Transcript Production of goods - University of Chicago

From Congo through Chicago:
Understanding the Life-Cycles of Metal
Commodities in the Global Economy
Wolframite mining, Maniema Province,
Democratic Republic of Congo
Photo by: Julien Harneis
Mid-sized scrap yard, Englewood,
South Side Chicago
Photo by: Brian Ashby
Prepared by: Brian Ashby
for the University of Chicago Center for International
Studies’ 2009 Summer Teacher Institute:
“Understanding the Global Economy: Bringing the
World Market into your Classroom”
June 22-25, 2009
• EVERYTHING comes out of the
ground
• Try to imagine the origins of materials
in your classroom, and where they’ve
been on their way to you:
To maintain our current standard of living, each person in the
USA requires over 48,000 pounds of minerals each year:
• 12,428 pounds of stone
• 9,632 pounds of sand and
gravel
• 7,667 pounds of petroleum
• 6,886 pounds of natural gas
• 940 pounds of cement
• 639 pounds of nonmetals
• 425 pounds of iron ore
• 400 pounds of salt
• 307 pounds of phosphate rock
• 276 pounds of clay
• 77 pounds of bauxite
(aluminum)
• 29 pounds of other metals
• 17 pounds of copper
• 11 pounds of lead
• 10 pounds of zinc
• 6 pounds of manganese
• 1/3 pound of uranium
• 0.0285 ounces of gold
Source: United States Geological Survey
The “ecological rucksack”
The consumption figures
above only count the refined
final products. Mining also
generates large amounts of
tailings, the leftover material
from separating valuable
from worthless ore.
Nickel tailings #34, Sudbury, Ontario, 1996
Photo: Edward Burtynsky
The “ecological rucksack” concept is a measurement of mined
material to end-product:
- Gold: 540,000 kg / 1 kg
- Aluminum: 1.2 kg / 1 kg
(Note: all the gold mined in the last 2,500
- Copper: 356 kg / 1 kg
years could fit in a box with 72ft sides)
Source: NOAH, Friends of the Earth Denmark
Mineral wealth in the Democratic
Republic of Congo
Ex-child soldier mining gold, Mongbwalu, Northeastern DRC, 2004
Photo: Marcus Bleasdale / Photo Agency VII
• An estimated 5.4 million people have
died since the Second Congo War
began in 1998, the deadliest conflict
since World War II.
• More than half have died since the
war’s official end in 2003, an estimated
90% of this total from disease and
starvation.
• More than 1,000 people daily are still
dying avoidable deaths in the DRC.
Mai Mai child soldier, Kanyabyongo, North Kivu, 2009
Photo: Marcus Bleasdale / Photo Agency VII
• The DRC conflict has employed the highest number of child soldiers in the
world -- up to 40% of rebel and government forces at the war’s height, with
more than 10,000 yet to be de-mobilized.
• 30,000 rapes have been reported in the DRC each year for the past 4
years. The unreported number could be 4 times higher.
Sources:
International Rescue Committee
Human Rights Watch
Amnesty International
Documentary films:
-Lumo
-The Greatest Silence:
Rape in the Congo
The Northeast: Ituri, North Kivu, South Kivu
• 64 – 80% of world’s known reserves of tantalum (found in
columbite-tantalite ore, known in the mud in which it resides
as coltan)
• One third of world’s known reserves of cassiterite (tin oxide)
• Heavy deposits of silver, zinc,
manganese, uranium, exotic timbers,
coal, oil, and coffee
Ituri
North Kivu
South Kivu
Refined tantalum from coltan
Photo: Stephen Hutcheon, The Age, 5/8/09
• The dark side of the hi-tech wireless and “weightless”
economy: tantalum and cassiterite are used in the
circuitry of nearly every cell phone, PDA, laptop, and
video game console.
• Tantalum is a lightweight and heat-resistant
conductor of electricity, used extensively in the
manufacture of miniature high-voltage capacitors.
• As phones and wireless devices (ex. Bluetooth) have
grown smaller, global demand for tantalum has risen
tremendously
• #1 export destination for the DRC’s tantalum: USA
• Percentage of US tantalum imported: 90%
Source: UN Global Policy Form
• Cassiterite is a main source of the world’s tin, used
in solder (which is melted to join metal surfaces)
• Traditional makeup of solder: 63% tin / 37% lead
• The use of lead was banned in solder in consumer
electronic goods by the EU and Japan in 2002,
shortly after the start of the war in DRC. Lead-free
solder contains 95%+ tin, and the demand for
cassiterite grew by over 150% in 2 years.
