Commodities: Material revolution
8/12/15, Henry Sanderson, Financial Times
As oil, steel and coal prices hit new lows, demand is rising for other metals, prompting a new technology-driven resource era
When Douglas Caster was 13 his father marched him to the Teeside steelworks in the north-east of England where he worked. It was meant as a warning.
“I was scared to death. The heat, the noise, the danger of the place and the message was as clear as a brick through a plate-glass window: ‘you have an opportunity to do well with education — otherwise this is where you end up’,” Mr Caster says. “This is a dying industry.”
He moved away from the north of England after university. But now, as the UK’s steel industry seems set to fulfil his father’s warning of its demise, he hopes to make a contribution as chairman of a small company on the site of an old coal mine that shut down in the late 1980s. Though there are no furnaces, the plant still produces metal.
His company, Metalysis, is one of a number seeking to produce the commodities that will underpin an increasingly high-tech society. Founded in 2001, it manufactures titanium powder — designed to be used in 3D printing for medical and industrial parts — and is working with GKN Aerospace to use the technology to supply aeroplane parts.
Goldman Sachs describes lithium as potentially the “new gasoline”. It forecasts that demand for its use in electric vehicles could grow 11-fold to more than 300,000 tonnes by 2025. The opportunity is clear — hybrid and electric car batteries contain between 40kg and 80kg of lithium.
But the speed of discovery also makes it an uncertain bet: scientists are constantly working to lower the cost and boost the power of electric batteries by mixing new materials or producing man-made ones. As a result, it is not clear what the electric car battery will look like in 10 years or which commodities it will use.
Dion Vaughan, Metalysis’ chief executive, argues that traditional mining companies — which have slashed billions of dollars in spending on projects in 2015 — are facing a “left-field” change from technology.
“We are at the start of a revolution,” he confidently states at the company’s plant in the Yorkshire town of Wath upon Dearne. “It doesn’t mean that aluminium is about to disappear but the order of things is about to change. There will be new winners and losers.”Key to the success of these commodities will be lowering their cost of production, a problem that has bedevilled the titanium market.