Who's Been Feeding Matthew Syed This Bullshit?

Lordy be this is idiot nonsense

Matthew Syed has clearly been grievously misled. For we know he’s not stupid, therefore he cannot have come up with this himself. It must be true that he’s been fed nonsense for him to reach the conclusion he did.

For he’s telling us that Putin’s real aim in taking eastern Ukraine is the minerals wealth underlying the place. $12 trillion and change it is! Which is abject argle bargle. Complete nonsense. Nope, really, this is as true as the - admittedly much more believable - story that TayTay is going to install herself in the loft as my gimp once the Eras tour is over.

Sigh:

Tucker Carlson seemed clueless about our energy crisis. Putin certainly isn’t

If you know Ukraine sits on not just coal but minerals needed for renewables, the war takes on a grim logic

Yep. Vova invaded to get the minerals. See? See! All makes sense now, right?

It’s flatulence born of not just grossly misunderstanding the subject but not even being aware of the terms we use to describe it.

But what was also conspicuous about the interview was Carlson’s stunning lack of insight into what’s happening in Ukraine and why Russia invaded. Yes, it’s partly to do with empire-building, but why, did he not wonder, is Ukraine so central to this objective? Why risk war for this patch of land? The explanation, I’d suggest, can be expressed in a single word: energy. Energy, after all, is central to all human activity; indeed to all life. A cheetah must gain more energy from the meat of a kill than is expended in the chase or it will eventually die. The same is true for societies. Rome declined as it ran out of wood via deforestation; the Maya civilisation was finished when it eroded its soil with agriculture. If you don’t have enough energy to serve the “metabolic” needs of a complex society, you vanish.

Eastern Ukraine has plenty of coal, true, but then so do many other places around the world. It’s not strategically important that is.

But, aha! the world is changing, right?

And here we glimpse the geopolitical significance of Ukraine. In the coming decades two things will prove crucial. First, we’ll need fossil fuels to keep the lights on in the short term; second, in the medium term we’ll need access to a wide variety of materials to build a renewable energy infrastructure (we can argue about the speed of the energy transition, but the transition itself is non-negotiable). This means that fossil fuel prices will continue to rise, providing a final windfall to suppliers (look at the money flowing to Saudi Arabia). But it also means that the price of some materials is set to spiral. These include lithium, cobalt, nickel, copper, manganese and “rare earths” like neodymium, used in electric vehicles and the magnets of wind turbines.

Oooooh - strategic minerals, that’s Vlad’s dastardly plan!

It’s worth pondering this. Renewable energy may be clean at the point of delivery, but it is also materially intensive in production. An electric car can use six times more minerals than a combustion-engine equivalent, with up to 250,000kg of raw materials just for the battery. Now widen the lens to consider the staggering requirements to build wind turbines, solar panels and more at scale. You can perhaps now see why the International Energy Agency estimates that demand for lithium will rise by 2,700 to 4,300 per cent and that of cobalt and nickel by 2,500 per cent. These are the new gold.

250,000kg raw materials for a battery? That’s a new one even to me. I mean it’s bullshit but it’s at least new bullshit. 250 tonnes for a battery?

What is being done here is measuring the amount of dirt that has to be moved around to then gain the 1 tonne of useful stuff that goes into the battery. That’s not a useful definition of “raw materials”. We might indeed dig a hole, take out 250 tonnes, put 245 back in the hole and take away 5, from which we then extract the 1 we really want to use, leaving 4 tonnes in the slag pile. But that’s still not 250 tonnes of “raw materials” used to make a battery. That’s 250 tonnes of dirt moved around a bit to make a battery.

We might also note something else. If lithium’s the new gold then why has the price declined 90% over the past 20 months? Why are mines closing down - or being put on care and maintenance at least, as at Core Lithium - as they simply cannot make a profit any more? So too with cobalt, Jervois just announced that they’re not going to bother opening their cobalt mine? On the grounds that the current cobalt price is below production costs? We could even return to lithium. A reasonable estimate is that the lithosphere (that’s the crust of the planet, not something specifically to do with the lith in lithium) contains 2,850,000 billion tonnes of Li. According to Tesla we need 20 million tonnes for the global car fleet. We’re not about to run short of it.

Let’s circle back to Ukraine. Did you know that it has been described by Jonathan Maxwell in his superb book The Edge as a “mineral superpower”? Did you know it has the second-largest gas reserves in Europe after Norway? Or that the Donbas boasts one of the largest coal deposits in the world? And that Ukraine has stocks of 117 of the 120 most widely used metals and minerals, including manganese, sulphur, graphite, titanium and nickel? Did you know that one think tank has estimated the mineral wealth now under Russian control in Ukraine at $12.4 trillion, which is nearly four times the UK’s GDP (albeit the former is a stock, the latter a flow).

Dear God, that’s insane.

True, it’s popular insanity:

After nearly six months of fighting, Moscow’s sloppy war has yielded at least one big reward: expanded control over some of the most mineral-rich lands in Europe. Ukraine harbors some of the world’s largest reserves of titanium and iron ore, fields of untapped lithium and massive deposits of coal. Collectively, they are worth tens of trillions of dollars.

That’s not even true.

Reserves is a particularly freighted word. Mineral reserves actually means something - and it’s not “there’s some there”. We also have access to data about what reserves we have where. For titanium Ukraine has 8,400,000 tonnes of global reserves of 1,550,000,000 tonnes. It’s simply not even a major player, let alone a vital source.

