The Global Environment and the World’s Energy Needs
The earth’s crust is rich with minerals and transforming these ores into - metal tools, machines and equipment of all sorts, motor vehicles, solar cells, wind turbines, computers, the internet, communications satellites and the rockets that put them in orbit, medical equipment and innumerable other products - allow us to live a quality of life much different from that of our parents and grandparents. Stop and think about it. Even the most basic things we take for granted, from the roads and highways we drive on to flat screen television panels, are products of mining. Society not only relies on, but demands it receives the manufactured products it wants and has become accustomed.
Besides allowing us our standard of living and products, raw mineral products are the necessary ingredients of the world’s global economy. There is a saying that “raw materials are the basis of every modern industrial economy.” It is from raw, natural resources that nations treat, manufacture and produce value-added products. If a country does not have or cannot acquire raw minerals or initially beneficiated products like concentrates through international trade, it cannot produce and export manufactured goods or employ its citizens in good, long-term high-paying jobs. The choice for a country is to develop an industrialized economy or remain an agrarian one with all the age-old shortcomings of being at the bottom of the global economic ladder. It should be safe to assume that most of the world’s farmers would like their children and future generations to obtain an education or skills to enable them to move up that ladder.
Competition between developed and developing countries for the world’s finite production of metals will become more and more acute.
And recently there has been growing concern over man’s emissions of greenhouse gases and a renewed interest and acceptance of electricity produced from clean nuclear power. Not only is nuclear power clean and does not emit greenhouse gasses, but the U.S. and France have designed new and improved safe nuclear reactors. Much of the world, especially the Asian countries of China, Japan, Korea, Taiwan and India have chosen to emphasize the development of nuclear power rather than rely on problematic fossil fuels.
So it is clear that we benefit immensely in a material way from the metals we remove from the ground. But there is more to this story than just the transformation of metals to products. Most people are not aware of origin or the obvious existence of the metals in their vehicles, metal beams in their bridges, overpasses, household appliances, wiring in their houses and work place. While in ancient times the ability to work with metals and manufactured things was extremely valued, people in modern times have become used to the benefits of refined, machined metals and manufactured products and take them for granted. To have these products people must be employed, and this is an important point. Mines are not usually in urban, developed areas. They are usually not close to large metropolitan areas. They are often “off the beaten track,” and in the U.S. are primarily in the Western states. But the people who work at mines, refine and produce the metals used in the manufacture of the products have one thing in common. They all enjoy high-paying sustainable jobs, jobs that allow them to obtain auto and home loans, purchase products and put money that multiplies its beneficial effect as it circulates through the economy. Indeed, the huge, U.S. economy was built on its domestic metal resources. From those metals, we built our railroads, ships, airplanes, engines of all sorts, and motor vehicles. And from those industries, we created millions of high-paying jobs and trained and hired workers to fill those jobs. And those workers bought things, built our strong economy and supported its continued growth. Currently, it is jobs, spending and jumpstarting the nation’s economy that President Obama is trying to create with his economic development program.
As far as the world is concerned, economic growth resulted in the increased consumption of raw materials throughout the twentieth century. Between 1960 and 1995, world mineral use expanded by 2.5 times and metals use more than doubled (2.1 times). This growth outpaced the increase of the world’s population and occurred even though the world’s economy shifted to become more service oriented, and non-materials intensive manufacturing industries such as telecommunication and finance developed. Interestingly, metals use doubled even though metals became less important because of the increased use of plastics and other manufactured materials in the manufacturing industries.
To further illustrate how important the main industrialized countries are when it comes to metals use, the United States, Canada, Australia, Japan and Western Europe represent 15% of the world’s population, but consumed 61% of the world’s aluminum, 60% of the lead, 59% of the copper and 49% of the steel. Use is high on a per capita basis as well. For example, the average American uses 22 kilograms (48.4 lbs.) of aluminum per annum, while the average Indian and African use 2 kilograms (4.4 lbs.) and 1 kilogram (2.2 lbs.), respectively. And the numbers are similar for China, but China is becoming a major consumer of metals to feed the development of its transportation sector, not only for roads and railroads, but for vehicles, ships and airplanes to be sold both domestically and on the world market. It is well known, and becoming more widely understood, that China is aggressively seeking to obtain long-term supplies of the metals, oil, gas and other natural resources that will be required for it to continue its march to become a fully developed country. On a broader scale, the countries known as the “BRIC” countries, Brazil, Russia, India and China, are the countries that will be increasing their percentage consumption of the world’s metals over the coming decades. As their economies develop, they will significantly influence the future price of metals.
So where is this global increase in the consumption of metals taking us? No one has a long-term crystal ball, but in the shorter term it is obvious.
Metals prices will increase and manufactured products containing them will become more expensive. Not only will metals resources be sought out in more and more remote locations, i.e., the Arctic, Antarctica, seabed mining, central Asia and of course continued expansion into the far recesses of South America and Africa, but ways will need to be developed to ensure these metals operations will be reliable from an environmental perspective.
Besides allowing these countries to grow their economies and better the livelihood of their people, a fallout of this sprint to acquire and develop metals resources has the potential for increased greenhouse gas emissions and other environmental consequences.
Mining metals requires the use of heavy equipment, equipment that not only run on diesel, but they cannot be manufactured without using a lot of energy. And what about environmental consequences that could result from mining metals in far off places? On one hand, developing nations recognize the importance of conducting mining operations and promoting economic development in a clean, environmentally responsible manner. However, it is not always easy for developing countries to closely monitor mining and other development activities, or to enforce its environmental laws and regulations. But since most major mining operations involve at least one international mining company who knows how to conduct operations that are sound from an environmental perspective, the operation may well have obtained financing that requires compliance with the Equator Principals.
So the U.S. and all developing countries in the world must face the challenges resulting from the fact that populations and economies continue to grow, which will result in the increased consumption of metals, including Uranium for nuclear power reactors.
The challenge for a country and the world as a whole is to obtain enough metals necessary to sustain its economic growth, all the while mining the needed metals in a safe, sustainable and environmentally conscientious manner.
This is of course a lot easier said than done, but the mining industry and the world’s large financial institutions who will provide much of the funds necessary for this growth, are committed to this goal.
But because the world’s metals resources are in a sense finite, recycling will continue to become more efficient and more significant in the metals sector. In this regard, recycling is a truly substantial and vital sector of the steel industry. Having a stable metals mining industry is a fundamental requirement if the world is to regain and then maintain a strong economy. And no economy can be strong without a good source of energy to power its industries making nuclear power part of a vigorous global economic development effort. The world must be realistic and reasonable if it is to achieve this goal. People will come to realize they cannot escape their need to consume metals. So their ultimate challenge is to figure out a balance between the obvious needs of any vibrant economy for metals and energy and the goal of living in a healthy pollution-free environment.
Mark T. Nesbitt is at Nesbitt & Associates LLC, Attorneys and Counselors at Law. You can contact Mr. Nesbitt at 1580 Lincoln Street, Suite 700, Denver, Colorado 80203-1557. Phone: (303) 302-3097 Fax: (303) 302-3088 Email: [email protected].