1. Material Chain Management and Open Trade: The Cases of Coltan and PGM
Presentation at the Conference: Governing Trade in Critical Raw Materials,
GMF Washington DC Dec 8, 2011
Prof. Dr. Raimund Bleischwitz
Transatlantic Academy Fellow & Wuppertal Institute, Germany

2. Challenge I: clean sourcing
Outline
The issue
Challenge I: clean sourcing
Challenge II:open loops
Perspectives

3. The Issue: challenges for material value chain management
Transparency and certification could strengthen material chain management.
Material value chains are complex and often involve dozens of actors across many companies and jurisdictions.
Small-scale mining and early stages of trading and processing offer many ways of by-passing any proper management.
Some countries involved (e.g. China) may have strategic interests.
Traded products (and semi-products) inhibit materials as hidden flows. Material leakages are significant.
=> Transparency and certification require resilient institutions with support from companies and key countries.

4. The case of Coltan
Coltan (tantalum) is used in mobile phones, other ICT products, medicine, optics, cutter technologies, etc.
Largest Mine (Australia)has abandoned its operations in 2008
Central Africa (incl. Mozambique) now serves as largest supplier, followed by Brazil and Australia
Small-scale mining, civil war, lootability and profitability give incentives for illicit trade: ca. 20 % of worldwide coltan market (2009/10)
China deeply involved.

6. Coltan: Risks and threats
Intersection and cumulativeness of risks
Affected
Industries
Resource Nationalism
Global & transat-lantic scale
Low
Growth
Low standards, enhanced climate change
Civil
war
Failing
states
Piratery,
Organized crime
Regional scale
Migra-
tion
Decrea-
sing Re-
venues
Decrea-
sing agri-
culture
Local scale
Small-
Scale
Mining
Illicit trade
Increa-
sed bush-
meat hun-
ting
Defo-
restation
19. September September 2018
Source: own compilation after Folke et al. 2011

7. The case of Platinum (PGM)
Important for car catalysts and electronics as well as for fuel cells & electric vehicles.
Projected future demand for these applications in 2030 likely to be 1.5 times higher than total production today.
Mining environmentally intensive (large amounts of water and energy, sulphur dioxide etc.): for the production of one single ounce a volume of 7 – 12 tons of ore have to be processed.
Main producers and South Africa and Russia.
Source: Saurat/Bringezu 2008.

8. PGM flows in Europe PGMs in glass industry: organized in closed loop
secondary PGM input represent ~ 43 % of European secondary input
primary input represent only 0.5 % of European primary input
PGMs in car catalysts:
low recycling rate (~30 %), mainly due to exports
expanding car fleet, growing average cylinder capacity, stricter emissions standards
=> The automotive industry represents 76 % of PGM primary input to Europe
PGM flows in EU 25 + Norway + Switzerland in 2004
Sources: Saurat/Bringezu 2008/9; Wilts 2011

9. PGM: Losses, Risks and Threats
High material leakage
For car catalysts: In Germany e.g., only 15 % of registered cars are dismantled and recycled domestically. Most used cars are being exported to West Africa and Central Asia.
For mobile phones: 243 kg PGM inputs compared to 16,5 kg outputs to recycling (2009, Germany).
For discarded screens: 355 kg PGM inputs compared to kg outputs to recycling (2009, Germany).
Shady business, grey markets, illegal shipping, organized crime (money laundry etc.).
Health and environmental risks
„Responsibility gap“ for post consumer waste abroad

10. Proposal: An International Metal Covenant
Rationale: poor performance, material leakages internationally, low recycling standards in many countries.
Covenant to include industry (recycling, automotive)
and target countries.
To set long-term goals to increase the resource productivity by high quality recycling of old cars
To define the responsibilities of different actors in terms of operation, implementation, and evaluation.
Establishes material stewardship internationally.
States shall guarantee stable and supportive regulatory framework conditions
Going beyond compliance!
Recycling industry
Automotive industry
Exporting countries
Importing countries
Source: Wilts / Bleischwitz 2010:

11. Conclusions
Sustainable sourcing and recycling improve material chain management
Spillovers and secondary benefits create further contributions to green and inclusive growth
Policies: to focus on life-cycle aspects and material leakages
Opportunities
Global Challenges
Critical metal markets put companies, high-tech industries and regions at risk
Transparency and certification encounters challenges from open markets and Chinese involvement
Material chain management (incl. mining, recycling and waste) at an international scale
New alliances beyond transparency and certification: an international metals covenant
….export restrictions should not be an option!
Response options
Material chain management and material stewardship raise collective action problems
Data base not yet fully established
Commodities have a collective goods dimension (externalities, property rights, dissociated markets, knowledge management)
Policies for mining countries (taxation issues, diversification, etc.) to be aligned with international resource politics
Rethinking Trade
19. September September 2018