We’ll accept that it could be just horrendously bad information and assumptions that have led to the tin foil hattery:
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.
Ukraine isn’t an important source - not even an interesting source - of any of these materials. We’d also point out that the cobalt and lithium prices are currently below production costs - not a sign of a shortage - and rare earths are rapidly approaching that price.
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).
Now do you see the geopolitical importance of Ukraine?
That’s just argle bargle. Yes, we know the source. It’s nonsense.
The $12 trillion is the value of those minerals extracted, prepared and sitting on the dockside ready to ship. The actual value of those minerals is $12 trillion minus the costs of extraction and preparation. Which is, for a very rough and ready guide, likely to be about $12 trillion. The net present value of those minerals, in the ground, where they are, is around and about zero. We’d not be categoric about it being entirely nothing, but it’s not, if we’re using $12 trillion as our other measure, much above that nothing.
Ukraine isn’t even a major home for reserves (nor even resources) for the minerals identified, iron ore, titanium, strontium and so on. Yes, there’s some there, as there is some of everything else. Because there’s some of all those things near everywhere. Because the world is only made up, all of it, of those 90 things.
As to the claim about sulphur, really, Maaaate? Get a grip, it’s a waste product from processing high sulphur (of which there are lots and lots) fossil fuels. The usual problem is getting rid of it, not producing it - which is why it often goes for $50 a tonne, the cost of transport.
Seriously, the idea that columns are written on these assumptions, let alone their being actual geopolitical incentives, is an absurdity.
Give us a call Matthew, we’ll explain it to you. Then you can return your tin foil to wrapping your sandwiches, the use it’s intended for.
Just nonsense.