentrations that do not

favor recycling for chromium content. Thesematerials are usually recycled for their ironcontent, and the value of the alloying metalsis lost (this practice is referred to as “down-grading”).

More chromium may be lost each year todowngrading or to failure to recover obsoleteproducts than is recovered from purchasedscrap. According to estimates prep ared for theBureau of Mines,38 about 135,000 tons of stain-STU,S, Department of Commerce, Critical Materials Require-

ment of the U.S. Steel Industry (Washington, DC: U.S. Govern-ment Printing Office, 1983), p. 32.Snchar]es L. Kusik, et a]., Availability of Critica] Scrap Metak

Containing Chromium in the United States: Wrought StainlessSteel and Heat Resisting Alloys, U.S. Department of the Interior,Bureau of Mines Information Circular 8822 (Washington, DC:U.S. Government Printing Office, 1980).




gate the shell for recycling as stainless steelscrap. Instead, the shell is shredded or baledwith the rest of the car.

While small in relation to overall chromiumdemand, appreciable quantities of chromiumas well as other critical metals are also lost in

flue dusts, slags, sludges, and other steelmak-ing and chemical wastes each year. Thesewastes ar e not suitable for direct recycling be-cause of contam inants su ch as lead or zinc, butthe chromium and other metals from some of these wastes are increasingly recovered throughspecial processing,

According to Bureau of Mines researchers,about 17,400 tons of chrom ium were containedin m etallurg ical wastes generated in 1974 (themost recent year which comprehensive datawere collected).39 Until recently, these low-

grade wastes were almost entirely unrecov-ered. However, some firms are now commer-cially recovering chrom ium containing wastes,and several steel producers have establishedtheir own in-house waste recovery programs.A partial impetus for this has been environ-mental regulations restricting the disposal of solid wastes.

Since 1978, Inmetco, a subsidiary of Inco,has been recovering chromium and nickel fromlow-grade steelmaking wastes. This facility hasthe capacity to process 47,000 tons of waste per

year to produce 25,000 tons of pig metal con-taining 4,500 tons of chromium and 2,000 tonsof nickel. The pig metal, which is 18 percentchromium and 8 percent nickel, is suitable foruse in AISI-typ e 304 stainless steel or , if it con-tains m olybdenu m, AISI 316. Inmetco current-ly processes about 75 to 80 percent of the fluedust, mill scale, and grinding swarf of U.S.stainless steelmaker. The company estimatesthat 3,100 tons of chromium was contained inwastes entering their plant in 1982, of which2,800 tons were recovered. The Inmetco facil-ity also has the capacity to recover chromium

WW. M, Dressel, L. C. George, and M. M. Fine, “Chromiumand Nickel Wastes: A Survey and Approval of Recycling Tech-nologies, ” Proceedings of the Fijlh Mineral Waste Symposium,Eugene Aleskin (cd.), cosponsored by the U.S. Bureau of Minesand the I IT Research Institute (Chicago, IL: I IT Research In-stitute, 1976), p. 269.

and other materials from catalysts, superalloys,and other products. An Inmetco subsidiary,Pittsburgh Pacific Processing Corp., reproc-esses oil-contaminated scrap.

Economic processes for recovery of chro-mium and other metals from specialty steel-making slags have yet to be developed, Esti-mates made in the 1970s of nationwide lossesof chromium to slag in stainless steelmakingvary widely—from 3,000 to 30,000 tons peryear. The lower figure is from the previouslycited 1974 estimate of total chromium lossesin metallurgical wastes, and ap pears to be qu itelow. The latter figure, based on 1965-75 data,is from a stud y by the N ational Materials Advi-sory Board, which also projected that losseswould be reduced to about 10,000 to 15,000



——Ch. 6—Conservation of Strategic Materials . 251

tons per year as stainless steelmaker switchentirely to the AOD process,

Revised estimates do not ap pear to hav e beenmade since the NMAB study, which was pub-lished in 1978, but the AOD process is nowused almost universally. Nonetheless, the losses

remain appreciable. Chromium content insteelmaking slags analyzed by the Bureau of Mines Rolla (MO) Research Center range be-tween 1 and 12 percent, with most samples inthe range of 6 to 7 percent. Experiments be-ing conducted at the Center are aimed at up-grading chromium and nickel from crushedand ground slag. Concentrations of more than20 percent chromium have been achieved. Fu-ture research will assess ways to recycle theconcentrates in steelmaking furnaces.40

Over 3,000 tons of chromium were also lost

annually in processing wastes from the chem-ical industry, metal plating and etching shops,and leather tanning firms, according to the1974 data mentioned previously. Recovery of the chromium in such w astes is expensive, anduntil recently wastes were generally disposedof in municipal wastewater systems or land-filled without significant preprocessing. Envi-ronmental requirements under Subtitle C of theResource Conservation and Recovery Act(RCRA) and the Federal Clean Water Act haveresulted in the need to process such wastesprior to disposal. As a result, the opportunity

to recover chromium from the w aste has arisen.Many metal finishing wastes are classified

as hazardous wastes by the Environmental Pro-tection Agency and are subject to the disposalrequirements of RCRA. Pollutants, includingchromium, must be reduced to acceptablelevels before disposal in Subtitle C landfills.Disposal fees at land fills may r un on the ord erof $25 to $50 per d rum , which does not includecosts of transportation and preprocessing.41 Re-covery of metal values may be incorporated

‘As discussed in Bureau of Mines Research 83, op. cit., p, 104.41 ~’ ,s. ~nvironmenta] protection Agency, Environ mcmtal Po~-

Iution Control Alternatives: Sludge Handling, Dewatering and Dis-posa~ Alternatives for the Metal Finishing Industry (Washington,DC: U.S. Government Printing Office, 1982), p, 1, EPA 62515-82-018.

into waste processing, and the value of the met-als can then help reduce the cost of disposal.

Several processes have been developed or areunder development by public agencies and in-du stry to recover or recycle metals from p roc-essing wastes. Corning Glass reportedly has de-

veloped a closed-loop process which permitsreuse of chromic acid etching solutions, thusreducing the amount of waste and reducing theneed for new chromium-bearing chemicals.Another process to recover chromic acid etch-ing solutions, developed by the Bureau of Mines, has been demonstrated to be economi-cally competitive with the purchase of newacid, when savings of disposal costs are in-clud ed in the analysis. This p rocess, which ex-tends th e useful life of the acid a hu nd red fold,results in major materials savings and also per-mits the recovery of other metals, such as cop-

per, which can be sold.42

Elect ronic Scrap

The key constraint in recycling of PGMsfrom electronic scrap is the very sm all amoun tof metal used in each unit. The two largest con-sum ers of PGMs in the electrical and electronicsector are the telecommunications industry,which uses them in electromechanical con-tacts, and the ceramic capacitor industry. Intelephone relays, palladium and platinum arefound in the contact points, which are brazed

to base-metal alloy arms. In a single hand-dismantled relay module taken from a largeunit, the Bureau of Mines found 18 large and36 small PGM contacts, weighing a little morethan 0.06 of 1 percent of the weight of thewhole module.43 The National Association of Recycling Industries estimates that 1,000 tonsof telephone relay scrap are generated eachyear. However, this scrap contains only a mi-nute proportion of PGMs.

aZDeborah A. spo t ts , Economic Evaluation af a i$fethod to Re-generate \$’aste Chromic Acid-Sulfuric Acid Etchants, U.S, De-partment of Interior, Bureau of Mines Information Circu]ar 8931(Washington, DC: US, Government Printing Office, 1983].

atFre~ Ambrose and B. Wr. Dumay, Jr,, ‘‘Mechanical process-ing of Electronic Scrap to Recover Precious Metal Bearing Con-centrations, ” paper presented at the International Precious Met-als Institute Conference, Vicksburg, VA, May 1983.




Another potential barrier to recycling of PGMs from electronic scrap is the fact that pal-ladium (which, with an average 1982 dealerprice of $100 per troy ounce is much lower inprice than platinum or gold) predominates inthis sector. Palladium is used in ceramic capac-itors and is increasingly substituted for gold

in low-voltage, low-current electrical contacts,such as telephone relay contacts. Higher reli-ability electronics, including those for militaryuse, require greater amounts of platinum andgold in contacts, capacitors, and other elec-tronic components.

Despite these potential barriers, there is agrowing electronic scrap recycling ind ustry inthe United States. An industry observer 44 esti-mates that 102,000 troy ou nces of platinum , ormore than the total yearly p latinum pu rchasesby the industry, were recovered from elec-

tronic scrap in 1982. The growth in recyclingof this type of scrap is reflected in the locationof the secondary precious metals industry.Twenty years ago, most precious metals re-finers and semi-refiners w ere clustered ar oundthe jewelry industry on the east coast. Today,man y semi-refiners and refiners are located inCalifornia’s “Silicon Valley,” Texas, and otherareas where the electronics industry has de-veloped.

As in other sectors, PGM recovery is great-est from manufacturing scrap. Large refiners

such as Johnson Matthey deal in both primarymetals and scrap, supplying the electroniccomponent industry with palladium metal,powders, and pastes, and recycling the metalfrom their reject components. In addition,some large electronics companies have set uptheir own in-house recycling processes torecapture the precious metals from both theirmanufacturing scrap and obsolete scrap. How-ever, the percentage of PGMs recycled fromobsolete electronic scrap is generally lower. Be-cause of the high labor costs involved in m anu-ally processing electronic scrap prior to final

refining, some electronics firms and scrapdealers find that foreign dealers offer the best

44Mark Stringfel]ow, “Platinum: Its Present and Future, ” pa-per presented to the National Association of Recycling Indus-tries, Dec. 15, 1982.

price for their scrap. Material is shipped bothto Europe, where such firms as SGM in Bel-gium have a long history of expertise and so-phisticated technology for precious metal refin-ing, and to Taiwan and other Asian countries,where lack of raw materials and low labor costsmake low-grade scrap more attractive.

Indu stry assessments of the quan tity of elec-tronic scrap exported by the United States vary.Total sales of PGMs to the electrical and elec-tron ic sector w ere 438,000 troy ounces in 1982.By comparison, exports of all types of PGM-bearing scrap that year were 388,437 troyounces. 45

Future trends in d omestic recovery of PGMsfrom electronics are difficult to predict. Overthe next decade, the scrap market is expectedto increase as technological advances makeequipment obsolete. Computer manufacturers,concerned about possible resale of their obso-lete components, may crush the parts and sellthem for recycling. How ever, whether the p lat-inum group metals found in this scrap are re-covered for U.S. consumption depends on a va-riety of factors. While some of the materialsmay be exported for overseas refining, this maybe done on a toll-refined basis. For example,

A5u.s. Depa r tmen t of Interior, Bureau of Mines, Mineral in-dustry Surveys, Platinum Quarterly, June 7, 1983, table 5,

Photo credit’ GTE Corp

Precious metal scrap produced during the manufactureof electronic components is segregated to enhance

recycling of gold, silver, and platinum group metals



Table 6.6.–Selected Opportunities for Increased Recycling of Chromium, Cobalt, and Platinum Group Metals (Continued)

Current level Key recovery Barriers to increased recyclingof recycling opportunities Technical Economic Institutional

Stainless steal (Cr): Home scrap is efficiently recov-

ered; purchased scrap for stain-less steel accounted for about20°/0 of total demand for Cr in1983.

Catalytic converters (PGM, Cr): Up to 30°/0 of scrapped converters

may now be recovered forrecycling.

Electronic scrap (PGM):High for industrial scrap, low for

obsolete scrap.

Improved recovery, reduceddowngrading of obsoletescrap, especially automotivecatalytic converters.

Increased recycling of industrialprocessing wastes (slags, fluedust, low-quality fabricationscrap, etc.)

Retrieval of PGM from scrappedautomobiles, muffler shops,etc. Maximum theoreticalPGM recovery will grow to800,000 troy oz by 1995. Maxi-mum practical recovery ratewill probably be about 500,000troy oz.

Obsolete scrap.

Not significant, but current in- Comparatively low price of chro-dustrial practices encourage mium and labor costs asso-

downgrading. ciated with removal of stain-less steel components fromautomotive and other obsoletescrap encourages down-grading.

Recovery of chromium from Resource recovery from indus-some wastes (e.g., slags) istechnically difficult.

trial wastes may not be eco-nomic: however. commercialrecovery of low-grade fluedusts, grindings, turnings, bor-ings is now being undertakencommercially.

Several companies have proprie- Dependent on PGM prices, buttar y processes to r ecyc le appears favorable.catalysts.

Lack of technology for Depends on PGM prices; hand

preprocessing of scrap to a labor disassembly encouragesform usable by a refinery. export of scrap.

Recovery of obsolete consumerproducts containing stainless

steel catalytic converter shellsis a primary candidate for re-covery, but will depend oneffective linkage of PGM andCr recovery efforts.

Environment and solid wastedisposal requirements are pro-viding increased impetus torecovery where economic.

Some dismantles do not re-move catalytic converter fromcars prior to scrapping.

Collection networks have notbeen established in manyareas.

Dismantles want more for thecatalysts than reclaimers are

(i.e., households) is unlikelywithout incentives.

Value of scrap is not widely rec-ognized; monitoring of trendsis inadequate.

willing to pay.

Collection of obsolete scrap

from consumer electronics

SOURCE: Office of Technology Assessment.




Evidence from past “crises’ ’-most notablythe Canadian nickel strike of 1969 and the co-balt price spike in 1978—suggests that U.S. in-dustry can quickly increase recycling whenconcerns about supplies are paramount orwhen prices rise rapidly. In 1969, nickel scrap

pu rchases exceeded 1968 levels by over 60 per-cent despite the fact that the Canadian strikedid not occur until mid-1969. Nickel scrap asa proportion of domestic consumption ex-panded rapidly over the following 3 years—accoun ting for 22 percent of d omestic supp liesin 1972 as compared to 8 percent in 1968, (Thecurrent level is about 23 percent,) Cobalt scrappurchases doubled in 1978 and remained at orabove 1 million poun ds p er year through 1981,a growth from 4 percent of dom estic consump -tion to 8 percent.

It is more difficult to quantify savings of stra-tegic materials likely to arise from adoption of new manufacturing and processing technol-ogies by U.S. industry, but they are also large—particularly in the cases of man ganese used insteelmaking and strategic materials used insuperalloy. Upgrading of basic steelmakingprocesses could lead to important reductionsin the amount of manganese needed to produceeach ton of steel (see table 6-6). Use of advancedmanufacturing technologies by the aerospaceindustry will reduce chromium, cobalt, andother strategic material input requirements for

superalloys on a perpart basis. Part life exten-sion programs could also conserve materialsover the long run. As discussed in chapter 7,increased use of coatings and other surfacetreatment technologies and use of advanced ce-ramic and composite materials also could re-duce per part strategic material requirements,especially in the long term.

Recycling Technology

With some notable exceptions, there appearto be few significant technological barriers to

increased recycling of strategic materials.High-quality scrap generated in the productionand manufacture of products is recognized tobe a valuable source of raw materials by indus-try and is usually effectively recovered and re-used. Ongoing industrial trends, including

establishment of specialized scrap processingfirms and improved industrial waste treatmentprocesses, have expanded the range of wastematerials considered suitable for recycling, sothat continued incremental improvement inrecycling is likely in the coming decade.

Difficulties in identifying and sorting complexscrap containing several materials have re-cently been eased by the comm ercial availabil-ity of portable and relatively inexpensive in-struments suitable for use in scrapyards, asdiscussed in box 6-A.

In the area of superalloy recycling, consid-erable technological advan ces have been m adeover the last decade. However, additional in-novations may be needed if full use of obso-lete scrap and other less preferred scrap is tooccur. In the most demanding applications,

even small trace amou nts of imp ur ities may beunacceptable. Because of concern that con-taminants acquired from scrap material couldresult in failure of superalloy parts, use of superalloy scrap in jet engines has been limitedto scrap of the highest quality—generally, homeand prompt industrial scrap, although limiteduse has been made of obsolete scrap obtainedfrom commercial aircraft, where parts can beidentified by alloy type. Much of the remain-ing scrap is downgraded to use in stainlesssteel, where it is used for its nickel and chro-mium content. When th is occurs, cobalt is lost,

and the previously high-quality chromium usedin superalloys becomes a replacement for chro-mium usually supplied from high-carbon fer-rochrome or stainless steel scrap.

Nontechnical Impediments

In most applications, institutional and eco-nomic constraints on recycling are more for-midable than the technical constraints. Fluc-tuating commodity prices, costs associatedwith segregation and processing of scrap,transportation costs, and industry structure all

affect the ability of recycled materials to com-pete with primary metals.

ECONOMICS OF RECYCLING AND CONSERVATION

The economic incentive for recycling high-priced materials, such as PGMs, is very high.




However, other strategic metals are less expen-sive and often account for only a very smallproportion of the scrap. For many applications,raw materials comprise only a small fractionof the total value of the product. A 6,000-pound

jet engine, for example, may cost $3.5 million,

while the value of the materials it contains isonly $60,000. Even though an alloy may con-tain metals that are relatively rare and highpriced, the cost of separation of the alloy intoits constituents m ay be so high that it discour-ages any attem pt to recover the metals; so, thealloy is downgraded to recover its nickel andchromium content.

Recycling opportunities will change alongwith changes in manufacturing processes andprod uct d esigns. More efficient m anu facturingprocesses will require less raw material, so

there will be less prompt industrial scrap avail-able for recycling, New product designs thatuse combinations of m aterials to achieve desir-able properties will present difficult and expen-sive problems for the separation of materialsfor recycling. Often, products can be designedfor ease of recycling, but since raw materialcosts are generally a sm all comp onent of over-all cost, this is seldom done,

Materials conservation is an important sidebenefit of the advanced manufacturing tech-nologies widely used by the aerospace indus-try. These technologies may gradually filterdown to other industrial users. Diffusion of computer-aided design and nondestructiveevaluation techniques may be impeded to someextent by lack of experience of engineers, de-signers, and others with these new approaches.This is not a major problem in the aerospaceindustry or in other critical uses, however.

INFRASTRUCTURE

The complex structure of recycling indus-tries, often entailing primary metals proces-sors, collectors and dealers, scrap processors,

and parts manufacturers, can inhibit initiationof recycling programs, even when the pro-grams may be economically advantageous.Generally, the second ary m etals ind ustry com-prises a large number of small firms that re-spond to prices offered by the primary metals

indu stry, This system wor ks well for materialsfor which there is a relatively constant d emandfor a standard product. Although recyclingfirms can respond rapidly to changes in mate-rials demand du e to shortages of primary m a-terials, exacting standards for superalloy and

other premium materials can only be metthrough the use of sophisticated equipment andexperienced personnel who are familiar withthe needs of consumers. This can delay recy-cling response time in a shortage situation,

Recycling and Conservation Data Base

Accurate information is needed to have arealistic picture of the potential for recyclingto reduce U.S. materials import vulnerability.The existing data are weak, with many uncer-tainties about their accuracy. Key areas where

improvements can be m ade are: upgrading of annual information about scrap purchases byconsuming ind ustries, development and use of materials flow m odels on a periodic basis, andimproved tracking of the ultimate dispositionof obsolete scrap and industrial wastes thatcontain appreciable amounts of strategic ma-terials,

The U.S. Bureau of Mines prepares annualestimates of scrap purchases by domestic in-dustry. In most instances, these estimates arebased on voluntary reporting by private firms.

Not all firms are canvassed, and of those thatare, not all respond. Consumers of more thanone strategic material may be surveyed aboutonly one material. Although adjustments canbe made to compensate for incomplete report-ing, the resulting estimates are subject to con-siderable uncertainty. In the course of thisstudy, OTA found evidence that substantiallymore recycling may be taking place than is cur-rently reported in Bureau of Mines’ data.49

Scrap purchases alone provide only a limitedpicture of recycling trends, Substantial recy-cling occurs internally and through toll refin-ing arrangements that d o not involve purchases,

goother reports have reached a similar conclusion. See, for ex-ample, the NMAB report, Cobalt Conservation Through Tech-nological Alternatives, op. cit., p. 25 .



Ch. 6—Conservation of Strategic Materials 259

Also, scrap purchases provide no insight intothe u ltimate fate of scrap that is not recovered.Periodically, Federal agencies such as the Bu-reau of Mines and the NMAB have publisheddetailed and relatively comprehensive mate-rials flow models for individual metals. These

models have appreciably increased under-standing of overall recycling trends, but theyhave been prepared infrequently and there hasbeen little or no consistency in procedures usedin developing the models.

A notable impediment—from the perspectiveof identifying possible responses to disruptionsin m aterials supp ly—is the absence of informa-tion about accumulations of unrecovered ob-solete scrap containing strategic materials.Only a portion of the scrap that becomes ob-solete each year is recycled domest ically. Some

is exported, while the rest is unaccounted forin national statistics. Much of this lost mate-rial may now be effectively unrecoverableowing to disposal in landfills, dissipative cor-rosion, contamination, or abandonment inunknown locations. Some, however, may be

retrievable from indu strial disposal sites, com-mercial scrap yards, and military storagedepots for use during supply disruptions. Ex-tensive efforts have been made over the yearsto estimate the accumulated “inventory” of po-tentially recoverable ferrous scrap, but a simi-lar effort to monitor the disposition of strate-gic materials in obsolete superalloy parts,catalysts, and other applications has not beenmade. As a result, plausible estimates of theabove-ground mine of strategic materials re-coverable in an emergency are not available.



CHAPTER 7

Substitution Alternatives forStrategic Materials



Contents

PageRoles of Substitution in Materials Use. .. ...263

Substitution as an Emergency Response toa Supply Problem. . . . . . . . . . . . . . . . . . . .264

Substitution as a Continuing Strategy forReducing Import Vulnerability. . . . . . . ..264

Factors Affecting the Viability of

Substitution . . . . ...............,.....265Technical Factors . . . . . . . . . . . . . . . . . . , . . .265Economic Factors . . . . . . . . . ...,.........265Institutional Factors. . . . . . . . . . . . . . . . . . . .265Designer and End-User Acceptance .. ....266

Summary of Substitution Prospects . .......266Prospects for Direct Substitution in Key

Appl i c a t ions . . . . . . . . . . . . . . , , . . . , . . . . 268Chromium Substitution in Stainless Steel .268Chromium Substitution in Alloy Steels.. ..276Redu cing Cobalt and Chrom ium Used in

Superalloys for High-TemperatureAppl i c a t ions . . . . . . . . . . . . . . . , . . . . . . . , 277

Advanced Mate r ia ls . . . . . . . . . . . . . . . . . . . , .285

C e r a m i c s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 8 6C o m p o s i t e s . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 0 1Long-Range Ord er Interm etallic Materials .313Rapid Solidification . ...................314

Institu tional Factors in Substitu tion . . . . ....318Information Availability and Substitutes ..318Qualification and Certification of Alloy

S ubs t i tu t e s . . . , . . . . . . . . . . . . . . . . . . . . . 319Institutional Barriers and Advanced

Materials . . . . . . . . . . . . . . . . . . . . . . .., ..323

List of TablesTable No, Page

7-1.

7-2.

7-3.7-4.

7-5.

7-6.

7-7.

Examples of Substitu tion Relevant to

Strategic Materials . . . . . . . . . . . . . . . . 263Primary Motivations for Substitu tionR&D . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266High-Volum e Stainless Steels . . . . . . . 269Development Status of PotentialSubstitutes That Could ReduceChromium Requirements in StainlessSteel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271Ladle Analysis Ranges for theChrome-Free ReplacementCompositions for Standard 4118 and8620 Steeds . . . . . . . . . . . . . . . . . . . . . . . 277Typical Structural Alloys Used forHot-Section Com ponents. . . . . . . . . . . 280Nickel-Base Superalloys Selected forCobalt Substitution Research byNASA . . . . . . . . . . . . . . . . . . . . . . . . . . . 283

Table No. Page

7-8. Use of Structural Materials U n d e r -

7-9(

7-1o,

7-11,

7-12.

7-13,

7-14,

7-15,

7-16.

7-17.

7-18.

7-19.

Figure

7-1.

7-2

7-3,7-4(

7-5.7-6,

7-7,

7-8.

Development to Reduce Cobalt andChrom ium Usage in Hot-SectionParts . . . . . . . . . . . . . . . . . . . . . . . . . . . .Current and Prospective Uses forAd van ced Ceram ics . . . . . . . . . . . . . . .

Some Advanced Ceramics MaterialFamilies . . . . . . . . . . . . . . . . . . . . . . . . .Potential of Advanced Ceramics toSubstitute for First-Tier StrategicMateria ls . . . . . . . . . . . . . . . . . . . . . . . .Advanced Composite MaterialsOp tion s . . . . . . . . . . . . . . . . . . . . . . . . .Price Range of Selected Comp ositeRaw Materials . . . . . . . . . . . . . . . . . . . .Current Aircraft Applications forAdvanced Comp osite Materials . . . . .Potential Comm ercial Applications of Metal Matrix Composites . . . . . . . . . .Potential Automotive Applications

for Composites of Kevlar 49 Aramid.Curren t Status obtesting of Modified 8Cr-1Mo Steel Tubes inU.S. and Foreign Steam PowerplantsStatus of Specifications for Modified9Cr-1Mo Alloy . . . . . . . . . . . . . . . . . . .Structural Ceram ic TechnologyFederal Government Funded R&D...

List of FiguresNo.Temperature Capability of Sup eralloy . . . . . . . . . . . . . . . . . . . . . .Temperature Capabilities of TurbineBlade Materials . . . . . . . . . . . . . . . . . . .Grap hite Fiber Cost . . . . . . . . . . . . . . .Fiberglass Composite Ap plications . .Carbon/ Carbon Composite Needs . . .Development of Modified 9Cr-1MoSteel for Fossil Fuel an d Nu clearPow er Ap plications . . . . . . . . . . . . . . .Technology Transfer Ladder for ODSMA 6000. .. . . . . . . . . . . . .Technology Transfer Ladder forCOSAM Strategic MaterialSubstitution . . . . . . . . . . . . . . . . . . . . . .

284

287

288

291

303

304

307

309

312

321

321

326

Page

279

281304

306308

320

323

324



CHAPTER 7

Substitution Alternatives for Strategic Materials

Roles of Substitution in Materials UseDesigners choose materials that they think

offer the most attractive combination of serv-ice performance and reliability, ease in proc-essing and manufacturing, cost, and availabil-ity. However, these factors constantly changeas new m aterials with better p roperties are de-veloped, better information about existing m a-terials becomes available, new processing tech-niques are developed, and relative costs andavailability of materials fluctuate. Substitution,the pr ocess of revising th e match between m a-terials and applications, is the material users’technical response to this shifting environ-ment. In some cases, substitution involves find-ing or developing the best material for the ap-plication (replacement); in others, it involvesdesigning or redesigning the application tomake the best use of available materials.

Substitutions can be very costly and there-fore are undertaken only when there is a highdegree of certainty that the benefits will be sub-stantial. To be adopted, a substitute materialor design must demonstrate both technical and

economic feasibility and must overcome a va-riety of institutional hurdles. More important,it must gain the acceptance of the designersand end users who will ultimately use it.

Even though substitution includes both re-placement and redesign, current strategicmaterials-motivated substitution research is,for the most part, oriented toward developmentof alternative m aterials that have less strategicmaterial content.l At present, considerable re-

I Th(] ugh product design and redesign can be used to reduce

strategic materials requ i rernents, this strategy is less amenabloto a centralized research effort because of the vast number of products [and the case-by-case nature of this technique). Newmanufacturing process designs can also rfxluce strategicm a ter ia ]s needs i n some applications, However, these sa \’i ngsare rare] y the prima r}’ m oti \’a t ion for process d e~. elopm en t orimplcrnf?ntation dnd are not realized if greater cost or perform-an(:e advantages lie with other processes. As a national strat -

search—most of it government sponsored—isfocused on development of replacement ma-terials that could reduce strategic material re-quirements in several critical applications.These include, among others, several lowerchromium alternatives for existing stainlesssteels now used in powerplants, chemical proc-essing facilities, and other applications wherecorrosion resistance in a range of environ-ments is needed; low- or no-chromium alloysteels for bearings, gears, shafts and other high-

stress, long-service life applications; and low-or no-cobalt superalloy for gas turbine appli-cations. Some examples of substitutions thathave been or could be important to strategicmaterials use are shown in table 7-1.

Table 7-1 .—Examples of Substitution Relevantto Strategic Materials

Direct material substitution:Ceramic magnets for aluminum-nickel-cobalt magnetsDolomite for magnesia-chromite refractoriesInterchangeability of platinum-group metals and gold in

electronic componentsModified 9% chromium-1% molybdenum steel for 18%

chromium-8% nickel stainless steel in reactor vessels,heat exchangers, and tubing in powerplants

Polymeric materials for decorative chrome in automobilesCobalt-free superalloy for 56% cobalt superalloy in JT-9

jet engineProcess design substitution:

AOD vessel for double-slag in stainless steel makingPrecision casting and forging for machining in parts

manufactureContinuous casting for ingot casting in steelmaking

Product design substitution: Ceramics in experimental automotive gas turbine enginesDownsizing of turbine engines made possible through the

use of lighter materials in aircraft components ——S–OURCE” Off Ice of Tech~ology Assessment

— .egy to reduce U.S. dependency on imported materials, produ(:tor process design modification can on]}’ be succf?ssful i f df~signengineers can be convinced to include strategi(, materials sa\-

ings as an i rnportant objective in design decisions.

263




Substitution as an Emergency Responseto a Supply Problem

To a certain extent, already developed, on-the-shelf substitute m aterials and technologiescan be relied upon in an emergency to con-

serve materials that are in short sup ply. As dis-cussed in chapter 3, substitutes for strategicmaterials in man y ap plications are often avail-able, thou gh n ot necessarily readily recogniza-ble as such. Alternative materials could be usedin these app lications w ith low (or at least toler-able) penalties in performance and cost. Thematerial saved through these measures wou ldthen be available for use in critical applicationswhere higher or unacceptable penalties areassociated with substitution.

The existence of technically and economi-cally viable substitutes is not the on ly require-ment for a timely response to a supply emer-gency. For many critical applications, a newmaterial must be tested and its use in a par-ticular comp onent mu st be qu alified (acceptedby the consumer) and certified (shown by theproducer to meet the consumer’s require-ments). Thu s, imm ediate response is limited tothose materials that are already in (or very closeto) comm ercial use, and to app lications that d onot have stringent materials requirements orfor which the material has been certified andqualified. The substitution response by U.S. in-

dustry to prior supply problems involving stra-tegic materials is discussed in chapter 4.

The current ability of U.S. industry to re-spond to a supply problem with substitutionis not known with any degree of certainty. Al-thou gh a large backlog of alternative materialsand technologies is generally conceded to ex-ist, information about many of these potentialsubstitutes has not been assembled in a system-atic way which would be accessible to design-ers, material users, and decisionmakers in anemergency. Development of a substitution databank or a materials information system thatwould bring available substitutes to the atten-

tion of engineers and designers is one frequent-ly proposed means for reducing U.S. vulnera-bility to an import curtailment. This conceptis discussed further in chapter 8.

Substitution as a Continuing Strategy forReducing Import Vulnerability

Besides being an emergency response, sub-stitution can also play a key role in long-termstrategies to reduce dependency on importedmaterials. During the last decade, there hasbeen much research focused on developmentof substitute materials that could reduce stra-tegic material requirements for many alloyscurrently used in key applications. Other re-search has been aimed at development andcommercialization of ad vanced materials (e.g.,

ceramics and composites) which may displaceuse of strategic materials in som e app lications.

Although many technically promising substi-tutes are under development, the extent towhich they will be adopted by U.S. industryis difficult to foresee, In the absence of animmediate availability problem, industry’sadoption of new materials, designs, and man-ufacturing technologies is usually not moti-vated by concerns about strategic materialsavailability. Generally, the new technologieswill be used only if they offer some more im-

mediate benefit such as reduced costs, in-creased outputs, improved product perform-ance, or potential new products.

A successful long-term strategy for reducingU.S. vulnerability to imported materialsthrough substitution depends not only on thetechnical feasibility of alternative materials buton acceptance of them as practical alternativesby industry. Acceptance comes only when thetechnical and/ or econom ic benefits have beenclearly demonstrated, various institutional bar-riers have been surmoun ted, and a high degreeof designer and end-user confidence has beenestablished.



Ch. 7—Substitution Alternatives for Strategic Materials q 265

Factors Affecting the Viability of Substitution

Technical Factors

Over time, a backlog of proven, on-the-shelf materials and technologies have been devel-oped that for one reason or another have notbeen adop ted by indu stry, Research and d evel-opment (R&D) efforts by public and privateagencies throughout the world are adding tothis store of potential substitutes almost d aily.Only a few of these are likely to be adop ted byindustry at any given time.

Technological barriers to strategic materialssubstitution can be time-consuming and for-midable, especially for applications in whichlittle or no compromise in performance isacceptable, Even when a promising substituteis developed in the laboratory, new and signif-icant technical problems may be encounteredwhen large-scale tests are undertaken to ver-ify laboratory findings, Often, a return to basicresearch is required to overcome these scale-up problems. Additional technical problemsmay be encountered when full-scale industrialproduction is begun.

Economic Factors

The technical potential of substitution to re-duce strategic materials requirements is fargreater than wh at is economically feasible. In-dustry will not adopt technically promisingalternative materials unless they are cost-effective compared with current materials.Often, the cost effectiveness of using the cur-rent material is not greatly affected by priceincreases in strategic raw materials. In fact, theprices of raw materials can be such a small partof the cost picture that they are relatively unim-portant in a substitution decision. For exam-ple, raw materials account for only about 1 per-

cent of the cost of a jet engine, Even platinumgroup metals (PGMs), which cost between $100an d $400 per troy ounce, account for less than5 percent of the cost of prod ucts manufacturedwith PGM catalysts. Therefore, all else beingequal, a change in the cost of raw materialsoften has to be d ramatic to warrant the expense

of shifting to a substitute material. Adoptionof a new material may require costly newequipment or changes in operations. There are

also costs associated with change itself—fortraining workers in the use of a new materialor process, for changing the design of products,and for adjusting manufacturing practices.

Institutional Factors

An alternative material may take a decadeor more to bring to commercial fruition, evenafter the technical and economic feasibility of the substitute has been demonstrated. Govern-ment, industry, academia, professional soci-eties, and standard-setting organizations may

all play roles in this process, depend ing on thematerial and its application.

Substitu tion R&D relevant to strategic mate-rials is conducted in government, industrial,and academic laboratories. Since most of thesupport for this work has come from the gov-ernment, funding of the projects is subject toshifting governmental budgetary priorities andmay not be sustained for the protracted periodneeded to adequately demonstrate the techni-cal potential of a material or its application.Also, government conducted or sponsored

R&D can suffer from insufficient industrial in-terest in commercializing a material,

Industry, the group which ultimately decideswhether or not substitutes are adopted, usuallydoes not commit the funds, time, and effortnecessary to develop and qualify substitutes forstrategic materials unless such activities alsoprovide cost or performance advantages. Pri-vate firms often do not perceive national ma-terials availability and vulnerability as prob-lems that they have a major role in remed ying,Availability concerns are usually not immedi-ate enough to cause much corporate concern.Table 7-2 illustrates the representative R&D pri-orities by government and industry.

Standard-setting and professional organiza-tions play key institutional roles in the devel-opment process by testing new materials anddeveloping standar ds for their use. Often, test-




Table 7-2.—Primary Motivations for Substitution R&D

Industry GovernmentReduced import dependency . . . . . xCost advantage . . . . . . . . . . . . . . . . . xBetter performance . . . . . . . . . . . . . xNew market penetration . . . . . . . . . xMaterials conservation. ., . . . . . . . . x

Maintenance of nationalindustrial competitiveness . . . . . x

SOURCE: Office of Technology Assessment,

ing and standard -setting are done by volunteersfrom professional societies, with limited re-sources and time to dedicate to the effort. Inother instances, such as the qualification of anew superalloy for jet engine use, testing andqualification is undertaken by an individualfirm on a proprietary basis. The effort mayhave to be duplicated by others if the materialis to be used broadly. In many cases, severalyears of effort—and millions of dollars—maybe entailed in testing and qualifying a new ma-terial for use in a critical application.

Designer and End-User Acceptance

Acceptance by designers and end users canbe the highest hurdle in the adoption of a sub-stitute. These groups sometimes have been in-

different to the need to save strategic materi-als. A heightened a wareness of the imp ortanceof design to strategic materials vulnerabilitymay be able to reverse this indifference,

Substitutes are adopted only when compo-nent d esigners and end users have acquired ahigh degree of confidence in the technical ca-pabilities and economic potential of the newtechnologies. These materials users will not useany substitute technology with which they areuncomfortable; they are reluctant to makechanges, especially if the new designs orreplacement materials are relatively untried,Substitution in critical applications often re-quires a degree of confidence or comfort withthe new material or design that can only comefrom a proven track record. Consequently,promising substitutes are often introduced first

into noncritical applications wh ere confidencecan be gained without fear of catastrophicfailures.

These acceptance hurdles can be especiallyhigh for advanced materials. Since many ad-vanced m aterials are relatively recent d evelop-ments, they are still fighting to establish a trackrecord, This situation is exacerbated by the factthat most designers receive little formal train-ing in the use of advanced materials,

Summary of Substitution Prospects

On-the-shelf substitutes, which could beadop ted by indu stry relatively quickly, enhanceU.S. preparedness to deal with import prob-lems. It has been estimated, for example, thatimmediately available substitutes could replaceone-third of the chromium now used. There arealso fully developed su bstitutes for cobalt andPGM in some applications. Substitution pros-pects for manganese are less promising, al-though substantial reductions in the amount

of manganese needed per ton of steel producedare likely in the coming years because of theupgrading of steelmaking processes, as dis-cussed in chapter 6.

Industry response time depends in part onthe ready availability of information about sub-

stitute materials. Technologically sophisticatedfirms are generally aware of available substi-tutes, and some are reported to have under-taken contingency planning to address futuresupply availability problems. Less sophisticatedfirms may have greater difficulties in obtain-ing such information in the event of an actualsup ply disrup tion, and , as a general rule, wouldhave the greatest difficulty in competing forscarce materials.

Substitution prospects in many critical eco-nomic and defense applications depends partlyon overcoming significant technical barriers.In these applications, substitutes must equalthe performan ce of the materials already u sed,which is often technically difficult, Substitutes



— — .. .—. .

with low strategic material content have notyet been developed for some of these impor-tant applications. The degree of commitmentneeded to develop direct substitutes is substan-tial in both money and time. For applicationswhich require that alternative materials be

qualified, the development effort may take 10or more years an d several million dollars, evenafter their technical promise has been identi-fied in the laboratory.

Industry has little incentive to develop sub-stitutes on its own un less clear benefits in costor performan ce are anticipated . As a result, theFederal Government h as und ertaken or spon-sored most of the research where strategicmaterials savings, not cost or performance ben-efits, are given top priority. Several Federalagencies, including the Department of Energy

(DOE), the Interior Department’s Bureau of Mines, and NASA have sponsored researchprograms aimed at developing substitutes forstrategic materials. However, the sustainedsupport needed to develop particular materialsto the point of commercialization generally hasbeen lacking,

Substitution research programs undertakenby NASA, the Bureau of Mines, and DOE na-tional laboratories have resulted in lower chro-mium research alloys that are potential substi-tutes for stainless steel in some applications.

(Selected examples of these alloys are discussedin a subsequent section, and summ arized in ta-ble 7-4,) Even if fully developed, most of thesematerials would not duplicate the great versa-tility of the high-volume stainless steels andwould be capable of replacing stainless steelsin only a limited range of applications.

With some exceptions, these substitutes areonly in the initial stages of development. Inmost instances, a continuing governm ent com-mitmen t will be required if these materials areto be fully developed , since private indu stry isunlikely to undertake this research itself. Issuessurrounding possible additional Federal sup-port for such development activities are dis-cussed in chapter 8.

The Federal Government–especially NASA,through its Conservation of Strategic Aero-

Ch. 7—Substitution Alternatives for Strategic Materials q 2 6 7

space Materials Program (COSAM)—has alsosponsored initial laboratory work on replace-ment superalloys that have reduced levels of cobalt, These research materials could poten-tially reduce the cobalt now used in somenickel-based superalloys by one-half or more.

However, full development of these replace-ment materials would require several moreyears and millions of dollars in additionalfund s. As with lower chromium stainless steel,subsequent development steps needed to bringthese substitute sup eralloy to the point of com-mercial use probably w ill need to be federallysupported if this development is to occur at all.

The changing material requirements of theaerospace industry may make it impractical todevelop these direct substitutes for superalloysto the point of commercial use. The develop-

ment steps required could entail 5 to 10 yearsof additional effort. Beginning in the mid-1990s, advanced superalloy materials may be-gin to be commercially used in the next gen-eration of military aircraft. The direct substi-tutes now under development for currentlyused materials will not be suitable replace-ments for new materials used in the next gen-eration of jet engines. (Less near- and med ium-term change in materials is expected in thecase of stainless steel.) Superalloy substitutionresearch is discussed in greater d etail in a sub-sequent section.

In addition to direct substitutes, advancedmaterials (including ceramics and composites)are also under development because their prop-erties offer n ew possibilities in prod uct d esignand performan ce. These materials, which con-tain little or no strategic metals, may have long-term implications for reducing import depen-dency, although to w hat extent is not clear. Be-cause the emph asis is on cost and p erformancebenefits, much of the development of advancedmaterials is carried out by private concerns.

Advanced ceramic materials have the poten-tial to displace metals wh ere exceptional w ear-resistance or heat-resistance is required. Cur-rent and prospective advanced ceramic appli-cations in which strategic materials are nowused are discussed in a su bsequent section, and




summarized in table 7-II. Aerospace andautomotive applications command most of thefunds for ceramic R&D efforts.

Composites (includ ing p olymer m atrix, m etalmatrix, and carbon/ carbon materials) are pri-

marily under development because of theirlightness compared to conventional materials.In critical applications, their potential role inreducing strategic material requirements islikely to be indirect and will depend upon de-sign factors. At present, commercial applica-tions for advanced composites are dominatedby aerospace app lications and high-value sport-ing goods. Increased use of composites in auto-motive applications is predicted.

Strategic materials conservation is n ot a pri-mary motivation in the development of ad-vanced materials, and the potential of thesematerials for displacing current requirements

for strategic materials should not be overem-phasized. Nonetheless, in the long term, theymay well bring fundamental changes in theoverall mix of materials in the domestic andinternational economy. Major industrial coun-tries includ ing th e United States, Japan , Great

Britain, and several Western European coun-tries are all vying for prospective markets forthese m aterials. Moreover, because of their keyimportance in defense applications, the ques-tion of the adequacy of domestic processing ca-pabilities with respect to these materials islikely to be an increasingly important issue.Processing capacity is often located in severaldifferent countries. The United States, for ex-ample, currently imports from Japan most of its high-quality polyacrylonitrile (PAN) used asa precursor in carbon-carbon composites. Theinternational nature of these markets could cre-ate a new typ e of materials imp ort dep endency.

Prospects for Direct Substitution in Key Applications

Adequ ate substitutes exist for man y app lica-tions in which strategic materials are nowused. For example, aluminum alloys, plastics,and plated carbon steels already compete withstainless steels for m any constru ction an d con-sumer markets. In the event of a chromium

supply disruption, these alternative materialswould be readily available as substitutes forstainless steel in many nonessential applica-tions where exceptional corrosion resistanceis not need ed. Similarly, if the su pp lies of PGMwere to tighten, electronic components man-ufacturers could quickly substitute gold formuch of the platinum and palladium now usedfor contacts. This is a case wh ere raw materialsprices are a significant part of the total prod-uct cost and can be counted on to drive sub-stitution. Fifteen years ago, gold was the pre-ferred material for contacts, but curren t p rices

favor platinum and palladium.Materials substitu tion in m any essential eco-

nomic and defense uses is more d ifficult, how-ever. Performance compromises are very costlyin these cases, so the replacement must match

or better the prop erties of the curr ent ma terial,There are very few, if any, immed iately avail-able replacement m aterials capable of meetingthe demanding performance standards requiredfor these app lications. In som e cases, adequatesubstitutes for the current materials have yet

to be developed. In other cases, technicallyacceptable substitutes may be known, but aretoo expensive to be used. In still other cases,potential substitutes have been developed inthe laboratory but have yet to be taken throughthe time-consuming and expensive testingprocesses necessary to make them acceptablefor commercial use. Depending on the extentof the laboratory research and the promiseshown by the results, some of these substitutescould be brought to the point of commerciali-zation in the next 5 to 10 years, while othersare unlikely to be developed fully.

Chromium Substitution in Stainless Steel

Stainless steel accounts for almost half of thetotal U.S. chrom ium d emand , and abou t 70 per-




cent of the chromium consumption in metal-lurgical uses. Table 7-3 shows the contributionof the highest volume stainless steel grades tochromium use. The most common grade, AISI304, alone accounts for over 40 percent of do-mestic stainless steel production and over 20percent of total domestic chromium consump-tion. Although the chromium content of stain-less steels varies from 10 to over 30 percent,on the average stainless steels contain about17 percent chromium.

The primary function of chromium in stain-less steel is to provide corrosion an d oxidationresistance. z Chromium makes stainless steelhighly resistant to dam age in a large variety of environments. This characteristic, along withgood fabricability and mechanical properties,is what makes stainless steel so attractive for

a wide variety of applications, ranging fromdecorative trim, kitchen utensils, and otherconsumer products to industrial applications

ZThe protection from corrosion and oxidation damage comesfrom the chromium oxide skin that forms at the surfaces of stain-less steels. Chromium concentrations of 12 percent or higherare required for the formation of the protective skin, but sincecorrosion and oxidation resistance increases with chromiumcontent, much greater concentrations are often used. AISI 304stainless steel contains 18 to 20 percent chromium, and somesuperstainless grades have chromium contents of 30 percent ormore.

In addition to conferring corrosion and oxidation resistance,chromium improves the hardenability and stabilizes the aus-tenite, the highly workable, ductile, and weldable microstruc-ture found in the majority of stainless steel grades.

such as tubing and reaction vessels in power-plants and chemical processing facilities.

There is little chance that a u niversal substi-tute for stainless steel can be found for use inall of these applications. However, some oppor-

tunities exist for piecemeal substitution. Thepotential for reduced u se of stainless steel (andthus chromium) in an emergency is very greatin the decorative and consumer uses and low-temperature (room temperature to 900

0 F) in-dustrial applications. Materials such as alumi-num, titanium, plastics, and low-chromiumstainless steels (9 to 12 percent chromium) canoften substitute without serious performancecompromises for stainless steels in these rela-tively undemanding uses. The possibilities forreplacement in the industrial applications oper-ating at higher than 900° F (5OO° C) is some-

what smaller. In some of the moderately severe(referring to both temperature and corrosive-ness) industrial environments, steels with 12to 15 percent chromium would suffice wherehigh-chromium stainless grad es (18 percent ormore) are now used. This substitution oppor-tunity exists because engineers often specifythe common grades, which have better prop-erties (and more chromium) than needed, in or-der to exped ite the design process. In add ition,there are low-chromium (e.g., 9 percent) orchromium-free steels now under developmentfor use in these moderately harsh environ-ments. Even considering these new alloys, re-

Table 7-3.—High-Volume Stainless Steels

Percent of domestic Percent of chromium Percent of totalstainless steel Typical chromium consumed in domestic chromium

AISI stainless steel grade product ion compositions stainless steel consumption

301 . . . . . . . . . . . . . . . . . . . . 9.60/o 17.0% 9.4% 4.60/o304. . . . . . . . . . . . . . . ! . . . . 42.3 19.0 46.5 22.6304N & 304L . . . . . . . . . . . 4.0 19.0 4.4 2.1316. . . . . . . . . . . . . . . . . . . . 3.6 17.0 3.5 1.7316L . . . . . . . . . . . . . . . . . . 3.1 17.0 3.1 1.5

409. ......., ., . . . . . . . . 10.1 11.1 6.5 3.2430. ., . . . . . . . . . . . . . . . . . 3.5 17.0 3.4 1.6

Other grades . . . . . . . . . . . 23.9 NA 23.1 11.2

Total stainless ... . . . . . . 100.0 ”/0 17,3”/0 100.0 ”/0 48.50/o

alncludes chromium in metal, ferroalloys, and chromite

Columns may not add to totals because of roundingNA = Not applicable, chromium composftlons vary greatly among these stainless steels

SOURCE American Iron and Steel Institute, Cwarfer/y Product/on of Stainless and Heat Res(stirrg Raw Steel, publication AlS-l04(1983) and U S Bureau of Mines, Miner- als Yearbook, Chromium Preprint (1982)




placement of the high-chromium stainlesssteels in extremely severe industrial applica-tions, especially those at temperatures above1,300° or 1,400° F (700° to 800° C) appears in-feasible. Much of this currently irreplaceabledemand for stainless steel is in critical defenseapp lications, the chemical processing ind ustry,and energy facilities such as powerplants andpetroleum and natural gas refineries. These ap-plications make full use of stainless steel’s im-pressive high-temperature corrosion and oxi-dation resistance and strength.

According to a 1978 report by the NationalMaterials Advisory Board (NMAB), in a sup-ply emergency 60 percent of the chromiumused in stainless steel could be saved throughthe use of low-or no-chromium substitutes thatare either already available or could be devel-

oped within 10 years.3

The other 40 percent of the chromium consumed in stainless steel wasfound to be irreplaceable unless compensatedfor by design or process improvements. Thisamount represents approximately 20 percentof the current total domestic chromium use.

Most research on reducing the use of chro-mium in stainless steels is sponsored by Fed-eral agencies. The focus is on developing alter-native alloys with lower chromium contentsthan those stainless steels in greatest demand(e.g., AISI 304,409, and 301) for use in moder-

ately harsh industrial environments. In addi-tion, R&D related to advanced surface treat-ment processes and ceramic and compositematerials, though not motivated by chromiumconservation, may uncover ways to reduce theuse of stainless steel in some applications,

Low-Chromium or Chromium-Free Substitutesfor Stainless Steels

Current commercial low-chromium steels areunsuitable as substitutes for stainless steel incritical applications. However, several low- orno-chromium alternatives for some grades of

3National Materials Advisory Board, Contingency Plans forChromium Utilization, National Research Council, Commissionon Sociotechnical Systems, Publication NMAB-335 [Washing-ton D. C.: National Academy Press, 1978).

stainless steel are und er development (table 7-4.) These new steels show prom ise for variousmoderately harsh environments but do not per-form as well as high-chromium grades in ex-tremely severe applications. Most are still atthe laboratory stage of development, although

some are now undergoing certification, Thebulk of the research is being sp onsored by Fed-eral agencies, since private firms have little in-centive at current chromium prices to developlow-chromium substitutes. (See ch. 3 for chro-mium price information.)

Low-chromium or chromium-free substitutealloys for th e AISI 300 (austen itic) series stain-less steels have r eceived th e greatest attentionfrom researchers. Austenitic grades, most of which contain between 16 and 26 percent chro-mium , account for nearly 70 percent of dom es-

tic stainless steel production and for about 36percent of all domestic chromium demand.Among this group is the very popu lar and ver-satile type 304. Excellent fabricability and me-chanical properties, combined with corrosionand oxidation resistance in a wide range of environments, makes the 300 series stainlesssteels attractive for many applications, Unfor-tunately, the remarkable combination of prop-erties that enables this great versatility is cur-rently impossible to replicate, Consequently,a universal substitute for the entire 300 series(or even one of the p articularly popu lar grades)

is not a likely development, The promise of each of the substitutes tends to be very appli-cation- or environment-specific.

Examples of promising research on substi-tutes for 300 series stainless steels in moder-ately severe applications include:

qDOE’s Oak Ridge National Laboratory de-velopm ent and p romotion of a modified 9percent chromium (Cr), 1 percent molyb-den um (Me) steel [mod ified 9Cr-lMo alloy).4

The initial objective of the laboratory wasto develop a single reference material forintermediate sections of liquid metal fastbreeder r eactors, Curren tly, these reactorscontain 18 percent chromium-8 percent

4Basically a standard 9Cr-1Mo alloy with additions of colum-bium and vanadium.



. .

Ch. 7—Substitution Alternatives for Strategic Materials 271

Table 7“4.—Oevelopment Status of Potential Substitutes That Could Reduce ChromiumRequirements in Stainless Steel

Substitutematerial Key objective

1. Modified 9 % Develop single materialc hromium-1 % system to replace

molybdenum ferritic (2.25°/0 Cr)steel. and austenitic (18°/0Cr) steels used inpressure vessels andconnecting tubing inliquid metal fastbreeder reactors.

2. 12°/0 chromiumalternative to18°/0 chromium304 stainlesssteel.

3. Iron aluminummolybdenum(Fe-8 °/O Al- 6°/o Mo)alloy strengthenedby zirconiumcarbide (ZrC).

4. 9°/0 chromiumaustenitic alloys.

5. Theoreticalmethod to de-velop low-chromium austen-itic stainlesssteel compo-sitions.

6. Manganese-alumi-num steel(Fe-M n-Al).

Determine feasibility ofreducing Cr use intype 304 stainless.

Develop chromium-freematerial for midtem-perature oxidation-resistant application.

Technicalstatus Institutional sponsors

Fully developed; may Oak Ridge Nationalalso find use in Laboratory.

fossil, solar thermal,and fusion energysystems,

Determine if other alloy-ing elements couldreplace part of thechromium in stain-less steels.

Develop a technical toolfor devising low-chromium alloyswith mechanical pro-perties equivalent tothose of type 304stainless steel.

Develop general usealternative tochromium-nickelstainless steel.

Mechanical propertiesand corrosion andoxidation resistancecompare favorablywith type 304stainless.

Early tests show excel-lent workability andoxidation resistance,ZrC strengtheningmechanism couldnot be controlledreliably and needsadditional work.

Tests show corrosionresistance (in lesssevere environ-ments), fabricability,weldability, and me-chanical propertiescomparable to con-ventional stainlessgrades.

Modeling of alternativecompositions hasbeen undertaken. Notest heats have beenmade.

Laboratory work showsthat these alloysmay be useful atcryogenic and mod-erate temperaturesand various corrosiveenvironments.

NASA-Lewis ResearchCenter.

U.S. Bureau of MinesAlbany ResearchCenter.

INCO under U.S.Bureau of Minessponsorship.

Allegheny LudlumSteel Corp.

