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    Mapping Critical Resources for Wales:


    December, 2014

    Philip HarfieldDr Christopher HarrisChristopher Sanders

    029 2020

  • This report gives the findings of a one year scoping study on critical resources for Wales.

    Front page photo credit: Symbols from the noun project by Luis Prado, Marcio Duarte, Iconathon, Tammie Anderson, Edward Boatman

    Mapping Critical Resources for Wales1

  • AcknowledgementsThe authors and the Ecodesign Centre as a whole would like to thank the Welsh Government Academic Expertise for Business Programme (A4B) for funding Mapping Critical Resources for Wales. We would also like to acknowledge the following people for their involvement in our advisory group meetings: Alan Mumby (Managing Design and Innovation), Calvin Jones (Cardiff Business School), Ed Evans (Constructing Excellence), Eoin Bailey (Enterprise Consulting), Iwan Davies (IQE), Julie Cunnington-Hill (Welsh Government), Keith James (WRAP), Nigel Smith (Redrow Homes), Paul Nieuwenhuis (Cardiff Business School), Rhys Charles (Metech Recycling / University of Swansea), Simon Ripton (Welsh Government), Stafford Lloyd (RiverSimple) and Vicki Stevenson (Welsh School of Architecture). A full list of MCRW contributors is included in the appendices.

    Mapping Critical Resources for Wales 2

  • Mapping Critical Resources for Wales

    Critical Resources for Wales AssessmentSourcing raw materials from around the world to feed manufacturing in Europe and USA has become a major concern in recent years. In this project, critical resources for Wales are defined as having both high global supply risks and high importance to the economy of the country (or a sector within it). The metrics used to calculate supply risk mandate that the focus of the criticality assessment be on specialty and technology metals that have become crucial to modern products and services that we enjoy in developed society (Gunn et al., 2014). Resources beyond this scope are considered in MCRW as essential and sustainable growth resources (see relevant sections below).

    Key Message 1: A list of the nine most critical resources for Wales has been quantified (Figure S1). They are: cobalt, gallium, indium, magnesium, niobium, platinum group metals, rare earths (heavy), rare earths (light), and silicon metal.

    The reasons for criticality vary; magnesium is important to the extensive auto, aero, metals, construction materials and chemicals industries in Wales, whilst platinum group metals are important to various aspects of the ICT industry, as well as the auto, jewellery, pharmaceuticals, chemicals, glass and refining industries, for example (Figure S2). The ICT, metals, electrical equipment, automotive and aerospace sectors are identified as being of highest risk to critical resource

    issues (Figure S2). A full analysis of each resource importance metric used can be found in section 4 of the main report. Figures 4.2 To 4.6 in the main MCRW report show that materials are more or less important dependent on the metric used, for example light rare earths are of most importance in terms of Gross Value Added (GVA) and employment, magnesium is most important in terms of business population and environmental impacts, and platinum group metals are most important in terms of waste generated.

    The suite of critical resources identified for Wales as a whole are not dissimilar to those highlighted by the European Commissions 2014 Report on Critical Raw Materials in the EU (EC, 2014). This is due to the global nature of critical resources and the macro-scale at which a national study must be conducted. However, the quantitative analysis carried out here provides a solid starting point for developing the critical resource agenda in Wales, especially given methodological improvements made over previous assessments.

    Section 3 of the main report sets out the methodology for the quantitative assessment of criticality across the Welsh economy. The approach taken has learnt from previous studies and aims to strike a balance between scientific rigour and a need for detail at a relatively low resolution (see Key Message 3).

    Key Message 2: The approach used to quantify a list of critical resources for Wales has significant methodological improvements over other high profile low-resolution criticality assessments,

    1. Geological scarcity, production concentration,reserve distribution, recycling rate, substitutability, governance and price volatility.


  • such as the European Commission list.

