Even Carlos Ghosn Seems To Be Missing The Point On Raw Materials. The Issue Is Not Only Their Rising Cost; It's Also Their Diminishing Availability

Implications: The first industrial revolution in the west highgraded out the world's then known and accessible metal ores and energy minerals. Extraction and refining technologies have since kept up with the declining grades of ores and minerals accessible with today's infrastructures and machinery. But finally, with the explosion of demand from Asia, the age of profligate mining of metals and energy minerals is over. Price alone cannot any longer dictate supply.

Analysis: Carlos Ghosn has correctly identified what I think is the key issue in all future mass production of durable goods, such as automobiles. That issue is the availability of raw materials.

Geologically ignorant 'analysts' and gurus tell us confidently that there is no such thing as a 'Peak resource,' because all of the resources that are supposedly being exhausted can be found in inexhaustible volumes in the earth's crust.

These gurus and other ignoramuses are blissfully unaware that only those raw materials concentrated by natural processes, over millions and even billions of years, which bring such concentrates near to the surface of the earth, can be found and extracted economically.

The above applies only to the dry land of the earth's surface (30%) in the case of metals, and only to submerged resources relatively  close to the shoreline in the case of oil and gas.

It seems to escape notice that the extraction and refining of oil, such as that believed to be off the coast of Brazil requires an immense investment in infrastructure prior to the refining of the first drop.

China and India are searching the world for natural resources, but not, as Thomas Friedman, misunderstands thoroughly, as part of a global level playing field in which to profit from a free market, but rather to secure resources for their domestic growth.

For example, at first China exported ferroalloys made from ores imported into China, but this was to entice foreign technology into China, so as to shorten the length of time and effort required to develop processes. As soon as China has in place, domestically, the technology it needs to efficiently produce ferroalloys for its own domestic use it will simply restrict the export of them with taxes or allocations so as to favor domestic industries. This process is well under way.

America's anti-mining attitude is now turning the US into a second rate nation with respect to metal and mineral self-sufficiency.

America's OEM automotive industry had every opportunity to secure long term supplies of raw materials, but since it believed in Friedmman's theory of a level level playing field it simply exported its jobs and production to nations where labor was cheap and raw materials were available.

To sweeten the deal the OEM American automotive industry gave away its manufacturing technology.

China believes now that it has paid enough for that technology, and that the growth of the Chinese domestic market must take precedence.

As a net importer of critical metals, energy,  and even of iron ore it looks as if America will never again be self sufficient in raw materials. In that case its OEM automotive industry is doomed.

The natural resources clock is running out for America.