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Critical and strategic materials
Conservafion & Recycling, Printed in Great Britain.
Vol. 9, No. 2, pp.
0361-3658/86 Pergamon
L73 - 182, 1986.
REVIEW ARTICLE CRITICAL
AN
STRATEGIC
$3.00~ .OO Press Ltd.
No. MATERIALS
J. P. CLARK* and B. REDDY? ~~assac~~setis Institute of Technology, Cambridge and tCharies River Associates, Boston, Massachusetts, U S.A.
INTRODUCTION The terms critical materials and strategic materials are often used jointly or interchangea general, a material is considered critical by a country if future events involving it threaten to inflict serious damage on the nation. A material that is needed for military purposes is considered strategic, although a strategic material need not be critical, nor a critical material strategic. Assessments of whether materials should be considered critical and/or strategic can vary from country to country. Metals like platinum, manganese and chromium are often considered critical in the U.S.A. but in South Africa, a major source of all three, they are not. This article focuses on the U.S. perspective concerning critical and strategic mater will use the terms critical and strategic jointly. It also concentrates on metals a rather than organic materials such as natural rubber and opium. U.S. legislation concerning stockpiles of critical and strategic materials defines t that (a) would be needed to supply the military, industrial, and essential civilian U.S.A. during a national emergency, and (b) are not found or produced in U.S.A. quantities to meet such a need. This definition is fairly precise, but it leaves considerable room for disagreement on practical grounds, Some materials (such as nickel) are defined as critical nd strategic, even though all U.S. requirements during a national emergency could be satisfied by imports from a relatively secure source of supply, such as Canada. Although te~~ni~a~ly a critical and strategic material, nickel is seldom considered a serious problem for the U.S.A. Criteria are needed for measuring criticality and for comparing it across different materials.
1. CRITERIA FOR EVALUATING
CRITICALITY
Many criteria have been proposed for analyzing the degree of criticality of materials. They can generally be grouped into one of three categories: availability of foreign supplies, availability of domestic supplies, and means for reducing domestic consumption. 1. I Foreign supplies Several issues can be raised concerning foreign supplies of a material that might be considered critical or strategic: how likely is a disruption, how severe might a disruption be, and how long might a disruption last. These general issues are usually analyzed by considering a number of factors.
Article to be published in Encyclopedia of Materials Science and Engineering (Pergamon Press, 1986). 173
174
9. P. CLARK
and B. ItEDDY
A major concern is whether production is concentrated in a small number of countries. If production is dominated by a small number of suppliers, the possibility exists for c~teIizatio~ of the market. This risk is considered quite small for most mineral markets, particn~a~ly in the long term. Of greater practical concern is the diversification of supplies. Materials-~rocessi~~ operations can experience disruptions caused by labor unrest, fires, floods, earthquakes and local political or economic problems. If a market is supplied by a large number of small producers, one or more is likely to have production problems at any given time, but t variance of total production will be relatively low. If the market is dominated by just a few producers, disrnptiQ~s will be more unusual events, b the variance of total ~r~d~ct~o~ will be relatively high. rvlarkets dominated by a small nu er of supply sources are therefore of relatively high risk. The location of these supply sources is also of concern. S~rne, such as Cana considered relatively safe on the grounds of both olitical orientation and secur routes. A country like Australia might be considered secure politic~~y, t the length of the supply route from Australia to the U.S.A. raises some concerns. Suppl of materials from many African countries might be considered insecure on both grounds~ The speed with which foreign producers could i ease production during a shortage is also of interest. Most minerals projects have long lead t s, in the range of five to ten years for new roperties. If adequate reserves are available, exi ng capacity can be expanded much more quickly, sometimes in as little as one to two years. Domestic supplies Issues concerning domestic supplies are somewhat different. The availability of domestic raw materials and processing capacity are of major importance, but these two factors mast considered separately. In the U.S.A., some materials (e.g. copper) are primarily mined a processed domestically. Others, like aluminum, are primarily processed domestically from foreign raw materials. Still others, such as cobalt, are primarily imported in metallic form. The ability of the domestic industry to expand during an emergency will depend on the availability of raw materials, the availability of domestic processing capacity, and the speed with which h can be expanded. Expanding domestic processing capabilities is of little benefit, howeve dditional raw materials would not be available during a crisis. The costs of new or addition production are important from a policy standpoint, because the costs of producin domestically during an emergency must be compared with the costs of other policies, such as stockpiling. I.2
1.3 Domestic demand Demand issues include substitution, conservation, an recycling possibilities, the normal business cycle, and effects of new technologies. In some instances, substitute materials that provide equivalent properties may be readily available with little or no increase in costs. However, this is seldom the case. Potential substitutes are typically either more expensive or provide somewhat inferior properties, and they almost always require time to develop and/or implement. These lags can be as long as ten years, depending on the amount of development required. Substitutions can be either direct or functional. Consider, for example, the use of cobalt as a binder in tungsten carbide cutting materials. A direct substitution might involve replacing some of the cobalt with nickel, while a functional substitution might involve replacing a machined part with a forged part. Conservation possibilities also tend to take time to explore and implement, and usually entail either inferior properties or higher costs. For example, the amount of manganese used in carbon steel might be reduced in several ways. One approach would involve more precise
CRITICAL AND STRATEGIC MATERIALS
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control
of the manganese ferroalloy additions to the steel furnace, which would permit the steelmaker to aim for the low end of the acceptable manganese range, rather than the midpoint. This increases the costs of making the steel but does not affect the steel’s properties, and cou e accomplished rather quickly. Another approach would be to lower the manganese specification for steels in which the manganese is used primarily as a desulfurization rather than alloying agent. This would affect the properties of the steel, but not unacceptably so in many applications. Educating steel consumers to use lower quality steel where acceptable could take some time. A much more expensive, time-consuming approach to conserving manganese might involve recycling steel furnace slags. This approach conserves manganese by charging recessing methods, rather than by just using less with the same processing methods. For some aterials, the conservation allowed by more material-efficient (but more expensive) processing and fabrication methods can be substantial. Recycling, if technically and economically feasible, can be an effective way to reduce domestic demand during an emergency. Recycling of some materials, like platinum, is extensive even during normal market conditions. The situation can be very different for other materials, however. For example, prior to 1978 virtually no superalloy scrap, except some of that generated by the superalloy producers themselves, was recycled. Technically, recycling mixed superalloy scrap is at best marginally feasible, and in the past the costs of segregating and storing scrap by alloy type exceeded the value of the scrap. When cobalt prices rose to very high levels in 1978 and 1979, segregating the scrap by type of superalloy became economically feasible, and recycling of scrap generated in fabrication became quite common. Recycling of old jet engine parts made of superalloys, however, was still minimal because of technical and economic problems. Variations in demand over the business cycle can also cause problems for consumers of materials. For example, the aerospace industry has occasionally experienced large surges in emand. This has led to corresponding increases in the demand for titanium castings and forgings, sometimes outstripping the capacity of the industry. Analysis of issues concerning the demand for critical and strategic materials must cover the possibility that supply emergencies could coincide with upswings in the business cycle. Another potential problem with demand is the emergence of new technologies that require large amounts of materials. If these technologies emerge suddenly, shortages can develop. Usually, however, firms assure themselves of a steady supply of raw materials before they commit themselves to new products. One example of this is the use of platinum in automobile catalytic converters in the U.S.A. Before the U.S. automobile manufacturers committed themselves to this product, they negotiated contracts with the South African platinrtm reducers to assure themselves of continued supplies, and even promoted capacity expansions y the smaller producers to diversify their supplies somewhat. Catalytic converters are now the largest single use of new platinum in the U.S.A.
