The role of primary processing in the supply risks of critical metals

Keisuke Nansai, Kenichi Nakajima, Sangwon Suh, Shigemi Kagawa, Yasushi Kondo, Wataru Takayanagi and Yosuke Shigetomi

Economic Systems Research, 2017, vol. 29, issue 3, 335-356

Abstract: This study seeks to understand the role of primary processing, i.e. the first post-mining stage, in supply risk, by means of a case study on three critical metals (neodymium, cobalt, and platinum) in the context of Japan. Applying the ‘footprint’ concept with a multiregional input–output model, we have quantified the direct and indirect vulnerability of the Japanese economy to such risks. Considering the supply risks associated with primary processors, we find that Japanese final consumers are exposed to relatively higher supply risks for neodymium as compared with cobalt and platinum. Our study shows that the primary processing stage of a metal’s supply chain may contribute significantly to the overall supply risks, suggesting that this stage should be taken into due account in understanding and mitigating supply-chain vulnerability through, e.g. supplier diversification and alternative material development.

Date: 2017
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DOI: 10.1080/09535314.2017.1295923

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