Studies are being con-ducted in many dif-ferent laboratories.

7. 6-12°/0 chromium Develop low-chromium Oxidation and creep ARMCO (producerferritic steels. oxidation-resistant resistance are super- company).

ferritic stainless ior to type 409steels. stainless.

Economic factorsand commercial statusIn process of certifica-

tion by ASME boil-

er and pressurecode committee.Cheaper than18%Cr-8% Ni stain-less for indicateduses; lack of indus-try sponsorshipmay slow commer-cialization.

Laboratory stage;initial workcompleted in 1979.

Laboratory stage.

Laboratory stage.

Could add to thestockpile of infor-mation about sub-stitutes, but workhas yet to progressto the experimentalstage.

Most work is still atthe laboratorystage. Limited pro-totype testing isbeing done in othercountries. May becheaper than cur-rent stainlesssteels.

Laboratory stage.

SOURCE Off Ice of Technology Assessment




q

nickel (Ni) (18 Cr-8Ni) alloys (e.g., AISI 304,321, 347) in the reactor vessels and heatexchangers and a 2¼Cr-1Mo alloy in thesteam generators. Use of a single ma terialin these applications eliminates, amongother problems, an undesirable dissimilar

metal weld at the transition joints. Themodified 9Cr-1Mo alloy was found to bea promising replacement for both types of materials. The encouraging results of theresearch suggest that this alloy may finduse in conventional pow er app lications, aswell. Although it will replace both low- andhigh-chromium materials, modified 9Cr-1Mo will probably yield a net chromiumsavings. However, chromium conserva-tion is a byprod uct of this development ef-fort, not a p rimary m otivation. If this newmaterial sees widespread use in the p ower

industry, the resultant availability anddesigner acceptance may encourage its usein other low or moderately hostile appli-cations now dominated by high-chromiummaterials.

Nearing commercialization, this modi-fied 9Cr-1Mo alloy is being considered bythe American Society for Testing of Ma-terials (ASTM) and by the American So-ciety of Mechanical Engineers (ASME)boiler and pressure vessel code commit-tee for final certification. Since use of thematerial entails fabrication an d inspectioncost savings, as well as a materials cost re-du ction, pr ospects for su ccessful su bstitu-tion are good if it is approved 5 6 (table 7-4,item 1).NASA’s comparison of the mechanicalprop erties and oxidation and corrosion re-sistance of redu ced chromium alloys withthose of type 304. One steel, containing 12percent chromium, 10 percent nickel, 1.5percent silicon, 1 percent aluminum (Al),2 percent molybdenum, and 2 percentmanganese (Mn), demonstrated properties

that compare favorably with 304 stainless‘Robert R. Irving, “What’s This Steel They’re Raving About

Down in Tennessee?” Iron Age, June 25, 1982,‘V. K. Sikka and P. Patriarca, Data Package for Modi~ied 9Cr-

IMO Alloy [Oak Ridge, TN: Oak Ridge National Laboratory, De-cember 1983).

q

q

q

steel and could be used for most applica-tions (except nitric acid environments)where type 304 is currently used. This al-loy conserves one-third of the chromiumnormally used in type 304 stainless steel 7

(table 7-4, item 2).

The U.S. Bureau of Mines’ investiga tion of a chromium-free iron-aluminum-molybde-num (Fe-Al-Mo) alloy as a potential substi-tute for high-chromium, heat-resistant al-loys. An optimal comp osition for the alloyhas yet to be developed , but early findingssuggest that the chromium-free alloy mayresist oxidation at moderate temperaturesto an extent comparable to 300 series stain-less 89 (table 7-4, item 3).The Bureau of Mines’ work on reduced-chromium substitutes for high-performancestainless steels (e.g., type 310 with 25 per-cent chromium) used in elevated-temper-ature, severely corrosive environments,Steels containing chromium (12 to 17 per-cent), nickel, and aluminum are beingstudied in this program. The Albany Re-search Center of the Bureau of Mines hasbeen successful in red ucing the chrom iumcontent to 12 percent. One 12 percentchromium substitute has about three timesthe sulfidation-resistance of, and approx-imately equivalent mechanical propertiesto type 310 stainless steel.10

The Bureau of Mines’ study of low-chromi-um stainless steels for high-temperature,oxidation-resistant applications. Researchhas shown that steels having 8 to 12 per-cent chromium with additions of alumi-num and silicon can h ave excellent oxida-tion-resistance and mechanical properties(to 800° C), These alloys ar e potent ial sub-stitutes for 18Cr-8Ni stainless steels in————

7Joseph R. Stephens, Charles A, Barrett, and Charles A.Gyorgak, “Mechanical Properties and Oxidation and CorrosionResistance of Reduced-Chromium 304 Stainless Steel Alloy s,”NASA Technical Paper 1557, November 1979.‘J. S. Dunning, An iron-Aluminum-Molybdenum Alloy as a

Chromium-Free Stainless Steel Substitute, U.S. Department of theInterior, Bureau of Mines Report of Investigations 8654 (Wash-ington, DC: U.S. Government Printing Office, 1982).

‘J. S. Dunning, M. L. Glenn, and H. W. Leavenworth, “Sub-stitutes for Chromium in Stainless Steel s,” Metal Progress,October 1984, p. 23.l’JIbid., p. 23.




Information requirements for stainless steelsubstitutes are u nd er evaluation by the MetalProperties Council, Inc. (MPC), an organiza-tion set up by industry and technical societiesin 1966 to provide engineering data on mate-rials, MPC established a Task Group on Criti-

cal Materials Substitution in 1981. An initialMPC task group report,16 issued in 1983, noteda gap on the technical information abou t alter-native low-chromium compositions for stain-less steel. Most of the available data w as fromlaboratory investigations, with little informa-tion developed about processing and fabrica-tion of these compositions, or about how theyheld up in service environments—essentialinformation if industry were to use these sub-stitutes during a protracted supply shortage.Subsequently, MPC has decided to focus onchromium substitution options for 18 percent

chromium-8 percent nickel stainless steels usedin room-temperature to moderately high-tem-perature (up to 1,2000 F) applications.17 Theseapplications comprise the highest volume usesfor stainless steels, including many for whicha decrease in corrosion resistance may be ac-ceptable to some consumers in times of a sup-ply shortage. MPC is now evaluating futuresteps, such as developing alternative compo-sitions that d up licate all metallurgical and me-chanical properties of the popular grades of steel, except corrosion resistance. MPC is pre-paring a survey to gain input from industry.

The AISI 400 series, accounting for about 20percent of dom estic stainless steel prod uction,is the second largest class of stainless steels.Type 409, which contains approximately 11percent chromium, is the second most popu-lar stainless steel. It accounts for about half theproduction of 400 series grades and is usedprincipally in the catalytic converter housingsin automotive exhaust systems.

ARMCO is exploring several lower chromiumalternatives to ferritic (400 series) stainless steels

containing 12 percent chromium, These newalloys, still at the laboratory stage, may be p rom -—. .- ——-.——

leThe Meta] Proper t ies Council, Inc., “Task Group on Critica]

Materials” (New York: The Metal Properties Council, Inc., 1983).ITprivate communication with R. A. Lula and officials of the

MPC.

ising substitutes for stainless steel used in thecatalytic converter sh ell of autom obiles, ARMCOreports that its 6.6 percent chrom ium alloy 6SR(scale resistant) is more oxidation- and creep-resistant than 409 stainless steel. Unlike, the othersubstitu tes described above, the SR alloys (which

also include 12SR, a potential 12 percent chro-mium substitute for some 18 percent chromiumgrades) are being researched in th e prod ucer in-du stry. As a result, the institutional barriers tothe acceptance of these SR alloys are relativelylow 18 (table 7-4, item 7),

These substitutes are all in various stages of de-velopment. Other than the modified 9Cr-1Mo al-loy, which is undergoing certification, thereplacement alloys have not yet advanced beyondthe laboratory level of investigation in the UnitedStates. The d evelopment of the chromium-free

substitutes, such as the ferritic Fe-Al-Mo and theaustenitic Fe-Mn-Al alloys, designed for ele-vated-temp erature oxidation/ corrosion-resistantservice, probably involve the longest range, high-est risk research. The low-chromium alloys alsorequire ad ditional stud y, but technical successis in general less speculative, Extensive addi-tional testing of mechanical properties, phase sta-bility, and oth er physical prop erties of any of thenewly designed alloys, as well as ease of proc-essing, could take several years. Even if these al-loys overcome the initial hurdles, economic fea-sibility will remain in question. Without large

markets in place, these alloys cannot be prod ucedcheaply enough (du e to poor economies of scale)to compete effectively with the current high-volum e stainless steel prod ucts.

Advanced Surface TreatmentTechnologies and Processes

Most of the chromium in stainless steel ispresent solely for corrosion and oxidation re-sistance. Chromium’s secondary roles can bemet with the use of other alloying elements orprocessing techniques. Since corrosion and ox-

idation resistance is only needed at the surface,the chromium on the interior of the stainless—.—

leJoSeph A. Douthett, “Substitute Stainless Steels With LessChromium, ” in Conservation and Substitution Technology forCritical Materials, vol. I, NBSIR 82-2495 (Springfield, VA: Na-tional Technical Information Service, April 1982).



Ch. 7—Substitution Alternatives for Strategic Materials . 275 .— .

steel is nonessential, Sur face mod ification tech-niques can endow low- or no-chromium ma-terials with corrosion an d oxidation resistancesufficient to substitute for stainless steels insome applications, Advanced surface treat-ment techniques may also improve wear resis-tance, thus extending product life.

Existing fully developed surface treatmenttechnologies—e.g., plating steels with chro-mium, nickel, cadmium, or zinc or welding astainless steel overlay to nonchromium alloys—have been used for decades in a large numberof applications, but there are constraints intheir use. Fabricated parts and brittle metalscannot be clad, for examp le, and clad materialsare difficult to weld. Claddings sometimes sep-arate from the base metal, with p otentially dis-astrous results.

A nu mber of advanced processes now und erdevelopm ent or in the early stages of comm er-cialization may broaden applications for sur-face treatment. One advanced coating tech-nique that can compete directly with stainlesssteels in some applications is the DILEX proc-ess, This technique involves the diffusion of chromium (or other elements) into the surfaceof a ferrous part that is placed in a lead bath.The surface alloy typically contains 25 percentor more chromium (and possesses excellentcorrosion and oxidation resistance), while theunderlying substrate contains little chromium.

The cost of continuously processed DILEXstrips is currently competitive with stainlesssteel products. In addition, parts and compo-nents that are difficult to fabricate from stain-less steel can sometimes be produced moreeasily with the DILEX process.19

Surface alloying with lasers (by processescommonly referred to by their United Technol-ogies trade names, LASERGLAZING andLAYERGLAZING) can provide corrosion andoxidation protection and wear resistance tomaterials. LASERGLAZING can improve ero-

sion and corrosion properties through elimi-~eRa}l J, L’a n Th~’n e, “Conservation of Critical Metals Utiliz-

ing Su~face Alloy ing, ’ ‘as cited in Conser~ration and SubstitutionTmhnoIogj for CriticaJ ,MateriaJs, v~l. II, NBSIR 82-2495 April1982.

nation of surface porosity, and can produce awear-resistant surface that could extend the lifeof steels used in metal cutting and grinding.LAYERGLAZING can be used to build entireparts (e. g., turbine discs) through continuousmelting of very thin layers of alloy at the sur-face. Such processes permit tight control overthe composition of the alloy and can also re-duce part rejections, since flaws detected inprocessing can be reglazed immediately. Whilelaser techniques have impressive capabilities,these processes are not presently as cost effec-tive as some of the more established surfacemodification practices, such as roll bonding.

A recent technological advance, ion implan-tation, holds long-term p romise as a w ay of im-proving the wear- and corrosion-resistance of parts, thu s helping conserve strategic materialsthrough extending product life or reducing the

need for chromium in corrosion-resistant ap-plications. In ion implantation, high-energyions of alloying elements are embedded intothe surface of the workpiece to produce a sur-face layer of 100 to 1,000 angstroms that is anintegral part of the substrate. Advantages of this technique include excellent coating-sub-strate adhesion (owing to the lack of a sharpboundary between the two), no dimensional al-teration of the substrate, and low processingtemperatures. Elements such as carbon, nitro-gen, chromium, and nickel can be implanted,but the resulting properties are not as depen-dent on the type of ion as on the mechanicaldeformation it causes to the matrix surface.Therefore, the choice of an ion is based on itsmechanical effect in the host material, noton its own inherent corrosion- or oxidation-resistant properties. 20

Ion implantation has been shown to extendthe life of cobalt-based cemented carbides andtool steels when carbon and / or nitrogen are ap-plied. Implantation of yttrium in diesel fuel injection pumps reportedly dramatically im-proves wear resistance in comparison with

chrome plating. Bureau of Mines-supported re-search has shown that ion implantation can

Zochar]es River Associates, INeIIF Metals Processing Technol-

ogies, OTA contract report, December 1983, p. 46.




protect plain carbon steels against mild aque-ous corrosion.

Ion imp lantation techniques, first developedin Great Britain, are fully commercialized inthe semiconductor industry. For metallurgicalapplications, ion implantation is at the opera-

tional prototype stage—commercial machinesare being developed, but there has been littlemarket penetration.21 Substantial technical andeconomic constraints impede its use for large-volume metallurgical uses. To be effective inproviding corrosion resistance, ionic densitymust be much greater than in semiconductorapplications. Commercial equipment capableof handling this higher beam density has yetto be developed and app ears to be prohibitivelyexpensive at this time. High capital costs andlimited product size and production rates arekey constraints acting against this technique’swidespread use.

All surface treatment techniques have draw-backs, If the surface layer fails, the exposedsubstrate would be vulnerable to corrosion.Fabrication and construction with surface-treated materials is more difficult and costlythan with monolithic materials. Special weld-ing and joining techniques must be used to as-sure that the base material does not become ex-posed, Edges of the material must be treatedto maintain protection. These welding and join-ing techniques are subject to sep arate research

and development efforts. In addition, surfacetreatment can be very expensive, so there aremajor efforts aimed at improving the processeconomics of these techniques.

Surface treatments also face nontechnicaland noneconomic hurdles, Designers and con-sum ers often resist use of surface m odificationprocesses in new applications where solidmonolithic alloys perform satisfactorily.

ZICarnegie-Mellon university, Department of Engineering andPublic Policy, Department of Social Sciences, and School of Urban and Public Affairs, The Potential of Surface TreatmentTechnologies in Reducing U.S. Vulnerability to Strategic Materials,Pittsburgh, PA, April 1984.

Chromium Substitution in Alloy Steels

About 15 percent of U.S. metallurgical chro-mium (10 percent of total dom estic chromium )is consumed in alloy steels, Chromium is usedin these steels primarily as a hardening agent.Although other elements, such as molybde-

num, silicon, and nickel, can be used for thispurpose, chromium and manganese are cur-rently th e m ost cost-effective hardenability en -hancers, Because chromium’s hardenabilitycharacteristics are more easily r eplicated thanits corrosion and oxidation attributes, fewertechnical problems exist in developing ade-quate su bstitutes for alloy steels than for stain-less steels. In its 1978 Chromium Utilizationstudy, the NMAB concluded that 80 percentof the chromium used in alloy steels could bereplaced either now or after a short-term R&Deffort.

The chromium contents of alloy steels typi-cally range from less than 1 to 4 percent, al-though some grades have as much as 9 percent.Compared to carbon steels, these steels haveimproved strength, wear resistance, and hard-enability. They are chosen when parts (e.g.,bearings, gears, shafts) will be highly stressedover a long service life.

Several alternative chromium-free alloy com-positions are und er investigation as substitutesfor large-volume alloy steels. These alloys have

been d esigned to d up licate the most importantproperties of the steels they would replace, sothat processing changes and design changescould be minimized if they were to be used asreplacement steels.

Work at the International Harvester Co.,sponsored by the Bureau of Mines, was aimedat the design of chromium-free substitutes fortwo alloy steels that together accoun t for about60 percent of the chromium used in construc-tional alloys, or about 6 percent of total U.S.chromium dem and . These Cr-Mo grad es (AISI4100 series) and the Ni-Cr-Mo grades (8600 ser-ies) have been used for decades, and as a re-sult, current designs for parts and manufactur-ing processes are adapted to these steels. Thechromium in these grades was substituted with




manganese, molybdenum, and nickel. Silicon,another common hardening agent, was notused because alloy steel producers have littleexperience with the high silicon levels (0,6 per-cent Si) required to achieve the desiredhard enability. The comp ositions of the Mn-Ni-

Mo and Mn-Mo replacement steels are shownin table 7-5.

To minimize the disruption entailed in shift-ing to new steels, the new chromium-free steelswere designed to be produ ced using prevalentU.S. production practices. Moreover, the ex-perimental substitutes have the same micro-structure, heat treatment response, and me-chanical properties as the steels they wouldreplace, and therefore would provide equiva-lent engineering performance. So far, actualproduction of these steels has been limited to100-pound” experimental test heats, thus thesteels’ characteristics in large-scale commer-cial production have not been demonstrated.

The second phase of this program—to pro-duce larger heats for testing–was delayed,owing to the financial status of the contractor.However, in 1984 the Bureau released a requestfor proposal which calls for about a 3,000-pound test heat. When completed, this phaseof the program w ill prov ide better informationfor the possible transfer of this technology toindustry.

In the original economic analysis (based on1981 raw materials costs), these steels were notfound to be cost effective. However, the Mn-Mo replacement for the 8600 series steels maybecome economical with the moderate chro-

mium price increases that would be expectedunder steady economic and political condi-tions. The other replacements (Mn-Ni-Mo for8600 and both Mn-Ni-Mo and Mn-Mo for 4100)would become economical only with the dras-tic price increases (on the order of tenfold forchromium ore and fourfold for ferrochromium)that would accompany severe chromium sup-ply d isruptions, such as a complete cutoff fromSouth African supplies. To facilitate their usein such an emergency, the researchers recom-mend ed ad ditional testing of these steels to de-termine equ ivalency of these steels und er typi-cal production practices by U.S. producers .22

Development of these alternative steels wasfacilitated through International Harvester’sCHAT (Computer Harmonizing ApplicationsTailored) system, which first identifies metal-lurgical properties needed for particular parts

and then selects the least-cost alternatives fromAISI and SAE steels that are available. Use of computerized information systems of this sortcould facilitate the development of a strategicmaterials substitution information system thatcould be used in an emergency.

Reducing Cobalt and Chromium Used in

Superalloy for High-Temperature Applications

Superalloys, used in jet engines, industrialgas turbines, and a widening spectrum of otherindustrial applications, account for 30 to 40

Zzcar] J. Keith and V. K. Sharma, Development of Chromiu m-FreeGrades of Constructional Alloy SteeJs, U.S. Department of the In-terior, Bureau of Mines’ contract No. JO1 13104, May 1983.

Table 7-5.—Ladle Analysis Ranges for the Chrome-Free Replacement Compositions forStandard 4118 and 8620 Steels (in percent)

4100 type steel 8600 type steel

AISI-4118 Mn-Ni-Mo Mn-Mo AISI-8620 Mn-Ni-Mo Mn-MoChemistry ladle range steel replacement replacement steel replacement replacement

Carbon. . . . . . . . . . . . . . . . . . 0.18-0.23 0.16-0.21 0.16-0.21 0.18-0.23 0.16-0.21 0.16-0.21

Manganese . . . . . . . . . . . . . . 0.70 0.90 1.00-1.30 0.70-0.90 1.00-1.30 1.00-1.30Chromium . . . . . . . . . . . . . . . 0.40-0.60 rNickel . . . . . . . . . . . . . . . . .

0.08-0.15 0.15-0.25 0.25-0.35 0.15-0.25 0.25-0.35 0.35-0.45r— residualsilicon range = 0, 15-().35°/0, sulfur = O 05°/0 maximum, phosphorus = 0.04°/0 max!mum

SOURCE Carl J. Keith and V K Sharma, Deve/oprnerrt of Chromium-Free Grades of Constructfona/ A//oy Stee/s, U S. Bureau of Mines contract No JO 1 13104, May 1983




percent of U.S. cobalt consumption. Only asmall portion of U.S. chromium consumptiongoes into superalloys—about 3 percent in 1982.This amount is in the form of highly purifiedferrochromium and chromium metal. Othermaterials used in superalloys include nickel,aluminum, titanium, and a number of minoralloying elements, including columbium (nio-bium) and tantalum —two second -tier strategicmaterials for which the United States is import-dependent.

While many superalloys do not contain co-balt, the use of cobalt has increased over timebecause it improves the weldability of some su-peralloys, contributes to their strength, and alsoenhances oxidation and corrosion resistance.Chromium is currently essential in all super-alloy.

Importance of Superalloy to the Aerospace IndustryImproved jet engine performance has been

highly dependent on development of newsuperalloys 23 that extend the maximum oper-ating temperature of the engine yet are still ableto withstand the high m echanical and thermalstress, oxidat ion, and h ot corrosion that occursin the hot section parts of a jet engine. Throughcomplex adjustm ents in comp osition and proc-essing, the temperature capability of super-alloy has been extended from about 1,4000 Fin 1940 to about 1,9500 F today (some superal-

loys now in use have operating temperaturesof about 2,100° F), as shown in figure 7-1. Inaddition, the required life of various compo-nents (the minimum predictable time beforeoverhaul or replacement) has also increasedsignificant y.

ZsThe ana]ysis of superalloy substitution potential in this sec-tion is drawn in large part from Richard C. H. Parkinson, Sub-stitution for Cobalt and Chromium in the Aircra-ft Gas TurbineEngine, OTA staff background paper, September 1983. It shouldbe noted that superalloy use is spreading to many nonaerospaceapplications, such as oil country tubulars, heavy duty tooling,pulp and paper production, medical and dental uses, and glass

manufacture. In these applications, superalloy were substitutedfor other materials that could again be used in an emergency,although possibly with some performance costs. In the case of gas turbine engines used in jet aircraft, however, alternativesto superalloy are not currently available, and moreover are notlikely to be developed in this century. Thus, aerospace uses re-main the most demanding and critical superalloy applications.

Each individual component in the hot sec-tion of a jet engine, such as turbine blades,vanes, and discs, requires a superalloy with adifferent range of pr operties—so that d evelop-ment of an adequate substitute for one partdoes not mean that it can also substitute forother parts, In addition, each of the U.S. jet en-

gine manufacturers maintain separate speci-fications for superalloy that can be used ineach part. Today, there are well over 100 su-peralloys used dom estically, but som e of thesemay be certified for use only by one enginemanufacturer, Table 7-6 shows representativesuperalloys used in the different parts of thehot sections of current jet engines,

As superalloy have become more special-ized, their costs have escalated, so that it oftentakes a decade or m ore and several million d ol-lars to bring a pr omising new alloy even to the

engine testing stage. Initial development of anew superalloy in the laboratory for disc orblade applications constitutes only part of thetotal effort. Prior to engine qualification anduse, a complete design data base, specificationsand standards, component and machine test-ing, and commercial-scale heats must be dem -onstrated, Without a pressing need for substi-tutes, industry alone is unlikely to make thiskind of commitment.

Substitution Prospects

From the stand point of redu cing U.S. vulner-ability, backing out or reducing cobalt andchromium use in superalloy would be highlydesirable–but only if they could be achievedwithout impairing the push toward higher per-formance in military applications. Continuedincrease in performance is the primary objec-tive behind most government and industrial re-search aimed at developing new hot-sectionmaterials, although many of these materialscould have the side benefit of reducing strate-gic materials requirements. Figure 7-2 showsNASA estimates of the approximate date for

introduction of some of these higher tempera-ture materials in aircraft. These materials arediscussed later in this chapter.

Sup eralloys w ill almost certainly remain theprimary structural material in turbine blades



Ch. 7—Substitution Alternatives for Strategic Materials . 279

for at least

Figure 7-1 .—Temperature Capability of Superalloy

2,000

1,500

1.4001940 1950 1960 1970 1980

Approximate year availableSOURCE Garrett Turbine Engrne Co

the next 20 to 30 years. During thisperiod, complete elimination of cobalt andchromium in jet engines is highly u nlikely, al-though use of alternate alloys, wider use of coatings, and adoption of more efficient proc-essing technologies could reduce use of thesematerials in individual applications.

In the long term, probably not before the sec-ond decade of the next century, a variety of nonmetallic materials (e. g., advanced ceram-ics and carbon-carbon comp osites) may be de-veloped su fficiently to be widely used in somehot-section parts of human-rated jet engines.If so, chrom ium, cobalt, and oth er metals thenmay begin to be pha sed ou t of jet engines. Ac-tual p roduction dates for the first engines con-taining significant amou nts of nonm etallic ma-terials is likely to be well beyond the year 2000.

In the sections that follow, near-term (to1990), medium-term (1990 to 2000), and long-term prospects for reduced chromium and co-balt usage in jet engines are selectively dis-cussed, und er the assum ption th at R&D efforts

continue at approximately their pr esent levels.Institutional factors th at could affect the extentto which various substitution potentials areadopted are discussed in the concluding sec-tion of this chapter.

Near-Term Prospects for Cobalt Substitution (to 1990)

Cobalt supply insecurities in the late 1970sled U.S. jet engine m akers to su bstitute alreadydeveloped nickel-base superalloy for cobalt-base alloys wherever possible. A conspicuousexample of this was the substitution of the al-ready developed and qualified cobalt-free su-peralloy Inconel 718 for Waspaloy (13 percentcobalt) in tu rbine d isk app lications below 7000C. Inconel 718, which contains a large amountof niobium, a strategic material importedlargely from Brazil, continues to be used inthese applications owing to its comparativecheapness and ease of fabrication. Other super-alloy substitutions included replacement of cobalt-base vanes with cobalt-free nickel-basesuperalloy.

Cobalt prices are unlikely to stimulate fur-ther substitution in the near term. Easy to ac-complish substitutions have already takenplace, As a p ractical matter, adop tion of lowerchromium or cobalt substitutes by enginemakers is not likely unless substantial improve-ments in properties, higher temperature capa-bilities, or ease in fabrication accrue, as well.

Processing Advances. —As a result, the greatestopp ortun ities for cobalt and chromium conser-




Table 7-6.—Typical Structural Alloys Used for Hot-Section Components

Nominal operating conditions

Composition (percent weight)Surface

temperatureComponent Alloy Ni co Cr Fe Form Stress (oF)

Combuster liner . . . . Hastelloy XHA-188

Turb ine va lve MA-754MAR-M 200MAR-M 247

MAR-M509X-40IN-713Rene-77

T u r b i n e b l a d e Alloy 454

MAR-M200MAR-M247B-1900Rene-80IN-713LCRene-77

Turbine disc. IN-100MERL-76Astroloy

WaspaloyRene-95IN-718IN-901A-286

C a s e WaspaloyIN-718IN-901A-286

48

22

786060

101 0 572.555

62.5 60 60 65 60.5 72.3

55

5654.155.5

58 61.3 53 45 25.5

58 53 45 25.5

1 5

41

—

1010

55 56 —

15

5

1010109 5

—

15

18,518,517

13,59

— — —

13.5 — — —

22 22

209

8

23.525.513.515

10988

1412

15

12.512.415

19.5141912.515

19,51912.515

18.5 —

1——

————

,.

c c

c c

c c

c c

–Large grains– — se—————

—

———

——1834

55

—183455

DS

CC, DSDS

c c

c c

c c

–Small grains–PM +HIP, PM +forgedPM +HIP, PM +forgedPM +HIP, PM +forged,

forgedForgedPM +forgedForgedForgedForged

–Small grains–Sheet, forgedSheet, CC, forgedForgedForged

Low

Low

Moderate10 low

High

1600

16001600

1900+ ‘1900

1800-1850

1800 +1800 +

16001600

19001850

1800-1850180017501600

–Rim temperature–130013001300

1250High 1200

120011001000

1300High 1200

11001000

vation in superalloys in the near term lie incontinued commercialization of advancedprocessing technologies, which have the in-cidental effect of improving cobalt or chro-mium yields in parts or of extending the lifeof components.

Several of these new metals p rocessing tech-nologies are curren tly being adopted by ind us-try, as is discussed in chapter 6. Powder metal-lurgy, with its potential to produce parts that

are close to their final shap e, can dr amaticallyreduce reject rates and scrap generation infabrication of engine components. Two powdermetallurgy p rocesses used in conjunction witheach other—hot isostatic pressing (HIP) andisothermal forging—are now used commer-cially, although equipment costs are high.

Improved material utilization would beachieved if HIP parts did not have to be hotwor ked. This is now essential in order to over-



——.

Ch. 7—Substitution Alternatives for Strategic Materials q 28 1

Figure 7-2.—Temperature Capabilities of Turbine Blade Materials

800

SOURCE’ National Aeronautics and Space Administration

come fatigue problems, but reduces productyields. The U.S. Air Force Office of ScientificResearch is sup porting research in th is area toimprove the final quality of superalloy com-ponents.

Hot isostatic pressing can also be used to re-

juvenate turbine vanes and blades, potentiallydou bling the op erating life of parts. So far, HIPrejuvenation has been used prim arily in indu s-trial gas turbines bu t is not yet widely used forworn aircraft parts. As discussed in chapter 6,life cycle extension techniques are under in-tensive investigation by the Air Force, andsome jet engine parts are now being saved(rather than sold as scrap), pending possible im-provements in rejuvenation technologies. Mostobsolete jet engine parts, however, continu e tobe sold as scrap, and most of the scrap is d own-graded to less demanding uses.

By the end of the 1980s, add itional jet engineapplications for cobalt-free oxide dispersionstrengthened (ODS) superalloy are probable.These nickel- and iron-based superalloys areproduced through a mechanical alloying proc-

ess, first developed in 1968. Although still con-sidered an emerging technology, rapid growthin ODS production is expected as new appli-cations are accepted.

All currently available ODS superalloys arecobalt free and are marketed by the Inco Al-

loy Products Co. One ODS alloy, MA-754, hasbeen used for years in high-pressure turbinevanes of military aircraft prod uced by GeneralElectric. New applications for ODS alloys incombustor linings and tu rbine blades are beinginvestigated as part of NASA’s Materials forAdvanced Turbine Engine [MATE) Program.

NASA and Pratt & Whitney Aircraft are cur-rently evaluating another cobalt-free ODS alloy(MA-956) for use in combustor linings. Earlyresults suggest that MA 956, coupled with de-sign changes, could extend the op erational life

of these linings by up to four times comparedto existing linings. It can also be used at ahigher temperature than a commonly usedliner material, Hastelloy X (which contains 1.5percent cobalt).

38-844 0 - 85 - 10 , QL 3




Although ODS alloys are superior at hightemperatures (i.e., 2,100° F), their poorer per-formance in intermediate temperature ranges(i.e., 1,4000 to 1,600° F) has so far preventedtheir use in turbine blades. However, NASA,in conjun ction w ith the Garrett Turbine Engine

Co., is evaluating the recently developed cobalt-free ODS alloy MA-6000, for turbine blade ap-plications. Research suggests that an increasein surface metal temperature of 1500 F over thebest current superalloy blade material may befeasible.

ODS alloys are more expensive than conven-tional superalloy. With expanded markets,however, finished part costs have d eclined. Ad -ditional pr ice redu ctions could arise if the mar-ket expands into turbine blade and industrialapplications. Current production of these al-loys is about 120,000 pounds per year, but isgrowing rapidly.

Coatings.—Continuing near-term progress inenhan cing the su rface pr operties of hot-sectioncomponents throu gh u se of coatings is also ex-pected. Coatings of one sort or another havebeen used since the 1960s and have extendedthe life of parts significantly. Thermal barriercoatings (TBCs), now used on combustor lin-ings and vane platforms, provide oxidation andhot corrosion resistance through a metallicbond coat (often containing chrom ium), wh ich,in turn, is covered with a thin ceramic coat to

provide thermal insulation. TBCs have yet tobe applied to turbine airfoil surfaces becausepeeling problems have not been completelyovercome. How ever, they may m ay be used onairfoil surfaces by the end of the decade.

Coatings (or other surface treatments) maysome day p ermit reduced use of chromium insuperalloys—although near-term prospects arevery limited. Chromium’s primary function insuperalloy is to provide oxidation and hot-corrosion resistance at the surface of compo-nents. Most superalloy contain several times

as much chromium as strictly needed to pro-vide this surface protection. As an insurancemeasure, chromium is added throughout thealloy, even though it is only needed at thesurface.

Aside from its absolutely essential role in cor-rosion resistance, the h igh levels of chrom iumthroughou t mon olithic sup eralloy may not beneeded. In theory, conservation of chromiumand improved mechanical properties could beachieved if a safe way could be found to put

chromium only at the surface of components,leaving the rest of the part chromium free. Pres-ently, coating or cladding of a chromium-freebase alloy is not acceptable, owing to the pos-sibility of a disastrous crack forming in thecoating. Other advanced surface treatmentprocesses have yet to be applied for the spe-cific purpose of reducing chromium content.

From the above discussion it would appearthat prospects for cobalt substitution in super-alloy are quite limited in the near term, andthat few available alternatives are ready for useby engine manufacturers, Chromium substitu-tion prospects are even more limited.

Medium-Term Prospects f or Further Cobalt andChromium Substitution (1990-2000)

Over th e next 10 to 15 years, only substitu tematerials that are now approaching qualifica-tion and approval for jet engine use are likelyto be useful in reducing U.S. dependency onimported strategic materials, The long leadtime entailed in testing and certification of newmaterials and the time it takes for designers tobecome familiar with them make it unlikely

that new materials or processes not now be-ing actively developed will be in commercialuse before the last half of the 1990s.

Several cobalt-free or low-cobalt alternativematerials have been investigated under NASAsponsorship (Conservation of Strategic Aero-space Materials Program, established in 1981,and pre-COSAM research activities.) Thesesubstitutes could provide alternative composi-tions for six widely used superalloy. Table 7-7 shows currently used superalloys selected forsubstitution research. Preliminary laboratory

experiments suggest that cobalt may not beneeded in the high-volum e Udimet 700 type su-peralloy (18 percent cobalt) which is used inturb ine discs and blades. One evaluation of theinitial COSAM research hypothesized that




Table 7-7.–Nickel-Base Superalloy Selected for Cobalt Substitution Research by NASA

Typical engine Cobalt contentAlloy application Form Remarks (% weight)

WASPALOY . . . Turbine disc Forged Highest use wrought alloy in current 13.5eng ines

UDIMET-700 . . . Turbine disc F o r g e d Similar alloys used in various forms and 18.5(LC) ASTROLOY Turbine disc as-hip-powder applications(RENE 77) . . . . . Turbine blades CastMAR-M247 . . . . Turbine blades and wheels Cast Conventially cast, DS and single crystal 10,0RENE 150 . . . . . Turbine blades DS-Cast Highly complex directionally cast alloy 12.0

SOURCE Adapted from Joseph R Stephens, A Status Review of NASA COSAM (Conservation of Strafegfc Aerospace Mafer)als) Program, NASA Techn{cal Memoran

dum 82852 (Springfield, VA National Techn!cal Information Service, May 1982)

while definite conclusions are premature, itmay be possible to cut by one-half or even elim-inate cobalt now used in some nickel-based su -peralloys with little or no effects on mechani-cal properties or environm ental resistance. (Anestimated 2.15 million pounds of cobalt wascontained in nickel-based superalloy primarypr oducts in 1980, accord ing to th e NMAB. This

comprised about one-eighth of total apparentcobalt consumption in that year. )24

The COSAM substitutes are still in the lab-oratory stage of development and are manyyears away from actual use in a jet engine. Intheory, the COSAM alternatives could bebrought on line more quickly than an entirelynew material, since only slight adjustments inmanufacturing processes may be needed toproduce the low-cobalt substitutes. However,to commercialize these alloys fully could stillrequire 6 to 7 years and $6 million to $9 mil-

lion per application—a commitment that en-gine makers will find difficult to justify, givencurrent low-cobalt prices. Hence, their post-COSAM development may be delayed until aperceived need arises.

Over the next 10 to 15 years, strategic ma-terials conservation could also be a side benefitfrom several advanced superalloy productiontechniques that are approaching commercial-ization—simply because some of the experi-mental prototypes and research materials happento contain little or no cobalt. These processes

may not n ecessarily conserve strategic materi-

Z4Nationa] Materials Advisory Board, Cobalt ConservationThrough Technological Alternatives, National Research Coun-cil, Publication NMAB-406 [Washington, DC: National AcademyPress, 1983), pp. 24 and 47.

als over the long run, however, if it turns outthat cobalt provides a performance benefit overthe experimental prototypes.

One group of these new processing m ethodsis “rapid solidification, ” in which metals aresolidified so quickly that the resulting distri-bution of elements is nearly homogeneous, hav-

ing few inclusions that could initiate fatiguecracks. Moreover, previously unattainable al-loy compositions with superior properties canbe obtained in some cases, Experimentalcobalt- f ree superalloy powders producedthrough various rapid solidification processeshave been shown in early experiments to havesome advantages over conventionally proc-essed alloys. Detailed information on rapidsolidification processes and their prospects assubstitutes for strategic materials is providedin the Advanced Materials section of this chapter.

The capability to produce directionally solidi-fied eutectic superalloy is another of the re-cent processing advances. Over the past twodecades considerable effort has been devotedto developing this technique. When sup eralloyare produced in this manner, they are strength-ened by the formation of microscopic carbideor intermetallic fiber reinforcements. Most of the experimental alloys have comparativelylow levels of chrom ium and cobalt—4 percentand 3 to 10 percent respectively. As with otheradvanced processes and materials, the key objective of eutectics development is not to con-

serve strategic materials, but to increase tem-perature capabilities of turbine blades andvanes. Eutectic superalloy could increase theallowable operating temp eratur e of these com-pon ents by abou t 100° F comp ared to curr entlyavailable single-crystal alloys.




Although work on eutectic alloys is progress-ing, they have yet to receive qualification forengine use. Technical problems include inferi-or transverse properties and poor oxidationand corrosion resistance. Cost of these alloysis high because the processing times are high;a eutectic blade can be withdraw n from the fur-

nace at only about one-fourth inch per hour,How ever, eutectic R&D has had active sup portby engine producers (General Electric andUnited Technologies) as well as scientific sup-port at government laboratories and univer-sities.

The medium-term (1990-2000) prospects forreducing cobalt and chromium in jet enginesare difficult to assess because new materialswill be used as new jet engines are introducedinto military and civilian aircraft. The selec-tion of these materials will be performance

driven, and while some materials may containlittle or no cobalt, others almost certainly will.Development of the COSAM alternatives to thepoint of commercial use is possible over thisperiod, but these materials will serve as sub-stitutes for currently used superalloys which

will comprise a declining portion of superal-loy use. It is also possible that, over this period,a breakthrough in basic science will occurwh ich w ill lead to a better und erstanding of theprecise role of cobalt in superalloy, with pos-sible redu ctions of cobalt in th e design of newalloys. Improved understanding of the role of

cobalt and other strategic materials in super-alloy is a key pu rpose of the COSAM program.

Long-Term Prospects

Over the long term, several classes of newmaterials that are completely free of cobalt orchromium may come into use. These alterna-tives are being actively pursued because of their potential to extend the maximum oper-ating temperatures (and thus performance) of turbine blades beyond the current limits of around 1,150° C or 2,100° F. These materials

include ceramics, composites, and monolithicintermetallic compounds (or long-range ordermaterials) and are discussed in detail in thenext section. Table 7-8 summarizes potentialapplications for these advanced materials inthe hot section of jet engines,

Table 7-8.—Use of Structural Materials Under Development to Reduce Cobalt andChromium Usage in Hot-Section Parts

Composition (percent weight)

Material c o Cr Suitable componentsRapid solidification processed superalloy . . Varies Varies Combustor liners; cases; turbine blades,

vanes, discs, seals.Long-range order (intermetallics):Ni . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — HP turbine discs (combustor liners; HP

turbine vanes, blades)Ti — LP turbine discs, blades, vanes; cases,Fe j I 111 I 1 ; I j ~ 1 : 111 j 11 I ; 1 I I 11 I 111 I I ~ 111 ~ — Combustor liners; LP turbine discs, blades,

vanes; casesDirectionally solidified eutectics . . . . . . . . . . . 3-1o 4 Turbine blades, vanesOxide dispersion strengthened superalloys . . — 15-20 Turbine vanes; (combustor liners, turbine

blades).Fiber-reinforced (metal matrix composite)

superalloy . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 15 (matrix) Turbine blades, vanes; combustor liners;cases

Monolithic ceramics . . . . . . . . . . . . . . . . . . . . . . — — Turbine discs, vanes, blades, seals; cases;combustor liners

Ceramic-ceramic composites . . . . . . . . . . . . . . — — Turbine vanes, blades, casesCarbon-carbon composites . . . . . . . . . . . . . . . . — — Combustor liners; cases; afterburners;

nozzles; turbine discs, vanes, bladesKEY” HP = High pressure

LP = Low pressure.( ) = Less likely application — = Minimal ornone




——


Advanced

There is currently a great deal of interest inthe development of advanced materials suchas rapid solidification processed materials,long-range order intermetallics, ceramics, and

composites. This interest is driven by the im-pressive array of properties these new materi-als offer. They not only offer enhanced prop-erties, but often entirely new combinations of prop erties, as well, A side benefit of advan cedmaterials is their use of little or reducedamounts of strategic materials.

Many advanced materials are still undergo-ing R&D and have thus far seen limited com-mercialization, In selected component appli-cations, some advanced materials are nowbeing used . The nu mber of app lications for ad-

vanced materials should increase appreciablyduring the next 5 to 20 years—especially wheremajor design modifications are not needed. Inmost critical applications where performancestandards tend to be exacting, however, theywill require much more R&D before they seewidespread use,

Although growth in the u se of advanced ma-terials is expected, the overall effect of theiruse on future strategic material needs is un-clear. Some major technical problems (e.g., thebrittleness of ceramics, difficulties in repair-

ing composites, etc.) must be solved before theycan be used in many critical applications.Moreover, advanced materials will not neces-sarily be used as direct replacements for ex-isting materials. In many applications, thesenew materials are so different from the alloysubstitutes described previously that redesignof entire systems is often necessary to benefitfully from their properties. In addition, use of strategic materials may just as easily increaseas decrease as these new materials are adop ted.For example, using advanced materials in thehot section of a gas turbine engine to raise its

operating temperature may increase the tem-perature in a cooler section of the engine to apoint where it requires the use of strategicmaterials. Yet, using advanced materials (e. g.,composites) to make an aircraft lighter m ay al-

Materials

low the use of smaller engines containing lessamou nts of strategic materials. In an econom icsense, advanced materials and materials con-taining strategic elements may be both substi-

tutes and complements.The various industries involved in develop-

ing and produ cing ad vanced materials are do-ing so because of a belief in the prom ise of fu-tur e econom ic benefit from the introd uction of these materials in existing and entirely new ap-plications, not because they foresee a role forthem as materials substitutes. The advancedmaterials industry has the potential to make alarge contribution to futu re U.S. gross nationalprod uct (GNP), The U.S. market for ad vancedceramic materials, for instance, has been pro-

jected at $5.9 billion by the year 2000, anamount 10 times the 1980 market. 25

This emerging U.S. advanced materials in-dustry faces global competition, especiallyfrom Japan and Western Europe, in materialsdevelopment, processing, and commercializa-tion. Today, some p rocessed ceramic materialsand components of composites are only avail-able from foreign sources. In some instances,the Un ited States is credited with the basic re-search on some material components for whichJapan now holds m ost of the processing capac-

ity. In oth ers, process licensing has been mad eavailable to U.S. firms for foreign patentedmaterials.

Compared to their metallic counterp arts, ad-vanced materials have relatively brief historiesof use, and this absence of a proven track rec-ord often makes designers and their industriesreluctant to use them. Different societies ap-proach institutional barriers to commerciali-zation in different ways. In the United States,the standard engineering education still pro-vides little, if any, formal training in the useof advanced materials, Industry must bear thecost of continuing education. In Japan, indus-

Z5U .S. Depa r tmen t of Commerce, A Competiti\re Assessmentof the U.S. Advanced Ceramics Industry [Washington, DC: U.S.Government Printing Office, March 1984), p. xiii.




tries are willing to introduce advanced mate-rials to the ma rketplace at a lower level of con-fidence in their eventual success than in theUnited States. The risk of failure is reduced bytesting new materials in everyday items suchas scissors or high-value glamour products,such as sporting goods.

The following sections present the currentstate of the art of these advanced materials,and, where known, potential areas for strate-gic material savings. It must be kept in mind,however, that many unknowns exist, and therapid advance of the science of these materialscould change their prospects in only a shorttime.

Ceramics

Advanced ceramic materials are an emerg-ing technology with a very broad base of cur-rent and potential applications and an ever-growing list of material compositions (see table7-9). While this dynamic situation makes it dif-ficult to quantify their future impact, it doesnot appear that advanced ceramics will replaceany su bstantial portion of the U.S. demand forfirst-tier strategic materials within the next dec-ade. Beyond 2010, a larger potential for sub-stitution exists if ceramic rotating parts are suc-cessfully applied in gas turbine engines. Inorder for this major materials substitution to

be technically feasible, however, the brittlenesstendency of ceramic materials must be over-come by improvements in material propertiesand processing technologies and the use of cer-amics must be integrated with system designsthat reduce the ways in which stresses areloaded on ceramic parts.

Most ceramic raw materials (see table 7-10)are not considered poten tial strategic materialsbecause they are available in large quantitiesfrom domestic sources. However, the UnitedStates is comp eting with oth er countries in ad-vanced ceramics R&D, and loss of a leadershiprole in the development and use of ceramicmaterials could ultimately result in a depen-dence on international sources (primarily Ja-pan) for processed ceramic materials andproducts.

While a potential decrease in U.S. consump -tion of strategic materials is an important ben -efit of ceramic use, the promise of performanceimprovements is the main force driving the de-velopmen t of advan ced ceramic materials. Thesought-after properties of advanced ceramicsinclude wear resistance, hardness, stiffness,corrosion resistance, and relatively low density(providing a weight savings that can translateinto energy savings), A m ajor attraction, how-ever, is a high melting point and accompany-ing mechanical strength at high temperatures.Ceramics offer one of the best possibilities forraising the operating temperature of heat en-gines and power generating equipment; and asthe operating temperature in these systems isincreased, system efficiency in energy conver-sion can increase, resulting in cost savings. Themetallic superalloy currently used in jet en

gines limit operating temperatures to about2,000° F, whereas ceramic materials can with-stand temp eratur es up to abou t 2,500° F. Com-plicated and energy-consuming cooling sys-tems now must be used—even in relativelylow-temperature engines such as automobiles—to maintain the integrity of metals at operat-ing temperatures. Ceramic materials can alsobe used to increase the energy efficiency of many high-temperature processing systems.The excellent wear-resistance properties of cer-amics could increase productivity in themachining, chemical, and metal p rocessing in-

dustries, where wear and corrosion resistanceare critical. Box 7-A provid es detailed informa-tion on the properties of ceramics and on theprocesses for making them.

Although research into some areas of ad-vanced ceramics is still in the developmentstages, new roles in electronics and wear-re-sistance ap plications are being filled by ceram-ics. Neither the economic viability nor the tech-nical capability of using ceramics in many of the structural applications (e.g., heat engines)has yet been dem onstrated . Although th e basic

ceramic raw materials (e. g., silicon, alumina,magnesium) are plentiful and inexpensive, theprocedures necessary for converting the rawmaterial into a usable form (usually an ultra-fine powder) and then a final product can beexpensive. It has been estimated that from 25



Ch. 7—Substitution Alternatives for Strategic Materials . 28 7

Table 7-9.—Current and Prospective Uses for Advanced Ceramics

First-tier strategicmaterials substitution

Ceramic material Current and potential applications opportunities-. . .Electric: Insulating (AI2O 3, BeO,

MgO)Low-firing and/or glass cer-

amics, ferroelectrics(BaTiO 3, SrTiO3)

Piezoelectric (PZT)

Semiconductor (BaTiO3

SiC, AnO-Bi2O3, V2O 5,and other transitionmetal oxides)

Magnetic: Soft ferrite

Hard ferrite

Optical: Translucent aluminaTranslucent magnesium

oxides, muIIite, etc,Translucent Y2O 3-ThO 2

ceramicsPLZT ceramics

Chemical: Gas sensor (ZnO, Fe2O 3,

SnO2)Humidity sensor

(MgCr 2O4-TiO2)Catalyst carrier (cordierite)Organic catalyst

Electrodes (titanates, sul-

fides, borides)Thermal: ZrO 2-basedAl2O 3-basedSi-based

IC circuit substrate, package, wiring substrate, resistor sub-strate, electronics interconnection substrate,

Ceramic capacitor.

Vibrator, oscillator, filter, transducer, ultrasonic humidifier,piezoelectric spark generator.

NTC thermistor:temperature sensor, temperature compensation,

PTC termistor:heater element, switch, temperature compensation.

CTR thermistor:heat sensor element.

Thick film thermistor:infrared sensor.

Varistor:

noise elimination, surge current absorber, lighting ar-restor.

Sintered CdS material:solar cell.

SiC heater:electric furnace heater, miniature heater.

Solid electrolyte for sodium battery.ZrO2 ceramics:

oxygen sensor, pH meter fuel cells.

Magnetic recording head, temperature sensor.

Ferrite magnet, fractional horsepower motor, powderstapes and discs (u-FezOS, CrO2).

High-pressure sodium vapor lamp.

—

Low-temperature firing per-mits use of copper in-stead of tungsten, molyor PGM wires, nickel in-stead of PGM elec-trodes.

—

—

Pt, Pt-Rh heaters, Ni-chrome heaters

Ceramics for Co-Sinmagnets

forCeramics for AINiCo

magnets

For a Iighting tube, special-purpose lamp, infrared transmis-sion window materials,

Laser material.

Light memory element, video display and storage system,light modulation element light shutter, light value.

Gas leakage alarm, automatic ventilation fan; hydrocarbon,fluorocarbon detectors.

Cooking control element in microwave oven.

Catalyst carrier for emission control.Enzyme carrier, zeolites, other ceramics.

Electrowinning aluminum, photochemical processes, chlo-

rine production.

Infrared radiator, thermal barrier coatings.

——

—

Reduced use of Pt-groupcatalyst

—

—

Catalytic processes mayreplace Co, Pt

—

Reduced use of W, Cr, Co,Ni




Table 7-9.—Current and Prospective Uses for Advanced Ceramics—Continued

First-tier strategicmaterials substitution

Ceramic material Current and potential applications opportunities

Mechanical: Cutting tools Ceramic tool, sintered SBN. WC-Co cemented cutting(AI 2O3, TiC, TiN, others) Cermet tool , ar ti ficial d iamond. tools and high-speed

Nitride tool. steels (Cr)Wear resistant (AI2O3, ZrO2) Mechanical seal, ceramic liner, bearings, thread guide, pres- Hard facing alloys

sure sensors. (Cr, Co, Mn)Heat resistant (SiC, AI2O3, Ceramic engine, turbine blade, heat exchangers, welding Superalloy (Co, Cr)

Si 3N 4, ZrO2, others) burner nozzle, high-f requency combustion cruc ibles .

Biological: Alumina ceramics implan- Artificial tooth root, bone, and joint. Bone and tooth implants

tation (Pt, Co, Cr-basedHydroxyapatite bioglassSOURCE’ Elaine P. Rothman, George B KenneY, and H. Kent Bowen, MIT Materials Processing Center, Poterrtlal of Cefarrric Materla/s to Replace Gobal(, Chromium,

Manganese, and Platinum in Critical Applications, OTA contract study, January 1984.

Table 7.10.—Some Advanced Ceramics Material Families

Families Chemical formula Elements

Alumina . . . . . . . . . . . . . . . . . . . AI2O 3 Aluminum, oxygenAluminum silicate. . . . . . . . . . . AISi Aluminum, siliconBarium titanate . . . . . . . . . . . . . BaTiO 3 Barium, titanium, oxygenLAS . . . . . . . . . . . . . . . . . . . . . . . Lithium, aluminum, siliconMagnesium silicate . . . . . . . . . MgSi Magnesium, siliconMAS (cordierite) . . . . . . . . . . . . 2MgO~5Si0,02Alz0, Magnesium, silicon, oxygen,

aluminumMagnesia . . . . . . . . . . . . . . . . . . MgO Magnesium, oxygenSilicon carbide . . . . . . . . . . . . . SiC Silicon, carbonSilicon nitride . . . . . . . . . . . . . . Si3N 4 Silicon, nitrogenSiAION . . . . . . . . . . . . . . . . . . . .(various alloys of silicon nitride and alumina)Zirconia . . . . . . . . . . . . . . . . . . . ZrO2 Zirconium, oxygen

PZT (partially stabilized zirconia) Zirconia with particles of calcia,magnesia or yttria


to 75 percent of the p roduction cost of ceramiccomponents is due to a high rejection ratecaused by the poor reproducibility of currentprocessing steps.26 As new manu facturing tech-nologies mature and the ability to design withbrittle materials increases, prices are projectedto become competitive with existing metallictechnologies. As yet, however, mass produc-tion of many advanced ceramics does not yetoccur. Scaling up an experimental process toa commercial manufacturing level of produc-tion, while retaining the desired properties of

ZaE]aine p, Rothman, George B. Kenney, and H. Kent Bowen,Materials Processing Center, Massachusetts Institute of Tech-nology, Potential of Ceramic Materials to Replace Cobalt, Chro-mium, Manganese, and Platinum in Critical Applications, OTAcontract report, January 1984, p. 240.

the materials and obtaining production relia-bility, has not often been achieved.

Ceramics as a Strategic Material Substi tute

A growing market for advanced ceramics ex-ists in a number of applications, with limitedimplications for th e u se of strategic materials,Strategic material substitution, however, mayhave a higher potential in the long term (2010and beyond), particularly in the eventual useof advanced ceramics in aircraft gas turbineengines and, to a lesser extent, as componentsin automotive gas turbine and heavy vehiclediesel engines.

As shown in table 7-11, ceramic materials aredisplacing some first-tier strategic materials in



.— ——

Ch. 7—Substitution Alternatives for Strategic Materials • 289

Box 7-A.—Ceramics Primer

Ceramics, derived from the Greek wor d“keramos,” meaning “burnt stuff,” is a gen-eral term for inorganic,27 nonmetallic materi-als processed or consolidated at high temp er-

atures. Traditionally, ceramics has referred tothe family of earthenw are, brick, glass, por-celain, and enamels in common use. The fieldnow encompasses a wide range of materialsand applications.