2. METHODS FOR RANKING CRITICALITY After all the factors important in analyzing criticality have been analyzed, methods for ranking the relative importance of different materials are needed. A number of approaches have been suggested, all of which have drawbacks. The simplest approach is to rank materials by import dependence, the percent of normal demand that is met through imports. Although it is relatively easy to obtain data and use import dependence as a measure of criticality, the approach ignores so many important issues that it is generally useful only for rough comparisons across materials. For instance, this method does
176
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and B. REDDY
not account for scrap as a source of supply or changes in gov~r~rn~~t stockpiles in ~st~mati~g import dependence. Purely judgmental approaches bave been used at times to rank mater~a~s by their degree of
compare materials. Judgmental method their perceived degree of criticality, bu some materials ca estimates of the degree to whi
important factors were ident~~~e~that affect criticality, a
ltiplying the monetary measure of the costs of a disr
much more ~nformat~~~ than the judgmen explicit, visible assumptions c~~~er~i~g important issues, and it Beads to monetary measures of criticality that can be used directly in performing policy analyses. The in - out is probably best suited for studying short-run cr ul-0 ity issues, because are ill-suited for reflectory inventory, supply an mand responses to shortages. The market model approach to measuring criticah overcoats these objections to the input - output approach, but it requires ev can be constructed using ~~g~~eering an and inventory behavior ng both normal times and during these emerge~cie economic surplus (consumer’s surplus approach, the measures of economic 1~~s estimate a monetary index of criticality. The major of this approach is its large information requirements. Detailed ma studied.
3. POLICY QPTI
Many policies have been implemented or proposed to ea%with perceived problems and strategic materials. Stockpiling has been the most commonly followed practice. Other policies have generally been designed to reduce domestic consumption or increase domestic production. In most cases stockpiling has proved to be the most cost-effective policy in providing supplies for potential emergencies. The carrying costs for large stockpiles can be quite high, however, even if storage costs are negligible, so other options have been investigated regularly. The other policies most commonly implemented in the U.S.A. have been designe
CRITICAL
AND STRATEGIC
MATERIALS
1’71
encourage domestic production. Such policies have included price guarantees for firms considering whether to develop domestic capacity, guaranteed loans, and direct capital subsidies. Federally funded research programs to investigate methods for making use of lowgrade domestic resources have been quite common. Policies directed at reducing consumption or increasing recycling have primarily involved research and development, and information programs. Although never implemented, direct taxes on primary consumption would be one method to encourage recycling and discourage primary consumption. Some policies, such as import tariffs and import quotas, affect both consumption and production. Their effects are similar: both raise the domestic price of a material, relative to the world price. This encourages recycling and domestic production and discourages domestic consumption. Import tariffs and quotas have often been imposed on industries, but usually for pm-ely protective reasons. The U.S. oil import quota in the 1960s was, however, called a strategic poiicy.
4. MARKETS FOR CHROMIUM,
MANGANESE AND COBAET
The markets for chromium, manganese and cobalt are of concern to policymakers in some developed countries because they are considered to be essential materials for some defense applications and because supplies are highly concentrated in a few potentially unstable or hostile countries. Moreover, most developed countries import more than 95% of their supplies of these materials. efore discussing these markets, however, it is useful to consider briefly what is meant by the terms requirements and demand for materials. The term demand refers to the quantity of consumption that exists at varying levels of price, other factors being constant. It is usually expected that the demand for a material is inversely correlated with its price and directly proportional to the level of economic activity in the industrial sectors that use the material. If prices rise, demand is expected to decrease if economic activity and other factors remain unchanged. Requirements refer to the level, of consumption of a material by domestic customers that is expected to occur based on technological and market growth assumptions. The concept of requirements thus implicitly assumes that the price elasticity of demand is small enough to be neglected. Much of the debate concerning critical and strategic materials has focused on projections of the requirements for these materials and not on an analysis of demand. However, It is the demand analysis that is most useful for evaluating future materials consumption. It is desirable to evaluate the demand for these materials this year and in the future if prices rise (e.g. because of a supply disruption).
Chromium production is highly concentrated in a few countries. The most important supplier to the market economies of the world is South Africa, which is of concern to some because of the potential for political disruptions in the future. South Africa accounted for about 36% of total world production in 1978. The second most important supplier to the West in the 1970s was the USSR, which accounted for 27% of total world production in 1978. Another of the most important western producers has been Zimbabwe, currently the scene of political unrest. ther producers include the Philippines, which for several years has been in a state of martial law and has experienced sporadic insurrections on the part of the Moslem minority, and Turkey, which currently is experiencing rather severe financial difficulties. This indicates that a
J. P. CLARK and B. REDDY
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moderate disruption in chromium supplies is quite likely to occur within the next decade or so, and a severe disruption is also possible. Metallurgical grade chromite ores are found primarily in the USSR, Turkey and Zimbabwe. Although South African production is of a lower grade, most useful for chemical uses, technological developments have made it possible to use these ores in metallurgical applications. In the 197Os, South Africa gradually assumed an increasingly important position in the world market. The chromite ores found in t e Philippines are primarily useful for refractory applications.
