Sustaining next cycle of economic growth will require a secure supply of minerals

An detour from fintech, researching the physical realm of the next phase of economic growth.

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Study of the roots of economic growth drove me in all my degrees (M.A History, then M.A Finance) — be that the diligent application of innovative techniques, the scaling of scientific methods or savvy use of available resources: mined, extracted, shipped, refurbished, marketed, sold at scale.

Numerous small-time reports on industrialisation and various components of growth, be that labour inputs via migration, or TFP and ICT components — bring me to learn of the mineral resource input angle.

Production of goods — as the world departed from artisanal manufacturing of numerous staples to factories build-and-assembly require different materials — also extracted, distilled and shipped at scale. Consumption of the mass-production pillars of 20th century required millions of tons of coal, pig iron, steel, rubber, followed by plastics and silicon.

As the brains and brawns of the intelligent machinery require sophisticated circuits — so the supply chain in search for a steady supply of input materials grows in complexity: increasing number of intermediary and final goods — and materials — travel longer distances according to (annually published) DHL Connectedness Index.

Politically charged calls to disengage from regions that provide either manufacturing platforms or critical minerals is hard to follow. Take note of the US Geological Survey report published in March 2023:

Industries dependent on imported minerals contributing a disproportionate share to GDP and influence a growing number of other industries that are dependent on mineral-dependent’s output.

The number of mineral groups that US is becoming critically dependent grows steadily: as the world catalyses push from combustion engine to EV, from fossil to renewables and tries to power energy-hungry AI, these minerals become ever more important to secure.