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’,” 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.
As the prices for traditional commodities such as oil, steel and coal languish at multi-year lows, the raw materials used in smartphones, electric cars and 3D printers – among them lithium, graphite and cobalt for use in batteries – are set to experience increased demand.
That is prompting some analysts to declare the advent of a new resource era driven by technology.
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, chief executive at Metalysis, 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.
First used extensively by the US military for spy planes during the cold war, the metal has for decades been made using energy-intensive processes. Metalysis says it can now produce titanium from naturally occurring ores and cut energy costs by at least 50 per cent.
Technology drives change
Similarly, 3D printing is lowering the cost of producing titanium parts on an industrial scale by significantly reducing waste.
Norway’s Norsk Titanium plans to build a 200,000sq ft 3D metal printing factory in the US next year to produce 2,000 tonnes a year of components. It forecasts commercial demand from the aerospace industry will grow by 25 per cent from its current value of $4.5 billion over the next five to seven years, gradually displacing aluminium.
Changes in the battery market are no less dramatic, with costs set to halve over the next decade, according to Goldman Sachs.
It forecasts that electric vehicles will account for 25 per cent of car sales by 2025 from under 3 per cent today.
The technology is changing so quickly that it is difficult to predict which materials will be required and which will be discarded. High prices for any single metal are likely to spur a market for substitutes. For example, growing battery demand is expected to boost prices of cobalt, which is already expensive. That could result in its replacement in batteries by other materials after 2025, according to consultancy CRU.
"You're going to need a lot more of these metals and minerals," says Chris Berry, the founder of consultancy company, House Mountain Partners. "The real wild card is how fast the technology can advance. It could be good or it could be devastating [for a commodity]."
The major factor in the growth in demand for these raw materials is the same one that boosted the prices of copper, iron ore and others over the past 15 years: China. Beijing's support for electric cars and buses is driving lithium demand, which has seen prices in the country rise by more than 60 per cent in the past year. If all the lithium used by electric carmaker Tesla in its batteries was purchased by the company today, its share of the global market would still be less than 2 per cent, according to Joe Lowry, a market expert who has worked for FMC Lithium, one of the big producers.
In contrast, the Chinese market will consume almost 20 per cent of the lithium produced globally this year.
“Tesla’s a big deal no question,” he says. “But China has the most growth. It is extremely worried about a shortage. Capacity that was supposed to come online [outside the country] didn’t, and demand is at a tipping point.”
Traditional miners are keen to exploit the potential of lithium.
is looking at developing a mine in
that, it says, has the potential to supply a “significant portion” of global demand.
"We're pretty sure that the route to electric cars is through the lithium battery," says Alan Davies, Rio's head of diamonds and minerals. "And as the technology to manufacture them [improves]. . . then there will be more acceptance, and you bring the price point down."
But the company also believes that established commodities such as copper – which has seen prices fall by 50 per cent since 2011 – still have a future. There is a much bigger market for the red metal than lithium, graphite or cobalt, worth about $124 billion last year. In contrast total annual sales from the big three lithium producers are currently worth less than $1 billion.
"The key thing is whether they [new metals] are going to be used in a big industry – most of the commodities of today are driven by steel and everything that's related to steel ," says Simon Moores, managing director of Benchmark Mineral Intelligence .
"These niche minerals don't really have a huge industry yet. But we believe batteries are on the way to being that industry." Copyright The Financial Times Limited 2015 Hot properties: The metals and minerals in demand across the world LITHIUM It powers modern life. Almost all electronic devices use lithium-ion batteries – technology first pioneered by Sony in the 1980s – and around 30 per cent of the metal produced is used as cathodes in batteries. It is also used in glass, ceramics and lubricants. Silver in colour, it has high-energy density and in its pure form will react violently to water, so needs to be chemically extracted from brine and hard rock. Around 70 per cent of the world's supply lies in the salt flats of Argentina, Bolivia and Chile. Lithium-ion batteries already account for 75 per cent of electric vehicle demand, according to Bloomberg New Energy Finance. But analysts expect that demand to increase over the next five to 10 years, as battery costs drop to a point where electric vehicles and storage for grid power become more economically attractive. To meet that demand many new factories are being built, including Tesla's Gigafactory in Nevada as well as plants in China by the likes of LG Chem.
London-based consultancy Roskill predicts that demand for lithium carbonate – one of the two types used in batteries – will this year reach 175,000 tonnes, which could rise to 231,000 tonnes by 2020 and has the potential to reach 266,000 tonnes if electric cars hit the mass market. COBALT A shiny grey metal widely used as a compound with lithium in the cathode of lithium-ion batteries as well as in high-strength metal alloys for gas turbines.
Cobalt derives its name from the German word kobold, which means goblin. Produced mostly as a byproduct of copper, more than 50 per cent of the world's cobalt came from the Democratic Republic of Congo last year.
That is mostly sold to China, where it is made into refined cobalt. Tesla’s Gigafactory, which is under construction in Nevada, could increase demand for battery-grade cobalt by 20 per cent, according to London-based consultancy Benchmark Mineral Intelligence.
Meanwhile, Macquarie forecasts that overall battery demand for cobalt could more than double by 2020.
But the metal is often the most expensive component of a battery so it is likely to be substituted for other materials as manufacturers seek to drive down costs, according to analysts.
Scientists are also working on using fewer materials for the cathode in lithium-ion batteries. TITANIUM Known as a "wonder metal", it has been used since the cold war in military aerospace and spy planes.
Titanium is stronger than steel, 45 per cent lighter and also resistant to corrosion. That makes it "strong and tough enough to survive in space or at the bottom of the ocean", according to the Royal Society of Chemistry.
But its high cost of production has so far limited wider use. 3D printing could change that, as it cuts down on the waste produced for each block of titanium material used. Companies such as UK-based Metalysis have begun to produce titanium powder for use in 3D printers through electrolysis, without the high heat and energy needed for conventional titanium.
Cheaper titanium could attract the automotive industry, as it seeks to reduce the weight of cars to meet emissions legislation. "What really has held it back is the cost of production, the metal could easily be a commodity tomorrow because of its widespread appeal and the fact that the original source of titanium is available all over the globe," says Kartik Rao, director of business development at Metalysis. "It's one of the most abundant elements in the earth's crust so there's no shortage of supply." GRAPHITE One of the purest forms of carbon found in rocks, graphite is used in electric batteries for its conductivity, and steel furnaces for its ability to withstand high temperatures.
Electric vehicles, utility storage devices and mobile technology are all powered by batteries that use graphite as the anode material, according to Benchmark Mineral Intelligence.
Graphite will be the largest input material into Tesla’s Gigafactory, the company predicts.
Around 60 per cent of the material in batteries comes from natural flake graphite and the rest from synthetic man-made sources.
China produces more than 60 per cent of the world’s supplies of natural graphite, but Tesla has not said where it will source its graphite from. Benchmark says that if Tesla uses natural graphite for its lithium-ion battery production, the world will need significant new sources of supply. Global battery- grade graphite production is 80,000 tonnes a year but Benchmark forecasts this will exceed 250,000 tonnes a year by 2020.
Battery developers are also working on replacing graphite with other materials such as silicon, which could be capable of storing more energy.