Table 1. Stainless steel consumption relative to base consumption at different stainless steel price levels Price relative to base price
Years after price increase
I.00 1.10 1.25 1.50 2.00 3.00
0
1
2
3
4
1.00 0.97 0.92 0.83 0.75 0.60
1.00 0.96 0.88 0.76 0.66 0.51
1.00 0.95 0.86 0.70 0.60 0,45
1.00 0.94 0.84 0.68 0.55 0.40
1.oo 0.93 0.83 0.66 0.51 0.37
Table 2. Chromium consumption in alloy steels, relative to base consumption at different ferrocbromium price levels Years after price increase
Price relative to base price
0
1
2
3
4
5
6
7
8
1.00 1.67 2.67 4.33 9.33 17.67
1.00 0.92 0.80 0.75 0.72 0.72
1.00 0.92 0.79 0.72 0.66 0.65
1.00 0.92 0.77 0.70 0.60 0.58
1.00 0.92 0.76 0.67 0.55 0.52
I.00 0.92 0.74 0.63 0.50 0.47
1.00 0.92 0.72 0.60 0.45 0.42
1.00 0.92 0.70 0.55 0.36 5.31
1.00 0.92 0.69 0.51 0.29 0.23
1.00 0.92 0.67 0.47 0.23 0.17
Table 3. U.S. chromite consumption in refractories relative to base consumption at different chromite price levels Price relative to base price 1 2 5 10 25 50
Years after price increase 0
1
2
3
1.00 0.70 0.49 0.46 0.45 0.45
1.00 0.59 0.44 0.38 0.35 0.33
1.00 0.48 0.36 0.29 0.24 0.22
1.00 0.35 0.24 0.19 0.13 0.10
CRITICAL
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In the developed world chromium is used for three main applications: production of metallic alloys, chemicals and refractories. In the U.S.A. about two thirds of the chromium consumed in a typical year is in the form of ferrochromium for metallurgical applications. Of this about 70% is used for the production of stainless steels, and approximately 15 - 20% is consumed in alloy steels; less than 5% is used in superalloys. Most of the chromium used by the steel industry is in the form of high-carbon ferrochromium, which cannot be used in superalloys because of requirements for high-purity materials. It is often stated that there is no substitute for chromium in the production of stainless steels and superalloys. For instance, it is estimated that in super-alloys, which account for 1 - 2% of total chromium consumption in the U.S.A., only 10% of current chromium use could be eliminated, even at very high prices (e.g. 50 times current chromite prices). Moreover, since most of these materials are used in aircraft and industrial gas turbine applications, which require long testing and qualification programs before new alloys can be used, there is a 3 - 5 year lag time before a significant amount of the substitutions could be accomplished. Moreover, only a limited amount of substitution for stainless steels by other materials would occur, even at higher prices. More importantly, however, there is opportunity for considerable substitution among grades of stainless steels (e.g. ferritic grades for austenitic grades) and for conservation in the production processes. Tables 1 - 3 summarize the results of a study of tbe potential for various substitution and conservation options at prices that are various multiples of a base price. The prices are expressed in terms of the form of the material that is actually consumed in one application, and therefore the price elasticity of demand cannot be estimated in terms of equivalent prices. However, it has been shown that a twofold increase in the price of chromite would lead to an increase of hi6010in the cost of producing an austenitic stainless steel. There is considerably more elasticity of demand with respect to price in refractory applications than in stainless steel applications. 4.2 Manganese Manganese is used as a bulk ferroalloy even more than chromium. In the U.S.A. over 9OVoof the manganese consumed is used by the metallurgical industry, mostly in carbon steels. Alloy steels, particularly the Hadfield steels, use more manganese per ton of steel than do carbon steels, but the much higher production levels for carbon steels make them the most important market for manganese. Manganese is an essential input in modern steelmaking, for desulfnrization, which is why manganese is of vital concern to all steel producers. Most manganese is consumed in the form of standard high-carbon ferromanganese, which contains about 78% manganese and 5% carbon. Standard ferromanganese is well suited for use producing carbon steel, but alloy steels and other specialized metallurgical products often require more refined forms. Medium- and low-carbon ferromanganese directly follow standard ferromanganese in importance, and electrolytic manganese has only a very small market. Manganese ore is used directly by the chemical industry, particularly for use in dry cell atteries . The world’s largest producer of manganese is the USSR, but East-West trade is minimal. The most important producer in the noncommunist world, from the standpoint of both current output and reserves, is South Africa. It accounts for about 36% of noncommunist supply,, and over 75% of noncommunist reserves. Brazil, Australia and Gabon all are of about equal importance, each accounting for about 15% of noncommunist supply. Gabon and Australia are expected to increase production somewhat in the future, but production in Brazil is likely to ecline. Other producers, except Mexico, are of declining importance./The U.S.A. currently reduces no manganese. Manganese reserves are estimated to be of the order of 1.5 x log t, with South Africa and the
I80
J. P. CLARK Table 4. Manganese
and B. REDDY
demand
in carbon
steel production
Time lag (years) Price factor”
O
2
U.S.A.
(Base steel production 810450 2x 750000 5x 68OOOO 10x 635000 25 x 615000 50x 6OOOOO
4
I
= 127 630 000 short tons)
IX
Japan IX
2x 5x 10x 25 x 50x
(Base steel production 610147 585000 572000 555000 550000 544866
EEC (Base steel production PX 1052840 981000 2X 929OOO 5x 905000 10x 890000 25x 882800 50x Other (Base steel production 634000 1x 612000 2x 577000 5X 558000 IOX 540000 25 x 532293 50x a Base manganese
price
725000 640000 585000 5oOOO0 490000
7oOOoo 595000 515OOO 440000 420000
619000 505000 420000
= 110 135 000 short tons) 574000 512000 482000 465000 461465
558000 480000 426000 41OOOO 4O6398
= 155 058 000 short 954000 852000 810000 770000 765987
924000 815000 751000 695000 688458
= 92 434 000 short 594000 524000 480000 450000 439559
578000 495000 444000 415000 397829
544000 462000 405OOQ 263000 257115 tons) 883000 766 688 485000 479129 tons) 532000 44OOOO 398000 330000 263365
= 55 U.S. cents kg-‘.
