Illinois-based Mondelez International has shocked lovers of its chunky chocolate triangles by tinkering with the gaps in its Toblerone bar. Whilst international travelers might have to find other stocking fillers, it is confirmation of gaps in U.S. infrastructure investment that is dominating mining news.
The Colorado-based Minerals Education Coalition, or MEC, tells us that the average American born this year will consume almost 3.13 million pounds (1,418 tonnes) of minerals, metals, and fuels in their lifetime. Whilst the total is sobering, the breakdown reminds us that the U.S. is under-spending on infrastructure.
Five years ago, the average newly born American was expected to consume less than three million pounds, and since then, the lifetime requirement has soared for a range of mined products, including natural gas, cement and salt. However, the consumption of coal and iron ore has slumped by around one-quarter to 178 tonnes and 9.7 tonnes respectively.
The Society for Mining, Metallurgy and Exploration formed the MEC to "develop and deliver accurate and timely education materials" on the mining sector. The MEC is the successor to the Mineral Information Institute, and its calculations are based on a current life expectancy in the U.S. of 78.8 years, and from mineral-use data provided by the National Mining Association, the U.S. Geological Survey, and the Energy Information Administration.
The iron ore statistic stands out as modest. The U.S. consumption of iron and steel is far less than equivalent consumption rates in most other countries when adjusted for national wealth. The reason is a legacy of underfunding, mismanagement and neglect of U.S. infrastructure. In May, the American Society of Civil Engineers estimated that it will cost US$3.3 trillion to keep up with repairs and replacements over the next decade. However, based on current funding levels, the nation will come up short by at least US$1.4 trillion.
The society warned of a "mounting drag" on business activity. Without radical intervention, the society calculates that decay of tunnels, railways and waterways will cost the local economy almost US$4 trillion in lost gross domestic product by 2025 as costs rise and productivity is impeded.
Josh Bivens, research and policy director of the Economic Policy Institute, said that putting just US$18 billion a year into roads, bridges and waterways could create a US$29 billion jump in GDP and create more than 200,000 jobs in the first year. As a result, and as noted in the "Doctor's note" backfill two weeks ago, both President-elect Donald Trump and Hillary Clinton had espoused the issue in their campaigns.
Inadequate infrastructure is not unique to the U.S. Indeed, public investment has been trending lower as a share of GDP in many economies, including Japan, Germany and France. However, the issue is especially acute in the U.S., and Trump's transition team has already confirmed that it is considering an "infrastructure bank" to make the necessary investment.
Trump's campaign website promised to "transform America's crumbling infrastructure into a golden opportunity for accelerated economic growth and more rapid productivity gains." The central idea is to trigger US$1 trillion in private sector infrastructure spending by offering US$140 billion in tax credits.
We all, of course, want to be Americans, at least in terms of their access to consumable goods. Unfortunately, as I note in my Mining Insight webinars and seminars, which summarize the industry for non-geologists and mining engineers, current global production of almost all metals and minerals is nothing like sufficient for this aspiration.The world's population is expected to grow from the current 7.4 billion people, with an average life expectancy of 71.4 years, to over 11 billion by 2100. If we assume that, 84 years hence, everyone lives to the same age as your average American does now and consumes as much, we will need to annually mine three to four times as much coal and copper.
Interestingly, because of the relatively low per capita consumption of iron ore in the U.S., and the huge amount being utilized in China, we are already, statistically, producing more iron ore than the world's "American-like" citizens will need in 2100.
One cannot, of course, use the bare statistics quite so simplistically. These back-of-the-envelope calculations take no account of intensity of use and substitution, for example. Still, it does suggest that President-elect Trump is correct in at least one of his policies.