Industrial Explosives Manufacturing The entire global military sector only buys 25% of all explosives that are manufactured, the other 75% of explosives are purchased and consumed by the mining industry. Whilst the military usually outspends mining in terms of the financial expenditure, mining totally dominates on raw tonnage. The mining industry gets through thousands of tonnes per day of Ammonia Nitrate Fuel Oxide (ANFO), this is a stable and low cost blasting media that is used in thousands of open pit mining operations around the world. The mining industry shifts millions of tonnes of earth and rock every day, almost all of it is blasted loose for recovery. Demand for metals and commodities is demand for high explosives and the chemical pre-requisites. Permitting for explosive manufacturing facilities is one of the big limits on the expansion of global mining operations, and the expansion of global commodity supplies. This isn’t obvious to most people, but if we want to build and make more things, if we want more goods manufactured, then that starts with making a lot more explosives. Explosives are one of the furthest upstream markets for the global economy and are therefore a good canary for an expansion of the global economy. Explosive prices will rise sharply before any new surge in commodity volumes feed through to the wider economy. This a good place to monitor the “fast takeoff” scenario commonly advocated by lots of people who have a very “software” understanding of how the world works. The reality is that upstream commodity prices and feedstock materials will need to blow out and stay blown out for a long time, for the supply chain to begin to respond to the price signal. A lot of these markets are cyclical and market participants often view price spikes as transient opportunities rather than structural shifts, and respond to price spikes with gouging rather than increasing production volumes. The Ukraine war disrupted the ammonia market in 2022 causing prices to rocket, but they have since fallen back quite substantially. The Ukraine war remains a bit of a ceiling on a major expansion of the global extractive industries. Interesting times ahead.