USSR accounting for about 50 and 25% of the total, respectively. There are ca~sidera~l~ additional tonnages of land-based manganese deposits that could potentially be recovered at higher prices, but these are also located primarily in South Africa and the USSR There is not much concern about short-term problems with manganese supplies because the leading free-market producer-South Africa-accounts for only about 20% of tot production. Moreover, the other major producers (Gabon, Australia, Brazil and India) account for
CRITICAL AND STRATEGIC MATERIALS 4.3
1.81
cobalt
Cobalt is considered by many to be both a strategic and a critical material for the U.S.A.; strategic because of its use as a high-temperature material in jet engines and industrial gas turbines and as a catalyst for petroleum desulfurization; critical, because the U.S.A. imports virtually all of its supply of primary cobalt, and a large percentage of these imports comes from countries with potentially unstable political environments. Zaire is the dominant producer in the cobalt market, accounting for 50---60% of world production in most years. Cobalt is a coproduct with copper in Zaire, and serious declines in production occurred from 1975 through 1978. In Zambia, cobalt is a byproduct of copper and production declined after 1975 as copper prices fell. In Canada, the Philippines, Australia, nesia, New Caledonia and Botswana, cobalt is recovered as a by-produ processing operations. Disposals of cobalt from the U.S. strategic st important role in the cobalt market in the early I97Qs, but sales of cobalt e Zaire has experienced severe problems in supplying cobalt in recent years. In 1975, the nguela railroad from Zaire through Angola to the Atlantic was cut off due to the civil w * ngola. In 1977, the Shaba province of Zaire, where cobalt is produced, was invaded.. C production was not affected that year, but the invasion in 1978 did affect production. The damage tQ the facilities in 1978 was slight, but virtually all of the foreign workers many facilities were in a state of poor repair. Low copper prices have left Z ankrupt, unable to improve its domestic tran or to maintain the c cobalt facilities. The International Monetary d Bank have been at to remedy Zaire’s financial difficulties, but i n if their attempts will pro successful. It is possible that Zaire could just manage for the next several years until et recQvers and the efforts by the IMP and Worl ank bear fruit. Despite attempts ‘by to improve its economy and mining industry, other cutoff in supplies, a~t~~n~b ely, could happen at any time. ost important uses of cobalt on a tonnage basis in the U.S.A. are in su oys, element in permanent magnets and in chemicals. Other important us lnde ides, hard-facing and welding materials and as an alloying element in steels. dy of the world cobalt market found that there is considerable price elasticity in r cobalt, because, as the price rises, consumers shift their pref~rcnc~s ts rials and designs. Furthermore, the increase in price encourages c~nservat~l~~ of cobalt through increased recycling and improvements in processing techniques, For inst y showed that if the price of cobalt were to stabilize at 55 U.S. dollars per kg (197 fsr cobalt would decline to less than half of its initial value within five ye would be less, but there would still be a decrease of approximat cobalt within one year if the price were to increase from 22 t Its of the substitution analysis, which was developed in 1978, h the test of time well, and were used as part of an overall supply - demand frame with considerabIe accuracy, world cobalt prices over the period 1978 - $2. The results of the substitution analysis are crucial to an understanding of the economic and national security consequences to the U.S.A. of a supply disruption in the world cobalt market. is conceivable, even likely, that another supply disruption will occur because of the stability in southern and central Africa. In such an event, it is clear that the price of c again rise as the result of psychological factors and actual production curtailm magnitude of the price increase is uncertain, but it is quite unlikely to increase above 110 U.S. dollars per kg for any appreciable period because of the downward pressure from snbstitnti,Qn and additional supplies from other nations. The results of the analysis may be interpreted as follQws. If the price were to increase by a factor of 2.5, and other parameters (such as in
182
J. P. CLARK
and B. REDDY
activity and prices of substitutes) were to remain unchanged, the total demand for cobalt in the U.S.A. would decrease by 15% in a one-year period. A price increase by a factor of five would bring a demand decrease of 2QVoin the first year. C~rre~tly~ about 15% of cobalt supplies in the U.S.A. come from recycled (secondary) sources. Thus even if supplies were restricted by 50% in the first year of the disruption only up to 2OVa of demand would have to be met releases from the government stockpile. The greater the price, the less the dem&md and greater the contribution from recycled material. If the supply restriction were to last for more than a year, d adjust and there would be more substitution, Thus the would decrease by 50% in years two through seven, wi e factor of 2.5, if sthm factors were to remain unchanged. In the event of larg increases, substitution would greater. If the disruption were to continue, there woul e time for additional sources supply to respond to the higher price, Indeed, such responses have been shown by both the demand and supply sides of the market to the 1978 disruption. Following the disruption, the producer price was set at 55 U.S. dollars per kg and an attempt was made to maintain the price at that level. However, because of substitution and increased supply from other sources outside Zaire and Zambia, large stocks were built up by producers, and the free market price recoined to less than 22 U.S. dollars per kg in 1982. Consequently, extreme pressure was placed on the price, which gradually decreased to about 11 U.S. dollars per kg in early 1983, before rebounding to about 25 U.S. dollars per kg in late 1984. Two conclusions may be drawn from this analysis. Firstly, a disruption in cobalt supplies from Zambia and/or Zaire woul not have a measurable effect on the national security of the §.A. The increased prices would result in substa substitution away from cobalt in nessential uses. However, there would be a time de and it might be necessary to release some cobalt from the government stockpile. Secondly, there would be an economic cost to the U.S.A. resulting from a supply isruption because of the lass in consumer surplus due to higher market prices and reduction in quantities consumed. The costs of such a disruption could be substantial but would be short lived because of the downward pressure on the price.
BIBLIOGRAPHY Charles River Associates, Measuring Materials Criticality for National PaoiicyAnalysis. Prepared for the U.S. General Accounting Office. Charles River Associates, Boston, Massachusetts (1978). Charles River Associates, The Effects of Supply Restrictions on the Demandfor Manganese, Chromium Cot& ad Platinum. Report to the U.S. Department of the Interior. Charles River Associates,Boston,Massachusetts War).
REFERENCES 1. U.S. Congress, Office of Technology Assessment, An Assessment of Alternative Economic Stockpiling Policies. U.S. Government Printing Office, Washington, DC (1976). 2. E. F. Hughes, Strategic Resources and National Security: An Initial Assessment. Prepared for the Defense Advanced Research Projects Agency. Stanford Research Institute, Stanford, California (1975). 3. A. H. King, Materials Vulnerability of the United States-An Update. U.S. Army War College, Strategic Studies Institute, Carlisle Barracks, Pennsylvania (1977). 4. A. H. King and J. R. Cameron, Materials and the New Dimensions of Conflict. U.S. Army War College, Strategic Studies Institute,.Carlisle Barracks, Pennsylvania (1974). 5. M. D. Levine and I. W. Yabroff, Department of Defense Materials Consumption and the Impact of Material and Energy Resource Shortages. Prepared for the Advanced Research Projects Agency. Stanford Research Institute, Stanford, California (1975).
