Platinum Availability for Future Automotive Technologies

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Platinum Availability for Future Automotive Technologies Elisa Alonso, Frank R. Field, and Randolph E. Kirchain* Massachusetts Institute of Technology, Cambridge, Massachusetts 02139-4307, United States S Supporting Information *

ABSTRACT: Platinum is an excellent catalyst, can be used at high temperatures, and is stable in many aggressive chemical environments. Consequently, platinum is used in many current industrial applications, notably automotive catalytic converters, and prospective vehicle fuel cells are expected to rely upon it. Between 2005 and 2010, the automotive industry used approximately 40% of mined platinum. Future automotive industry growth and automotive sales shifts toward new technologies could significantly alter platinum demand. The potential risks for decreased platinum availability are evaluated, using an analysis of platinum market characteristics that describes platinum’s geophysical constraints, institutional efficiency, and dynamic responsiveness. Results show that platinum demand for an automotive fleet that meets 450 ppm greenhouse gas stabilization goals would require within 10% of historical growth rates of platinum supply before 2025. However, such a fleet, due largely to sales growth in fuel cell vehicles, will more strongly constrain platinum supply in the 2050 time period. While current platinum reserves are sufficient to satisfy this increased demand, decreasing platinum ore grade and continued concentration of platinum supply in a single geographic area are availability risk factors to platinum end-users.

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INTRODUCTION Globally, much effort is being applied to develop new technologies to satisfy the world’s energy appetite. While these new technologies offer environmental and other improvements, concerns have been raised about the future availability of certain minor, but crucial, materials upon which these technologies rely. Because the adoption rate of these new technologies depends upon a simultaneous increase in the supply of these materials, the feasibility of necessary supply expansion is an important determinant for any technology projection. One material whose availability has important implications for the future of energy, transportation, and the environment is platinum. Platinum’s catalytic property aids emissions control in transportation. Its demand is growing as the populations of developing nations gain wealth and desire increased mobility and smog control in their city centers.1 Hydrogen fuel cell vehicles would significantly reduce carbon emissions and gasoline dependence; however, the adoption of fuel cells would mean a 3−10-fold increase in the amount of platinum required per vehicle.2 Conversely, battery electric vehicle technologies could eliminate the need for tail-pipe emission controls. Evaluating the future availability of any material is challenging as it involves many possible actions and actors.3 The goals of this paper are both (1) to provide a best available statement of the state of platinum supply and demand, the projected interaction of the two, and the current and projected risks to platinum supply chain stakeholders and (2) to extend © 2012 American Chemical Society

the previous discussions of availability risk to also include dynamic market characteristics that either positively or negatively reinforce market risk. We examine platinum availability in depth by (1) providing a detailed current status of platinum availability using metrics (described later in more detail) and describing how these metrics have changed over time, (2) identifying metrics whose values are at levels that indicate increased risk for those who use platinum, in part by comparing platinum to other materials, and (3) examining a range of future demand scenarios and the implication of these scenarios on platinum availability.

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LITERATURE The concern that a material may “run out”, that availability may be constrained, arises from the observation that the Earth is of a limited size and has limited resources, whereas human population is capable of continuously increasing or at least continuously consuming more.4,5 In the past two centuries, many scholars have participated in building a better understanding of the implications of limited resource availability on economic growth and sustainable development.6−10 Within this general theme, a growing body of work examines specific materials’ availability for new technologies such as electric vehicles (lithium,11−13 platinum2,14−16) and solar Received: Revised: Accepted: Published: 12986

