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Living in a Material World: Raw material diplomacy

By Andrew Perchard - Posted on 16 August 2013

With ongoing geopolitical tensions over access to key natural resources, Dr Andrew Perchard from the Department of Strategy and Organisation, discusses his recent conference on the issue and what history has to tell us…

The control and supply of certain raw materials, or “raw materials diplomacy” as it has become known, continues to be a pressing and highly charged political issue.

From the heated public debates surrounding recent Australian and Greenland elections about access to and control of raw materials reserves showed, to the US, EU, and Japan’s responses to and posturing over China’s perceived stranglehold of “rare earths” – which form components of everything from microwaves, laptops to missile guidance systems – this continues to be characterised by highly emotive rhetoric.

In a New York Times exposé earlier this year, light was shed on financial institutions’ manipulation of raw materials markets, by pointing to Goldman Sachs’ stockpiling of aluminium to artificially inflate its price and JPMorgan’s monopolisation of copper reserves.

Strategic decisions about raw materials, whether determined by governments or companies, have a profound impact on geopolitics, markets, society, local communities, and the environment. What’s more, debates about these materials are also remarkably reminiscent of the language used about the issue in the 1930s and during the Cold War, yet the critical eye of history has ,until recently been at least, absent this discussion.

So, how do strategic raw materials affect national policy initiatives and business strategy? And how can we learn from history to distinguish between rhetoric and real need?

As co-founder of the History and Strategic Raw Materials Initiative, together with my international colleagues, Drs Mats Ingulstad and Espen Storli from the Norwegian University of Science and Technology (NTNU), I’ve been working to answer some of these questions with research considering, for example, the relationship between business and government and strategic decision-making in the UK and North America in the 20th and 21st centuries.

At HRSMI’s recent conference, held at Strathclyde Business School, we also brought together some of the field’s leading international scholars. Designed to improve the sharing of knowledge on the issues surrounding strategic raw materials, the conference included a talk from the father of the study of the geopolitics of raw materials, Professor David Haglund of Queens University, Canada, which inspired some very productive discussion.

As economic development continues to exert pressures on our finite resources, the issue of strategic raw materials will become ever more prominent in the years to come, so it’s vital that we devote more time and resources to its study.

Working with NTNU, we at the Department of Strategy and Organisation have begun to make progress, but we know there is a lot to be done. Over the coming years we’ll be continuing to advance the issue of strategic raw materials through events and a programme of streamed research work, so look out for further updates in future.

How do you think the debate around strategic raw materials will evolve? What can history teach us about their management in the future? Let us know in the comments below…

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