Russian Mineral & Metal Mayhem
As the ongoing crisis in Ukraine grows larger and larger, day by day, there has been increased focus on what Russia’s role is in the global economy.
Much of the focus has been Russia’s role within commodities markets such as oil and wheat. However, Russia is a renowned exporter in minerals and metals which are vital in the production of capacitors, semi conductors, and a litany of sought after end-use items that power (pun intended) the global economy.
In 2019, Russia’s total exports of minerals clocked in at nearly $5.3 Billion. Take a wild guess at who took in the largest share of those exports… Clearly China takes the cake here, accounting for $1.92 Billion of that total. Yikes.
(Source: World Integrated Trade Solution)
China is a major player in this market, and is a world leader in rare earth metal refining, as they accounted for 60% of the rare earth production in 2020. I couldn’t possibly dream up a more nightmarish duo of sorts to dominate the global economy, Xi JinPutin (wake up babe, new meme just dropped).
Russia also happens to be the largest exporter of Palladium, which is used vastly in capacitors and as a catalyst to chemical reactions. Funny enough, my buddy had his catalytic converter sawed out of his Honda Accord while parked in a lot in Philadelphia. Gone, but never forgotten. Back to the topic at hand, Russia accounts for over a third of the world’s palladium production, accounting for $6.4 Billion in 2020.
While most of Russia’s GDP is derived from its abundant oil resources, it’s also sitting on commodity reserves that are ostensibly important to the greater global economy, and I’d go as far as to say ever more important as time goes on.
While we may have sanctioned the Russian financial and oil sectors to the teeth, there is still a looming fear of a developing partnership that is taking place between the Russian Federation and China. LET’S DO SOMETHING ABOUT IT. Hopefully American ingenuity can reign supreme, namely in our processing of rare earths. If we want to “Build Back Better”, here’s a good place to start.