Shortage of minerals and metals slows supplies for seven core
TORONTO, Jan. 11, 2012 /CNW/ - A majority of industries (77%) consider
minerals and metals scarcity a pressing issue causing stress for their
suppliers, according to a new global study of manufacturers from PwC.
The seven manufacturing industries most impacted are infrastructure,
high-tech hardware, automotive, renewable energy, chemicals, energy and
utilities, and aviation, with the highest concerns amongst participants
from the infrastructure, high-tech and automotive industries.
The report, Minerals and metals scarcity in manufacturing: A 'ticking time bomb' surveyed 69 senior executives in seven different manufacturing industries across
the Americas, Asia Pacific region and Europe. According to the survey,
83% of respondents indicate their suppliers consider minerals and
metals scarcity an issue and 61% believe their customers are taking the
issue seriously. In North and South America, over half of the
respondents believe the government is aware of the shortage and its
"Manufacturers recognize that the lack of minerals and metals is a
serious issue, but it's not as clear whether various industry
stakeholders are aware and are being responsive to the matter," says
Calum Semple, Consulting partner and Leader of the Operations practice
at PwC in Toronto.
Most regions and industries globally view an increase in demand as the
primary cause for minerals and metals scarcity (84%), followed by
geopolitics (79%) and extraction shortages (73%).
"With growing GDP levels and with the world's population surpassing
seven billion people, consumption levels are rising which in turn is
creating a high demand for resources," says Semple. "Raising awareness
and developing new business models to help manage the urgency of this
issue is a necessary task for both companies and governments."
The impact of growing demand is highest for suppliers within the
infrastructure industry. Other causes for the shortage and level of
impact are noted in the table below:
High to very
Low substitution rate
Re-use rate low
Reserves running dry
Insufficient Research and
Risk is growing
Risk arising from minerals and metals scarcity is expected to increase
across all industries in the next five years. Industries within the
renewable energy (78%), automotive (64%) and energy and utilities (57%)
sector are currently experiencing instability of supply.
"Preparedness is critical to responding to the risks associated with the
scarcity of resources," says Semple. "Across different sectors, we're
faced with varying levels of preparedness. The majority (73%) feel they
are sufficiently prepared, but some companies do not have adequate
plans in place to reduce the impact of the shortage on their business."
Areas of opportunity
Respondents from the automotive sector (82%) have the most positive
outlook when it comes to finding opportunities over the next five years
in the midst of a metals and minerals shortage. Overall, 43% of
respondents across all industries view scarcity as a current
opportunity, while 59% of respondents say the opportunity will grow in
the next five years.
Europeans remain the most optimistic with 58% perceiving an opportunity
at hand, whereas only 35% of respondents from North and South America
sense potential for good prospects.
"Buying power, co-ordinated purchasing policy, recycling and extraction,
upgrading technology and forward contracts with key suppliers are just
a few of the current and potential opportunities resource scarcity
presents to manufacturers," says Semple.
To read the full report, please visit http://www.pwc.com/resourcescarcity. A copy of the report is also available from the media contacts.
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