The EV Revolution – the West “adopts” the Diktat

A key problem of the decision to electrify the powertrains of personal and road-freight vehicles in most industrialized countries is that it was purely politically, not market, driven outside of China (and I think Korea and perhaps even Japan). The “scientific model” making bureaucrats in support of the lowest common denominator social justice, re-election, and personal profit driven politicians, have crafted convenient, unverifiable, and thus non-scientific theories to support the wealth robbery from the 99%. Yet that fact, that the driver for this transformation, is synthetic, not natural, has been simply ignored by the neo-liberal efficient market promoters and operators. This political decision’s effect, on the demand for the currently classified “critical metals and materials”, has distorted the market for certain materials substantially. There are two aspects of this politically invented demand driver that affect and distort separate areas of our technological economy: First there is the effect on the overall production of natural resources, which is rarely, in any case, allowed to achieve equilibrium (a balance of demand and supply) and second there is the effect on the downstream demand for engineered materials  (the end user forms created by technologies that transform the minerals brought from the earth into the end-use products in which they are necessary either for the structure or more-importantly-today for their mode of operation (mechanical or electronic).

The true “free” market is not driving the demand for the transformation of the motor vehicle economy from internal combustion powertrains to a regime of electrified motor vehicles, but market mechanisms do drive the investment in the supply of critical materials both natural and engineered that are necessary to produce the electrified vehicles. This is the disconnect in the marketplace that is driving the price increases seen in the natural resources production markets but not, so far, in lockstep in the engineered materials markets. The wildly varying “predictions” ( i.e., guesses and wishful self -enriching fantasies) of the time it will take to transform the powertrain fuel systems in question have completely distorted the markets for some key technology metals and materials.

A prime example of this distortion is the belief that that sufficient cobalt can be produced from known and indicated/inferred sources to enable the total replacement of the global fleet of internal combustion powered vehicles by electrified power trains. This is a scientifically illiterate fantasy unsubstantiated by the data measured in the real world or its reasoned analysis. There is no other more appropriate description than fantasy, or, euphemistically, magical thinking, for the lack of knowledge of the geology and geography of natural resources and the technologies required for their production shown by the majority of financial analysts.

The answer to the question, “Is it possible to have a sufficient supply of cobalt for use in the highest practical charge density/storage of electricity lithium ion battery chemistry currently known to allow for long range internal combustion (of fossil fuels) powered motor vehicles in wide use today to be replaced by battery powered vehicles with similar ranges (on a single charge)?”, is no. There is not enough accessible cobalt in nature for this purpose. Yet the electrification of motor vehicles meme continues as if the efficient market hypothesis is a law obeyed by natural resources.

The amount of any natural resource that can be produced, not just annually, but overall, for use is dependent on how much of its available capital a society is willing to allocate for state-of-the-art finding, selectively extracting, refining, and fabricating that resource into a useful form. The resulting annual and ultimate total amounts of the natural resource can be said to be accessible for our use. But it cannot be overemphasized that an accessible resource is defined as a mineable resource. And a mineable resource is and can only be a known deposit that can be economically and efficiently developed into a mine.  A mine is an operation that produces a natural resource commercially. Thus academic formulations such as earth abundant, which measures the amount of a chemical element on average in the earth’s solid crust, are useless in calculating our society’s access to a resource. The USGS defines the total accessible amount of any natural resource as the remaining extractable material in existing mines. The USGS calls this the known “reserves” of a natural resource. Of course, the mine’s actual production rate is a function of not just the demand for the resource in question but of the economics of contemporary extraction, which themselves are functions of many unrelated factors such as technological efficiency, local- and geo-politics, and local, national, and global environmental issues at any moment in the mine’s history.

The least energy (and therefore also least capital) intensive aspect of natural resource production is exploration. This is euphemistically defined as “junior mining,” although it is not mining at all.  “Junior” mining is basically the exploration for mineral deposits that may be able to be developed into mines. Until such deposits are in production they are not virtual, but only potential, or junior mines.

Investors in junior mining shares are betting always that a deposit can be developed into a mine. However, they rarely look at the downstream economics of such a venture either because they don’t understand them, or they simply do not wish to know. Such “investors” are betting not on any production of the target metal or mineral but on “the other” being likely to pay more, in the short term, for the junior mining share than they themselves did.

Note also that there are just two natural sources of newly produced metal (ores) and nonmetallic minerals. There are primary deposits; those from which the desired metal or material is the primary product; and there are primary deposits of metals and minerals in which the desired metal or mineral is not the primary economic product but is a “companion’ metal or material in a (relatively) high enough concentration so that the companion material can be, and usually is, produced when the primary metal or material is refined.  The definition of a “primary deposit” can be fluid based on economics. For example some of the “manganese” nodule fields that are found in the Pacific and Indian Oceans can now be called “cobalt nodule fields” because the grade and resultant value of their contained cobalt now dominates the calculation of the value of the metals recoverable from their collection and processing. Many rare earth and lithium “deposits” have been created in the same way, economically.

Neoliberal economics has decided that resource production is synonymous with resource creation and is infinitely expandable, so that even if accessible resource distribution on Earth is geographically and therefore politically extremely uneven the problem can be resolved by simply allocating more capital.

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