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energy (tellurium, selenium17,18). These technologies are particularly attractive because they reduce dependence on oil, reduce carbon emissions, and increase energy efficiency. However, because increased use of these technologies means major changes in the demand patterns for raw materials, the common concern among these studies is that the limited supply for certain raw materials may constrain the growth of these new technologies. The most common method for evaluating materials availability for new technologies is to compare estimates of the amount required, based on technology market penetration and growth estimates, with a measure of the quantity of material available for extraction or with present extraction rates.11,16,19 Such studies implicitly utilize a Malthusian concept of scarcity: materials availability measured by comparing geophysical constraints on supply with the rate of current (or projected) resource usage, without considering supply quality.3,6 Increased concern for scarcity has been recommended when use is projected to outpace supply, although the literature does not provide a clear consensus on how to quantify the appropriate level of concern. A number of studies also consider supply quality by examining extraction costs and ore grade and how both change over time, in particular, with a cumulative resource supply curve.13 The consideration of increasing cost as a risk factor for materials availability may be traced to Ricardo, who noted that land was limited and of varying quality.20 Ricardian metrics measure geophysical constraints on materials availability by examining the quality of the supply.3,6 Factors that mitigate geophysical constraints are evaluated as well in a number of studies, in particular recycling21 and substitution.22 Finally, a number of materials availability studies have identified the geographic location of these supply sources to evaluate potential institutional concerns such as import reliance and cartel formation.15,23 This paper expands on previous work by evaluating current and historic scarcity metrics for platinum availability and compares them to other materials, where possible. In addition, metrics are estimated for a range of scenarios for future platinum demand. While understanding risk for materials scarcity ultimately requires models that can capture the dynamic characteristics of markets, developing and maintaining them is expensive. As such, it is imperative that such tools only be developed when warranted. The analysis presented here may be applied to inform the decision about making such an investment to model a given material system. Where dynamic factors reinforce conventional risk signals or confound the risk signal evaluation, detailed market modeling is recommended.

availability makes this possible. In some cases, data was obtained over an extended period of time in order to identify whether a given metric was identifying increasing or decreasing risk of platinum availability. Following the evaluation of the availability metrics, future demand scenarios for platinum are presented. Given these demand scenarios, risk for platinum availability is re-examined. Calculating Platinum Availability Risk Metrics. Many of the metrics presented here have been previously used in the literature,3,24,25 but an additional set of metrics are proposed here that would help identify potential for market responses to scarcity. These “dynamic” metrics of risk for scarcity are discussed qualitatively rather than quantitatively due to a lack of sufficient data. Relevant data were obtained from company financial reports,26−31 platinum industry trade data,32,33 the USGS,34,35 and other publications.16,36−38 Platinum, palladium, rhodium, iridium, and ruthenium form a group of metals referred to as the platinum group metals (PGM). Data for PGMs are often reported in aggregate, making it difficult to isolate information regarding platinum itself. In such cases, the assumption will be made that the information about the PGMs is a good approximation for characterizing platinum itself. For example, calculations involving reserves assume that the reported global reserves for platinum group metals have the same proportion of the five platinum group metals as the 2011 supply, except for Ir and Ru, where supply data is unavailable and demand data was used instead. Defining Demand Scenarios. Two sectors have accounted for over 60% of primary demand over the past decade: automotive and jewelry. The two sectors differ in several key aspects: jewelry demand is highly price elastic and quick to respond to price changes, while the automotive industry’s response to changes in price is limited, except with a long delay; jewelry is easily recycled, and its collection for recycling is price-sensitive, while platinum recycling in automotive applications is dependent on overall vehicle recycling rates rather than the price of platinum. Finally, platinum use in jewelry is largely influenced by the price of platinum and overall wealth, while the dominant drivers for platinum use in automobiles will be vehicle demand patterns and propulsion technology decisions. In order to better understand how potential future technological changes can be used to evaluate material availability, we focus on changes in the automotive demand for platinum and assume that other forms of industrial (noninvestment) platinum demand grow at historical rates. Automotive demand for platinum has been a dynamic demand sector over the past 30 years and may continue to be so as new technologies for cars are introduced (or reintroduced) and adopted. In 1975, catalytic converters (and associated platinum) were not found in cars. By 1981, the three-way catalyst had become the only technology that car companies could economically use to meet the environmental regulations on emissions set by the EPA, and by 1985, all new cars sold in the U.S. contained one.39 With the catalytic converter, the platinum group metals contained in each car increased from about 0 to 3−4 g.14 Between 2005 and 2010, 40% of platinum mined was used by the automotive industry.33 Today, automotive companies are contemplating the use of a number of technologies to reduce the greenhouse gas emissions from cars. The implications for the platinum system differ immensely depending on technology adoption: hybrid, battery

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METHODOLOGY Many aspects of materials production and use can contribute to availability risk, but few stakeholders have the time or resources to comprehensively analyze the market for every material on which they depend. As such, it is critical to focus that analytical effort. To this end, the literature broadly advocates first examining characteristics (i.e., metrics) of a materials market to screen for risk and then, where appropriate, to examine expected patterns of supply and demand to identify increasing or decreasing risk (i.e., scenario analysis). Following this approach, this paper begins with a detailed evaluation of platinum availability metrics and compares platinum metric values with those of other metals, where data 12987