Traditional types of ceramics are made fromnatural raw materials such as clay, silica, andfeldspar and produced using relatively simplechemical processing, forming, and firing steps.Advanced ceramic products, on the otherhand, are produced from ultrafine powderforms of synthetic materials derived from thenatural raw minerals. The powder productionphase of advanced ceramics processing hasbecome increasingly critical. Pu rity, particlesize, shape, and distribution of particles andhow they agglomerate must be rigidly con-trolled in ord er to produce reliable, reproduc-ible components, To attain such h igh-quality,new techn iques su ch as sol-gel, coprecipita-tion, and laser synthesis have been added toconventional powder production and agglom-eration methods.

Because a great nu mber of materials areclassified as ceramics, a wide range of prop-erties are available; and ceramic ma terialshave m any characteristics that d istingu ish

them from metals. They are generally morestable chemically and thermally and are bet-ter insulators than metals. On the other hand ,they are much stronger in compression thanin tension and do n ot have the same d uctil-ity, or “forgiving” nature, of metal. Ceramicsare harder and more rigid than either metalsor plastics and are more stable (retain theirlow-temperature properties) at high temper-atures.

Owing to their lack of d uctility, ceramicprod ucts cannot be formed by the stampingor forging p rocesses used for metals. Instead,they ar e generally processed d irectly from

highly refined raw material by the consolida-tion of powder. (Melt formation is used to

form g lass and single crystal ceramics.) Thepow der is first formed to the d esired shap e.Forming methods include isostatic pressing,injection molding, and slip casting. This

“green body” p reform is then further d ensi-fied by the ap plication of heat (sintering) orthe simultaneous application of heat and pres-sure (two such processes are hot-pressing andhot-isostatic pressing). Reaction bonding andreaction sintering are special sintering p roc-esses during which the final composition of the ceramic material is obtained along withden sification. The combination of processesselected to produce a ceramic material will af-fect its ultimate p roperties.

Ceramics are br ittle and fracture with littleor no warning. This characteristic has beenthe material’s major barrier to expansion intoa wide range of applications, both technicallyand institutionally. Ceramics mu st be consid-ered and used in w ays different from thosetaugh t traditionally to designers and engi-neers schooled in the u se of metals. Becausemetals bend and d eform p rior to reaching apoint of fracture, ceramics cannot usually bedirectly substituted for metal alloys on a one-for-one basis. Instead, redesign of componentsand systems to eliminate or m inimize load-bearing (stresses) are often necessary in ord erto substitute a ceramic material.

A considerable amount of the research in

ceramics centers around how to redu ce, copewith, or design around this brittleness. Re-search takes th ree approaches: 1) basic re-search to increase the knowledge base and un-derstanding of the behavior of the materials,2) improvement of processing technologies toreduce the p robability of brittle failure, and3) investigation of how varying m aterial com-positions can affect ceramic properties.

Brittle failure results from microscopicflaws (cracks), solid inclusions, and voids inthe microstructure28 of finished products in-evitably introduced to a ceramic material dur-ing p rocessing. The likelihood of brittle fail-

ure increases with th e size of such flaws, andtension loading on a part will lead to the

ITSubstances that do not contain carbon except as a minor con-stituent.

ZaThe detailed arrangement (size, nature, and distribution) of phases (combinations of elements) that constitute the overall ma-terial.



Table 7-11. —Potential of Advanced Ceramics to Substitute for First-Tier Strategic Materials

Current strategic Ceramic materialsmaterial use currently used Extent occurrent

estimated percent of or under Advantage to usePrimary factors affecting adoption commercialization—

Application annual U.S. consumption consideration of ceramics Technical Economic lnstitutional U S and world —Near term (before 1995): Wear resistance.

Cut ting too l tips Cobal t, as binder mtungsten carbide

5 percent

Sea ls , bearings, Cobal t, as binder mnozzles, etc tungsten carbide

3 percent

Alumina, silicon Increased productivitynitride, sialon

Overcoming Inadequatefracture toughness

Appears competitive withtungsten carbide

Most U S machine tools cannotaccept ceramic bits Lack of

information within machine toolindustryNeed to standardize parts Con-

sumer awareness and lack ofdesire to change; pumps are areplacement parts market,longer seal life is not seen asan advantage to producers

Change over to electrical induc-tion heating which does notuse recuperators. Depressedstate of the domestic steelindustry and metal processingindustries has inhibited change

Ceramics will be used if theydemonstrate superiorperformance

2% of U.S. marketHigher in Japan and

West Germany

Alumina- Improved wear and cor-zirconia, rosion resistance

silicon carbide

No significant barriers Competitive withtungsten carbide ex-cept large (>8 inchdiameter seals)

20% of U.S. and worldmarket

Improved joining

technology (ceramic/ceramic. ceramic/metal) andreproducibility of SICtubes in processing

Overcoming difficulties inceramic/metal joining;improving reproducibil-ity of the ceramicrotors

Higher initial capital in-vestment than metallicheat exchangers Highcost of SiC tubing

< 5% of U.S. marketPossibly higher in Japan

Heat exchangers Small amounts ofLarge Industrial chromium in high-Small single burner temperature stainless

recuperators steels

Silicon carbide Energy savings Longerfurnace life

Cordierite

Turbochargers Superalloy containing(automotive) Chromium. (0.02 percent)

Cobalt: (0.4 percent)

Silicon carbide, Higher temperaturesilicon nitride capability with lower

mass Potential fortower costs

Current cost of produc-ing the ceramic rotorIS high, but economiesof scale are predicted

Expected limited in-troduction byJapanese soon, possi-ble market penetrationby 1990

Long term (after 1995):Automotive diesel

engine (cylinder,pistons, sensors)

Some chromium andcobalt in heat resistantand specialty steels;in addition, chromium:1 5 percent, PGMs 34

percent in automobilecatalytic converters(Use of ceramic partswill alter operatingtemperatures of en-gines, causing possi-ble change inconverter material re-quirements )

(same as above)

Silicon, silicon Higher engine efficien-

carbide, silicon cies potential. Light-nitride, zirconia weight engine

components

Improved fracture tough-ness, reproducibility

and reliability of parts

Only prototype parts arecurrently produced,generally, hot pressedprototype parts requirediamond machining

which ISan expensivemass production tech-nique. New processingtechniques couldgenerate significanteconomies of scale

Almost revolutionary change inengine style IS required to fullyrealize ceramics potential

Only several demonstra-tion engines so far

Automotive gas turbinecombustors, shrouds,and rotors

Silicon carbide, Higher engine efflclen-

silicon nitride, cies, ability to burnsialon, lithium, any fuel, lower massaluminum Potentially lower cost

silicate

improved fracture tough-

ness, thermal shockresistance, reproduci-bility and reliability

High cost of processingdue to current tech-niques and Iimitedproduction volumes

r ‘Proof of concept” enginesfollow-on design will need

thorough, exhaustive road test-ing to overcame brittle imageof ceramics

Only prototypes anddemonstration testing

NOTE These apphcahons are not meant 10 be all Incluswe but represent key potential applications

SOURCE Elaine P Rothman, George B Kenney, and H Kent Bowen MIT Materials Processing Center Poferrt@ of Ceramic L4aterlak 10 Replace CobaH C/Irornwn Manganese and Plaflflum In Wlca/ App/IcatIorM OTA contract study, January 1984




and less than half a percent of its chromiumdemand, and most of this material is used inthe manufacture of jet engines.)

Owing to their higher temperature capabil-ities, resistance to corrosive environments, lowinertial mass, potentially low cost, and theready availability of raw materials, ceramicscould become an integral part of future powergenerating technologies. In contrast to currentand near-term applications, however, majortechn ical barriers m ust be overcome before ce-ramic components for diesel and gas turbineengines can advance from demonstration proj-ects to commercialization. Improvements areneeded in material properties (most signifi-cantly, fracture toughness), processing andfabrication techniques, ceramic-ceramic andceramic-metal joining capabilities, testing pro-

cedures, and design methodologies. Ceramiccomponents must be reliably produced andmanufacturing processes must be capable of a high degree of reproducibility, neither of which is possible at the current state of thetechnology.

The Ceramics Market and Industry

The worldwide market for advanced ceram-ics in 1980 was estimated to be $4.25 billion. 29

Electronic components represent the primarymarket for ceramics, with cutting tools andwear parts second and third, respectively.Roughly half of the present overall demand isbeing met by Japan ese comp anies, whose salesexceeded $2 billion in 1980.

30 While the elec-tronic segment now accounts for more thantwo-thirds of the total market and offers sig-nificant growth poten tial, it may eventu ally bedwarfed by the ultimate size of the high-tem-perature applications market.

Indicative of a h igh level of uncertainty, projections made to estimate the value of the ad-

vanced ceramics market by 2000 vary widely.An American Ceramics Society study 31 projected a $20 billion wor ld m arket, half of whichwould be domestic. The U.S. Department of Commerce was more conservative in a studyreleased in 1984. It projected total domestic

shipments (as equivalent to future market po-tential) of advanced ceramics of $5.9 billion.Included were electronics shipments of $3.5billion; heat engines, $840 million; cuttingtools, $960 million; and wear p arts,$540 mil-lion.32 In yet another estimate, advanced ce-ramic usage in automotive engines alone wasprojected to reach $30 billion on a worldwidebasis by the year 2000.

33

Except in electronics, advanced ceramicmaterials have penetrated a very small shareof their recognized end use markets world-

wid e, prim arily due to the state of the technol-ogy and relatively high costs of its products.While low-volume production adds to thesehigh costs, demonstrated technical perform-ance will not necessarily create mar kets for ad -vanced ceramics. Roughly half of the cost of a typical ceramic component is estimated tobe due to production rejects.34 An incrementalintrodu ction into most markets is expected u n-til ceramic component mass production tech-niques are developed which can reproduciblyfabricate reliable products and customer ac-ceptance can be firmly established. In auto-

mobile markets, revolutionary ceramic enginedesigns may have to await a lengthy provingprocess p rior to successful commercialization.If it is successful, the ceramic turbocharger—the first comm ercial structural heat engine u seof advanced ceramics—can prov ide invaluableinformation for this process and the beginningsof institutional acceptance of the structur al ca-pabilities of advanced ceramics.

The essence of the advanced ceramics busi-ness is that common starting m aterials are con-

~9ROthrnan, et al,, op. cit., p. 238.

~Ibid., Japanese firms were estimated to hold 52 percent of the worldwide ceramic powders market; 61 percent of electronicIC packages/substrates; 91 percent, piezoelectrics; 43 percent,capacitors; 63 percent, thermistor/varistors; 79 percent, ferrites;II percent, gasdlmmidity sensors; 44 percent, translucent ceram-ics; 12 percent, cutting tools (carbide, cermet); and 48 percent,structural ceramics (heat and wear resistant).

Slrbido

32u.s. Depa r tmen t of Commerce,, op. cit., p. 13. The Depart-ment of Commerce cautioned in its study that it is too early inthe history of this new industry to predict its future with a highlevel of confidence.

33AccOr&ng to Kent Bowen of MIT, as quoted in Ro thman ,et al., op. cit.s41bid.




verted into high value-add ed commod ities andcomponen ts by sophisticated, high-technologyprocessing and manufacturing systems. Exact-

ing standards require extensive quality control.Generally, material producers in the ceramicsindustry have been and still remain vertically

integrated; thus, raw materials are processedand fabricated into component parts within asingle comp any. Relatively few p roducers sup -ply ceramic raw materials, and even fewer sup-ply new advan ced ceramic pow ders. The evolv-ing advanced ceramics industry consists of traditional ceramics firms expanding into newapplications, new end users taking on the taskof being m aterials sup pliers, and conventionalmaterials firms expanding into the ceramicsarena.35

The United States is not alone in its interest

in advanced ceramic materials. It already iscompeting with and will continue to encoun-ter stiff competition from Japan and WesternEurope in tapping future markets. The Japa-nese industry is currently the sole source forsome high-grade ceramic powders (e. g., siliconcarbide) and has eclipsed th e rest of the worldin su pp lying the electronics m arket. se A Brit-ish firm, which holds numerous patents forsialons (a ceramic comp osed of oxides and ni-trides of silicon and aluminum), now licensesothers to manufacture these materials.

Japan began its comprehensive advancedceramics R&D program only in 1977, but itsgovernment-industry-university collaborativeeffort is wid ely regarded as the best organizedand financed in the world, The Japanese are,of course, more materials and energy import-depend ent than the United States; and a primegoal of their research efforts is to ease that d e-pendence. But they also view advanced cer-amics as a technology w hich will be part of an

tsFOr a review of the status of the U.S. advanced ceramics in-dustry and the firms involved, see the U.S. Department of Commerce, A Competititre Assessment of the U.S. Advanced Ceramics Industry, op. cit.

t@Not a]] such sales in the United States are imports, however.Kyocera International, a subsidiary of Kyoto Ceramic Co. of Ja-pan, established production facilities in San Diego in 1971 whichnow supply 70 percent of the U.S. demand for ceramic packag-ing for integrated circuits. See “The Japanese Score on a U.S.Fumble, ” Fortune magazine, June 1, 1981, pp. 68-72,

indu strial base for the futu re. In an issue of TheJapan Industrial & Technolog ica l Bu l le t in

37 i n1983, R&D in ceram ics is recognized as involv-ing “huge investment risks” and requiring “arelatively long lead time before the commer-cialization of these materials. ” As such, the

study conclud ed that the Japanese government“should take the main role in promoting ad-vanced and fundamental research as well asdevelopment. ” And, the primary objectives of the Fine Ceramics Office set up in July 1982under the auspices of the Ministry of Interna-tional Trade and Industry (MITI) are to “geta comprehensive picture of the domestic fineceramics industry, systematize the industry,consolidate the industry’s foundation andadop t comprehensive policies designed to p ro-mote the indu stry’s sound growth. ”

While the United States, Japan and WesternEurope have all followed interdisciplinary ap-proaches in their indep endent research efforts,the U.S. effort has leaned toward basic re-search and design methodologies while othershave emphasized materials supply and proc-essing. As a consequence, some feel that theUnited States may end up lagging behind inthe implementation and exploitation phases of advanced ceramics technology. In advancedceramics (as in other new technologies), theJapan ese seem w illing to take the risk to app lystate-of-the-art materials to consumer products.

This provides field testing for improvement of the know ledge base of the technologytion experience and cost reductionscome to finance furth er research effortswhile gaining customer acceptancematerials,

produc-and in-

, all thefor new

If one assumes that the Japanese rather thanthe United States becomes the dominate fac-tor in an all-important future automobile ce-ramic engine market, the United States couldbe adversely affected by a d ecline in the GNP,loss of employment opportunities, shift in the

— —37 Japan Externa] Trade Organization, The Japan Industrial ~

Technological Bulletin: The Development of Structural Fine Cer-amics in Japan, Specia] Issue, No. 15. 1983, pp. 6-7. Note thatJapan uses the term “fine ceramics” for what is commonly re-ferred to as “advanced ceramics” in the United States.




balance of trade, and loss of savings in energycosts .38

One aspect of the expanding ceramics ind us-try for wh ich th ere is little data is the possibleenvironmental, health, and safety effects on the

commu nities and workers w here the p rocess-ing occurs. While some may assume that theseprocesses may be “cleaner” than those of ex-isting metal production, the statistics as theyare now collected and aggregated by th e Envi-ronmental Protection Agency and the Occupa-tional Safety and H ealth Adm inistration basedon the traditional ceramics ind ustry d o not cor-respond to the future industry,

Research in Ceramics Applications

Ceramics is an ancient art. Despite—or be-cause of—the age old and common use of ce-ramics, it remained essentially an art until re-cently, when more exacting standards wereasked of the materials. One major engineeringtextbook on ceram ics states in its 1976 editionthat:

. . . un til a decade or so ago, ceramics was inlarge part an empirical art, Users of ceramicsprocured their materials from one supplier andone particular plant of a supp lier in order tomaintain uniformity. Ceramics producers werereluctant to change any d etail of their process-ing and manu facturing (some still are), The rea-son was that the complex systems being usedwere not sufficiently well known to allow theeffects of changes to be predicted or under-stood, and to a considerable extent this re-mains true.39

British scientists conducted much of theoriginal research in the 1950s and 1960s in cer-amics theory, raw materials development, andprocessing methods. Not until the 1970s wereceramics developed to the point where theycould be considered engineering materials inthat their chemical and physical propertiescould be altered to match intended functions

3LIL. R, Johnson, A, P. S. Teotia, and L. G. Hill, A Structura]

Ceramic Research Program: A Preliminary Economic Analysis.ANL/CNSV-38. Argonne National Laboratory, March 1983.wwr, D. Kingery, H. K, Bowen, an d D. R. Uhlmann, ~ntroduc-

tion to Ceramics, Zd ed, (New York: John Wiley & Sons, 1976),p. 1.

in various applications. This short period of de-velopment time probably contributes to therelatively low rate of usage of advanced ce-ramic materials so far,

Following is a discussion of the current

status of the research and u se of advanced cer-amics in cutting tool, wear r esistance, heat ex-changer, and heat engine applications.

CUTTING TOOLS40

Cutting tool ap plications represent a limitedbut growing and potentially valuable marketfor ceramic m aterials. At p resent the total U.S.market for cutting tools has been estimated at$2.2 billion per year. Advanced ceramic cut-ting tools hold 2 to 3 percent of this market(comp ared to tu ngsten carbide at 45 percent).41

Nine percent of the annual U.S. consumption

of cobalt is used as a binder in tungsten car-bide material.42

New cutting tools are continually beingsought to increase manufacturing productivityby attaining higher cutting speeds and reduc-ing the downtime of cutting machinery throughimproved lifetime of tool inserts. Ceramicmaterials have p roven feasible in th is app lica-tion and may offer higher performance thanexisting cutting tool materials; but they mustcompete with new metal alloys, coatings, andprocessing methods (e.g., powder metallurgy)

for market penetration. No one material meetsall cutting requirements in all applications, andadvanced ceramic cutting tools tend to behigher in cost than conventional tools,43 owingto their smaller volume production and morecomplex processing. This higher initial cost,however, can be mitigated by the higher cut-

— —.————aCutting tools are insert pieces—the cutting edge—held and

guided by machine tools. The process of machine tooling shapesand removes excess materials from manufactured products toproduce desired tolerances.AIU.S. Depa r tmen t of Commerce, Op. Cit., P. 35.AZRothman, et a]., op. Cit., p. 168.

‘sAccording to an interim draft report (January 1984) byCharles River Associates for the National Bureau of Standards,Technological and Economic Assessment of Advanced Ceramic

Materials: A Case Study of Ceramic Cutting Tools, a typical sili-con nitride cutting tool is currently sold in the $18 to $20 range,whereas typical tungsten carbide cutting tools are priced at $4to $5.



Ch. 7 —Substitution Alternatives for Strategic Materials q295

ting speeds, if downtime due to lower reliabil-ity is not excessive,

An increase in the u se of advanced ceramicsis dependent on improvements in ceramic ma-terials and the machine tools in wh ich they areused. Advanced ceramic materials have greaterabrasion, wear, and creep r esistance than th eircarbide counterparts, but less strength, fracturetoughness, and thermal shock resistance. Theattributes of ceramic materials provide su-perior performance at high cutting speeds(especially demanded by the automotive andaerospace indu stries), wh ich can tran slate intoprod uctivity gains. But w idespread conversionto advanced ceramic cutting tools will requireinvestments in new machine tools as many of those still in u se have neither the speed, pow er,nor rigidity needed to use ceramic cutting tools

effectively.While approximately two-thirds of current

ceramic tool sales are alumina (Al 2O 3), intro-du ced in the 1960s, the new est cutting tools inuse today are based on the silicon family. (Sili-con nitride exhibits twice the fracture tough-ness of alum ina.) Rapid developm ent of siliconnitride ceramics has been the result of acceler-ated research activity over the past decade onhigh-temperature structural ceramics for usein advanced energy conversion systems. FordMotor Co., for instance, is now m oving tow ardcommercialization of its “S-8” material, whichwas d eveloped du ring research on materials forgas turbine rotors.

Most of the direct research in cutting toolsin the United States is cond ucted by p rivate in-du stry and has been estimated at $1 million peryear. 44 Indirect benefits may accrue, however,from the much heavier investmen ts by govern-ment, indu stry, and academia in structural cer-amics R&D.

Japan and Western Eur ope are considered tobe ahead of the United States in the develop-

ment and utilization of ceramic cutting tools.(About half of the advan ced ceramic tools soldin the Un ited States are impor ted from Japan.)The difference in h igher u sage has been attrib-

~41bid., p. 45.

uted to the fact that in the United States’ oldermachine tool industry equipment is outdatedand must be modernized or replaced before ce-ramic tools can be used to their full advan-t a g e .4 5

WEAR APPLICATIONSWear applications are often in low-tempera-

ture environments in which resistance to abra-sion and corrosion are the primary perform-ance goals. Applications includ e ball and rollerbearings, valves and pipefitting, industrialfasteners, and pumping equipment such asseals, liners, and nozzles. The traditionalmaterials for those applications are cementedtungsten carbide and wear-resistant steels (inwhich chromium is used as an alloying agentfor its hardenability). Up to about 3 percent of U.S. cobalt consumption may be used in allwear-resistant applications and about 2 percentof chromium . Thus, strategic materials savingscould result from more extensive substitutionof ceramic materials in wear applications.

While the technical feasibility of wear partsmade from ceramics (primarily aluminum ox-ides, and silicon carbides, silicon nitrides) hasbeen demonstrated, the Department of Com-merce has estimated that ceramics currentlyhold less than 1 percent of the annu al $3.3 bil-lion U.S. market.46 The extent to which theywill assume a greater share of these markets

will be strongly affected by performance versuscost tradeoffs. The current state of processingand fabrication techniques for ceramic wearpar ts (rather than raw materials costs) leads tothe higher initial costs than those for metalparts, Ceramics can, however, provide longerservice life than metals.

The potential to resist fatigue, corrosion, hightemperatures, and loss of lubrication betterthan metals make ceramic materials attractivefor ball and roller bearing uses, Their high costof fabrication, however, makes them imprac-

4s E Dow Whitney, “Process in Ceramics Research for Cut-ting Tools in the U. S., West Germany, Japan and Sweden, ” pa-per given at the National Science Foundation conference on Sub-stituting Non-Metallic Materials for Vulnerable Minerals, June1983, p. 1.

SeDepar tment of Commerce, Op. cit., p. 35.




tical in many applications. Ceramic bearingstend to be consumed primarily by petroleumand chemical industries, which have demand-ing performance standards (e. g., in corrosiveenvironments) and in specialized aerospace ap-plications, all of wh ich can absorb th e high ini-

tial cost.47

Pump seals are the largest w ear ap-plication market now held by ceramics. Theproperties required are hardness, low friction,high resistance to corrosion, and high-tempera-ture capability. Ceramics (especially, siliconcarbide and silicon nitride) have been shownto be sup erior to metals in p erformance in thisapplication and, with improved manufactur-ing techniques and redu ced costs, are expectedto assume more of the market. Nozzle partsmu st withstand high w ear and abrasion resis-tance properties which the hardness of ceram-ics p rovides. 48

Research in wear applications for ceramicsis primarily conducted by the private sector,much of which remains proprietary, resultingin little transfer of technology. The researchis concentrated on improving the properties of the materials, on manufacturing techniques toredu ce costs, and on n ond estructive evaluationmethods to gain reliability.

HEAT EXCHANGERS

Competitive pressure in high-temperature in-du strial processes, as well as the rising cost of

energy and the reduced availability of high-grad e fuels in the 1970s, have led to the devel-opment and expanded use of energy conser-vation devices such as heat exchangers.49 A sin other high-temperatu re app lications, the useof advanced ceramic materials in heat ex-changer technology allows for improved per-formance over metals and often makes thetechnology possible. In addition, ceramics canprovide better oxidation and corrosion resis-tance, which can result in longer component—

qTceramic bear ings Cost about $100 while simi]ar steel bear-

ings cost from $1 to $3,50.aaRothman, et al., op. Cit., p. 191.@’Heat exchanger” is a generic term for any device that trans-

fer heat from a fluid flowing on one side of a barrier to anotherfluid flowing on the other side of the barrier. Here, the term refersto the use of such devices in combination with industrial fur-naces, stationary power generators, and engines.

lifetime. Constraints to the expanded use of ceramics in this application are those specificto individual types of heat exchangers, but in-clude the need for improved materials prop-erties such as thermal shock resistance and re-sistance to certain corrosive environmen ts, the

development of joining and sealing technol-ogies, and low confidence in the reliability of the ceramic components. The use of ceramicsis still not cost effective vis-a-vis metal alloysin some heat exchanger designs, especially forlarge industrial furnace and power systems,which are constructed from an array of thin-walled ceramic tu bes, Processing technologiesare still being refined to provide high repro-du cibility for long (greater than about 8 feet)tubes. In addition, sealing against leakage be-tween the hot and cold streams has not beenfully successful.

Because of their high temperature and oftencorrosive environments, heat exchangers havebeen predominantly fabricated from stainlesssteels and superalloy; therefore, substitutionof ceramic materials will result in some sav-ings of chromium and cobalt, although theamount is difficult to quantify due to lack of specific end use reporting. On the other hand,much recent heat exchanger technology hasbeen mad e possible by new ceramic materials,and the resultant growth in th e use of ceramicmaterials are not as replacement materials. The

use of ceramic materials, such as high-tempera-ture cordierite (a magnesium alumina silicatecommonly referred to as “MAS”), silicon car-bide, silicon n itride, alum inum oxide, and lith-ium-alumino-silicate (LAS) in this applicationwill be driven by energy costs faced by usersand the unit cost of fabricating ceramic com-ponents.

The use of ceramics in recuperators, a typeof heat exchanger that allows a furnace to oper-ate more efficiently by recycling its waste heatto preheat incoming combustion air, has re-ceived a considerable amount of attention.Both development and commercialization re-search in ceramic recuperators was contractedby DOE’s Conservation Office through GTESylvania and the Carborundum Co. As a result,small ceramic recuperators are now commer-




cially available and are economically viable.They can be retrofitted to existing furnaceswith the modification of furnace burners tocope w ith the higher temp eratures generated.The performance advantage of ceramic recu-perators is expected to encourage their use in

new furnaces and as add -ens to u nrecup eratedfurnaces; but a changeover in large industrialsystems will be slow owing to the high invest-ment costs of such installations coupled withthe current stabilization of energy costs. TheGTE “Sup er Recuper” is reported to save someindustrial furnaces 30 to 60 percent in fuel byenabling furnaces operating at 2,500° F to pre-heat incoming air to 1,600° F. Unlike the longtubular array systems, GTE’s counterflow platedesign heat exchanger does not present anymajor ceramics processing problems. But ma-terials properties improvements are needed in

order for the d evice to be ap plicable in certainhighly corrosive environments such as thosein the glass industry,

A variety of other heat exchanger applica-tions are being investigated by both the p rivatesector and DOE. They include ceramic regen-erator cores for inclusion in gas tu rbine enginedesigns and specific designs for use in cogen-eration and combined-cycle power generationequipment.

HEAT ENGINES

Ceramic materials are under active investi-gation by both the Federal Government and in-du stry for use in the p ropu lsion of autom obiles,trucks, military equipment (tanks and missiles),and aircraft as well as stationary uses, such aspower-generating equipment. Research in theseapp lications is being condu cted to achieve sig-nificant advantages over the use of metal al-loys, including fuel economy, improved per-formance, reduced maintenance, and possiblereduction of pollution emissions, with savingsof strategic materials a secondary objective.

Private sector R&D is focused primarily onadvantages of ceramics that could translateinto direct cost savings or improved productcompetitiveness. A review of the governm ent-sponsored research in ceramic heat engines intable 7-11 show s that the m ain focus of that ef-

fort has concentrated on the gas turb ine enginefor automotive applications.

The ceramic materials being applied todayto these technologies are generally termed“structur al ceramics.” They include mon olithicforms of the silicon carbide (SiC), silicon ni-tride (Si3N 4), zirconia (ZrO 2), and aluminum sili-cate (AlSi) families of ceramic materials. Ce-ramic composites are also being considered forengine applications because of their superiorstrength and hardn ess, low thermal expansion,and wear resistance, which may allow them toovercome the fracture problems of the mono-lithic ceramics. However, ceramic compositeshave been found to lose their strength at highertemperatures, a problem that has n ot yet beenresolved,

Ceramics are likely to see service in the hot

sections of engines, progressively, as follows :50

q

q

q

q

q

q

q

Turbochargers: static parts and rotors,Small stationary electric power generators,similar to airplane auxiliary power units(APUs).Large stationary electric power generators,then mobile (ground and marine) APUs.Short-life turbojet and turbofan engines formissiles.Heavy-duty turboshaft vehicular propul-sion engines; military truck, tank, off-roadvehicular, marine engine.

Automobile propulsion,Hu man-rated aircraft p ropulsion and util-ity electric power generation.

Technical advances gained from continuingresearch efforts are necessary before ceramicmaterials can serve in these applications.

VEHICLES

Ceramic materials are being considered ei-ther as direct substitutes for selected compo-nents of existing gasoline and diesel enginesor for use in engines designed specifically to

benefit from the properties of ceramic ma-terials.

Component substitution in gasoline enginesoffers only minor improvements in fuel econ-

Soparkinson, op . Cit.




omy or power production over conventionalall-meta l engines. As such, wh ile selected com -ponents (cylinder liners and heads, exhaust andintake p orts, valves, bearings) of such enginesmay be fabricated from ceramics, a “ceramicgasoline engine “ is not considered a possibil-

ity, Ceramic diesel engines, on the other hand ,can provide a 10- to 30-percent reduction infuel economy and improved reliability due tothe elimination of cooling systems. Since onlyminor amounts of strategic materials are usedin conventional engines, ceramic componentssubstitution can only marginally affect the u seof strategic materials. One possibility, as yetun proven, is that the pollutants emitted by su chhybrid metal-ceramic engines will be lower,owing to higher operating temperatures, andthat strategic materials savings could occurwith a shift in the materials requirements (now,

PGMs and chromium) consumed by automo-tive catalytic converter systems.

Turbochargers. —Turbocharger rotors, nowmade primarily of nickel-based superalloys andnickel-iron alloys, could be a significant near-term use of ceramics. This technology 51 is oneof the few heat engine applications being in-vestigated with mostly private rather than gov-ernment funding and is driven by a desire tocombine the fuel economy of today’s small carswith the performance of yesterday’s larger en-gines, As this competition for greater fuel econ-

omy/ performance increases in the automotiveindu stry, the inclusion of ceramic rotors in tu r-bochargers may retard an otherwise growingmarket for superalloy. The main candidatematerial for ceramic rotors is silicon nitride.

The primary attraction of the ceramic rotoris the improved performance provided by itslow rotational inertia, which enables a quickresponse by the turbocharger at low enginerpm s. The h igher weight of metal alloys causesa d elayed response called tu rbo lag. Second ly,there are expected material cost savings to begained from the use of ceramics, along with

sIA turbocharger, added to a standard internal combustion en-gine, pumps hot air (compressed by action of a turbine spun byhot exhaust gases) into the engine. Other options for fuel econ-omy are available through redesign of the standard engine toimprove its performance by reducing the amount of waste heat.

overall weight savings (providing additionalfuel economy). The high-temperature charac-teristics of ceramics are not a prime factor.

Two technical problems constrain massproduction of ceramic rotors for turbochargers:the difficulties in joining ceramics and metalsand un certain reliability and reprod ucibility inmaterials processing. Nevertheless, ceramicturbochargers may be offered—to a limitedextent—by the Japanese automobile industrywith in the next few years. Two Japan ese firmsreportedly began d elivering samp le turbocharg-ers to Japanese car companies in mid-1983 fortesting purposes. One of these firms announcedplans to begin p rodu ction in late 1984 and p re-dicted that its ceramic turbines will be mass-produced within 3 to 4 years. The major U.S.turbocharger manufacturer, Automotive Prod-ucts Division of AiResearch, competes in inter-national markets and expects to have its ce-ramic rotor tu rbocharger read y by 1986 for the1987 model year, If the ceramic turbochargeris successfully marketed by the Japanese indus-try, the U.S. automobile industry is expectedto compete by offering similar turbochargerson their specialty market automobiles, wheresuch gains in performance are desirable andthe consumer may be willing to absorb addedcosts (both initial and maintenance).

The ceramic turbocharger is seen as a pre-curser to the u se of ceramics in gas tu rbine en-

gines where the rotor must withstand higherstresses. Successful commercialization of theceramic turbocharger could provide valuableinformation to accelerate the application of cer-amics to gas turbine engines.

Gas Turbines and Diesel Engines.—Research in new

automotive engine designs to incorporate ce-ramic materials has been a major beneficiaryof government support. Technologies now be-ing investigated under contract to industry arethe “adiabatic” (or, minimum heat loss) dieseland gas turbine engines. Industry also supports

R&D in engine technologies throu gh cost shar-ing on government contracts and its own p ri-vate basic research. While various governm entprojects have been funded sporadically sincethe 1940s, the heaviest support has occurred



Ch. 7—Substitution Alternatives for Strategic Materials q299

during the last decade.52 NASA was directlyinvolved in the early research with the Depart-ment of Defense and the Department of Energy(DOE) now taking the lead. The curren t majorprojects are DOE’s Automotive Gas Turbine(AGT) program to d evelop a gas turbine engine

by fiscal year 1986 and the U.S. Army Tank Au-tomotive Command (TACOM) program withCummins Engine Co. to develop the adiabaticdiesel engine for use in military vehicles. It isbelieved th at this d iesel engine technology willeventually be transferred to the private sectorfor use in heavy-duty trucks. Automotive useof both the diesel and the gas turbine engines,if commercialized, is not expected until after2000.

The benefits foreseen in use of the adiabaticdiesel engine are increased fuel econom y (du e

to the reduction of lost energy and the elimi-nation of the n eed for a cooling system), redu c-tion in weight and inertia, and greater enginereliability and maintainability. Energy loss maybe reduced as much as 50 percent, and fuelconsumption, 25 percent over conventionaldiesel engines with a significant increase inpower.

The TACOM/ Cum mins research projectstarted with development of ceramic compo-nents for conventional diesel engines. A sec-ond phase followed to design and test an

uncooled, nonadiabatic diesel engine with ce-ramic and metal parts. R&D is now proceed-ing on an adiabatic diesel engine, combiningboth a ceramic combustion system and a tur-bocompound unit (to utilize waste heat). Re-maining technical issues include the need forfurther materials research and the development

sZAc~ording to a draft interim report (November 1983) byCharles River Associates for the National Bureau of Standards,Technological and Economic Assessment of Advanced Ceramic

Materials: A Case Stud~r of Ceramics in Heat Engine Appli-cations:

Since

1976,total

U.S.

Government support for R&D in ceramicheat engines has exceeded $10 million per year. In 1981, 74 percentof tota! go~.ernment funding was provided by DOE, 23 percent b yDOD, and about 3 percent by hTASA, In addition, Charles Ri\er Asso-[.iates ha~re estimated that private funding of structural ceramics R&D1s roughly’ equal to the amount of funding received by the prit’ate~ector from the government in this area. However, little informa-tion is available about the focus of this private funding, i.e., whatarnou n ts are devoted to heat engine applications.

of component manu facturing m ethods that arecost effective and provide reproducibility.

After Congress passed the Automotive Pro-pulsion Research and Development Act (TitleIII of Public Law 95-238) in 1978, DOE and

NASA initiated the AGT program. Two con-tracts were awarded: one to General Motors(Allison and Pontiac divisions) for the AGT 100and another to the Garrett Corp. and the FordMotor Co. for the AGT 101. Each of these con-tracts involve the design, development, andtesting of an advan ced ceramic autom otive gasturbine engine. In the final versions the engineswill have been designed from scratch to exploitfully the material properties of ceramics. Sinceits inception in 1980, the AGT program hasbeen revised to take the d evelopment of the ce-ramic engine through to the proof-of-concept

stage. A probable d ecrease in fund ing in fiscalyear 1985 will require another shift in the over-all program goals or organization.

Both the AGT 100 and 101 have successfullypassed an initial testing phase. The modelstested were designed using ceramics for staticcomponents, retaining metal for rotary parts.The phase now underway will test versions de-signed with ceramic rotary parts.

One of the largest technical problems fore-seen with the ap plication of ceramics as enginecomponents is that of gaining reliability and

reproducibility in the large-scale productionthat commercial automotive application will re-quire, The ultimate phase required for bridg-ing a tough attitudinal barrier (“ceramics arebrittle”) and to ensure transfer of this new en-gine technology w ill be to convince engineers,designers, the automobile industry manage-ment, and consumers that ceramics can ind eedserve in these capacities. This will require rig-orous testing of ceramic engines in real en-vironmen ts—in au tomobiles subjected to d ailyuse over long periods of time.

Again, the benefits of strategic material sav-ings from these new automobile engines willbe minor except for the possible changes inmaterials now used for catalytic converters. Re-sults f rom the use of advanced ceramicmaterials in vehicle applications and the knowl-




Photo credit A//isorJ Diw.won, Genera/ Mofors

Ceramic components are being evaluated in the advanced gas turbine being developed by Allison Division of General Motorsfor the U.S. Department of Energy and NASA

edge gained in processing of those materialswill undoubtedly benefit the development of aircraft gas turbine engines, where real stra-tegic materials savings may be realized fromthe substitution of ceramics for superalloy(chromium and, especially, cobalt).

AIRCRAFT TURBINE ENGINES

The use of ceramics in gas turbine enginesfor human-rated aircraft is believed to be oneof the most challenging and difficult applica-

tions for advanced materials, owing to highperformance demand s and the extremely highrisk of use involved. It is, however, an area inwhich the private sector is acutely interestedbecause of a continuing desire to increase the

performan ce of jet engines. This p erformance,wh ich translates into fuel economies, increasesas the inlet temperatures for a gas turbine en-gine increases. The current materials—super-alloys—used in the hot sections of the enginehave operating limits over time of about 1,9500F. Ceramics, on the other hand, can withstandoperating temperatures up to about 2,500° F.This higher thermal efficiency allows for a re-duction in airflow through the engine and acorresponding smaller engine size. NASA hasestimated possible introduction of monolithic

ceramics as turbine blades in this applicationaround the year 2010.53

Ssparkinson, op. cit.



Ch. 7—Substitution Alternatives for Strategic Materials

Both the Air Force and NASA 54 have main-tained a continuing interest in ceramic gasturbine engine development, In the privatesector, both Pratt & Whitney and General Elec-tric Co. have contributed to basic research onstructural ceramics for potential aircraft engineapplications. The Air Force Materials Labora-tory has sponsored small research programs onthe evaluation of ceramics and ceramic com-posites with potential use in aircraft systems.NASA’s Lewis Research Center, in addition tomanaging DOE’s AGT programs, has sponsoredsmall research programs on structural cer-amics. NASA has also developed an overallprogram to augment its current research effortsin ceramics. This program, with its focus onthe aircraft engine, is intended to broaden thetechnological base of advanced ceramics by co-

ordinating research in the various technicalneeds (e. g., materials p rocessing, nond estruc-tive testing, design method ologies). The devel-opment of this plan was coordinated with othergovernment agencies and industry bu t was notincluded in the final NASA fiscal year 1985budget proposal.

Much work remains in developing mono-lithic ceramics and processing techniques andgaining applications experience before thesematerials will be acceptable for human-ratedaircraft. The advantages of ceramics with re-gard to engine performan ce and, to a lesser ex-

tent, the potential for reducing the overall useof first-tier strategic materials are incentivesthat will help promote the still-substantial re-search, development, and commercializationtasks ahead.

STATIONARY ENGINES

Stationary engines being considered for ce-ramic materials applications are primarily gasturbines for industrial and household use, in-cluding accessory power units for emergencyor peak load service. The possible development

of these small generators for near-term usehave benefited from research sponsored by

s~The budget for NTASA’s Ceramic Technology for AerospaceHeat Engines was an estimated $3.3 million in fiscal year 1983and $4.4 million in fisca] year 1984.

q 3 0 1

DOE and th e private sector. In the longer term,both General Electric Co. and Westinghouseare investigating the application of advancedceramics in large gas tur bines for electric pow-erplants. It is believed that the thermal efficien-cies obtainable with the use of ceramics canresult in considerable energy savings. To beeconomic, the ceramic materials will have towithstand long component lifetimes. Theselarge un its are not expected for use u ntil 2000.Strategic materials savings could be realizedthrough reduced use of wear- and corrosion-resistant materials, such as chromium alloysteels.

Composites

Two or more materials, wh en combined intoa composite, can yield a p rodu ct with very im-pressive properties, including high strengthand stiffness, low weight, and good corrosionand chemical resistance. In addition, compos-ites offer engineers unparalleled opportunitiesto tailor materials to particular applications.Most composites contain little or no strategicmetals, As a result, the anticipated growingmarket for composites has the p otential to dis-place some strategic metal use.

Technically, a composite is any materialcomposed of two or more physically distinctphases. This category includes, among other

materials, filled plastics, laminated materials,dispersion-strengthened alloys, and fiber-rein-forced materials. Of these, the latter two aremost likely to affect strategic materials usage.Dispersion-strengthened alloys were coveredin the superalloy substitution section, so thediscussion here will be limited to fiber-rein-forced materials (commonly called advancedcomposites). The basic characteristics of fiber-reinforced composites are outlined in box 7-B.

Advanced composites can be made from sev-eral different combinations of matrix and rein-

forcement materials, but are generally clas-sified by matrix material. Table 7-12 shows themost common matrix and filament combina-tions. Organic (polymeric) matrix composites(including fiberglass reinforcements) are theonly composite materials in widespread com-




Box 7-B.--Fiber-Reinforced Composites

Fiber-reinforced composites, which are continuous filaments or whiskers embedded in a bindingmatrix, exhibit properties that exceed those of its constituents taken alone. Each constituent servesa special function. The filaments provide the strength and stiffness, while the matrix provides thebody of the finished composite product and transfers the stresses and loads to the fibers.

The mechanical properties of a composite depend on the composition of both the matrix andthe fibers, the relative proportion of each, the orientation of the fibers, and the length of the fibers.By varying these parameters, the strength of a composite can be optimized for the loads encounteredduring its service.

The filaments, which account for 25 to 80 percent of the composite by w eight, can be eithercontinuous or d iscontinuou s (whiskers). Composites with continuous fibers have outstand ing direc-tional properties, while those with discontinuous fibers lend themselves more read ily to such con-ventional metalwork ing operations as forging, extrusion, squeeze casting, and welding.55

In addition to strength and stiffness, the filaments enhance other properties of the composite.Often, the filaments will increase the maximum service temperature by adding high-temperaturestrength to the composite. Also, certain filaments can enhance thermal stability because they donot expand greatly when heated (i.e., low coefficient of thermal expansion).

Since most of the load-bearing responsibility falls on the fibers, the importance of the strengthcharacteristics of the matrix material is diminished. In fact, composites with the weaker, but lightermatrices such as plastics, carbon, and aluminum can have good strength. Therefore, compositesare known to have good strength and stiffness for their weight (i.e., high specific strength andmodulus).

The matrix provides more than the body of the composite. In unidirectional composites, whichhave all the filaments aligned in a single direction, the matrix provides most of the transverse (per-pendicular to the fiber direction) and shear properties. Additionally, the matrix is responsible formuch of the corrosion and oxidation resistance and for providing the visual and textural appear-ance of the finished composite product.

Although matrices and fibers serve different functions, they are not independent. The thermalexpansion mismatch between matrix and fiber must below to minimize thermal fatigue problems.Also, both phases must be chemically compatible at both fabricating and operating temperaturesin order to prevent interdiffusion and the concomitant degradation of fiber strength. In some cases

where such compatibility is inconvenient, barrier coatings can be applied to the fibers to inhibitinterdiffusion.

SORobart R. Irving. “Metal Matrix Composite pose a Big Challenge to COnV9ntiOn~ mOYSt” 1- 4N , Jan. IZ, 19839 P. 35.

mercial use. Carbon/ carbon comp osites are inlimited production for aerospace applications.Metal and ceramic matrix comp osites have yetto be commercialized, except in highly special-ized applications.

prospects for composites to displace strate-

gic materials varies by composite class, Or-ganic or p olymeric comp osites—the only com-posites now in widespread use—will seldomdirectly replace the first-tier strategic materialsconsidered in this report, but the indirect ef-fects of their use could be significant, as was

brought ou t at a recent National Science Foun -dation workshop:

It is unlikely that th is coun try w ill witnessany wholesale and direct substitution of com-posites for critical and strategic materials un-less some national emergency dictates suchsteps. Rather, composite materials will makeinroads in those areas where weight and/ orcost are the primary d rivers. Most of the criti-cal materials, namely cobalt, chromium, plati-num , tungsten and tantalum are used becauseof their unique resistance to high temperatur e,



Ch. 7—Substi tution Alternatives for Strategic Materials q 3 0 3

Table 7-12.—Advanced Composite Materials Options

NOTE Circles ind!cate composites which have been or are now In production status

SOURCE Stanley L Channon, /ndustria/ Base and Qua/IfJca/Ion of Composfte Mater(a/s and .SWctwes (An Execut/ve Overview) (Alexandria. VA. Institute for DefenseAnalyses, March 1984), working paper, p 3

corrosion or their catalytic phenomena. In noway can the composite materials we ordinar-

ily consider, graphite, glass, or Kevlar with ep-oxy, polyimide, or thermoplastic resins be con-sidered for d irect substitu tion. The imp act of composites will come indirectly in secondaryeffects. An example is a gas turb ine in w hichthe weight reduction by the use of compositesfor stationary, low-temp erature comp onentswill cascade into downsizing of high-tempera-ture components and result, not in eliminationof the critical metals, but in a significant re-du ction in the am oun t of strategic materialneeded. se

Carbon/ carbon composites, used primarily in

aerospace app lications, may also have ind irecteffects on strategic materials throu gh redesignof prod ucts. Metal and ceramic/ glass matrix

S“William E. Winters, “Use of Composites in High Perform-ance Structural Application s,” Materials and Society, vol. 8, No.2, 1984, p. 313.

composites may eventually be used in veryhigh-temperature superalloy applications.

The high cost of advanced composite mate-rials is an important deterrent to their wide-spread use. Table 7-13 shows the h igh relativeraw material costs of various advanced com-posites. Moreover design, fabrication, testing,and inspection costs are often higher for com-posite materials than for monolithic materials.These costs can be expected to decrease as thematerials come into more widespread use andas processing and fabrication problems areovercome. Figure 7-3 shows the decrease ingraphite fiber costs since 1970.

The advanced composites industry has rap-idly become internationalized, with the UnitedStates, Japan, Great Britain, France, and othercountries participating in individual segmentsof the industry. Very often, separate fabrica-tion steps needed in the manufacture of par-




Table 7-13.—Price Range of Selected Composite Raw Materials

1985 Reinforcement cost/pound

Graphite grades:Rayon precursor fibers (woven cloth) . . . . . . . . . . . . . . . . . . . . ., . . $70 to $80PAN precursor (commercial and large-volume

aerospace orders). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17 to $40Pitch grade (high-volume aerospace) . . . . . . . . . . . . . . . . . . . . . . . . $35 to $275Graphite fiber prepreg (PAN grade, 60 percent fiber) . . . . . . . . $36 to $40;

up to $100/lb forspecialty products

Boron:Tungsten core. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $365 to $375

Boron fiber prepreg (carbon core fiber):250°cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $270 to $300350°cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $310 to $340

Kevlar:Type 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5.40 to $39.25Type 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12.55 to $48.20

SOURCE Va~ous Industrial producers contacted~ythe Offlceof ~chnology Assessment

;970 1975 1980 1985

Years

SOURCE1970.1980d ata: Commercia/ Opportunities for Advanced Composites,A A Watts (ed)(Philadelphla, PA. American Society for Testing andMaterlals,1980), publication 704,p 90; 1985data provided bylndustry

producers.

ticular composites are undertaken in separatecountries. Although advanced composites arenot strategic materials in the ordinary sense of the term, a growing concern in the defensecommunity concerns U.S. dependency on for-eign p rocessing capacity to fabricate key com-posite components. Until recently, for exam-ple, the United States depended on Japan and

Great Britain for virtually all carbon fiber rein-forcements made from polyacrylonitrile (PAN),one of three possible precursor materials forcarbon fiber. The United States now producessome carbon fiber using foreign PAN precur-sor materials. Also, Union Carbide has opened

a domestic PAN production facility that re-duces U.S. dependence on foreign PAN to 70percent of domestic needs. However, this do-mestic precursor is not yet qualified for all de-fense programs, so in many critical applica-tions dependence on foreign supplies is stillnear 100 percent. France, similarly, is thesource of all quartz fibers and of an impor tantcuring agent used in epoxy resin formulations.57

It has been estimated that, in most segmentsof the composites industry, U.S. prod uction ca-pability could be doubled within 2 years if theneed arose.58

Polymer (Organic) Matr ix

Polymers, such as polyesters, epoxies, andpolyamides, are by far the most developed of all composite matrix materials. They are mostfrequen tly reinforced with (fiber) glass, graph -ite, or aramid (commonly referred to by itsDupont tradename, Kevlar) filaments. Poly-meric composites can have performance capa-bilities that are commonly thought unattaina-ble by plastics. For example, polyimidecomposites are capable of continuous opera-tion at 7000 F in some applications. Organic

Szstan]ey L. Channon, Industrial Base and Qualification of

Composite Materials and Structures [An Executive Overview)(Alexandria, VA: Institute for Defense Analysis, March 1984),p. 10 (working paper).

‘eIbid., p. 16.




composites are attractive because they com-bine these good physical properties with light-weight and ease of fabrication. Consequently,these materials may reduce the need for stra-tegic materials—not via d irect substitution, butthrough the cascading effects of downsizing

and redesign allowed by the decreased weightand innovative fabrication.

The total U.S. consump tion of polym er com-posites in 1982 approached 1 million metrictons (tonnes). Of this, 618,000 tonnes of poly-ester/ glass (fiberglass) was th e largest share,Additionally, 106,000 tonnes of reinforced ther-moplastics and 28,000 tonnes of epoxy resins(equivalent to approximately 90,000 tonnes of epoxy-based composites) were consumed.59

U.S. consumption of composite reinforcingfilaments in 1982 was: glass, 280,000 tonnes;

aramid, 900 tonnes; carbon (graphite), 800tonnes; and other, 10 tonnes,

Fiberglass-reinforced organics (which are notgenerally considered advanced composites)dominate current markets. High-volume appli-cations include boat hulls, plumbing and bath-room fixtures, and au tomotive body and trimpanels, which are often made from poly-ester/ glass composites. Low raw material costsand automated, high-speed production proc-esses have made possible the widespread useof polyester/ glass comp osites. Figure 7-4 show sselected applications for different fiberglass

composites.Because of their high price, use of other poly-

mer composites has been largely limited to aer-ospace applications, sports equipment, and au -tomotive applications. Low-volume aerospaceapplications for polymer composites have in-creased since 1968, wh en an epoxy/ boron hori-zontal stabilizer for the F-14 jet was first usedon an experimental basis. In 1970, the GrumannCorp. approved this application for limitedproduction.

Since then, air frames, air panels, satellitestructures, and sporting goods have been builtfrom advanced composites, Table 7-14 shows

5e]Oe] Clark, ~ofen~jaj of Composite Materia]s to Replace c~ro-

mium, Cobalt, and Manganese in Critical Applications, O T Acontract report, 1984.

recent aerospace applications for advancedpolymeric composites. In each of these appli-cations, advanced composites were selected fortheir high specific properties. Specific proper-ties refer to comm on m aterials properties (e.g.,strength), normalized to the weight of the ma-

terial. Organic composites have very goodstrength and stiffness for their weight and aretherefore said to have high specific strengthand stiffness.

Aside from polymer/ glass composites, thepolymeric composites with the greatest poten-tial for continued growth appear to be epoxy/ graphite and epoxy/ aramid. Epoxy/ boron (de-spite its early use) is no longer seen as prom is-ing, owing to difficulties in processing the ex-tremely hard and brittle boron fibers, to highcosts associated w ith pr odu cing th e fibers, and

to effective competition from th e grap hite andaramid systems.

Carbon Matri x

A carbon matrix reinforced with carbon orgraphite fibers is commonly known as a car-bon/ carbon comp osite. They are high-costmaterials used in specialty applications andare, for the most part, in early developmentalstages. To date, commercial applications in-clude rocket nozzles and exit cones, re-entryvehicle nosetips, and aircraft brakes. 60

These materials are very strong and tough,and have the potential for maintaining theseproperties at temperatures up to 4,500

0 F.Moreover, carbon/ carbon comp osites are verylight—somewhat less than 25 percent of super-alloy density and about 50 percent of ceramic(monolithic or ceramic/ ceramic composite)density—dimensionally stable, wear resistant,and free of strategic metals,

There are, however, several disadvantageswhich must be addressed. Controlled environ-ments or imp ervious coatings mu st be used toprevent oxidation problems in high-tempera-ture ap plications, and sp ecial weaves of graph-ite fibers are needed to pr event su rface fatiguecracking caused by low interlaminar strength.

eochannon, op. cit., p. 36.




Pressurebottles

SilosTubingPipeMissile

shells

Figure 7-4.— Fiberglass Composite Applications

I f Fabrics 1 I I I

IManufacturing methods and design

Nozzles I

RodsTubesShapesBuilding

componentsElectrical

appliancesStructural

BoatsSilosCar bodiesScootersMotorcyclesFurnitureTrucksHomesChemical tanksSwimming poolBath tubsPlumbing f ixtures

SOURCE: Cornmerck?l Opportunities for Advanced Composites, A. A. Watts (cd.) (Philadelphia, PA: American Society for Testing and Materials, 1980), publication 704,p. 112.

In add ition, carbon/ carbon composites are veryexpensive as a result of the complex weavingprocedures, long processing times, and highenergy consump tion involved in pr ocessing. Aswith most d eveloping materials, the cost is ex-pected to decrease as the technology emergesand production rates increase.

