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De-Dollarization: More Countries Seek Alternatives to the U.S. Dollar

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de-dollarization

De-Dollarization: More Countries Seek Alternatives to the U.S. Dollar

The U.S. dollar has dominated global trade and capital flows over many decades.

However, many nations are looking for alternatives to the greenback to reduce their dependence on the United States.

This graphic catalogs the rise of the U.S. dollar as the dominant international reserve currency, and the recent efforts by various nations to de-dollarize and reduce their dependence on the U.S. financial system.

The Dollar Dominance

The United States became, almost overnight, the leading financial power after World War I. The country entered the war only in 1917 and emerged far stronger than its European counterparts.

As a result, the dollar began to displace the pound sterling as the international reserve currency and the U.S. also became a significant recipient of wartime gold inflows.

The dollar then gained a greater role in 1944, when 44 countries signed the Bretton Woods Agreement, creating a collective international currency exchange regime pegged to the U.S. dollar which was, in turn, pegged to the price of gold.

By the late 1960s, European and Japanese exports became more competitive with U.S. exports. There was a large supply of dollars around the world, making it difficult to back dollars with gold. President Nixon ceased the direct convertibility of U.S. dollars to gold in 1971. This ended both the gold standard and the limit on the amount of currency that could be printed.

Although it has remained the international reserve currency, the U.S. dollar has increasingly lost its purchasing power since then.

Russia and China’s Steps Towards De-Dollarization

Concerned about America’s dominance over the global financial system and the country’s ability to ‘weaponize’ it, other nations have been testing alternatives to reduce the dollar’s hegemony.

As the United States and other Western nations imposed economic sanctions against Russia in response to its invasion of Ukraine, Moscow and the Chinese government have been teaming up to reduce reliance on the dollar and to establish cooperation between their financial systems.

Since the invasion in 2022, the ruble-yuan trade has increased eighty-fold. Russia and Iran are also working together to launch a cryptocurrency backed by gold, according to Russian news agency Vedmosti.

In addition, central banks (especially Russia’s and China’s) have bought gold at the fastest pace since 1967 as countries move to diversify their reserves away from the dollar.

How Other Countries are Reducing Dollar Dependence

De-dollarization it’s a theme in other parts of the world:

  • In recent months, Brazil and Argentina have discussed the creation of a common currency for the two largest economies in South America.
  • In a conference in Singapore in January, multiple former Southeast Asian officials spoke about de-dollarization efforts underway.
  • The UAE and India are in talks to use rupees to trade non-oil commodities in a shift away from the dollar, according to Reuters.
  • For the first time in 48 years, Saudi Arabia said that the oil-rich nation is open to trading in currencies besides the U.S. dollar.

Despite these movements, few expect to see the end of the dollar’s global sovereign status anytime soon. Currently, central banks still hold about 60% of their foreign exchange reserves in dollars.

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All the Metals We Mined in One Visualization

This infographic visualizes the 2.8 billion tonnes of metals mined in 2022.

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All the Metals We Mined in One Visualization

Metals are a big part of our daily lives, found in every building we enter and all devices we use.

Today, major industries that directly consume processed mineral materials contribute 14% of the United States economy.

The above infographic visualizes all 2.8 billion tonnes of metals mined in 2022 and highlights each metal’s largest end-use using data from the United States Geological Survey (USGS).

Iron Ore Dominance

Iron ore dominates the metals mining landscape, comprising 93% of the total mined. In 2022, 2.6 billion tonnes of iron ore were mined, containing about 1.6 billion tonnes of iron.

Metal/OreQuantity Mined in 2022 (tonnes)% of Total
Iron ore2,600,000,00093.3%
Industrial metals185,111,8356.6%
Technology and Precious Metals1,500,0080.05%
Total2,786,611,843100%

Percentages may not add up to 100 due to rounding.

Iron ores are found in various geologic environments, such as igneous, metamorphic, or sedimentary rocks, and can contain over 70% iron, with many falling in the 50-60% range.

Combined with other materials like coke and limestone, iron ore is primarily used in steel production. Today, almost all (98%) iron ore is dedicated to steelmaking.

The ore is typically mined in about 50 countries, but Australia, Brazil, China, and India are responsible for 75% of the production.

Because of its essential role in infrastructure development, iron ore is one of the most crucial materials underpinning urbanization and economic growth.

Industrial Metals

Industrial metals occupy the second position on our list, constituting 6.6% of all metals mined in 2022. These metals, including copper, aluminum, lead, and zinc, are employed in construction and industrial applications.

