March 23rd, 2012

Engineering Companies Impacted By Mineral Shortages

A recent survey conducted by PwC is raising concern in the engineering sector about the possibility of mineral shortages impacting production. Metal minerals are heavily relied on by companies involved in the automotive, energy and utilities, and renewable energy sectors and these are the companies that are going to be impacted first.

It is estimated that within 5 years, if not sooner, these companies may feel the pinch and may not be able to access the materials they need to continue production. Sectors in aviation and high-tech fields have a little bit longer before they are impacted, with estimates putting the shortages coming into effect by 2016.

The report released by PwC stated in part, “Although some Asia Pacific countries, especially China, have abundant reserves of scarce minerals and metals, the expected impact of scarcity on companies in these countries over the next five years is still substantial. The risk of scarcity across all sectors is expected to rise significantly, leading to supply instability and potential disruptions in the next five years but this will also create opportunities for competitive advantage.”

What does this mean for engineering companies and other sectors that are looking at potential shortages? Right now, it is vital to begin developing alternative materials that can be substituted. Other solutions include sourcing new deposits of minerals that can be readily accessed if and when the shortage does occur.

While 73% of the companies that responded to PwC’s survey feel somewhat confident that they can weather these shortages, it is clear that the time to take action is now. Geopolitical strife is adding to the issue, and some reserves that are accessible now may not be accessible in the future. While governments are aware of this growing issue, no serious steps are currently being taken to ensure the future of these minerals and of the companies that rely on them for production of vital and necessary materials.

Leave a Reply

©2011 SoloPoint Solutions. All Rights Reserved. Site Credits.