Environmental and technical characteristics of conductive adhesives versus soldering

4. Silver resource aspects of substituting tin/lead solders with electrically conductive adhesives

4.1 Production, consumption and reserves
4.1.1 Production of virgin silver
4.1.2 Consumption of silver
4.1.3 Silver Resources
4.1.4 Silver scarcity
4.1.5 Prices for silver
4.1.6 Trend analysis
4.1.7 Production of virgin lead
4.1.8 Lead consumption and resources
4.1.9 Scarcity of lead
4.1.10 Production of virgin tin
4.1.11 Tin consumption and resources
4.1.12 Scarcity of tin
4.2 Substitution scenarios
4.2.1 Scenario calculations
4.3 Discussion

The aim of the present investigation has been to investigate the possible consequences on silver consumption/demands and thereby scarcity and prices associated with substitution of traditional tin/lead solder with silver containing electrically conductive adhesives.

The first part of the report presents data and descriptions on silver production/mining, consumption, reserves and prices. A few data on lead and tin have been included for comparison.

The second part outlines different substitution scenarios and calculates their influence on the silver resource situation. Finally, the results are discussed in light of adhesive technology development, recycling possibilities and other precious metal demands connected with substitution of solder with adhesive.

4.1 Production, consumption and reserves

This section presents key figures for evaluation of silver, lead and tin scarcity. For silver, also economic data has been included. The individual metal paragraphs begin with a short description of metal mining/production.

4.1.1 Production of virgin silver

The virgin mining materials most often contain several compounds like lead, copper, zinc, silver or gold.

According to the Silver Institute, Washington, primary silver mine production accounted for just 17% of total silver production in 1997, whereas silver produced as a by-product or co-product of lead, zinc, copper and/or gold mining comprised the remaining 83% [29].

In USA 30% of silver is produced from copper mining.

In Sweden virgin silver is produced from complex mines (20 - 160 g Ag/ton). Silver is extracted from concentrates of copper and lead. Boliden Bergsöe produces Zn, Cu, Pb, Au, Ag in mines in Sweden, Spain, Saudi Arabia, Canada and Chile [30].

4.1.2 Consumption of silver

The consumption of silver on the world market is dominated by 37% for industrial use and 27% for photographical use, [31]. The remaining part is used for jewelry, silverware and coinage. Industrial use for electronics and photography is increasing.

Silver consumption for the electronic industry (batteries and electronics) has for 1997 been estimated to 12% of supplies. For non-electronic alloys, solders and for dentistry the estimated consumption was 18% [29].

4.1.3 Silver Resources

Large private and governmental stocks characterize the market for metals - especially for gold and silver -, which balances the difference between production and demand. The variations in stocks also balance prices to a certain extent.

Many silver mines are closed since they cannot profitably produce silver at current market prices [32].

The Silver Institute has recently estimated the total World demand and supply of silver for 1997. The total supply (demand) was 24,477 tonnes and the total production of virgin silver was only 14,532 tonnes (59.4% of demand). Production of silver from recycled scrap was 4,323 tonnes (17.7% of demand). The remaining supply to satisfy the demand was taken from stocks, meaning that stocks has been reduced by 5,622 tonnes, corresponding to 23% of the total supply in 1997 [31].

The silver consumption has outpaced production since 1992, and the balance is being supplied from aboveground stocks. The stocks in coinage are estimated to 60,000 tonnes and private stocks in India alone are estimated to 100,000 tonnes [30].

4.1.4 Silver scarcity

Scarcity of silver can be assessed in different ways. The LCA tool EDIP¹ [33] applies the amount of known global reserves per person as an index. Another way to express scarcity is by estimating the known reserves of silver relative to the annual consumption per year. The scarcity can be expressed as the "Reserves Life Index" (reserves/consumption) – the number of years before all known reserves have been used if the known reserves and the yearly consumption is unchanged in the future.

The reserve base is the part of the identified resources that meet criteria for current and expected mining technology. The known reserves are the part of the reserve base, which can be economically extracted at the time of determination.

Data from various sources are listed in the following table:

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Based on the above information, the demand is estimated to 25,000 tonnes/year, of which 5,000 tonnes/year is due to recycling. Since stock reductions are not expected to continue in the coming years, it is assumed that stocks are unchanged in the future. Then 20,000 tonnes/year, will be produced from mining of virgin silver. With known reserves of 280,000 tonnes, the "Reserves Life Index" will be 14 years (280 tonnes/20 tonnes per year).

4.1.5 Prices for silver

Silver is a tangible asset, and is recognized as a store of value. Its price can be affected by inflation, changing values of paper currencies, fluctuations in deficits, demands and interest rates, etc. [31]. In recent years, fabrication has greatly outpaced mine production forcing market participants to draw down existing stocks to meet demand.

The annual demand for silver is more than 22,700 tonnes a year (800 million ounces) and the production is 4,300 - 5,700 tonnes (150-200 million ounces) short of that. Since 1990, there has been a cumulative shortfall of more than 28,400 tonnes (1,000 million ounces) [35].

Since 1980, the prices have varied considerably from 4 USD to a maximum monthly average of 59 USD an ounce in 1980.

The following table list some key figures:

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4.1.6 Trend analysis

It is expected that prices will increase in the coming years due to increasing demands and reduced stockpiles. Stocks have been reduced considerably during more than five years. In the short run production can be increased by re-opening silver mines but this will only take place if prices are increased.

4.1.7 Production of virgin lead

Lead is mostly found in complex veins in combination with zinc. The lead content is approximately half of the zinc content. Lead production is practically always combined with production of zinc and often with production of silver.

