The American economist, Brad Delong, has occasionally run numbers courses for journalists. Also, recommended that everyone should. On the basis that everyone writing about the world should have a good - if rough - idea of what the right numbers are. This works as a good bullshit filter. If you know that the US economy is $25 trillion (no, no more accuracy than that is required) then someone chuntering about a billion here or there is chuntering, not talking about something of importance to the national economy. Sure, a $billion is important as an individual fortune, but not as a macroeconomic point.
So too with population at 350 million and that sort of thing. Over here, population is 65 million, the economy is £2 trillion, the national debt is £2 trillion , the tax burden is 40% of everything and so on.
The point really isn’t about teaching everyone actual economics, it’s about giving a sense of size of numbers in the same sense that someone working as a journalist might know what a hanging particle, or a run on sentence is (me, no, no idea).
Delong also notes that such courses tend not to happen which is why we get things like this:
Inside Javier Milei’s big bet on ‘new oil’
Argentine president hopes vast copper reserves can revive embattled economy
And, well, perhaps not really. Argentine GDP is around $600 billion (no more accuracy than that required) and copper, well, copper’s not going to be a thing that really jolts a $600 billion economy. Global - global - copper production is 20 million tonnes (again with the accuracy, right first digit, right number of digits, that’s all we require here) at $7,000 a tonne (one of those from memory numbers, not the actual market price), it’s a $150 billion a year business. Gaining some fraction of that would be very nice, certainly. We could imagine a 2 or 3% boost to the Argentine economy, sure, if there’s a really big boom. You know, they gain 10% of the global copper production, that would be 2 or 3% to the Argentine economy.
But that’s not a bet the economy sort of number. Maybe fracking the Vaca Muerte (yes, the geology really is called “The Dead Cow”) would be bigger. The lithium salt flats are going to help too. But no, the metals are not going to rescue anything, they’ll be nice additions - at best - to actual reform of the Argentine economy.
OK, but this is me being a pedant (or pendant) surely? And, to an extent, yes. It’s deeper in the piece that we get to real proof of innumeracy:
Copper futures recently surged as high as $5.20 per pound in May, amid excitement about BHP’s later-aborted takeover of Anglo-American. However, prices have since fallen back to around $4.5 per pound, or just below $10,000 per tonne.
OK, that’s true.
The numbers already stack up for McEwen. The Canadian says his project will be able to extract copper for $1.64 per pound, all in. At current market prices, that suggests a healthy profit.
Los Azules is expected to yield 400,000 pounds of copper annually and have a lifespan of 27 years,
And that’s obviously not. No, back up a bit, copper’s $5 a pound. This mine will produce 400,000 pounds a year. $2 million a year. This is not going to move the needle on a $600 billion economy now, is it?
400,000 tonnes a year, now that’s a proper copper mine. $4 billion a year. As I say, that’ll be nice, sure. Argentina - the state, government - itself might get a few hundred million of that as royalties. Which is, again, a nice to have but not exactly a deal breaker in a $600 billion economy.
BTW, as I write, this piece has been up for 5 days already. So no one has noted this and thought to call it in. Will be fun if it’s still there when this is published in about 5 days time.
McEwan is hopeful about the prospects of Los Azules, which will entail $2.5bn of investment alone. Construction is slated to begin in 2026 – about half way into Milei’s first term – with production following by late 2029 if all goes to plan. Barring a significant about-turn, the global net zero sprint will by then be well under way – and hungry for copper.
For Milei, investments like this might help to deliver the economic boom Argentina so desperately needs.
$500 million a year? Much of which will be imports of machinery. As I’ve said, nice to have but not exactly a deal breaker in a $600 billion economy - it’s 0.1%.
Journalists really do tend to not grasp numbers. Delong is right.