Why Chinas Export Ban is So Dangerous

Añadido: 2026-05-17

[00:00:00]If there's some sort of disruption on sulfuric acid, it means that you could be putting at risk 10% of the world's supply of copper. And that's why it's a concern, right? Cuz copper doesn't take big shifts to be able to big big problem, right? Like it doesn't it doesn't take, you know, silver can go through what is this year's, you know, a couple of got a 200 million oz deficit one year versus 800 million production versus 200 million recycling.

[00:00:27]That's like 20%. But they're also big gigantic stockpiles. Right. The world's stockpiles of copper >> [clears throat] >> right now are equivalent to 14 days, right? And they're the highest levels they've been in and for like 20 years.

[00:00:39]So they're really big, but it's mostly because I call it it's the the toilet paper moment. The United States is building their stockpiles cuz they're worried about running out, but it still is only would be equivalent to 14 days of the world's demand. So that's the concern. I know that a lot of silver is a byproduct of like copper, lead, and zinc, and all that. So this would actually affect silver production as well, right? Um, I don't know how much silver production comes from leaching.

[00:01:06]Probably very little. It's normally from the sulfide, it gets captured in the concentrate, it goes to a smelter, a smelter then creates, what's called an anode copper, which is about 90 to 98%, and then it goes to a refinery, and that 2% though is normally gold and silver.

[00:01:23]And I think about 25% of the world's silver production does come from does come from copper mines, but I think it's coming out I'm almost pretty pretty sure it's coming out of the sulfide side. It's coming out of the smelter side. So it wouldn't be affected by this issue. Okay, so it won't be affected by like actual like copper mining or anything. It's more of like the after effect of that.

[00:01:45]>> There are some pure oxide mines, so yes, it would it would probably affect. Now, they might still be running for a time and they're just building a the dump stockpile, but there's going to become a point where it goes, we can't put any more lifts on it. We can't We run out of area and if we keep dumping stuff on top, we're not going to recover it.

[00:02:03]Believe it or not, too, though, it's not like compromises sitting around with a month worth of sulfuric acid, right? I mean, you wouldn't, right? You wouldn't be sitting on gigantic tanks of sulfuric acid. Uh when I worked at the uh Asarco mine, um uh at the Ray mine, right? We kept 98% sulfuric acid uh on site, but it would probably only be about a week's worth of supply. So, why why do you think China's doing this? Is it to cut off the world from this or does it have to do with the strait and and and supply disruptions or do you have any theories on this?

[00:02:37]Yeah, so um where does China get their supply from is from uh metal smelters, from the copper smelters, lead smelters, zinc smelters. Anything that's processing a sulfide ore then is captured as sulfuric acid.

[00:02:50]Where uh the other big byproduct of sulfuric acid is from oil gas, right? Anything that has sulfur in it and you're pulling sulfur out is you're going to then create sulfuric acid. Now, I once in the you know, I don't know if this is true today, but sulfuric acid was like the basic ingredient to a massive amount of of industrial processes. It is a very common feed material in a lot of um industrial processes, which China has a lot of those, right? They built all the factories.

[00:03:23]So, I think it's protecting two things.

[00:03:25]A, it's saying, I'm not going to be selling you my sulfuric acid when I need it. It's what they're basically saying.

[00:03:31]We are producing it We're not going to be producing enough to export and still cover off ourselves. And that is caused by the disruption of the straits because that is the other big source of sulfuric acid.

[00:03:44]Oh, okay. This reminds me of what China did with the export bans of silver, as well, right? They banned silver exports.

[00:03:53]>> Um actually, I think China is doing this really calculated plan of first they did ban silver exports at the beginning of the year, banned uh sulfuric acid. Then you have them importing 683 tons of silver in March, which is way higher than the norm of like 250 or whatever. A couple of weeks ago, um their tax authorities are doing this investigation through the Shanghai of insider trading all this. They get caught with 60 tons of fake silver bars, which is like 1.9 million oz flooding the market that they're selling out that they got caught. I think this is just one huge calculated plan and with silver added to the US critical minerals list this year, you know, obviously it's it's uh used from a national security threat perspective. Now, I think most people realize that. So, China doing this is is a genius plan, right? Just cut off the rest of the world, leave them hanging to dry. You know, I used to talk about uh China's assassin's mace.

[00:04:56]And I used to think of it in those types of terms.

[00:04:59]But their actions on the ground still have a massive takeaway. It is more What What are you talking about? We built this for ourselves.

[00:05:09]Right? We're going to keep it.

[00:05:11]And and so, the actions might seem Machiavellian or seem astute or devious or whatever, but the truth is China did not build up the world's supply of silver or be able to produce silver and copper and sulfuric acid because they wanted to sell sulfuric acid, silver, and copper. They built it so they could um they could build their supply chains so they wanted to secure their supply chains. The big big takeaway and silver, I really like that example, is because they had all the freaking silver, right?

[00:05:47]They They had their own silver mines. I think they were the second largest producer of silver in the world. So, they actually had silver, wherein the case of copper and oil, they did not, right? They had silver. Number two. So, they got all the silver from the silver mines, which if you add gold mines plus silver mines together, there's 40% I'm guessing 40% of the world's silver supply. They another They add another uh 35% is zinc and lead mines. They probably had a few of those, and they were also the smelters for a large majority of that. So, when you smelt the lead and silver, you get you That's where you get the silver, like I explained. It comes out in the Doré process, right?

