Solar PV modules are primarily based on four technologies: traditional crystalline silicon (c-Si), thin-film amorphous silicon (a-Si), cadmium-telluride (CdTe), and thin-film copper-indium-gallium-selenium (CIGS).

Although crystalline silicon still provides by far the greatest number of systems, there is a need for all these technologies. Each has its advantages and drawbacks, but despite lower conversion efficiencies, thin-film technologies have promising advantages, such as flexible substrates and potentially lighter weight and lower cost-per-watt.

An issue that the PV industry has had to deal with is a supply shortage of crystalline silicon, and even though new supply is likely to come on stream in the next 18 months or so, this shortage has given renewed impetus to those developing thin film solutions. One of these technologies is CIGS, which some high profile companies have started to take more seriously as an alternative. IBM, for example, announced in June 2008 that its IBM Research Group is targeting 15% plus conversion efficiencies for CIGS solar PV cell modules (current CIGS thin-film cells achieve efficiencies in the range of 8% to 12%, according to IBM).

To reach its stated efficiency goals, IBM has teamed with Tokyo Ohka Kogyo (TOK), a specialist chemicals company that is well-known for photo resist materials used in lithography processes. The two companies say they are developing new, non-vacuum, solution-based manufacturing processes for CIGS that include equipment and materials.

IBM will be joining Nanosolar, Miasole, and HelioVolt in the CIGS Solar market. The CIGS space has recently attracted a greater proportion of VC funding than other solar technologies (source – StrategyEye).

But what about the raw material supply for these companies operating in the CIGS space?

Indium is a bye-product of base metal production and as such, clear production data is not readily available. In addition, complete consumption data is difficult to consolidate due to the fact that consumption is spread over such a large number of uses.

The abundance of Indium in the earth's crust is estimated to be 0.05 ppm for the continental and 0.072 ppm (parts per million) for the oceanic crust, respectively (source: Taylor and Mclennan 1985). This concentration is higher than the concentration of silver. Consider that silver is now produced at a rate of 20,000 tonnes per year compared to approximately 400 tonnes per year for Indium. Silver is not perceived to be in short supply. These observations would suggest that Indium could enjoy virtually infinite growth in use without supply limitations.

For primarily economic reasons, Indium was originally only extracted from zinc and lead concentrates containing at least 500 ppm indium (and coming from ores containing about 50 ppm of indium). Due to improvements in the extraction technology, combined with the economics of higher prices, Indium is now recovered as a bye-product of a wider range of base metals including tin, copper, and other polymetallic deposits. Indium is also now being extracted and recovered from base metal concentrates containing as little as 100 ppm of Indium.

Base metal consumption has increased over the last few years, and mining companies have started making positive financial returns. This profitability, in turn, has prompted new investments in mining. Furthermore, new indium containing ore bodies are being discovered and developed. Some examples are the new Neves Corvo Zinc mine in Portugal, Mitsui Mining's increased mining output in Peru, the Chinese exploration investments in the Guanxi and Yunnan provinces, the Chelyabinsk Zinc purchase of a majority stake in lead and the zinc mine Nova Zinc of Kazakhstan. Mining output is increasing, thereby increasing supplies of indium containing feedstock.

Existing mines of indium containing ores are dispensed around the globe, in terms of geography and political policies and influences. This broad geographic and political dispersion adds to the stability of indium supply. Recent changes in China export policies affecting Indium reinforce the importance of a broad and diverse base to ensure a relatively stable and predictable supply of Indium.

Indium extraction

Base metal smelters are improving the extraction process of indium from concentrates. Concentrates with lower Indium content are more commonly processed. In addition, base metal smelters, which can extract the indium from concentrates, are now more actively seeking and purchasing Indium-containing concentrates from more sources and at higher volumes.

In the past, the revenues these smelters could generate from the Indium recoveries were not significant enough for them to change zinc concentrate suppliers, or to pay more freight expenses to source these Indium-containing Zinc concentrates from further distances. Thus, Indium-containing concentrates were often treated by smelters which could not extract the Indium, and these quantities were historically lost as unprocessed. The demand for Indium, and the improves economics are factors driving steadily-increasing extraction output.

A number of smelters have accumulated large amounts of tailings and slags over the years. These could be an additional source of Indium. Many of these are Indium-containing residues from production processes, which have very low Indium content and/or are particularly difficult to treat. But, again, due to the higher Indium prices and improving recovery process technology, these tailings and slags are now economical to treat. China, as an example, has started treating many of these residues.

