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Tuesday 12 May 2009

Copper at Morewellham Quay

Victorian Copper

As you gaze around the tiny Devon hamlet of Morwellham Quay, fifteen miles up the River Tamar, deep in an area of outstanding natural beauty, it’s hard to imagine you’re standing at the gateway to the biggest copper mine in Queen Victoria's far flung empire. By 1850 Morwellham Quay was a more important port than Liverpool yet within a few decades the port was subsiding into ruin, from which it’s only now re-emerging as an industrial archaeology site and post-industrial tourist attraction.

Once this leafy backwater was a blasted and desolate wilderness – the pollution generated by the multiple mines along the Tamar turning what is now a green, leafy beauty spot into a Hell on Earth. All because of the most precious base metal of them all, copper.

Historical Copper

Victorian “venturers” would invest their money into copper mines on the basis of the visible surface loads of iron pyrites, taking enormous risks with their capital but standing to make huge fortunes. The miners, meanwhile, working in conditions so desperate that their wives could expect to marry three times risked their lives in return for a pittance. Nothing much changes, does it?

All this was in quest of a metal discovered in prehistoric times – its use can be dated as far back as 9000 BC – when it was used for jewellery and weaponry. Really – nothing much changes.

Copper's the ultimate industrial bellwether. Three quarters of worldwide production is for electrical purposes – conduction, telecommunications and so forth. Much of the rest is used to pipe water and gas, for cooking utensils and transportation. Unsurprisingly the metal’s price is a good general indication of the economic state of the world.

Looking forward, if you believe in a world of energy efficient vehicles, copper is a crucial component in hybrid cars and the like. This, too, is typical of copper’s history – as we find replacements for it in one area another new use appears.

The Price of Copper and Industrial Growth

Throughout the twentieth century the ebb and flow in the price of copper more or less presaged the state of the world economy. Economic collapse in the thirties saw a drop in its usage while the rapid industrialisation of developing nations in the 1990’s saw the need for it spike. Between 2006 and 2008 the price of copper tripled as global economic expansion fuelled by the rapid industrialisation of China kicked in. You can’t build homes or create infrastructure without it and so spot and futures price of copper have been reliable predictors of the likely state of the global economy six months hence.

As ever there’s no consensus on how this linkage works. One theory, the Environmental Kuznets Curve, suggests that metals use increases rapidly during a country’s industrialisation and then decreases as the economy moves into services. Another proposes that base metal use continues to grow with GDP. A more nuanced view suggests a rather more complex interaction between multiple factors but with a distinct trend towards more use over time. Whichever view you take industrialising nations need more base metals, period.

Copper Recycling

The recent price explosion has led to a secondary phenomenon – the rapid expansion of the recycling industry. This applies to all industrial metals but to copper most of all. It’s a trend that’s likely to continue – each of us in developed nations uses about 200kgs of the metal while in the rest of the world people only require 25kg per person. Thomas Graedel at Yale reckons that for every person on the planet to have enough copper to take their place in the developed world will require virtually every atom of copper present on the planet.

Gordon, Bertram and Graedel conduct similar resource estimates on other industrial minerals. With the exception of zinc they see no particular concerns about the future global supplies of any of them. Zinc usage, however, is “dissipative” – we destroy it as we use it, unlike most base metals, including copper.

Not everyone agrees with Graedel – but the calculations are complex. So, for instance, we can replace copper piping with plastic but plastics manufacture has other impacts including the usage of non-recyclable commodities like oil. Better recycling will be critical to reduce the problem and reduce the environmental impacts.

Oh yeah, and the rapid increase in the price of copper has led to an equal expansion in copper related crime. No surprise there, then. People, eh?

Copper and the Environment

Walking around Morewellham Quay today it’s difficult to imagine the unholy mess that the twenty or so copper mines had made of the place a century or so ago. It’s a beautiful, tranquil spot which shows no sign of the vast cost in lives and environmental damage needed to provide the first wave of industrialising nations with the materials needed to build the modern world.

Copper mines are still horribly damaging to the environment. Factoring this cost into production, as many environmentalists would like to do, would significantly alter the economics – in much the same way that factoring in the cost of nuclear decontamination changes the cost-price points of that industry. The problem for the developed world is that it’s unlikely industrialising nations will take any heed of this: we’ll either have to transfer technology or pay a price, either way it’s likely to be another part of a painful worldwide adjustment.

Copper and the Industrialising Nations

Those looking for signs that the global economy is improving – or worsening – would do worse than to look at the price of copper. Although more recycling and use of alternatives will place increasing pressure on such indicators these changes take a long time to enact and then only under economic pressure. Still, no doubt one day we’ll look back at our use of copper and marvel that it was so highly prized.

Commodities, industrialisation, recycling and replacement are all issues we’ll hear more about over the next decades. The easily available supplies of copper are already exhausted at vast environmental cost, which is simply not factored into the price of the metal. As the world’s population increases and as its expectations about the level of wealth it can expect also increase then the collision between developed and developing worlds will take shape alongside the grab for raw materials and the development of new technologies to recycle and replace them.

The Future of Copper

China’s recent suggestion that the world should move to a new global currency standard, invokes suggestions that they’ve been looking at Keynes’ suggestions for the Bankor. The Bankor was Keynes’ idea to replace gold as a monetary standard with a basket of commodities which allowed sufficient monetary expansion to keep the world economy growing. Copper was, of course, a key component. Perhaps it’s no coincidence that the Chinese have been stockpiling the metal while the price is low.

The land grab originated by the Victorian British won’t be easy for developing countries to replicate without environmental damage on an unfathomable scale. Whether the First World is prepared to pay to stop this by transferring cheap technology must be a doubt. However, when the raw materials are exhausted then the world will move on to something else.

Just as it has at Morewellham Quay. If you’re in the area it’s well worth a visit: try and imagine the leafy, beautiful and peaceful little village as an industrial hellhole and the key to Victorian industrial expansion. The world’s moved on but our need for copper hasn’t and how we deal with this will determine the structure of the global economy for decades to come.

Visit the Morewellham Quay website here. If you're in the area I can recommend a visit.

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