[00:06:27]Or it comes out in uh Actually, I don't know how it comes out exactly in lead and zinc. I do know how I have a pretty good idea how it comes out in copper, which I explained. And 25% comes from copper mines, where they process the ore. They were processing 60% of the world's copper concentrates.

[00:06:45]Uh which then produced a copper cathode, and then they refined it and produced a uh cat- Sorry, an anode, and they produced a cathode, and guess what falls out is all the gold and silver. So, they had all these different streams. They were had their own production. They were also getting it from the ores that they were importing.

[00:07:04]Um and they were on annually, they were a massive exporter of silver.

[00:07:08]And then all of a sudden they go, "Nope, we're not exporting anymore." Right?

[00:07:12]"Because we might not have enough for our circuitry, and the big one, our solar panels, our our our our all these other industries that they built around those production chains."

[00:07:25]And you see it on sulfuric acid. You see it on copper. You see all these things going on, and it seems somewhat insidious. Um don't know if I'm using a Spanish word or an English word or just insidious or is that >> Insidious, there's the word. There's the word I'm looking for. Sorry, my brain works in Spanish.

[00:07:41]Um sometimes.

[00:07:42]And it was it's but it's more like, "What are you guys talking about? We told you what we were doing." Right. The only problem is we're waking up and going, "What? You can't do that? What?

[00:07:53]We told you we were going to do that."

[00:07:54]This is all playing out. And the big news about it is every time one of these little seems to be little hiccups, you know, yeah, I get it for oil, but why severe gas? Like, what's the big deal, right?

[00:08:06]Um, is affecting us because the world is used to a globalized world where we maximize It's like, "I'm going to make this coffee cup, right? I'm going to make this coffee cup and all I care about is making the coffee cup."

[00:08:20]I don't care where all the materials that it takes to make the coffee cup, I just assume they're going to be there.

[00:08:26]Right? And then I hand off the coffee cup.

[00:08:28]And then, you know, Starbucks puts the brand on it and then they sell it as their coffee cup, right? We just focus on our tiny little box.

[00:08:36]And that creates a lot of efficiency.

[00:08:38]And but that efficiency is it's a little bit like a house of cards, right? Because if you start losing it, Yep. um, everything starts collapsing.

[00:08:48]And that's where it creates the opportunity for us. Like, it is happening, right? It's happening as we say, you know, and and so as it all inefficiency part starts building in, every single coffee cup maker all of a sudden says, "I better figure out where my clay is coming from and I better have my own clay." Right? So, you actually need you actually end up making more clay mines, right? Even if the total production doesn't change because you're like, "Nope, I need that extra two Before there was no stockpiles of clay, now you're building up stockpiles and you're building up an addition which adds inefficiency and adds and actually adds a lot of of of demand even if it's not consumed.

[00:09:28]We're we're export reliant. We're at the mercy of our enemies for something that's used, you know, for national security, but this reminds me exactly of what happened to the US Mint in 2020.

[00:09:41]Well, actually this dates back several decades. The US Mint used to make their Eagles in house, right? Cuz they were minted in the tens of millions. And then at one point they said it's actually more efficient to just get our silver planchets and outsource them.

[00:09:57]And they get a lot of them from like Sunshine Mint produces a lot of their silver planchets, but they're export-reliant.

[00:10:04]Then all of a sudden, silver's price starts rising and the US Mint cannot fill these orders. It's like 10 to 15 million ounces 10 to 15 million Eagles, whatever. And the Sunshine Mint is also selling to all these other mints. Well, there's a specific law within the US Mint where the Treasury cannot pay above spot price. Well, these other mints can.

[00:10:28]So in 2020 when there's, you know, all this silver demands coming in, the Sunshine Mint's like, "Why would I sell to you guys? You can only pay spot price." The US Mint's like, "Well, you're our source." But the then Sunshine Mint's like, "Well, Perth Mint's paying well well above spot price." So in 2020 you saw the US Mint come out and say, "Hey, there's a silver shortage. We can't get silver planchets." Then 2021, they're like, "Hey, 2021's the first time they admitted it."

[00:10:53]2020 they ran out of Eagles, had to make the emergency 1 million minted supply from the San Francisco Mint. Then 2022 they banned the silver and Morgan Peace dollars because they admit they don't have enough silver. And this whole problem just went all because they are now at the mercy of other mints to get their silver planchets. And that reminds me exactly of what's happening right now, you know, with China. But It is similar, but there's a lot more levers to pull on silver because there is a very large above ground inventory. So it takes the story as like watching in slow motion. Where other or metals This stock pulse zone exists, right?

[00:11:36]They just don't have the same amount of material. So that story, same story, it's just that playing out at a much quicker rate.

[00:11:45]and But we're going to see this like I've seen this story before, right? It's just just you know I mean the world has gone okay now we can eke a little bit out we can just a little bit out of these playing and not worrying about where is all that material coming from. In the beginning we just ignored that. We were like no I got a solution and they you know they took the wire from here and they bypass this and they do that and then blah blah blah etc. etc. Until one day people wake up and then they look up you know it's you know there's no water going into the pipe.

[00:12:15]Right?

[00:12:17]So that we're you know we're we're at a point now where we go we cannot keep ignoring the problem and the problem is we're not producing enough.

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