Material criticality is the determination of which materials that flow through an industry or economy are most important to the production process. It is a sub-category within the field of material flow analysis (MFA), which is a method to quantitatively analyze the flows of materials used for industrial production in an industry or economy. MFA is a useful tool to assess what impacts materials used in the industrial process have and how efficiently a given process uses them. Material criticality evaluation criteria consist of three dimensions: supply risk, vulnerability to supply restriction, and environmental implications. Supply risk comprises several components, and changes based on short or long-term temporal outlooks. Vulnerability to supply restriction is dependent on the organizational level (global, national, and corporate). This methodology was developed from a United States National Research Council model, and is intended to help stakeholders make strategic decisions about the materials used in their production process. In the globalized economy, scarcity of essential materials in the industrial supply chain is a growing concern. As a result, nations and other large institutions are increasingly analyzing a material's criticality and seek to minimize any risk, restriction, or environmental impact associated with the material.
Supply risk Supply risk is one of three dimensions that determine a material's criticality. Supply risk can be evaluated for the medium term (5–10 years, typically most appropriate for corporations and governments) and the long term (multiple decades, usually considered by long-range planners, futurists, and sustainability scholars). Supply risk consists of three components: Geological, Technological, and Economic; Social and Regulatory; Geopolitical. The first component focuses on the availability of the material's supply and the last two focus on how access to that supply could be restricted. The components are assessed on a 0-100 scale for both medium and long-term risk with higher values indicating higher risk. The aggregated scores yield a material's supply risk.
Geological, Technological, and Economic The geological, technological and economic components of supply risk relate to the most basic questions relating to a materials availability; geologically, how much (material) is there; technologically, is it feasible to obtain; and economically, is it practical to do so. This component comprises two indicators of equal weight. The first looks at the relative abundance of material resulting in "depletion time" or relatively how much of the material has not been consumed. The second is a percentage of a given material extracted as a companion or trace material extracted as a by-product. This is used to understand depletion rates of materials consumed as a by-product to extraction. Quoting Graedel et al., "One should not regard the result as how long it will be until we run out, but rather as a useful relative indicator of the contemporary balance between supply and demand for the metal in question." In practice, geological, technological, economic, political and other aspects of criticality are interconnected. For example, new exploration technologies can alter geological availability, shortages can lead to higher prices which can in turn promote technological innovation.
Social and Regulatory The social and regulatory components of a materials supply risk can impede or expedite the development of mineral resources. Regulations can hinder the reliability of mineral resource supply. Social perceptions towards the negative environmental and socioeconomic effects on communities typically fuel these regulations. Material criticality employs the policy potential index (PPI) and human development index (HDI) indicators to quantify the social and regulatory components of supply risk evaluation.
Geopolitical The geopolitical component of a material's supply risk takes into account how governmental decisions and stability can significantly impact a material's accessibility. For example, politically unstable and war-torn nations pose a greater risk to supply restriction than developed peaceful nations. Material concentration, geographic location, security, socio-economic distress, and political stability are all analyzed to address what amount the geopolitical component should factor into a material's supply risk.
Metal scarcity Metals are among the most important materials to the industrialized world, everything from infrastructure to personal electronic devices heavily relies on metals for production. As a result, global supply is being increasingly monitored and examined. For example, a recent study analyzed the varying levels of risk to the copper metals around the world. Another study found that increasing metal scarcity could alter typical industrial behavior. It also noted that metals heavily concentrated in certain geographic areas, such as strontium in China or the platinum group in South Africa and Russia; pose greater risk for supply disruptions. Since the late 1990s China has had a near monopoly on a variety of rare-earth metals commonly used in every day products. Much to the surprise of the international trade community China began restricting exports of these metals in 2009. The U.S. and World Trade Organization immediately protested however China has not changed its stance. This is a great example of a geopolitical based supply risk. To combat this supply disruption other countries, such as Japan, are attempting new and innovative methods of mining these rare-earth metals.
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