Minerals scarcity a "time bomb" for manufacturing: PwC

Shortage of minerals and metals slows supplies for seven core manufacturing industries, according to report

January 11, 2012
by Purchasing b2b staff

TORONTO: A majority of industries (77 percent) consider minerals and metals scarcity a pressing issue causing stress for their suppliers, says a new global study of manufacturers from PwC. The seven manufacturing industries most affected 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 and Europe. According to the survey, 83 percent of respondents indicate their suppliers consider minerals and metals scarcity an issue while 61 percent believe their customers are taking the issue seriously. In North and South America, over half of respondents believe the government is aware of the shortage and its ramifications.

Most regions and industries globally view an increase in demand as the primary cause for minerals and metals scarcity (84 percent), followed by geopolitics (79 percent) and extraction shortages (73 percent). The impact of growing demand is highest for suppliers within the infrastructure industry.

“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,” said “Raising awareness and developing new business models to help manage the urgency of this issue is a necessary task for both companies and governments.” Calum Semple, consulting partner and leader of the operations practice at PwC in Toronto.

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 percent), automotive (64 percent) and energy and utilities (57 percent) sector are currently experiencing instability of supply. Respondents from the automotive sector (82 percent) have the most positive outlook for opportunities over the next five years in the midst of a metals and minerals shortage. Overall, 43 percent of respondents across all industries view scarcity as a current opportunity, while 59 percent said the opportunity will grow in the next five years.