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Table 1. Comparison of Metrics of Scarcity for Metalsa metal magnesium aluminum iron lead zinc copper nickel tin cobalt silver platinum group metals

ore grade (wt %) 70−95% MgCO3, brine 3% Mg 35−50% Al2O3 30−65% Fe 4−8% Pb 2−4% Zn 0.2−5.0% Cu 1.5% Ni 0.5% Sn 0.4% Co, byproduct of Cu, Ni, Ag 0.006% Ag, byproduct of gold and base metals 0.0003−0.002% PGM, sometimes a byproduct of Ni-sulfide ores

price ($/tonne)

energy (MJ/kg)

reserve/ production (years)

recycling input rate in US (%)

old scrap collection rate in US (%)

2 982 2 168 471 2 153 2 160 7 566 21 914 20 362 43 105 648 840

257 201 12 21 85 64 195 324 132 not available

423 131 60 19 20 42 44 19 76 22

33 36 41 63 27 30 41 22 32 32

39 42 52 95 19 43 56 (excl. batteries) 75 68 97

51 832 053 (platinum)

196 000−846 000

134

16

76

a References are ore grade,36 price (average for 2010),56 energy,55 reserves/production for 2011,35 recycling input (recycling) rate and old scrap collection (recovery) rate in US from USGS Recycling Circular 1998/2000/2004, data for 199857.

require 1 g/vehicle,14,43,44 hybrid/plug-in hybrids require half the platinum of a conventional vehicle, and fuel cell vehicles require 15 g/vehicle.2,45−47 Trucks require 3 g/vehicle and are assumed to compose 25% of vehicle sales, matching the estimated composition of the 2010 vehicle sales fleet.48 Total primary platinum demand based on the combination of the vehicle use scenarios and projected evolutionary growth was estimated. For simplification, platinum in vehicles was assumed to be recycled at an end of life collection rate, r, of 50% (based on historical data33), which was assumed as constant at 15 years:49

electric, or polymer electrolyte membrane fuel cell vehicles. For hybrid (HEV) or battery electric vehicle (BEV) technologies, the amount of platinum group metals used per vehicle would drop significantly, as they would have lower requirements of tailpipe emissions control and, in the case of the BEV, would not require an engine at all. On the other hand, a proton exchange membrane (PEM) fuel cell vehicle is expected to require as much as 15 g per car.40 In the present analysis, we examine four scenarios, which will be presented in more detail: (1) a continuation of historical growth rates, (2) a scenario with high vehicle electrification based on a World Energy Outlook projection of future light duty vehicle fleet sales for stabilizing greenhouse gas levels at 450 ppm, (3) a scenario with no vehicle electrification, and (4) a scenario with no fuel cell adoption. To build the scenarios, we first evaluated historical platinum usage and its growth rate for individual platinum-using industries and then built future vehicle fleet demand scenarios that were combined with the historical usage in nonvehicle demand industries. Projected future supply based solely on historical supply growth was termed evolutionary supply. Statistical software, JMP, was used to fit historical data from 1975 to 201033 to an autoregressive integrated moving average (ARIMA41,42) (0,1,0) with constant model. This model assumes constant exponential growth at a growth rate, C, such that log(Q t ) = C + log(Q t − 1)

Dprimary,projected, t = T = Dprimary,evolutionary, t = T +

i

− r ∑ Vi , t = T − 15ai i

∑ vehicle types i

(3)

Future automotive sales were based on projections by the International Energy Agency.50−52 In their “blue map” scenario, an aggressive scenario aimed at stabilizing greenhouse gas levels at 450 ppm, light duty vehicle sales reach 135 million in 2035, roughly twice the estimated 2010 LDV sales figure of 77.6 million. The 2010 cars and commercial vehicle sales are estimated at 77.6 million vehicles. In the “blue map” scenario, the LDV sales mix migrates toward an all EV-fleet, composing one-third of 2015, one-half of 2025, and two-thirds of 2035 fleet sales. Fuel cell electric vehicles (FCEV) are expected to be mostly introduced after 2025 and grow to 12% of passenger vehicle sales by 2035. The IEA blue map scenario was our base scenario, scenario A, and two permutations were introduced to develop two alternative scenarios. For scenario B, the FCEVs projected by IEA were replaced with conventional gasoline engine vehicles (i.e., no FCEVs), and in scenario C, all electric vehicles were assumed to be either conventional gasoline engine vehicles or diesel engine vehicles.