Vol. 9, No. 2, pp.
0361-3658/86 Pergamon
L73 - 182, 1986.
REVIEW ARTICLE CRITICAL
AN
STRATEGIC
$3.00~ .OO Press Ltd.
No. MATERIALS
J. P. CLARK* and B. REDDY? ~~assac~~setis Institute of Technology, Cambridge and tCharies River Associates, Boston, Massachusetts, U S.A.
INTRODUCTION The terms critical materials and strategic materials are often used jointly or interchangea general, a material is considered critical by a country if future events involving it threaten to inflict serious damage on the nation. A material that is needed for military purposes is considered strategic, although a strategic material need not be critical, nor a critical material strategic. Assessments of whether materials should be considered critical and/or strategic can vary from country to country. Metals like platinum, manganese and chromium are often considered critical in the U.S.A. but in South Africa, a major source of all three, they are not. This article focuses on the U.S. perspective concerning critical and strategic mater will use the terms critical and strategic jointly. It also concentrates on metals a rather than organic materials such as natural rubber and opium. U.S. legislation concerning stockpiles of critical and strategic materials defines t that (a) would be needed to supply the military, industrial, and essential civilian U.S.A. during a national emergency, and (b) are not found or produced in U.S.A. quantities to meet such a need. This definition is fairly precise, but it leaves considerable room for disagreement on practical grounds, Some materials (such as nickel) are defined as critical nd strategic, even though all U.S. requirements during a national emergency could be satisfied by imports from a relatively secure source of supply, such as Canada. Although te~~ni~a~ly a critical and strategic material, nickel is seldom considered a serious problem for the U.S.A. Criteria are needed for measuring criticality and for comparing it across different materials.
1. CRITERIA FOR EVALUATING
CRITICALITY
Many criteria have been proposed for analyzing the degree of criticality of materials. They can generally be grouped into one of three categories: availability of foreign supplies, availability of domestic supplies, and means for reducing domestic consumption. 1. I Foreign supplies Several issues can be raised concerning foreign supplies of a material that might be considered critical or strategic: how likely is a disruption, how severe might a disruption be, and how long might a disruption last. These general issues are usually analyzed by considering a number of factors.
Article to be published in Encyclopedia of Materials Science and Engineering (Pergamon Press, 1986). 173
174
9. P. CLARK
and B. ItEDDY
A major concern is whether production is concentrated in a small number of countries. If production is dominated by a small number of suppliers, the possibility exists for c~teIizatio~ of the market. This risk is considered quite small for most mineral markets, particn~a~ly in the long term. Of greater practical concern is the diversification of supplies. Materials-~rocessi~~ operations can experience disruptions caused by labor unrest, fires, floods, earthquakes and local political or economic problems. If a market is supplied by a large number of small producers, one or more is likely to have production problems at any given time, but t variance of total production will be relatively low. If the market is dominated by just a few producers, disrnptiQ~s will be more unusual events, b the variance of total ~r~d~ct~o~ will be relatively high. rvlarkets dominated by a small nu er of supply sources are therefore of relatively high risk. The location of these supply sources is also of concern. S~rne, such as Cana considered relatively safe on the grounds of both olitical orientation and secur routes. A country like Australia might be considered secure politic~~y, t the length of the supply route from Australia to the U.S.A. raises some concerns. Suppl of materials from many African countries might be considered insecure on both grounds~ The speed with which foreign producers could i ease production during a shortage is also of interest. Most minerals projects have long lead t s, in the range of five to ten years for new roperties. If adequate reserves are available, exi ng capacity can be expanded much more quickly, sometimes in as little as one to two years. Domestic supplies Issues concerning domestic supplies are somewhat different. The availability of domestic raw materials and processing capacity are of major importance, but these two factors mast considered separately. In the U.S.A., some materials (e.g. copper) are primarily mined a processed domestically. Others, like aluminum, are primarily processed domestically from foreign raw materials. Still others, such as cobalt, are primarily imported in metallic form. The ability of the domestic industry to expand during an emergency will depend on the availability of raw materials, the availability of domestic processing capacity, and the speed with which h can be expanded. Expanding domestic processing capabilities is of little benefit, howeve dditional raw materials would not be available during a crisis. The costs of new or addition production are important from a policy standpoint, because the costs of producin domestically during an emergency must be compared with the costs of other policies, such as stockpiling. I.2
1.3 Domestic demand Demand issues include substitution, conservation, an recycling possibilities, the normal business cycle, and effects of new technologies. In some instances, substitute materials that provide equivalent properties may be readily available with little or no increase in costs. However, this is seldom the case. Potential substitutes are typically either more expensive or provide somewhat inferior properties, and they almost always require time to develop and/or implement. These lags can be as long as ten years, depending on the amount of development required. Substitutions can be either direct or functional. Consider, for example, the use of cobalt as a binder in tungsten carbide cutting materials. A direct substitution might involve replacing some of the cobalt with nickel, while a functional substitution might involve replacing a machined part with a forged part. Conservation possibilities also tend to take time to explore and implement, and usually entail either inferior properties or higher costs. For example, the amount of manganese used in carbon steel might be reduced in several ways. One approach would involve more precise
CRITICAL AND STRATEGIC MATERIALS
175
control
of the manganese ferroalloy additions to the steel furnace, which would permit the steelmaker to aim for the low end of the acceptable manganese range, rather than the midpoint. This increases the costs of making the steel but does not affect the steel’s properties, and cou e accomplished rather quickly. Another approach would be to lower the manganese specification for steels in which the manganese is used primarily as a desulfurization rather than alloying agent. This would affect the properties of the steel, but not unacceptably so in many applications. Educating steel consumers to use lower quality steel where acceptable could take some time. A much more expensive, time-consuming approach to conserving manganese might involve recycling steel furnace slags. This approach conserves manganese by charging recessing methods, rather than by just using less with the same processing methods. For some aterials, the conservation allowed by more material-efficient (but more expensive) processing and fabrication methods can be substantial. Recycling, if technically and economically feasible, can be an effective way to reduce domestic demand during an emergency. Recycling of some materials, like platinum, is extensive even during normal market conditions. The situation can be very different for other materials, however. For example, prior to 1978 virtually no superalloy scrap, except some of that generated by the superalloy producers themselves, was recycled. Technically, recycling mixed superalloy scrap is at best marginally feasible, and in the past the costs of segregating and storing scrap by alloy type exceeded the value of the scrap. When cobalt prices rose to very high levels in 1978 and 1979, segregating the scrap by type of superalloy became economically feasible, and recycling of scrap generated in fabrication became quite common. Recycling of old jet engine parts made of superalloys, however, was still minimal because of technical and economic problems. Variations in demand over the business cycle can also cause problems for consumers of materials. For example, the aerospace industry has occasionally experienced large surges in emand. This has led to corresponding increases in the demand for titanium castings and forgings, sometimes outstripping the capacity of the industry. Analysis of issues concerning the demand for critical and strategic materials must cover the possibility that supply emergencies could coincide with upswings in the business cycle. Another potential problem with demand is the emergence of new technologies that require large amounts of materials. If these technologies emerge suddenly, shortages can develop. Usually, however, firms assure themselves of a steady supply of raw materials before they commit themselves to new products. One example of this is the use of platinum in automobile catalytic converters in the U.S.A. Before the U.S. automobile manufacturers committed themselves to this product, they negotiated contracts with the South African platinrtm reducers to assure themselves of continued supplies, and even promoted capacity expansions y the smaller producers to diversify their supplies somewhat. Catalytic converters are now the largest single use of new platinum in the U.S.A.
