The 'Electronification' of Everything
Only about 150 years ago, almost all materials in a person’s home came from a nearby forest or quarry. By the 1960s, with more developed supply lines and more consumer appliances, the average American home contained about 20 different elements.
Since then, a revolution has transformed the products we use and the materials that allow them to work. Products now rely on elements that were once mere scientific oddities just a couple decades ago. In the 1990s Intel used only 15 elements in its computer chips. Now the company demands close to 60 elements. While rare metals have been around since the beginning of time, most were just discovered in the past few hundred years, and some just in the past century.
This transformation in the products we use appear subtle to the untrained eye. Modern lights, for example, emanate hues slightly different from predecessors. But these subtle changes mask a profound change in resource use. Whereas Edison’s lightbulb contained a simple metal filament, the resources in today’s LED lights are more akin to computer hardware, powered by gallium, indium and rare-earth elements.
Today, the collective impacts of our individual purchasing decisions and the technologies we use have significant ramifications on the resources we use, especially rare-metal supplies.
From 1980 to the present, mining companies have produced four times the amount of many if not all rare metals versus the amount they produced from the dawn of civilization until 1980.
These metals have brought forth digital technologies that transformed not only the ways we travel, communicate and shop but also our expectations. We have come to demand that technologies will become cheaper, lighter, more accessible and more powerful each year -- and that they do far more than once thought possible.
Although the multiple functions of our new gadgets appear to come with the opportunity to use fewer raw materials -- after all, the iPhone is a computer, book, and music player -- the reality is we use far more total resources.
By 2017, there will be an estimated 1.5 billion smartphones in the world. They contain more metals, in greater amounts and often at higher grades, than their predecessors. For example, 4g smartphones use 6 to 10 times more gallium than a regular cellphone just several years before.
Indeed, some new products use less rare metals than their previous iterations. For example, LED displays use far fewer rare-earth elements per lamp than their fluorescent cousins. But other times, an apparent reduction in materials use is just a displacement.
In laptops, new solid-state drives -- which store data on flash memory chips -- are replacing hard drives. Because hard drives use two rare-earth magnets, one to help spin magnetic-coated metal platters and the other to encode data on them, the switch to flash drives appears to reduce the demand for the 10,000 tons of rare-earth magnets we use annually to store pictures and files.
However, while flash drives are faster and smaller, in 2014 they cost nearly eight times more than hard drives for the same amount of memory. Consequently computer companies are building laptops with less memory. To offset this smaller memory, people are turning to cloud storage, where hard disk drives, with their rare-earth magnets, are whirling away forming the backbone of remote storage. So while we are seeing a reduction in rare earths used in laptops, we are witnessing an explosion in rare-earth magnets used in hard drives in cloud-data storage centers.
And we aren't just talking about relatively new inventions that are using rare metals. The “electronification” of what were once simple products is now embedded with rare metals.
Take the evolution of the toothbrush, which started as a frayed twig in ancient Babylonia. In the 1500s the Chinese produced toothbrushes from carved bone and bamboo fastened with pig whiskers. Four centuries later they were made of plastic and nylon. The first commercially successful electric toothbrush appeared in 1960. Today, they're ubiquitous. Besides the battery-powered offerings, there are app-enabled cleaners that collect data about your hygiene.
Manufacturers like Royal Philips Sonicare need dozens of components for their product. An electric toothbrush alone needs circuit boards dotted with materials of tantalum in a capacitor that helps it to store energy; it requires a neodymium, dysprosium, boron and iron magnet with material coming from southern China to provide the power to spin brushes in excess of 31,000 strokes per minute; and it needs batteries made from nickel and cadmium or lithium.
Supplying the roughly 35 metals it needs to make the electric toothbrush takes an extensive supply chain: miners like China’s Xiamen Tungsten to supply the metal; a plant in Estonia to process it; and metal traders in New York to provide the alloys to component manufacturers, who sell their wares to the toothbrush manufacturer. It is a web that spans six continents.
Unfortunately, we have thought little about the tenuous supply lines that support our habits and that have made small, powerful devices inexpensive enough that billions of people can afford them.
Numerous government and think-tank studies highlight the risk of shortages over the next decade and some even longer. While production levels of many elements will rise to meet demand, the American Chemical Society found that over the next century, 44 of the 94 naturally occurring elements face supply risks.
With our current rate of rare-metal resource production and our consumption patterns, we could run low have the dysprosium necessary to build MRI machines; the cobalt critical for electric vehicle batteries; or the rhenium we need for aircraft engines. New high-tech inventions will only add urgency to expand constrained supply chains. The most pressing concern is not that we are running out of resources; it’s that we are not investing in the supply lines to bring cost-effective materials to market.
The future of high-tech goods that we in the West crave and those in developing countries need to lift them from poverty may lie not in the limitations of our minds, but in our ability to secure the ingredients to produce them.
Because whole industries are built on just a few rare metals, disruptions to their supply can have profound global implications and give resource-rich countries tremendous leverage. Billion-dollar companies are often beholden to just one country such as Congo or Kazakhstan -- or even one particular mine — for a vital advanced metal. And as these metals are critical to green technology as well as underpin complex weapons systems and ultimately a country’s national defense, more is on the line than spinning toothbrushes.
As we will see in the third excerpt of my book, some countries and companies are realigning their relationships to ensure a reliable supply of rare metals. And that means understanding China's bold attempt to own the entire high-technology supply chain, from rare-metal mining to finished products.
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