(1)

where Q is the quantity of platinum being measured and t is time. Compound annual growth rates and linear and exponential fits of the historical data were evaluated for comparison. Gross vehicle platinum demand, D, for a given year was calculated as number of vehicles sold of each type (HEV, PHEV, etc.) in that year, Vi, times the mass of platinum per vehicle of that type, ai: Dgross,vehicles =

∑ Vi ,t = Tai

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Va i i

RESULTS AND DISCUSSION Platinum Availability Metrics. Geophysical Constraint. The static depletion index, the ratio of the reserves to present usage, indicates that, even without future discovery, known reserves could meet over 100 years of present needs. If the growth rate in platinum supply over the period from 1980 to

(2)

Using reports in the technical literature regarding platinum use for different vehicle technologies, we estimate total primary platinum demand per vehicle in the future fleet. We assume that conventional ICE vehicles require 0.5 g/vehicle, diesels 12988

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Figure 1. Reserve and resource quality curves based on 2005−2006 financial reports collected from platinum producing mines. Individual mines may define ore cutoff for reserve and resource differently. Figures do not represent total PGM reserve and resource, which are estimated at 66 × 103 and 100 × 103 tonnes.34

88.7% of identified global PGM reserves. Global production of platinum is unsurprisingly also concentrated in South Africa, which produced 76.5% of global platinum in 2009. In addition, the market can be described as being an oligopoly in that only five companies (Anglo Platinum, Norilsk Nickel, Implats, Lonmin, and Inco) control most of the supply.58 While a number of metals, notably magnesium and the rare earths, have higher geographic concentration of production, their concentration is a reflection of economic rather than geophysical conditions.35 Historical cases where geographic concentration played a role in material crises have occurred with much lower concentration: cobalt with just 48% in Zaire in 1977 and palladium with 43% in Russia in 1997.3,59 Hence, the institutional risk associated with platinum is considered high. Secondary materials are an alternative and potentially riskdiversified source of supply, an important consideration for a material with high geographic concentration of primary resources. Data from 1998 indicate that about 76% of platinum in products reaching end-of-life are recovered for recycling in the US.60 More recent data from Germany indicate that about 67% of the platinum in Germany is recovered.58 Published data for platinum suggests recycling rates as high as 50%24 or as low as 21%,33 while simulation estimates are about 40%.61 The simulation includes direct recycling within industries such as the petroleum industry, while the published data only accounts for recycling from consumer products (electronics, jewelry, and automotive). Recycling rate and recovery rate are two metrics that provide information about a material’s risk for scarcity relative to other materials. The high cost of primary extraction and the energy savings achieved through recycling (platinum recycling requires 5% of the energy required for primary extraction55) are strong motivations for recycling. However, platinum disposal is not regulated, and it is used in applications where dissipation occurs (automotive catalytic converter), product collection relies on consumer responsibility (automotive, electronics, jewelry), or product life can be very long (jewelry). Platinum recovery rates exceed those of many lower priced metals like aluminum and copper, but the recycling rates of regulated hazardous metals, like cadmium and lead, are even greater. Moreover, while recycled platinum is technically a good alternative to mined platinum, since the metallurgical process for recycling results in a secondary product that is a perfect substitute for the primary metal, anecdotal evidence indicates that platinum reaching end-of-life in the US is sometimes