2. METHODS FOR RANKING CRITICALITY After all the factors important in analyzing criticality have been analyzed, methods for ranking the relative importance of different materials are needed. A number of approaches have been suggested, all of which have drawbacks. The simplest approach is to rank materials by import dependence, the percent of normal demand that is met through imports. Although it is relatively easy to obtain data and use import dependence as a measure of criticality, the approach ignores so many important issues that it is generally useful only for rough comparisons across materials. For instance, this method does
176
J. P. CLARK
and B. REDDY
not account for scrap as a source of supply or changes in gov~r~rn~~t stockpiles in ~st~mati~g import dependence. Purely judgmental approaches bave been used at times to rank mater~a~s by their degree of
compare materials. Judgmental method their perceived degree of criticality, bu some materials ca estimates of the degree to whi
important factors were ident~~~e~that affect criticality, a
ltiplying the monetary measure of the costs of a disr
much more ~nformat~~~ than the judgmen explicit, visible assumptions c~~~er~i~g important issues, and it Beads to monetary measures of criticality that can be used directly in performing policy analyses. The in - out is probably best suited for studying short-run cr ul-0 ity issues, because are ill-suited for reflectory inventory, supply an mand responses to shortages. The market model approach to measuring criticah overcoats these objections to the input - output approach, but it requires ev can be constructed using ~~g~~eering an and inventory behavior ng both normal times and during these emerge~cie economic surplus (consumer’s surplus approach, the measures of economic 1~~s estimate a monetary index of criticality. The major of this approach is its large information requirements. Detailed ma studied.
3. POLICY QPTI
Many policies have been implemented or proposed to ea%with perceived problems and strategic materials. Stockpiling has been the most commonly followed practice. Other policies have generally been designed to reduce domestic consumption or increase domestic production. In most cases stockpiling has proved to be the most cost-effective policy in providing supplies for potential emergencies. The carrying costs for large stockpiles can be quite high, however, even if storage costs are negligible, so other options have been investigated regularly. The other policies most commonly implemented in the U.S.A. have been designe
CRITICAL
AND STRATEGIC
MATERIALS
1’71
encourage domestic production. Such policies have included price guarantees for firms considering whether to develop domestic capacity, guaranteed loans, and direct capital subsidies. Federally funded research programs to investigate methods for making use of lowgrade domestic resources have been quite common. Policies directed at reducing consumption or increasing recycling have primarily involved research and development, and information programs. Although never implemented, direct taxes on primary consumption would be one method to encourage recycling and discourage primary consumption. Some policies, such as import tariffs and import quotas, affect both consumption and production. Their effects are similar: both raise the domestic price of a material, relative to the world price. This encourages recycling and domestic production and discourages domestic consumption. Import tariffs and quotas have often been imposed on industries, but usually for pm-ely protective reasons. The U.S. oil import quota in the 1960s was, however, called a strategic poiicy.
4. MARKETS FOR CHROMIUM,
MANGANESE AND COBAET
The markets for chromium, manganese and cobalt are of concern to policymakers in some developed countries because they are considered to be essential materials for some defense applications and because supplies are highly concentrated in a few potentially unstable or hostile countries. Moreover, most developed countries import more than 95% of their supplies of these materials. efore discussing these markets, however, it is useful to consider briefly what is meant by the terms requirements and demand for materials. The term demand refers to the quantity of consumption that exists at varying levels of price, other factors being constant. It is usually expected that the demand for a material is inversely correlated with its price and directly proportional to the level of economic activity in the industrial sectors that use the material. If prices rise, demand is expected to decrease if economic activity and other factors remain unchanged. Requirements refer to the level, of consumption of a material by domestic customers that is expected to occur based on technological and market growth assumptions. The concept of requirements thus implicitly assumes that the price elasticity of demand is small enough to be neglected. Much of the debate concerning critical and strategic materials has focused on projections of the requirements for these materials and not on an analysis of demand. However, It is the demand analysis that is most useful for evaluating future materials consumption. It is desirable to evaluate the demand for these materials this year and in the future if prices rise (e.g. because of a supply disruption).
Chromium production is highly concentrated in a few countries. The most important supplier to the market economies of the world is South Africa, which is of concern to some because of the potential for political disruptions in the future. South Africa accounted for about 36% of total world production in 1978. The second most important supplier to the West in the 1970s was the USSR, which accounted for 27% of total world production in 1978. Another of the most important western producers has been Zimbabwe, currently the scene of political unrest. ther producers include the Philippines, which for several years has been in a state of martial law and has experienced sporadic insurrections on the part of the Moslem minority, and Turkey, which currently is experiencing rather severe financial difficulties. This indicates that a
J. P. CLARK and B. REDDY
178
moderate disruption in chromium supplies is quite likely to occur within the next decade or so, and a severe disruption is also possible. Metallurgical grade chromite ores are found primarily in the USSR, Turkey and Zimbabwe. Although South African production is of a lower grade, most useful for chemical uses, technological developments have made it possible to use these ores in metallurgical applications. In the 197Os, South Africa gradually assumed an increasingly important position in the world market. The chromite ores found in t e Philippines are primarily useful for refractory applications.
