Smart Economy

The real reason for the war in Afghanistan ? Control of rare strategic metals in Afghanistan

Ever wonder why Soviets sent troops and tanks into Afghanistan in the 1970’s into what many returning troops have called a country with God-forsaken mountains and passages. Why are American,  Canadian, British,  and other NATO  troops  stationed there today?

The Taliban, terrorists, drugs, poppies, proximity to nukes in Pakastan, protecting future regional oil pipelines, etc you say…of course...that’s all true now-the official line.

But Afghanistan has something far more precious that the rest of the world wants and  needs-four unexplored rare metals- lithium, caesium, tantalum and niobium.

Another important group in the periodic table  are the so called "rare earth" metals-part of a total class of 17 industrially valuable  "lanthanide" elements near the end of the periodic table, with less then pronounceable names.  Rare-earth  metals are the key ingredients in 21st Century high tech and green technology: Without them, we wouldn’t have smartphones, digital cameras, laptop screens, hybrid car batteries or precision weapons. In the 1930 we had alcohol prohibition. Imagine the teenager boycots around the world with a ban or restriction on strategic metals used in cell phones or cameras?

So brush up on your high school chemistry and the periodic table.

So what metals are on this strategic list?

In a 1981 article in Science, the Journal of the American Association of Science, the following metals were all identified as strategic, but not all as critical metals:

1. Cobalt
2. Chromium
3. Manganese
4. Platinum, not PGMs
5. Titanium

This year’s list, (selected by Ivan Herring at the National Academies for its Critical Minerals for Industrial Use study group)  the following were added:

1. Rhodium
2. Molybdenum
3. Platinum and other PGM's- Palladium etc
4. Lithium
5. Rare Earth Metals -  we use that phrase to denote the 17  "lanthanide" elements running from Lanthanum (La) through to  Ytterbium (Yb) and Lutetium (Lu)

While not high on the currrent priority list for countries fighting in Afganistan, these rare strategic  metals may jump up the list fairly quickly.  I can imagine back room deals being made with Afgan war lords  for mineral exploration rights and wealth sharing agreements even before predicted shortages come to pass.

Some researchers are predicting that we only have 5-10 years of supply left of the currently known and easy-to-get rare earth metals. That's a very short period of time from a strategic planning point of view, some new mines can take a decade to get off the ground-or should I say get "into the ground".( like the new  mine in northern Canada which isn't expected to go into production until 2012 but now might be fast-tracked.)

 

To make matters more uncertain, the USA and the rest of the world buys 90-95% of their  rare earth metals from China, who just threatened a potential export ban or severe restrictions....and all high technology manufacturers around the globe are in a panic.

 

Afganistan, the USA and Canada could become new sources if China bans exports of rare earth metal and rare metals by 2015.

 

According to the NYT:

"A copy of the draft rules,  said China would further reduce its combined annual export quotas for all rare-earth elements to 35,000 tons a year, from 53,000 tons last year and almost 66,000 tons as recently as 2005." The draft policy also clearly stated that exports of dysprosium and terbium were to be prohibited along with exports of three other rare-earth elements: thulium, lutetium and yttrium. By cutting exports, as well as putting a total tax of 42 percent on exports of dysprosium, terbium and some of the other rare-earth elements, Beijing officials have successfully required manufacturers of advanced magnets, motors and other technologies to move their factories to China, where the minerals are readily available."

 

While researching shortage opportunties for my new book on Opportunties, I ran across a  report on Minerals in Afghanistan posted on the British Geologic Survey  

 

It outlines the following:

"In Afghanistan rare metals (lithium, caesium, tantalum and niobium) occur in three main deposit types: pegmatites, mineralised springs and playa-lake sediments"

 

"Globally, rare metals are produced from deposits in these three settings, chiefly in Chile, Argentina, the USA and Turkey. ..[also China & in the future-Canada--Walter Derzko]

Lithium has many uses, for example in batteries, in the glass and ceramics industry, and in high performance alloys for aircraft. Most tantalum is used to produce capacitors that are used in laptop computers, mobile phones and digital cameras. Niobium is primarily used in specialist steels although it also shares some uses with tantalum since it has almost identical chemical properties.

Conclusions and potential

Afghanistan has considerable resources of rare metals in pegmatites, mineralised springs and lake-sediment salts. No systematic modern exploration has been carried out since the withdrawal of Soviet forces and many of the known localities warrant further investigation and exploration based on modern mineral deposit models and techniques."

 

 

Walter Derzko

Dr Mehmet Oz to promote Vitamin D for H1N1 influenza, swine flu on the Dr Oz show

America's favorite Doctor had to be Dr Kildare when I was growing up. Now its Dr Mehmet Oz..hands down.  Dr. Oz has served as the on-air health expert on "The Oprah Winfrey Show" since 2004

I've been complaining and perplexed that no public medical figure has yet warned the public to take vitamin D to prevent influenza.

When Oprah reviews a book on her book club it usually rockets to the best seller list.

This week Dr Oz will tell his viewers to take Vitamin D to mitigate flu. Will Dr Oz''s public on-air prescription save millions in  Canada and America from the swine flu pandemic? Will this medical meme spread like wild-fire, reaching a tipping point? I hope so.

From the TV press release: On Tuesday, September 15, "The Dr. Oz Show" focuses on the H1N1 ("swine flu") virus with "The Next Pandemic: 5 Things You Need to Prepare."  Statistics say that 150 million are at risk and up to 90,000 could die in America alone.  The show looks at who is the most susceptible, what the key symptoms are and how to stay safe with five can't-be-missed, life-saving tips.