Lead is extracted in 3 mines in Sweden (by Boliden) of which The Laisvall Mine is the largest lead mine in Europe [30].

4.1.8 Lead consumption and resources

The lead consumption is approximately 3.4 million tonnes/y. According to Boliden approximately 50% of the world production of lead is due to reused lead.

Collection and reuse is quite easy because lead has only a few areas of applications. 69% of the consumption is used for batteries and the rest is used nearly equally in 3 branches – alloys, chemicals and semi-finished-goods [30].

4.1.9 Scarcity of lead

4.1.10 Production of virgin tin

Tin is produced from both primary and secondary sources (The Materials Home Page. Tin). The chief source of tin is cassiterite. When heated (with powdered coal) in a reverbarory furnace at 1200 °C, a tin containing slag is formed. By a second melting in a sloping hearth the metallic tin runs off (99% purity). By electro refining greater purity can be obtained.

Primary tin used for tin/lead solder at Boliden is produced in mines in Bolivia, Peru or Thailand. The metals are bought at the London Metal Exchange [37].

4.1.11 Tin consumption and resources

The Western World produces 145,800 tonnes/y of refined tin and 138,800 tonnes/y of tin in concentrates. Western World consumption of refined tin is estimated to 187,000 tonnes/y [38]. China and Russia are major tin producers but data are not verifiable.

About 40% of the world’s consumption of tin is as coating material for steel "tin" cans (The Materials Home Page. Tin).

4.1.12 Scarcity of tin

4.2 Substitution scenarios

This section aims at estimating the increased silver demand for adhesives that will be the result of substitution from tin/lead solder to electrically conductive adhesives. The results will be discussed in the following section.

4.2.1 Scenario calculations

Assumptions:

	The tin/lead soldering market consumes approx. 60,000 tonnes tin/lead solder per year2. [39], [40].
	About 1/3 is solder paste or other solder, which in ‘the ideal world’ could be substituted. A reasonable optimistic estimate on substitution is 20% of this value. That would require that several of the present technical problems (equipment precision placing and component availability) should be solved, see also [7]. Based on the present technology and adhesive performance, a maximum of 5% of the ideal world situation could be expected [7].
	Solder pastes contain 2% (w/w) silver.
	Electrically conductive adhesives contain 80% (w/w) silver.
	On a weight basis, the adhesive demands is estimated to be 1/5 of the solder demand. The difference consists of [7]: Differences in densities. Adhesives have about half the density of solder paste3. A stencil with about half the thickness can be used when using adhesives. The area necessary for adhesive application is smaller than the area needed for solder

This gives altogether about a factor 5. The factor was almost obtained in the Grundfos case [7], where a thinner stencil was used but where the application area was not reduced. In can also be mentioned that [ ] assumed a factor 6,25 in difference in his solder-adhesive comparison.

The demand for silver in adhesives can now be calculated as:

Pb/Sn solder consumption * substitution potential * 1/5 * adhesive silver content

The substitution will decrease the silver demand in solder paste by:

Pb/Sn solder consumption * substitution potential * solder silver content

The net increase in silver demand is of course the difference between adhesive content and reduced solder content.

Table 4.1 summarises the increased silver demand based on the three scenarios: ‘ideal world’ (substitution potential 1/3), optimum performance (0,2 * 1/3) and present technology (0,05 * 1/3).

Table 4.1: Increased silver demand

4.3    Discussion

If the estimates in Table 4.1 are compared with the yearly silver demand on the world market (about 25.000 tonnes), it can be seen that a widespread substitution would increase the demand by 11%, whereas a presently more realistic substitution would increase the demand by about 0,5%.

As found in the life cycle assessment (chapter 7), the substitution for adhesive will most obviously also increase the silver demands for component termination as Ag/Pd terminated components are highly recommended for adhesives [6]. Though very uncertain, it was assessed that the extra silver demand for component termination was greater than the silver content in adhesive – approx. a factor two [3]. I.e. – if the component estimates reflect reality - that the above estimates should actually be multiplied by a factor three

A widespread – future - substitution would therefore most obviously increase silver prices – when also comparing to the fact that it is estimated that the silver supply horizon is only about 14 years! However, with the present technology level, the increase in silver demand due to adhesive application would most obviously be marginal as compared to other mechanisms affecting silver prices (see discussion in previous paragraph ‘prices of silver’).

Further, some of the demand can be met by increasing electronics recycling. That would decrease the net consumption of silver resources. More than 90% of silver in electronics can presently be recovered via recycling.

Recycling of electronics is a demand in Denmark (regulated by law) as it is in a number of other European countries. It is expected to be a demand in the entire European Union in the near future. Recycling plant are also found in Japan and the United States. Recycling will therefore become a considerable disposal route for electronics. It is rather uncertain to estimate a realistic global recycling percentage for electronics in the future. However, if it is estimated to be 50%, the above estimated increase in demands should be divided by about a factor two when considering the net resource consumption (draw on resources). Increased recycling would therefore most probably reduce the influence of the increased demand on silver prices.

Further, new adhesives are developed with reduced silver content (e.g. silver plated aluminium or copper) or without silver (e.g. nickel, carbon or perhaps even future ‘conductive polymers’), see [5] and [6] for further details. Reduced silver content in adhesives will reduce the possible influence on silver prices, but silver in component termination may still be a potential problem.

Finally, it should be remembered that silver prices might increase due to several other mechanisms (see discussion in previous paragraph ‘prices of silver’).