Goldman Sachs: ‘Copper is the new oil.’ Will Minnesota be the next North Dakota?
A new report by Goldman Sachs makes a bold claim: copper is the new oil. If this is true, it means Minnesota, which has some of the largest undeveloped copper…
Senator John Marty (DFL) offered his proposed solution to the surge in catalytic converter theft that has surged in the past two years during a floor debate in the State Senate.
Marty’s concerns are warranted because KSTP reports that there are more than 600 reported catalytic converter thefts in St. Paul this year.
Catalytic converter theft has skyrocketed due to the value of the metals used in this pollution-reducing device. The primary metals used in catalytic converters are platinum and palladium, which have seen prices rise substantially over the last six months.
Marty has proposed legislation that would put tighter restrictions on converters, making them in effect, contraband, according to KSTP.
“It would be illegal to possess a used catalytic converter that’s detached from a car unless it has certain markings on it, the VIN number on it,” Marty said. “And if you’re in possession of a catalytic converter not attached to a car and doesn’t have a VIN number in Minnesota, you’re breaking the law.”
The proposal would also permit only licensed scrap dealers to buy a used converter. The seller would have to provide a VIN and a title.
Marty’s bill would also require scrap metal dealers to hold for one week any catalytic converters they’ve purchased. Payments would be mailed to the seller or electronically deposited so there would be a paper trail for law enforcement to follow.
“It’s a huge hit on people,” Marty said. “It can cost them $3,000 to $4,000 to get them replaced.”
I think there is merit to Sen. Marty’s proposal. Marking the VIN number on the catalytic converter and requiring scrap dealers to run the number before purchasing it could deter the sale of stolen catalytic converters by making it more difficult to sell them afterward.
The legislation would be a step in the right direction, but like all legislation aimed at alleviating a societal problem, it has limitations. The limitation of this bill is that it cannot make the metals in catalytic less valuable, much like the prohibition of alcohol was unable to reduce demand for it. Only increasing the supply, or reducing the demand, of platinum and palladium can meaningfully reduce the underlying incentive for catalytic converter thefts.
Unfortunately, it is unlikely that Minnesota’s nation-leading platinum deposits will bring more metal to the global marketplace anytime soon, or that demand for these metals will fall.
Minnesota contains 51 percent of all the platinum reserves in the United States and 48 percent of the palladium. To learn more about how reserves are calculated, click here. The responsible development of Minnesota’s essential metal deposits could boost America’s contribution to global metals supplies, but the permitting process has become politicized, preventing the development of Minnesota’s non-ferrous metal resources.
While the legislation proposed by Sen. Marty would help to stem catalytic converter thefts by creating more hoops for thief’s to jump through, it is likely the trade in stolen auto parts will continue on a cash basis regardless of whether the law is passed, much like cannabis is bought and sold on the black market in the state.
Responsibly developing Minnesota’s platinum and palladium deposits wouldn’t be a silver bullet to the problem of catalytic converter theft, but it would allow our state to show leadership and demonstrate that responsible mining can increase the supply of this valuable metal while creating up to 14,850 jobs in the process.