Scarcity of metals and minerals will become more severe in the next five years, with the automotive, chemicals and energy industries likely to be hit hardest, according to a global survey of company executives by PricewaterhouseCoopers (PwC).
The survey of 69 executives across seven sectors, published on Wednesday, found that European companies were most concerned about a shortage, with 71% of respondents seeing scarcity as a risk, compared with 53% in Asia Pacific and 50% in the Americas.
“Put simply, many businesses now recognize that we are living beyond the planet’s means,” said Malcolm Preston, PwC’s global sustainability leader, in a statement.
Companies pinpointed growing demand for materials and political issues, such as China’s export restrictions on rare earth metals, as the main drivers of scarcity.
Those in the renewable energy, automotive, energy and utilities sectors said they currently faced supply instability, while
those in the aviation, high-tech and infrastructure sectors expected increasing disruption of supply by 2016.
The report suggested that some industries might use scarcity to their competitive advantage. Some 43% of respondents said scarcity offered an opportunity at present, while 59% said opportunities would increase in the next five years, with the automotive sector most positive.
“New business models will be fundamental to the ability to respond appropriately to the risks and opportunities posed by the scarcity of minerals and metals,” PwC’s Preston said.
Despite abundant material reserves in Asia, particularly in China, which produces about 97% of the world’s rare earth metals, Asian firms still expect substantial problems as explosive growth in emerging markets puts pressure on supplies.
PwC listed 14 materials as “critical”, including tantalum, which is used in computers and mobile telephones; fluorspar, found in cement, glass and iron; and lithium, used in wind turbines and batteries for hybrid cars.
Eighty-three percent of surveyed firms said their suppliers considered metal scarcity to be an important issue, but only 61% said they thought their customers were concerned about it.
In Europe, 96% of executives said their governments were aware of the problem, compared with 58% in Asia and 54% in the Americas.
Almost half of companies rated their preparedness for scarcity as ‘high’ to ‘very high’. The renewable energy sector had the highest percentage at 67% who were highly confident about their plans to combat a supply shortage, while just 33% of companies in the chemical and high-tech sectors rated their preparedness as “high” to “very high”.