Minerals and metals scarcity in manufacturing: The ticking time bomb

The fine line between ‘just in time’ and ‘just not there’

With a growing population, increasing GDP levels and improving lifestyles, we’re consuming more and more. Renewable and non-renewable resources—energy, water, land, minerals—are in ever-higher demand. And since the relationships between these resources are strong, both the causes of, and the solutions to scarcity are complex. Which, for a manufacturing organisation with a global supply chain, can spell trouble.

Minerals and metals scarcity—explosive prices, delivery delays

In Minerals and metals scarcity in manufacturing: The ticking time bomb, we explore the impact that minerals and metals scarcity is likely to have on seven manufacturing industries. We interviewed senior executives in many of the leading organisations that are central to the future growth of these industries to gauge the relevance and effects of this scarcity.

We found that the supply of many minerals and metals is struggling to keep up with rapid increases in consumption, resulting in price hikes and delivery delays. For example, dysprosium, an essential component of super magnets, and tantalum, an important component in aircraft and medical equipment, automotive electronics, mobile phones and LCD screens, have both experienced explosive price increases in recent years.

Video: Minerals and metals scarcity in manufacturing
Malcom Preston, Global Sustainability Leader, explains the relevance of the report in terms of measuring the impact scarcity has on the entire supply chain.
Malcom Preston, Global Sustainability Leader, explains the relevance of the report in terms of measuring the impact scarcity has on the entire supply chain.

On policy-makers’ radar

Resource scarcity is becoming a central issue on the policy agenda for many governing bodies:

  • The European Union is pushing for resource efficiency and trade policies that favour international open markets.
  • In the U.S., the Dodd–Frank Act is forcing companies to become transparent with how they use so-called ‘conflict minerals.’
  • Producing countries are starting to protect their interests with export taxes and trade restrictions—for example, China has imposed trade barriers for some metals to protect its domestic industries.
  • Scarcity of resources is also likely to be a central issue at the Rio+20 UN Conference on Sustainable Development in June 2012.

Efficiency and collaboration through the supply chain would help address this issue

For a large majority of the companies we interviewed, efficiency and collaboration throughout the supply chain are seen as essential to responding to the risk. While the effects of scarcity can cause stress at any link of the supply chain, it is especially evident as you move down the supply chain.

Data information, recycling technology, substitution technology and regulation are all considered required elements of any response to the issue of minerals and metals scarcity.