The green boom is not just another “supercycle”, as prolonged periods of high commodity prices are known
Save time by listening to our audio articles as you multitaskNow the copper price is even higher. But the projects are in trouble. Insiders say they are short of vital foreign equipment that has been blocked by the West after Russia’s invasion of Ukraine, and that they are starved of the funds they had expected from blacklisted Russian banks. Mr Usmanov, too, faces sanctions. A spokesman for Udokan says, “We are doing everything we can to ensure business continuity.
. The last such cycle, early this century, was fuelled by rapid urbanisation and industrialisation in China. The combined realof Brazil and Russia, two resource-rich economies, grew by two-thirds between 2000 and 2014. But the rally was largely driven by China alone. When the country’s leaders decided it should build fewer factories and flats, the commodity giants suffered. The green transition, by contrast, stems from the decisions of many governments, not one.
The second bucket comprises countries with revenues that stay flat, or fall a little. It includes the low-cost members of the Organisation of the Petroleum Exporting Countries — including Iran, Iraq and Saudi Arabia—and Russia. Although oil revenue shrinks, their share of it expands from 45% today to 57% in 2040. Other countries, such as America, Brazil and Canada, lose fossil-fuel earnings but are able to tap vast mineral deposits.
The capex drought is a result of three daunting problems: the industry’s limited firepower, diminishing investment returns and rising political risk. Start with firepower. Though what miners must spend over two decades is equivalent to only four years of typical oilcapex, it still seems beyond the capacity of the comparatively tiny sector. Even big miners can only fund one serious project at a time.