2010 (2.7%/year) is assumed to continue into the future, then the known reserves could be expected to meet 56 years of projected demand, a value significantly larger than that of many other mineral resources (see Table 1) and well above the depletion index threshold of approximately 30 years that would motivate heightened exploration efforts.3,53,54 On the other hand, platinum reserve concentration is very low, on the order of 1 g/t (1 ppm or 0.001%) (ore grade), which results in high costs of extraction and, hence, price ($50 million/tonne). Moreover, the trend has been a decrease in ore grade over time for mines in South Africa26,27,30 and the US.31 The production cost (measured by cash cost, given per unit of output) of the marginal mine is on the same order of magnitude as the price of platinum. The high costs for platinum in part reflect the high energy costs for extracting and refining platinum, which are estimated at 4 orders of magnitude greater than those of base metals such as copper, zinc, and lead (see Table 1). Associated with these high energy costs are high greenhouse gas emissions, which are estimated at 1.58 × 104 kg CO2 equiv/kg of platinum.55 The reserve and resource quality curves for PGMs, with quality for each ore body estimated using the total PGM ore grade, are shown in Figure 1. As shown, the minerals that are part of the reserves are of varying quality in terms of ore grade, depth in the Earth’s crust, comining product concentration, mineralogy, etc. Not all platinum in reserves can be extracted at the same unit cost, so mining companies will consider factors such as price, technological capabilities, and expected demand when deciding which ore bodies to mine. Although platinum content cannot be directly assessed from these curves, overall PGM reserve quality appears to be similar to presently mined ore quality. Although the geophysical constraint metrics indicate that known quantities of platinum in the Earth’s crust are expected to be sufficient to satisfy global needs in the near to medium term, the cost of obtaining it is very high relative to other mineral commodities. Moreover, historical trends indicate that costs are likely to increase because the ore grade is decreasing as energy costs are increasing. Limits to energy supply and to environmental absorption of carbon are particularly significant concerns for future platinum availability, especially given anticipated implementation of carbon taxes and other environmental regulations. Institutional Constraint. Although platinum reserves are large, they are concentrated in a single geographic region, specifically, South Africa’s Bushveld Complex, which contains 12989

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Unfortunately, there are high costs involved in expanding mining and extraction capacity (e.g., capital costs), long delay times to evaluate resource quality, uncertainty and challenges for discovering new resources, and long life expectancy of capital (once a mine is opened, it can continue producing for 20−30 years). However, platinum is somewhat better off than metals such as copper (Table 1) in that known reserve size is large and a significant portion of the reserves are located in an already established mining region, thus lowering some of the costs for expanding capacity. On the demand side, manufacturing firms are more motivated to respond to platinum price when platinum price accounts for a larger fraction of product costs. It is more difficult to pass increases in costs on to consumers when a doubling of platinum price (as experienced in recent years) results in a high increase in the cost of the product (e.g., jewelry, fuel cell automobiles) rather than a small increase in the cost (e.g., petroleum, electronics). In the past, the jewelry industry has acted as a buffer in times of growing platinum demand and increasing price,61 reducing the price risk for other platinum consumers. Unfortunately, substitution options for platinum are few and come with performance trade-offs for many applications. Moreover, finding new substitutes or reducing use has been challenging, especially for industrial applications that depend on platinum’s catalytic properties. Use of nanotechnology has provided relief for some.32,62 Nevertheless, for most of the industrial applications of platinum, the cost is small relative to the total cost of production. As such, industrial users would be expected to respond slowly and less intensely to price changes, amplifying the price risk associated with platinum. Recycled platinum provides a perfectly substitutable alternative to mined platinum. One positive factor for platinum users is that 26% of primary platinum demand is for applications where the platinum used stays at the manufacturer (e.g., petroleum production catalysis), is minimally dissipated, and, therefore, benefits from direct recycling, where industrial users of platinum directly buy and sell their platinum from suppliers.58 Unfortunately, having a high old scrap collection rate means that, when prices rise, recycling in those sectors is price inelastic (i.e., does not respond to price). While sufficient historical recycling data is unavailable, anecdotally, recycling is price elastic for consumer products such as jewelry and automotive catalytic converters.63 Comparison of Platinum Metrics. Risks factors for platinum based on risk metrics and dynamic factors are presented in Table 3. The metrics identify three main factors of concern. While reserve size is large (significantly greater than the 30 years threshold that is often used), the higher costs arising from decreasing ore grade, including higher environmental costs, are of concern. The high and potentially

exported back to South Africa, where it is recycled in the same refineries that process the primary metal. Although this can change, recycling only partially alleviates the high geographic concentration risk of platinum supply under current supply chain configurations. Dynamic Factors. Decision makers should also consider whether dynamic and adaptive aspects of the materials market reinforce or confound the metric-based conclusion. Dynamic metrics, including delays in action and elasticity on platinum availability are listed in Table 2. Table 2. Examples of Factors That Affect Material Availability factors

supply

elasticities

existence of mining byproducts that affect cost of mining time to build new capacity

delays

demand

recycling

demand price elasticity

responsiveness of collection to price time to find and time to build or implement expand recycling substitutes infrastructure

