“Commodities” – can you procure them as is conventional wisdom going forward?
Views By Tshepo Magagane
“Commodities” – can you procure them as is conventional wisdom going forward? Conversations with the majority of people from the West will have you going “wtf is that” – not even angry, just “wtf was that”!
[Actual strategic ownership includes the control of the offtake contracts coming from that mine, the national identity of its controlling shareholders, and, most crucially, the processing location where that ore is refined into metal.
the deeply held economic belief that, with sufficient capital and open trade routes, any physical resource could be procured in the necessary quantities, at any time, from a friction-free global market.
We have entered an era of complex constraints, where the physical availability of matter, not the availability of credit, sets the limit on national power.
the West should specialise in high-margin “thinking” (services, IP design, complex finance) while offshoring the “dirty” work of “doing” (smelting, refining, processing) to the lowest bidder.
it was a slow-motion act of strategic self-harm that hollowed out the industrial base required to sustain a conflict or a protracted crisis.
The English Crown eventually realised it was acting as a mere raw-material hinterland for foreign powers who captured the value-added. Through a series of legislative acts and export bans, the Crown forced the reshoring of processing capacity, laying the foundation for the textile industry that would eventually spark the Industrial Revolution
The western assets are essentially flipped to Chinese assets through a combination of contractual, ownership and processing leverage.
“Material Impairment Thesis,” positing that supply chain deficits in critical metals, specifically copper, silver, antimony, and rare earth elements (REEs), are no longer cyclical market fluctuations to be ridden out, but structural impairments that are actively degrading the performance specifications of advanced technologies.
We are witnessing a forced regression in engineering capabilities: the substitution of inferior materials (e.g., substituting aluminium for copper in cabling, or ferrite for neodymium in magnets) results in heavier, hotter, less efficient, and larger systems.
The outcome of this contest will not be decided by who invents the best technology, but by who owns the factories and refineries required to build it at scale.
Aluminum has ~60% the thermal conductivity of copper and introduces high risks of galvanic corrosion. This results in less efficient cooling and higher energy consumption for pumps—a physical drag on AI progress.
Switching to aluminum motor windings to save weight requires larger motors (due to lower conductivity), negating the benefit
Chinese firms operate on Strategic Utility rather than profit, they can flood markets to crash prices (as seen in Nickel), rendering Western projects “unbankable” due to volatility risk.
Before we fight China, we will likely see a trade war between the US and the EU for offtake agreements. China will exploit this by offering preferential supply to nations that remain neutral in a Pacific conflict. Germany’s industrial base cannot survive without Chinese midstream processing, making it susceptible to “resource Finlandization”: a forced neutrality where allied nations decline to join US-led containment efforts to preserve their access to critical Chinese material flows.