The ability to turn titanium oxide into titanium sponge, now, yes, Ukraine is an important world source there. But that’s a factory, not a mineral deposit.

Iron ore, sure, there’s a nice little operation producing iron ore in the country quoted on the London Stock Exchange, Ferrexpo. Quite a bit of export in fact. But global production? Ukraine’s maybe 3% of global production and 4% of global reserves. And note what a reserve is - essentially, the stuff we’ve prepped up to be used in the coming few decades. Resources is a further step out, what we’re pretty sure we can use at current technology etc: “World resources are estimated to be greater than 800 billion tons of crude ore containing more than 230 billion tons of iron.” Ukraine’s iron ore is nice to have but it’s really not a geopolitical goal.

Ukraine is widely known as an agricultural powerhouse. But as a raw-material mother lode, it’s home to 117 of the 120 most widely used minerals and metals, and a major source of fossil fuels. Official websites no longer show geolocations of these deposits; the government, citing national security, took them down in early spring.

Yet SecDev’s analysis indicates that at least $12.4 trillion worth of Ukraine’s energy deposits, metals and minerals are now under Russian control. That figure accounts for nearly half the dollar value of the 2,209 deposits reviewed by the company.

Do not, ever, hire SecDev to do anything. They’ve not a clue what the fuck they’re talking about.

Their estimate here is to take those thought to exist resources (ie, deposits of summat, maybe) and then times that by the value of prepared metals, above ground, nicely wrapped and ready for shipping. Without doing the obvious thing - asking how much it’s going to cost to dig them up, process them and wrap them nicely for shipping. Which will be substantial. In fact, for near all mineral deposits that cost is higher than the value of having it done. That’s the very reason we refer to mineral reserves - those are the few deposits where we’ve proven the opposite, that the value of production is greater than the costs of production.

As the old story goes, the North Sea contains $5 trillion of gold. But it would cost $20 trillion to process it out. Not that I’d want to have to stand by those numbers but yes, seawater does contain gold and yes, there’s a reason we don’t mine seawater for gold.

SecDev are being dribbling idiots here. And Mr. Syed is being - well, let’s put it at far, far too gullible shall we? - silly in believing them.

We also need to go further here. For all the minerals mentioned (“Ukraine has stocks of 117 of the 120 most widely used metals and minerals, including manganese, sulphur, graphite, titanium and nickel?”) Ukraine’s reserves, resources, production levels and so on are simply not important at a global level. As a special addition I’m really very, very, fond of that claim about sulphur. The usual source is as a waste product from the use of high sulphur fossil fuels. The big problem is “What in buggery do we do with it?” which is why it costs $50 a tonne, about the transport price.

Matt again:

Perhaps the key imperative is to wake up. Carlson is a pawn being played by forces he doesn’t understand (while raking in advertising revenue), but the West is making a succession of unforced errors. Hell, the US sold its last cobalt mine in the Democratic Republic of Congo to the Chinese in 2016 without seeming to grasp the significance.

Wake up Sheeple!

Those with a little knowledge of the mining industry would worry a little about the point being made there. For no one in the industry has ever known of a cobalt mine in DRC owned by America. The country doesn’t go around owning mines. Might also go around muttering that the cobalt price is below production costs so damn good thing to sell. Which is why that Jervois mine in Idaho isn’t going ahead.

But now we’ve a little problem here. Matthew Syed is a ping pong player writing for a major Sunday newspaper. Tim Worstall is a small time freelance journo with a couple of decades experience of the weird metals trade. Who we gonna believe, hunh?

As a tie break. Back a decade and more there were estimates that Afghanistan’s minerals were worth a $trillion. Then much more recently this came up again, all that value had gone to the Taliban:

The swift fall of Afghanistan to Taliban fighters has triggered a humanitarian crisis, with thousands trying to flee the country. It’s also brought renewed focus on Afghanistan’s vast untapped mineral wealth, resources that could transform its economic prospects if ever developed.

Afghanistan is one of the poorest nations in the world. But in 2010, US military officials and geologists revealed that the country, which lies at the crossroads of Central and South Asia, was sitting on mineral deposits worth nearly $1 trillion.

Supplies of minerals such as iron, copper and gold are scattered across provinces. There are also rare earth minerals and, perhaps most importantly, what could be one of the world’s biggest deposits of lithium — an essential but scarce component in rechargeable batteries and other technologies vital to tackling the climate crisis.

That is exactly the same claim. Thems hills is packed with gold I tell ‘ee! It’s also the same toss as these claims about Ukraine.

And for our tie break here is the Pentagon itself adjudicating on the point:

More recently, and more colloquially, the British economic writer Tim Worstall commented on the U.S. government’s view of Afghanistan’s large deposits of iron, copper, and lithium: “The problem with all of this is that those minerals are worth nothing. Just bupkis.” The reason for his assertion: “The value of a mineral deposit is not the value of the metal once it has been extracted. It’s the value of the metal extracted minus the costs of doing the extraction. And as a good-enough rough guess the costs of extracting those minerals in Afghanistan will be higher than the value of the metals once extracted. That is, the deposits have no economic value”—“As we can tell,” he adds, “from the fact that no one is lining up to pay for them.”

Worth reading that report from page 17 on.

The Pentagon quotes me to rebuff insane claims made by the Washington Post and New York Times about the values of minerals in Afghanistan.

Hmm, dunno, maybe we should go with the ping pong player’s views?