Firms along the autocatalyst supply chain are in the early stages of drawing up a three-year work plan to improve the sustainability of platinum metals.
The work follows two meetings of the Roundtable on Sustainable Platinum Group Metals,1 in 2005 and in December 2007, which included carmakers Toyota and Renault, catalyst producer Johnson Matthey and material technology firm Umicore. NGOs such as Greenpeace and the European Environmental Bureau, along with mining firms Anglo Platinum and Norilsk Nickel have also been involved in talks.
The group is considering a range of options. Recent discussions have honed in on: developing sustainability indicators for platinum mines and improving environmental reporting standards; and extending recycling infrastructure to capture more platinum from end-of-life vehicles, particularly outside Europe.
Participants say the ultimate aim is to increase transparency throughout the supply chain. Material security fears are a key driver motivating downstream platinum buyers to participate in the roundtable. Earlier this year, a report for the UK’s Resource Efficiency Knowledge Transfer Network rated platinum as one of the ten "most insecure materials".2
Platinum is a useful metal and has played a vital role in green technology. But it is rare. Just 400 tonnes are produced each year worldwide, mostly in South Africa and Russia. Demand grew by 8.6% in 2007, outstripping supply by 15 tonnes. Prices have soared this year after power-supply problems in South Africa cut output.
The autocatalyst market, which accounts for half of demand, is the biggest driver of growth, because more vehicles are fitted with platinum-based catalysts which reduce pollution in exhaust gases. Platinum is also used in car spark plugs and sensors. Jewellery, chemical catalysts and electronics sectors are other major markets. And if fuel-cell technology takes off, the squeeze on global supplies will intensify.
In the case of platinum the roundtable is focusing initially on end-of-life vehicles, the biggest source of ‘leakage’ from the metal’s life cycle.
Umicore, a major autocatalyst maker and recycler, estimates that while recycling of end-of-life car catalysts has recovered about 80 tonnes of platinum in Europe since 1997, about 200 tonnes have been "lost" through used and scrap car exports, typically to Eastern Europe and West Africa where recycling infrastructure is poor. Another 900 tonnes is estimated to be still on European roads.
Umicore argues that recovering more platinum-based catalysts is in the car industry’s interest because it reduces associated greenhouse gases, improves supply security and has a high intrinsic value in excess of $50 billion dollars worldwide even when accounting for life-cycle losses.
Given the high price and small supply of platinum, the roundtable believes there is a "strong business case for developing [recycling] infrastructure on a global scale as soon as possible". It is assessing whether recycling pilots can be set up in car-importing regions to collect end-of-life catalysts and feed them back to European recycling plants.
It is also likely to call for greater enforcement of the end-of-life vehicles Directive to prevent illegal exports of scrap cars out of the EU. Germany’s Öko-Institut for Applied Ecology estimates that about 6.25 tonnes of platinum metals - 30% of the country’s annual demand - are lost from Germany through used car exports, which account for 80% of all deregistered vehicles.
The roundtable has also identified the environmental performance of some of the mining firms in the platinum supply chain has a key supply chain risk.
While there are social and environmental issues with all the major platinum production sites, some of the most notorious centre around Russian firm Norilsk Nickel, a major player in the global nickel, copper and precious metal market. The firm’s Siberian mines, located 200 miles above the Arctic Circle, produce 95% of all Russia’s platinum metals and 12% of world platinum supply.
Yet many consider Norilsk Nickel to be the worst polluter in Russia. In 2007, Norilsk, the city built up around the company’s operations, was ranked among the world’s ten most polluted places by New York-based Blacksmith Institute.
Figures on the pollution’s extent are not easy to find. The firm does not publish data relating to its controversial Siberian site. However, Russian NGOs claim the firm emits two million tonnes of sulphur dioxide a year, which is similar to that pumped out by the whole of Germany. Greenpeace Russia claims this has created a 30-kilometre "dead zone" around the city and has affected thousands of hectares of forests.
In addition, mining the metal is a carbon-intensive process. Only rhodium produces more CO2 per kilogram mined.
The lack of transparency over data is a concern for firms involved in the roundtable talks. At the last meeting, participants said reporting across the sector was variable and needed to be standardised through a common set of environmental and social indicators to allow benchmarking, comparison and communication through the supply chain. Their development is likely to be a priority for the roundtable.
It is revealing that despite moves by firms in other industries, such as electronics, to accept some accountability for the mines they source from (ENDS Report 399, p 19 ), some of the world’s largest carmakers believe they have only a limited ability to help clean up their supply chain.
BMW, while claiming to know where it sourced its metal from, said it did not think environmental issues associated with mining metal were in its sphere of influence because of industry’s "quasi-monopoly situation". Ford said because metals may enter the supply chain six to ten tiers before the final product "it is impossible to address [environmental] issues in an absolute fashion. Meanwhile, a GM spokesperson said the issue "was not a priority."