Development work at NASA and in indus-try is aimed at reducing the high fabricationcosts of carbon/ carbon comp osites. Improv ingcomposite strength and stiffness and increas-ing the reliability of coatings and oxidation-inhibiting matrix additives are also goals of this

work.U.S. carbon / carbon composite use is expected

to grow rapidly, primarily because of defenseand aerospace needs. In 1982, an estimated200,000 pounds of carbon/ carbon was con-sumed in the United States. One survey of gov-

ernment and industry experts found an ex-pected need for 800,000 pounds of carbon/ carbon by 1990—-a quadrupling in demand inan 8-year period.61 As already discussed, someconcern exists about U.S. reliance on Japan formost of its carbon fibers made from PAN. Al-though rayon- and pitch-based carbon fibers ex-ist, PAN-based fibers are used in most currentapplications. Figure 7-5 projects defense andcivilian needs for carbon/ carbon comp ositesthrough 1990; this may be an overestimate, dueto changed program priorities.

Ceramic/Glass Matri cesMonolithic ceramics and glasses are brittle

and exhibit low fracture tou ghness. The tough-ness of these materials can be improved by

61The 1982 estimate and the 1990 projection were made byChannon, op. cit., p. 42.



——— ..——— - -—


Table 7-14.—Current Aircraft Applications for Advanced Composite Materials

Component Source Remarks

Wing:F-15 composite wing . . . . . . . .

C-5A leading edge slat . . . . . .

F-5 main landing gear door. . .737 spoilers . . . . . . . . . . . . . . . .

A-4 landing flap. . . . . . . . . . . . .

F-5 leading edge flap . . . . . . . .B-1 leading edge slat . . . . . . . .

Empennage: A-4 horizontal stabilizer . . . . . .

F-5 horizontal stabilizer . . . . . .

F-4 rudder . . . . . . . . . . . . . . . . .

DC-10 upper aft rudder , . . . . .

L-101 1 vertical fin . . . . . . . . .

Fuselage: A-7 speed brake . . . . . . . . . .

F-5 speed brake . . . . . . . . . . .

McDonnell Douglas

Lockheed-Georgia

NorthropBoeing

McDonnell Douglas

NorthropLockheed-Georgia

McDonnell Douglas

Northrop

McDonnell Douglas

McDonnell Douglas

Lockheed

Vought Aeronautics

Northrop

Graphite/epoxy used to form wing ribs and spars overmuch of the wing substructure; target weight savingsfor entire wing, 25°/0

Basic design is graphite/epoxy skins over aluminum

honeycomb core: weight savings, 22%Weight savings, 36°/0Basic design is graphite/epoxy skins over aluminum

honeycomb core with aluminum and fiberglass fittings,edgemembers and ribs: 108 units (27 ship sets) havebeen fabricated and service tested: weight savings,15%

Basic design is graphite/epoxy skins over aluminumhoneycomb with aluminum edgemembers except for amolded graphite/epoxy actuator rib: weight savings,47 %

Weight savings, 32%Basic design is graphite/epoxy skins over aluminum

honeycomb core with aluminum and fiberglass ribs andtrailing edge close-out. Front beam is moldedgraphite/epoxy along with the leading edge structure:weight savings, 15%; cost savings, 35%

Basic design is multishear web/solid-laminate skinconcept; shear web constructions are bothgraphite/epoxy laminates and fiberglass core-graphite/epoxy skin honeycomb structure: weightsavings, 28%

Basic design is graphite/epoxy skins over aluminumhoneycomb core with aluminum close-out ribs, integralspar, and torque tube fitting: weight savings, 23°/0

Used graphite/polymide in leading edge spar; other high-temperature materials used were fiberglass olyimidehoneycomb core, boron/polyimide prepreg. titanium,and high-temperature adhesive

Graphite/epoxy rudder is 32 ft2 rib-stiffened-skin designmanufactured in a co-cured assembly; compositecomponent weight is 57 lb: weight savings, 37%

Graphite and Kevlar composite box beam and skins toreplace 9 x 25 ft primary structure; compositecomponent weight is 640 lb (17°/0 metals): weightsavings, 25°/0

Built-up molded laminate design using graphite/epoxyelements bonded with structural adhesive: weightsavings, 400/0

Weight savings, 23°/0CONVERSION FACTORS 1 ft] – O 1 m’

Ilb = O 45 kgIf ! = 03 m

SOURCE CornmercM Opporlunft~es focAdvarrced Cornpo.wfes, A. A Watts (cd.) (Ph!ladelphla, PA American Soc!ety for Testing and Mater!als, 1980), publication 704, p 104

reinforcing them with ceramic fibers to limit Most glass compositions (e.g., lead, quartz,the growth of cracks. Currently, glass matrix borosilicate, and boron oxide) have been rein-composites are more developed than their forced on a laboratory scale. They have been

ceramic counterp arts. Ceramic matrix comp os- allied with a variety of filaments, including alu-ites are still confined to experimental ap plica- mina, silicon carbide, graphite, and tungsten,tions–-they are not currently used commercially, in order to improve their toughn ess and high-




800 -

600 -

400 -

200 -

0 1 I I 1 I I I 1

1982 83 84 85 86 87 88 89 90 1991

Years‘Th~~e e~tlrnates, reported ifl 1~, reflect anticipated ‘se ‘n ‘eaPons

systems, aircraft brakes, andengines at that time. Recent changes in programplanning indicate that these needs may be overestimated.

SOURCE: Stanley L Channon, /rrdustria/ Base and Qua/if/cation of Composite Ma?eria/s and Structures (An Executive Overview) (Alexandria, VA: In.

stitute for Defense Analyses, March 1984), working paper, p 43

temperature strength. One p romising exampleis United Technologies’ lithium aluminu m sili-cate glass, reinforced w ith silicon carbidefibers, This material has roughly 10 times thefracture toughness of the unreinforced glass upto about 2,0000 F.

Ceramic matrices that have been examinedexperimentally include alum ina, boron nitride,zirconia, silicon nitride, and silicon carbide,Reinforced with either inorganic materials ormetal wires, these ceramics could possibly be

used in applications with temperatures exceed-ing 3,0000 F. As with glasses, ceramics arereinforced to impr ove their toughn ess. They d onot, in general, benefit from any im provementin high-temperature properties.

Reinforcement of higher temperature ce-ramics has been relatively unsuccessful to d atebecause of fiber strength losses due to fiber andmatrix interaction at h igh fabrication temp era-tures, fiber recrystallization, and fiber fracturedue to abrasion and stress during processing.As a result of these problems, NASA research

has been r edirected to ceramic comp osites em-ploying weak bonding between the fiber andthe matrix and to developing processing tech-nologies that employ lower temperatures andno pressing, Clearly, ceramic/ ceramic compos-

ites will need substantial additional researchand development. They may eventually be usedfor turbine vanes, blades, and cases.

Metal Matrix

Metal matrix composites are relatively new

structural materials. Many metals, includinglead, titanium, stainless steel, magnesium, cop-per, nickel, and zinc, have been experimentedwith, but the m ost highly d eveloped are alumi-num matrix composites. Virtually any metalcan be reinforced; benefits include increasedspecific strength compared to conventionalmetals, improved wear resistance, and higherallowable operating temperatures. However,the gains from reinforcement are often insig-nificant when compared with the costs.

Metal matrix composites are still primarily

laboratory materials. However, some success-ful commercial applications exist. Toyota Mo-tor Co. has developed an aluminum/ aluminacomposite for reinforcing the piston ringgroove in production diesel engines and is de-veloping composite pistons and cylinder heads.In such applications, improved performanceis highly valued, and this has been the justifi-cation for developing metal matrix composites,Table 7-15 shows some potential commercialapplications of metal matrix composites,

Copper composites are under considerationfor use in tran smission lines. Lead is reinforcedfor use in batteries because in certain applica-tions lead lacks the strength to sup port its ownweight. Aluminu m m atrices, containing boron,alumina, or silicon carbide fibers are d esignedto compete with titanium. Reinforcing an alu-minum alloy can raise its allowable servicetemperature by 2000 F, permitting its utiliza-tion in many applications where it otherwisecould not be used. Aluminum / graphite and alu-minu m/ boron comp osites have been developedfor use at 525° F.

Fiber-reinforced sup eralloy (FRS) technology

is under development in the NASA Metal Ma-trix Composite Program, The aim of this pro-gram is to develop the technology to fabricatean FRS turbine blade capable of operating ata surface temperature of 1,100° to 1,200° C




(2,000° to 2,200° F). FRS development has beencarried out almost solely through NASA spon-sorship. With no end user deeply committedto the material, its development pace has beenslow.62

NASA’s development prototype is a cobalt-

free (15 percent chromium) iron-based tungstenfiber-reinforced sup eralloy (TFRS). This exper-imental material has been successfully fab-ricated into a turbine blade, but has not yetbeen engine tested. Cobalt- and nickel-based su-peralloys can be used a s a matrix material, butonly if a protective barrier is provided to pre-vent tungsten/ matrix interdiffusion. Hence, thefirst FRS material likely to be commercializedwill probably be cobalt free.

In addition to their high-temperature prop-erties, TFRSs are good substrates for thermalbarrier coatings (TBC), which also raise enginetemperature capabilities. The thermal expan-sion coefficient of TFRSs is low compared tosuperalloy and approaches that of currentTBC. Such coatings applied to TFRS compo-nents would, therefore, show less tendency tospan (i. e., crack and flake particles off the sur-face) than they do with present superalloy,(Spalling problems prevent TBC from being ap-plied to present superalloy blade and vane airfoils.) Further, regardless of the application of a TBC, the high thermal conductivity of TFRSspermits the use of simpler internal blade ge-

ometries for cooling air, thereby lowering man-ufacturing costs,

Several major technical problems currentlylimit the prospects for widespread use of TFRSs in turbines. The expansion coefficientof the tungsten fibers is approximately one-third that of the matrix. This induces thermalfatigue in a TFRS blade, considerably reduc-ing its life. Also, tungsten fibers oxidize rapidlyat turbine operating temperatures if exposedto the hot gas, Accidental exposure of the fibersin service could lead to rapid failure of theblade. At present, insufficient confidence ex-ists that the probability of such exposure canbe kept acceptably low, even with the applica-tion of a coating,

Ceramic whiskers and fibers also have beenused to strengthen metal matrices. Such rein-forcement is attractive because ceramic whisk-ers and fibers have high strength at ambientand elevated temperatures, high elastic modu-lus, good oxidation resistance, and low density,It has been found that ceramic reinforcement,

usu ally as chopp ed fibers, can significantly im-prove the wear resistance of certain metals.However, results of research with both thewhiskers and the long single crystal fibers havebeen disappointing so far.

One of the major advantages of metal com-posites over polymer composite systems is thatthere is not as large a d ifference between tran s-verse and longitudinal strength. Transversestrength in metal composites is essentiallyequal to the strength of the matrix metal. Anadditional advantage, which can be important,

is that metal matrix composites are electricallyconductive.

Generally, the cost of metal composites is onthe order of 10 times the cost of the matrixmetal alone. Much of this differential is dueto the high raw material cost of the reinforce-ment. Also, processing complexities add sig-nificantly to the total cost. For this reason,metal matrix composites are only consideredfor applications where the value of their addedperformance is great,

Prospects for the FutureAdvanced composites are now entering a

period of rap id grow th. Much of this increaseduse will occur in the transportation industry,where there are significant incentives to de-crease the weight and increase the perform-ance of materials. Over the next 10 years, theaerospace indu stry could rep resent over 50 per-cent of the total high-performance compositesmarket, Significant growth in the automobileand industrial sectors may occur in the late1980s.63

ezparkinson, op. cit. esclark, op. cit., p. 1.




Aerospace Appli cati ons

Most aircraft applications of composite ma-terials do not require high-temperature per-formance and can be satisfied by polymer oraluminum matrix composites in such applica-tions as airframe and structural parts. The useof alum inum matrix composites in these app li-cations rep resents the largest foreseeable mar-ket for metal matrix composites, The down-sizing and redesign, made possible through thereduction in weight, has the potential to reducestrategic materials usage.

Weight reduction in aircraft translates intofuel savings, lower operating costs, and in-creased profits for commercial aircraft; in-creased range, payload, and maneuverabilityfor military aircraft; and reductions in manu-facturing due to parts consolidation in both

cases. The imp etus for substitution of compos-ite materials for conventional m aterials comesfrom market forces alone rather than from anydesire to substitute strategic materials. Con-stant economic pressure can be expected tostimulate materials innovation.

Metal matrix composites, like advancedceramics, ceramic comp osites, and carbon/ car-bon composites also have some potential foruse in the jet engine industry, where the useof composite materials is expected to be per-formance- and market-driven. Cost considera-

tions for jet engine materials will be of second-ary importance relative to the overall cost of the engine.

While substantial technical problems mustbe overcome, these advanced materials couldboost operating temperature above 2,500° F,far beyond even the most advanced superalloysnow under development, However, use of these nonmetallic materials is not expected byNASA for human-rated engines until after theyear 2010—roughly th e same period as for ad -vanced ceramics.

Tungsten fiber-reinforced superalloys will,in all likelihood, be used in jet engines only inthe event of a prolonged crisis in the cobaltmarket. They have not satisfied important relia-bility criteria necessary for serious long-term

consideration as substitutes for conventionalsuperalloys or directionally solidified eutectics.They have not yet seen active operating serv-ice and would require a serious testing com-mitment before acquiring the confidence forindustrial implementation,

Today, carbon/ carbon composites can be fab-ricated into forms that m ay be useful in the gasturbine for combustor liners, cases, afterburn-ers, and nozzles. A one-piece bladed turbinedisc has also been formed, Industrial-researchis at such an advanced stage for low- stress ap-plications that jet engine afterburners made of composites could be in use in 5 years. High-stress app lications are 10 or more years aw ay.The complex qualification procedures used inthe composites industry could affect timing, aswell. These procedures are discussed in the

concluding section of the chapter.Carbon/ carbon composites, despite their ad-

vantages in low-stress applications, cannot beexpected to satisfy high-temperature, high-stress requiremen ts for jet engine ap plicationsfor another 10 to 20 years. Use of these materi-als will depend on developments in oxidationinhibitors and nondestructive testing methods,While materials prices are of negligible imp or-tance when compared to the overall cost of anengine, efficient implementation of these ma-terials in jet engines w ill require a major over-all redesign effort that will be both costly andrisky, Industry seems to believe that govern-ment r isk-sharing w ill be necessary to prom otea rapid development of these novel tech-nologies.

It is not expected that engine blades will bemad e of carbon/ carbon composite materials,if only because reliability criteria for rotatinghigh-stress parts are far from met, and testinghas been far from sufficient. 64

Automotive Applications

Currently, all the major automotive manufac-turers have active development programs in-vestigating the use of advanced composites in

~4c]ark, op, cit., p. 75.




automotive structures. A wide variety of pro-totypes hav e been fabricated of adva nced com-posites, including hinges, brackets, leaf springs,drive shafts, doors, and door guard beams.Many of these components have been testedin actual service over the last few years and

have been found to perform well. Compositeparts equivalent to steel parts in performancehave been built. Significant redesign of thesecomponents has been accomplished to takeadvantage of the design flexibility w hich com-posites offer. Table 7-16 shows the potential au-tomotive applications for Kevlar-reinforcedcomposites.

Composites will also see increased u se in au-tomobile engines. Toyota has used aluminumreinforced with polycrystalline aluminum ox-ide fibers for the connecting rods in an exper-imental engine. Advantages of composite usein engines could include increased fuel effi-ciency, faster engine response, and redu ced en-gine vibration.65

Large-scale use of composites by the auto-motive industry could occur as broader con-sum er acceptance, lower prod uction costs, and

B6Meta] Progress, February 1984, p. 14.

Table 7-16.-Potential Automotive Applications forComposites of Kevlar 49 Aramid

Potential application Reasons for useLeaf springs . . . . . . . reduced weight, stiffness, fatigue

resistanceTransmission

supports . . . . . . . . . reduced weight, stiffness,vibration damping

Drive shafts . . . . . . . .

Bumper beams . . . . .

Radiator supports. . .Anti-intrusion

beams. . . . . . . . . . .

Wheels . . . . . . . . . . . .

Body parts . . . . . . . . .

reduced weight,strength

reduced weight,resistance

reduced weight,



reduced weight,

resistance

stiffness, fatigue

stiffness, damage

stiffness

damage

damage

stiffness, damage

Clutch faces, brakelinings . . . ~ . . . . . . . strength, wear resistance, high

temperature, frictional propertiesSOURCE: Commercial Oppoflunfties for Advanced Composites, A. A. Watts (cd.)

(Philadelphia, PA” American Society for Testing and Materials, 1980),publication 704, p. 119.

design concepts lead to a general expansion of composite materials markets and lower p rices.Corporate Average Fuel Economy (CAFE) reg-ulations have been instrumental in creating anenvironment for novel new concepts of auto-motive designs and m aterials usage. How ever,

these pressures have been relieved by au tomo-tive downsizing to meet CAFE standards in theshort ru n. If CAFE requiremen ts become morestringent and make downsizing less profitablein the U.S. market, polymeric and metal ma-trix composites could be a very importantmeans of achieving weight reduction. Newauto body parts production and assembly tech-nologies, which are likely to affect the use of composites in automotive structures, are ex-pected to see implementation over the next 10years. Use of composites in substantial quan-tities is not expected to increase before the

1990s. The impact of composites technologyon critical ma terials (mostly chrom ium ) will belargely indirect, through weight reduction andperformance enhancement.

Barriers to t he Adoption of Composit es

Comp osites have some major techn ical prob-lems wh ich coun ter the attractiveness of manyof the properties described above and inhibitthe introduction and effective use of thesematerials. There is little doubt that many of these problems will be overcome as the tech-

nology matures,Use of composites in many potential applica-

tions has been discouraged by the lack of estab-lished design practices and insufficient designdata, Additionally, when composites are se-lected for use, they are often used as direct sub-stitutes for conventional materials without re-design. The performance of comp osites in su chcircumstances is often less than optimal. Theimplementation of sophisticated computer-aided design algorithms promises to reducegreatly the complexity of designing for com-

posite structures and allow more effective useof composites,

Another problem of composites is the highcost of raw materials, especially high-perfor-mance reinforcements such as boron, graph-



ite, and aramid. Prices for these reinforcementsrange from $20 per pound to well over $100per pound. For this reason, advanced compos-ites (those with specific properties exceedingsteel) are selected only for app lications w heretheir special properties are highly valued.

Contributing to the high cost is the poorprod uctivity of composite prod uct fabrication.Processing composites is generally labor-in-tensive and time-consum ing. While innovativetechn iques for autom ated, high-speed p rocess-ing have been developed , their use is not wide-spread and is usually limited to forming specifictypes of goods. Moreover, once a nonmetalliccomposite is fabricated, the integrity of thestructure is d ifficult to assess without d estroy-ing the component. This drawback is beingovercome with the advent of nondestructive

tests based on ultrasound and laser holographyand w ith imp roved design p rocedures and in-creased experience in end uses.

Long-Range Order Intermetallic Materials

Materials in which two elements are ar-ranged in an ordered pattern throughout theentire crystal lattice are known as long-rangeorder intermetallics. Although there are manytypes of intermetallics, three families are par-ticularly interesting with respect to the use of strategic materials:

Nickel aluminizes , , ., ... , . . . . . . NiAl and Ni3AlTitanium aluminizes . . . . . . . . . . . . TiAl and Ti3Al

Iron aluminizes . . . . . . . . ., . . . . . . FeAl and Fe 3Al

Non e of the above materials contains any co-balt or chromium, bu t other compound s couldcontain strategic materials. Very little informa-tion concerning long-range order materials ispublicly available, making it difficult to assessthe state of the technology or determine whenit will be commercialized.

Each of these six materials has low densityas w ell as excellent h igh-temperatu re stability,strength, and oxidation resistance. These prop -erties have been known for many years, but thematerials have seen little service because of brittleness p roblems. Their poor d uctility, par-ticularly at low temperatures, results in fabri-

Ch. 7—Substitution Alternatives for Strategic Materials Ž 313

cation p roblems, low imp act strength , and lowthermal shock resistance. Recent research,however, has shown that the ductility can beimproved by microalloying and thermome-chanical treatment, This raises the prospect of using the intermetallics in high-temperature ap-

plications, such as gas turbines, where strate-gic materials are currently used.

Nickel Aluminizes

Single crystals of Ni3Al exhibit good ductil-ity, but p olycrystalline N i3Al is very br ittle. Be-cause of the cost and inconvenience of singlecrystal-technology, monolithic Ni3Al is unat-tractive for most applications.66 Research atOak Ridge National Laboratory has demon-strated that small additions of boron (around0.05 percent) to the polycrystalline form re-

moves the ductility problem.67

Microalloying(doping) with boron makes it possible to ex-trude, forge, and cold roll these materials, Inaddition to being fabricable, these boron-dopedalum inizes have tensile strengths that comp arefavorably with those of Waspaloy, Hastelloy X,and 316 stainless steel.

Possessing high-temperature strength and ox-idation resistance, and adequate ductility andfabricability, boron-doped Ni3Al alloys have po-tential as structural m aterials. The aircraft gasturbine industry is beginning to evaluate thematerial for various applications. Polycrystal-line forms are being considered for discs—operating temperatures up to 1,250° C, or2,280° F, seem possible. Combustor liners andturbine vanes are other possible uses. A sin-gle crystal Ni3Al turbine blade is also of in-terest.

The good oxidation resistance of Ni 3Al re-sults from the formation of aluminum oxidescales, which protect the alloy, Recent workhas shown that alumina-forming materials

88 NiaA] is most commonly known as the dispersion phase[gamma prime) that imparts high-temperature strength to nickel-based and iron-nickel-based superalloy.5TC. T. Liu and C. C. Koch, “Development of Ductile PoIY-

crystalline NiqAl for High-Temperature Application s,” Techni-cal Aspects of Critical Materials Use by the Steel Industry, Vol-ume 1113, NBSIR 83-2679-2, June 1983, op. cit.

38-844 0 - 85 - 11 , ~L 3




have excellent hot-corrosion resistance in coalenergy conversion systems. Such findings sug-gest that aluminizes may be useful as structuralmaterials in sulfiding environments.

Titanium Aluminizes

The du ctility problems of Ti3Al are overcomeby microalloying with columbium (niobium),a second-tier strategic material. Ti3Al is beingstudied in the United States for use in aircraftgas turbine engine comp ressor rotors and bladesand in low-pressure turbine discs, blades, andvanes. These m aterials are potential (albeit ex-pensive) substitutes for some superalloy (e.g.,Waspaloy and Inco 713.)68

Iron Alumini zes

Pratt & Whitney Aircraft has studied these

materials in conjunction with rapid solidifica-tion rate processing.69 The inherent ductilityproblem was removed and an increase in ten-sile strength achieved by microalloying withtitanium diboride (TiB2). The particular inter-est in these materials is for use as sheet forcombustor liners—up to temperatures of 1,800°to 2,0000 F. Iron aluminizes are also of inter-est for turbine discs, blades, and vanes at lowertemperatures, and for cases.

Nickel, titanium , and iron alum inizes are allin relatively early stages of development. While

they have shown great promise to date, muchremains to be learned concerning the full rangeof their material properties.

Rapid Solidification

Many new and potentially useful materialsare being developed using technologies that so-lidify molten alloys extremely quickly. Theserapid solidification (RS) technologies enablematerials engineers to improve current alloysand to explore previously unattainable alloycompositions and microstructure. The effects

~Parkinson, op. cit., p. 49.@@JoSeph Moore and Colin Adam, “Potential of Rapid Solidifi-

cation for Reduction of Critical Element Content of Jet EngineComponents, ” Conservation and Substitution Technology for Critical Materials, Vol. IZ, NBSIR 82-2495 (Springfield, VA: Na-tional Technical Information Service, April 1982).

of this new technology on the use of strategicmaterials are as yet unknown. As emphasizedin a 1983 NMAB study:

Work is continuing in the field of rapidsolidification and its applicability to the reduc-tion of strategic elemen ts. Work to date indi-

cates that this method of processing holdsmuch promise for attaining at least a degreeof independence from su ch elements as cobaltand chromium in various systems of alloys.However, it must again be emphasized that, forcritical alloy applications, the principal moti-vation in alloy and p rocess development is theachievement of improved mechanical, physi-cal, or chemical proper ties, Whether the suc-cessful application of RS technologies will be

accompanied by a redu ction of the use of stra-tegic elements cannot be foreseen at this time.70

Rapid solidification refers to the chilling of

molten m aterials into solids at very high cool-ing rates. Materials are considered rapidlysolidified when they have been cooled fastenough to assume microstructure that cannotbe generated by conventional solidificationtechniques. Cooling rates obtained with RSprocesses are often on the order of millions of degrees Celsius per second.

Because of the heat transfer characteristicsneeded to attain the requisite high coolingrates, RS materials must have high surfacearea-to-volume geometries. This requirementlimits the shapes of RS products to powders,flakes, and ribbons. These are rarely used inthe as-cast form; usually, consolidation andmill working operations are needed. The cast-ing, consolidation, and mill working p rocessesare described in box 7-C.

RS in Strategic Materials Substi tut ion

A vast number of alloy systems have beenrapidly solidified in the course of scientific in-quiry, but commercial interest in RS has beenlimited to only a few classes of alloys. Of these,transition metal-based glasses and aluminum-,

nickel-, and iron-based crystalline alloys seemto have the greatest commercial potential.71 In

PONMAB.406, op. cit., p. 68.

71J. V. Woods, “Rapid Solidification Processes and Perspec-tive Part I I,” Materials and Design, vol. 4, April/May 1983, p. 712.




general, glassy materials are most interestingfor their magnetic or electrical properties,wh ile crystalline alloys are of interest for struc-tur al app lications. Some of the p otential app li-cations of RS materials include:

Aluminu m alloys for aerospace structures.RS aluminu m w ould compete w ith polymeric-and, possibly, aluminum-matrix compositesand titanium in these app lications.72 73

— .pZNa t i O n a l Ma@rialS Advisory Board, Rapidly Solidified (RS)

Aluminum Alloys—Status and Prospects, National ResearchCouncil, Publication NMAB-368 (Washington, DC: NationalAcademy Press, 1981). This unclassified document contains in-

Nickel alloys with abnorm ally h igh refrac-tory m etal concentrations for gas turbines.

Steels with subm icron-sized ph ase disper-sions for higher sp eed bearings.

formation which is subject to special export controls. It shouldnot be transferred to foreign nationals in the U.S. or abroad with-out a validated export license. Distribution is limited to U.S. Gov-

ernment organizations. Other requests for the document mustbe referred to DARPA/TIO, 1400 Wilson Blvd., Arlington, VA27709.

TSC$ Blankenship , panel/Workshop on Critical Questions inRapid Solidification Processing, Rapid Solidification Process-ing, Principles and Technologies, III, Proceedings of the ThirdInternational Conference on Rapid Solidification, Reston, VA,1983.




Amorphous (glassy) eutectic iron alloys withunusual electrical and m agnetic properties forpow er transformers and magnetic applica-tions. Use of RS alloys with good magnetic per-meability coupled with high resistivity can cuttransformer core losses by 60-70 percent. Thiscan greatly reduce energy wastage during

power distribution.74 75

Commercial use of RS is still limited primar-ily for cost reasons. Auto ind ustry experts esti-mate it will be 10 to 15 years before the tech-nology reaches their area. Entry should besooner in aerospace where a lo-percent im-provement in strength-to-weight ratio warrantsa twofold to thr eefold increase in raw materialprice. T’ Based on information gath ered at thefirst Workshop on Rapid Solidification Tech-nology held at the National Bureau of Stand-ard s (NBS) in 1981, the NMAB concluded that :

The primary application of RS crystalline al-loys at this time are superalloy disks for air-craft engines and high speed tool steels . , , andnear-term opp ortun ities for commercial appli-cations of RS alum inum alloys appear limitedto the aerospace industry. 77

Limited commercial acceptance notwith-standing, RS research enjoys substantial sup-port from industry. Pratt & Whitney Aircraft,with the considerable support of the DefenseAdvanced Research Projects Agency (DARPA),has p layed a m ajor role in prom oting RS alloydevelopm ent, Produ ction of RS sup eralloy ma-terial has reached the level of a few thousandpou nds p er year and some d iscs mad e from RSmaterial have been incorporated into jet en-

74’’ Glassy Metals Move Into Production, ” High Technology,March/April 1982, p, 80,75’4Glass-Like Metals Cut Cost and Energy Use, ” Machine De-

sign, Apr. 26, 1984.~Metal Progress, “Trends in Powder Metallurgy Technology,”

January 1984, p. 58.TTNationa] Materials AdvisorV Board, Rapid so~idification

Processing, Status and Facilities;, National Research Council,Publication NMAB-401 (Washington, DC: National AcademyPress, 1982), p. 3. This unclassified document contains infor-mation which is subject to special export controls. It should notbe transferred to foreign nationals in the U.S. or abroad with-out a validated export license. Distribution is limited to U.S. Gov-ernment organizations. Other requests for the document mustbe referred to DARPAITIO, 1400 Wilson Blvd., Arlington, VA27709.

gines.78 79 If processing difficulties can be over-come, it is possible that the suitab ility of d iffer-ent RS alloys for other engine applicationscould be determined in 5 years (with an ex-pend iture of $5 million for each app lication).80

Cobalt-free superalloy powders producedthrough various rapid solidification processeshave been shown in early experiments to havesome advantages over conventionally proc-essed alloys. One p romising example is an ex-perimen tal, cobalt-free superalloy being devel-oped by Pratt & Whitney Aircraft for turbineairfoils. The alloy, which chiefly containsnickel, molybdenum , and alum inum , offers su-perior creep resistance compared to someother hot-section alloys. Moreover, with addi-tion of 3 percent chromium as well as smalleramounts of hafnium and yttrium, the RS alloyhas oxidation resistance exceeding that of al-loy 454 (10 percent chromium), now used inthe turbine blades of the F-100 jet engine. TheRS alloy “offers approximately 1500 F advan-tage in temperature capability over our current(directionally solidified polycrystalline) metalsin the stress range critical for blade design.” 81

Depending on the design strategy, the increasedtemperature capability can be used to improvethe performance, durability, or cost of the en-gine. R&D with this RS superalloy continues,but neither the results nor an estimate of thepossible year of introduction are available.82

The development of rapidly solidified iron-based alloys has received sup port from DARPAand the Army Materials and Mechanics Re-search Center (AMMRC). These two organiza-tions have sponsored a program at MarkoMaterials Inc. aimed at developing RS iron-based alloys for potential high-temperaturestructural applications in the intermediate tem-perature range of 800° to 1,200° F. These new

TWMAFMO1, op. cit., p. 16.Tgcharles River Associates, New Metal Processing Technol-

ogies, OTA contract report, 1983, p. 53.aOJohn K. Tien and Robert N. Jarrett, Potential for the Devel-

opment and Use of New Alloys to Reduce the Consumption of Chromium, Cobalt, and Manganese for Critical Applications,OTA contract report, 1983, p. 9.alMoore and Adam, op. cit.azparkinson, op. cit., p. 48.




RS alloys will be specifically developed toevolve as potential replacements for conven-tional precipitation-hardenable (PH) stainlesssteels, titanium alloys, and iron-based super-alloys.83

Rapid solidification particulate technology

offers great potential for the production of anew family of aluminum alloys that have prop-erties superior to those of ingot alloys. Accord -ing to NMAB, realistic property im provementslikely betw een 1985 to 1990 includ e: 10-per centreduction in density, lo-percent increase intensile strength, 15-percent increase in fatiguestrength, 10-percent increase in modulus of elasticity (stiffness), and usable properties atelevated temperatures (450° F).84 Improve-ments in corrosion and stress corrosion crack-ing resistance are also likely. These alloys arenot expected to replace many strategic mate-

rials directly. Furtherm ore, the new alum inumalloys may contain cobalt and manganese asalloying elements. However, RS aluminum al-loys will probably change the need for strate-gic materials because of design relationshipsin the applications where they are likely to beused.

Though actual in-service experience has n otbeen accumulated, use of these new alloys isforeseen in a variety of aircraft, missile, ar-mored vehicle, and space structure applica-tions. Because of weight savings, significant re-

ductions in fuel costs would be achieved, a’Effective use of the expected improved prop-erties will make these materials potentiallycompetitive with various composite materialsand titanium alloys for selected applications.

as~an jan Ra]~, vlsw~a nathan panchanathan, and Saul Isserow,“Microcrystalline Iron-Base Alloys Made Using a Rapid Solidifi-cation Technology, ’ Metals Progress, June 1983, p. 30,

84N MAB-S6B, op. cit, The improved properties of RS alum i-inure alloys derit’e from \’ery’ small grain sizes, extended solu-bilitj or supersaturation of solute alloying elements, and Ierjrfine dispersions of dispersoid and insoluble particles,WA, [,. Bement and E, C, van Reuth, “QUO Vadis—RSR, ” Rapid

Solidification Processing; Principles and Technologies 11, R, Me -habrian, B. H. Kear, and M, Cohen (eds.) Baton Rouge, LA:

Claitors [publishing [livision, 1980).

Near-term op portu nities for commercial app li-cations, other than aircraft, are limited. Signif-icant commercial applications have not beenidentified, or at least verified, w ith any degreeof confidence. 86

Two RS aluminum alloys have achieved

production status and are being offered as ex-trusions, die forgings, and hand forgings.These are alloys 7090 and 7091, air-atomized700()-series powder alloys that are modifiedwith cobalt additions and have been developedby Alcoa.87 The mechanical properties of 7090and 7091 have been evaluated in several indus-try and government programs. In addition togood streng th and fracture tou ghness, these al-loys have excellent exfoliation and stress cor-rosion cracking resistance. This combinationof high strength and corrosion resistance is su-perior to that of any existing ingot alloy. Two

7090 die forgings will be used as a main land -ing gear support link (an 85-pound finishedforging) and an actuator component for themain landing gear d oors on th e Boeing 757 airtransport. The components offer a 15-percentweight savings over the same parts designedwith conventional alloys. 88

The Air Force Materials Laboratory is cur-rently working on the development of advan cedsecond-generation alloys with improved strengthand ductility properties, improved fatigue andfracture pr operties, increased mod ulus and de-

creased density, and improved elevated tem-peratu re prop erties for service at temp eraturesranging from 450° to 6500 F. Scale-up to pro-du ction status will be initiated w hen ad equateproperties are demonstrated and is expectedto be completed by 1990.89

WIN MA B-368, op. cit., p. 5.IW090 A]uminum—8. (1 7,inc—2, 5 Magnesium- 1.0 (kpper- 1.4

Cobalt7091 Aluminum—6,5 Zinc—2.5 Magnesium-1.6 Copper-O.4Cobalt.

‘8 Stephen Ashley, “RS Alloys Gaining A[;f:e[)tance, ’ .4n]eri-can Metal ~~arket, 9/12/83, p. 13.

aeNMAB-36u, op. cit., p. 2.




Institutional Factors in Substitution

The potential role of direct substitutes andadvanced materials in reducing U.S. strategicmaterial needs depends not only on resolutionof technical problems, bu t also on overcoming

several institutional barriers that may impedetheir development. Several institutional issuesare discussed below, including the generalneed for improved m aterial data man agement,qualification and certification processes in-volved in substituting one metal alloy foranother in critical applications, and factorsaffecting development of advanced ceramicsand composites.

Information Availability and Substitutes

Limited access to m aterials prop erties infor-mation inhibits the use of substitute and ad-vanced materials in many applications. Thelack of a publicly accessible material propertydata base not only discourages direct substi-tution, but also frustrates the design process.In a recent study on material properties datamanagement, the NMAB found that:

Materials properties combined with struc-tural analysis form the basis of mod ern indu s-trial design. International competitive pres-sures are d riving virtually all structural d esignin the direction of greater complexity and in-

creased economies of prod uction and opera-tion. If the U.S. industrial design process is toremain competitive in this environment, engi-neers must have rapid access to a well orga-nized m aterials properties data base.90

Handbooks, the traditional method of pre-senting material properties data, are increas-ingly un able to keep up with d evelopments ina timely manner. Moreover, their methods of organizing the data are too limited. The com-puterized material information sources that ex-ist are bibliographic services that search ac-cording to material properties. However, the

information they prov ide is often cumbersom eto use. According to NMAB:

,. . the citations for a given material are fre-quently so numerous as to render compilationand evaluation for relevancy a very time-con-suming an d expensive task. Further, the inter-

pretation of relevant d ata often is complicatedby the lack of a standard format for presenta-tion and the absence of sufficient informationto properly characterize the material.91

To make the m ost of the wealth of materialsinformation being generated, an on-line mate-rial properties data base with concise, thor-ough, and validated data would be desirable.This base would provide engineers with easyaccess to important information regard ing sub-stitution and design. Benefits of such a system,according to the NMAB study, would include“stimulation of innovative design, decreaseddesign costs, and increased component relia-bility, and, as a result, the U.S. position in theinternational markets would improve.” 92

Such an on-line data base would greatly en-hance the d esign process, especially that basedon computer-aided design (CAD) and com-puter-aided manufacturing (CAM) systems.Also, it wou ld d isseminate a gr eat deal of use-ful information to small businesses, which maynot be able to support a staff of materialsengineers.

There seem to be no technical barriers to thedevelopment of such a data base. A recentworkshop sponsored by NBS, the Committeeon Data for Science and Technology of theInternational Council of Scientific Unions(CODATA), Fachinformationzentrum, and OakRidge National Laboratory (ORNL) found thatthe major problem is selecting the best orga-nization to lead the effort, raise the necessaryfunds, and coordinate the required technicalexpertise. 93

Finally, it should be mentioned that thedearth of easily accessible properties data is a

particularly acute problem for advanced ma-terials, such as composites and ceramics. The

WNational Materials Advisory Board, Materials Properties Data Management–Approaches to a Critical National Need, NMAB-405 (Washington, DC: National Academy Press, 1983).

QIIbid., p. 3.‘JZIbid., p. 33.QaIbid., p. 3 and 102.




great potential of these new materials lies inthe innovative structural designs that theymake possible. However, in order to examinea wide array of structural configurations andto use most effectively the special capabilitiesof the materials, the design process must be

computer assisted, An on-line material prop-erties data base would be an integral part of such a design system, However, not only aremachine-readable data not widely available,but information in any form is d ifficult to comeby. Much of the development work on ad-vanced materials is done by end users (as op-posed to suppliers) who have no interest inpromoting the material outside their compan yor industry. Therefore, properties data are of-ten unavailable for use in other applications.

Qualification and Certification ofAlloy Substitutes

Currently, many promising alloy substitutesare under development that have potential toreduce strategic materials requirements. Actualuse of these materials by industry is problem-atic. Many of these substitute materials will notbe tested and developed to the point wh ere theycan be considered on-the-shelf technologiesthat will be immediately available in a supplydisruption.

A major reason for this is that ind ustry is not

likely to commit resources to qualify and cer-tify new materials that it does not have imme-diate plans to use. Qualification and certifica-tion is needed in many critical applications—those in which substitution could be most im-portant to reduced import vulnerability—yetfew substitutes will be taken through this proc-ess because of the time and cost involved. Thisbarrier appears greatest when there is no evi-dent economic driving force to entice indus-try to engage in the process. Such is the casefor many strategic materials substitutions—government, not ind ustry, is the party w ith the

most concern for making sure that the newalloy gains customer acceptance. In addition,owing to their critical applications, the certifi-cation process for strategic materials substi-tutes is more demanding of time and data,which translates into cost.

Two examples of alloy certification processes—one for stainless steel, the other for super-alloys—are discussed below.

Stainless Steel

As the earlier section on substitution pros-pects suggests, several promising low- or no-chromium alloys could serve as alternatives tocurrently used stainless steels and nonstainlessalloy steels. Actual use of technically promis-ing, lower chromium substitutes will dependon acceptance of these new materials by pro-du cers and end u sers. For many consumer anddecorative steel applications, substitution of anew material is a comparatively simple mat-ter—often entailing a decision to switch by amanufacturer. For critical applications, how-ever, extensive testing and certification is es-

sential before widespread use.In contrast to superalloys, in which com-

pany-oriented qualification of materials pre-dominates, certification of new stainless steelsand alloy steels is usually undertaken throughcommittees of professional societies or tradeassociations, often throu gh voluntary d onationof time and facilities by producers and endusers, Such activities may take 10 years ormore if the immediate need is small, and canslow th e p rocess of user acceptance of replace-ment materials,

An instructive example of the steps entailedin qualifying a new material in a critical ap-plication is provided by the ongoing effort byDOE to qualify a new alloy as a boiler and pres-sure vessel material. The initial steps towarddevelopm ent of the alloy began in 1974, whena task force set up by DOE (then called theEnergy Research and Development Adminis-tration) recommended a program to developreference structural alloys for use in the liquidmetal fast breeder reactor.94 The alloy devel-opment process was sponsored through twooffices in the DOE under an Oak Ridge Na-

g4The history of the 9- I alloy is discussed in P. Patria rca, E.E. Hoffman, and G. W. Cunningham, “Historical Background”in P. Patriarca, compiler, ORNL Technology Transfer for A4eet-ing A New Chromium-Molybdenum Steel for Commercial Ap-

plications (Oak Ridge, TN: Oak Ridge National Laboratory, Apr.7, 1982].




tional Laboratory contract with Un ion CarbideCorp., and in conjunction with CombustionEngineering, Inc. After studying several alter-native alloys, a modified 9Cr-1Mo alloy wasselected for further development, Data devel-opm ent for qu alification began in 1979, but the

alloy has yet to be approved for widespreadcommercial use. The pur pose of the effort w asnot to conserve chromium, but rather to pro-vide a uniform construction material for boilersand pressur e vessels. Figure 7-6 shows the de-velopment “ladder” for this alloy.

Once initial laboratory work had been under-taken, the need to demonstrate reliable trans-fer of properties through scale-up and field test-ing arose. Under arrangements with severalalloy producers, commercial heats (rangingfrom 0,5 to 15 tons) were made using several

commonly used processing practices (e. g.,AOD and vacuum induction melting). Thecommercial heats were then formed into plates,bars, tubes, and pipes, using a variety of fab-

Figure 7-6.— Development of Modified 9Cr-1Mo Steelfor Fossil Fuel and Nuclear Power Applications

r

Foundation of knowledge of alloys A

SOURCE. John K, Tlen and Robert N. Jarrett, Potenfial for the Deve/oprnerrrand Use of New Alloys to Reduce the Consumption of Chromium,Cobalt, and Manganese for Crltlcal Applications, OTA contract

rication processes. To provide additional testdata , mod ified 9Cr-1Mo alloy rep lacements for18-percent stainless steel tubes have been putin service in six conventional powerplants lo-cated in the United States, Canada, and GreatBritain, as shown in table 7-17.

Widespread, nonexperimental use of thissubstitute in powerplant applications is depen-dent first on approval of its specifications bythe American Society for Testing of Materials(ASTM), followed by its inclusion in th e Amer-ican Society of Mechanical Engineers (ASME)Boiler and Pressure Vessel Code,

In May 1981, an application was made toASTM to approve specification of the modified9Cr-1Mo alloy for use in plate and tube prod-ucts, followed a year later by a similar requestfor forgings, pipings, and fittings. The speci-

fications are currently working their waythrou gh the ASTM app roval process, as shownin table 7-18. A data package for inclusion of the material in the ASME Boiler and PressureVessel Code pertaining to nonnuclear applica-tions was provided in June 1982, Additionaldata will have to be collected before the sub-stitute m aterial can be considered for p ossibleuse in nuclear powerplants.

By early 1984, the alloy had been approvedfor certain limited uses in conventional (non-nuclear) powerplants. Additional applications

for the alloy can be expected to be approvedsometime in 1985—9 years after initial designof the alloy. Estimated costs for the post-labora-tory alloy d evelopm ent throu gh th e end of 1983are $5 million by the government (an estimated$2 million has been donated in services by in-dustry).95

Superalloy

As suggested p reviously, several curr ent andprospective materials and technologies couldbe used to reduce cobalt and , to a lesser extent,

chromium use in the hot sections of gas tur-bine engines. Some, perhaps most, of thesemay have the technical potential to reduce stra-

osInformation provided by V. Sikka, Oak Ridge National Lab-oratory.report, September 1983.



Ch. 7—Substitution Alternatives for Strategic Materials 321

Table 7-17.—Current Status of Testing of Modified 8Cr-1Mo Steel Tubes in U.S. and Foreign Steam Powerplants

OperatingTube temperature Tubes being Number Date

Utility Plant location (“c) replaced of tubes installed Status

Tennessee Valley Authority Ki ngston Steam Pl ant, Uni t 3 Super heater 593 Type 321 8 May 1980 Operating

American Electric Power Tanners Creek Unit 3 Secondary 593 Type 304 10 April 1981 Operating

superheater

Detroit Edison St. Clair Unit 2 Reheater 538 Type 347 2 February 1981 OperatingCentral Electric Generating Board (U K) Agecroft Power Station Superheater 590-620 2¼ Cr-1 Mo 6 April 1982 Operating

O n t a r i o H y d r o ( C a n a d a ) Lambton TGS Reheater 538 Type 304H 9 May 1983 Operating

Reheater 538 Standar d 9 Cr-1 Mo 9

Ontario Hydro (Canada) Nanticoke TGS Secondary 538 2¼ Cr-1 Mo 11 April 1984 Planned

superheater

SOURCE V K Slkka and P Patrlarca, L7a/a Package for Modlfled 9Cr-lMo A//oy (Oak Ridge, TN Oak Ridge National Laboratory December 1983), p 28

Table 7-18.–Status of Specifications for Modified 9Cr-1 Mo Alloy

Specificationnumber Description

A-213 T91 . . . . Seamless ferritic and austenitic alloy-steel, boiler, super-heater, and heat-exchanger tubes

A-387 GR91 . . . Pressure vessel, plates, alloy steel, chromium-molybdenum

A-182 F91 . . . . Forged or rolled alloy-steel pipe flanges, forged fittings, andvalves and parts for high-temperature service

A-234 WP91 . . . Piping fittings of wrought carbon steel and alloy for moder-ate and elevated temperatures

A-335 P91 . . . . Seamless ferritic alloy steel pipe for high-temperatureservice

A-336 F91 . . . . Steel forgings, alloy, for pressure and high-temperatureparts

A-199 T91 . . . . Seamless cold-drawn intermediate alloy-steel heat-exchangerand condenser tubes

A-369 FP91 . . . Carbon and ferritic alloy-steel forged and bored pipe forhigh-temperature service

Status as of December 1983

Approved and available as separate

Approved by Main Committee and await-

ing Society BallotApproved by Main Committee and await-ing Society Ballot

Approved by Main Committee and await-ing Society Ballot

Approved by Main Committee and await-ing Society Ballot

To be submitted for AI.06 Subcommitteeapproval



SOURCE: V K. Sikka and P Patriarca, Data Package for Modified 9Cr-lMo Alloy (Oak Ridge, TN: Oak Ridge National Laboratory, December 1983), p. 5

tegic materials without imp airing the advan ces

in performance so critical to the m ilitary. How -ever, aside from those that are already fully de-veloped, most of these potential substitutes stillface massive R&D costs, and , if they prove via-ble, large scale-up and qualification costs.Given industry’s little incentive to assume thesecosts itself, unless clear performance and costbenefits would also accrue, most of the re-sources available for qualifying new super-alloy are dedicated to prospective materialsto be used in the next generation of jet engines.

Successful commercialization of a new su-

peralloy for the hot section of a gas turb ine en-gine can take two decades, beginning with theresearcher’s idea, th rough laboratory p roof-of-concept, to engine testing and eventual com-

mercial application. Many research ideas never

reach the laboratory stage, and of those thatdo, only some show technical promise.

Even when technical problems can be over-come, institutional barriers can add appreci-ably to development time or can indefinitelydelay work on the project. Given the protractedtime period involved, wha t may have been ini-tially seen as a clear need for a new materialmay not be relevant a decade later. Many su-peralloy development efforts are cost-sharedbetween government and industry, which addsto the risk that R&D priorities will change d ur-

ing the course of the project. Coordination of research may also be difficult. By the time com-mercialization of a superalloy is successfullyreached, several different government agen-




Photo credit: U.S. Oepatiment of the Interior, Bureau of Mines

Aluminum and silicon can reduce the need for chromium in stainless steels for high-temperature applications. A 5-percentaluminum addition to a Bureau of Mines 17Cr-8Ni research alloy (center) enormously improves oxidation resistance after380 hours at 1,000° C compared to type 304 (18Cr-8Ni) and type 316 (18Cr-12Ni) stainless steels. The research alloy is under

investigation as a possible high-performance alternative to the 25 percent Cr-20 percent Ni stainless steels

cies, universities, and companies may becomeinvolved—each with its own specific objec-tives, personnel, and priorities.

Typically, laboratory findings must be veri-fied in large-scale industrial heats. It is only atthis stage that the technical validity and man-

ufacturing practicality of the process can beknown with assurance, and it is only at thisstage that the expensive and time-consumingprocess of engine qualification can begin.Designer and user acceptance of the new ma-terial will occur only wh en th ere is confidenceabout its reliability and performan ce at accept-able costs.

Figure 7-7 shows key steps that must be over-come in the successful commercialization of a new superalloy, using Inconel MA 6000 asan example. Inconel MA 6000 contains no co-

balt, but its initial development had n othing todo with conservation of strategic materials.Rather, the key objective was to develop a tu r-bine blade material able to operate at a highertemperature than other superalloy, while

avoiding the p erformance penalties associatedwith the need for cooling air.

The origins of Inconel MA 6000 date backto 1968, with the invention by a researcher atthe International Nickel Co. of a mechanicalalloying process for producing oxide disper-

sion strengthened superalloy. In 1974, NASAentered the picture by providing Inco with sup-port to design an alloy composition that be-came MA 6000. In time, university research-ers and several manufacturers of jet enginesbecame participants in the project as it ad-vanced throu gh scale-up to its present status—preparation for engine testing. If successful, itwill probably be another 5 years before MA6000 is actually used for turbine blades andvanes in human-rated jet engines. Using 1974as a starting date, 15 or more years—and anestimated $10 million to $12 million—will have

been consumed in the development of this onecobalt-free superalloy.

Development costs associated with an en-tirely new superalloy may be greater than for



— —— .


Figure 7-7.—Technology Transfer Ladder for ODS MA 6000

I

SOURCE Joseph R. Stephens and John K. Tlen, Considerations Of Technology Transfer Barriers in the Modification of Stra-t.9QiC Supera//oys for Aircratf Turbine Er?glrres, NAsA Technical Mernorarldurn 83395 (Springfield, VA’ NationalTechnical Information Service, 1983)

a superalloy with a modified composition. Forexample, the low- or no-cobalt COSAM alter-natives are intended as su bstitutes for existingsuperalloy. If the alternative materials werecommercially used, it is probable that on ly mi-nor adjustments in manufacturing and fabri-cation processes would be needed, In this re-gard, NASA’s proposed fiscal year 1985 budgetearmarks $50,000 for preparing several testheats of one of its four low -cobalt, alternativesuperalloy. Figure 7-8 shows steps taken todate and add itional development required forthe COSAM superalloy.

Institutional barriers to continued develop-ment of the materials are formidable, even if their technical promise is favorable. In the caseof the low-cobalt COSAM alternative super-alloy, post COSAM augmentation efforts

could requ ire 6 to 7 years and $6 million to $9million, assuming real-time testing require-ments and typical scale-up activities for eachmodified alloy. Since the COSAM alternative

superalloy w ould substitute for already used,widely accepted, higher cobalt superalloy, nosingle comp any is likely to be comm itted to as-suming such a development effort simply forthe purpose of contingency planning for ahypothetical future cobalt shortage.

Institutional Barriers and Advanced Materials

Advanced m aterials face a num ber of institu-tional barriers before being adopted on a major scale. As comparatively new technologiesand new industries, they need the support of more complete and reliable data than is cur-rently available and of innovative design whichuses the materials to their best advantage. Inthe end, final acceptance of advanced materialsby engineers, designers, and consumers will

come only from experience in use. The Fed-eral Government’s efforts focused on these newmaterials can assist in this adoption processand promote the growth of new industries.




Figure 7-8.—Technology Transfer Ladder for COSAMStrategic Material Substitution

SOURCE Joseph R Stephens and John K Tien, Considerations of Techrro/ogy Transfer Barr/ers in the Modification of StrategmSuperalJoys for Aircraft Turbfrre Engfnes, NASA Technical Memorandum 83395 (Springfield, VA Nattonal TechnicalInformation Servtce, 1983)

Ceramics Data Base Requirements, Standards,and Qualif icati on Processes

The properties of ceramic components andthe materials from which they are made—andthus their usefulness for any particular ap-plication—can vary depending on their chem-ical formula and the methods by which theyare pr odu ced. One of today’s largest single in-stitutional constraints to expanded structuralusage of ceramics is the poor quality andlimited availability of information on thesevariable material properties. The technologyneeds not only the application of standardizedtest pr ocedu res (specific to materials and proc-essing and the effect of different temperatureand chemical environments over time) and a

systematic collection of available informationbut also research efforts devoted to producingthe information.96

geThe National ~ureau of Standards recently announced theestablishment of a Ceramic Powder Characterization Labora-

Designer Preference and Education

Produ ct design engineers select m aterials onthe basis of past experience and available data.Few structural design engineers have experi-ence with ceramics (less so with composites).As stated above, reliable data about materialproperties are scarce, and in general, formalcodes and specifications do not yet exist, Suchdata bases normally serve as guides for engi-neers working with unfamiliar materials,

In general, the formal edu cation received byengineering students is deficient both in knowl-edge obtained about advanced materials andin how to incorporate that knowledge into de-sign work. For instance, materials courses arenot generally requ ired of mechanical engineer-

ing students, and if they are, the emphasis ison metals. Educational institutions are reluc-——

tory (IVZ?S Update, June 11, 1984). The laboratory will help man-ufacturers by providing them with information on powder char-acteristics.




tant to adjust long-established curricula to elim-inate such deficiencies and may often be con-strained by bud gets from d oing so. In a broadercontext, the base of 10 to 15 universities in theUnited States with programs in ceramics maybe insufficient to meet the future research

needs of a rapidly expanding industry,

Industry in Transition

The advan ced ceramics indu stry is being cre-ated out of discrete parts of other industries.The matu re trad itional ceramics ind ustry, con-servative because of a history of stable andprofitable years, is only now examining newpossibilities. This change in perspective maybe a result of recent depressed conventionalmarkets (linked to the steel industry) and talkof futu re competition from abroad . Most of the

innovations in the industry, however, appearto come from end users rather than from theproducers. Much of the research conducted byend users naturally leads them into becomingmaterials processors in order to maintain thenecessary tight control over this critical step.Other segments of this emerging industry arethe expansion into advanced ceramics by con-glomerates and conventional materials firmsthat sense future market changes.

