Most readers will be aware of the current shortage of what we’ll call “computer chips” that are used today in all sorts of technological areas, but critically in car manufacturing. Compared with only a decade ago, most cars contain ten times as many such chips today, many of them involved in safety systems, communications, and electronic driver aids. As we move towards partial, if not total, driving autonomy, even more of these chips will become involved. This supply crisis has worsened over the past year, although it was already brewing, even with the decline in car production and sales going into 2020. Initially the problem was a temporary delay in supplies, as chip factories shut down when the coronavirus pandemic first hit, and units such as the Honda UK factory shut down for four days due to the supply chain problems, when chips were a critical component. Although production is now largely back to previous levels, a surge in demand driven by changing habits, some fuelled by the pandemic itself, means that the crisis has not gone away. For behind this situation is not just a lack of manufacturing capacity, but also a supply and cost problem with the raw materials used in chip, or “semiconductor wafer” manufacture. Silicon, copper, and plastics are the main chip components, by weight, but there are also relatively small, but critical, amounts of the element germanium, and the compound gallium arsenide. Copper prices have rocketed with the crisis, and the other two rare and costly items come from only limited sources, with the lion’s share of annual germanium production of around 150 tonnes coming from China, Russia, and the USA, in that order.
That covers the problems with computer chips; but with the advent of electric power for transport, the electric motor and its various parts represent another critical area for manufacturers. Two “rare earth” elements, neodymium and praseodymium, are critical components of the powerful magnets of brushless permanent magnet drive motors, often preferred for use in EVs over the alternative (magnet-free) induction motors. Permanent magnet motors are easier to control, easier to cool, and lighter, making them better suited to smaller electric vehicles. But with China controlling 95 per cent of world rare earth metal sources, it leaves permanent magnet motor manufacture subject to similar supply concerns as for computer chips, increasing pressure to optimise the fundamentally cheaper induction motor, or adopt the third alternative of the magnet-free “switched reluctance” motor.
But there’s another very significant area in EV manufacture from which there is no escape at present, and that’s the compounds of two metals, lithium and cobalt, in the almost universally used lithium-ion energy storage battery. Both again are elements relatively rare in nature, although lithium is not as rare, or as costly, as is cobalt. Projected EV battery demands in the coming years will probably treble the global requirement for lithium, and nearly double that for cobalt, by the end of this decade. As yet, recycling technology and facilities for batteries are complex and relatively undeveloped, so that offers no supply source, although partial replacement by nickel is viable. Again, supplies of both are limited, and the Republic of Congo has by far the lion’s share of global cobalt resources, mosty under Chinese control, whilst Australia has a significant, but considerably smaller, output. By comparison, Australia and Chile produce more lithium than the rest of the world, but there are significant, although largely to date undeveloped, lithium sources existing in other locations, including in Cornwall in the UK. Moves to re-commission recovery of the Cornish resources are active, although they are largely in the form of “geothermal” waters at least 800 metres down from the surface, and involve significant investment to extract them.
Precious metals, recently used in quite large quantities for fossil fuel catalyst boxes and particulate filters, like platinum and rhodium, will see a declining demand, although silver, an excellent electrical conductor, may see a steadily rising demand in the motor industry, although any significant increase in fuel-cell vehicle production might see a resurgence of platinum group metal demand. But it’s no wonder that the western world is worried about China’s controlling interest in many of these areas, and western researchers are looking hard for alternative materials, or technology, particularly to replace cobalt in batteries, which is probably where they are most vulnerable to the Chinese near-monopoly.