Price, historical price, and expected price are factors that are considered by mining companies when defining reserves, when deciding which ore bodies to develop, which mined stockpiles to refine and sell, and how much capacity to build. They are also factors that manufacturing companies consider when deciding how much to purchase, which future technologies to consider, which materials to use when substitution is possible, etc. Finally, price characteristics factor into recycling decisions in that higher prices can motivate consumers and recyclers to return products at end-of-life, to collect more, or to recycle more efficiently. Delays factor in to the response to price in that while there is motivation to respond, the technical and institutional ability to change manufacturing and mining practices may be limiting. The following is a qualitative analysis of these dynamic metrics of platinum availability. From the perspective of the primary producer, the importance of platinum price in decision-making is dependent on whether or not platinum is a byproduct of other metals produced. While data on supply price elasticity is unavailable, we can evaluate the fraction of total platinum that is considered a byproduct of another metal, but not include the mines that consider other PGMs as the main product (e.g., palladium mines that also produce platinum are not included). Most major platinum-producing mines consider platinum group metals their main product (80% of 2008 mining production) while only a few major mines consider them a byproduct (15% of 2008 mining production). This suggests that suppliers will be strongly motivated to add or remove capacity in response to changes in platinum price, reducing the institutional price risk for platinum. Table 3. Summary of Risk Concerns for Platinum risk metrics

level of concern

static and dynamic depletion index ore grade energy costs geographic concentration

low (>30 yrs) high high high (>40%)

organizational concentration recycling and recovery rates

high medium (improvement possible)

dynamic factors demand elasticity and delay (jewelry) demand elasticity and delay (automotive) primary supply responsiveness recycling elasticity (glass, chemical, petroleum) recycling elasticity (automotive, jewelry)

12990

level of concern low (high elasticity and short delay) high (low elasticity and long delay) medium (similar to other minerals) high (inelastic because recycling maximized) low (highly elastic)

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increasing energy costs of extraction of platinum have implications on automotive lifecycle environmental impact and therefore should be considered by policy-makers. Moreover, platinum production is highly concentrated in a single geographic region, increasing the risk of supply disruptions, inefficient management, and political interference. Finally, for platinum, production concentration is coupled with reserve and resource concentration, which are highly concentrated in South Africa. Both of these factors matter to automotive supply chain managers who are considering the risks of high reliance on a limited number of suppliers, especially following recent experience with rare earth metal supply.64 Of the dynamic factors identified for platinum, there are those that (1) amplify concern (e.g., challenges in substitutability for certain applications), (2) mute concern in that they indicate potential for flexibility (e.g., high price elasticity of certain applications), and (3) indicate that concern is needed, but no more than for many other nonrenewable resources (e.g., delays in increasing supply). Understanding the net consequences again requires careful analysis. In particular, for automotive manufacturers facing potential different future technology paths, scenario analysis, such as the one presented in the next section, could indicate a potentially strong growth in demand. Dynamic modeling of platinum markets is likely also warranted, but is not undertaken here. Scenario Analysis. Over the past 30 years, platinum usage growth has been driven mainly by growth in automotive demand for platinum. While total platinum usage is estimated to have grown at an average annual rate of 2.73%/yr,33 automotive platinum usage has grown at a rate of 5.16%/yr. In the absence of automotive usage, platinum usage growth has only averaged 2.16%/yr. Two factors have driven past growth in automotive demand. Global automotive sales have grown at a pace of 3.4% annually between 1970 and 200849 and the amount of platinum per vehicle has grown since the first automotive emissions regulations were adopted in the 1970s.39 Approximately 1 g, and as much as 5 g, of PGMs is used in an automotive catalytic converter, and additional platinum is used in spark plugs and the oxygen sensor for the exhaust system.14,43,44 Diesel vehicles require more platinum in the precious metals mix than gasoline engine vehicles.65 A historical estimate of platinum used per vehicle produced indicates that average platinum use per vehicle in North America has been relatively stable since the 1980s, but globally, the amount of platinum per vehicle increased from less than 0.5 g in 1975 to over 1.5 g in 2007. The global increase is due to an increase in the number of countries regulating vehicle emissions, an increase in the stringency of regulations, in particular for diesel vehicles in Europe, and a move toward larger vehicles. These factors more than offset the effect of improvements in the performance of catalytic converters.44 Recently, high platinum prices have motivated substitution (to palladium, mainly) and efficiency improvements, which have resulted in a drop in platinum use between 2008 and 2010. Moreover, increased recycling has further decreased the primary platinum used per vehicle. Figure 2 shows projected platinum demand through 2050 for scenarios A−C. For comparison, three curves are drawn: the projected primary supply curve based on historical supply growth rates and the 1.5% and 5% exponential growth rate curves, which bound the results from scenarios A−C.