Table 1. Stainless steel consumption relative to base consumption at different stainless steel price levels Price relative to base price
Years after price increase
I.00 1.10 1.25 1.50 2.00 3.00
0
1
2
3
4
1.00 0.97 0.92 0.83 0.75 0.60
1.00 0.96 0.88 0.76 0.66 0.51
1.00 0.95 0.86 0.70 0.60 0,45
1.00 0.94 0.84 0.68 0.55 0.40
1.oo 0.93 0.83 0.66 0.51 0.37
Table 2. Chromium consumption in alloy steels, relative to base consumption at different ferrocbromium price levels Years after price increase
Price relative to base price
0
1
2
3
4
5
6
7
8
1.00 1.67 2.67 4.33 9.33 17.67
1.00 0.92 0.80 0.75 0.72 0.72
1.00 0.92 0.79 0.72 0.66 0.65
1.00 0.92 0.77 0.70 0.60 0.58
1.00 0.92 0.76 0.67 0.55 0.52
I.00 0.92 0.74 0.63 0.50 0.47
1.00 0.92 0.72 0.60 0.45 0.42
1.00 0.92 0.70 0.55 0.36 5.31
1.00 0.92 0.69 0.51 0.29 0.23
1.00 0.92 0.67 0.47 0.23 0.17
Table 3. U.S. chromite consumption in refractories relative to base consumption at different chromite price levels Price relative to base price 1 2 5 10 25 50
Years after price increase 0
1
2
3
1.00 0.70 0.49 0.46 0.45 0.45
1.00 0.59 0.44 0.38 0.35 0.33
1.00 0.48 0.36 0.29 0.24 0.22
1.00 0.35 0.24 0.19 0.13 0.10
CRITICAL
AND STRATEGIC
MATERIALS
179
In the developed world chromium is used for three main applications: production of metallic alloys, chemicals and refractories. In the U.S.A. about two thirds of the chromium consumed in a typical year is in the form of ferrochromium for metallurgical applications. Of this about 70% is used for the production of stainless steels, and approximately 15 - 20% is consumed in alloy steels; less than 5% is used in superalloys. Most of the chromium used by the steel industry is in the form of high-carbon ferrochromium, which cannot be used in superalloys because of requirements for high-purity materials. It is often stated that there is no substitute for chromium in the production of stainless steels and superalloys. For instance, it is estimated that in super-alloys, which account for 1 - 2% of total chromium consumption in the U.S.A., only 10% of current chromium use could be eliminated, even at very high prices (e.g. 50 times current chromite prices). Moreover, since most of these materials are used in aircraft and industrial gas turbine applications, which require long testing and qualification programs before new alloys can be used, there is a 3 - 5 year lag time before a significant amount of the substitutions could be accomplished. Moreover, only a limited amount of substitution for stainless steels by other materials would occur, even at higher prices. More importantly, however, there is opportunity for considerable substitution among grades of stainless steels (e.g. ferritic grades for austenitic grades) and for conservation in the production processes. Tables 1 - 3 summarize the results of a study of tbe potential for various substitution and conservation options at prices that are various multiples of a base price. The prices are expressed in terms of the form of the material that is actually consumed in one application, and therefore the price elasticity of demand cannot be estimated in terms of equivalent prices. However, it has been shown that a twofold increase in the price of chromite would lead to an increase of hi6010in the cost of producing an austenitic stainless steel. There is considerably more elasticity of demand with respect to price in refractory applications than in stainless steel applications. 4.2 Manganese Manganese is used as a bulk ferroalloy even more than chromium. In the U.S.A. over 9OVoof the manganese consumed is used by the metallurgical industry, mostly in carbon steels. Alloy steels, particularly the Hadfield steels, use more manganese per ton of steel than do carbon steels, but the much higher production levels for carbon steels make them the most important market for manganese. Manganese is an essential input in modern steelmaking, for desulfnrization, which is why manganese is of vital concern to all steel producers. Most manganese is consumed in the form of standard high-carbon ferromanganese, which contains about 78% manganese and 5% carbon. Standard ferromanganese is well suited for use producing carbon steel, but alloy steels and other specialized metallurgical products often require more refined forms. Medium- and low-carbon ferromanganese directly follow standard ferromanganese in importance, and electrolytic manganese has only a very small market. Manganese ore is used directly by the chemical industry, particularly for use in dry cell atteries . The world’s largest producer of manganese is the USSR, but East-West trade is minimal. The most important producer in the noncommunist world, from the standpoint of both current output and reserves, is South Africa. It accounts for about 36% of noncommunist supply,, and over 75% of noncommunist reserves. Brazil, Australia and Gabon all are of about equal importance, each accounting for about 15% of noncommunist supply. Gabon and Australia are expected to increase production somewhat in the future, but production in Brazil is likely to ecline. Other producers, except Mexico, are of declining importance./The U.S.A. currently reduces no manganese. Manganese reserves are estimated to be of the order of 1.5 x log t, with South Africa and the
I80
J. P. CLARK Table 4. Manganese
and B. REDDY
demand
in carbon
steel production
Time lag (years) Price factor”
O
2
U.S.A.
(Base steel production 810450 2x 750000 5x 68OOOO 10x 635000 25 x 615000 50x 6OOOOO
4
I
= 127 630 000 short tons)
IX
Japan IX
2x 5x 10x 25 x 50x
(Base steel production 610147 585000 572000 555000 550000 544866
EEC (Base steel production PX 1052840 981000 2X 929OOO 5x 905000 10x 890000 25x 882800 50x Other (Base steel production 634000 1x 612000 2x 577000 5X 558000 IOX 540000 25 x 532293 50x a Base manganese
price
725000 640000 585000 5oOOO0 490000
7oOOoo 595000 515OOO 440000 420000
619000 505000 420000
= 110 135 000 short tons) 574000 512000 482000 465000 461465
558000 480000 426000 41OOOO 4O6398
= 155 058 000 short 954000 852000 810000 770000 765987
924000 815000 751000 695000 688458
= 92 434 000 short 594000 524000 480000 450000 439559
578000 495000 444000 415000 397829
544000 462000 405OOQ 263000 257115 tons) 883000 766 688 485000 479129 tons) 532000 44OOOO 398000 330000 263365
= 55 U.S. cents kg-‘.