    The AMM sector has similar critical resources to the overall economy, as it is the most prominent part of the economy to which material usage can be quantified. Those materials used in the metals sector have greater importance compared to the overall economy analysis (e.g. cobalt, graphite, antimony, magnesium, coking coal etc.), whilst those in electronics, life sciences and some aspects of electrical equipment are less important (e.g. indium and gallium (which become non-critical), lithium etc.) (Figure S3).

    Focussing in on the ICT sector produces a different list of critical resources to the economy as a whole. Beryllium and germanium become critical, whilst cobalt and magnesium become non-critical) (Figure S4). The added benefit for businesses of describing critical resources at a higher resolution is immediately evident given the different resources identified in the sectoral quantitative analyses to the overall economy (Table S1). An assessment of current and planned low carbon energy generation in Wales suggests that tellurium has the highest supply/demand risk (see section 8), although this analysis does not take into account the suite of criticality metrics used in Figure S1 and so should be treated with caution. This assessment highlights the importance of developing forecasts to run alongside criticality assessments; this is particularly relevant to higher resolution company-level studies.

    Key Message 3: National scale assessments are limited in their

    usefulness to companies and industry bodies on the ground. Increasing the resolution of criticality studies is preferable and company assessments should be encouraged where relevant. The ICT sector assessment produced as part of MCRW emphasizes the importance of higher resolution. Higher resolution studies also merit more complexity, and thus more value.

    Critical Resource- Resilient CompaniesKey Message 4: Examples of Welsh companies understanding and mitigating for their individual critical resources issues have been identified The approaches for doing so included moving production of a resource in-house, ecodesigning products, engaging in collaborative research projects, diversifying supply chains, substituting materials, increasing resource efficiencies and vertically-aligning supply chains.

    It is recommended that action be taken to facilitate increased awareness so that any organizations within the supply chain of the ICT and AMM sectors assess their critical resource issues and use it to influence their design process, and install practical ecodesign, wherever possible.

    Tools used to build critical resource resilience in companies should be of proportionate complexity to the organisation, from the simple critical resource assessment tool shown in Figure S5 for those with fewer allocable resources through to full materials database approaches for

    Mapping Critical Resources for Wales 4

  • Mapping Critical Resources for Wales

    large organisations with the substantial financial and human resources to achieve it. Raising awareness across Welsh SMEs by providing simple language guidance and tools for mitigating critical resource risks in business is vital.

    Although there is no panacea to the risks identified here, a business population in the identified high risk Welsh sectors that is aware of critical resource issues will be more resilient to critical resource risks. Where awareness is strong, innovative capacity is high and decisions can be made quickly, consciously conducting a critical resources assessment may not be necessary and decisions on resource uses can be made ad-hoc.

    Increasing linkages between resource organisations and businesses, developing projects such as those suggested in the following sections, and cultivating cross-sectoral dialogue and knowledge exchange, are ways of achieving such a business population.

    Key Message 5: Within the AMM and ICT sectors, smaller companies with high innovative capacities, particularly those with a product in the design phase, are more most resilient to critical resource issues as long as awareness is apparent. Larger companies often have a harder task in retrofitting their processes to account for criticality, but generally have high innovative capacity and greater awareness of critical resource risks.

    Solutions to criticality issues vary from sector to sector. For example recycling of electronics currently has little value for

    retaining the critical resources identified in Figure S4 due to miniaturisation, the use of complex materials, incompatibility of different metals in the process, and the relatively low value of gallium, indium and rare earths compared to precious metals (Balkenende et al., 2014). On the other hand, the recycling of magnesium from aluminium and cast iron in the AMM sector has great potential for reducing magnesium supply risks and overcome extremely high primary production energy costs (Neelameggham and Brown, 2014), although improvements to the optimisation of scrap, labelling of materials and ecodesigned products are necessary (Ditze and Scharf, 2008).

    Policy OpportunitiesKey Message 6: Opportunities for Welsh Government policies to directly mitigate critical resource ri