September 28, 2009

Reading Old Magazines: The World’s Resources II- Minerals, Food, and Water

Recent reports of China’s corner on current production of rare earth minerals have caused quite a stir. In the recent proliferation of authors and institutes looking at U.S. mineral dependencies, it’s no longer just natural security geeks who have taken notice; the coverage has been widespread and mainstream.

With that in mind, today I’m looking at the second article in a three part series published in The New Yorker by Richard J. Barnet. The articles were excerpted from his book, The Lean Years, which examined the worldwide status of natural resources.  A few weeks back, my colleague Mike “Ninja” McCarthy did a great review of the first essay, “The World’s Resources I- The Lean Years” that looked at “non-human energy sources.” The second part in the series, published on March 31, 1980, “The World’s Resources II- Minerals, Food, and Water” (subscription required), focused on the three distinct areas mentioned in its title. Although all sections of his essay are important and are clearly interrelated, I have chosen to look mostly at his first section on minerals, which echoes his own analytical focus in the essay.

What struck me most when reading Barnet’s piece was how little our concerns had changed in almost thirty years. In fact, he opened his essay by tracing historic mineral dependencies and applying them to 1980s America; it is easy to do the same for 2009.  For example, one of them relays that

[t]he civilization of modern Europe was built on the shiploads of gold and silver bullion extracted from the mines of the new world; the slaves, diamonds, copper, and vegetable oils of Africa; and the cotton rubber, and spices of India and Malaysia—all taken at gunpoint.

His analysis of how dependent the United States was on foreign supplies is quite relevant today, but he went beyond where the public debate is currently by looking at the political problems between manufacturing countries and those that provide the raw materials. Now, we worry about the same country fulfilling both roles.

Barnet reviewed the uncertainty of mineral supplies by contrasting an argument by Nobel Prize winning economist Wassily Leontief that we would run out of lead by 2020 with arguments by John E. Tilton that mineral reserves are increasing, we can substitute for scarce minerals, and we can reuse minerals and manufacture products more efficiently. The uncertainty of mineral supplies can enable countries with reserves to “warn of scarcity or celebrate abundance as their marketing strategies and public relations dictate.”  The exclusive knowledge of reserves by producing countries often placed consuming nations at a distinct disadvantage in negotiations.  Private industry’s role in mineral extraction now means that companies are becoming equal holders of sensitive information about the extent of supplies.

Barnet focused on physical supplies at current consumption ratios. He did not examine shifts in mineral importance based on developing technologies, nor did he review the increased role that emerging economies would come to play. I find this odd because he does note that “certain elements embedded in the earth’s crust hold the key to the energy systems in the post-petroleum era” and that “the rise of reindustrialized postwar Europe, the Soviet Union, China, and the industrializing nations of the Third World is changing the world consumption patterns.” Yet his analysis then moved off this point and never again addressed what role a rising or re-strengthened country or a new element might play in the future. I can’t fault him for not predicting the future, but it would have been helpful to see these points fleshed out with a more robust analysis.

Although he did not pretend to predict the extent of world minerals supplies, Barnet noted that the United States was even then running out of domestic supplies of some critical minerals. He looked at possible solutions to this fact. He advocated importing more of our minerals from foreign sources. He pointed out that we had often been faced with supply problems of critical resources, and looked at the Paley Commission and the issues surrounding stockpiling critical reserves. 

Our current questions surrounding supplies of lithium and other rare earth minerals are echoed in two distinct facets that Barnet analyzed. First, even when the world possesses adequate outside supplies, production takes a long time to come online. Barnet explained that “it would take from five to ten years to adjust to a cutoff of chromium from South Africa.” Likewise, although Molycorp used to be one of the foremost suppliers of rare earth minerals it will take at least two years to regain production capacity. Furthermore, China and others will invest in new mining ventures to maintain control of the supplies of these critical resources.

On a completely different note, Barnet explored the ecological and societal disruptions that often accompany intensive resource extraction operations. With the vertical integration of many companies, raw materials are often undervalued, as was the case with Bauxite ore in the Caribbean in the 1970s and 1980s. The value-added results of raw materials are so much higher that countries have begun to restrict exports in order to encourage domestic manufacturing of these more expensive products.

The parallels between environmental degradation and violence that often plagued mineral extraction in the 1980s and today are quite depressing. We have seen that the only thing that has changed for the Democratic Republic of the Congo is the country’s name.  Our reliance on cheap minerals is conflicting with humanitarian concerns resulting in some companies halting purchases due to rising consumer pressure.

Reading Barnet’s article, I was personally surprised to see so many similarities and struggles that we are facing today being analyzed nearly 30 years ago. Many of the minerals that we argue about now and the countries that we extract resources from have long histories of trade relations over minerals with the United States. Although it’s disappointing that after all of this time we haven’t been able to come up with a better solution, it’s encouraging to see a tradition of scholarship on the topic stretching back through the decades.