Criticality of the supply of metallic and mineral raw materials to German companies

Unlike oil as an energy source, there is no geological scarcity for most mineral raw materials. However, in a growing global economy based on the division of labour, the significance of short and medium-term supply risks is increasing. On behalf of the KfW banking group, the IZT together with adelphi presented a study on the criticality of the German raw materials supply. The institutes proposed the following solution: the raw materials problem could be significantly eased by utilising the potential of recycling and resource efficiency in a targeted manner. After all, while naturally occurring deposits in the earth are tending to shrink, the stocks built up by humans are growing: in buildings, in infrastructure, in cars or even in electrical appliances.

The availability of metallic and mineral raw materials is becoming increasingly important for economies with high-tech industries. In Germany, value creation in the manufacturing industry is heavily dependent on the economic, stable and secure supply of metallic mineral raw materials. Supply difficulties can be caused by physical disruptions to the supply chain (e.g. due to war or natural disasters), market restrictions (e.g. oligopolistic supply structures, co-production) or government intervention (e.g. export restrictions, stockpiling). The concept of criticality encompasses both the economic importance of raw materials for the processing industry and the various supply risks.

In this project, around 50 economically important raw materials whose supply situation could prove to be critical in the medium to long term (10-20 years) were initially assessed from the perspective of companies producing in Germany. For 10 potentially critical raw materials, a detailed analysis of the main areas of application, supply, demand, price trends, recyclability, substitution possibilities and strategic importance with regard to future technologies was carried out. The supply situation was analysed in greater depth in regional studies in order to illustrate the influence of governance factors.

In particular, the aim was to identify measures to reduce criticality. The spectrum of possible measures ranged from increased primary production (domestic, foreign), foreign trade policy (e.g. import incentives, changed import base), product and process efficiency (e.g. substitution, process optimisation), price risk management (e.g. warehousing, insurance), strategic management (e.g. vertical integration, joint ventures) through to recycling (e.g. production waste, end-of-life waste).