Aluminum constituted nearly 40% of industrial metal production in 2022. China was responsible for 56% of all aluminum produced.

Industrial Metals2022 Mine Production (tonnes)% of Total
Aluminum69,000,00037.3%
Chromium41,000,00022.1%
Copper22,000,00011.9%
Manganese20,000,00010.8%
Zinc13,000,0007.0%
Titanium (mineral concentrates)9,500,0005.1%
Lead4,500,0002.4%
Nickel3,300,0001.8%
Zirconium Minerals (Zircon)1,400,0000.8%
Magnesium1,000,0000.5%
Strontium340,0000.2%
Uranium49,3550.03%
Bismuth20,0000.01%
Mercury2,2000.00%
Beryllium2800.00%
Total185,111,835100%

In the second position is chromium, which plays a primary role in rendering stainless steel corrosion-resistant. South Africa led chromium production, accounting for 44% of the total mined last year.

Technology and Precious Metals

Despite representing less than 1% of all the metals mined, technology metals have been on the news over the last few years as countries and companies seek these materials to reduce carbon emissions and improve productivity.

Technology and Precious Metals2022 Mine Production (tonnes)% of Total
Tin310,00020.7%
Rare Earth Oxides300,00020.0%
Molybdenum250,00016.7%
Cobalt190,00012.7%
Lithium130,0008.7%
Vanadium100,0006.7%
Tungsten84,0005.6%
Niobium79,0005.3%
Silver26,0001.7%
Cadmium24,0001.6%
Gold3,1000.2%
Tantalum2,0000.1%
Indium9000.1%
Gallium5500.04%
Platinum Group Metals4000.03%
Rhenium580.004%
Total1,500,008100%

They include lithium and cobalt, used in electric vehicles and battery storage, and rare earths, used in magnets, metal alloys, and electronics. Many of them are considered critical for countries’ security due to their role in clean energy technologies and dependency on other nations to supply domestic demand.

However, despite increasing interest in these metals, they are still behind precious metals such as gold and silver regarding market size.

The gold market, for example, reached $196 billion in 2022, compared to $10.6 billion for the rare earths market.

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Visualizing Mining’s Footprint in British Columbia

Mining represents 7% of British Columbia’s GDP despite only accounting for 0.04% of the land use.

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Mining Footprint in British Columbia

Visualizing Mining’s Footprint in British Columbia

British Columbia is considered a global leader in the development of socially and environmentally responsible resources.

An estimated 54% of the province’s total land is protected, making it one of the world’s greenest mining hubs.

This graphic by the B.C. Regional Mining Alliance (BCRMA) details mining’s footprint in the province.

A Tier 1 Jurisdiction for Mining

British Columbia covers almost 95 million hectares (234 million acres), more than any European country except Russia, and more than any U.S. state except Alaska.

As the largest mining province in Canada, BC registered $18 billion in revenue from the industry in 2022.

British Columbia stands as Canada’s sole producer of molybdenum, which finds applications in metallurgy and chemistry. Additionally, B.C. is the country’s leader producer of copper and steelmaking coal, besides gold and silver.

B.C. mined material breakdown

At the heart of British Columbia’s mining industry lies the Golden Triangle, one of the hottest mineral exploration districts in the world.

More than 150 mines have operated in the area since prospectors first arrived at the end of the 19th century. The region alone is endowed with minerals worth more than $800 billion.

How Green is B.C. Mining

Mining represents 7% of the province’s Gross Domestic Product (GDP), despite only accounting for 0.04% of the land use. In comparison, farmland demands 3% of the land, bringing $2.1 billion (0.8%) per year.

Land Use in B.C.Revenue (2022, CAD $)
Mining 0.04%$18.0 billion
Oil & Gas 0.4%$9.5 billion
Infrastructure1%$25.0 billion
Farmland3%$2.1 billion
Forest62%$13.3 billion

Mining operations are also supported by a stable, transparent, and effective policy environment. The province ranked as the world’s least risky for mining in 2017 and 2018.

In addition, mineral exploration has received ample support from local Indigenous communities. Today, mining accounts for over two-thirds of all indigenous people employed in the extractives sector.

According to the International Energy Agency, up to six times more minerals and metals will be needed by 2040 to accelerate the energy transition.

In this scenario, British Columbia is well positioned to support the transition to a low-carbon future and make a significant contribution to climate action.

The BCRMA is a strategic partnership between indigenous groups, industry, and government representatives that aims to promote B.C.’s mining opportunities internationally.

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