• Thus the process of making phones more
eco-friendly has also greatly increased the stakes of
the Congo war
The South: Katanga
• 10% of world’s known
reserves of copper
• 30 – 40% of world’s known
reserves of cobalt
• Heavy deposits of gold and
diamonds
• Copper and cobalt are mined
together in heterogenite ore.
They are also used together in
the manufacture of lithium ion
batteries, used in most portable
electronics.
Copper reserves in Katanga province visible from space.
Source: Google Maps
Katanga
Cell phones
• In 2005, worldwide mobile phone sales surpassed 200
million per quarter – production equivalent to one every
25 seconds.
• In 2005, US consumers typically replaced their cell
phones once every 18 months. In Western Europe, once
a year.
• In 2007, total mobile subscribers passed 2 billion – a
phone for each 3 people on the planet.
• Currently, despite take-back programs, less than 1% of
retired phones are recycled in the US.
• It is not possible for human rights-conscious consumers to
specifically boycott any of the complex array of minerals
found in miniscule quantities inside their electronics.
Sources: US Geological Survey, UN Global Policy Forum
• The war was not originally fought
for natural resources, but after
occupiers began mining operations,
domestic and foreign rebel groups
continue to fight for control of
infrastructure and contracts.
• Mining is performed by “artisanal”
miners -- local people responding to
gold-rush conditions. Many are
children.
• Mining is performed using hands,
pickaxes, plastic buckets, and
troughs made of bark, in alluvial
deposits (riverbed silt) or open pits,
ranging from the size of one person
to the pit featured at right.
Human chain in Chudja open-pit gold mine,
Northeastern DRC
Photo: Finbarr O’Reilly / Reuters
Current scenario
• In April 2009, Senators Brownback (KS), Durbin (IL), and
Feingold (WI) put forward the Congo Conflict Minerals Act,
covering cassiterite, tantalum, and wolframite (tungsten).
• Sanctions and embargoes -- Do they work? Are they
humane? In which circumstances?
• Even after taxation by paramilitaries,
coltan miners can make up to $50 a day.
Current average living standards in the
DRC are still below $1 a day.
• Can rebels with cross-border bases in
Rwanda and Uganda be starved out by
sanctions? What political solutions exist
for the people of Eastern DRC?
Gold dealer, Bunia, Ituri Province
Photo: Riccardo Gangale
Current scenario
An economics problem:
• Until this year, Talieson Minerals extracted 50% of the world
supply of tantalum from 2 mines in Australia (the other 50%
coming mainly from DRC, Brazil, and Canada).
• In January 2009, Talieson closed both mines, citing the
downtown in consumer demand, the small fraction of their
total business devoted to tantalum, and cheap, unregulated
competition from DRC blood resources. They will resume
activities once prices rise 80%.
• What might this mean for the world market in consumer
electronics?
• What might this mean for the fighting in the Congo?
Source: The Age, 5/8/2009
Next:
Production of goods using metals
China Quarries #2, Xiamen, Fujian Province, China, 2004
Photo: Edward Burtynsky,
Next: Use of goods
Recycling: Chicago
Scrapper, Back of the Yards, South Side Chicago
Photo: Brian Ashby
Trash as a valuable resource
Are you interested in what happens to
your trash after you throw it away?
So are lots of other people!
Waste haulers
role -- government contractors
paid -- by pick-up fees
incentive -- to throw out
(and deliver to landfills,
which they may also own)
Recyclers
role -- private industry
paid -- by the pound
incentive -- to not throw out
(and deliver to industry for
re-use)
These 2 industries are opposites, though they are often portrayed as related.
Scrappers: global informal labor
• From 2003-2008, scrap metal recyclers
around the world were responding to
demand from the Chinese construction
industry--rebar, siding, plumbing, etc.
• Goal of China’s Ministry of Civil Affairs
Urban China 2020 mandate: 400 new
cities, 20 built annually from 2000-2020.
•To conserve its natural resources and
regulate its growth, China seeks its raw
materials from recycled sources abroad.
Scrap workers harvest former Rockefeller Chapel organ
pipes, University of Chicago.
Photo: David Schalliol
The “informal sector” = un-taxed, un-regulated economic activity, not
reflected in a country’s Gross National Product.
• In developing countries the informal sector may be larger than the formal
sector (ex. Nigeria). Informal sector labor is unacknowledged in the US, and
often associated with illicit activity (ex. the drug trade).
