Wednesday, 03 September 2014
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PwC survey warns of mineral shortage's harmful effects

A shortage of minerals and metals could adversely impact supply chains and economies, according to a new survey from PwC.

In a statement, PwC said that it surveyed some of the largest manufacturing businesses to see what impact such a scarcity would have, and where, over the next five years.

Of these, business leaders in the automotive, chemicals and energy sectors fear they will be hit hardest, according to PwC’s Minerals and metals scarcity in manufacturing: a ticking time-bomb, report.

Elsewhere in the survey, 77 per cent of major manufacturing companies consider minerals and metals scarcity as an important issue for their business, but are concerned that only 39 per cent of their customers do.

The chemicals and energy and utilities sectors believe that they will be severely impacted until 2016, with the percentage of chemical businesses affected by this scarcity expected to triple over the next five years.

The risk of scarcity across all sectors is expected to rise significantly, leading to supply instability and potential disruptions in the next five years — but this will also create opportunities for competitive advantage, the report said.

The survey shows that, while 80 per cent of automotive respondents are currently worried about reserves running out, only 33 per cent in aviation are, for example.

Renewable energy (78 per cent), automotive (64 per cent) and energy and utilities (57 per cent) are all currently experiencing instability of supply. The aviation, high-tech and infrastructure sectors are also expecting to experience high rises in supply disruption from now to 2016.

When asked about other primary concerns around scarcity overall, 84 per cent cited an increase in demand, 78 per cent said it was geopolitics and 72 per cent said extraction shortage. The report also indicated that European companies were better prepared with policies and programmes in place to mitigate risks.

At risk

Minerals and metals identified as being in short supply include beryllium, cobalt and flurospar.

Beryllium is used as a lightweight component in military equipment and in the aerospace industry, and can be found in high-speed aircraft, missiles, space vehicles and communication satellites.

Cobalt, a material used in industrial manufacturing, is used in jet-turbine engines and automotive rechargeable batteries; while flurospar is used in construction, cement, glass, iron and steel castings.

Shortages of tantalum, used in mobile phones, computers and automotive electronics; and lithium, applied in wind turbines and lithium-ion batteries in hybrid cars, were cited also as being a source of concern.

The report’s main author, Hans Schoolderman of PwC Netherlands, said: ‘The world’s growing population, an increase in GDP levels and changing lifestyles are causing consumption levels to rise globally, creating a higher and higher demand for resources.

‘Governments and companies should all be aware of the scope, importance and urgency of the scarcity of both renewable and non-renewable natural resources: energy, water, land and minerals.’


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