The 6 ‘invisible’ raw materials behind technology – 06/23/2023 – Market

In Joseph Conrad’s novel “Nostromo” (1904), Charles Gould, the British owner of a Latin American silver mine, becomes dangerously dependent on his treasure. “[Ele] he had swallowed the pill, and it was as if it were composed of some subtle poison that acted directly on his brain. He was immediately overwhelmed by mines.”

The story doesn’t end well for Gould, but his fate used to seem limited to fiction. Histories of mining for minerals like silver, copper and iron seemed more like relics of the past than fundamental parts of the modern economy. In the age of services and technology—what Ed Conway calls “the ethereal world”—these were common raw materials that could be easily purchased in global markets.

But, as Conway, Sky News’ economics editor, points out in “Material World” [Mundo material], today we are all dominated by mines. New resources are needed to produce computers, build homes and offices, and manufacture internal combustion engines and electric cars. “Far from being independent of the physical world around us, we’ve never been more dependent on it.”

Battery manufacturers and the companies they supply are competing to secure access to lithium for batteries. China and the West are in a global dispute over control of the silicon chips in millions of devices. Fracking to obtain natural gas gave the United States energy independence, while Russia used its fossil fuels to blackmail European countries.

No one could accuse Conway of lacking global reach in his analysis of six New Economy Materials. He crosses the world to many mines and quarries, as well as high-tech factories that need what they produce, to arrive at a strange truth. We still live in a material world and depend on drills and explosives to feed it.

Its materials are sand (for concrete), salt (fertilizer), iron (and steel), copper (electric wires), petroleum and lithium. One can argue about the six – what about cobalt, nickel or platinum?– but they are enough to make the case. They also allowed him to unearth fascinating cases from history.

He records that one of the first naval engagements of World War I took place off the Pacific coast of Chile, as Germany and Great Britain fought over control of the nitrates needed for explosives. Later, despite Mao Tse-Tung’s obsession with steel production in the 1950s, China was unable to produce a high-quality steel ballpoint pen in 2015, as its Prime Minister Li Keqiang complained.

Sometimes on his journey, as Conway describes a deep mine or noisy furnace, I miss photos or even videos. After all, he is a television reporter. He gives a good description of Chuquicamata, a vast copper mine in Chile, but I found it easier to look online for his report on Sky News last year and watch the recording.

He lucidly shows the scale of the environmental problem and the irony of the new demand created by efforts to get off oil and invest in batteries. However, without copper and fiber optics, “there would be no data centers and no electricity.” In 2019, more materials were mined than in all years up to 1950.

The obvious conclusion is that the winners of the future will be the countries that own or control the most mineral assets: they will be able to manufacture more cars and computer chips at the lowest cost. China’s relentless focus on securing raw materials from Africa through its New Silk Road initiative has paid off in lithium.

But it’s not that simple. You also need to be able to make the right silicon wafers and etch them with the most sophisticated machines made by ASML in the Netherlands. The US is hurting China by blocking access to these tools, and chip maker TSMC (“a company that personifies the material world”) is based in Taiwan.

The story of “Nostromo”, with its corruption, violence and fierce power rivalry, still resonates. The difference is that competition now reaches the top of the supply chain, for metals and minerals. As long as there is no alternative, the environment will continue to be exploited and the land mined.

Translated by Luiz Roberto M. Gonçalves