Figure 2. Projected demand estimates for platinum in tonnes/year. Primary platinum demand in 2010 was estimated at 181 tonnes with 62 tonnes for auto catalysts and 119 tonnes for other demand.

Of the three fleet scenarios, scenario A, which uses the IEA projected fleet for meeting 450 greenhouse gas goals, is the one that requires the fastest growth in platinum supply to meet its demand. The lowest demand growth projected occurs in scenario B. The only difference between scenarios A and B is that fuel cell electric vehicles are not adopted in scenario B but instead are conventional vehicles. Scenario C has an intermediate level of projected demand since conventional vehicles use more platinum than all non-fuel-cell electric vehicles. For all three scenarios, the dynamic depletion indices, assuming no new discovery or other expansion of reserves, would still be over 40 years, a time frame that is considered sufficiently long for typical mineral resources. In terms of the rate of growth needed to meet the new demand, all three scenarios project demand within 10% of the historical supply growth path up to 2025. The historical growth path is indicative of the capacity of the platinum supply chain to expand. As such, this analysis indicates that short-term risks of platinum scarcity with the IEA projected fleet are low. After 2025, scenario A demand grows more rapidly than historical supply growth but would only result in a present dynamic depletion index of 42 years (see Table 4). This result is still above the 30-year threshold for motivating heightened exploration. On the other end, scenario B is just above the 1.5% growth rate curve, resulting in a present dynamic depletion index of 72 years. Although the depletion index indicates that, within the 2050 time frame, the reserve size for platinum would not warrant heightened concern, the reserve curve (Figure 1) would indicate a potential for a steep decrease in the ore grade as reserve depletion occurs. This would have both increased cost and energy use implications for platinum mining. The risks as measured by ore grade change would be significantly greater for scenario A (PGM ore grade possibly falling to less than 2 g/t) 12991

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Table 4. Mapping Growth Rates to Dynamic Depletion Indices and Cumulative Consumption scenario

% growth rate

dynamic depletion index (years)

total consumption by 2025 (tonnes)

total consumption by 2050 (tonnes)

reference B: IEA without fuel cell vehicles C: IEA without electric vehicles evolutionary supply A: IEA scenario reference

1.0 1.6 1.9 2.5 4.7 5.0

85 72 67 58 42 41

7400 7700 7800 8300 9700 9900

23 000 27 000 28 000 33 000 55 000 59 000

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than for scenario B or C. Unfortunately, the reserve and resource curves do not include all reserves and resources, and therefore, exact ore grades cannot be read from these curves. The implications of these scenarios for the future of platinum supply is that the automotive fleet projected for meeting 450 ppm greenhouse gas goals does not significantly impact platinum availability for 2025 but may have more impact for 2050, especially in terms of mining cost. This analysis assumes current (non-fuel-cell technology) and expected (fuel cell technology) platinum loadings to be maintained in the future. If, however, fuel cell technology platinum loading does not decrease rapidly or an attempt is made to introduce fuel cells more aggressively into the fleet, platinum availability, even in the 2025 time frame, is a greater concern for automotive manufacturers and those hoping for the success of fuel cell technologies.

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ASSOCIATED CONTENT

S Supporting Information *

Tables and figures supplementing the data provided in the article. This material is available free of charge via the Internet at http://pubs.acs.org/.

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AUTHOR INFORMATION

Corresponding Author

*Tel: (617) 253-4258; fax: (617) 258-7471; e-mail: kirchain@ mit.edu. Notes

The authors declare no competing financial interest.

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ACKNOWLEDGMENTS We thank Christian Hagelueken from Umicore and Jeffrey Christian from CPM Group for their helpful discussions and support.

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REFERENCES

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