This merging process means that there is nofocal point, no industrial champion for ad-vanced ceramics. As yet, no industrial associa-

tion or organization is charged with research,development, or product data specification.The established professional association—theAmerican Ceramics Society—provides a forumfor the exchange of technical information. Itdoes not, however, have a technical sectiondealing with advanced ceramics as a separateissue. Recently, it has begun to collect data onindustry production of advanced ceramics andform a standardized data bank. With little in-formation yet available about th e organizationof the industry and its participants, govern-ment data collection centers, such as those of the Department of Commerce,97 EPA, and

971 n f. rrnat iO n is hegi n n i ng to emerge, however. See, for in-stance, U.S. Ilepa rtrnent of Commerce, A Cornpetititre Assess-ment of the [;. S. ,4d\anced Ceramics lndustr~-, March 1984.

OSHA, do not yet aggregate advanced ceram-ics data separate from that of the traditionalceramics industry.

Government Research

Currently, several agencies are involved inmany aspects of advanced ceramics research:primarily, DOE, Department of Defense, NASA,and NSF. Those interested in the advancementof the technology express concern over the un -certainty from year to year over adequacy of funding, the direction of funding, and possi-ble lack of coordination which may lead toduplication of effort.

The bulk of the research effort is focused onthe high potential (in terms of market size,energy efficiencies, and strategic materials sub-

stitution) heat engine applications. While thismay be approp riate from an app lications p ointof view, questions remain as to whether con-centration on major development projects isthe best way to advance the science of ad-vanced ceramics and whether this approachwill contribu te to the bu ilding of a firm, broadbase of technical knowledge for the support of a comp etitive dom estic indu stry. Sup porters of the concept argue that the technological baseis broadened by focusing on the developmentof a major application, since success requiresan iterative process in which researchers must

continually return to basic science in order tosolve problems encountered in the develop-ment p hase. Others worry that, by pushing thedevelopment phase at the expense of basic re-search, application failures which occur willresult in generating negative impressions of theultimate capabilities of the technology.

The current contractors on the ceramic heatengine projects have plans to commercializethe technology eventually, but a technology gapwill exist after the proof-of-concept stage isreached by governm ent R&D efforts. The skillsdeveloped in designing the ceramic compo-nents of experimen tal engines w ill be transfer-able to engines designed with the consumer inmind . But ind ustry w ill have to be firmly con-vinced of the technology’s viability to be will-ing and able to take on expensive and lengthy




developm ent costs before ceramic heat enginesare ready for the marketplace.

Until recently, there was no Federal officewith a specific mission to p romote, coordinate,and focus the governmen t’s R&D efforts in ad -vanced ceramics. (As is discussed in chapter

8, the National Critical Materials Act of 1984establishes a council in the Executive Officeof the President that is to formulate a Federalprogram plan for advanced materials.) It is cur-rently difficult to obtain a comprehensive over-view of the R&D efforts of the various agen-cies and to determine whether there is anyoverlap of effort. Table 7-19 provides a break-down by agency of estimated Federal Govern-ment R&D for stru ctural ceramics technology.This reflects internal shifts of program empha-sis and is a result of a growing awareness inmany sectors of the important role that ad-vanced ceramic technology could play in fu-ture U.S. economy.98

DOE has initiated some steps to cope withthe lack of available information. Its Oak Ridge

National Laboratory (ORNL), in its CeramicTechnology for Advanced Heat Engines Pro-gram Plan,99 provides a breakdown of the fundscommitted by various agencies for R&D in ad -vanced ceramics considered app licable to heatengine technology. The Advanced Materials

Development Program at DOE is developinga computer-based data system which, whencompleted, will provide continuing—and sys-tematically collected—information on the R&Defforts in structural ceramics of Federal Gov-ernment agencies.

Even with these statistics available, overlapof effort is d ifficult to assess. The d ifficulty lies,in part, in the large and growing number of ad-vanced ceramic materials, each designed withspecific properties for specific applications(similar to metallic alloys). While the knowl-edge gained from success in one application,if transferred, can advance the use of similarceramic materials in another ap plication, a ma-terial designed for a specific application can-not necessarily serve “as is” elsewhere.

SeRobert B. Schulz, Program Manager, Advanced MaterialsDevelopment Program, Department of Energy, personal com-munication, Oct. 4, 1984,

W3ak Ridge National Laboratory, Ceramic Technology for Ad-vanced Heat Engines Program Plan, ORNL/TM-8896, June 1984.

Table 7.19.—Structural Ceramic Technology Federal Government Funded R&D (in millions of dollars)

Fiscal year Fiscal year Fiscal year Fiscal year1982 1983 1984 1985

Department of Energy: q Conservation and renewable energy:

— Heat engine propulsion . . . . . . . . . . . . . . . . . . . . . . . . . . . — Industrial programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — Energy utilization research. . . . . . . . . . . . . . . . . . . . . . . . .

. Fossil energy: — Advanced research and technology development . . . . . — Advanced energy conversion systems . . . . . . . . . . . . . . .

“ Energy research: — Basic energy science . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

NASA: q Lewis Research Centerb. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

NSF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Department of Defense:q Defense ARPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .q U.S. Air Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

s U.S. Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. U.S. Navy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 9 . 31.50. 3

1.21.9

2.0

1.8

2.7

2.01.7

1.31.0

$26.7

$14.61.00.5

1.0

3 . 0a

3.0

2. 9

7.73.0

4.7C

1.2

$42.6

$15.52.30.6

1.0

3. 0

3.53.3

9.53.4

6.0C

1.3

$49.4

$13.62.72.0

1.0

3.0

4.6

3.6

7.74.7

2.5C

1.4

$46.8aReflects increase in portion of budget applied to structural ceramics.blnclutjes salaries for manpower.CTACOM included.SOURCE: U.S. Department of Energy, Advanced Materials Program, October 1984



Despite the lack of official oversight, coordi-nation among agencies has apparently im-proved in recent years. The ORNL programplan on ceramic heat engine technology wasdeveloped to identify technology base needs;develop a multi-year technical and resource

agenda; and coordinate activities with other in-du stry, government, and university programs.NASA holds regular and frequent meetingswith DOE that now include DARPA and theAir Force. Each fall, an interagency meetingis held for all the participants from govern-ment, industry, and academia working on cer-amics in heat engines,

NASA’s Lewis Research Center has also de-veloped a new comprehensive ceramics pro-gram proposal but funding was not includedin the fiscal year 1985 budget, The program’sgoal, while focused on the aircraft engine asthe application, was to broaden the ceramicstechnology base in general.

The National Science Foundation, under itsindu stry and university cooperation program,has funded the Center for Ceramic Researchat Rutgers University. This center has beengranted pu blic fund ing for 5 years with the in-tent that it will be able to generate sustainingprivate funding of its research efforts withinthat period. Research areas in which the Cen-ter is involved include, among other things,powder processing technologies and improve-

ment of materials properties.

Qualification, Certification, and Standardizationof Composites100

Comp osites are engineered ma terials, and assuch are very sensitive to a multitud e of struc-tural and processing factors. This character-istic is very beneficial, because it gives de-signers great control over the properties of comp osites, allowing the tailoring of thesematerials to ind ividual applications. However,

l~Thls section draws heavily on Stanley L. Channon, ‘ ‘Indus-trial Base and Qualification of Composite Materials and Struc-tures (An Executive Overview)” (Alexandria, VA: Institute forDefense Analysis, May 1984). Presented as a working paper fora Department of Defense-sponsored colloquium/workshop onComposite Materials: Standardization, Qualification, Certification,Washington, DC, May 1984,


with the greater design flexibility also comesthe need for strict materials and processing tol-erances during production runs, Addressingthe concerns arising from the sensitivity of composites to each manufacturing step, thecomposites industry has adopted elaborate cer-

tification and qualification schemes. These pro-cedures are needed to ensure the quality anduniformity of the various m aterials, through themany times they change hands, used in theproduction of composites.

Qualification and certification is more com-plex for composites than for traditional mate-rials for several reasons,

The composites industry is very fragmented–there is very little vertical integration. Thereare many processing steps entailed in the pro-du ction of composites, and rarely, if ever, does

one company engage in all these segments of the business. Most composites companies arespecialized, each concentrating on a segmentof the industry,

While this may not increase the amount of testing needed to ensure product quality anduniformity, it causes confusion with regard totesting needs and data interpretation.

Composites are fundamentally different intheir structure and behavior than traditionalmaterials. The well established testing andcharacterization techniques used for tradition-

al materials are not suited for comp osites. Ap-propriate composites testing techniques havebeen developed, but on an ad hoc basis withlittle industrywide agreement.

There is no uniform procedure for certify-ing and qualifying composite materials andstructures; every product is handled differ-ently, on a company-by-company basis.

The composites industry has no industry as-sociation to pursue the interests of the compos-ites ind ustry as a wh ole. There is no organ iza-tion through which the industry can work on

qualification, certification, and standardizationproblems common to many of the involvedcompanies.

Developing the data package necessary forqualification of comp osite materials and struc-




tures is very time-consuming and expensive(especially considering the small quantities of materials often associated with compositeorders). The battery of tests required to qual-ify a material may cost $20,000 to $200,000 ormore, depending on the scope of testing. While

these costs are borne by the composites userfor the initial supplier’s material, alternate sup-pliers may be required to assume part or all of their qualification costs. The new suppliersmay be required to perform costly full-scaletests if bench-scale evaluation suggests signif-icant differences between their material andthe primary material. Qualification of a newsupplier for an existing material may require3 to 6 mon ths for most structural app lications.Whenever any change is made in the compos-ites used in rocket nozzles, full-scale test-ing—taking up to a year—is required. This

costly testing limits the number of suppliers forany given application.

In addition to being costly, the complexityof the qu alification p rocess may discourage in-novation. Once a comp osite has been qu alifiedfor a particular u se, changes in the m aterial orits production are usually disallowed for thatapplication. This, along with designers’ pref-erence for proven materials, tends to restrictthe number of available qualified materials.

There is also a need for standardization of material specifications and test methods for

composites, Standards are currently generatedby a variety of government and indu stry groups,but it is customary to rely on specificationsfrom fiber and resin su pp liers. The governm entspecifications are rarely u sed because th ey aretoo broad or ou t of date. Indu stry groups su chas the American Society for Testing and Materi-als (ASTM), the Am erican National Stand ardsInstitute (ANSI), the Society of Automotive

Engineers (SAE) and others generate compos-ites standards, but the process is slow and oftenincludes compromises accepted in order tobroaden the applicability y of the specifications.ASTM test method s find frequen t use in indu s-try, but many companies develop their own test

methods because of preferences in testingequipment and procedures.

Regarding the need for standardization of composite materials, a recent industry surveyconcluded:

Although the majority of industry and gov-ernment personnel would prefer to see stand-ards ad opted for the composites industry, it isrecognized th at this w ill not be accomplishedeasily. A major resistance to standar dizationemanates from the suppliers of materials whofear that the identity of their materials wouldbe lost. , . Some opp onents to standardization

feel that th is would retard technological inno-vation in the industry whereas proponents feelthat the industry will advance more rapidly if standards are ad opted. Some feel that the tim-ing is inappropriate for standardization be-cause the indu stry is still in a dynamic state. 101

Composites technology also faces other in-stitutional barriers similar to those for ce-ramics, although it is probably far ahead inmost aspects, The technology has found its major application in the aircraft and automotiveindustries and has been sup ported and p ushedby those industries and by the government. Theextensive government research in compositeshas been centered p rimarily in the Departm entof Defense. The interest in composites for usein m ilitary aircraft, and the accompany ing lackof public information, however, has been blamedfor slowing technology transfer between thegovernment, academia, and industry.

101 Ibid., p. 22.



CHAPTER 8

Policy Alternatives for Strategic Materials



CHAPTER 8

Policy Alternatives for Strategic Materials

The central premise that underlies concernabout strategic materials can be stated as fol-lows: the United States must import a numberof materials that are essential to the national

defense and to domestic industry. For a num-ber of these materials, the bulk of the supplycomes from countries or regions that are eitherpolitically unstable or ideologically hostile tothe Un ited States. As a result, the Un ited Statesmay face disruptions in the supply of thesematerials, disruptions that could be damagingto the national defense or industrial strengthof the country.

The National Defense Stockpile and the pri-ority allocation system prov ided u nd er the De-

fense production Act address the problem of maintaining an adequate supply of materialsfor national defense. These policies and pro-cedures, however, are not meant to protect theU.S. industrial economy from disruptions inthe supply of strategic materials except in timesof war or national emergency.

The technical approaches that are the subject of this report can help reduce the vul-nerability of the United States to disruptionsin the supply of strategic materials. The ap-proaches can be group ed into th ree categories:

mineral production and processing, conserva-tion and recycling, and substitution. Policyoptions for the implementation of these ap-

proaches, including the formulation of coordi-nated Federal str ategies for strategic materials,are the subject of this chapter.

Two general observations apply to the dis-cussion in this chapter. First, most of thesetechnical approaches are long-term in nature.Some of the alternatives, such as the develop-ment of substitute materials for the most de-manding applications, may require 10 years ormore to be brou ght to fruition. Second , privateindustry, not the Federal Government, is theprimary producer, importer, and consumer of strategic materials. Therefore, it is private in-du stry that w ill make most d ecisions about th elocation of new mineral development, about

the use of conservation and recycling technol-ogies, and about the development and use of substitute materials.

The Federal Government can influence pri-vate decisions through such actions as supportof research and development or use of tax andother economic tools to influence investments.The degree of government involvement consid-ered appropriate or desirable depends on thepolicymaker’s assessment of the likelihood andeffect of supply disruptions, on his or her phi-losophy of the relationship of government and

industry, and on the economic and technicalresources available for this issue in the widerange of national affairs.

Potential Contributi on of Alt ernatives to Speci f ic Material Supplies

Prospects for redu cing vu lnerability must beassessed on a material-by-material basis. Thepotential contribution of each alternativediffers for each strategic metal under exami-nation; however, taken in sum, these alterna-tives can contribute significantly to net redu c-tion of U.S. vulnerability to disruptions of supplies of strategic materials.

Table 8-1 illustrates how each technical alter-native relates to the first-tier strategic materials(chromium, cobalt, manganese, and platinumgroup metals) that are addressed in detail inthis study. These alternatives are summarizedbriefly below. Detailed discussion of the tech-nical alternatives to import vulnerability is pro-vided in chapter 5 (produ ction and processing),

331



Table 8-1.—Technical Prospects for Reducing U.S. Import Vulnerability for Chromium, Cobalt, Manganese, and thePlatinum Group Metals

Chromium (Cr) Cobalt (Co) Manganese (Mn) Platinum group (PGM)

U.S. apparent consumption 319,000 short tons(1982)a

U.S. import dependence (1982 )a85%Recycling in 1982 12%

(purchased scrap)b

Domestic production in 1982a 0%

5,592 short tons 672,000 short tons(1 1,184,000 Ibs)92°/0 9 9 0 / o

61 short tons(1,787,000 troy ounces)800/019°/0 (excludes toll refined)80/0 Not estimated

0 % About 2°/0 of apparentconsumption

About $1.58-$1.68 per longton unit (22.4 pounds) of 46to 48°/0 of Mn metallurgical

ore.$197 million

0.40/0 of apparentconsumption

Dealer Price:platinum —$327/troy oz.;palladium —$67/troy oz.

Price in 1982 a Turkish chromite: $100/short ton($110/metric)South African: $47/short ton

($52/metric).$120 million

Cathode 99°/0 Co:$12.90/pound

Value of imports into theUnited States in 1982C

(including gross weight)Import sources (1979-1982)a

(Bold-faced countries areprimary producers)

$143 million $554 million

Chromite:South Africa (480/o);U.S.S.R.(170/0); Philippines (130/.); Other(220/0). Ferrochromium: South Africa(440/o); Yugoslavia (90/.); Zimbabwe(90/.); Other (380/.).

Ore: South Africa (330/0);Gabon (260/o); Australia(200/0); Brazil (120/0); Other(9%) Ferromanganese:South Africa (430/.); France(260/o); Other (31 O/O).

South Africa (400/o); U.S.S.R.(370/o); remaining 23°/0(distributed among 8 coun-tries) represents reserves inexcess of 200 million shorttons.

Zaire (37%); Zambia (130/o); Canada ( 8 0 / 0 ) ;

Belgium-Luxembourg( 8 0 / 0 ) ; Japan (70/o);Norway ( i ’ ” / o ) ; Other l sO /o) .

South Africa (560/o); U.S.S.R.(160/O); U.K. (11 O/O); Other (l T”/o).

Location of major worldreservesd

South Africa and Zimbabwe (920/o); theremaining 8 ° / 0 , distributed amongmore than 10 countries, representsreserves in excess of 100 millionshort tons of chromite. Chromitetypically ranges from 22 to 38°/0chromium content.

Very good for noncritical applications;for critical applications, extensiveapplied R&D will be needed. Basicresearch breakthroughs may beneeded to develop substitutes in themost critical applications.

Fiber-reinforced plastics and someother composite materials may com-pete with stainless steels in somecritical applications over time.

Zaire (500/0); Zambia (130/0); Cuba (70/.);U.S.S.R. (50/o); the remaining 250/. ofworld reserves (2 million short tons) isdistributed among 12 countries.

South Africa (790/o); U.S.S.R.(190/0); remaining 20/0 (20 milliontroy ounces) is in Canada, theU. S., and Columbia.

Prospects for increasedsubstitution

Good for many applications; additionalR&D needed for critical applicationssuch as superalloys. Qualificationrequirements may limit practical use ofthese substitutes.

Poor—substitutes for Mn insteelmaking (whichaccounts for 900/0 of con-sumption) are not promising.

Alternatives to PGM exist in manyapplications; in critical applica-tions, prospects for directsubstitution are poor in the nearand medium term.

Potential for displacementby advanced materials

Reasonable prospects for incrementalphase-in of advanced materials in nearand medium term; long-term prospects(2010 and beyond) may be great in heatengine applications.

Limited: various compositesmay compete with steel inspecialized applications.

Breakthrough in basicresearch is probablyneeded for other materialsto replace PGM as a catalyst.

Potential for increasedrecycling

Good—major obstacles are economic.Reduced downgrading, improvedobsolete scrap recovery, andrecovery of Cr values from steel-making wastes appear to be the ma-

jor opportunities, although data isout-of-date. Scrapped catalytic con-verter shells could become source ofCr; recovery of Cr from steel makingwastes also may add to supplies.

Good—economic factors are primaryimpediments to recycling, althoughadvanced technologies may have to bedeveloped to maximize recovery ofsuperalloy scrap. Obsolete superalloyscrap, spent catalysts, and otherpostconsumer uses will be a growingpotential source of cobalt. For 1980, anestimated 2,350 short tons (4.7 millionIbs) of Co was not recycled or was

Poor—unless technicaladvances make Mn recoveryfrom slag economical.

Excellent—recycling of PGM fromautomotive catalysts could pro-vide 400,000 to 500,000 troyounces of PGM annually in themid-1990s. Obsolete electronicscrap could also be a majorrecycling source if high costs ofdisassembly are overcome.

downgraded.




chapter 6 (conservation and recycling) andchapter 7 (substitution and advanced ma-terials).

Chromium

The United States is dependent on SouthAfrica and the Soviet Union for most of itschromium, half of which is used in stainlesssteels. Major opportunities exist to conservechromium, especially in nonessential applica-tions for stainless steel where substitutes (e.g.,aluminum and plastic) are widely available. Forcritical applications, some promising lowerchromium stainless steels are now under de-velopment—primarily by government. Thesewill need substantial additional work beforethey will be available for use. In some appli-cations, chromium is so essential that a break-

through in basic research may be needed tofind substitutes. Although recycling of stain-less steel scrap has reached a high level, re-du ced d owngrading and improved recovery of obsolete scrap and steelmaking wastes couldhelp add to chromium supplies . Becauseknown domestic chromite deposits are verypoor in quality, diversification of foreign sup-pliers may be a more attractive option than de-velopment of known domestic chromite depos-its. Discovery of higher quality domesticchromite deposits appears unlikely but cannotbe ruled out.

Cobalt

Of the first-tier strategic materials, cobaltoffers the greatest range of technical alterna-tives to current supply patterns, which aredominated by Zaire and Zambia. Ongoing man-ufacturing trends in the aerospace ind ustry areencouraging highly efficient use of cobalt inthe fabrication of jet engine parts, and thistrend is likely to continue in the future. Withadvances in recycling technologies, it shouldbecome technically possible to recover much

more of the several million pounds of cobaltcontained in downgraded scrap or waste thatis not recovered each year. Substitutes are al-ready available for cobalt in many applications.In addition, some low-or no-cobalt substitutes

have been developed which could replace co-balt in some superalloys-–the application of greatest concern because of their importancein jet engines. These will need to be thoroughlytested and qualified for use before they can beemployed. Over the long term—beyond the

year 2000—promising advanced materials mayincreasingly be u sed in jet engines, potentiallyreducing the need for superalloy (and hencestrategic materials) in this critical application.

Evaluations of known domestic deposits sug-gest that more than 10 million pounds of co-balt could be produced annually for a 15- to 20-year period if the four most promising siteswere developed simu ltaneously. At current co-balt prices, none of these sites would be profita-ble to develop. Moreover, at some sites, cobaltwould be a coproduct or byproduct of othermetals produ ction so that p rodu ction econom-ics would not depend on cobalt alone. Federalsubsidies, such as a guaran teed purchase price,would probably be needed for a protractedperiod for sustained cobalt production tooccur.

Manganese

Options for reducing U.S. reliance on the So-viet Union and South Africa for manganesesupplies are largely limited to conservation insteelmaking and developing greater diversity

among foreign su pp liers. The ongoing p rocessof upgrading U.S. steelmaking facilities andprocesses shou ld m ake it possible to redu ce to-tal manganese requirements (excluding homescrap) for each ton of steel from about 36 to

25 pounds by the year 2000. Manganese fer-roalloy requirements, especially, could be re-duced–falling from about 16 to about 8.3pounds per ton by the year 2000. A commit-ment to changing supply patterns to reducereliance on South Africa and the Soviet Un ioncould also reduce U.S. vulnerability, since sev-eral other major foreign producers exist. As

with chromium, v irtually no exploitable d omes-tic manganese dep osits are know n at this time.Unless a major new deposit is found, prospectsfor significant domestic production will remainslight.



.

Ch. 8—Policy Alternatives for Strategic Materials 33 5


Alternatives for reducing U.S. dependencyon South Africa and the Soviet Union for plati-num group metals (PGMs) include increasedrecycling of automotive catalysts and elec-

tronic scrap and development of domesticPGM dep osits. Between n ow and 1995, the an-nual amount of potentially recoverable PGMfrom scrapped cars will grow from about110,000 to 700,000 troy ounces or more, If 500,000 troy ounces of this were to be recycled,an amount of PGM equivalent to 25 percent of 1982 U.S. PGM consumption for all uses wouldbe added to U.S. supplies. PGMs are of such

high cost that they are used very efficiently,and the incentive for conservation is high . TheUnited States also has one of the world’s mostpromising deposits of PGM that has yet to beexploited in the Stillwater Complex of Mon-tana. One mine site in the complex is now be-

ing evaluated for possible production, raisingthe p ossibility of appreciable dom estic prod uc-tion by th e end of the decade. Initial plans callfor production of about 175,000 troy ounce of PGM, about 9 percent of total U.S. consump-tion in 1982. Over the long term, much higherproduction levels may be achievable if addi-tional sites within Stillwater and elsewh ere arebrought into production,

Existing Laws and Strategic Materials Policy

There are many ways in which the FederalGovernment can assist and guide the privatesector in implementing the aforementionedtechnical approaches if it chooses. Optionsrange from dissemination of information anddata, to sponsorship of research and develop-ment (R&D), to provision of incentives and sub-sidies to encourage private actions. Over theyears, congressional concern about strategicmaterials has led to adoption of several lawswh ich p rovide a relatively comprehensive stat-

utory framework for Federal activities of thiskind. Laws such as the Defense Production Actand the Strategic and Critical Materials Stock-piling Revision Act provide basic authorizationto und ertake a full panop ly of activities relatedto strategic materials, such as development of substitutes, development of processing technol-ogies, and development of domestic productioncapabilities when such activities are deemednecessary for national security or would helpachieve stockpile objectives.

Two recent Federal laws have emphasizedthe need for high-level executive branch pol-

icy coordination of strategic materials R&Dactivities. The National Critical Materials Actof 1984 directed the establishment of a NationalCritical Materials Council in the Executive Of-fice of the President to assist in executive

branch strategic material policy formulationand coordination, and oversee a new Federaladvanced materials R&D program. The 1980National Materials and Minerals Policy, Re-search and Development Act placed increasedemphasis on materials R&D in the Federal Gov-ernment, and articulated a national materialspolicy. Table 8-2 compares the potential con-tribution of the technical alternatives to mate-rial supplies with the degree of governmentaction that may be needed to achieve that con-

tribution, while major Federal laws that pro-vide p otential vehicles for imp lementing theseactions are discussed briefly below.

National Materials and Minerals Policy,

Research and Development Act

(Publi c Law 96-479)

In 1980, Congress enacted the National Ma-terials and Minerals Policy, Research and De-velopment Act to provide a basic coord inatingframework for executive branch material pol-icy decisions. The law gave heightened visibil-

ity to su bstitution, recycling, and conservationas well as to mineral developm ent to meet U.S.material policy objectives, and emp hasized th eimpor tance of governm ent sup port for R&D inaddressing material problems. A key purpose




Table 8-2.—Probable Degree of Government Involvement Neededin Long-Term Strategies to Reduce Vulnerability

Extent of Nature of government actionsLikely time-

Potential government Direct frame tocontribution action needed Information subsidy achieve

Material to reduced to achieve and Research and to implement outcome oncealternative vulnerability potential monitoring development alternative action initiated—.Chromium: Recycling LargeSubstitution:

Noncritical Largeapplications

Critical Mediumapplications

Supply diversity Small to mediumDomestic Small, without

production new discoveries

Cobalt: Recycling and Large

conservationDomestic Large

productionSubstitution Medium

Supply diversity Medium

Manganese: Conservation Large

Supply diversity LargeDomestic Small

productionSubstitution Small

Platinum group metals: Recycling and Large

conservationDomestic Medium to

production largeSubstitution:

Noncritical Largeapplications

Critical Probably smallapplications

Supply diversity Probably small

Advanced materials:Ceramics Potentially

largeComposites Potentially

large

Moderate

Moderate

Moderate toextensive

ExtensiveExtensive

Moderate toextensive

Extensive

Moderate to

extensiveExtensive

Modest

ExtensiveExtensive

Not assessed

Modest

Probablymodest

Modest

Not assessed

Not assessed

Extensive

Extensive

KEY:Large—200/0 or more of 1982 U.S. consumption.Medium—5 to 20°/0 of 1982 U.S. consumption.Small—less than 5°/0 of 1982 consumption.Near-term—within 5 years.Medium-term—within 15 years.Long-term–beyond 2000.Modest—Little required beyond current level.Moderate-Some new actions needed.

Extensive—Major new actions required.X = Increased activities in this area.? = Not assessed.


x

x

x

x

x

x

x

x

x

x

x

x

?

x

x

x

?

?

x

x

x

Possibly

x

Possibly x

x

x

x

Possibly

x

Possibly x

Minor

Minor

x

x

No

No

No

Probably x

Probably not

x

Possibly

Probably

No

x

x

?

No

Probably not

No

?

?

Possibly

Possibly

Near-term

Medium-tolong-term

Long-term

Long-termLong-term

Near-tomedium-termNear-term

Medium-to

long-termLong-term

Near-tomedium-term

Long-termLong-term

?

Near-term

Near-term(possible)

Near-term

Long-term

Long-term

Long-term

Long-term



Ch. 8—Policy Alternatives for Strategic Materials q 337

of the Act was to provide better mechanismsfor coordinating Federal material-related pro-grams, which presently are highly decentral-ized, being ad ministered by a host of agencieswith differing missions, objectives, and per-spectives.

The Act declared that “it is the continuingpolicy of the United States to promote an ade-quate and stable sup ply of materials necessaryto maintain national security, economic well-being and industrial production with appropri-ate attention to a long-term balance betweenresource production, energy use, a healthyenvironment, natural resources conservationand social needs.” 1

The 1980 Act encomp assed all m aterials thatare related to industrial, military, and essen-tial civilian needs. However, strategic materials

were given h igh visibility in the Act, wh ich d e-fined materials as:

. . . substances, including m inerals, of currentor potential use that will be needed to supplythe industrial, military and essential civilianneeds of the United States in the productionof goods or services, including those which areprimarily imported or for which there is a pros-pect of shortages or uncertain supply, or whichpresent opp ortunities in terms of new physi-cal properties, use, recycling, disposal or sub-stitution . .

2 (The definition excludes food andenergy fuels.)

The law also called on the president to submitto Congress, on a one-time basis, a “programplan” containing such existing or prospectiveproposals and executive branch organizationstructures “as he finds necessary” to imple-ment key sections of the Act.

In April 1982, president Reagan submittedto congress his materials and minerals pro-gram plan required by the Act. The 22-pagedocument summarized actions to be taken infour major areas—land availability, materialsresearch and development, minerals and ma-

terials data collection, and the strategic andcritical materials stockpile.3 The plan assigned

‘Public Law 96-479, sec. 3.ZPubl ic Law 96-479, sec. 2(b).aThe White House, National Materials and Minerals Program

Plan and Report to Con gress (Washington, DC: N. P.) April 1982.

responsibility for coordination of nationalmaterials policy to the Cabinet Council on Nat-ural Resources and the Environm ent. R&D co-ordination not involving policy questions wasassigned to the interagency Committee onMaterials (COMAT), un der the d irection of the

White House Office of Science and Technol-ogy Policy (OSTP) Federal Coordinating Coun-cil on Science, Engineering, and Technology.

Several concerns have been expressed abou tthe Administration’s discharge of its respon-sibilities to Congress under the 1980 Act. TheAct required the plan, as a minimum, to con-tain a program, budget, and organizationalstructure for “continuing long-range analysisof materials use to m eet national security, eco-nomic, and social needs. ” The plan refers toa review of the Federal minerals and materials

data system, but makes no specific referenceto establishment of a continuing long-rangeanalysis of materials, and also did not providea budget proposal.

The President’s plan also drew criticism foroverlooking some key areas of emp hasis in theAct. The report focused primarily on mineralsavailability issues associated with Federallands and on the man agement of the stockpile;substantially less emphasis was given to theR&D compon ents of the 1980 Act. Nor d id itaddress recycling, conservation, and substitu-tion in detail. Although the Act provided thePresident with substantial discretion to selectplan components, critics contended that thefailure to address these issues made the Presi-dent’s plan inadequate to fulfill the intent of the Act.

Other imp lementation d ifficulties were iden -tified by the U.S. General Accounting Office(GAO) in a 1984 report to Congress on overallexecutive branch responses to the law.4 GAOpointed out that not all agencies with impor-tant materials responsibilities were representedon the Cabinet Council on Natural Resources

and the Environment, charged with overall pol-icy coordination. Add itionally, GAO found that

41-J.s. General Accounting Office, Implementation o f the Na-tional Minerals and Materials Policy Needs Better Coordinationand Focus (Washington, DC: U.S. General Accounting Office,Mar. 20, 1984), GAO/RCED-84-63.



Ch. 8—Policy Alternatives for Strategic Materials Ž 33 9

bers, particular emp hasis is to be given to p eo-ple with training, experience and achievementin materials policy, science or engineering, andat least one member is to have a backgroundand understanding of environmental issues.The Council is directed to appoint a full-time

Executive Director, who is authorized to employa staff of up to 12 people in carrying out theCouncil’s duties under the act, and develop,subject to Council approval, rules and regula-tions needed to carry out the Act’s purposes,The law authorizes the appropriation of $500,000for fiscal year 1985, and thereafter, such sumsas maybe necessary. As mentioned , Title II au-thorities will expire at the end of fiscal year1990 unless specifically extended by Congress.

The Council, among other things, will: 1) as-sist in establishing responsibilities and provid efor coordination and implementation of criti-cal materials policies (including research andtechnology) among Federal agencies; 2) bringmaterials issues deemed critical to the Nation’seconomic and strategic health to the attentionof the President, Congress, and the generalpublic; and 3) ensure continuing consultationwith the private sector in matters related to crit-ical mater ia ls; mate r ia ls r esearch , de -velopment, and use; and Federal materialspolicies.

In accomplishing these responsibilities, theCouncil is to review and appraise Federal

agency programs to determine the extent towhich they contribute to achieving the policyand directions given by the 1980 NationalMaterials and Minerals Policy, Research andDevelopment Act. It is also to be involved inrecommending budget priorities to the Officeof Management and Budget (OMB) for mate-rials activities by each Federal agency and de-partment.

By April 1, 1985, the Council was to submitto Congress a report on critical materials inven-tories, and prospective needs for these mate-

rials by government and industry, One com-ponent of this report is to be a long-rangeassessment, prepared in conjunction withOSTP, on prospective critical materials prob-lems, and to advise about how to address these

problems. The Council is to review and up da teits report and assessment as app ropriate, andis to report to Congr ess at least biennially. TheCouncil is also to recommend to Congresschanges in current policies, activities, and reg-ulations, as well as new legislation, needed to

achieve the intent of Public Law 98-373, andPublic Law 96-479.

The Council is given a major role in devel-oping and overseeing the national Federal pro-gram for advanced materials research andtechnology called for by the Act. It is to estab-lish a Federal program plan for R&D in thisarea, identifying responsibilities for carryingout the research and providing for coordina-tion among the Office of Management andBudget, the Office of Science and Technologypolicy, and other appropriate agencies and

offices. The Council is to annually review, andto report to Congress, on the Federal R&D plan.

The Council is to annually review the mate-rials research, development, and technologyauthorization requests and budgets of all Fed-eral agencies to ensure close coordination of program goals and directions with policies de-termined by the Council. The Office of Man-agement and Budget is to consider authoriza-tion requests in these areas as an “integrated,coherent, multiagency request” to be reviewedby the Council and OMB for its adherence tothe national Federal materials program plan ineffect for that fiscal year.

To promote innovation in the basic and ad-vanced materials industries, the Council is toevaluate and make recommendations aboutestablishing Centers for Industrial Technologyas provided for by the Stevenson-Wydler Tech-nology Innovation Act of 1980, which is dis-cussed subsequently. The activities of suchnonprofit centers, initially funded by Govern-ment but intended to become self-sufficient af-ter 5 years, would focus on generic materialsresearch.

The Council is directed to establish, in co-operation with other agencies and private in-dustry, a mechanism for the efficient andtimely dissemination of materials property




data. This is intended to promote innovationand better use of materials in design. Possibleestablishment of a computerized material prop-erty data system (using existing resources tothe extent practicable) is to be considered.

Public Law 98-373, like Public Law 96-479 be-

fore it, is in many respects process-oriented leg-islation, intended to give the Executive Officeof the President key responsibilities for criti-cal materials policy. Within the frameworkestablished by the law, the executive branchis given considerable discretion and flexibilityto establish goals, objectives, and priorities forcritical and advanced material programs. Thelaw, for example, does not specifically definethe terms “advanced materials” and “criticalmaterials, ” but instead uses the broad defini-tion of materials provided by public Law96-479.

Defense Production Act (50 U.S. C. 2061 et seq. )

Enacted in 1950, the Defense Production Act(DPA) provid es several mechan isms for assur-ing availability of materials and industrialcapabilities needed for the national defense.Title I authorizes government priorities for al-location of materials in a congressionally orpresidentially proclaimed national emergencyor war.

Title 111 auth orizes the Presiden t to sup portprivate activities which would expedite “pro-du ction and deliveries or services” in aid of na-tional defense. Loans and loan guarantees areauth orized for expansion of capacity, develop-ment of technological processes, or the produc-tion of essential materials, including explora-tion, development, and mining of strategicmetals. Purchases and purchase commitmentsare authorized for metals, minerals, and othermaterials for government use or resale. ThePresident is also authorized to “make p rovisionfor the development of substitutes for strate-

gic and critical materials” when “in his judg-ment it will aid the national defense. ” Materialsconsidered excess to DPA requ irements can betransferred to the national stockpile. Title 111assistance can be used both domestically andabroad.

In its 1984 reauthorization of DPA (PublicLaw 98-265), Congress established new proce-dures for authorization of Title III projectswhich apply when a congressionally or presi-dentially declared national emergency is notin effect. Among other th ings, the law requ iresthe President to determine that federally sup-ported projects meet essential defense needsand that the Federal supp ort offered w ould bethe most “cost-effective, expedient, and prac-tical alternatives for meeting the need, ” Thelaw requires “industrial resource shortfalls” forwhich Title 111 assistance is sought to be iden-tified in the budget (or budget amendments)submitted to Congress. If more than $25 mil-lion in aggregate Federal assistance would beentailed to meet the industrial resource short-fall, specific authorization by law w ould be re-quired.

Historically, DPA has been used prim arily toencourage mining of strategic minerals in thiscountry and abroad. The instruments p rovidedin the law, however, could potentially be usedfor development of substitutes, advan ced recy-cling technologies and other technical innova-tions considered desirable for national secu-rity. In addition, DPA is now viewed as ameans to secure supplies and essential proc-essing capabilities for advanced materialsneeded for defense purposes.

Strategic and Critical Materials Stock Piling

Revision Act (Public Law 96-41)

In 1979, Congress revised and updated priorlaws related to the Nat ional Defense Stockpilethrough enactment of Public Law 96-41. Thelaw resolved several issues related to chang-ing executive branch strategies for stockpilemanagement among successive administra-tions. Among other things, it stated that thestockpile was for the purpose of national de-fense only, and established a statutory stock-pile goal of having a 3-year supply of materials

on hand to meet national defense, industrialand essential civilian needs in a national de-fense emergency or war. It also established astockpile transaction fund so that sales of ex-cess materials could be used to acquire newmaterials consistent with stockpile goals.



Ch. 8—Policy Alternatives for Strategic Materials Ž 341

Several provisions in the Stockpile RevisionAct have indirect relevance to government sup-port of private activities related to strategicmaterials. The law calls for maximum feasibleuse of competitive p rocedures for stockpile ac-quisitions; however, waivers are authorized,

and this could provide a basis for supply diver-sification on an ad hoc basis.

The law authorizes upgrading of alreadystockpiled materials through refining and proc-essing so that they will be in the form mostsuited to current needs. This has promp ted theconsiderable interest of domestic processors.A panel of the American Society for Metals(AS M), for examp le, recommend ed in Augu st1983 that sufficient quantities of substandardcobalt from the stockpile be provided to indu s-try in ord er that it could test capabilities to up-grade th e m aterial to current stand ards,’ Of the46 million pounds of cobalt in the stockpile,40.8 million poun ds w ere acquired in the 1947-61 period. More stringent requirements andconsumer specifications have made much of this cobalt inadequate to meet today’s demand-ing requ irements for man y critical applicationsunless the cobalt is upgraded. The ASM panelrecommended pilot tests with cooperating pri-vate firms to identify preferred procedures toupgrade the cobalt quality so that it could beused immediately in a crisis. The recommen-dation is under consideration by the General

Services Administration (GSA) and FederalEmergency Management Agency (FEMA).

As in the prior stockpiling law, the 1979 Actcalls on the President to make “scientific, tech-nologic and economic investigations” concern-ing ‘‘development, mining, preparation, treat-ment and utilization of ores and other mineralsubstances , . .“ These investigations, delegatedby the President to the Secretary of the Interior,are to be carried out to determine and develop“new domestic supply sources; devise meth-ods for treatment and use of lower grade oresand mineral substances; develop substitutes foressential ores and m ineral s.” Investigations

may be carried out on public lands, and withthe consent of the owner, on p rivate lands “forthe pu rpose of exploring and determining theextent and quality of deposits of such minerals,the most suitable methods of mining and bene-ficiating such materials, and the cost at which

the mineral or metals may be produced.’”

Stevenson-Wydler Technology Innovation Act

of 1980 (Publi c Law 96-480)

The Stevenson-Wydler Act is intended topromote d evelopment and diffusion of new in-du strial technologies in th e United States. Thelaw gives the Secretary of Commerce, in co-operation with other relevant agencies, keyresponsibilities in stimulating transfer anddiffusion of information about federally fundedtechnology development to the private sector

and to State or local governments. It requireseach Federal laboratory to establish an Officeof Research and Technology Applications tofacilitate information transfer about activitieswithin the lab that have potential for success-ful application by industry. In addition, the lawestablished a central Federal clearinghouse(called the Center for Utilization of FederalTechnology) to collect and disseminate infor-mation about federally owned or originatedtechnologies. (This function has been assignedby the Commerce Department to the NationalTechnical Information Service. )

The Act also directed the Secretary of Com-merce to assist in the establishmen t of “centersfor ind ust rial technologies’’—center s affiliatedwith u niversity or nonpr ofit institutions set upto enhance technological innovations, The Rea-gan Administration, on November 17, 1983, re-voked r ules for making grants for such centers.At the same time, it also promu lgated ru les fora program for promotion of private sector in-dustrial technology partnerships, indicatingthat this program was intended to supercedethe generic technology center program.7 Th e

new Administration program provides infor-mation support to industrial technology part-

0 f’uh] i(: 1,aw 96-41, sr(, 8[ a ]. This pro~is ion is a cent i nuat io n

of similar pro~’ision~ in prior stockpiling laws.7F’edcral Rcgi.stcr, Irol. 48, Nro. 223, N o~r. 17, 1983, p. 52289.




nerships and cooperative R&D arrangementsof corporations, nonprofit organizations, andgovernment.

The Stevenson-Wydler Act also directed theNational Science Foundation (NSF) to assist inthe support of “centers for industrial technol-

ogy” un der the Act. According to a 1984 Ad -ministration report on implementation of Pub-lic Law 96-480, NSF’s previously existingprogram of support for university/ industry co-operative research centers is being used to meetthe requirements of the Act in this respect.8

—.—. ——‘Secretary of Commerce, The Stevenson- Wydler Technology

innovation Act of 1980, Report to the President and Congress(Washington, DC: U.S. Department of Commerce, February1984). According to the report, which was required by Public

The newly enacted National Critical Mate-rials Act of 1984 directs the N ational CriticalMaterials Council established by this law toevaluate and make recommendations aboutestablishment of Centers for Industrial Tech-nology to promote innovation and increasedproductivity in basic and advanced materialsindustries. Among the activities identified forpossible Center involvement were corrosion,welding and joining of materials, advancedprocessing and fabrication technologies, mi-crofabrication, and fracture fatigue.

Law 96-480, the National Science Foundation, in fiscal year 1983,was supporting eight university/industry centers, including twocenters on polymers, one on ceramics, and one on welding.

Formulati on of Strategic Materials Policy

In formulating long-term technicalfor reducing import dependency, the

strategiesfull range

of available-options, on a m aterial-by-materialbasis, must be considered. In some instances,there m ay be several op tions available for eachmaterial. These options could potentially easeimport vulnerability, but entail different costsand different levels of security. In the case of cobalt, import vulnerability could be reducedin several ways, including domestic produc-

tion, recycling, and substitution. Domesticproduction, for example, could make a majorcontribution to domestic cobalt supplies, withcomplete sup ply security, but only at a cost tothe government (at 1983 prices) far higher thansimply purchasing cobalt for the stockpile fromworld markets. Other options, such as devel-oping promising recycling technologies to thepoint where they could be used by industrywould cost less, but would also entail greaterrisk, since it cannot be certain that a given re-search technology will be commercially viable.It is noteworthy that the implementation of

these and other technical approaches to reduc-ing cobalt import vulnerability allcreased government support.

In other instances, as in the casesubstan tial long-term reductions in

entail in-

of PGMs,import vul-

nerability may be achievable with little govern-ment action, Private industry is already well-positioned to take advantage of the grow ing in-ventory of PGMs that could be recycled fromautom otive catalysts as cars are scrapped ; and ,with some limited increase in PGM prices,nearly 10 percent of current domestic needscould be p rovided from one U.S. site, with ad-ditional production possible from other sitesin the longer term. Continued monitoring of

industry trends will be needed, but unless oneassumes that a PGM supply disruption is likelyin the near term, governm ent action to encour-age recycling or domestic production is prob-ably not needed at this time.

Experience has shown that development of overall Federal strategies to reduce import vul-nerability is a highly complex task. Several Fed-eral agencies have important research respon-sibilities in the materials field, including theDepartments of Defense, Interior, Energy, andCommerce; and the National Aeronautics and

Space Administration (NASA). FEMA has leadagency responsibility for coordination of stock-pile planning, and GSA administers it. Manyother Federal departments and regulatoryagencies have indirect effects on materials pol-icy through tax policies, regulation of com-




merce, environm ental p rotection, Federal landmanagement, antitrust enforcement, patentpolicy, foreign affairs and trade policy, andother activities. (Selected executive branchagencies with direct responsibilities for stra-tegic materials are shown in table 8-3.)

This decentralization is, to a certain extent,unavoidable, and may even be desirable, butit has made the job of formulating strategicmaterials policy difficult for both Congress andthe executive bran ch. Congress itself has manydifferent committees with jurisdictional areasrelated to strategic materials, including (amongothers) House Committees on Arm ed Services;Banking, Finance, and Urban Affairs; Scienceand Technology; and Interior and Insular Af-fairs; and Senate Committees on Armed Serv-ices; Banking, Housing, and Urban Affairs;

Commerce, Science, and Transportation; andEnergy and Natural Resources. Appropriationsubcommittees are even more diverse.

Through enactment of the National CriticalMaterials Act of 1984 and the National Mate-rials and Minerals Policy, Research and Devel-opment Act of 1980, Congress has firmlyplaced statutory responsibility for coordinat-ing Federal agency activities and decisionmak-ing w ith regard to strategic materials researchin the Executive Office of the president. Thepolicy planning and coordination proceduresrequired by the 1980 Act, together with the stat-utory establishment of the National CriticalMaterials Council “under and reporting to” theExecutive Office of the president by the 1984Act, may in time provide coordinated and co-herent strategies to guide Federal agency activ-ities to reduce import vulnerability.

As the Administration begins to implementits new mandate, congressional oversight of theAdministration’s progress in the continuingimplementation of both the 1980 and 1984 lawswill be important. Both laws give the Admin-istration considerable flexibility and latitude

in developing strategies to address strategicmaterials issues. They are oriented towards de-velopment of effective processes to formulate,coordinate, and implement materials policyprograms, and by and large do n ot dictate sub-stance. This flexibility could lead to highly

innovative initiatives in the materials field, butit also means that continuing congressionalguidance may be needed at times to assure thatthe intent of the the two laws is met.

OTA’s analysis of oversight issues has fo-cused on two specific issues that may be par-ticularly relevant as the Ad ministration beginsto implement the 1984 Act: establishing policygoals, objectives, and priorities for strategicmaterials, and upgrading information aboutFederal strategic materials R&D activities as akey step in interagency coordination. These is-sues are discussed below and are summ arizedin table 8-4.

Goals, Objectives, and Priorities of

Strategic Materials Policy

A long-term commitment is needed if tech-nical approaches to the reduction of strategicmaterials vulnerability are to succeed. More-over, the combination of technical app roacheseffective for one material will often be inap-propriate for another. Recognition that effec-tive planning and policy formulation proce-dures by the executive branch were needed todevelop coordinated goals, objectives, andstrategies for materials research led to enact-ment of the National Materials and MineralsPolicy, Research and Development Act of 1980.However, the expectation that this law wouldlead to an effective policy structure for coordi-nation of strategic material activities through-out the government has not been fully realized,as has been discussed.

With adoption of the National Critical Ma-terials Act of 1984, prospects for improving theexecutive branch p olicy structure w ill hinge toa considerable extent on the effectiveness of the n ew National Critical Materials Council inthe Executive Office of the President. Section205(a) of the law gives the Council “specificresponsibility for overseeing and collaborat-

ing” with Federal agencies and departments“relative to materials research and develop-ment p olicies and progr ams. ” In this role, theCouncil is mandated to annually review boththe authorization requests and budget pro-posals of all Federal agencies conducting ma-




Table 8-3.—Selected Federal Agencies With Strategic Material Responsibilities

Off Ice of T echnology Assessment




Table 8-4.—PoIicy Alternatives for Formulation of Strategic Materials Policy

Arguments for/against

Problem/issue Option Positive Negative

1. The executive branch has haddifficulty in establishingoverall goals, objectives, andpriorities for strategic

materials R&D policy. As aresult, Federal agencyactivities are not guided by acoherent, overall strategy forlong-term reduction in importvuInerability.

2. Federal R&D activities relatedto strategic materials aredispersed over a largenumber of agencies. To co-ordinate R&D policy, conductoversight and establishpriorities, improved surveyinformation is needed.

Direct the National Critical - — .

Materials Council estab-lished by Public Law98-373 to develop a long-

term strategy forFederal strategicmaterials activities, in-cluding goals and objec-tives by which individualagency activities can bemonitored. The multi-year strategy could berevised on a 4-yearbasis by the ExecutiveOffice of the President,giving Congress the op-portunity to review pro-gress, provide guidanceand clarification asneeded.

Clear direction for strategicmaterials policy and long-range plans to addressspecific material needs is

required to give contin-uity and ensure appro-priate follow-through forstrategic materialresearch.

Overly specific congres-sional guidance couldresult in inflexible agen-cy response. Periodic

revision of the overallstrategic materials plancould lead to excessivetime and expendituresdevoted to policy form-ulation and planningactivities.

Instruct the NationalCritical Materials Coun-cil to give high priorityto section 209(a)(3) ofPublic Law 98-373 whichcalls for cataloging R&Dactivity as fully as pos-sible. Such a catalog, ifundertaken on a mater-ial-by-material andobjective-by-objectivebasis, with updates on aregular schedule, wouldbe useful in the budgetreview activities of thecouncil and would helpidentify progress

towards meeting goals.

Would give decisionmakersinformation needed tomonitor multi-agencyresponses to overallstrategic material goals,identify areas of overlapor duplication of effort,and areas where insuffi-cient R&. D is conducted.

*

Could lead to overempha-sis on strategicmaterials R&D to thedetriment of otherneeded materialsresearch in agency R&Dprogram planning.

SOURCE Off Ice of Technology Assessment.

terials R&D to “ensure close coordination of the goals and d irections of such pr ograms w iththe p olicies determined by the Cou ncil. ” Thisprocess is to be coordinated with the Office of Managemen t and Bud get, which is to considermaterial budget proposals as a coherent multi-agency request. The new law requires theCouncil to prepare and annually revise a Fed-eral program plan for ad vanced m aterials R&D.

It seems unlikely that the Council will be ableto succeed in its coordinating fun ctions u nlessit is able to articulate overall goals, objectives,and priorities that could guide strategic mate-rials R&D policy. One important question iswh ether Federal research objectives should be

set broadly—i.e., strategic materials in gen-eral—or shou ld be targeted as closely as p rac-tical to those materials considered to be mostvulnerable. By and large, the approach takenover the years, and which still prevails, is toaddress strategic materials in a generic sense.This allows agencies to adopt a flexible ap-proach in their research programs, but with-out centralized administration guidance, it alsoresults in diffusion of efforts among manymaterials.

An alternative approach would be for theCouncil to give greatest priority to those ma-terials that are most vu lnerable to a supp ly dis-ruption and most critical to the United States.

38-844 0 - 85 - 12 : QL 3



Ch. 8—Policy Alternatives for Strategic Materials . 347

for strategic materials policy, and the extentto which it wishes to delegate that function tothe executive bran ch. Establishm ent of the N a-tional Critical Materials Council, and the con-tinuing planning processes required by the1980 Act, clearly provides legislative authori-

zation for effective policy planning by the ex-ecutive branch. However, without legislativeoversight and guidance when needed, there isno assurance that current or future adminis-trations will fully use these policy tools to ef-fectively formulate executive branch strategicmaterials policies.

Providing Information About Federal Research

and Development Activities

A sustained progr am of Federal R&D will bethe cornerstone of any long-term strategy to re-

duce U.S. materials vulnerability using thetechnical alternatives considered in this rep ort.In the last decade, strategic materials R&D hasreceived increased em ph asis, and recent levelsof research funds appear to be quite healthy,However, concern exists about the adequacyof current coordination mechanisms at the in-teragency level, especially as they relate to theformulation of policy.

The Federal Government is the primarysponsor of R&D activities related to strategicmaterials. It is also the primary sponsor of

basic and applied research related to develop-ment of advan ced materials. This is consistentwith th e adm inistration’s position that Federalsupport for R&D should focus on high-risk orlong-term areas that m ay not oth erwise be ad-dressed by industry.

In fiscal year 1980, about 4 percent ($67 mil-lion) of the total Federal m aterials R&D bud getwas directed at strategic materials (excludingadv anced m aterials) .11 As shown in tables 8-5and 8-6, nearly 40 percent of this budget wasfor chromium research, followed by aluminum,titanium, nickel, and cobalt. Most of this re-

search was conducted or sponsored by DOEnational laboratories, the Bureau of Mines,NASA, the National Bureau of Standards(NBS), and various components of the DefenseDepartment.

Fiscal year 1980 was the last year for which

the executive branch has published compre-hensive information about strategic materialsR&D activities on a material-by-material basis.Detailed information of the sort portrayed inthe tables have not been issued for subsequentyears on a governmentwide basis. However, itappears that strategic materials R&D has notbeen greatly affected by the general trendtoward reduction of research bu dgets that h asaffected other areas, although some strategicmaterials programs (e.g., NASA’s conservationof strategic aerospace materials progra m) havebeen cut back.

Federally funded R&D has been the drivingforce behind the development of advancedmaterials. Total Federal expend itures for stru c-tural ceramics R&D were $23 million in fiscalyear 1982.12 By fiscal year 1984, Federal ex-pend itures had grown to over $40 million. Re-cent figures are not available about compositeR&D funding. However, in fiscal year 1980,over $80 million in composites R&D were ex-pended by Federal agencies. Advanced mate-rials R&D activities are u nd ertaken by severalFederal agencies, including the Department of

Defense, NASA, DOE, NBS, and the NationalScience Foundation.