• US scrappers are often paid in cash, and pay tax only voluntarily.
The bubble
bursts
Unprecedented growth
2003-06
2006-08
Peaks of $4.00/pound
Historical average
~ $1.30/pound
Like the DRC’s artisanal miners, the livelihoods of American scrappers are
tied to the fluctuating prices of commodities on the London Metals Exchange.
How does it work?
• Scrap dealers make profits by
upgrading scrap (separating it
from upholstery, plastics, etc.),
sorting metals out from each
other, and identifying and
specializing in different alloys
(mixes) to exploit economies of
scale.
Photo: Bruker AXS
• Analysis and processing is done
using X-ray spectrometry, eddy
currents (electromagnetic bursts
to separate ferrous & nonferrous
metals), and water streams and
filters; along with shredding,
crushing, and/or baling.
Balance of trade
• As a consequence of globalization, container ships bring
manufactured goods to the US from China and return home
empty. It can cost only a few hundred dollars to send a
shipping container full of recycled “raw” materials back to Asia.
It is often cheaper to ship scrap abroad by sea than to send it
to inland US mills and foundries by rail.
The stock exchange (derivatives market)
• As in all commodity businesses (oil, livestock, etc.) and in the
financial sector, scrap dealers leverage money and multiply
their profits by hedging their bets. When a dealer receives a
large order, and knows prices will remain the same or rise,
they purchase futures for that metal commodity, and cash in
following the sale.
Who are Chicago’s scrappers?
Here’s two featured in the documentary Scrappers
Photo: Brian Ashby
Name:
From:
Age:
Lives:
Came to Chicago:
Sources of metal:
Problems:
Income after 2008
market crash:
Photo: Andrew Narwocki,TimeOut Chicago 9/4/08
Oscar
San Pedro Sula, Honduras
36
Northwest Side (Portage Park)
2000, began scrapping immediately
alleys, residential moves
no license/insurance, risk of deportation
Otis
Clarksdale, Mississippi
75
South Side (Marquette Park)
1947, began scrapping 1957
alleys, body & fender shops
age/health
spouse’s work (domestic, assembly line)
Social Security
The film: www.scrappersmovie.com
Directed by Brian Ashby, Ben Kolak, and Courtney Prokopas
Current scenario
A political science / civics problem:
• The city of Evanston, IL is currently considering a ban on
private metal scavenging. It cites a loss of $85,000 in
revenue -- pick-up fees it charges residents for large items.
• Is it acceptable for a municipal government to consider a
fee charged for the cost of service provision as “revenue”?
• It is not clear whether the $85,000 figure includes either:
– The cost of the city collectors’ salaries and garbage trucks, or
– The income received when the city sells the recyclables.
• If not, how does including these factors change the financial
equation?
A political science / civics problem (continued):
•Should a city ever prohibit the free
provision of a public service by
private individuals? How do other
factors relating to scavengers, such
as theft and public safety, help or
hurt the city’s cause?
• Other Chicagoland suburbs have
maintained an older system of selling
private junk peddling licenses, while
ticketing the unlicensed. What pros
and cons are there with this system?
Scrapper waiting in line to sell at General Iron Industries, Chicago.
Photo: Nic Halverson, Odelay Yonquero!, AREA Chicago, 6/7/08.
Chicago garbage picking ordinance.
Photo: Brian Ashby
The Future: Peak Metal?
Available at:
New Scientist, 5/23/07
Economics teachers: have your students discuss possible flaws with the apocalyptic
calculations presented in these graphs. The data is discussed in the article.
Cell phones again
• The e-waste (electronic waste) recycling market is growing
at an amazing speed.
• In 2007, an estimated 500 million un-used phones in the US
could be “mined” for 17 million pounds of copper, 6 million
ounces of silver, 600,000 ounces of gold, 250,000 ounces of
palladium, and valuable quantities of 17 other metals.
• However, almost all of the disassembly work is performed
by hand in countries with poor workers’ rights protections
(China, Sudan, Malaysia).
• There is currently no technology to profitably reclaim
tantalum.
Source: US Geological Survey
Photos: Luca Gabino, “Ctrl+Alt+Landfill: China’s Secret
Computer Graveyard”, Vice Magazine, 10/1/07
China Recycling #12, E-waste sorting, Zeguo, Zhejiang Province,
2004
Photo: Edward Burtynsky,
Recycling: constant innovation
• Landfill mining:
“Landfills will soon have higher concentrations of useful ores
than virgin ground; for some elements, they already do.”
