Hurricane Helene caused over $100 billion in estimated destruction when it smacked the southeast United States last week. Now, I don’t write cliches like I am sending my thoughts and prayers to the flood victims. This is a disaster and that is why it is called as much. If you know what is happening there, you don’t need mean to tell you it’s a disaster. What I can tell you is that the disaster is more than meets the eye.
Augusta National golf course was also impacted by the hurricane, and I am very concerned about the Masters in 6 months and if the course will be ready to play. Easy, easy with the vitriol about how lives are more important than sporting events, I’ll get there. This is Augusta National and the Masters we are talking about. This is why it is so important. Augusta National has the best bunkers in the world. Still don’t follow me…They aren’t even sand but imported granulated quartz. This from Meghan Overdeep in Southern Living, “Known as “Spruce Pine sand” or “SP55,” this coveted bunker filler is named after the only place where it is found: the Spruce Pine Mining District in Western North Carolina. According to a 2020 Los Angeles Times feature, the iconic white “sand” Augusta has been using since 1975 is a byproduct of mining ultra-pure quartz used to create semiconductor chips for computers, phones, and other electronic devices.
CBS announcer Jim Nantz has famously compared the bunkers at Augusta National to “bowls of sugar.”
“They pop, they stand out,” Nantz told the LA Times. “Visually, they look different than everything else that you see. It just fits the rest of the motif, that it’s fantasyland for the golfer. Everything appears to be perfect.”
Did you catch that? Since 1975 SP55 has been a byproduct of mining ultra-pure quartz to create semiconductor chips. It turns out those devices have gotten more popular and one of the reasons why is the not byproduct of the best looking bunker sand in the world. The Spruce Pine quartz is one of one. It has the best quartz in the world for bunkers and semiconductors.
Now, even quartz must take a backseat to humanity while the area recovers from lives lost, homes destroyed, and dogs separated from owners. The area is far from hurricane areas and surely didn’t have the precautions in place for such an event. The last time it flooded this badly was 1916. In some areas this flood was even worse. I often poke fun at people that refuse to leave a hurricane area and then desperately need help afterwards. There was no warning for these folks as nobody forecasted this kind of destruction. I guess all that AI weather forecasting technology kind of shit the bed… But I digress, back to quartz and why it is so desperately needed for wait for it…AI.
This from ZeroHedge, “In March, a Wharton professor who studies artificial intelligence and start-ups claimed on X, “The modern economy rests on a single road in Spruce Pine, North Carolina. The road runs to the two mines that are the sole supplier of the quartz required to make the crucibles needed to refine silicon wafers.”
Ethan Mollick noted at the time, “There are no alternative sources known” if supply disruptions were seen in Spruce Pines.”
I knew that the Spruce Pine mine was important for golf, but I had no idea it was that important for the global economy. Mollick references Conway’s Material World on his original post about the topic in March of this year, “No high-purity quartz means no Czochralski crucibles, which means no monocrstyalline silicon wafers, which means, well, the end of computer chip manufacture as we know it. We would adapt; find a new process or an alternative substance. But it would be a grisly few years. Perhaps this is why those who work in high-purity quartz are so jumpy.”
Well, they are jumpy now. Here is Gretchen Smith on here Twitter account “hundreds of families have loved ones unaccounted for…the roads into Spruce Pine are not passable. Bridges are collapsed.” This is from Jags Board Game &Movie Guy’s twitter account “The CSX rail between Erwin, Tn and Spruce Pine, Tn is unrecognizable, and in some case, completely missing, lost to the floods created by Helena. Could take months to open again.” I’m assuming he means Spruce Pine Nc, since they are an hour away. These sources are just Twitter but this is critical infrastructure that is missing here folks. 4CatDoc’s twitter shows a screengrab of FoxNews weather that shows 23.25 inches of rain had already fallen in Spruce Pine. Lastly, this from Code of Vets Twitter, “Flooding has receded. The town of Spruce Pine NC is destroyed. Population 2200. No water. No electricity. No gas stations. No internet. No phone service. No grocery stores. There is looting.” Bloomberg is now reporting that the mines are closed.
The reason that this area is so important is because of the unique geography that exists there, as in where Africa crashed into North America 380 million years ago. That is according to the Sibelco company that mines the quartz in Spruce Pine. This from their website, “the region boasts largescale reserves of high purity quartz (HPQ) – a mineral that has played an important part in Sibelco’s growth. Sibelco’s move into Spruce Pine came in the 1970s through the acquisition and integration of Unimin, North America’s largest silica sand producer. Since then, continued investment in new extraction and processing technologies has secured our Spruce Pine operation its place as the world’s leading provider of HPQ.
Mined from two uniquely pure ore bodies, Sibelco IOTA® HPQ is used to make fused quartz, a material with unparalleled optical, mechanical and thermal properties that make it indispensable in the manufacture of high-tech products such as semiconductors, solar photovoltaic cells, optical fibre and quartz lighting. Today, almost all IOTA® products are exported thousands of miles from North Carolina to Asia’s specialist electronics and solar PV markets.”
I have mentioned that Nvidia’s surprising rise to top 5 company status worldwide has been largely due to 4-5 of the world’s largest companies buying most of their chips, aka they are not very diversified. Which works well until it doesn’t. If Facebook, Google, or Tesla walks away from a purchase contract that could seriously impact the future revenues of the company that are well baked in the cake that is the stock price. However, there are other significant fragilities in this narrow ecosystem. ASML is the Dutch company that makes the lithography equipment necessary for the etching of the chips. They are also one company of one. They rely heavily on mirrors from Germany which are from Zeiss which makes the most accurate mirrors etc. These are all very real and necessary companies to make semiconductor chips at least the latest and greatest ones. Before we get to the parallel processing genius of Nvidia, or the lithography of ASML, or the Zeiss mirrors we need the damn quartz.
Back to ZeroHedge, “As of Monday morning, Mollick’s worst fears could be realized as Google Traffic data shows road closures around the Sibelco mining facilities and across the entire region. A 2018 note from Wired shows just how critical Spruce Pines area mines are for semiconductor production: “A fire in 2008 at one of the main quartz facilities in Spruce Pine for a time all but shut off the supply of high‑purity quartz to the world market, sending shivers through the industry…There has been no confirmation from the miner about any disruption. Well not as of Monday morning”
Unless they want to canoe this quartz out, it looks like we have ourselves a transportation problem. We will know about who shot Kennedy before we get the real story about what is happening at this mine. Do you know what would happen if Jensen Huang at Nvidia was to say, ugh yeah honey I will sign your titty in a minute but we didn’t make any chips this quarter because we ran out of blank canvasses for Michaelangelo to draw on. This would be the Shaquille O’Neal of Black Swans were this supply chain to get disrupted for weeks or months.
This is yet another Black Swan just sitting out there. Add to that the continuing strike at Boeing, the new East Coast port strike, and Israel invading Lebanon, Iran firing missiles on Israel and we should have plenty of volatility for the markets to digest. Speaking of Lebanon, since Israel is invading, are we going to see a bunch of I stand with Lebanon flags? Should I order a bunch of them from Amazon just in case and corner the market? Who knows what the court of public opinion is going to do with that one.
Luckily, I can still sleep at night knowing that Joe Biden is on the job and commanding.
Sincerely Yours,
C Thomas Printer
On this date in history… 188 years ago to be exact, Charles Darwin returned to England after his voyage on the HMS Beagle where his observations led him to theory of evolution based on natural selection.
Also born on this date …. Photographer Annie Leibovitz and god bless Chris Ledoux.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.