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Posts Tagged ‘Natural resources’

The Real China Threat

Posted by Ram Kumar Shrestha on December 5, 2011

China continues to snatch up precious natural resources while they’re still available. Will the U.S. step up before it’s too late?

 By STEPHEN LEEB 

Bundles of copper rods

Ordinary Americans and policymakers in Washington have plenty to worry about these days: unemployment, housing, deficits and debt, not to mention terrorism, wars and myriad foreign crises.

But there’s another looming issue that actually trumps those. It’s China’s push — while the U.S. sits on the sidelines — to amass the lion’s share of natural resources such as copper, silver and rare-earth elements, which are essential to renewable energies and are becoming scarcer and more expensive.

(VIDEO: America Wants in on China’s Clean-Energy Business)

Prices of these and many other key industrial materials have been in steady uptrends for a decade as supplies have tightened. They’ve remained high even despite the dreadful U.S. economy. Emerging economies, particularly China — which has become a voracious consumer of industrial materials — are behind the stunning growth in demand. One statistic: in 2011, Brent oil, the chief marker for oil, has been above $100 a barrel a record number of days; its average price for the year is likely to be an all-time high. And with China’s growth continuing, there’s no end in sight.

High and rising resource prices largely account for the decline in the American standard of living over the past decade. China, because it’s growing so rapidly, can simply absorb high and rising commodity prices as part of the cost of doing business. But the mature U.S. economy can’t. Those same price hikes impose an implicit tax on every American, hitting us in the wallet at all turns and choking the economy — while simultaneously constituting an inflationary force.

The only genuine path to sustainable economic growth in the U.S. is to make a full-scale transition to an economy based on renewable energies. This would be a huge effort requiring trillions of dollars. But we need to launch it now — we can’t put it off until later. Building a sufficiently large renewable-energy infrastructure requires huge inputs of natural resources, and they won’t always be there for the taking. Read the rest of this entry »

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Natural Resources Being Exhausting As World Goes Into ‘Ecological Debt’

Posted by Ram Kumar Shrestha on September 27, 2011


We know everything but specially the responsibl­e persons are pretending that they know nothing as they just talk but doing nothing to be done. This is the root of the problem.
Read the Article at HuffingtonPost

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China’s Mining Pit: Is Australia’s Economy Dangerously Dependent on China?

Posted by Ram Kumar Shrestha on June 26, 2011

By MICHAEL SCHUMAN / PORT HEDLAND

If you’re ever in the Australian outpost of Port Hedland, make sure you’ve got a high limit on your credit card. The dusty

Fast boat to China: Port Hedland's capacity has tripled in eight years Adam Ferguson / VII Network for TIME Print

downtown of this isolated hamlet of 20,000 may be a few deserted streets lined with bank branches, the local cultural scene confined to drinking halls and pool tables. But when the bills come, you’d think you were in Beverly Hills. A brunch of two scrambled eggs, toast, hash browns and a Coca-Cola at a greasy diner comes to more than $20. A local hotel with rooms that are little more than sunbaked concrete cubes charges $300 a night. Taxi fares are outrageous enough to embarrass a Tokyo or London cabbie. The front window of a real estate agent’s office is plastered with flyers advertising one-story, three-bedroom homes — the kind found just about anywhere in Australia — on sale for more than $1 million. Why would anyone pay such crazy prices to stay here? “China needs its iron ore,” says Tony Swiericzuk, a local resident and a general manager at Australian mining outfit Fortescue Metals.

That explains everything. Favorably located on the northwestern coast of Australia, Port Hedland is the point through which the iron ore, copper and other resources dug up from the wastelands of the interior get shipped abroad — more and more to the voracious Chinese economy. Last year 70% of the exports from Port Hedland were bound for China, up from 45% in 2005. That surge has turned Port Hedland into an indispensable part of Australia’s economy and a hot destination for mining executives. The port can barely keep pace with Chinese demand. Its capacity has tripled over the past eight years, and Lindsay Copeman, acting chief executive of the Port Hedland Port Authority, expects it to double again by 2016. “It’s a very fast-evolving process,” Copeman says. “Instead of being a gentle growth curve, it’s an exponential curve, and we’re almost at a vertical wall.”(See pictures of Chinese investment in Africa.)

All of Australia has been enjoying that climb. The Chinese-driven boom at Port Hedland is symbolic of the growing giant’s impact on the entire Australian economy. Chinese demand for Australian exports, especially raw materials, was one big reason Australia didn’t fall into recession after the 2008 financial crisis. Since China will get even hungrier for natural resources as its economy roars ahead, Australia is likely to become more and more dependent on the Middle Kingdom. Ben Hunt, an economist at the International Monetary Fund, estimates that roughly 12% of Australia’s GDP growth during the past 10 years can be attributed to trade with China; over the next decade, that share could reach 35%. Colin Barnett, premier of Western Australia, Port Hedland’s home state, says China has been “probably the single biggest factor” behind the region’s strong performance during the Great Recession. “China’s almost insatiable demand for natural resources continues to drive our economy,” he says. Read the rest of this entry »

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