Currently practiced in the US for harvesting methane gasses.
• Accretions on roads from automobile catalytic converters:
invention by UK biologists of bacteria to profitably separate
platinum from dust after collection by street sweepers in dense
urban areas. There is no synthetic alternative for platinum.
• Air pollution mining: recovery of nickel dust from acid rain in
industrial Siberia, where one factory produces 20% of the
world’s nickel supply.
Sources: Worldchanging 12/25/07; New Scientist, 5/23/07; New York Times, 7/12/07
A final question for your students
What’s your crazy metal recovery scheme?
Further readings and additional
teaching materials
Pre-readings for this talk
Distributed earlier, and now available online at:
http://cis.uchicago.edu/outreach/summerinstitut
e/2009/resources.shtml
Under “Brian Ashby”
Covering DRC conflict, coltan & cell phones,
US scrap recycling and waste history,
extraction of other metals around the globe,
production of metal consumer goods
Further reading and resources
(not in pre-readings)
Uchicago Center for International Studies Global Lessons,
“Human Rights and Accountability in Contemporary Wars: Child Soldiers, Rape, and Blood
Resources”:
http://cis.uchicago.edu/outreach/workshops/08-09/090508-childsoldiers.shtml
The ENOUGH project (DRC): http://www.enoughproject.org/
Global Witness (natural resources and conflict): http://www.globalwitness.org/
UN Global Policy Forum: Minerals in Conflict:
http://www.globalpolicy.org/security-council/dark-side-of-natural-resources/minerals-inconflict.html
Mineral Information Institute – Your Source for Natural Resource Teaching Materials:
http://www.mii.org
Alcoa - It All Starts with Dirt: http://www.alcoa.com/global/en/about_alcoa/dirt/default.asp
Encyclopedia of Chicago (waste, ecology, and urban planning history):
http://www.encyclopedia.chicagohistory.org/
Graphic representation
of mineral consumption
in an average US
lifetime
(Could be used while
teaching the metric
system)
Available at:
New Scientist, 5/23/07
100x the final weight is
required in copper ore
Congo Concepts: legacies of
colonialism and genocide
• Congo was King Leopold of Belgium’s personal
possession for 31 years. Half the population, 8-10
million people, are thought to have died during this
time of heavy rubber and ivory exploitation.
• The current war began after the end of the
Rwandan genocide, when the victorious Tutsi
government pushed Hutu militia into Eastern
DRC.
• Multinational war: in exchange for mining
concessions, the Congolese government was
aided by the armies of Zimbabwe, Angola,
Namibia, Chad, Libya, and Sudan. Against
them, the armies of Rwanda, Uganda, and
Burundi annexed large territories in the East, and
supported numerous rebel groups. The conflict is
referred to as the “African World War.”
Mining in the Belgian Congo, 1938, 1934
Photos: The EUROMIN project
Congo Concepts: transport & corruption
Photos: Guy Tillim / Vanity Fair 6/13/07
• The DRC is approximately the size of
Western Europe, or 3 times the size of
Texas, and has only 300 miles of paved
roads.
• Rebel-controlled mines are dug deep into
inaccessible rainforests, national parks, and
indigenous peoples’ territories.
• Flows of goods and people are controlled
by lengthy guarded footpaths and small
private airstrips.
• In DRC, as in all of Africa, networks of
mainly Ukrainian and South African pilots
charge a premium to carry goods via small
Soviet-era planes across remote areas.
• In addition to ferrying illicit natural
resources, these transport companies are
linked to arms smuggling, sanctions busting,
drug trafficking, and coup attempts.
• Official government corruption leaves Congolese soldiers rarely paid.
As a consequence, they pillage rather than protect local populations.
Commanders collude with rebel leaders to gain mining concessions.
• Contracts are made in DRC mining centers by mainly Chinese,
Lebanese, and Indian buyers; bribes are made to truck minerals
across the borders with Rwanda, Uganda, and Zambia; they find
their way to ports in Tanzania, Mozambique, and South Africa; are
refined in the US, UK, and Europe; and enter the global supply chain
via markets in China and Russia.
• Having passed through so many middleman, it is nearly impossible
for multinational companies such as Sony, Apple, Nokia, Dell, and
Ericsson to verify their suppliers’ claims of their materials’ countries
of origin, let alone certification of mining practices. Major tantalum
processors such as US-based Kemet and Cabot claim to have
ceased buying from the DRC since 2001 – the trade hasn’t stopped.
Statistics on US
scrap recycling
Available at:
http://www.isri.org