A central thrust of both the National Criti-cal Materials Act of 1984 and the NationalMaterials and Minerals Policy, Research andDevelopment Act is to establish a mechanismthat w ould replace ad hoc materials and m in-erals decisionmaking within the executivebranch with a coordinated Federal R&D pol-icy. As mentioned, the President’s 1982 mate-rials plan reestablished COMAT under the di-rection of the Federal Coord inating Council on

Science, Engineering and Technology (FCCSET)




Table 8-5.—Distribution of R&D Funding for Critical Materials by Materials and by Technology Goal* ($1000)

‘NOTES Funds may be attributed to more than one goal, where appropriate, upper amounts “direct” program funding for research pnmarlly to Indicated category,lower amounts “’related” program funding directed tu the categories, but with slgnlflcant potential for Impact In the lndlcated category,

tl Department of Energy2 Department of Defense3 Department of the Interior4 Department of Commerce5 Natlonai Aeronautics and Space Admlnlstratlon.

SOURCE U S Department of Commerce, Survey Ma feria/s Life Cyc/e Research and Development /n tbe Federa/ Government Flsca/ Year 7980 (N BSIR 81-2359 DOE,September 1981) The above table may not reflect all Federal funding of research that affect strategic materials For example, Department of Defense sup-port for surface modtficatlon technologies, near. net shape technologies, and retirement for cause research are not Identlfled In the substitution and conservatlon columns of the table These programs could result In savings of chromtum, cobalt, nickel and other strategic materials.

for the coordination of Federal materials and q

minerals R&D activities, directing:

q

q

Assistant Secretary-level representation q

from the departments and agencies con-cerned with minerals and materials;the incorporation into COMAT of the De-partment of Defense Material Availability s

Steering Committee and the InteragencyMaterials Group;

establishment of a working panel withinCOMAT to coordinate Federal R&D on es-sential materials;establishment of a formal mechanismwithin COMAT for information exchangeamong agency managers of materials R&Dprograms; andpolicy resolution of materials R&D ques-tions through the Cabinet Council on Nat-ural Resources and Environment.




tacted by OTA to determine whether detailedagencywide information on strategic materialsfunding had been compiled independently forfiscal year 1985. Some agencies provided thisinformation at a relatively detailed level, butone major department was able to provide only

a partial answer. In this case, OTA was toldthat it wou ld take 3 to 6 months to perform astrategic material R&D inventory if given a for-mal request.

It would app ear, therefore, that COMAT hasnot established an effective mechanism to trackand report on interagency strategic materialsresearch activities, The need for such informa-tion in R&D policy formulation is widely rec-ognized as a key step in establishing effectivecoordination of all Federal activities related tostrategic materials research, In fact, the 1984National Critical Materials Act calls on the Ex-ecutive Director of the National Critical Ma-terials Council to catalog, “as fully as possible,research and development activities of the Gov-ernment, private industry, and public and

private institutions” (Public Law 98-373, sec.209(a)(3)). Such information will indeed be crit-ical if the Council is to effectively exercise itsnew responsibility for coordination and reviewof Federal strategic materials activities. Con-sistent with the premise that the executive

branch should have considerable flexibility informulating materials p rograms and plans, theAct does n ot specify a timetable for such cata-log activities nor identify its content.

Certainly, if effective coordination of strate-gic materials research were envisioned, infor-mation equivalent in detail to the earlier (fiscalyear 1980) survey would be needed. Periodicsurveys of this sort wou ld also be needed to d e-velop a m ulti-year executive bran ch plan of ac-tion for strategic materials. Given the recentdifficulties the executive branch has had in de-veloping such survey information, congres-sional oversight and guidance may be neededif the initial activities of the Cou ncil do not givepriority to developing a continuing trackingsystem of this sort (table 8-4, issue 2).

Mineral Production and Processing

Currently, there is virtually no prod uction of cobalt, chromium, manganese, or PGMs fromdom estic mines.14 How ever, prosp ects are good

for platinum and palladium production fromthe Stillwater Complex in Montana, whichcould p rovide about 10 percent of U.S. PGMneeds (as a percentage of 1982 consumption)if prices increase somewhat, as well as muchlarger amounts of PGM if it becomes feasibleto open other sites, (The decision whether togo ahead with an initial mining project is ex-pected to be m ade in 1985,) In add ition, morethan 10 million pou nd s per year of cobalt (5,000

lqAbout 2 percent of apparent domestic consumption of man-ganese is contributed from manganiferious ore containing lessthan 35 percent manganese, Platinum group metals have been

produced domestically in small amounts as recently as 1982.I,arger amounts of manganese and some chromium wereproduced during the 1940s witb considerable Federal subsidy.Substantial amounts of cobalt were produced under Federal sub-sidy during the 1 950s. Cobalt was also produced in smallamounts as a byproduct of iron production until 1971.

short tons) could be p rovided for a 10- to 15-year period if known domestic cobalt depos-its were simultaneously developed, production

will not occur un less cobalt prices rise and aresustained at appreciably higher levels than isnow the case, or unless the government pro-vides a substantial subsidy. Domestic prospectsfor production of chromium and manganeseproduction are not good, owing to the verypoor quality of known domestic deposits.

The United States heavily relies on a fewcountries for its sup plies of strategic materials,To some extent, supp ly diversity could be broad -ened through greater reliance on other coun-tries which have known deposits of strategic

materials. Of the four m etals un der study, sup -ply diversity is currently greatest for man-ganese; greater diversity on manganese sup-plies will probably depend on the willingnessof producers in Australia, Mexico, and Brazil



Ch. 8—Policy Alternatives for Strategic Materials q351

to increase production for export markets. Inthe case of chromium, expanded productionin Turkey, Albania, and the Philippines ap-pears to be the primary near-term supp ly diver-sification option; in the longer term, limitedamounts of chromite may be obtainable from

deposit types that are now untapped in thePhilippines and New Caledonia. Increased sup-plies of cobalt maybe obtainable from Canadaas a byproduct of nickel-copper production.Over the long term, cobalt may be obtained asa byproduct from Pacific-rim nickel laterite de-posits when future nickel demand justifies newmine op erations. Other th an the U.S. Stillwaterdeposit, significant diversification of platinumsupplies seems unlikely. (See table 5-3 of ch.5 for a country-by-country ranking of supplydiversification prospects for each of the first-tier minerals.)

OTA’s analysis of alternative policy actionswith regard to minerals production and proc-essing focused on the following areas: poten-tial of intensified exploration assistance tolocate new dom estic dep osits; possible govern-ment subsidization of d omestic production; tar-geting of Federal programs to encourage diver-sification of foreign supply sources; andoptions for addressing problems associatedwith declining domestic processing capabil-ities. The options addressed are summarizedin table 8-7 and discussed below.

The emphasis in this assessment is on tech-nological issues. Therefore, political issuesassociated with competing values for Federalland management are not addressed here.Some Federal lands are under highly restric-tive management policies which limit the cir-cumstances and kind of exploration activitiesthat can be undertaken, and these restrictionsare seen by some exploration geologists as pos-sibly inhibiting private initiatives to discovernew mineral deposits. In general, Federal landsbeing considered for permanent addition to

such restrictive management systems as theNational Wilderness Preservation System aregiven some mineral appraisal prior to desig-nation. The reader is referred to a prior OTA

assessment,15 in which alternative alternativemanagement strategies and policy issues asso-ciated with mineral development on Federallands were comprehensively addressed, as wellas several other, more recent publications ad-dressing mineral development issues and Fed-

eral lands.16

Exploration for Domestic Strategic Resources

The outlook for the discovery of commercial-scale deposits of the first-tier strategic materialsin the United States is generally agreed to beinsufficient to generate m ore than m inor inter-est by m ost mineral d evelopers. The U.S. Gov-ernment spent considerable effort during andafter World War II in seeking high-grade do-mestic deposits of manganese and chromium,with only subeconomic deposits to show for

its efforts. Cobalt, while not sought directly, hasonly been found in low grades and only as aresult of exploration for nickel, copper, lead,and zinc. Platinum, the one successful case of discovery of a commercial-grade deposit of afirst-tier material, is quite limited in terms of total U.S. demand for PGMs.

Past failures, however, do not mean thatthere is no possibility of discovering dom esticdeposits of chromium, cobalt, manganese, orPGMs. Past experience, however, makes explo-ration less attractive for these materials than

15u. s. Congress, Office of Technology Assessment, ~anage-

ment of Fuel and Nonfuel Minerals in Federal Lands, OTA-M-88 (Washington, DC: U.S. Government Printing Office, April1979).

l eLeg is ]a t ive s ta tu5 of selected bills in the 98th Congress re-lating to strategic minerals evaluation and Federal lands is pro-vided in Strategic Materials Management, June 15, 1984. Pro-cedures used in regional mineral appraisals on Federal landsare discussed in John J. Schanz and John G. Ellis, Assessing the

Mineral Potential of the Federal Public Lands (Washington, DC:U.S. Library of Congress, Congressional Research Service, 1983).Recent Department of Interior activities related to Federal landmineral evaluation potential are discussed in U.S. Departmentof the Interior, Summary Report: US. Bureau of Mines Depart-ment of Interior Programs and Studies Required by the National

Materials and Minerals Policy Act of 1980 (Public La w 96479)(report submitted to the chairman of the Subcommittee on Trans-portation, Aviation, and Materials, U.S. House of Representa-tives Committee on Science and Technology, with cover letterdated Nov. 10, 1983).




Table 8-7.—Policy Alternatives for Exploration, Mineral Production, and Processing



1.

2.

3.

Lack of industry interest inexploring for domestic depositsof strategic materials.

Known domestic strategicmaterial sources are economi-cally noncompetitive, andtherefore not currently producing.

Magnitude of productionresources of existing concen-trated foreign suppliers inhibitdevelopment of alternate sources.

a. Improve the economics ofdomestic deposits of stra-tegic material resourcesthrough tax incentives for

exploration and develop-ment.

b. Reduce the cost of explora-tion by increasing level ofdetail obtained by govern-ment resource assessmentsand by conducting R&D toimprove explorationtechnology.

c. Improve ability to predictlocation of possibledeposits of strategicmaterial resources throughincreased understanding ofore formation processes.

Federal subsidies fordomestic mining.

a. Cobalt

b. PGM

c. Chromium and manganese

Use government resourcesto expand foreign productionof strategic materials.

a. Improve information aboutpossible projects.

b. Reduce political risks toU.S. private sectorinvestment.

c. International direct/indirectaid to encourage foreignprojects.

Cost to government arisesonly if deposits of strategicmaterials are developed.Costs are limited to tax liabil-

ity of those deposits.

Could reduce cost of identi-fying areas of possibledeposits and allow industry toconduct more explorationwithin current explorationbudgets.

Could lead to location ofdeposits that cannot be foundby current exploration equip-ment or methods.

Assure domestic supply.Reduce likelihood of disrup-tion occurrence.

Could provide an assureddomestic supply of up to 10million pounds per year over10 to 15 years.

A relatively small subsidy couldassure near-term productionof 6 to 10 percent of U.S.needs.

Subsidy would assure produc-tion of Cr and Mn in lim-ited amounts over relativelyshort time period; might

encourage domestic explo-ration activities.

Reduces likelihood ofsuccessful supply disruptions.

Relatively inexpensive use ofresources.

Relatively inexpensive use ofresources.

While relatively expensive,many foreign mining projectsare marginally economic andcould be less costly than

domestic subsidies. Aid canbe coupled with otherdeveloping country needs.

Tax incentives can onlyimprove project economics byseveral percentage points.They cannot turn deposits

simiIar to known domesticchromium, cobalt, andmanganese deposits intoprofitable ventures.

Actions are not material-specific and are unlikely toresult in increases in explora-tion for strategic resourcesunless coordinated with otherincentives.

Unlikely to result in discoveryof any deposits of strategicmaterials resources untilgreater scientific understand-ing is achieved—a processthat could take many years.

High costs relative to pur-chasing for stockpile onworld markets. No guaranteethat production period wouldcoincide with any supplydisruption.

At 1983-84 metal prices, asubstantial Federal subsidywould be needed so that itwould be cheaper to buycobalt on world markets forthe National DefenseStockpile.

Government action probably notnecessary. Market forcesalone are expected to pro-mote domestic production —possibly in the next 5 years.

Uneconomic nature of knowndeposits would require highsubsidies: for Cr, two or more

times and Mn, seven timesmarket world prices.

Perpetuates reliance on foreignsources. If actions are not -

targeted, option could pro-mote competition fornonstrategic domestic miningindustry.

Results tend to be limited anddifficult to foresee.

Targeting to specific mineralsis difficult. Results arelimited in weak mineralmarkets.

As with domestic subsidies,it would be less expensive atcurrent prices to purchasefrom existing sources for

stockpile.



Ch. 8—Policy Alternatives for Strategic Materials q35 3

Table 8-7.—Policy Alternatives for Exploration, Mineral Production, and Processing (Continued)

Problem O p t i o n

4 Decl ining domestic ferroal loy ore a Government subsidies toprocessing capabi l i ty maintain/develop capaci ty

along with ore sourcesb Government support fo r

modern iza t ion e f fo r ts andR&D in emergingtechnologies.


for other minerals, such as copper, lead, zinc,or bauxite, for which there is a substantial rec-ord of success to hearten investors.

The Federal Government generally partici-pates in only the first of the four stages of pros-pecting and exploration, that of wide-scalereconnaissance (table 5-2, ch. 5). Informationobtained at this stage helps prospectors selectareas for more detailed survey but is unlikelyto locate signs of a specific deposit. In view of the prevailing industry belief that commerciallycompetitive deposits of the first-tier strategicmaterials are unlikely to be discovered, an in-crease in general information would probablybe insufficient in and of itself to encouragemore intensive exploration for these specificmaterials, although such information may in-deed encourage exploration for other metals.

To increase the p otential for d iscovery of do-

mestic deposits of first-tier materials, the po-tential profitability of deposits must increase,the cost of exploration must decrease, or thelikelihood of success of exploration must in-crease. Further, in order to be efficient in theuse of Federal resources, actions directedtowar d these goals shou ld be material-specific.Table 8-7, issue 1, identifies three approacheswhich could be taken.

The first possibility, increase of profitabilityof potential deposits, could be approachedthrou gh tax policy (e.g., increasing the percent-

age depletion allowance for specified mate-rials), through exploration loans that have re-duced rates or reduced principal when theylead to the discovery of deposits that eventuallylead to commercial exploitation, and throughmining and metallurgy R&D directed specifi-


Posi t ive

Assures processing capabi l i tyin time of emergency need.

Improves productivity andthere fore compet i t i ve pos i t i onof domestic Industry. Couldtarget development of flexibleproduction capaci ty,

Negative

Creates excess global supply.

Closureof some remainingfacilit ies continues with job

loss in near term.

cally at reducing the cost of exploiting depos-its for the first-tier materials as they are likelyto be found in the United States.

The second approach would be for the Fed-eral Government to undertake, either directlyor through contract with private firms, moredetailed prospecting activities, again directedat specific types of mineral deposits. This ap-proach could also include the development of improved exploration equipment and tech-niques, such as the development of geophysi-cal techniques for locating sedimentary man-ganese deposits, more portable and accurateequipment for geochemical analysis, and lowercost core-drilling equipment.

The third app roach, increasing the likelihoodof success of exploration, could combine cur-rent data collection and analysis procedureswith intensified research into the processes of

formation of deposits of strategic materials,with the goal of improving the ability to iden-tify areas most likely to have deposits of spe-cific first-tier strat egic mater ials. Predictive ge-ology, based on theories of the formation of mineral d eposits, is in its infancy and certainlya long-term approach to strategic materialssupply issues.

Domestic Production of Strategic Materials

As discussed in chapter 5, known domestic

deposits of first-tier strategic materials cannotsupport profitable minerals production at cur-rent prices, Nonetheless, domestic productioncould make a contribution to domestic mate-rial sup plies. Of the materials und er study, po-tential contributions to material supplies (as a




portion of U.S. requirements) varies from mod-erate to large in the case of PGMs and cobaltto small, in the case of chromium and man-ganese,

Several potentially exploitable PGM depos-

its exist, the largest of which are located in th eStillwater Complex in Montana. Commercialprod uction of PGMs from on e site in the Com-plex is now under evaluation by a private firm.Other than monitoring progress at the Still-water site, there appears to be no pressing needfor government involvement in this project atthis time. It has been estimated that, if a deci-sion to go ahead is reached , about 2 years leadtime wou ld be necessary before the m ine wouldproduce PGMs. At current prices, domesticproduction of the other first-tier materialswould require a Federal subsidy.

The Federal Government can subsidize—andsometimes has subsidized—domestic produc-tion of strategic materials. During World War11 and the Korean war, the United States wasable to obtain some of its chromium, manga-nese, and cobalt supplies through heavy sub-sidization of production from limited domes-tic deposits. Between 1948 and 1962, about 14million pounds of cobalt were produced do-mestically under Federal subsidy.17 When Fed-eral contracts expired, most domestic produc-tion ceased.18

Recent concern a bout strategic materials hasrekindled interest in domestic production sub-sidies through Title III of the Defense Produc-tion Act (table 8-7, issue 2). Title III providesseveral instruments (loans, loan guarantees,guaranteed prices, or purchase commitments)that could be used to sup port indu strial proc-essing and production of strategic materials.

Possible subsidization of domestic cobalt pro-duction was among an initial list of Adminis-tration projects proposed for possible Title IIIassistance during congressional debate about

ITJarneS C. Burrows, cobalt: ArI Industry Analysis, a CharlesRivers Associates Research Study (Lexington, MA: Heath Lex-ington Books, 1971), p. 111.IaSome cobalt continued to be produced at Pennsylvania’s

Cornwall Mine until 1971 as a byproduct of iron ore produc-tion without subsidy.

reauthorization of DPA for fiscal years 1985and 1986. In hearings abou t th is legislation, theU.S. General Accounting Office expressed con-cern that the Administration had not under-taken adequate cost/ benefit comp arisons amongcandidate Title III projects for which it sought

funding. In April 1984, Congress amendedDPA to authorize a total of $100 million in fi-nancial aid to defense industrial projects forfiscal years 1985 and 1986.19 The amendmentdid not preclude a Title III cobalt project, How-ever, it did establish new procedures for theAdministration to follow in seeking Title IIIauthorization. Except in times of a nationalemergency, Title III projects must be presiden-tially cleared, and a determination made thatthe alternative is the most practical means formeeting a shortfall.

It is not clear whether the Administration hasany plans to initiate a cobalt project, but theissue of domestic production of strategic ma-terials is likely to continue to be debated in thefuture,

Potentially exploitable cobalt d eposits in theUnited States include the Blackbird Mine inIdaho, the Madison Mine in Missouri, theGasquet Mountain Project in California, andthe Du luth Gabbro Com plex in Minnesota. Fordomestic production to occur without subsidy,cobalt market prices, about $6 per pound in1983 and $11 to $12 in mid-1984, would needto rise appreciably and be sustained for a pro-tracted period in order for mine owners to as-sume the risks of production, Each of thesesites has received some scrutiny for possiblesubsidy under th e Defense Produ ction Act. Al-though DPA can be used to secure materialsfor the stockpile, it has generally been u sed tosupport industrial processing capabilities con-sidered essential for national defense, Oneproposed m ethod of subsidy has been a “con-tingent purchase contract” between the gov-ernment and mine owner. In such contracts,

a negotiated “floor price” would be set withthe company. The government would be obli-

l g p u b l i c L a w 9 8 - 2 Nj , t h e Defense Production Amendments Actof 1984, was signed into law by President Reagan on Apr. 17,1984.



Ch. 8—Policy Alternatives for Strategic Materials

gated to buy the cobalt only if the companywere unable to sell it on the open market,

Some evaluation of production economicsfrom candidate sites has been conducted by thesponsoring companies, with estimates rangingfrom $16 to $25 per pound. However, some of

the estimates h ave not been revised since 1981,and none should be considered definitive,According to the Department of Defense, “con-tradictory data being quoted and evaluated” ledthe Air Force, in 1983, to seek “definitive datathrough legal contracting procedure for acost/ benefit analysis of dom estic cobalt prod uc-tion.” 20 The form of the Air Force effort, a d raftrequest for proposal,21 evoked controversy be-cause some believed th at a final determinationhad been made to go ahead w ith a pilot plantproject to evaluate the quality of domesticallyproduced cobalt for defense applications. The

effort d id not reach the stage in which such d e-finitive data was submitted, however.

The Blackbird Mine (an inactive mine whichproduced cobalt under DPA subsidy in prioryears) is considered the largest potential do-mestic source. In 1981, the company whichowns the mine estimated that Blackbird couldsupport an annual production level of 3.7 mil-lion pounds (1,850 short tons) of cobalt for a14-year period if cobalt prices rose and weresustained at a $20 per pound level or if the gov-ernment subsidized production. 22 Lead time for

production would be 3 to 4 years. A spokes-man for the company recently told OTA thatit now estimates a sustained cobalt p rice of $16per pound to be sufficient to bring the mineinto production, owing to discovery of highergrade cobalt at the site, and improved mine

20Department of Defense submittal entitled “General DoD Com-ments on the Classifed GAO Statement, ” in U.S. Senate Com-mittee on Banking, Housing, and Urban Affairs, Reextension

of the Defense Production Act, hearing held Sept. 15, 1983,(Washington, DC: U.S. Government Printing Office, 1983), p. 161.

21 Department of the Air Force, Draft Request for prOpOsal(DFRP) for Contemplated RFP F33615-83-R-5106: Establishment

of Domestic Cobalt Production, Aug. 30, 1983.ZZLetter of R.V. Fiorini, Vice-president, General Manager,Noranda Mining Inc. to Senator Harrison S. Schmidt as repro-duced in U.S. Senate Committee on Banking, Housing, and Ur-ban Affairs, Defense Production Act and the Domestic Produc-tion of Cobalt Hearing, Oct. 26, 1981, Senate Hearing 97-38(Washington, DC: U.S. Government Printing Office] p. 143,

q 3 5 5

plan ning, It has also increased its mine life esti-mate to 20 years.

Another inactive mine, the Mad ison Mine inMissouri, could also supp ort prod uction of co-balt as a primary ore, according to its propo-nents. Closed since 1961, Madison produced

lead, copp er, and n ickel, and du ring the 1950s,cobalt un der a DPA subsidy. Madison’s ownerestimates that the mine could produce 2 mil-lion pounds of cobalt annually over an esti-mated mine life of 20 years. In addition, sub-stantial amounts of cobalt are present in minetailings that have accumulated over the yearsfrom lead and zinc mining in the area. Thesetailings could provide 300,000 to 500,000pounds of cobalt annually, using prevailinglead and zinc recovery technologies, but farmore if other processes were adopted. TheMadison mine owner estimated in 1981 that

a cobalt price of $25 per pound would be nec-essary to bring the mine into production. Re-vised estimates apparently have not been madesince then.

The Gasquet Mountain Project, a proposedmine on National Forest land in California,would involve production of cobalt and somechromite as coproducts of nickel production.A 1981 feasibility study for the project esti-mated that the lateritic deposits at the site couldsupport annual production of 19.4 millionpounds of nickel, 2 million pounds of cobalt,

and 50,000 tons of chromite over an estimatedmine life of 18 years. The economic feasibil-ity of the project wou ld thu s depend on mu lti-ple metals prices, with changes in the relativevalue of one metal, compared to the others,affecting production economics. For example,if nickel prices were $3.50 per pound, cobaltproduction would be viable at $12.50 perpou nd . If nickel prices rose to $3.96 per p ound,cobalt would be viable at $8 per pound, but if nickel prices were $2.21 per pound, a cobaltprice of $25 would be required.23 Nickel pricesin 1983 were $2.20 per pound. A company

ZSDocuments prot~ided to OTA on the Gasquet Mountain Stra-

tegic Metals Project by the California Nickel Corp. in March1983. The figures cited above assume a constant chromite priceof $40 per ton.




spokesman told OTA that it had not revised itseconomic evaluation since 1981.

In assessing the desirability of subsidizingdomestic cobalt or any other strategic material,several considerations shou ld be kept in mind .Supply security is the primary argument used

in support of government assistance for domes-tic cobalt production. To some, the risks en-tailed in continuing to depend on insecure for-eign sources of cobalt is an overwhelmingargument in favor of a domestic productionsubsidy even when cobalt could be more cheaplyacquired from w orld m arkets for the stockpile.The supply security aspect of domestic produc-tion is most persuasive if the risk that a pro-tracted su pp ly disrup tion will occur before ade-quate quantities of cobalt could be acquired forthe stockpile is seen as u nacceptable. To thosewho think the short-term risks of a supply dis-

ruption are not great, stockpiling now, ratherthan depleting limited domestic cobalt re-serves, seems to provide greater supply secu-rity in the long term.

Fluctuating cobalt or coprod uct metal p riceshave made it difficult to identify the extent of subsidy that would be needed, compared tosimply buying cobalt on the wor ld mar kets forthe National Defense Stockpile. If 1980 cobaltprices ($25 per pound) were to return and besustained, dom estic prod uction of cobalt wou ldcomp are favorably w ith world prices, and thus

could be cost effective even w ith m inimal gov-ernment involvement. At 1983 cobalt prices,about $6 per pou nd , it wou ld cost the govern-ment three to four times as much to buy co-balt from domestic mines than from the worldmarket. If it is assumed that mid-1984 cobaltprices (about $12 a pound) will continue, stock-piling from world markets would still becheaper than subsidizing domestic production.

Environmental considerations may also de-lay or potentially curtail proposed projects,especially when su pp ly security objectives are

not widely perceived as a pressing need. Con-cerns about possible water pollution and envi-ronmental damage to California’s GasquetMountain were raised in the legislative debate

about the 1984 DPA amendments.24 The Black-bird Mine is surrounded by Federal lands, in-cluding 40,000 acres which has been classifiedas wilderness with a stipulation that it will re-main open for cobalt exploration and miningactivities. Although open, actual developmentof the mine could be delayed by the processof establishing Federal regulations governingaccess to the site across Federal lands. Waterpollution problems arising from the presenceof arsenic will have to be overcome beforeproduction can begin.

Encouraging Foreign Production of

Strategic Materials

The United States is likely to be dependenton a few producing countries for most of its

supplies of strategic materials for the fore-

seeable futu re. Actions can be taken to increasethe number of countries supplying these ma-

terials, thus achieving greater d iversity of sup -plies. However, these actions take time to

implement and are not likely to alter funda-mentally the supply patterns in the next dec-

ade. Over the long term, a concerted effort to

promote diversity of foreign supply sources of specific minerals could help reduce overallU.S. vulnerability to a supply disruption. Tobe most effective, these actions must be nar-rowly focused to address problems that are

mineral-specific and to avoid possible compe-

tition w ith efforts to develop domestic sources.Potential benefits of supply diversification

strategies will vary by material, Of the first-tiermaterials, for instance, prospects for supplydiversification appear to be best for manga-nese, which already has the most diverse sup-ply. Several alternative sup ply sou rces also ex-ist for chrom ium, such as expanding output inTurkey and the Philippines. Cobalt diversifi-cation, primarily in the Southwest Pacific, de-pends to a large degree on world markets fornickel and copper, since cobalt is usually a by -

?4Environmental concerns associated with Gasquet Mountainwere discussed in House debate on the conference report onthe DPA amendments. (Congressional Record, H2538, Apr. 17,1984.)



product of production of these metals. In thecase of PGMs, the most promising known butnonproducing deposit is in the United States.Outside the United States prospects for PGMsup ply diversification will dep end on n ew d is-coveries rather than on the development of known deposits.

The likelihood that a supply diversificationstrategy will succeed also depends in part onthe extent to which the Federal Governmentand U.S. industry are willing to accept the risksand attendant costs associated with bringingalternative supply sources on line, Accordingto a 1982 GAO report, direct investment byU.S. firms in mining and smelting activities indeveloping countries has fallen significantlysince the late 1960's and early 1970s.25 Reasonsfor this include prolonged weak markets, per-ceived risks associated with such investments

(due to p olitical un certainties), and controls oninvestment asserted by prod ucer coun tries. Onthe other hand, the involvement of multina-tional mining firms in developing countries isstill extensive, While equity participation hasdeclined, firms are willingly supplying technol-ogy and management services.

New mining ventures from exploration toprod uction can cost $1 billion and more. More-over, mining prospects are long-term ventu res.Exploration activities to discover new depos-its can take many years and are often unsuc-cessful. Once a d eposit is identified an d foundto be promising, a minimum of 2 to 5 years isrequired to bring a new mine into produ ction;somew hat less time is required to increase out-put from an existing alternative mine that isalready in operation. Hence, actions taken toprom ote diversity of sup plies mu st be plann edand executed far in advance and are not likelyto be successful as a w ay to avert imm ediatelythe consequences of a sup ply d isruption, Evenif financial obstacles were overcome, supplydiversification strategies have inherent risks.Near the end of World War II, and through

much of the 1950s, the Federal Government2 5 [ J . S, (jfjnera ] A{{c)un ting office, Federal Encouragement ‘ f

hlining ln~estment in 1%~’eloping Countries for Strategic and

Criti{;al Minerals Has Onl~ Been hlarginall~’ Effectitre (Wash-ington, I)C: [J. S. General Accounting Office, 1982].


supported development of Cuban nickel re-sources to diversify U.S. supplies. The effortwas successful in d eveloping Cuban nickel, butfor political reasons the United States has nothad access to this supply since the early daysof the Castro regime.

In some countries the government plays avery active role in backing international re-source projects launched by private firms. InJapan, for instance, overseas ventures of suffi-cient importance to be considered “nationalprojects” are backed by low-interest loans toboth the coun try in w hich the pr oject is locatedand the consortium of Japan ese firms inv olvedin the project. The govern ment itself serves asthe major stockholder in the consortium.Among industrialized nations, Japan is unusualin that half or more of its foreign mining andsmelting investments are in developing coun-

tries—as compared to 25 percent among U.S.firms .28

In the United States, private industry—notgovernment—plays the primary role in secur-ing mineral su pp lies from foreign sources, andthis policy is likely to continue. However, theFederal Government can be a catalyst in pro-moting private investment overseas, throughthe dissemination of essential information, byfacilitating interaction between private indus-try and foreign owners, and by the targetingof international aid to private and producercountry mining activities that are related tostrategic materials. The extent and degree of encouragement considered appropriate canrange from m odest to extensive, dep end ing onthe imp ortance given to sup ply d iversificationin overall U.S. strategies to reduce import de-pendency.

The Reagan Administration has emphasizedinformation d evelopment to encourage p rivateaction. Initiatives include a Department of In-terior minerals training program for State De-par tmen t regional resource officers to imp rovethe collection of information. It also includes

discussions with market economy countriesabout mineral investment problems and the

2~Ibid., p. 5.




need for more consistent statistical reporting.In fiscal year 1983, the U.S. Geological Survey(USGS), in cooperation with Canada, West Ger-many, Australia, South Africa, and Great Brit-ain, began an International Strategic MineralInventory program to upgrade and standard-

ize resource and production information aboutworld deposits of chromium, nickel, manga-nese, and phosphate. Other minerals are ex-pected to be add ed to the inven tory. The USGSOffice of International Geology obtains fund-ing through the Agency for International De-velopmen t (AID) for various mineral potentialstudies of developing nations. These projectsare often cooperatively fund ed by th e develop-ing nation, must be “sold” to AID on the basisof their assistance to immediate developmentneeds, and do not necessarily focus on strate-gic materials. (Phosphate for agricultural pur-

poses is a major item.)President Reagan has also given new respon-

sibilities to the Trade and Development Pro-gram (TDP) of the International DevelopmentCooperation Agency (IDCA) in order to “broad enopp ortun ities for the U.S. private sector to par-ticipate in th e developm ent of and diversifica-tion of foreign sources of supply of strategicmaterials. “27 The mineral resources group of TDP received funding of about $700,000 infiscal year 1984 wh ich is su pp lemented by co-operative funding for specific projects. TDP

concentrates its efforts on a small number of strategic minerals and, as of March 1984, hadissued five reports that identified investmentpossibilities in those minerals for U.S. miningcompanies in foreign countries.28 TDP alsobrings private project promoters and prospec-tive investors together informally to discuss for-eign mining and processing projects. The TDPreports have been thoroughly prepared and arepotentially useful; however, some industry peo-ple claim they provide information alreadyavailable and that th e analysis is not extensiveenough to attract private investment, especially

during periods of depressed minerals markets.

ZTNatjona] Materia]s and Minerals Program Plan and Report to Congress, op. cit., p. 11.28Report~ cover manganese in Mexico, cobalt in Morocco and

Peru, and chromium in Turkey and the Philippines.

One TDP report has resulted in a TDP follow-up contract for a feasibility stud y to further en-courage private industry’s involvement. Futurereports might be more useful if they includedpossible followu p step s for governmen t actionto be considered by relevant agencies (e.g.,

technical or financial assistance), and joint ven-ture opportunities for the private sector. Al-though TDP’s approach is promising, fundinglevels may be too low to realize any substan-tial improvement in diversified mineralssources.

Other Administration efforts have involvedthe development of a model bilateral invest-ment treaty. When adopted by individual coun-tries, such a treaty may improve a country’sinvestment climate, but does not necessarilycreate mineral investment opportunities,

An alternative or complementary approachwould be to target or give special priority tostrategic materials in U.S. bilateral assistanceprograms, or as part of U.S. responses to multi-lateral assistance in w hich it p articipates (table8-7, issue 3). The 1980 National Materials andMinerals Policy, Research and DevelopmentAct emphasized the importance of such activ-ities by calling on the President to “assess theopportunities for the United States to promotecooperative multilateral and bilateral agree-ments for materials development in foreign na-tions for the purpose of increasing the reli-

ability of mineral supplies to the Nations.”29

Major multilateral and bilateral programsapplicable to mineral development are high-lighted in box 8-A.

Multilateral programs, established by theUnited Nations, the World Bank group, andother international organizations, have beenthe primary means (albeit indirect) for U.S.assistance for mining and smelting activitiesin developing countries. These programs, ac-cording to the GAO report, have had a limitedimpact on increasing supplies of strategic

materials of importance to the United States.Of 45 mineral-related projects during 1971-80,most involved copper, lead, zinc, and iron ore,

Zesec. 4(g) of Public Law 96-479.



Ch. 8—Policy Alternatives for Strategic Materials q 35 9

Box 8-A—Bilateral and Multilateral Assistance Approaches forMining Investment in Other Countries

Bilateral Approaches:q

q

Overseas Private Investment Corporation(OPIC) was established in 1969 to facilitate

flow of private U.S. capital and skills to theThird World th rough insuran ce, financialguarantee, direct loan, and prom otionalprograms. Mining and energy initiativeswere instituted in 1977 to help r evive in-vestor interest in developing country miningprojects. Although OPIC does not supporta significantly large n um ber of projects, themining projects that it does support are gen-erally targeted to strategic minerals.

Export-Import Bank was created in 1934 toprovid e financial supp ort for U.S. exportsales through direct loans, financial guaran-tees to private lenders, and commercial and

political risk insurance. Unlike most assist-ance program s, Ex-Im operations are n otlimited to developing countries. Programswere directed toward specific mineralneeds du ring World War II and the Koreanwar using the Reconstruction Finance Cor-poration an d th e Defense Produ ction Actas sources of funding. Since then, however,lending (for mining equipment exports) hasbeen limited and has not focused on strate-gic minerals. The Bank has no control overthe m ix of incoming ap plications it proc-esses. Weak markets and inability to com-pete effectively with foreign counterpartshave resulted in only a few mineral projects.

Multilateral Approaches:

• Development Banks (e.g., the World Bank,Asian Development Bank, and Inter-Ameri-can Development Bank) tend to devotesmall shares of their overall funding tomineral projects and have no mechanismto target “U. S.” strategic materials whenthe strategic materials of other involved na-tions are different. Priorities for addressingbasic needs of people limit mineral projects

to those wh ich are viewed as a wa y to im-prove foreign exchange earn ings and bal-ance of paym ents postur es. Developm ent

bank activities sometimes conflict with U.S.domestic mining interests by promoting thedevelopment of foreign competition.U.N. Revolving Fund for Natural Resources

Exploration was set up in 1973 to help in-crease natural resources exploration in de-veloping countries and expand th e world’sknown resources base. Its mission is to ad-dress what experts perceive to be the great-est mining-related problem for d evelopingcountries: insufficient exploration. Whileexploration costs generally are not greatcompared with mine development costs,the risks are greater due to a lower prob-ability of success. Therefore, funding is d if-ficult to obtain–even from d evelopm entbanks. The Fund, which contracts actualwork to the p rivate sector, deals in explo-ration projects exclusively although it doeshave the authority to d o follow-up feasibil-ity studies. Of 11 projects completed in1983 and 5 continu ing on throu gh 1984,none involved first-tier strategic materials.According to GAO, by 1982 the Fund hadnot yet d emonstrated its capabilities con-vincingly, having h ad financial and initialproblems in convincing governments to useits services, and in obtaining contributionsto set up the fund.

International insurance plans to safeguardforeign investment have been proposed butnever implemented, due to lack of agree-ment on how to arbitrate disputes, negoti-ate claims, finance the plans, or distributevoting rights. Recent proposals and spon-sors include: International InvestmentInsurance Agency (1966), World Bank; In-ternational Resources Bank (1975), U.S.Government; Inter-American Fund for En-ergy and Minerals (1979), Inter-AmericanDevelopment Bank.




and only four involved strategic materials. Mul-tilateral programs that support explorationactivities, such as the U.N. Revolving Fund forNatu ral Resources Exploration, have some po-tential to result in new discoveries of strategicmaterials.

Several bilateral aid programs could be spe-cifically targeted to encourage U.S. firms to in-vest in mining activities for strategic materials,Past efforts have been only m arginally success-ful, as was brought out by the GAO report,Among other th ings, the report found that ex-isting programs were not oriented tow ard p ro-viding solutions to w hat ar e, after all, mineral-specific problems (the TDP studies, a notableexception, were only beginning at the time of the GAO study) and that there was a lack of coherent investment strategies to guide imple-

mentation actions over the long term.One of the often stated impediments to min-

ing firm investment abroad is the fear of polit-ical instability, A mining firm will launch aproject only if it believes that the project willyield an adequate after-tax return on equityover a specified time period. Political risk in-surance can reduce the political component of economic decisionmaking. The Overseas Pri-vate Investment Corporation (OPIC), estab-lished by Congress in 1969, provides such in-surance as well as financing (loans and loan

guaran tees) to U.S. firms investing in d evelop-ing countries. Its involvement in mineral p roj-ects, however, has been limited due to theweakness of markets and, in the area of natu-ral resources, it concentrates on energy proj-ects. OPIC, like the Export-Import Bank (seebox 8-A), assists rather than subsidizes foreignprojects. Thus, it can improve the competitiveposture of U.S. firms but not the marketswherein firms must operate.

GAO cited policy and procedural restraintson OPIC’s activities as limiting factors on thenumber and type of mineral projects it sup-

ports. As a public corporation, OPIC must as-sure that, overall, its investments generate apositive return. To do so, its investments arebroadly based in terms of industries and coun-tries served. Loans granted by OPIC are re-

stricted by legislation to small businesses,which disqualifies the majority of mining firms.Loan guarantees (up to $50 million) are avail-able only for the production phase of miningprojects. OPIC political risk insurance maxi-mum ($125 million) may not be consistent with

the real costs of most m ineral investment activ-ities today, although it does provide 20-yearcoverage of the entire mineral exploitationprocess from exploration through production.

The President’s materials plan does not ad-dress foreign aid or loans as an instrument of national minerals policy. When more limitedmeans do not encourage the diversification of sources, it m ay—given th e perception of risk—be appropriate for the Federal Government toengage in direct financing support for exploi-tation of, or creation of demand for, these

diversified sources. Stockpile needs and otherFederal Government purchases, for example,could be directed at creating demand for un-exploited strategic materials deposits. Loansand loan guarantees could assist countries bothdirectly and indirectly in exploiting mineral re-sources. For instance, prospective miningprojects are often located inland, without ade-qua te in-place transp ortation and energy infra-structure. Developmental aid for such support-ing pro jec ts could overcome economicobstacles to mine development, provide invest-ment opportunities for U.S. firms, and, at thesame time, stimulate the overall economicgrowth of a developing nation.

In using both multilateral and bilateral mech-anisms, a clear distinction must be made be-tween the needs of the domestic mining ind us-try and those of U.S. firms involved in theinternational mining industry, Policies devel-oped for one m ay be viewed as d etrimental bythe other. The domestic mining industry todayfaces increasing competitive pressu re from for-eign m ining that is sup ported by governmentsthat are more concerned with generating for-

eign exchange or jobs than w ith p rofits. Manyof these ventures may be supported eitherdirectly or indirectly by public sector interna-tional development banks. The domestic indus-try, which is guided by the principles of the free



Ch. 8—Policy Alternatives for Strategic Materials q361— —

market, says it cannot continue to compete inglobal markets under these newly emergingand unfamiliar rules of competition. Con-versely, U.S. firms involved in foreign miningprojects can take advantage of them. Clearly, forcommodities where domestic mining competeswith foreign mining, a policy choice must bemad e that serves both sectors or just one. For-tunately, inherent in the nature of “strategicmaterials” is the fact that little, if any, domes-tic mining occurs for these commodities atpresent. If policies are specifically targeted,they w ould have less chance of being d etrimen-tal to the domestic mining industry and greaterlikelihood of success in diversifying U.S. sup-ply sources.

Implications of Diversification of Supply

for Ferroalloy Production

Diversification of ore suppliers offers onlya partial solution for decreasing the potentialfor interruption of supplies of chromium andmanganese, Since the bulk of chromium andmanganese ore is processed into ferroalloys foruse in the production of steel, stainless steel,and superalloys, it is also necessary to ensurethat ferroalloy production facilities will beavailable to process ore obtained from a vari-ety of suppliers.

The domestic ferroalloy industry was oncethe major supplier of ferroalloys to the U.S.steel industry, but this position has been erodedby foreign suppliers such as South Africa,France, and Brazil. This decline can be at-tributed largely to nontechnical factors, par-ticularly:

q

q

q

policies by foreign governm ents and inter-national organizations that provide finan-cial incentives that encourage developmentand operation of ferroalloy production indeveloping countries, primarily in conjunction with operating mines;higher cost for U.S. labor in comparisonto labor costs in other producing countries;current exchange rates that, due to thestrong U.S. dollar, favor the use of im-ported products over domestic production;and

qhigher capital investment required of do-mestic producers in order to meet strin-gent U.S. environmental and safety re-quirements.

The domestic ferroalloy indu stry has a nu m-

ber of strengths, including large, in-place ca-pacity for pr odu ction of ferroalloys; adap tabil-ity of furnaces between various manganese,chromium , and silicon products (although con-version between products is, in some cases,limited by design of electrical or pollution con-trol systems) and proximity to m arkets for fer-roalloy products that allows quick response tospecial orders for nonstandard products.

One way to assure ferroalloy processingavailability would be to encourage the con-struction of processing capacity along with

chromium and manganese mines, but thismethod would provide excess worldwide ca-pacity and be wasteful of capital investment.A second alternative is to maintain a ferroalloyprocessing capability in the Un ited States, onedesigned to be flexible both in prod ucts (ferro-chromium , ferroman ganese, silicon, and ferro-silicon, and specialty p rodu cts such as calciumsilicon) and in production rates (with plants de-signed for rapid expansion of capacity).

New technology may change the outlook forthe domestic ferroalloy industry in two ways.First, process impr ovements, su ch as increased

use of automated equipment and computercontrol, may increase labor productivity, re-duce energy consumption, and raise the qual-ity of products. These improvements, in turn,would improve U.S. competitiveness, sincehigh labor and energy costs are a contributorto the high cost of domestic production, andthe qu ality of produ cts for specialty steels andsup eralloy can protect and strengthen the U.S.position in these markets. The second majortechnical change facing the industry is theadoption of plasma arc and high-voltage elec-tric furn aces. These advan ced furnaces, whichare in the latter stages of development and thefirst stages of commercial use, may offer loweroperating costs and improved energy efficiencyover the submerged arc furnaces now in use.However, they must be built to replace fur-naces now in use, which will require the in-




dustry to make major capital investments.These new furnaces are applicable both to do-mestic and to foreign production, so it is pos-sible that the domestic industry could be leftbehind its foreign competition if it is slow toadopt the new processes.

Since the immediate problems of the ferro-alloy industry arise from political and eco-nomic factors rather than technical ones, theprincipal response of the government (if it isto respond) is likely to be political, In the longerterm, however, there are more options (table8-7, issue 4). First, the Bureau of Mines canwork with industry to develop process im-provements, particularly in the area of auto-mation and computer control, that increase

labor prod uctivity and redu ce energy and m a-terial consumption. Second, financial incen-tives, such as increased depreciation, taxcredits, or low-interest government loans couldbe used to encourage the adop tion of new ferro-alloy furnaces. Third, the government could

use its influence in internat ional lend ing orga-nizations to encoura ge the use of developm entloans for projects other than ferroalloy facil-ities. Fourth, additional support, either as loansor grants, could be provided to the ferroalloyindustry to include in plant designs the po-tential to increase capacity or shift betweenproducts rapidly when supplies of importedferroalloys are unavailable and ores must beprocessed for domestic industries.

Substitution and Advanced Materials

In discussing substitution, it is useful todifferentiate between two broad classes of alternative materials: direct substitutes, i.e.,materials that, wh ile not necessarily preferred,could replace materials now in use; and ad -vanced materials, which may displace cur-rently used materials in time because the newmaterial offers a clear advantage in perform-ance, cost, or other benefit. In contrast to di-rect substitutes, which may require only mi-

nor d esign changes for u se, advanced m aterialsoften require redesign of products for optimaluse.

Direct substitutes are immediately availablefor many applications that now use first-tierstrategic materials. However, this is not thecase for some applications that are most criti-cal to the national defense and the U.S. econ-omy. As discussed in chapter 7, the FederalGovernment sponsors considerable R&D aimedat finding direct substitutes for strategic ma-terials, Much of the research has focused on

development of lower chromium alloys as po-tential replacements for stainless steels of high-chromium content, and on alternative jet en-gine superalloy wh ich contain red uced amou ntsof cobalt or other strategic materials. This re-search adds to the choices of materials avail-

able to designers. However, institutional andeconomic barriers impede acceptance of thesematerials so that man y will not be fully devel-oped. Substitutes used in highly demanding ap-plications need to undergo extensive testingand qualification before they can be used. In-dustry has little incentive to undertake this test-ing unless the substitute offers a clear advan-tage over currently used materials.

Besides direct substitutes for materials nowused , the Federal Governmen t also plays a pri-mary role in sponsoring research on advancedmaterials, such as advanced ceramics and com-posites, and rapidly solidified metals. Thesematerials have long-term promise to changecurrent requirements for strategic materials—although to what extent is difficult to predictdue to the need for redesign of product com-ponents. In some applications, net savings instrategic materials may occur, while in otherapplications, product redesign could lead to in-creased use of strategic materials.

Many barriers must be overcome before useof these advanced materials becomes wide-spread. Some barriers are technical, arisingfrom the materials themselves or from the needto improve current processing techniques so




that reliability is increased. Oth ers are institu-tional and economic. Some of these materialsare much more expensive than currently usedmaterials, althou gh costs may go down in timeas processing problems are overcome. Fromthe institutional side, widespread use of these

materials may have to await establishment of standards and specifications for their use, aswell as greater emphasis on these materials inengineering curricula.

An emerging imp ort vulnerability issue con-cerns adequacy of domestic processing andmanufacturing capabilities for advanced ma-terials. Most advanced materials are m a d efrom raw materials which are plentiful in thiscountry. H owever, the manufacturing capabil-ities (including technology and technical know-how) to produce qualified materials suitable forthe most demanding applications is distributed

among several nations. Most advanced mate-rials are in limited production status at thistime. As they become more frequently used, theextent to which the United States should at-tempt to become self-sufficient in all stages of production of these materials is likely to be in-creasingly debated.30

Table 8-8 shows selected policy alternativeswith respect to substitution and advancedmaterials. Although some policy issues asso-ciated with direct substitutes and advancedmaterials are held in common, there is enough

divergence to merit separate discussion, as isdone below.

Direct Substitution Options

The Federal Government is the primarysponsor of R&D on direct substitutes for stra-tegic materials. Except in times of a supplyshortage, industry has little incentive to con-duct such activities unless the substitutes af-ford a clear benefit of cost or performance.

3oFOr ~ discussion of initial self-sufficiency issues associated

with the advanced composites industry, see Stanley L. Chamon, Industrial Base and Qualification of Composite Materials and Structures (An Executive Overview) (Arlington, VA: Institute forDefense Analyses, 1984). Concern about U.S. reliance on for-eign sources and a sole domestic supplier for polyacrylonitrile(PAN), used in production of some carbon composites, was oneissue discussed in the legislative debate about reauthorizationof the Defense Production Act in 1984.

Emphasis on substitution research amongFederal agencies has accelerated since the mid-1970s. Several Federal agencies, including va-rious defense agencies, NASA, the Bureau of Mines, and the DOE national laboratories un-dertake or sponsor strategic materials substi-

tution research. Despite recent budget cut-backs, Federal funds available for substitutionresearch app ear to be quite healthy, with somegains and losses among d ifferent Federal agen-cies. The Bureau of Mines substitution re-search effort has increased recently, whileNASA’s Conservation of Strategic AerospaceMaterials (COSAM) program has been cutsomewhat. The COSAM program has resultedin some superalloys with reduced cobalt con-tent that have the potential to directly replaceexisting superalloy. These materials have notreceived extensive development beyond the

laboratory stage. A more fundamental purposeof the COSAM program was to sponsor basicresearch that would shed light on the functionthat strategic materials play in superalloys.(Table 8-5 shows total U.S. expenditures forsubstitution on specific strategic materials forfiscal year 1980, the last year in which govern-mentwide data is available.)

Federal sponsorship of substitution researchis generally conceded to be essential if researchprograms are to be undertaken on a sustainedbasis to find direct substitutes for strategicmaterials. However, this research alone willnot do much to reduce overall vulnerabilityunless promising substitutes are developed tothe point that they can be used by industry. Thetime lag between initial laboratory develop-ment of an alternative material and the stagein which it is ready to be used is often pro-tracted; many expensive and time-consumingintermediary steps must be surmounted beforethe material can be considered “on the shelf.”The extent to which the Federal Governmentneeds to be involved in narrowing this gap de-pends on the relative weight that is given to

substitution in an overall strategy to reduce im-port vulnerability.

Actions the Federal Government could take,besides its continuing important role as the pri-mary sponsor of research on substitutes, areidentified in table 8-8 and discussed below.




These actions are of two kinds: greater govern-ment involvement in developing the informa-tion needed to facilitate industry use of newmaterials; and greater Federal support for thepost-laboratory development of direct sub-stitutes.

Providing Substitution Information to Industry

Many on-the-shelf technologies and materialscould lower strategic materials consumptionin the United States, and potential substitutesare at various stages of development. Thesealternative materials and technologies are wellknown to defense industries, automakers, andother large or technologically advanced ind us-tries. However, many small or technically un-sophisticated firms ordinarily would not haveeasy access to information about specific ma-

terials, technologies, and app lications in wh ichsubstitution could lessen strategic materialsuse. Difficulties in obtaining information aboutalternative materials might lengthen their sub-stitution response time in a su pp ly disruption—a critical concern, especially for firms that arenot likely to receive an allocation preferencein the event of a supply disruption of majorproportions,

The need for a mor e effective mechanism forcollecting and transferring information aboutstrategic materials substitutes to industry and

end users has long been recognized by thematerials community (table 8-8, issue 1). Sev-eral major conferences on materials, as wellas various testing societies and industry or-ganizations, have recommended that a sub-stitution information program of one sort oranother be an essential component of strate-gic materials policy.31 Some steps have beentaken by government agencies, trade organi-zations, and professional organizations to im-prove substitution information availability, but

slrI’he i m [)() rta n(; e of suhst itutio n information is illustrated i nrecommendations made at a workshop on (conservation and sub-stitution for critical materials held in 1981 at Vanderhi]t [’ ni\rer-sity under sponsorship hj’ the Departments of Commerce andthe Interior. of 27 recommendations, 10 invo]ved development,compilation, and dissemination of information related to sub-stitution, conservation, and d isplacemerlt of (:ritical metals,

these have been conducted on an ad hoc basiswithout a sustained focus.

Information programs of varying scope andcomplexity have been proposed. At the mostbasic level, an ongoing program of confer-ences, seminars, and information dissemina-tion has generally been seen by the materialscommunity as a relatively inexpensive and ef-fective way to heighten industry awareness of research developments relevant to strategicmaterials substitution and conservation oppor-tunities. Many Federal agencies and privateorganizations have contributed to such pro-grams in the past, but a continuing programof this sort does not exist.

Others see a need for a national informationrepository for substitution studies, includingstudies on alternative materials, analyses of

alternative processing techniqu es, substitutioncase histories, and directories of experts onpart icular technologies or material substitu tes.Much of this information may be availablethrough individual agencies or through the Na-tional Technical Information Service (NTIS),which has been given augmented responsibili-ties by the Reagan Administration to transferinformation about Federal technology develop-ment to the private sector. But the demandsplaced on NTIS may be too diffuse to addresseffectively the particular issue of strategicmaterials substitution.

At a m ore ambitious level, various organ iza-tions and individuals have proposed establish-ment of a “substitution information stockpile”to provide engineers, designers, and procure-ment officials with highly technical informa-tion needed to make decisions about availablesubstitutes. As generally prop osed, this “infor-mation stockpile” wou ld iden tify, systematize,and compile detailed information about theproperties and potential applications for cur-rently available and qualified alternative ma-terials. Often, systematized information about

alternative processing and fabrication technol-ogies that could conserve strategic materialsis seen as an essential component of the infor-mation stockpile. The primary p urp ose of sucha stockpile would be to reduce response time




in a supply disruption. However, it is possiblethat more firms would adopt their own con-tingency strategies for reducing their depend-ency on imp orted m aterials if they were awareof available substitution opportunities.

Even though often proposed, specific stepstoward development of an information stock-pile have been limited. Part of the reason forthis may be that developing a proper formatfor the information—a technical handbook orcomputerized data bank that could be availableto industry—could be quite difficult. Safe-guard s, for example, would h ave to be built intothe system to assure that the information, how-ever presented, clearly delineates those appli-cations in wh ich qualification is requ ired fromthose in which it is not, Another reason maybe a concern that a handbook or data bankcould quickly become obsolete, presenting staleinformation of little value. Hence, revision andupdating of the information stockpile would beessential. Finally, testing societies and tradeassociations have limited resources availablefor such purposes, while the Federal Govern-ment has focused most of its substitution ef-fort on research.

