Energy

Why must raw materials become more expensive?

Gold

For a gold mine to be profitable, the deposit must contain at least 2 million ounces of the precious metal, as this is the only way to ensure production for many years to come. In previous years/decades, new deposits were discovered and supply was guaranteed. However, in the last two years of the gold rush, when gold was being sought everywhere, no major deposits were discovered anywhere in the world! This is the first time in history and, of course, an argument for a further rise in price.

Petroleum

Shale oil is running out in the United States. According to the latest data from the Energy Information Administration (EIA), shale oil production will gradually decline, mainly due to the depletion of deposits. The Permian Basin, one of the largest and most important shale basins in the world, is expected to produce less and less shale oil in the coming years. The impending supply deficit and the ever-increasing demand for this raw material are prompting leading oil producers to seek alternative sources for extracting black gold, especially in offshore deposits. Perhaps this is also the reason for the possible war against Iran, in order to secure reserves there, as in Venezuela.

Metals and rare earths

When it comes to both, the West is completely dependent on China and Africa. The following graph shows how heavily the US depends on other countries when it comes to minerals:

Source: Elements

Particular attention should be paid to rare earths, a group of 17 nearly indistinguishable heavy metals with similar properties that are indispensable in a wide variety of technologies, high-performance magnets, electronics and industry as a whole, as well as natural graphite, which is found in lithium-ion batteries. When Trump imposed tariffs on China, Beijing responded with restrictions on rare earth exports, which only exacerbated the geopolitical situation surrounding these materials.

The data shows that Africa’s share of resources and production of important raw materials is as follows:

  • Platinum: 90% of global resources (mainly South Africa and Zimbabwe). Platinum is needed in catalytic converters and hydrogen technologies.
  • Cobalt: 70-75% of global production comes from the Democratic Republic of Congo. It is one of the key components of lithium-ion batteries.
  • Chromium: 85% of global reserves are of high quality. Required for the production of stainless steel.
  • Manganese: 80% of global resources (mainly South Africa). Key to the production of steel and batteries.
  • Tantalum: 60-70% of global resources (DRC, Rwanda). Indispensable in every smartphone and laptop (capacitors).
  • Gold: approx. 40% of global resources.

At the same time, Africa remains the least geologically explored continent on Earth. Canada spends more than US$2 billion annually on field exploration, while all African countries combined spend just over US$1 billion. This shows that if the African continent were not so politically unstable, many more deposits would likely be discovered there. In addition, more and more mines are being controlled by the Chinese (e.g. the cobalt mines in Congo), which poses a real threat to the West. 

The energy crisis is planned and desired Electricity prices skyrocket, but that’s our new better world after all

The Emissions Trading Systems (ETS) were introduced with the Kyoto Protocol and imposed on the EU and other countries by the infamous Al Gore. His idea that whoever produces more CO2 has to pay for it was seemingly clear at the beginning and many immediately embraced it, but the ETS quickly became financial instruments in the hands of large investors and thus began to serve as such for speculation. ETS became a commodity on the stock exchange, traded just like bitcoin or CFDs (Contract for Differences). The fact that in the end it is the end consumer who suffers is of no interest to high finance, the EU and US elites. Take Elon Musk, for example. Do you think he earns his money by selling electric cars? Not by any means. By 2021, he won’t have made a single cent of profit from car production. Until last year, his company made its best profits from trading CO2 certificates. In the last three years it was $3.3 billion. Another of Musk’s gold mines is trading in Bitcoin. As reported by Tagesschau at one time, Tesla had acquired Bitcoins for $1.5 billion from January to March 2021 and then resold them for the profit of $300 million. Everyone knows that Bitcoin production and transaction means enormous energy consumption. Never mind, the main thing is that it is a modern currency. Wow! Are electric cars not environmentally friendly at all because exorbitant amounts of precious and industrial metals are needed in their production? No problem. The main thing is to scrap old cars and buy new “emission-free” ones, according to the Green narrative. You have a Tesla? Wow! The ruble is rolling, one would like to say, although the ruble is just rolling towards China, as Russia has multiplied its exports to the Middle Kingdom since the sanctions were introduced, making nonsense of the West’s sanctions. Driving old diesel is yuck, but taking a tour into space with Spacex is mega cool. Isn’t that right, Greta? You’ve already circled the globe with the most environmentally unfriendly means of transport. The time is coming for the moon. Putin’s action against Ukraine is simply a good reason to speed up the green revolution in the West.  Continue reading →