The secondary materials referred to in this discussion are commonly residues from other metal fabrication, which are treated for environmental or economical reasons, and happen to contain some Indium. The relatively high prices of Indium economically support the separation of Indium from the other metals.

Refining capacity has been increasing on a worldwide basis. In 2004, Korea Zinc installed a brand new extraction and refining processing line at its zinc smelter in Korea. Dowa Mining increased its Indium capacity in Japan. A large number of Chinese companies have installed processing lines to treat material containing less than 0.5% Indium into crude metal. Others have installed refining lines to purify crude Indium into higher purities. Many of the older Russian smelters are being revamped and Indium production re-activated. Overall, several major base metal smelters have increased outputs with minor changes to their equipment.

Recovery yields are another important contributor to increased outputs. Historically, less than 20% of the Indium content in concentrates was extracted to yield Indium metal. Higher Indium prices now make it economically viable for smelters to invest in development studies and equipment to increase these yields and capacities. The additional processing costs are covered by the currently higher Indium prices.

Reclaiming Indium

One of the largest applications of indium is Flat Panel Displays. This sector consumes over 70% of the world output of Indium. Planar targets of Indium-tin oxide (ITO) are commonly sputtered on glass panels with less than 30% of the Indium from the target deposited on the glass. The balance (approximately 70%) remains in “used” ITO targets, in grinding sludge, or on the shields of the sputtering chambers.

Reclaiming the ITO targets is another important source of Indium, an area where efficiency improvements are being studied and recovery improvements are being realised. Capacity to reclaim the spent ITO targets into refined Indium metal is expanding, to help supply the growing demand for Indium. Most of this capacity is in Japan and China – and to a lesser extent in Korea – as this is where most of ITO target production and sputtering is done. Further expansions are planned.

Future supply of Indium

Predicting whether Indium will be in a deficit or an oversupply situation is rather difficult. The exact production and consumption figures for Indium are uncertain, and the future trends are influenced by many factors such as the world economy in general, or more specific industries trends (i.e. the mining, electronics or energy sectors).

However, a simulation consisting of a conservative compound annual growth rate of Indium applications, coupled with additional virgin outputs coming from increased efficiencies and treatment of residues, results in a more balanced supply/demand market. Although alternating periods of excess demand and over-supply are expected, small supply/demand imbalances primarily affect price. Hereafter, the long-term supply of indium is sustainable and reliable.

Gallium mining and extraction

Similar to Indium, Gallium is the result of an extraction process. There are no primary Gallium mines. Gallium is extracted from bauxite as part of the bauxite-alumina-aluminum refining flow, which most commonly utilises the Bayer liquor process.

By all accounts, bauxite is plentiful in the earth's crust and is widely distributed geographically and politically. Similar to Indium, this contributes to stability of supply of Gallium feedstock. Interestingly, only a small portion (less than 10%) of the potentially available Gallium in the bauxite is actually extracted. Hence, the existing flow of bauxite processing offers tremendous capacity increases. Historically, the low extraction volume was limited more by the relatively small demand and economics of relatively low prices. For all practical purposes, Gallium output is limited only by facilities investment and capacities.

Gallium supply

Gallium metal is now plentiful with intermittent volatility. In 2000–2001 Gallium saw a significant price decrease, primarily due to inventory stocking by the cell-phone supply chain when a feared shortage failed to materialise. In addition, poor communication up and down the supply chain contributed to a hoarding of material against a phantom demand. Hence, a massive over-supply (glut) followed, driving prices to historic lows. The more recent constrained availability of Gallium during 2007, and the resultant price run-up, is an example of this intermittent volatility and does not reflect any long term concern about supply.

As with many minor metals, the supply/demand balance of Gallium is difficult to fully track, and more difficult to forecast going forward. This lack of transparency is a secondary factor driving intermittent volatility.

A near-term supply/demand shortfall that is forecast, is due to the time required to bring facilities on-line. On a cumulative basis, prior year surpluses helped in the past to fill demand in subsequent years. Despite the small forecasted shortfall in 2007 and 2008, Gallium remains in a surplus condition.

Conclusion

Indium- and gallium-containing raw materials exist abundantly worldwide. The metals industry has been investing in process improvements and capacity over the last few years to bring more Indium and Gallium to the market. As described, price volatility and short-term availability will continue intermittently due to numerous factors including the time-lag required to install additional capacity, Government regulation, and the lack of information that suppliers receive about future demand. But overall, we anticipate adequate Indium and Gallium supply and continued price affordability for current and new applications.