Although some components of an informa-tion program—conferences and library repos-itory, for example—have broad relevance tostrategic materials, the substitution bank con-cept would probably be of greatest practical use

for chromium—especially as used in stainlesssteel. Designers frequently overspecify (usehigher chromium content stainless steels thanmay be needed) in many noncritical applica-tions. Stainless steel is used in a wide varietyof applications throughout the economy; anestimated 60 percent of this demand is for ap-plications in which adequate substitutes areavailable, or in which some substitutes maybedeveloped after a period of R&D. Ready accessto information about these substitutes couldhelp the consumer of chromium for nonessen-tial uses to respond to a sup ply disruption andease problems the government might have inallocating available chromium to essential uses.

Initial work on chromium substitution op-tions includes a major report by the NationalMaterials Advisory Board and an indu stry sur-

vey by the Metal Properties Council, which isan active supporter of the substitution bankconcept. (This latter effort has been su pp ortedin part by NBS.) In this regard, it should benoted that a nonprofit entity, called the Na-tional Materials Property Data Network, Inc.,

has recently been established to explore waysfor p roviding comp uterized data on engineer-ing materials. 32 Additional work to define thefeasibility and parameters of an informationstockpile would be needed.

Development of a substitution informationprogram would require extensive interactionbetween government and the private sector, in-cluding participation of testing societies, tradeassociations, professional societies, and indus-try. This need for extensive private sectorinvolvement in development and use of the in-formation program m ay mean that the govern-ment’s key role would be sponsorship—not ac-tual conduct—of the program. For example, thegovernment could provide funds to a testingsociety, a university, or other nonprofit orga-nization, to establish a nonprofit center witha specific mission and charter to develop in-formation about substitute materials and newtechnologies that would help conserve strate-gic materials. Participation of key Federalagencies, such as national laboratories, NASA,NBS, the Bureau of Mines, and the Departmentof Defense could be structured into the center’s

charter.

Developing Substitute Alloys

As a general proposition, the Federal Gov-ernment’s role in developing substitute mate-rials often end s at an early stage of laboratoryresearch. Research results may be published,but it is usually left to private industry to de-cide whether additional development stepsshou ld be taken. Thu s, many strategic materialsubstitutes are not placed on the shelf by fed-erally sponsored research, nor are they likely

to be fully developed by industry unless the

Ozsee National Materials Advisory Board, Materials Proper- ties Data Management Approaches to a Critical National Need (Washington, DC: National Academy Press, 1983), NMAB–405,for a discussion of the need for upgrading U.S. materials prop-erties data bases.



Ch. 8—Policy Alternatives for Strategic Materials . 367 —

new material is seen as providing significantcost or performance benefits comp ared to cur-rently used materials.

Substitu te m aterials used in critical app lica-tions, such as in powerplants and chemicalplant p rocessing, must be extensively tested af-ter their initial development in the laboratory,Depending on the application, it can take 5 to10 years and several million d ollars to developand qualify new materials or processes to thepoint that they can be used by industry,

Many—perhaps most—of the direct substi-tutes that have been developed with Federalfunds would be more expensive (at currentprices) than the materials they would replace.A few are potentially cost competitive with cur-rently u sed materials and thus m ight be usedby industry if the qualification hurdle were

overcome.Given this situation, the question arises as to

what steps, if any, could be taken by the Fed-eral Government to bring potential substitutescloser to commercial use? One alternativewou ld be for government to sup port a cooper-ative effort with the private sector to select,fully test, and qualify (where necessary) a fewmaterials with significant potential to reducecritical material n eeds (table 8-8, issue 2). Mostof this effort wou ld p robably involve contractswith industry, testing societies, and universi-

ties to carry out key roles, Once these materialswere fully developed, they would be availablefor use by industry or could serve as a kind of standby “national emergency alloy system, ”analogous to the national em ergency steel sys-tem developed in World War II.

Such a step would not necessarily entail amajor new Federal program: it could be accom-plished throu gh selective targeting of strategicmaterials development activities to focus onthose materials considered to be most criticalto U.S. substitution prep aredn ess. Both th e De-

fense Production Act and the Stockpile Revi-sion Act authorize the President to developsubstitutes for strategic and critical materials.Federal agencies, such as the Department of Defense, Bureau of Mines, and NASA, fromtime to time sponsor test heats and other de-

velopmen t activities of substitute m aterials ona cooperative basis with industry. Moreover,the Federal Government has sometimes spon-sored new materials for qualification by test-ing societies, Oak Ridge National Laboratoryis now sponsoring a 9 percent chromium steel

for use in powerplants, for example,33

and theDepartment of Defense has played a key rolein the commercialization of many materialsconsidered essential for defense purposes.

Obviously, because man y substitutes are po-tential candidates for augmented developmentactivities, considerable care would be neededin selecting the materials. Selection of anymaterials for further development work woulddepend on many considerations, includingtheir technical prosp ects, degree of ind ustry in-terest, and potential contribution to reducing

impor t vu lnerability relative to other strategies(e.g., stockpiling or recycling).

For example, as discussed in detail in chap-ter 7, several superalloy with reduced cobaltcontent, intended as direct replacements forsuperalloys now used in jet engines, are nowun der development, These will not be availablefor u se unless they und ergo several years of ad-ditional testing. It has sometimes been pro-posed that steps be taken to prequalify suchlow-cobalt substitutes (presumably by govern-ment) so that they wou ld be available for use.34

Because of rapid changes in materials used in jet engines, these substitutes could be partiallyobsolete by the time they are fully developed.Therefore, other op tions—ranging from stock-

—.33This stee] ~~as not del,e]oped to reduce import ~wlnerability,

but as part of the breeder reactor program. It is intended toreplace both a 2? 4 percent chromium steel and a 18 percent chro-mium steel now used in powerplants, so that the design of a par-ticular powerplant will determine whether more or less chro-mium is used. It has been speculated that this steel mayeventually replace 18 percent chromium stainless steels in someother applications, although, to date, this has not occurred. Fed-eral expenditures in data development and other activities asso-ciated with qualification of the material are estimated to be about$5 million since 1978. An estimated $2 million in private serv-

ices have been donated to the effort. The 9 percent chromiumalloy is expected to be used commercially in some applicationsin 1984.

aqsee, for example, the discussion in U.S. Department of Commerce, Conservation and Substitution Technolog.v for Crit-ical Materials: Proceedings of Public Workshops, June 15-17,1981, p. RI-1.



368 Strategic Materials: Technologies to Reduce U.S. Import Vulnerability —

piling to recycling to aggressive pursu it of ad-vanced materials—could be more effective inreducing vulnerability in this application.

Fewer options are available for reducingchromium import vulnerability for stainlesssteel, however, and despite appreciable re-search efforts, an estimated 40 percent of thechromium used in stainless steel is consideredirreplaceable. At present, several low-chro-mium alloys that could substitute for higherchromium stainless steels in som e app licationsare in the early stages of laboratory develop-ment. (Table 7-4 in ch. 7 shows selected exam-ples.) Current substitution research is add ress-ing applications in the midrange of difficulty(technically feasible substitutes could be devel-oped after a period of intensive R&D). Full de-velopment of substitutes for this midrange of

applications could ease allocation decisions ina supply disruption so that available chromiumcould be used in those applications for whichno alternatives are likely to be available,

Targeting a few of the most promising low-chromium substitutes for augmented develop-ment would require in-depth analysis of theircurrent status, needed developm ent steps andassociated costs, and applications in whichthey could reduce critical and strategic mate-rial needs. Substantial input from industry, test-ing societies, and academic institutions wou ldbe needed both to identify the most promising

materials, and to undertake most of the indi-cated development steps, Given the costs thatcould be entailed—the Oak Ridge qualificationprocess discussed above cost an average of $1million per year over a 5-year period—such aprogram would have to be conducted at a smallscale, with no more than two or three materialsundergoing augmented development at anygiven time.

Ultimately, whether it would be desirable toestablish a cooperative government and indus-try program of this sort depends on the p rom-

inence that is assigned to substitution in over-all Federal strategies for reducing importdependency. Development of direct substitutesis a medium-term (5 to 15 years) response forreducing import dependency, so that actionstaken now will not have an immediate effect.

At the same time, it maybe difficult to justifyFederal applied research on direct substitutesunless the end result is to reduce overall U.S.import vulnerability. This may not occur un-less ways are found to develop promising sub-stitutes to the point to which they can be used

by industry.

The Potential of Advanced Materials

Strategic materials displacement is not a p ri-mary reason for the current interest in ad-vanced ceramics, various composite m aterials,rapidly solidified alloys, and other advancedmaterials that are the subject of intensive R&Defforts by government and industry. Rather,these materials promise special performancebenefits compared to currently used materials.

However, advanced materials usually containlittle or no cobalt, chromium, manganese, orPGMs, and therefore, over the long term theyhave promise to displace or reduce some stra-tegic material requirements. Often, reducedstrategic material requirements will be an in-direct benefit of using these materials. Sinceredesign of comp onent systems m ay be neces-sary for optimal use of advanced materials,overall savings in strategic materials are diffi-cult to predict.

Advanced materials—unlike direct substi-tutes for currently used materials—have the po-

tential to provide the basis for important newU.S. industries, while at the same time reduc-ing requirements for strategic materials insome applications. Advanced ceramics may be-come a multibillion dollar business, with po-tential markets pr ojected to reach over $20 bil-lion by the year 2000, How ever, at present, thecompetitive posture of the United States in ad -vanced ceramics lags behind Japan in the areaof electronic components, and the UnitedStates is in some danger of losing the race formarket supremacy in engineering ceramics,Other countries, including Great Britain andsome Western Europ ean countries, are also vy-ing for expanding world markets.

A 1984 Commerce Department study of theadvanced ceramics ind ustry ind icated that nei-ther the United States nor Japan was in the




clear lead with regard to advanced ceramicengineering materials. However, the Depart-ment pred icted that the United States could fallbehind Japan if current trends continue. Japa-nese success was noted in the following areas:

q

q

q

q

q

q

domination of electronic componentsmade of advanced ceramics;domination of supplies of advanced ce-ramic powders;greater and more organized R&D efforts;sup erior performan ce/ cost characteristicsof Japanese demonstration products;reputation for accepting short-term lossesand investing in long-term product-marketdevelopment; andrecord in developing and implementingsuperior commercial manufacturing proc-esses and technologies.35

The potential importance of an internation-ally competitive advanced materials industryto the U.S. econom y, and the stance of the Fed-eral Government in encouraging such indus-trial activities, is likely to be an increasinglyvisible issue in the years to come. In general,the alternative roles that the governm ent couldplay in fostering a strong domestic ceramicsindu stry are likely to be iden tified and debatedwithin the broader context of the overall pos-ture of government-industry relations, not inthe context of strategic material issues. Regard-less of the extent of government involvement

in encouraging U.S. competitiveness in thisarea, a number of technical and institutionalproblems will have to be overcome before thesematerials come into general use. Therefore, thediscussion here is focused on issues of Federalinvolvement in research, development, infor-mation transfer, and education, rather than onthe full spectrum of alternative policies to en-courage advancement of this sector of the econ-omy.36

35 ~]. S. I)el)a rt ment of Commerce, A Competitive A Ssessmen tOF the Lr.,$. Ad~’anced Ceramics industry [Springfield, VA: Na-

tiona] Technical Information Service, 1984), p. 64.a6Readers who are interested in alternative Federal roles instrengthening the international competitiveness of the U.S. ad-vanced ceramics industry are referred to the Commerce Depart-ment’s assessment identified in the previous footnote. Thebroader issues associated with alternative government actions

Government Support of Research and Development

It is generally thought that the United Statesleads the world in basic research with regardto advanced materials. Funding of advancedmaterials R&D activities in the United Statesappears to be generally healthy. However, con-tinuation of a strong basic research effort willprobably be needed for many years. Manufac-turing processes and fabrication technologiesare areas in which more emphasis in R&D isgenerally considered necessary. The high costsof fabricating composites, for example, arisesin part from labor-intensive and time-consum-ing p rocesses. In ad vanced ceramics, key n eedsare to improve powder production and to de-velop reliable processing technologies to pro-duce flaw-free ceramics economically. Im-proved nondestructive evaluation techniques

are critically needed in both composite and ce-ramic applications.

As with other areas of material research, sev-eral Federal agencies, including NASA, NBS,the Bureau of Mines, various Defense Depart-ment agencies, and the DOE national labora-tories, undertake or sponsor advanced ma-terials research. Much of the governmentresearch is undertaken on a contractual basiswith industry. Information sharing among re-searchers, including various governm ent agen-cies and those firms directly involved in R&D,is generally considered by researchers to be ef-fective. However, coordination of policy withrespect to advanced materials, particularly athigh levels of the executive branch and withCongress, has been fragmented.

As discussed previously, the National Criti-cal Materials Act of 1984 calls for the estab-lishment of a “national Federal program for ad-vanced materials research and development, ”giving key respon sibility to the N ational Criti-cal Materials Council in the Executive Officeof the President for implementing the program,

—-————involving transfer of new technologies to the private sector arediscussed in 4’Development and Diffusion of Commercial Tech-nologies: Should the Federal Government Redefine Its Role?”(Office of Technology Assessment Staff Memorandum, Indus-try, Technology and Employment Program, March 1984.)




The Council, among other things, is directedto prepare and annu ally review a Federal pro-gram plan for advanced materials R&D. Theplan is to d esignate key respon sibilities for car-rying out research, and is to provide coordi-nation with the Office of Management andBudget, the Office of Science and TechnologyPolicy, and other appropriate Federal officesand agencies,

The Council is also to review annually thematerials research, development, and technol-ogy budget requests of all Federal agencies toensure close coordination of the goals anddirections of such programs with policies de-termined by the council, The Office of Man-agement and Bud get, up on reviewing ind ivid-ual agency budget requests, is to consider themas an “integrated, coherent, multiagency re-quest” to be reviewed by the Cou ncil and OMB

for adherence to the na tional Federal materialsprogram plan for each fiscal year.

The process established by the 1984 Act canbe expected to give far greater visibility to re-search needs associated with advanced mate-rials than has existed heretofor. However, inkeeping with the process orientation of mostcongressional laws pertaining to materialsR&D, the law gives the Council considerablediscretion in putting together components of the plan. For example, while the law makes itclear that the p rogram is to includ e R&D from

“basic phenomena” through processing andmanufacturing, it does not define the term “ad-vanced materials, ” thus giving the Council flex-ibility in determining which classes of mate-rials fall under the program plan, The Councilwill also have discretion in determining over-all goals and objectives of such a plan. As a re-sult, congressional oversight and guidance maybe needed to determine whether the Council’sprogram accurately reflects Congress’ intentin establishing the program (table 8-8, issue 3).

Education Needs and Advanced Materials

Considerable concern exists about the ade-quacy of current engineering curricula andtraining of engineers and designers in the useof advanced materials, Most curricula in engi-neering schools are designed to familiarize

engineers with materials that are most prev-alently used today, such as metals. Progress inadvanced materials fields—the materials whichwill come into greater prominence in thefuture—may hinge in part on the success of engineering curricula to make engineers anddesigners familiar with processing technol-ogies, and product design associated with ad-vanced m aterials, Although m any U.S. univer-sities are important research centers in one ormore advanced material areas, U.S. universi-ties are turning out comparatively few peoplein some advanced materials fields. In the areaof ceramics, for example, only 36 identifiabledoctorates w ere estimated to have been gran tedin the 1982-83 school year by U.S. un iversities.

The Federal Government can assist U.S. uni-versities to increase their emphasis on ad-vanced materials if it so desires, Various assist-

ance programs administered by the NationalScience Foundation, and academic researchand curriculum development activities sup-ported by other Federal agencies could be usedto channel increased support for advancedmaterials activities in universities,

One option w ould be to p rovide initial educa-tional development grants to several universi-ties for a specified time period (e.g., 5 years),after which time the university would assumefull responsibility for the program. Becausethese programs could have clear benefits to pri-

vate industry, industry might contribute tosuch an effort. The startup funds could be usedto attract new faculty, support research, assistin acquisition of needed instruments, or par-ticipate in other activities that would be neededto establish a sound curriculum and researchprogram, Industry-university cooperation andcoordination could be encouraged throughadvisory committees comprised of industryand government representatives and throughinternships and collaborative research projects,

Transfer and Diffusion of

Advanced Materials Technologies

Advanced materials are curr ently in an earlystage of commercial application. A key issuein their ultimate acceptance and adoption byindustry on a widespread basis will be the ex-




tent to w hich reliable engineering d ata (includ-ing clearly defined procedures for testingmaterials), materials specifications and phys-ical property d ata, and stand ards can be devel-oped in a form that is readily accessible tousers.

As d iscussed in chapter 7, current U.S. prob-lems in maintaining an upgraded materialsproperty data management system in generalare acute. In the case of many advanced ma-terials, including rapidly solidified metals, cer-amics and some composites, absence of acces-sible information is a major constraint to theirwidespread use, Data on advanced materialsis held largely by the research comm un ity andby the few firms that have been integrally in-volved in their early development or that haveproprietary data for specialized applications.

A kind of catch-22 is involved in this situation:designers will not use new m aterials unt il theyhave data on their behavior in engineering ap-plications, but until the materials are used bydesigners, that data will not exist.

The formal codes, reliability standards, speci-fications, and other forms of information thatwould aid product design engineers selectmaterials are not generally available for ad-vanced materials. Development of such infor-mation w ill be a long-term p rocess, and it maybe many years before general agreement isreached about the proper form of such infor-mation.

Although testing societies, private industry,and trade associations, generally determinematerial standards, the Federal Governmentcan play an important facilitating role if itchooses, Several Federal agencies, includingthe Department of Defense, DOE, NBS, and

NASA all have important programs related toadvanced materials, and have been integrallyinvolved in maintaining materials data basesthat could be of considerable relevance tostandard-setting activities.

A cooperative effort by government and in-dustry to undertake initial work to developorganizing concepts, define information n eeds,and identify appropriate formats for neededengineering data could be an important pre-liminary step toward advanced m aterial stand-ard-setting. Such a cooperative endeavor w ould

require extensive interactions between testingsocieties, ind ustry, academia, and governm ent,with each contributing key inputs to the proc-ess. One possible arrangement (table 8-8, issue4) for facilitating such interaction would be forthe Federal Government to partially sponsor(with contributions by relevant industries) anonprofit center associated with a testing so-ciety, a university, or other nonprofit institu-tion. A similar approach is being used to ex-plore the feasibility of establishing a nationalmaterials properties data network with primaryreference to metals.

Conservation and Recycling of Strategic Materials

OTA’s analysis indicates that ongoing tr endsin industry have led to more efficient use of materials in processing and manufacturing.These trends are expected to continue as firmsup grade facilities and adopt new manu factur-ing processes.

In steelmaking, for example, manganese re-quirements for each ton of steel produced areexpected to be reduced from 36 to 25 poundsby the year 2000. Somewhat greater savings (interms of imported manganese) are likely be-

cause of increased use of scrap and improvedmanganese recovery rates. Near-net shapingprocesses used in the aerospace industry willalso reduce cobalt raw material requirementsfor superalloy production, although this willalso be accompanied by a reduction of home

and prompt industrial scrap preferred for recy-cling. The incentive to conserve PGMs is veryhigh, owing to their high cost; thus, improve-ments in catalyst design that would reducePGM use can be expected to be ad opted quickly.Some mod est improvements in chromium u ti-




lization can be expected, but the rapid phase-in of the argon-oxygen decarburization (AOD)process in making stainless steel is now nearlycomplete, and no major breakthroughs appearimminent. As a rule, material-conserving tech-nologies will be adopted because of product

quality and cost competitiveness reasons, notbecause of concern about strategic materials.

Important opportunities also exist to increasesupp lies of cobalt, chromium and PGMs throughrecycling. In the case of PGMs, the chief op-portunity for increased secondary productionis through recycling of automotive catalysts;an emerging industry structure is developingto collect and process these catalysts. Oppor-tunities to extend cobalt supplies include im-proved recycling of cobalt values from obsoletesuperalloy scrap and recovery of cobalt fromspent catalysts used by the petroleum indus-try. Although stainless steelmaker now deriveone-fourth of their chromium needs from pur-chased scrap, losses from three areas—down-grad ing, failure to recover obsolete scrap, andlosses of chromium in steelmaking wastes—are substantial. See table 6-6 in chapter 6 fora detailed listing of recycling opportunities.

Increased recycling not only augments stra-tegic material supplies, but also has environ-mental benefits associated with reduced land-filling and disposal of wastes, Recycling alsooffers energy conserva tion benefits, since scrap

already embodies initial energy requirementsneeded to process raw ores into concentratedform, Energy savings from recycling aluminumscrap, compared to manufacturing the sameproduct from virgin materials, can exceed 90percent, and for copper, iron and steel, lead,and zinc, savings of over 60 percent h ave beennoted. 37 Because the first-tier minerals coveredby this report are prod uced and often partiallyprocessed abroad, net energy savings to theU.S. from increased recycling of these mate-rials would only accrue as an alternative to in-creased domestic production, however.

JTNationa] Association of Recycling Industries, Recycled Me -tals in the 1980s (New York: National Association of RecyclingIndustries, 1982), p. 174.

Economic barriers (arising from the addedcost of collecting, sorting, transporting, and re-processing obsolete scrap and waste) and in-stitutional impediments (e.g., difficulties inorganizing collection systems and the reluc-tance of consumers to use recycled materials)

are the major constraints on recycling.Appreciable advances in recycling technol-

ogies have been made in recent decades, owingin part to Bureau of Mines’ R&D efforts, andindustry initiatives. In general, few technicalproblems need to be overcome to increase re-cycling of PGMs, cobalt, and chromium . How -ever, in some applications—especially super-alloys—advanced technologies may have to bedeveloped before major advances can be mad ein current levels of recycling, Increasing com-plexity in materials used in products in gen-eral also means that continuing R&D will beneeded to meet future recycling needs,

OTA’s analysis of recycling issues focusedon several areas of possible congressional con-cern: adequacy of information about currentand prospective levels of recycling; the needfor evaluation of the indirect effects of Federalprogr ams and policies on recycling in ord er toidentify possible changes that could facilitaterecycling; and the possible need of a pilot plantproject to demonstrate advanced superalloyrecycling technologies. These issues, and asso-ciated options, are summarized in table 8-9 and

discussed below,

Information Needs and Recycling

Recycling’s potential to reduce import depen-dency can only be roughly estimated unlessreliable information is available about both cur-rent levels of recycling nationwide and aboutquan tities of un recovered scrap and w aste thatcould potentially be recycled if economic ortechnical conditions changed. Current statis-tical series provide incomplete informationabout annual levels of recycling because they

focus on the purchased component of scrapsupplies, and do not estimate potentially re-cyclable materials that are not recovered. In-creased emphasis on compilation of recyclingdata and trend analysis seems needed if pol-




icymakers are to h ave a r ealistic pictur e of theprospective role that recycling could play inreducing U.S. dependency on imported mate-rials (table 8-9, issue 1).

From time to time, agencies such as the Bu-reau of Mines and the N ational Materials Adv i-sory Board have produced relatively compre-hensive materials flow models for individualmetals or applications. These models have ap-preciably increased understanding of overallrecycling levels, but h ave been p repared infre-quently, with little or no followup or consis-tency in procedures used. The need for mate-rials flow information is especially apparentin the area of superalloy recycling—an area thatchanges rapidly, affects use of several strate-gic materials, and is of obvious importance tonational security. Most current information

about the flow of superalloy scrap is based onconditions in 1976—the last year for which a

comprehensive materials flow model for super-alloy scrap w as prepared by the government.Efforts to update th is model using 1980 data—but 1976 scrap ratios–do not fully reflect theimportant changes that have occurred in super-alloy recycling since then.

Analysis of long-term trend s in conservationand recycling is also needed on a periodic ba-sis, especially since the two often influenceeach other in complex ways, Adop tion of near-net shape technologies by aerospace manufac-turers will reduce the amount of preferredscrap generated in the fabrication of superalloyparts. This means that obsolete scrap and lowerquality manufacturing scrap will comprise anincreasing portion of the materials potentiallyavailable for recycling. Similarly, efforts suchas the Air Force retirement-for-cause p rogram

to extend the life cycle of jet engine parts couldreduce the amount of obsolete scrap available

Table 8-9.—Policy Alternatives for Recycling Strategic Materials



1. Annual statistical series donot provide an adequate pic-ture of current and prospec-tive recycling levels; detailedinformation is out of dataand not prepared on aregular schedule.

2. Adjustments in Federal pro-grams and policies couldencourage greater recyclingof strategic materials, butthe necessary evaluation ofthese programs has not beendone by the Administration.

3. Advanced recyclingtechnologies for superalloymay not be developed byprivate industry because oflow metal prices.

Supplement current datawith in-depth “cradle-to-grave” data and analy-sis of Cr, Co, Mn, andPGM or other materialsas appropriate on aregular schedule.

Call for an executivebranch evaluation, withrecommendations toCongress, about waysto structure Federal pro-grams related to taxa-tion, real property pro-curement and disposal,environmental regula-tions, etc., to encouragestrategic materialsrecycling.

Authorize one or morepilot-plant projects todemonstrate technicalfeasibility of reclaimingindividual elements

from superalloy scrapor other advanced scraprecovery processes.

Better information aboutrecycling is needed forrealistic appraisal ofrecycling’s prospectiverole in reducing importdependency.

Could lead to eventual

If

changes in Federal pro-grams which would behelpful to recycling firmsin increasing recyclinglevels.

technical merit ofresearch processes isdemonstrated in pilotproject, it may be possi-ble to recycle most of the

superalloy scrap that isnow downgraded or lost.(An estimated 2.8 millionpounds of cobalt waslost in superalloy scrapalone in 1980.)

Could add to industrypaperwork requirements

Federal Government shouldnot attempt to favor onemineral form overanother; overemphasis onrecycling could inhibitdomestic mining activ-ities related to strategicmaterials.

Option provides lessimmediate supply secur-ity than domestic produc-tion and depends on suc-cessful outcome of pilot

project to determine com-mercial feasibility;government should notbe involved in commer-cialization of newtechnologies.

SOURCE. Off Ice of Technology Assessment




for recycling. These interrelationships are dis-cussed in greater detail in chapter 6.

Superalloy applications are not the only areawhere current data are inadequate for identify-ing current and prospective recycling levels.opportunities for recovering more chromium

from obsolete stainless steel products and steel-making wastes can only be roughly estimatedsince most of the available national data datefrom 1976 and 1974, respectively. Importantimprovements have occurred since then. Sim-ilarly, monitoring of PGM recycling from au-tomotive catalysts and electronic scrap willclearly have to be emphasized in the years tocome in order to develop accurate informationabout recycling trends in this industry.

Analysis of industry trends and the revisionof scrap material flows on an annual basis is

probably not necessary or desirable, but itwould be desirable on a periodic basis, perhapsonce every 4 or 5 years. The Bureau of Mines,which sponsored the superalloy analysis dis-cussed above as well as a similar scrap flowmodel of chromium recycling in stainless steel,would be a logical agency to undertake thisanalysis. Cost of preparing new material flowmodels would vary, but would probably be lessthan $100,000 per application addressed. Theoriginal appropriation for the two models men-tioned above was provided to the Bureau of Mines under the Defense Production Act

through the Federal Emergency ManagementAct. Update of these models would cost about$50,000 per application.

At present, limited national level informationis available about “hidden inventories” of stra-tegic materials that could potentially be re-cycled in the event of a supply disruption.(Stockpile management estimates about recy-cling levels in a supply disruption are basedon economic analysis, not estimation of materials.) Hidden inventories include scrapinventories that for one reason or another are

not reported to the Bureau of Mines and po-tentially reclaimable mining tailings and indus-trial waste materials. Such inventories can bequite large. At one Gulf area petroleum cata-lyst recycling operation, for example, perhaps

as much as 7 million pounds of cobalt-nickelaluminate slag has accumulated over the years.This material would not be economic to re-cover without major increases in cobalt prices,and some technical problems in recoverywould have to be overcome. In a supply dis-

ruption of protracted length, however, it mayrepresent a recoverable resource. In addition,a large quantity of strategic materials arepresent in mine tailings which maybe poten-tially reclaimable. Although information isavailable about strategic material content of some of these tailings (e.g., cobalt tailings fromlead zinc mining in Missouri), their nationalmagnitude is not known accurately.

The importance of information can, of course,be overstated. It would not be necessary, oreven desirable, to attempt to inventory compre-hensively all low-grade sources of strategicmaterials, for example, to derive plausible esti-mates of the magnitude of such resources. Norare current information deficiencies so greatas to prevent identification of applications andmaterials in which there is potential for ma-

jor increases in current recycling levels. How-ever, an institutional mechanism for periodicreexamination of recycling and conservationtrends and opportunities would be highly use-ful in policy formulation.

The Impacts of Federal Activities on Recycling

The Federal Government influences recycl-ing of strategic materials both directly andindirectly. Direct effects arise from its R&Dactivities aimed at improving recycling tech-nologies. This research has had a demonstra-ble effect in encouraging increased recyclingof strategic materials; many currently usedprocesses were initially developed with Fed-eral support.

Indirect effects—some positive and somenegative—arise from a wide variety of Federal

policies and programs that are not specificallyaimed at recycling. Such activities as taxation,regulation of transportation rate setting, envi-ronmental policy, and procurement and dis-posal of materials by Federal agencies can af-



. - . . . .


feet material flows in the economy. Severalrecent laws have attempted to remove inadver-tent bias in Federal regulations that m ay favorvirgin raw materials over recycled materials,but th e recycling ind ustry continu es to be con-cerned that Federal policies may discourage

recycling.

38

The National Materials and Minerals Policy,Research and Development Act called on thepresident to:

. . . assess Federal policies which adversely or

positively affect all stages of the materials cy-cle, from exploration to final product recyclingand disposal includ ing but not limited to, fi-nancial assistance and tax policies for recycledand virgin sources of materials and make rec-ommendations for equalizing any existingimbalances, or removing any impediments,wh ich m ay be created by the ap plication of

Federal law and regulations to the market formaterials . . 39

The President’s materials plan did not specif-ically add ress this issue. (The plan placed suchanalysis in the overall context of its regulatoryreform assessment, an ap proach that is not sp e-cific enou gh to su ggest improvements for stra-tegic materials recycling.)

Such an evaluation and recommendationprocess—especially if focused on strategicmaterials—could help identify possible changesin Federal programs that could encourage

greater or more effective recycling of strategicmaterials (table 8-9, issue 2). This cannot bedone with a narrow focus simply on strategicmaterials: overall objectives and missions of Federal programs must be taken into account,even if a particular progr am or p olicy may ad-versely affect recycling.

Nonetheless, there may be w ays to encouragerecycling while meeting these broader objec-tives. One area meriting further examinationconcerns possible connections between wastedisposal policies and recycling. Spent cobalt-

ss~”[)r a rji scussion of the (;o n cerns of the recycling 1 IId USt ryabout Federal policles, see ,NJational Association of RecyclingIndustries, RecJrcled Lletal.s in flrc 1980s (New’ York: NationalAssociation of Reclcling Industrlcs, 1982), pp 167-177.a~[~uhli~ [,a\\, !36-479, 5(?(:. 4(8).

molybdenum hydroprocessing catalysts, for ex-ample, may contain trace amounts of lead andarsenic that may make them potentially haz-ardous. Although spent catalysts are not alisted hazardous waste, generators of spentcatalysts often treat them as such, and as po-tentially subject to Federal regulations whichrestrict storage of hazardous wastes on site to90 days. As a result, within 90 days, genera-tors of spent catalysts must decide whether tosend the material for recycling or to landfill thematerial at an ap proved site. In th e late 1970s,recyclers of spent cobalt catalysts would oftenpay generators $300 per ton to obtain this ma-terial in order to recycle molybdenum. In the1982-83 period, generators often needed to paythe freight to have the spent catalysts sent tothe single U.S. firm still recycling those cata-lysts for molybdenu m values. As a result, land-

filling is often a more attractive option, andsimply storing the material on site while wait-ing for metal values to increase is precluded.An estimated 270,000 pounds of cobalt werenot reclaimed from spent hydroprocessingcatalysts in 1982.

The impediments to recycling cobalt cata-lysts are thu s largely econom ic in n atur e, aris-ing from the low valu e of metals at the pr esenttime, but Federal hazardous waste regulationsmay inadvertently cause premature loss of co-balt values. It would be inapprop riate to changeFederal policy with respect to hazardous wastesimply to facilitate recovery of strategic mate-rials in circumstances such as this. However,with appropriate safeguards, it may be possi-ble to develop alternatives to encourage recy-cling of strategic materials while safeguard ingconcerns about public health and safety aris-ing from hazardous waste storage. Possiblealternatives to encourage recycling of strate-gic materials from some hazardous waste in-clude intensifying the recycling R&D activitiesby the Bureau of Mines to assist ind ustry in de-veloping effective reclamation technologies;

possible use of guaranteed purchase agree-ments under the Defense production Act todefray the expense of reclamation when it iscurrently not economic; longer term but tempo-rary storage of some hazardous wastes contain-



376 qStrategic Materials: Technologies to Reduce U.S. Import Vulnerability —

ing strategic materials in regional repositorieswhere they would be available for subsequentrecycling; and p ossible use of “w aste end” tax-ation, which could make land filling less attrac-tive as a disposal option by taxing generatorsof wastes when they are landfilled.

Increasing interest exists in strategic mate-rial recycling opportunities associated withsurplus Federal property—especially that of theDepartment of Defense. GAO is currently au-diting Department of Defense scrap generationlevels and possible alternative means of dis-posal of scrap at the request of the HouseArmed Services Committee. However, the GAOeffort is focused principally on aluminum—noton superalloy scrap.

Military aircraft contain large quantities of strategic materials that are potentially recycl-able at the end of their service life. Currently,most jet engine parts are declared surplus andare sold as scrap at the end of their useful serv-ice life, Generally, obsolete superalloy scrap isdowngraded for its nickel and chromium con-tent, so that other metals (e.g., cobalt) are notbeneficially used.

Alternatives to disposal of surplus scrapcould have strategic material conservationbenefits. The Department of Defense and theGeneral Services Administration can promoteadvancement of recycling technologies andprocesses by contributing surplus scrap to

demonstrate advanced recovery methods.A model and precedent for a government-run

recycling pr ogram exists. For nearly a d ecade,the Department of Defense has conducted aprecious metals recovery program (includingplatinum, palladium, and rhodium) from sur-plus, damaged, or outd ated government prop-erty. The recycled materials are refined to ahigh level of purity and may then be used asgovernment-furnished materials in defensecontracts and in certain other government con-tracts. Savings to the government from this pro-

gram have been very large because the costsof recovering and refining PGMs are cheaperthan purchasing new material.

At current cobalt prices, this would not bethe case with r egard to su peralloy reclamation.An Air Force working g roup established to as-sess a feasibility stu dy on a cobalt reclamationprocess for obsolete jet engine parts reachedthe conclusion that it wou ld be cheaper for thegovernment to sell these parts as scrap, givencurrent cobalt prices, (The working group didnot identify costs associated with the variousalternatives.) This argument fails to take intoaccount the strategic benefits of having a do-mestic capability to reclaim individual ele-ments from scrap in the event of a supplyemergency.

Besides evaluation of agency programs to de-termine whether changes may be needed inFederal policies with respect to recycling, theFederal Government can heighten visibility of recycling industry issues through special

studies.The National Materials and Minerals Policy,

Research and Development Act of 1980 estab-lished a continuing assessment function in theCommerce Department to undertake case studiesof specific material needs to ensure “an ade-quate and stable supply of materials to meetnational security, economic well-being and in-dustrial production needs. ” To date, studieshave been completed on the steel industry, andthe aerospace ind ustry, and a stud y on the d o-mestic mining industry is in progress, Al-

though such studies may address recycling tosome extent, special assessment of key com-ponents of the recycling industry would aid inunderstanding the role recycling could play inproviding strategic and critical materials andin the identification of economic ‘and institu-tional barriers to increased recycling.

Developing New Recycling Technologies

Recycling of strategic materials often entailshighly sophisticated technologies and proc-esses. The increasing complexity of materials

used in end products, such as jet engines andautomobiles, and the general trend towardmore stringent material specifications, require



Ch. 8—Policy Alternatives for Strategic Materials 377

adjustments in segregating and processingscrap by recyclers. As a result, extensive R&Dactivities are often needed to keep pace withchanges in end products.

Substantial technical advances have beenmad e in recycling technologies in recent years,

and many of these advances have been sup-ported by government research. Increasingly,as government funds for general recycling re-search have become more limited, availablefunds have been targeted on strategic mate-rials, including processes and technologies toeffectively reclaim them from low qualitymaterials (e. g., obsolete scrap) that are not nowprocessed.

Several Federal agencies, including the De-partment of Defense, NASA, and the Environ-mental Protection Agency, have sponsored

recycling R&D activities relevant to strategicmaterials. However, the Bureau of Mines is theprimary Federal recycling research agency. Re-cent Bureau projects have emphasized, amongother things, development of processes to en-hance recovery of cobalt, nickel, and chro-mium from materials such as superalloys andstainless or specialty steel scrap and wastes.Funding of strategic materials recycling activ-ities has been m aintained at a h igh level throughreprogramming of funds from other areas.

Normally, industry itself assumes the key role

in actually developing new technologies aris-ing from Bureau research. Many currentlyused processes pertaining to recycling of steel-making wastes, cemented carbides, and othermaterials were originally developed or spon-sored by the Bureau of Mines. At least sevencompanies, for example, are using a Bureau-patented process which permits effective re-covery of cemented carbide scrap, with its co-balt values.

Current metal prices do not justify privateinvestment in post-laboratory development of some experimental recycling technologies—

especially those for sup eralloys—that p romiseto su bstantially improve recycling of strategicmaterials, Superalloy raw materials providedthrough recycling will increasingly depend oneffective obsolete scrap recovery since manu-

facturing processes are reducing the amountof home and prompt scrap available.

Several commercially used processes can be,and to a limited extent have been, used to recy-cle obsolete superalloy scrap to provide mas-ter melts suitable as raw materials for jet en-

gine superalloy. Alternative processes thatreclaim individual elements from the scrap inhighly purified form have been demonstratedonly in the laboratory.

Experimental reclamation processes of thissort have been developed under Bureau of Mines’ sponsorship, and independently bysome companies. Proof that they would workin commercial-scale operations has not beenascertained, and an additional 2 to 5 years of work may be needed to reach definitive con-clusions.

One Bureau-sponsored experiment, undertakenin the late 1970s, demonstrated the technicalfeasibility of separately reclaiming individualelements from superalloy scrap, includingcobalt, chromium, and nickel—an importantbreakthrough if the technical merits of theprocess hold up outside of the laboratory. In-dustry feasibility studies for a pilot plant andsmall commercial facility showed promisingpr ofit p otential at 1980 prices (cobalt w as thenselling at $25 per p ound), but wh en p rices fell,so did interest in the project. (The price of co-

balt that wou ld allow this process to break evenis confidential information with the companythat d eveloped the feasibility stud y.) Other Bu-reau of Mines’ processes, including one whichrapidly dissolves metals out of the superalloyscrap, may also have the potential to advancesuperalloy recycling technologies. Some pri-vate firms, as discussed in chapter 6, have un-dertaken laboratory research in the area of reclamation. One of these firms currently re-covers cobalt from various scraps (includingsuperalloy grindings) for use in cemented car-bides, and is considering possible applicabil-

ity of the process for recycling superalloy perse.

Although government’s role in commercializ-ing specific new technologies is usually lim-ited, overriding national objectives, such as n a-

38-844 0 - 85 - 13 : QI, 3




tional security, may justify exceptions. Furtherdevelopm ent of advan ced su peralloy recyclingprocesses may well be such a case. One alter-native would be for government (in consulta-tion with industry to select the most prom isingcandidate processes) to sponsor one or more

pilot plant projects to demonstrate advancedreclamation processes—either at a governm entfacility or under contract with industry (table8-9, issue 3). The costs of a pilot plant project,probab ly entailing $5 million or m ore per p roj-

ect facility plus $1 million to $2 million in oper-ating costs, need to be viewed in terms of thepotential benefits and increased supply secu-rity that could accrue to the United States inthe event that such technologies are commer-cially viable. Commercial availability of such

technologies could give U.S. firms the techni-cal capability to recycle most of the cobalt thatis now lost or downgraded, estimated at 2.8million pounds in 1980.



Appendixes



Appendix A

Review of Previous Lists and Methods of Selection

Most lists of strategic materials are based, im-plicitly at least, on the two strands of criticality andvulnerability. A 1981 report by the CongressionalResearch Service listed the following criteria fordefining a materials impor t “vu lnerability” (as dis-tinguished from import “dependency ’’):1

1. Critical need for the m aterial.2. Lack of adequate domestic resources (includ-

ing both a total lack and an insu fficiency).3. Limited potential for substitution.4. Lack of alternative sources of supply (includ-

ing politically stable sources and geographi-cally close sou rces).

It will be noted th at factors (1) and (3) have to d owith criticality of use, and factors (2) and (4) withvulnerability of sup ply. On the basis of these fac-tors, the Congressional Research Service d efinedthe following as “materials of particular concern”:

Bauxite/aluminumCobaltChromiumColumbiumManganesePlatinum-Group MetalsTantalumTitanium

A “semiquantitative” index for rating strategicmaterials on the basis of vulnerability was devisedby the Strategic Studies Institute (SSI) of the U.S.Arm y War College in 1974.2 The index was basedprimarily on five factors affecting vulnerability to“coercive pressures from foreign suppliers, ” asfollows:

1. Availability of dom estic reserves.2. Availability of substitutes,3. Number and location of foreign suppliers.4. Ideology of foreign sup pliers.5. U.S. stockpile objectives (based, at that time,

on 1 year’s wartime needs).Materials selected for th e SSI assessment were

the 20 minerals for w hich the Un ited States im-ported half or more of its requirements, plus tung-sten. The authors included tungsten, even thoughU.S. import dependency for tungsten was below 50percent, because th e ratio of U.S. prod uction toconsumption was “rapidly decreasing” and because

ICongressional Research Service, A Congressional Handbook on U.S. Materials Import Dependency/Vulnerability, cited in note 2, p. 341 ff,ZAlwyn H. King and John R. Cameron, Materials and the New Dimen-

sions of Conflict, Strategic Studies Institute, U.S. Army War College(Carlisle Barracks, PA: 1974) available from National Technical Infor-mation Service, U.S. Department of Commerce, Springfield, VA 22151(AD/A-004263).

of “the unusual circumstances that the Comm unistcountries possess about 75 percent of world re-serves.” 3

Of the 21 materials, 10 were eliminated “becauseof favorable combinations of su ch factors as ad e-quate U.S. reserves, declining domestic demand,available substitute materials, availability of tech-nology to process low-grade ores, and p roximity of foreign supplies.”4 The other 11 minerals were as-signed index numbers and ranked by relative vul-nerability, as shown in table A-1.

The SSI does not describe exactly how the indexnumbers for each material were derived. The textimplies that the index numbers are the sum of nu-merical values assigned (on the basis of the authors’

judgment) to each of the five principal factors men-tioned above. The selection of these factors givesfar more weight to vulnerability of supply than tocriticality of use. How ever, it is eviden t from thetext that factors other than those five entered intothe ratings. For example, the authors’ discussionof individual materials refers to the essential usesof each, as well as the availability of substitutes. Inany case, as the authors state, the numbers do notrefer to anything qu antitative but w ere based on“qualitative assessment, ” that is, their own

judgment.In 1977, one of the au thors of the SSI stud y re-

vised the vu lnerability index in an attempt to r e-fine it and make it more quantitative.5The 1977 ver-sion of the SSI Index included 27 factors, each ratedfor the importance of its influence on economic,political, and military vu lnerability of materials. Ta-ble A-2 shows the factors and their ratings.

Of the 27 factors on the list, no more than 5 arerelated to criticality. Not one explicitly mentionsthe essential uses of pa rticular mater ials. Yet onemust assume that essential uses are implicit in therating scheme, at least in the selection of materialsto rate and in assessing the availability of substi-tute materials.

A further complication in the rating scheme isthat each of the 27 factors is also assessed for the

slbid,, p. 5. 1981 estimates indicate that China holds 47 per-cent of the world reserve base of tungsten, and another 11 per-cent is in the Soviet Union and North Korea. Both Canada andthe United States have large reserve bases of tungsten; Canada’sis 15 percent of the world trade.‘Ibid.5Alwyn H. King, Materials Vulnerability of the United States—An Up-

date, Strategic Studies Institute, U.S. Army War College (Carlisle Bar-racks, PA: 197’7), available from the Defense Technical Information Cen-ter, Defense Logistics Agency, Cameron Station, Alexandria, VA 22314,

381

38-844 0 - 85 - 14 : QL 3




Table A-1.—Strategic Studies Institute Index of Relative Vulnerability:1974 Ranking

Vulnerabilityindex Principal or major exporters

34 Soviet Union, South Africa32 Soviet Union, Canada, South Africa27 Canada, Peru

23 Brazil, Gabon22 Jamaica, Canada20 Australia, Canada20 Canada, Zaire16 Canada, Brazil, Zaire14 Canada, Norway11 Canada, Mexico, Spain6 Malaysia, Thailand

Material

Chromium . . . . . . . . . . . .Platinum metals . . . . . . .Tungsten . . . . . . . . . . . . .

Manganese . . . . . . . . . . .Aluminum . . . . . . . . . . . .Titanium . . . . . . . . . . . . .Cobalt . . . . . . . . . . . . . . .Tantalum . . . . . . . . . . . . .Nickel. . . . . . . . . . . . . . . .Mercury . . . . . . . . . . . . . .Tin . . . . . . . . . . . . . . . . . .SOURCE: Alwyn H. King and John R. Cameron, Mater/a/s arrd the New Dimensions of Conf/ict, Strategic Studies Institute,

U.S. Army War College (Carlisle Barracks, PA, 1974)

Table A-2.—Factors Affecting Materials Vulnerability Index: 1977 List

Effect on Vulnerability

Factor Economic Political Military

Domestic reserves:

Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cost of developing. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Domestic production industry:Present capability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cost of augmenting . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Substitute materials:Present availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cost of research to develop . . . . . . . . . . . . . . . . . . . . .Time required to develop . . . . . . . . . . . . . . . . . . . . . . .

Additional domestic resources:Present availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cost to develop suitable processes . . . . . . . . . . . . . .Time to develop suitable processes . . . . . . . . . . . . . .Probability of discovery if not available . . . . . . . . . . .Cost of additional exploration . . . . . . . . . . . . . . . . . . .

Foreign suppliers:Number of controlling companies. . . . . . . . . . . . . . . .Number of supplier countries . . . . . . . . . . . . . . . . . . .Political stability of supplier countries. . . . . . . . . . . .Ideology of supplier countries . . . . . . . . . . . . . . . . . . .Productive capacity of supplier countries . . . . . . . . .Economic sufficiency of supplier countries . . . . . . .History of political relations with U.S. . . . . . . . . . . . .U.S. dollar involvement in supplier country . . . . . . . .

LL

LL

Ls

LL

LL

LLL

LLL

LMMMM

LLMMM

LMMss

LMMMLLsM

sMLLLLMM

MMMMLsss

Accessibility of supplier countries(supply routes) . . . . . . . . . . . . . . .

U.S. stockpile:Present U.S. stockpile objective . .Actual quantity in U.S. stockpile . .Customary industry stockpile . . . .

Trend in usage of critical material . . .

s s L. . . . . . . . . . . . . . .

LMM

M

LMM

M

LMM

s

. . . . . . . . . . . . . . .

. . . . . . . . . . . . . . .

. . . . . . . . . . . . . . .

. . . . . . . . . . . . . . .

Proportion of national consumption directly related tomilitary requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . .

lmportance of secondary sources (recycling) . . . . . . . . .sM

sM

L

M

KEY: L = LargeM = Mediums = Small

SOURCE: Alwyn H. King, Mater/a/s Vu/nerabMty of the United States—An Update, Strategic Studies Institute, U.S. Army WarCollege (Carlisle Barracks, PA: 1977).



Appendix A —Review of Previous Lists and Methods of Selection q383

direction of its influence on vu lnerability; that is,whether it currently contributes to a significant in-crease, a moderate increase, or a decrease in thevulnerability of material supplies. All these factors,includ ing their importance and direction, are givennumerical values, the sum of which is the “relativevulnerability index” number of each material. Fig-ure A-1 shows the results for four materials.

The authors suggested using this numerical indexto help set pr iorities for stockpiling, allocation of funds to research and development, and other suchdecisions. A pitfall in using this index, or otherslike it,6 for such purposes is that it may convey amisleading impression of certainty or objectivity.The use of index numbers to show “relative vulner-ability” may be a convenience but does not at allevade the necessity of applying subjective judg-ment—as the authors of the index recognized. Judg-ment is involved at every step: in deciding what fac-tors to includ e, how much importance each shou ldbe given, how to rate a material in relation to a spe-cific factor (e. g., “political stability of supplier coun-tries”), and so on.

Another attempt to construct a systematic ratingsystem for strategic materials was the CriticalMinerals Index pilot study done by the U.S. Depart-ment of the Inter ior’s Office of Minerals Policy andResearch Analysis in 1979.7 Designed to be used aswarn ing of potential problems, the index includedtwo components: one to measure the likelihood of disruption of supply (i.e., vulnerability) and theother to measu re the cost of disrup tion or, con-versely, the importance of the minerals to the U.S.economy (including factors of vulnerability andcriticality). The scheme proposed to use the subjective jud gment of a panel of experts to assignindex nu mbers for both compon ents to specificminerals.

Examples of events considered possibly disrup-tive to supply were:

q

q

q

q

q

q

Collusive price agreements (cartels).Shifts in dem and.Embargoes.Labor strife.Transportation bottlenecks.Violent conflicts, including local rebellion, re-gional war, riots, border skirmishes, blockades,and sabotage.

‘An index with some similarities to the Strategic Studies Index, witha clearer description of how it is constituted, is in Bohdan O. Szuprowicz,HOW to Avoid Strategic A4aterials Shortages (New York: John Wiley &Sons, 1981), p. 8ff and p. 285 ff.

7Robert L. Adams, Barbara A. White, and James S. Crichar, Develop-ing a Critical Minerals Index: A Pilot Study, Office of Minerals Policyand Research Analysis, U.S. Department of the Interior, July 1979.

Figure A-1 .—Strategic Studies Institute RelativeVulnerability Index: 1977 Ranking

t3,400 -

3,200 “

3,000 “

2,800 -

2,600 -

2,400 -

2,200 -

2,000 -

1,800 -

1,600 -

Aluminum(bauxi te)

1

NOTE: Overall Index number IS the sum of military, polltlcal, and economicindex numbers

SOURCE: Alwyn H King, Maferlals Vulnerabl/ffy of the United States — Arr UKJdate, Strategic Studies Institute, U S Army War College, (Carllsle

Barracks PA: 1977)

Factors suggested for inclusion on the cost sidewere:

q

q

q

q

q

q

q

The magnitude and duration of the disruption.Total annu al U.S. dem and for the m ineral.Availability of alternative sou rces of sup ply;e.g., domestic or other foreign sources.

Time required to d eliver alternate sup plies.Availability of substitutes.Time requ ired to adop t substitutes.Expectations of those controlling investm entabout the future of alternative supplies and of substitute technologies.




The Critical Minerals Index was simply proposedin a pilot study. Its authors did not apply it to pro-duce a list of minerals.

A different approach to a rating system for stra-tegic materials, making no attempt to produce over-all index nu mbers, was p roposed by the British In-stitute of Geological Sciences (IGS) in a 1982

Memorandu m to a Comm ittee of the Hou se of Lords in Parliament.8 Dividing the factors that de-fine a strategic material into th e vu lnerability andcriticality strands, the institu te’s vu lnerability listincluded:

1.

2.3.4.

5.

6.7.

8.9.

Import d ependence (besides net imp ort de-pendence, this factor included total import de-pendence, recognizing that some of Britain’sminerals processing and export industry re-lies entirely on the import of raw materials).Concentration of supplies to Great Britain.Concentration of world p rodu ction.Indirect import dependence, involving a long,complex chain of supply.

Concentration of world reserves (or “eco-nomic resources”).Reliability of prod ucer coun tries.Market mechanisms, which include:Ž the lead time to develop new productive ca-

pacity.• the proportion of materials tied up in long-

term contracts, compared to the amountavailable on the “free” market.

q the potential for cartel formation, on the ba-sis of shared interests and values of pro-ducers.

The potential for recycling.The adequacy and security of supply links on

land and sea.The IGS memorandu m p ointed ou t that many of

the measures for vulnerability can be quantified,some quite simply. To show the concentration of sup pliers to Great Britain, the IGS dev ised an in-dex based on the total number of supplying coun-tries and the share they supp ly; the same kind of index was u sed to d enote concentration of worldproduction, Reliability of supply, on the other hand,cannot be quantified because it depends on suchconsiderations as political stability, ideology, or“excessive economic nationalism, ” which are mat-ters of qualitative judgment.

On the criticality side, the institute mentioned therange of u ses, the availability of substitutes, the na-ture of British industries consuming the material,

@Institute of Geological Sciences,Strategic Minerals, Memorandumsubmitted to the Parliament, House of Lords. Select Committee on theEuropean Community (Subcommittee F), Feb. 18, 1982.

and a number of measures of the economic impor-tance of the m aterial, all of which, the IGS con-ceded , were d ifficult to analyze and ap ply.

Altogether, the IGS concluded that criticality can-not be quantified read ily. The quantitative pointersare either crud e or trivial. The more importantquestions—defining the national interest, judging

the importance of one manufacture in relation toanother, determining wh ether substitutions for amaterial are possible and how long it would taketo effect substitutions— are all matters of judgment.However, it is possible to combine judgments aboutthese factors into a subjective criticality rating of high, medium, or low for each material.

Overall, the IGS rating scheme separated th e vul-nerability and criticality strands; disentangled fac-tors wh ich can be qu antified from those which can-not; quantified different factors, each in its ownterms; and gave subjective ratings to factors thatcannot be measured ad equately by quantitative in-dicators. No effort was mad e in the scheme to com-

bine all these unlike “apples and oranges” into acomm on ind ex num ber.

