Chronicle - Oct 22, 2023
Some Mining Facts that Make You Laugh
In the past few weeks, we have done deep dives into various metals. These are the cutest facts that we found.
No One Wants to Work as a Miner
A decade of ESG campaigns has now taken its toll. According to McKinsey, the younger generation is losing interest in working in the mining business. From 2016 to 2020, the number of mining engineering graduates in the United States declined by 39%. Mining engineering graduates fell by 63% in Australia, where mining accounts for roughly 20% of GDP growth. Labor demand for mining operations in Australia will require approximately 24000 new employees by 2026, while supply will be limited to only 16,000 workers at that time.
Respondents stated that the issue of mining labor scarcity is about value propositions. Generation Z is more likely to be driven by ethical and environmentally responsible careers. In the meantime, the mining industry is portrayed as unethical.
These surveys are from the U.S. and Australia, but they may only be the tip of the iceberg. In certain countries, the ESG movement has gone too far. For example, in the U.K., more and more campuses are prohibiting oil, gas, and mining corporations from hiring on campus.
No One Cares About Tin
The U.S. Department of Energy and IEA doesn’t include tin as critical minerals, that is minerals important for modern technology. But according to Massachusetts Institute of Technology, tin is the minerals most impacted by new technology. Everything that has electricity run over it needs tin.
We wonder if tin is forgotten because of its small size—roughly $9 billion in value for the whole world.
Tin supply is very concentrated in China (31%), Indonesia (21%), and Myanmar (9%). The rest are scattered, but mostly in hot countries such as Nigeria, Rwanda, Congo, Burundi, Peru, Bolivia, and Russia.
Tin mining is dirty and messy. And expensive. The marginal cost of production is $30,000 (current price is $25,000).
With this backdrop, big companies like BHP or Vale won’t go for tin. Too small and not worth the headache. For end-products manufacturers, a double of tin price won’t make a scratch. A smartphone only has 1 gram of tin. Double oil price will make an unrest. Double tin price nobody cares.
Last month, Indonesia, the second-largest producer of tin, had just assigned tin a critical mineral status. After endlessly battling illegal miners for years, this status may help the nation unify all the miners (both legal and illegal) and control the tin supply.
No New Ships
Another fun fact comes from ship rentals. Not the usual ship, but the Offshore Support Vessel (OSV) business. This business rents ships to oil companies to supply their oil rig platforms (Platform Service Vessel, PSV) or handle the anchoring of oil rigs (Anchor Handling Tug Supply, AHTS).
Many OSV ships have been retired due to a decade of low oil prices. Some have meaningful afterlives, like being converted into luxurious super yachts. Some were fortunate enough to be humanity's best hope for conquering space: they transformed into Marine Spaceport.
These conversions are still taking place. The above-mentioned MS Voyager conversion was scheduled to begin in April of this year.
A PSV or AHTS takes around two years to build (the New Build, NB) and costs between $50 million (PSV) and $80 million (AHTS). Because building a new ship is exceedingly expensive, nearly no new boats have been built since 2016, despite the low oil price scenario. Even with the current high oil price, hardly any new construction is planned.
However, due to the persistently high oil price, offshore oil activity has increased since 2021. Unfortunately, there are no OSVs left...
What is happening now is a matter of supply and demand; or a matter of demand, because there’s no supply. The rental price, or Day-rates, of OSV skyrocket.
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