USSR accounting for about 50 and 25% of the total, respectively. There are ca~sidera~l~ additional tonnages of land-based manganese deposits that could potentially be recovered at higher prices, but these are also located primarily in South Africa and the USSR There is not much concern about short-term problems with manganese supplies because the leading free-market producer-South Africa-accounts for only about 20% of tot production. Moreover, the other major producers (Gabon, Australia, Brazil and India) account for
CRITICAL AND STRATEGIC MATERIALS 4.3
1.81
cobalt
Cobalt is considered by many to be both a strategic and a critical material for the U.S.A.; strategic because of its use as a high-temperature material in jet engines and industrial gas turbines and as a catalyst for petroleum desulfurization; critical, because the U.S.A. imports virtually all of its supply of primary cobalt, and a large percentage of these imports comes from countries with potentially unstable political environments. Zaire is the dominant producer in the cobalt market, accounting for 50---60% of world production in most years. Cobalt is a coproduct with copper in Zaire, and serious declines in production occurred from 1975 through 1978. In Zambia, cobalt is a byproduct of copper and production declined after 1975 as copper prices fell. In Canada, the Philippines, Australia, nesia, New Caledonia and Botswana, cobalt is recovered as a by-produ processing operations. Disposals of cobalt from the U.S. strategic st important role in the cobalt market in the early I97Qs, but sales of cobalt e Zaire has experienced severe problems in supplying cobalt in recent years. In 1975, the nguela railroad from Zaire through Angola to the Atlantic was cut off due to the civil w * ngola. In 1977, the Shaba province of Zaire, where cobalt is produced, was invaded.. C production was not affected that year, but the invasion in 1978 did affect production. The damage tQ the facilities in 1978 was slight, but virtually all of the foreign workers many facilities were in a state of poor repair. Low copper prices have left Z ankrupt, unable to improve its domestic tran or to maintain the c cobalt facilities. The International Monetary d Bank have been at to remedy Zaire’s financial difficulties, but i n if their attempts will pro successful. It is possible that Zaire could just manage for the next several years until et recQvers and the efforts by the IMP and Worl ank bear fruit. Despite attempts ‘by to improve its economy and mining industry, other cutoff in supplies, a~t~~n~b ely, could happen at any time. ost important uses of cobalt on a tonnage basis in the U.S.A. are in su oys, element in permanent magnets and in chemicals. Other important us lnde ides, hard-facing and welding materials and as an alloying element in steels. dy of the world cobalt market found that there is considerable price elasticity in r cobalt, because, as the price rises, consumers shift their pref~rcnc~s ts rials and designs. Furthermore, the increase in price encourages c~nservat~l~~ of cobalt through increased recycling and improvements in processing techniques, For inst y showed that if the price of cobalt were to stabilize at 55 U.S. dollars per kg (197 fsr cobalt would decline to less than half of its initial value within five ye would be less, but there would still be a decrease of approximat cobalt within one year if the price were to increase from 22 t Its of the substitution analysis, which was developed in 1978, h the test of time well, and were used as part of an overall supply - demand frame with considerabIe accuracy, world cobalt prices over the period 1978 - $2. The results of the substitution analysis are crucial to an understanding of the economic and national security consequences to the U.S.A. of a supply disruption in the world cobalt market. is conceivable, even likely, that another supply disruption will occur because of the stability in southern and central Africa. In such an event, it is clear that the price of c again rise as the result of psychological factors and actual production curtailm magnitude of the price increase is uncertain, but it is quite unlikely to increase above 110 U.S. dollars per kg for any appreciable period because of the downward pressure from snbstitnti,Qn and additional supplies from other nations. The results of the analysis may be interpreted as follQws. If the price were to increase by a factor of 2.5, and other parameters (such as in
182
J. P. CLARK
and B. REDDY
activity and prices of substitutes) were to remain unchanged, the total demand for cobalt in the U.S.A. would decrease by 15% in a one-year period. A price increase by a factor of five would bring a demand decrease of 2QVoin the first year. C~rre~tly~ about 15% of cobalt supplies in the U.S.A. come from recycled (secondary) sources. Thus even if supplies were restricted by 50% in the first year of the disruption only up to 2OVa of demand would have to be met releases from the government stockpile. The greater the price, the less the dem&md and greater the contribution from recycled material. If the supply restriction were to last for more than a year, d adjust and there would be more substitution, Thus the would decrease by 50% in years two through seven, wi e factor of 2.5, if sthm factors were to remain unchanged. In the event of larg increases, substitution would greater. If the disruption were to continue, there woul e time for additional sources supply to respond to the higher price, Indeed, such responses have been shown by both the demand and supply sides of the market to the 1978 disruption. Following the disruption, the producer price was set at 55 U.S. dollars per kg and an attempt was made to maintain the price at that level. However, because of substitution and increased supply from other sources outside Zaire and Zambia, large stocks were built up by producers, and the free market price recoined to less than 22 U.S. dollars per kg in 1982. Consequently, extreme pressure was placed on the price, which gradually decreased to about 11 U.S. dollars per kg in early 1983, before rebounding to about 25 U.S. dollars per kg in late 1984. Two conclusions may be drawn from this analysis. Firstly, a disruption in cobalt supplies from Zambia and/or Zaire woul not have a measurable effect on the national security of the §.A. The increased prices would result in substa substitution away from cobalt in nessential uses. However, there would be a time de and it might be necessary to release some cobalt from the government stockpile. Secondly, there would be an economic cost to the U.S.A. resulting from a supply isruption because of the lass in consumer surplus due to higher market prices and reduction in quantities consumed. The costs of such a disruption could be substantial but would be short lived because of the downward pressure on the price.
BIBLIOGRAPHY Charles River Associates, Measuring Materials Criticality for National PaoiicyAnalysis. Prepared for the U.S. General Accounting Office. Charles River Associates, Boston, Massachusetts (1978). Charles River Associates, The Effects of Supply Restrictions on the Demandfor Manganese, Chromium Cot& ad Platinum. Report to the U.S. Department of the Interior. Charles River Associates,Boston,Massachusetts War).
REFERENCES 1. U.S. Congress, Office of Technology Assessment, An Assessment of Alternative Economic Stockpiling Policies. U.S. Government Printing Office, Washington, DC (1976). 2. E. F. Hughes, Strategic Resources and National Security: An Initial Assessment. Prepared for the Defense Advanced Research Projects Agency. Stanford Research Institute, Stanford, California (1975). 3. A. H. King, Materials Vulnerability of the United States-An Update. U.S. Army War College, Strategic Studies Institute, Carlisle Barracks, Pennsylvania (1977). 4. A. H. King and J. R. Cameron, Materials and the New Dimensions of Conflict. U.S. Army War College, Strategic Studies Institute,.Carlisle Barracks, Pennsylvania (1974). 5. M. D. Levine and I. W. Yabroff, Department of Defense Materials Consumption and the Impact of Material and Energy Resource Shortages. Prepared for the Advanced Research Projects Agency. Stanford Research Institute, Stanford, California (1975).