See  http://www.doctoroz.com/  and my blog post from last week- Vitmain D and Influenza

Update -What's better then Vitamin D to fight against influenza?  See Anti-viral effects of Hydrated Fullerenes

Walter Derzko

UPDATE: what was said by Dr OZ on TV

Take Vitamin D

"Vitamin D is produced in the body during exposure to sunlight.  During the winter we tend to get less exposure so vitamin D supplements are recommended.  People who take vitamin D supplements have better luck avoiding the seasonal flu; there is no reason to think that it won't do the same for H1N1 virus.  Flu outbreaks tend to occur in places where solar radiation is low."

Http://www.doctoroz.com/videos/swine-flu-prevention

When will the recession end ? Part 30 The China Factor; the Chinese economy has no legs?

The countries of the western developed world have defacto nominated China, with it's population of over a billion people to lead the world out of this economic and financial crisis.  The Chinese consumer, who has long been known more for their propensity to save money for retirement and not as a "spend thrift consumer", is supposed to replace the American shopper, who is still currently mired in debt, and dealing with continued troubles in residential mortgage defaults and home foreclosures.

What if this assumption is false?

What will the possibility of a collapse of the Chinese economy at some point in the future do to confidence in still fragile financial markets, not to mention your source of supply for many products and manufacturing inputs we count on today?  Many now concede, that the collapse of a single firm-Lehman Brothers in the USA, precipitated the financial mess that the world is now in.

What if a country goes bankrupt? 

Many analysts have not publicly explored this issue but it's not too early for entrepreneurs to start thinking about the resulting consequences, both threats and opportunities that might ensue from this wild card scenario.

It can't happen, you say.  Preposterous !  China is too big to fail, economists will tell you.  They have too much money-they hold 2 trillion dollars in US Treasury bills.

That's in fact why it can happen.

Did you ever stop to wonder?  In the 1930's, why was the Great Depression so much more severe in America then in other country?  Economists who study this in detail with provide many reasons, but a key one is the reliance on exports for continued growth.  In the 1930's America was quickly growing to become the new kid on the block, the new "exporter" to the world, replacing the then-prevalent superpowers, the UK and other countries in Europe.  Today, China has taken over that role, and just like the US, eight decades ago, it has much more to loose then the rest of the world.  As consumers put the breaks on purchasing in a recession, China must close factories and eliminate jobs.

I've always been somewhat suspicious of official Chinese economic data.  For instance, official GDP figures keep rising but paradoxically, industrial electricity usage is flat or dropping.  Just as Russia has admitted to fudging economic data, in the days of the former Soviet Union, I often ask myself - what's to stop the Chinese Communist government from doing the same thing -putting out a false economic image of growth in front of the whole world.  Proof of this deception has been hard to come by until this article, that appeared in the journal Foreign Policy entitled: How China Cooks its Books.[7]

It's an open secret that China has doctored its economic and financial statistics since the time of Mao.  But could it all go south now?  warns the author.

The government estimates that roughly 20 million migrant factory workers have lost their jobs since the downturn started.  But, with "resignations" which are not included in official figures, the number is likely closer to 40 million or 50 million, according to Yiping Huang, the chief Asia economist for Citigroup.  Workers are often given a choice to be fired with lower benefits or resign with higher benefits, distorting official figures.

Every year, just like the old Soviet Union Five Year plan "China announces its annual objective of GDP growth rate.  In Chinese culture, the government has to reach the objective; otherwise, they will 'lose face,'" illustrates the author "For instance, the government announced that it wanted to ensure a GDP growth rate of 8 percent in 2009, and it has become the priority for government officials to meet that objective."

Local, municipal and provincial governmental officials are often the ones who actually fiddle with and cook the books and not the senior bureaucrats.  They have a vested self-interest to manipulate raw economic statistics.  When they reach or exceed the central government's economic goals, they get rewarded with better jobs or more money.  "The higher their GDP figures, the higher the chance will be for local officials to get promoted,"

"China similarly distorts everything from its GDP to retail sales figures to production activity.  This sort of number-padding isn't just unethical, it's also dangerous: The push to develop rosy economic data could actually lead China's economy over the cliff."  cautions the author.

The author provides further proof:

"The government insists that even though China's all-important export sector has been devastated -- contracting about 25 percent in the past year -- a massive uptick in domestic consumption has kept factories producing and growth churning along.  A close examination of retail sales and GDP growth, however, tells a different story.  China's domestic retail sales have risen about 15 percent year on year, but that does not really translate into Chinese consumers purchasing 15 percent more televisions and T-shirts.  The country tabulates sales when a factory ships units to a retailer, meaning China includes unused or warehoused inventory in its consumption data.  There is ample evidence that state-owned enterprises buy goods from one another, simply shifting products back and forth, and that those transactions count as retail sales in national statistics."

Last October, Vice Premier Li Keqiang said in a speech after inspecting China's Statistics Bureau, "China's foundation for statistics is still very weak, and the quality of statistics is to be further improved" -- a brutally harsh admission coming from a top state official.  [7]

When the world finally sees that the Chinese emperor has no clothes, or the Chinese economy has no legs, what do you think will happen?

Will there be opportunities, as well as threats, should this collapse happen?

Of course.  -a political wild card opportunity

Source: [7] Foreign Policy; How China Cooks Its Books

Excerpt from Opportunity;  45 Scenarios to Drive Your Business in Challenging Times by Walter Derzko, published by J. Wiley and Sons ISBN13: 978-0-470-73761-3 ISBN10: 0-470-73761-1 Consumer Release Date: December 29, 2009