Peak extraction of minerals spells disaster

Environmental damage and increased global warming are the direct result of a poisonous combination of commodity speculation, reckless overproduction and failing to recycle.

Parliament’s Science and Technology Committee highlight this deadly brew in the report of an enquiry into strategically important metals.

The price of metals and minerals is soaring, as hedge fund speculators move in. They are buying up vast quantities of copper on the London Metals Exchange – but also dealing directly in more obscure metals such as rare earths, lithium and tungsten.

The committee heard from the Royal Society of Chemistry that vast quantities of metals have been removed from the ground over the past 50 years (the period of corporate-driven globalisation more or less). There are still reserves but these are harder to get at.

“You just have to dig deeper,” the committee was told. But digging deeper uses more energy – contributing to global warming – and causes greater environmental degradation.

The Royal Institute of International Affairs confirmed that while there may be few short-term shortages, there is a growing pattern of metals being drawn into trade wars and political disputes. And in the long term, unsustainable consumption patterns will result in actual scarcities.

In other words, as with oil, there is a growing trend to higher metal prices, to resource wars and disputes, and to greater environmental degradation and global warming, up to and beyond the point of peak extraction.

The environmental impacts may be quite close to home. A Cornish tin mine is to reopen soon, as well as a tungsten mine on the edge of Dartmoor. They are extracting gold in Wales and the Grampian mountains.

The committee recognised that there is far greater scope for recycling and recommended “cradle to grave” models of production. However, since production of commodities largely takes place in other countries, the UK has no power to impose this approach.

And indeed the UK is guilty of exporting its recycling problems. Where cheap, but environmentally damaging processes are available, waste is often exported to other countries.

For example, insulated copper cable can be granulated and the plastic coating removed, so both materials can be reused. But the easy solution is just to burn off the plastic coating. “This creates environmental issues which, within the UK, would be expensive to overcome,” the committee heard.

Therefore the problem is being exported to places like India, China, Africa and the Philippines where the initial reprocessing is “crude and environmentally damaging”.

UK firms are also guilty of illegally exporting electrical and electronic equipment, labelled as second hand and for re-use, when in reality it is going to be dismantled by hand, with huge health risks for workers handling dangerous substances with no protection.

The committee also took the opportunity to refer practices on the London Metal Exchange to the Office of Fair Trading. They found that big trading firms were warehousing vast quantities of metals through wholly-owned subsidiaries, thereby benefiting twice from higher prices – as traders and as suppliers.

Sadly, the idea of a green economic miracle is impossible in a profit-driven capitalist economy. The majority of the money printed by the US and British governments in an attempt to fund a recovery has not been lent for green initiatives but drawn into commodity speculation. Governments have been entirely unable and unwilling to prevent this.

The contradiction is that the resulting rising prices will limit consumption. At this point more firms descend into bankruptcy and more workers are thrown on the dole. Whatever happens, it is ordinary working people – and the eco-system – that will pay. We need not only an economic, but first an enabling political revolution, to halt this crisis.

Penny Cole

Environment editor

Plundering the planet

The battle for the planet’s dwindling resources has taken a further trade war twist with China placing limits on the export of the 17 chemical elements collectively known as “rare earths”.

These elements found near the bottom of the periodic table are absolutely crucial for manufacture of a wide range of modern technology products including superconductors, magnets used in wind turbines, catalysts for electric cars, electronic polishing for optical products, laser technology, fibre optics, cathode ray tubs, microwaves, and – less usefully perhaps – i-Phones and flat-screen TVs.

China gained a virtual monopoly of the “rare earth” market during the 1990s, stepping up production and driving down world prices, putting other mining operations out of business. Now it controls as much as 97% of the market.

Rare earths are not found in high concentrations – you have to move a lot of earth to get at them. The extraction process produces radioactive slurry and toxic acids are used in refining. The Chinese government’s operation in inner Mongolia, has caused major damage to the environment. The photograph (thanks to Keith Bradsher, Chinh’s News) shows a slurry pit outside the city of Bautou, centre of the mining industry, where the air is acrid and the people suffer respiratory illnesses.

If the Chinese continue to limit exports, there will be a rush to restart elsewhere. In fact the Mountain Pass mine in California – closed since 2002 – will re-open next year with new owners, and there are plans for a big operation in Canada. Shares in rare metal mining companies have soared in recent months.

Whilst the market in rare earths is worth $2bn a year, mining is not highly profitable since it is at the refining stage that most of the value is added. But that could all change as demand outstrips supply.

Some of the rare earth elements are becoming harder and harder to come by even in China – and the pressure to mine all known deposits is growing, in the same way that the rush is on to extract all known deposits of uranium to fuel a new generation of nuclear power plants.

The reality is that the world is running out of some of the most crucial chemical elements.

For example there is a growing shortage of Helium 3, an inert gas which is a by-product of radioactive decay. It is used in cryogenics, medical imaging research, and radiation detection devices. Stocks are dwindling whilst demand soars as a result of its use in security scanners. The “war on terror” is actually threatening cancer research rather than terrorists. There is about 10 years supply left of the elements indium and hafnium, thanks to the manufacture of flat-screen TVs. Both are essential for solar cells and computer chips.

A recent United Nations report called for urgent expansion of recycling of speciality metals. Thomas Graedel, the leader of the working group which is assessing world supply, warns:

“Scientists should anticipate the possibility that they may not have the whole periodic table to work with in future. Except for the major base metals and a couple of the most valuable metals, rates of recycling for almost all metals in the periodic table are low. That means that they will be used one time and discarded, and that's a non-sustainable approach.”

But sustainability is the last thing on the mining corporations’ minds. Extracting metals in useable form from manufactured products is expensive –particularly so in terms of the energy used to do it. Extraction of the raw material in low wage economies is cheap and controls are few. Apparently Afghanistan has significant deposits of rare earths – any bets on the future of those?

The only long-term and sustainable solution is to shift from profit-driven manufacture to needs-driven production, where valuable elements are husbanded for use in essential products. At that point, built-in obsolescence – an obscenity in the current crisis – becomes something we look back on with horror as we look back on the mines and mills of the industrial revolution.

Penny Cole
Environment editor