In their statement to the Hou se of Lords, theauth ors concentrated on d escribing their ratingscheme rather than applying it to produce a list of strategic materials. They did select 15 materials toillustrate how the scheme would work. Two of the15 materials were selected to show the independ-ence of vulnerability an d criticality. Fluor spar iscritical for the production of aluminum and steel,but is mined in Great Britain and th us is not re-garded as vulnerable. Vermiculite has h igh vu lner-ability because Great Britain is entirely dependenton imp orts from one d ominant sup plier (SouthAfrica), but it is not critical because substitutes arereadily available. Of the 13 other m aterials used toillustrate the IGS rating scheme, the au thors saidthat most “are likely to manifest high degrees of both vu lnerability and criticality, and wou ld there-fore be identified as strategically important.” Theyare:

Aluminum NickelColumbium Phosphate rockChromium Platinum-group metalsCobalt TantalumManganese TinMolybdenum Tungsten

VanadiumThe materials selected are strategic to Great Brit-

ain but not necessarily to the United States,Molybdenum, for example, would not appear on alist of U.S. strategic materials because the UnitedStates is the world’s largest prod ucer and exporterand holds m ore than h alf of the world’s resourcebase—a great deal more th an any other country.



Appendix A—Review of Previous Lists and Methods of Selection • 385

A simpler scheme, based on the aggregate judg-ment of an expert panel, was used by the BritishMaterials Forum on Strategic Materials.’ Applyingthe concepts of degree of criticality and degr ee of vu lnerability to the metals used by British indu s-try, the forum reported that “the following groupof eight metals emerged as meriting the highest pri-

ority in the newly defined strategic sense’’:10

Chromium ManganeseCobalt VanadiumColumbium MolybdenumTungsten Platinum-group metals

All members of the forum agreed on the rating,and all the metals were thought to merit equal rat-ing. Again, the m aterials listed a re strategic fromthe British point of view,

For each m etal on the Materials Forum list, thecriticality aspect was brought out by examining themetal’s more important uses in key industries. Tohelp assess vulnerability, the forum memberslooked at the ratio of reserves to production in each

of the major producer countries of the world to esti-mate which countries are likely to become domi-nant in the futur e. The group recognized that thereserves-to-produ ction ratio is a “static” ind icatorof reserve life (and could very well change as new

The Materials Forum, Strategic Metals and the United Kingdom, citedin note 3.

10 Ibid., p, 3,

reserves are discovered or as countries’ rates of pro-duction change). The members used qualitative judgment, as well, in estimating probable futurediversity of supply and in evaluating the politicalfactors involved in vu lnerability of supp ly.

The flavor of the forum ’s evaluation is suggestedby the following excerpt from its d iscussion of chro-

mium:ll

Although the physical long-term supply situationfor the world as a whole looks reasonable. . never-theless, 97 percent of the presently known reservesof chrom ium are located in South A frica and adja-cent Zimbabwe. The relatively small reserves lo-cated in other countries indicates that their presentlevels of produ ction are u nlikely to be maintainedfor more tha n 10 to 20 years (unless new reserveson a very substantial scale are found and then de-veloped commercially w ithin this time scale). Thu s,along with many other consumer countries, theU.K. could steadily shift towa rds a greater d epen-dence on South Africa and Zimbabwe for chro-mium supplies, whatever countries are supplying

us at present. Since these two countries are sur-rounded by political uncertainties, or at least suchis the generally accepted view by most Westerncountries, then imports to the U.K. need to beregarded as becoming increasingly “vulnerable” inthe future.

IiIbid., p. 6.



APPENDIX B

Import Sources of MaterialsJudged to be Nonstrategic, 1978-82

1982 netimport 1982

reliance Commodity Import sources (1978-81) by percent supplied consumption4

45

W b

74

52w

69

3

N Ac

7

10087

61

100

NA

43

36w

72

NA

w36

22

1

243

10075

386

AluminumAntimony

ArsenicAsbestosBariteBismuth

Cadmium

Cement

Cesium

CopperCorundumFluorspar

Gallium

Gem stones

Germanium

Gold

GypsumHafnium

IlmeniteIndium

IodineIron ore

Iron and steelLead

LimeMercuryMica sheetNickel

Canad a(62), Ghana(11), Norway(4), Japan(4), Other(19)Metal: Bolivia, China(34), Mexico(10), Belgium-

Luxembourg(7), Other(n)Ores and Concentrate: Bolivia(36), Canada,

Mexico, Chile(8), Other(18)S we de n , M e x ic o , F r a nc e , O the r ( 13 )Canada(97), South Africa(3)China(24), Peru(21), Chile(13), Morocco(11), Other(31)Mexico, Peru(26), Great Britain, West

Germany(9), Other(23)Metal: Canada(27), Australia, Mexico(n), South

Korea(9), Other(35)Canada, Japan(15), Mexico(7), Spain(7), Other(22)

Compounds: West Germany(95), Great Britain(4),Canada and France(1)

Pollucite: Canada(100)Chile(32), Canada(22), Peru(14), Zambia(11), Other(21)South Africa(100)Mexico, South Africa, Italy(4), Spain(3),

Other(3)Switzerland, Canada, West Germany(10),

China(6), Other(7)South Africa, Belgium-Luxembourg( 23), Israel,

India(n), Other(16)Belgium-Luxembourg( 50), West Germany,

China(12), Switzerland(n), Other(15)Canada(52), Soviet Union(20), Switzerland(17),

Other(11)Canada(73), Mexico, Spain(3), Other(2)Negligible

Australia, Canada, South Africa(6), Other(l)Belgium-Luxembourg( 32), Peru(28), Japan(n), Great

Britain(9), Other(20)Japan(81), Chile(18), Other(l)Canada(64), Venezuela, Brazil(9), Liberia(7),

Other(4)Europe, Japan(34), Canada, Other(15)Ore, concentrate and bullion: Peru(32), Honduras,

Canada, Australia(9), Other(13)Pigs and bars: Canada(39), Mexico, Peru(8),

Australia(8), Other(8)Canada(94), Mexico(6)Spain(34), Japan(21), Italy(12), Algeria(10), Other(23)India(83), Brazil(n), Madagascar(4), Other(2)Canada(44), Norway(n), Botswana(9), Australia(8),

Other(28)

4,740,000

33,200

w267,300

4,140,000

Reported: 1,050

4,08765,000,000

N A

1,980,000650

800,000

Reported: 10

$ million: 1,700

46

Troy oz: 3,800,00018,800,000

Crystal bar : 50Sponge: W

920,000

N A3,950

61,150,00088,100,000

1,171,500

14,900,00076-lb flasks: 50,700

1,800

174,000



Appendix B—Import Sources of Materials Judged to be Nonstrategic . 387

1982 netimport 1982

reliance Commodity Import sources (1978-81) by percent supplied consumption’

9

31

7115

NAW

NA8

50

2 0

5 9

8100

3WW

N A

12

48

w

53

w

Ammonia

Peat

PotashPumiceRare earthsRheniumRubidiumSaltSelenium

Silicon

Silver

Sodium sulfated

Strontium

SulfurTelluriumThallium

Thorium

Tit. d ioxide

Tungsten

Yttrium

Zinc

Zirconium

Soviet Union(38), Canada(23), Mexico, Trinidadand Tobago, Other(2)

Canada, West Germany(1)

Canada, Israel(3), Other(3)Greece, Italy(13)Monazite: Australia(89), Malaysia(8), Thailand(3)Chile(49), West Germany, Other(4)Canada(100)Canada(38), Mexico, Bahamas, Other(21)Canada, Japan(17), West Germany(8), Great

Britain(8), Other(23)Canada, Norway (22), Brazil, South Africa(7),

Other(32)Canada(37), Mexico, Peru(23), United Kingdom(5),

Other(n)Canada(98), United Kingdom(l), Other(l)Mexico, Other( l)

Canada(58), Mexico(42)Canada(43), Fiji(14), Hong Kong(13), Peru(9), Other(21)West Germany, Belgium -Luxem bourg(9), Japan(6),

Other(4)France, Canada(6), Netherlands(6), Malta(3),

Other(5)West Germany, Canada , Grea t Br i ta in ,

France, Other(30)Canada, Bolivia, China(14), Thailand(7),

Other(39)Monazite: Australia, Malaysia(8), Thailand(3)Zenotime: Malaysia, AustraliaYttrium concentrates: Malaysia, Canada, JapanOre and concentrates: Canada, Peru(17),

Mexico(8), Other(16)Metal: Canada, Spain(8), Mexico(6), Australia(6),

Other(16)Zirconium: France, Japan(23), Canada(5), Other(4)

16,000,0001,160,000

6,600,000590,000

21,500Reported: 2.5

N A42,050,000

550

330,000

Troy oz: 144,000,0001,278,000

15,000

11,440,00085

w

15 (nonenergy)

721,000

7,400140

891,000

Repor ted : 100,000Zircon: Australia, South Africa(10), Other(2)

astatistics ar e for apparent consumption in short tons, except where indicated.byv = withheld to avoid disclosing company proprietary data.CNA =. no t available

dlg82 import an d consumption data is unavailable. 1981 data is reported here.SOURCE: 1983 Mineral Commodity Summaries, U.S. Department of the Interior, Bureau of Mines. Al l the data presented above contain 1982 statistics.

The import sources are 4-year averages for the years 1978-81.



Appendix C

Overview of Second-Tier Materials

Bauxite and alumina are the raw and semi-processed materials from which aluminum is made.They are considered to be strategic materials be-cause of the high U.S. import reliance and becauseof the size and importance of the aluminum indus-try. For several reasons, however, bauxite and alu-mina are not in the first tier of strategic importance:many of the end uses of aluminum are not highlycritical and can easily be replaced by substitutematerials; the sources of bauxite and alumina sup-ply are fairly diverse and relatively reliable; and,since the United States is the wor ld’s largest alu-minum producer, accounting for 25 percent of theworld’s prod uction of aluminum, the U.S. marketis very important to foreign sup pliers.

Alumina (aluminum oxide) is prod uced frombauxite, and it is mad e into aluminum for use inproducts such as alloys, chemicals, and abrasives,Aluminu m alloys offer w idely varying combina-tions of mechanical strength, ductility, electricalconductivity, and corrosion resistance. Some alloyshave strengths app roaching those of steel. Similarto most other materials, the worldwide recessioncaused declines in the consumption of bauxite andalumina in 1982 (see table C-l).

Containers and packaging accoun t for over 20percent of total aluminum consump tion and are thelargest end use for the material. Almost as large isthe amount used in construction, for such productsas residential siding, doors and windows, roofing,mobile homes, curtain walls, bridge rails, and guardrails. The automobile industry accounts for about10 percent of U.S. aluminum consumption for suchitems as body, brakes, steering, pistons, trim, elec-trical uses, and metallic paint. Other transportationuses—marine vessels, rail cars, military vehicles,aircraft, and recreational vehicles—account foranother 10 percent of consumption. Aluminum ca-ble with steel reinforcing has replaced copper forhigh-capacity electrical transmission lines. This

Table C-1.–U.S. Consumption of Bauxite, 1978-82

Apparent consumptionYear (thousand metric dry tons)

1978 . . . . . . . . . . . . . . . . . . . . 5,3001979 . . . . . . . . . . . . . . . . . . . . 5,1061980 . . . . . . . . . . . . . . . . . . . . 5,8241981 . . . . . . . . . . . . . . . . . . . . 5,5551982 . . . . . . . . . . . . . . . . . . . . 4,048SOURCE: US. Department of the Interior, Bureau of Mines,Mirrera/ Commodity

Summaries 1984.

and other electrical uses account for still another10 percent of the aluminum used in the UnitedStates,

Approximately 10 percent of U.S. bauxite con-sumption goes into nonmetallic applications. Alu-minous chemicals are used for water and sewagetreatment, dyeing, leather tanning, and sizing pa-per. Bauxite is also used in high-alumina cement,as an absorbent or catalyst by the oil industry, inwelding rod coatings, and in fluxes for steelmak-ing. High-alumina abrasives and refractories areused in glass and ceramic products.

For many of the important uses of aluminumthere are adequate substitutes; e.g., steel and woodcan be used in residential construction. Zinc-baseddiecastings and chromium-plated steel were replacedby aluminum in the automobile industry, and ashortage of aluminum could conceivably reversethis substitution. Copper can be used in electricalapplications, and glass, plastics, paper, and steelcan be used in packaging. For some transportationuses, magnesium and titanium can be used insteadof aluminum, albeit at significantly increased costs.

Approximately 97 percent of U.S. bauxite sup-plies come from Jamaica, Guinea, and Suriname.Alumina is imported from Australia, Jamaica, andSuriname. Australia is the world’s largest producerof bauxite. As table C-2 shows, many other coun-tries have large reserves and production capacitiesof bauxite; e.g., Brazil, India, Guyana, Greece, andYugoslavia. Thus, there is a wide diversity of worldsuppliers, each with large reserves.

The United States is the world’s largest producerof aluminum and therefore the world’s largest mar-ket for bauxite. It appears unlikely that rawmaterials producers would refuse sales to this coun-try, lest they risk losing their share of this richmarket.

The United States has a small bauxite mining in-dustry, but reserves are relatively limited. The Bu-reau of Mines has conducted research on produc-ing alumina from alternative materials such asclays, alunite (a potassium-aluminum-sulfur miner-al), coal wastes, and oil shales, The United Stateshas large resources of these materials and couldmeet most of its aluminum raw materials needs if the appropriate technology were developed. A pri-vate industry consortium, Alumet, has done workon producing alumina from domestic alunite. Alarge deposit of alunite discovered in Utah in 1970could supply domestic aluminum producers for

388



Appendix C—Overview of Second-Tier Materials q389

Table C-2.—Bauxite: U.S. Imports, World Production, and Reserves

Sources of U.S. imports (1979.82):

Country Percent

Jamaica. . . . . . . . . . . . . . . . . . . . . .. ...39Guinea. . . . . . . . . . . . . . . . . . . . . .. ....32Suriname. . . . . . . . . . . . . . . . . . . . . .. ..10

NOTE: 1982 U.S. net import reliance = 96 percent.

World mine production and reserves, 1982 (thousand metric dry tons):

Mine production Reserves

Country Amount Percent Amount PercentAustralia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,621 32 4,600,000 21Guinea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,908 15 5,900,000 26Jamaica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,380 11 2,000,000 9Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,186 6 2,300,000 10Soviet Union . . . . . . . . . . . . . . . . . . . . . . . . . . 4,600 6 300,000 1

Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,853 4 650,000 3Yugoslavia . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,668 5 400,000 2Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,627 4 300,000 1

Suriname . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,059 4 600,000 3India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,854 2 1,200,000 5Guyana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 953 1 900,000 4United States . . . . . . . . . . . . . . . . . . . . . . . . . 732 1 40,000 <1Other market economy countries . . . . . . . . 4,820 6 3,100,000 14Other central economy countries . . . . . . . . 2,180 3 200,000 1

World total . . . . . . . . . . . . . . . . . . . . . . . . . . 74,441 100 22,500,000 100SOURCE:U.S. Department of the lnterior, Bureau of Mines,Mirrera/ Commodity Summaries 1984.

years. But alunite is a lower grade alumina raw ma-terial than bauxite, and the processing is currentlymore expensive than the standard Bayer processused on bauxite. Although the technology is avail-able (the Soviets are now producing alumina fromalunite), it it uneconomic in the United States at thistime.

Beryllium is the second tier because of its criti-

cal end uses and because one U.S. company is thesole processor of raw ore for beryllium in the en-tire free market world. Because of its relatively highprice, use of beryllium is not widespread. Butwhere it is used, it appears to be highly critical,especially to defense. Arguing against a higher stra-tegic rank for beryllium is the fact that the UnitedStates is apparently capable of supplying most of its own needs. (U.S. production figures are notavailable, so this conclusion is not certain.) Also,beryllium is used in relatively small amounts, sotransportation of imports is not a significantproblem.

Forty percent of U.S. beryllium consumption

goes to the aerospace industry and to nuclear weap-ons. Although the details of the military uses of beryllium are classified, beryllium is known to bea particularly good reflector of neutrons, Knownaerospace applications have been in missiles, air-craft brake disks, aircraft frames, satellites and

space vehicles, and inertial navigational systems formissiles and aircraft. Another large application (35percent of consumption) is in beryllium-copper al-loys in electronic components, including high-strength, noncorrosive housings for underwater ca-ble repeater stations, contacts, and heat sinks, Arelatively new use is in ceramic beryllium oxidesubstrates for complex electronic circuitry.

Consumption patterns of beryllium reflect its de-fense and aerospace uses. Table C-3 shows that con-sumption has actually been increasing, even in hardtimes.

Beryllium’s special properties include lightweight, high strength, high thermal conductivity,and neutron moderating and reflecting capability.There are some substitutes for beryllium metal(steel, titanium, graphite composites) and beryllium-

Table C-3.–U.S. Consumption of Beryllium, 1978-82

Apparent consumptionYear (short tons)

1978 . . . . . . . . . . . . . . . . . . . . . . . 2711979 . . . . . . . . . . . . . . . . . . . . . . . 3031980 . . . . . . . . . . . . . . . . . . . . . . . 3211981 . . . . . . . . . . . . . . . . . . . . . . . 3031982 . . . . . . . . . . . . . . . . . . . . . . . 150SOURCE: U.S. Department of the Interior, Bureau of Mines, inera/ Cornmodlty

Summaries 1984



.


copper alloys (phospher bronze), but not withouta substantial loss of performance. Synthetic sap-phire can be used in place of beryllium in someelectronic uses.

Some beryllium ores are imported, but exactfigures for net import reliance are not available be-cause domestic production data are withheld to

avoid disclosing company proprietary data (see ta-ble C-4). Before 1969, the United States was over90 percent import-dependent. In that year, a domes-tic plant opened to convert imported and domes-tic beryl and bertrandite to to beryllium oxide. Thisplant is the only known ore processing facility inthe market economy countries. It appears that theUnited States is capable of meeting its own beryl-lium requirements to a substantial degree, U.S. re-serves are very large (28,000 tons) in relation to the1982 consumption of 328 tons, and reported im-ports for 1982 were moderate—108 tons. Also, inthe case of beryllium, distance from sources of sup-ply is not an important factor. Because the mate-rial is used in relatively small quantities, it couldbe airlifted if necessary.

Columbium (niobium) l is included as a second-tier strategic material because it is entirely im-

Wolumbium and niobium are two names for the same metal. The namecolumbium is favored by engineers and is generally used in describingthe composition of alloys, while niobium is the accepted name in thescientific community. Since this report is directed toward engineeringapplications of strategic materials, the name columbium is used here,

ported—mostly from a single source, Brazil—andbecause it is used in a variety of essential indus-tries. It is not in the first tier, however, becausethere are a number of substitute materials. Also, itis used in limited quantities and could be airliftedfrom foreign suppliers if necessary. Table C-5shows a trend of increased use of columbium, ex-

cept for the recession year of 1982.High-strength, low-alloy (HSLA) steels owe their

strength and toughness in part to a fine-grainedstructure. Columbium is used in HSLA’s at levelsranging from 0,01 to 0.04 percent by weight to helpattain this structure. With the trend toward moreuse of HSLA steels to replace plain carbon steels,consumption of columbium has increased. The ad-dition of ferro- and nickel-columbium to high-temperature superalloy imparts strength and car-bide stability. For stainless steels, too, columbiumprovides carbide stability.’ There are substitutes forcolumbium, but not without performance penalties;vanadium and molybdenum in HSLA steels; tanta-

lum and titanium in stainless and high-strengthsteel and superalloys; molybdenum, tungsten, tan-talum, and ceramics in high-temperature applica-

2At high temperatures and pressure, molecular hydrogen dissociatesinto atomic hydrogen, penetrates steel (or other metals), and reacts withthe carbon in the steel to form methane. This causes the metal to fail.This hydrogen attack is decreased with the addition of carbide stabilizers,such as chromium, molybdenum, tungsten, vanadium, and titanium aswe]] as columbium,

Table C-4.—Bertyllium: U.S. Imports, World Production, and Reserves


Country Percent

Brazil . . . . . . . . . . . . . . . . . . . . . .......38China . . . . . . . . . . . . . . . . . . . . . .......40South Africa . . . . . . . . . . . . . . . . . . . . ...5Rwanda . . . . . . . . . . . . . . . . . . . . .. .....4Other . . . . . . . . . . . . . . . . . . . . . .......13NOTE: 1982 U.S. net import reliance = W,

World mine production and reserves, 1982 (short tons):

Mine production

Country Amount Percent Reserves

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 28 Not adequatelySouth Africa . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2 delineatedRwanda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3Argentina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1

United States . . . . . . . . . . . . . . . . . . . . . . . . . W NAChina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA NA

Other central economy countries . . . . . . . . 8 0 63

World totala. . . . . . . . . . . . . . . . . . . . . . . . . 126 100aDoeS not Include United States andChina.NA—Not applicableW—Withheld to avoid disclosing company proprietary data

SOURCE U S Department of the Interior, Bureau of ines, kfirreral Commodity Summaries 1984,



—Appendix C—Overview of Second-Tier Materials • 391

Table C-5.—U.S. Consumption of Columbium, 1978-82


1978.. .., :. . ... ., . 3,2931979. , . . . . . . . . ... ... 3,5601980 ..., . . . . . . . . . . . . . . . . 3,7671981, . . . . . . . . . . . . . 4,059

1982, . . . . . . . . . . . . . . . . . . . . . . 3,300--—SOURCE US Departm-entoft;e Interior ~ureauof Mines Mlnera/C&modffy

Summar/es 1984

t ions . Some of these subst i tutes are themselves con-s i d e r e d s t r a t e g i c .

C o l u m b i u m d e p o s i t s e x i s t i n t h e U n i t e d S t a t e s ,

b u t n o n e a r e p r o d u c i n g , n o r a r e t h e y l i k e l y t o i nthe nea r f u tur e . The Uni ted S ta tes impor t s a l l i t sco lumbium, e i the r in the f or m of concent r a tes andt i n s l a g s o r a s f e r r o c o l u m b i u m . B r a z i l d o m i n a t e sU . S . i m p o r t s a n d i n d e e d w o r l d s u p p l i e s . I t s r e -

serves wil l las t for hundreds of years ( see table C-

6) , The only other major source of U.S. impor ts is

C a n a d a , a n d i t s d e p o s i t s a r e l o w - g r a d e . A s i n g l eo v e r w h e l m i n g l y d o m i n a n t s o u r c e o f s u p p l y m a k e sf o r i n c r e a s e d v u l n e r a b i l i t y e v e n w h e n t h e s o u r c ei s f r i e n d l y a n d w e l l - e n d o w e d w i t h r e s e r v e s .

Natural industrial diamonds are included assecond-tier strategic materials because U.S. importdependence on them is 100 percent and becauseno substitutes are available, Another factor makingfor uncertain supply is that industrial diamond out-

put depends largely on gemstone production andis not directly related to industrial diamond de-mand. Diamonds are not included in the first tierfor two reasons: with the advent of a huge diamondindustry in Australia, the western world’s nearlycomplete reliance on African nations will disap-pear, and even from the limited area of southern

Africa, supply has been quite reliable in the past.Table C-7 shows the trend in industrial diamondconsumption in the United States.

The major use of industrial diamond stones is indrilling for minerals. Dies, core bits, cutting toolpoints, and electrical machinery also use naturaldiamond stone. Synthesized polycrystalline dia-monds are competitive with natural stones in someapplications where small stones are suitable, butsynthesis of large industrial diamonds is not cur-rently commercial. It is expected that eventuallyhalf of the demand for natural stones can bereplaced by synthetics.

Although the United States currently mines no

industrial diamond stones, there are diamond de-posits near the Colorado-Wyoming border. TheUnited States is the world’s largest consumer of nat-ural industrial diamond stones. As with severalother strategic materials in the first and secondtiers, supplies are limited to a rather small groupof producers. Currently, the main sources of sup-ply of natural stones are South Africa, Zaire, Bel-gium-Luxembourg, and Great Britain, as shown in

Table C-6.—Columbium: U.S. Imports, World Production, and Reserves


Country Percent

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . ..75Canada . . . . . . . . . . . . . . . . . . . . . . . . . 6Thailand . . . . . . . . . . . . . . . . . . . . .. ...6Other . . . . . . . . . . . . . . . . . . . . . .......13NOTE 1982 U S net import reliance = 100 percent



Country Amount Percent Amount Percent

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,165 - 83 4,000,000 93Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,417 15 175,000 4Nigeria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 1 100,000 2Zaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 <1 50,000 1

United States . . . . . . . . . . . . . . . . . . . . . . . . . Small NA Negligible NAOther market economy countries . . . . . . . . 98 1 9,500 0Other central economy countries . . . . . . . . NA NA NA NA

World total. . . . . . . . . . . . . . . . . . . . . . . . . . 15,780 100 4,334,500 100aDoes not ,n~lude united states or central economy countries

NA—Not applicableW—Withheld to avoid disclosing company proprietary dataNOTE Amer/can Metal Market (Mar ?9, 1983) reports that China has 400 million metric tons of columblum.beanng Iron ore

The Japanese are plannlng to extract the colu!nblum during steelmaklng

SOURCE U S Department of the Interior, Bureau of Mines, A4/nera/ Commodify .%mmarles 1984




Table C-9.—U.S. Consumption of Natural Graphite,1978.82

Apparent consumptionYear (thousand short tons)

1978 . . . . . . . . . . . . . . . . . . . . . . . W1979 . . . . . . . . . . . . . . . . . . . . . . . 741980. . . . . . . . . . . . . . . . . . . . . . . 49

1981 . . . . . . . . . . . . . . . . . . . . . . . 551982. . . . . . . . . . . . . . . . . . . . . . . 43W—Withheld to avoid disclosing company proprietary dataSOURCE:US Department of the lntenor, Bureau of Mlnes,Minera/Commodity

Summaries 1984

U.S. demand for graphite is met by imports of crystalline flake from Madagascar, lump and chipfrom Sri Lanka, and amorphous from Mexico. Ko-rea, the Soviet Union, and China also export graph-ite to the United States. In general, reserves of graphite around the world are large and are not iso-lated in any particular geographic region, but spe-cific types of graphite are highly localized. TableC-10 illustrates the U.S. imports, world production,

and reserves.Sri Lanka, sole world source for lump graphite,

attempted to take advantage of the situation by es-calating prices in the 1970s. This encouraged end-users to begin designing out requirement for lumpgraphite. As a result, Sri Lanka’s market for its

lump graphite is shrinking. It is this potential tosubstitute one type of graphite for another that putsgraphite into the second tier of strategic materials.

Titanium and rutile are considered togetherhere, because rutile is one of the ores from whichtitanium sponge (metal) is produced. Most rutile isconsumed in the production of titanium dioxide

pigment (see table C-n for consumption statistics).Titanium has critical uses in certain industries—in particular, aerospace —and thus is strategic tosome degree. It is not included in the first tier be-cause the main sources of supply, of both rutile andtitanium metal, are political allies of the UnitedStates and are considered secure suppliers. Also,substitutes do exist for many uses. Moreover, syn-thetic rutile can be produced from domestic il-menite, another titaniferous ore.

U.S. consumption of titanium metal increased inrecent years as the commercial and military aircraftfleets were built up, as shown in table C-12.

The major end use (60 percent) of titanium metal

is in jet engines, airframes, and space and missileapplications, where it is valued for its high strengthand light weight. Another 20 percent of titaniumconsumed in the United States goes into steel andaluminum alloys, where titanium is used to removeoxygen and nitrogen and to toughen the alloys.

Table C-10.—Natural Graphite: U.S. Imports, World Production, and Reserves

Sources of U.S. imports (1979-82):

Country Percent

Mexico . . . . . . . . . . . . . . . . . . . . .. ....63South Korea . . . . . . . . . . . . . . . . . . . . ...4Madagascar . . . . . . . . . . . . . . . . . . . . ...6China. . . . . . . . . . . . . . . . . . . . . .. ......8Brazil . . . . . . . . . . . . . . . . . . . . . ........8Other . . . . . . . . . . . . . . . . . . . . . .......12NOTE: 1982 U.S. net import reliance = W.

World mine production and reserves, 1982 a (thousand short tons):


Country Amount Percent Amount

South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . 39 6 LargeIndia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 8 ModerateMexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 6 LargeAustria . . . . . . . . . . . . . . . . . . . . ... , . . . . . . . 27 4 LargeMadagascar . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2 LargeSri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1 Moderate to largeUnited States . . . . . . . . . . . . . . . . . . . . . . . . . W — 1,100Other market economy countries . . . . . . . . 5 3 9 Moderate

Other central economy countries . . . . . . . . 383 63 LargeWorld total. . . . . . . . . . . . . . . . . . . . . , . . . . 608 100 1 70,000a

aThiS flgure E from Bureau of Mines’ statistics which aggregate reserves by COntinent.

W—Withheld to avoid dlsclos!ng company proprietary data

SOURCE U S Department of the Interior, Bureau of Mines, Mlnera/ Commodity Summaries 1984



394 • Strategic —.— .—

Materials: Technologies to Reduce U.S. Import Vulnerability

Table C-11.— U.S. Consumption of Rutile, 1978-82

Reported consumptionYear (short tons of concentrates)

1978 . . . . . . . . . . . . . . . . . . . . . . . 253,0001979 . . . . . . . . . . . . . . . . . . . . . . . 314,0001980 . . . . . . . . . . . . . . . . . . . . . . . 298,0001981 . . . . . . . . . . . . . . . . . . . . . . . 285,000

1982. . . . . . . . . . . . . . . . . . . . . . . 239,000SOURCE US Department of the anterior, ureauof Mlrres, Mirreral CornrnodttySummarres 1984

Another 20 percent is used in the chemical proc-essing industry, power generation, and marine andordnance applications.

In some uses, high-nickel steel and superalloycan substitute for titanium alloys. For aircraft andspace applications, high-strength, low-weight com-posite materials are being introduced to replacetitanium. Also, new aluminum alloys produced bypowder metallurgy techniques (discussed in ch. 7)provide alternatives to titanium in aerospace appli-

cations.There is some rutile mining in the United States,but most of the material is imported (see table C-13). The major import source is Australia, with mi-nor amounts coming from Sierra Leone and India.Brazil has by far the largest reserve base in theworld, but current production there is limited.Sources of supply are quite diverse, with produc-

ers including Italy, South Africa, and Sri Lanka, aswell as the other countries mentioned.

Ilmenite, a titaniferous ore which is abundant inthis country, can be used to produce synthetic ru-tile, from which titanium can be made. A new syn-thetic rutile plant is being planned by a firm whichmines ilmenite in Florida. The process to be used

is the same as the one in current use in Australia.For most domestic producers of metal (mainly lo-cated on the west coast) it is cheaper to import ru-tile from Australia than to use synthetic rutile de-rived from domestic ilmenite. According to anindustry source, the costs of starting up more syn-thetic rutile plants and shipping the produce to do-mestic sponge producers are the only barriers toU.S. self-sufficiency in titanium raw materials.

Major U.S. import sources for titanium spongemetal have been Japan, China, the Soviet Union,and Great Britain (see table C-14). The United Stateshas enough processing capacity to produce all thetitanium metal required for domestic consumption,

but about 35 percent of capacity was idle in 1982,Tantalum performs essential functions in certainproducts, and some of those products themselvesmeet critical needs, Others are nonessential. Thepresent major U.S. import sources for tantalum are

judged not to be highly reliable, which adds an ele-ment of risk. Yet worldwide ore production is quitesubstantial and diverse. For these combined rea-

Table C-12.—Rutile: U.S. Imports, World Production, and Reserves———


Country Percent

Australia . . . . . . . . . . . . . . . . . . . . .. ...69South Africa . . . . . . . . . . . . . . . . . . . . ...9Sierra Leone . . . . . . . . . . . . . . . . . . . . ..14Other . . . . . . . . . . . . . . . . . . . . . ........8NOTE 1982 U.S. net import reliance = W

World mine production and reserves, 1982 (thousand short tons of concentrates):



Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .South Africa . . . . . . . . . . . . . . . . . . . . . . . . . .Sierra Leone . . . . . . . . . . . . . . . . . . . . . . . . . .Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . .India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .United States . . . . . . . . . . . . . . . . . . . . . . . . .Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Italy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Central economy countries . . . . . . . . . . . . .

World total. . . . . . . . . . . . . . . . . . . . . . . . . .

243525314

9W——

10

381a

641414

42

NAo03

100

10,0007,0004,000

6,0004,000

3,000100,000

6,0003,000

143,000

753432

70

42

1 0 0aExciudeS U S productionNA—Not applicableW—Withheld to avoid disclosing company proprietary data

SOURCE U S Department of the Interior, Bureau of M!nes, &f frrera/ Commodity Summaries 7984




Table C-13.—U.S. Consumption of Titanium Sponge,1978.82

Reported consumptionYear (short tons)1978 . . . . . . . . . . . . . . . . . . . . . . . 19,8541979 ...., . . . . . . . . . . . . . . . . . . 23,9371980 . . . . . . . . . . . . . . . . . . . . . . . 26,9431981 . . . . . . . . . . . . . . . . . . . . . . . 31,5991982. . . . . . . . . . . . . . . . . . . . . . . 17,328SOURCE U S Department of the Interior, Bureau of Mtnes, Minera/ Corrtmod/ty

Summaries 1984

sons, tantalum is in the second tier of strategicmaterials.

As indicated in table C-15, annual U.S. consump-tion of tantalum is small, on the order of 1 millionpounds per year.

The largest share of U.S. tantalum consumption(54 percent) goes into electronic capacitors. Capa-citors are used in all areas of electronics: computersand office equipment, telecommunications, instru-ments and controls, consumer, and automotive.Some areas of capacitor use maybe considered es-sential and others not. For example, in the UnitedStates, consumer electronics accounts for about 12percent of tantalum capacitors. (In Japan, by con-trast, two-thirds of tantalum capacitors are used forthis purpose.) Moreover, where size and stabilityare not essential features (as in consumer products),aluminum electrolytic capacitors are competitiveand can substitute for tantalum capacitors. Thus,only a limited proportion of tantalum use in capac-itors may be regarded as critical.

Another important use of tantalum (27 percent)is in cemented carbide metalworking tool bits. As

an additive, tantalum carbide improves hot hard-ness and crater resistance in tool bits. Columbiumcarbide is a suitable substitute for the purpose.About 9 percent of tantalum consumption goes intohigh-temperature superalloys for critical parts(blades and vanes of gas-turbine engines for air-craft). The other principal use of tantalum is in millproducts, mainly used by the chemical industry forsuch items as corrosion-resistant heat exchangersand tank linings. Substitute products are glass-linedcontainers, graphite, Hastelloy C, titanium, and zir-conium.

The United States imports 90 percent of its tan-talum in the form of concentrate and tin slags. Thelargest supplier is Thailand, with smaller amountscoming from Canada, Malaysia, and Brazil. Malay-sia and Thailand ship substantial amounts of tan-talum-containing tin slags, a source that is likely todecline as the old tin slags become depleted, Can-ada is the largest source of natural tantalum min-erals, but Australia may eventually supply a largerportion. In addition, there are reserves of tantalumin Nigeria and Zaire. Nigeria’s tantalum is a by-product of columbium production; demand forNigerian columbium may decline as production of columbium oxide in Brazil gears up. Nigerian tan-talum production may then drop accordingly. Ta-ble C-16 contains statistics relating to tantalum,

No significant mining of tantalum has occurredin the United States since 1959. This country has3.4 million pounds of tantalum resources in iden-tified deposits, but they are uneconomic to developat current prices. For several years world tantalumprices have been falling, which probably indicatesconfidence about future raw materials supply. As

Table C-14.—Titanium Sponge: U.S. Imports, World Production, and Reserves


Country Percent

Japan. . . . . . . . . . . . . . . . . . . . . .. .....85China . . . . . . . . . . . . . . . . . . . . . .......11Soviet Union. . . . . . . . . . . . . . . ........4NOTE” 1982 U S net import reliance = W




Soviet Union . . . . . . . . . . . . . . . . . . . . . . . . . . 44,000 53 50,000 39

United States . . . . . . . . . . . . . . . . . . . . . . . . . 15,600 19 33,500 26Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,600 23 36,000 28United Kingdom . . . . . . . . . . . . . . . . . . . . . . . 2,600 3 5,500 4China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 2 3,000 2

World total. . . . . . . . . . . . . . . . . . . . . . . . . . 82,300 100 128,000 100w—Withheld to avoid disclosing company proprietary dataSOURCE U S Department of the nterior, Bureau ot Mines, Mneral Commodity Summarfes 7984




Table C-15.–U.S. Consumption of Tantalum, 1978.82


1978 . . . . . . . . . . . . . . . . . . . . . . . 5601979. . . . . . . . . . . . . . . . . . . . . . . 7201980. . . . . . . . . . . . . . . . . . . . . . . 5901981 . . . . . . . . . . . . . . . . . . . . . . . 630

1982. . . . . . . . . . . . . . . . . . . . . . . 530SOURCE: U.S. Department of the lnterioL Bureauof Mines, A4inera/Comrnodity

Summaries 1S4.

mentioned below, production capacities of devel-oping nations for both tin and tantalum have beenrising.

Tin is included in the second tier mainly becauseit occurs geologically with tantalum. Because of thisgeological pairing, tin supplies share characteris-tics of vulnerability with tantalum.

Tin consumption in the United States is shownin table C-17. Tin is used in cans and containers,electrical applications (solder), and in constructionand transportation. Substitutions for most of theseuses are widely available. There are a multitude of alternative materials for tin cans and containers.Epoxy resins can be used in place of solder in somenonelectrical uses, and aluminum or copper basealloys or plastics can be used in place of bronze.Lead-base bearing alloys and plastics can be usedfor tin-containing bearing metals as well. Thus, theessential use of tin is limited to electric solder.

Nonetheless, because the material is pervasive inmany industries, a serious interruption of supplymight cause severe economic dislocation, until sub-stitutes could be adopted.

The United States relies on imports for 72 per-cent of its tin requirements. Major import sourcesat present are Malaysia, Thailand, Bolivia, and In-donesia. Quite a few other countries have large de-posits (China, Soviet Union, Burma, Brazil, Austra-lia, Nigeria, the United Kingdom, and Zaire), asshown in table C-18. In the developed world, a Brit-ish mining consortium is going ahead with the firstcommercial use of a suction dredge for the seabedmining of tin in sands off the coast of Cornwall.

Small quantities of tin are produced domestically,as a byproduct of molybdenum mining in Colorado,and from placer deposits in Alaska and New Mex-ico. Over 20 percent of the tin consumed in thiscountry comes from recycled scrap.

There is a large inventory of tin in the U.S. stock-pile, which essentially serves as another supplysource, since sales are made constantly to reducethe surplus, From July 1980, when tin sales began,to the end of 1982, over 10,467 tonnes of tin weredisposed of from the stockpile. This amounted toapproximately 7 percent of U.S. apparent consump-tion over that period.

Vanadium is on the second-tier list because of itscritical uses. It is employed in a variety of steel and

Table C-16.—Tantalum: U.S. Imports, World Production, and Reserves

Sources of U.S. Imports (1979-82):

Country Percent

Thailand . . . . . . . . . . . . . . . . . . . . .. ...42Canada . . . . . . . . . . . . . . . . . . . . .. ....11Malaysia . . . . . . . . . . . . . . . . . . . . .. ....9Brazil . . . . . . . . . . . . . . . . . . . . . ........8Other . . . . . . . . . . . . . . . . . . . . . .......30NOTE: 1982 U.S. net import reliance = 92 percent.




Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 31 1,500 4Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 23 3,000 9Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 23 7,500 22Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3 10,000 29Nigeria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3 5,000 15Zaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3 3,000 9

Malaysia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — o 2,000 6Mozambique . . . . . . . . . . . . . . . . . . . . . . . . . . NA NA NA NAOther market economy countries . . . . . . . . 50 14 2,000 6Other central economy countries . . . . . . . . NA NA NA NA

World total. . . . . . . . . . . . . . . . . . . . . . . . . . 367 100 34,000 100NA—Not applicable.

SOURCE: U.S. Department of the Interior, Bureau of Mines, Mir?era/ Commodity Summaries 1984,




Table C-17.—U.S. Consumption of Tin, 1978-82


1978 . . . . . . . . . . . . . . . . . . . . . . . 70,3041979 . . . . . . . . . . . . . . . . , . . . . . . 76,2621980. . . . . . . . . . . . . . . . . . . . . . . 60,0681981 . . . . . . . . . . . . . . . . . . . . . . . 60,0121982. . . . . . . . . . . . . . . . . . . . . . . 44,364SOURCE” US Department of the anterior, Bureau of Mines, Minera/Cornrnodity

Summaries 1984

alloy products and as a chemical catalyst. Of thepossible substitutes for vanadium, many are them-selves more strategic. U.S. vanadium supplies andprocessing capacity are sufficient to meet this coun-try’s requirements. Yet a considerable amount is be-ing imported at present, which adds an element of vulnerability. Altogether, vanadium probably be-longs near the bottom of the list of second-tier stra-tegic materials.

Vanadium is another material that is used in com-

paratively small quantities, as shown in table C-19.About 80 percent of the U.S. vanadium consump-tion is used as a microalloying agent in steelmak-

Table C-18.—Tin: U.S. Imports,

ing. Vanadium imparts hardening properties tosteel by means of grain refinement. It is used inhigh-speed tool steels and high-temperature rotorsbecause it forms stable carbides and resists high-temperature abrasion. It is used in crankshafts, pin-ions, and gears because of its shock and wear re-

sistance, The high strength-to-weight ratios of steelscontaining vanadium (HSLA and full-alloy steels)make these steels valuable in weight-saving compo-nents. Because of its various uses in steel products,demand for vanadium is tied to the demand forsteel.

Ten percent of U.S. vanadium demand is in ti-tanium alloys, where it provides strength and work-ability. The rest of U.S. vanadium consumption isin the chemical industry, where vanadium is usedas a catalyst, mainly in the production of sulfuricacid.

Many metals are interchangeable with vanadiumto some degree in alloying; examples are colum-

bium, molybdenum, manganese, titanium, andtungsten. Platinum can be used in place of vana-dium as a catalyst in the chemical industry.

World Production, and Reserves


Country Percent

Malaysia . . . . . . . . . . . . . . . . . . . . .. ...39Thailand . . . . . . . . . . . . . . . . . . . . .. ...21Bolivia . . . . . . . . . . . . . . . . . . . . .. .....17Indonesia . . . . . . . . . . . . . . . . . . . . .. ..13Other . . . . . . . . . . . . . . . . . . . . . .......10NOTE” 1982 US net import reliance = 72 percent.

World mine production and reserves, 1982 (short tons): Mine production Reserves


Malaysia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,600Soviet Union . . . . . . . . . . . . . . . . . . . . . . . . . . 40,800Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,200Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,700Bolivia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,500China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,500Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,500Great Britain . . . . . . . . . . . . . . . . . . . . . . . . . . 4,400Zaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400Nigeria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000Burma. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,900United States . . . . . . . . . . . . . . . . . . . . . . . . . NegligibleOther market economy countries . . . . . . . . 12,100Other central economy countries . . . . . . . . 4,000

World total. . . . . . . . . . . . . . . . . . . . . . . . . . 265.600 a

22 15 15 11116

5

4

2

1

1

1

1,320,000 1,100,000

1,705,0001,320,0001,080,0001,650,000

385,000440,000286,000220,000308,000550,000

77,000231,00066,000

10.738,000

121016121015

4432351

21

100aExcludes U.S. production

SOURCE: U S Department of the Interior, Bureau of Mines, &firrera/ Commodity Summaries 1984




Table C-19.—U.S. Consumption of Vanadium, 1978-82


1978 . . . . . . . . . . . . . . . . . . . . . . . 8,1641979 . . . . . . . . . . . . . . . . . . . . . . . 10,1681980 . . . . . . . . . . . . . . . . . . . . . . . 8,5211981 . . . . . . . . . . . . . . . . . . . . . . . 9,5841982. . . . . . . . . . . . . . . . . . . . . . . 6,406SOURCE. U S. Department of the Interior, Bureau of Mines, Minera/ Commodity

Summaries 1984.

Overall, U.S. net import reliance for vanadium(24 percent) is not as high as for most other strate-gic materials, but this is due in part to the depressedstate of the steel industry in 1982. The foreignsources of supply are not very diverse; the majorityof vanadium imports originate in South Africa, astable C-20 indicates. The major world deposits arelocated in South Africa, the Soviet Union, theUnited States, and China. These same countries are

the world’s leading producers of vanadium. In this

Table C-20.—Vanadium: U.S. Imports,

country, vanadium is usually mined as a coproductor byproduct of uranium or phosphorus; an excep-tion is the vanadium mine in Hot Springs, Arkan-sas. Because of this geological pairing, continuedU.S. production may be somewhat uncertain, sinceit depends to a considerable degree on the marketfor unrelated minerals. Although the United Stateshas the reserves to be self-sufficient, market forcesmay at times favor imports.

Vanadium can also be recovered from iron slagsand petroleum residues. Japan and the UnitedStates are the only countries currently producingvanadium from petroleum. The United States usesVenezuelan crude oil as a vanadium resource.

Vanadium is also imported in semiprocessed formas ferrovanadium, largely from industrialized coun-tries. Canada, Belgium, Luxembourg, and WestGermany supply approximately 90 percent of U.S.ferrovanadium imports. Canada processes U.S. andSouth African ores into ferrovanadium and then ex-ports it to this country.

World Production, and Reserves


Country Percent

South Africa . . . . . . . . . . . . . . . . . . . . ..54Canada . . . . . . . . . . . . . . . . . . . . .. ....10Finland . . . . . . . . . . . . . . . . . . . . . . . . . ..7Other . . . . . . . . . . . . . . . . . . . . . .......29NOTE: 1982 U.S. net import reliance = 24 percent.



Country Amount Percent Amount PercentSouth Africa . . . . . . . . . . . . . . . . . . . . . . . . . . 13,200 36 8,600,000 47Soviet Union . . . . . . . . . . . . . . . . . . . . . . . . . . 10,500 29 4,500,000 25China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000 14 1,800,000 10United States . . . . . . . . . . . . . . . . . . . . . . . . . 4,100 11 2,400,000 13Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,470 10 100,000 1

Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 <1 270,000 1

Other market economy countries . . . . . . . . 120 <1 600,000 3

World total. . . . . . . . . . . . . . . . . . . . . . . . . . 36,500 100 18,250,000 100SOURCE’ U.S. Department of the Interior, Bureau of Mines, Minera/ Commodity Summaries 1984



Index



I n d e x q 4 0 3

(jriti(:a] N l;itf)riiils (;olln(;i l . 2{1(lumrnin l+:n~inc (h)., 299(:utting tool” a]j]]lications. 294-295(:\’R I), 178. 18:1




platinum group metals, 72, 74-77, 79, 80Electrolyt ic chromium metal , 156-158Electrolytic processes, 135, 157Electronic scrap, 251-254Elkem Metals, 158, 189-190Embargoes, 87-94Energy production faci l i ty construct ion, 65

Engelhard Corp. , 193, 194, 201, 253Environmental Protect ion Agency (EPA) , 243, 251Essential uses, 12-13, 46, 78-80, See also ApplicationsEtibank, 146-147Eutect ic superal loy, 283-284Explor a t ion

description, 129-131domestic, 26, 28, 201, 204, 206-211foreign, 142-143land-based resources, 201, 204, 206-209ocean-based resources , 209-211policy options, 4, 32, 351, 353prospects for, 126, 201, 204research and development, 208-209technology, 20, 131, 204-208

Extractive metallurgy, 135, 153, 174

Falconbridge, 161, 163-165, 194, 201Federal Clean Water Act, 251F e d e r a l E m e r g e n c y M a n a g e m e n t A g e n c y ( F E M A ) ,

172-173, 341, 342, 374Ferbasa, 144Ferroalloys

applications, 63, 187, 233chromium, 16, 19-21, 44, 53, 63, 138, 139, 141-147,

154-159

domestic production, 20-21, 33, 44-45, 126, 136, 154,157-159, 189-190, 361-362

foreign production, 15, 16, 19, 53, 126, 136, 139,141-147, 157, 179-180, 183

imports, 15, 44-45, 55, 94, 138, 139, 177, 179, 189

manganese, 15, 26-27, 44, 55, 154, 177, 179-180, 183,187-190

nickel, 175policy options, 33, 361-362prospects for, 26-27, 126, 141-142, 159supply disruption and, 33, 45, 136-137technology, 154-156, 187-188

Fiberglass composites , 305Fiber-reinforced superalloy (FRS), 308, 310, 311Finland, 141, 144, 154, 160, 164Ford Motor Co., 295, 299Foreign production

chromium, 126, 138-148cobalt, 126, 160-167ferroalloys, 15, 16, 19, 53, 126, 136, 139, 141-147,

157, 179-180, 183manganese, 126, 178-184platinum group metals, 126, 192-195policy options, 32-33, 356-361potential sources, 147-178, 162, 166-167, 180, 195prospects for, 125-127, 162, 194supply disruptions and, 91-92, 97, 102

Forging technology, 220-221Foster Wheeler Corp., 156Fuel cell stations, 77-78Full alloy steels, 229, 230Fuqua, Don, 116, 118

Gabon, 178, 179, 181, 183

Gag Island, Indonesia, 167Garrett Turbine Engine Co., 282, 299Gasquet Mountain Project, California, 150, 152, 168,

170-171, 355-356Gas turbine applications, 244, 298-301, 310, 311, 313Gecamines, 165Gemini Industries, 240General Accounting Office (GAO], 118, 173, 337-338, 354,

358, 360, 376General Electric, 67, 281, 301General Mining Union Corp. Ltd. (Gencor), 178General Motors, 63, 299General Services Administration (GSA), 157, 190, 341,

342, 376Genetic theory, 204, 208

Geology, 128-129, 137, 159, 177, 199, 201, 204Globe Metallurgical Division of Interlake, Inc., 159Gold Fields of South Africa Ltd., 195Goodnews Bay Placer Mine, Alaska, 196, 198, 200Grande Carajas Development Project, Brazil, 180-183Greece, 139, 144Groote Eylandt Mining Co., 180, 182Grumann Corp., 305GTE Corp., 254GTE Sylvania Corp., 225, 296-297Gulf Chemical & Metallurgical Co, (Gulf C&M), 247

Hadfield steels, 71, 229Hall Chemical, 176-177, 247-248Hanna Mining, 175Hanson Properties, 198Heap leaching, 132, 187Heat engine applications, 297, 325-327Heat exchanger applications, 296-297Hellenic Ferroalloys S. A., 144Hellenic Industrial Mining & Investment Co., 144High-strength, low-alloy (HSLA) steels, 63, 229, 230Home scrap, 215, 222, 233, 235, 248Hot isostatic pressing (HIP], 226, 280-281Hot isothermal forging, 24, 221House Armed Services Committee, 376House Committee on Science and Technology}, 115,

117-118, 346

House Subcommittee on Seapower and Strategic CriticalMaterials, 113

House Subcommittee on Transportation, Aviation, and

Materials, 117-118Hydrometallurgy, 135, 171, 174Hydroprocessing catalysts, 246-248, 375. See also

catalyst s

ICOMI, 178, 182Impala Platinum Holdings, 165, 192, 194, 195




Solution mining, 132, 153, 187South Africa

chromium production, 139, 141, 145-146, 156cobalt production, 160, 165manganese production, 178, 179, 181, 184platinum group metals production, 190, 195strategic materials production, 14-15, 19, 26, 27

Soviet Unionchromium and manganese embargo, 15, 91-92, 103,

104

chromium production, 138, 141, 146manganese production, 178, 179, 182minerals policy, 105-106nickel strike role, 96platinum group metals production, 190, 191, 194Rhodesian chromium embargo role, 93, 94strategic materials production, 14-15, 19, 26, 27

Stainless steeladvanced processing technologies, 66, 236, 274-276conservation approaches, 218, 248-250materials consumption, 80, 238materials substitutes, 270-274overview, 230

qualification and certification of substitutes,319-320

recycling, 239, 240, 242, 248-250substitution, 268-276

Stationary engine applications, 301Steel

classes, 229-230chromite use, 66conservation approaches, 218, 227-238manganese composition, 71-72, 187, 227-232maraging, 68materials consumption, 80processing efficiency, 232-237process waste recycling, 250-251tool, 68

Stevenson-Wydler Technology Innovation Act of 1980(Public Law 96-480), 30, 119, 341-342Stillwater Complex, Montana, 148, 151-153, 191,

196-198, 354Stillwater Mining Co., 197Stillwater PGM Resources, 197Stockpiling, 105, 107, 110, 112-114, 117, 167, 172,

173, 340-341Strategic and Critical Materials Stock Piling Act of

1946, 112Strategic and Critical Materials Stock Piling Revision

Act of 1979 (Public Law 96-41), 30, 45, 113,340 341

processing, 135-137production, 14-15, 136-137selection process, 51-52supply prospects, 125-128, 132-135vulnerability of, 48-51See also Chromium; Cobalt; Manganese; Materials

policy; Platinum group metalsStrategic Materials Act, 112Submerged arc electric furnace, 154, 187-188Subsidies and assistance, 30, 112, 126, 150, 167,

171-173, 190, 340, 354-356, 360, 362, 370, 374Substitution

alloy steel chromium, 276-277chromium, 21-23, 63-66, 268-277, 279, 282, 284, 290,

366cobalt, 25, 68, 69, 70, 99, 101, 279-284, 290criticality of materials and, 47data collection and analysis, 34, 277, 318-319,

365-366definition, 17development stage, 366-368institutional factors, 318-328manganese, 27, 55, 290

platinum group metals, 28, 76, 243-244policy options, 33-35, 365-366prospects for, 266-268, 277-279qualification and certification, 319-323research and development, 263, 267-268, 270,

272-274, 281-284, 321-322, 363role of, 263-264stainless steel, 268-276superalloy, 267, 277-284viability factors, 265-266See also Advanced materials

Substitution information system, 34, 277, 318-319,365-366

Sumitomo Metal Mining, 165Superalloy

advanced processing technologies, 24-25, 220-221,227, 257, 279-284applications, 63, 67, 278, 281-284, 290composition, 277-278conservation approaches, 219-227, 377fiber-reinforced, 308, 310, 311future requirements, 79near-net shape processes, 220-221, 227prospects for, 278-279qualification and certification of substitutes,

320-323rapid solidification process, 316

li 24 37 101 221 225 227 257 377