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> Does smelting actually need a lot of labor? https://agmetalminer.com/2009/02/27/cost-build-up-model-for-primary-aluminum-ingot-production/ https://agmetalmin

> Does smelting actually need a lot of labor? https://agmetalminer.com/2009/02/27/cost-build-up-model-for-primary-aluminum-ingot-production/ https://agmetalminer.com/2009/02/27/cost-build-up-model-for-... I've seen estimates from 7-10% are labor costs. > But this is not like manufacturing phones where labor = O(number of phones produced). Am I wrong? Why is aluminum production not almost purely capital intensive? You still need people to handle the machines, repair the machines, perform billing, HR, etc. You don't have giant automated aluminium factories devoid of people. > If so, it would suggest that the advantage of China isn't cheap labor costs, but either cheap energy, cheap regulations, or cheap currency. Yes. It is more the cheap energy/regulations but the labor savings isn't 0. Aluminum factories in the west regularly have 7-9 figure environmental problems. http://www.geelongadvertiser.com.au/news/geelong/epa-orders-alcoa-to-start-cleaning-up-the-toxic-cocktail-at-point-henry/story-fnjuhovy-1227288298308 http://www.geelongadvertiser.com.au/news/geelong/epa-orders-... http://www2.epa.gov/enforcement/case-summary-alcoa-inc-conduct-243-million-cleanup-grasse-river-superfund-site-new-york http://www2.epa.gov/enforcement/case-summary-alcoa-inc-condu...

agentgt 11y ago
There is also the fact that although direct labor may not be a large % almost everything needed to create and maintain the plant is produced by China with cheap labor (including exotic things like rare earth metals). This is the ole McDonalds econ effect (McDonalds owns their own farms etc..) of controlling production of all upstream things to provide better price and leverage. Besides regulation there is also the fact that China has a government where eminent domain and relocation citizens to other homes is not a problem.

agentgt 11y ago

There is also the fact that although direct labor may not be a large % almost everything needed to create and maintain the plant is produced by China with cheap labor (including exotic things like rare earth metals). This is the ole McDonalds econ effect (McDonalds owns their own farms etc..) of controlling production of all upstream things to provide better price and leverage. Besides regulation there is also the fact that China has a government where eminent domain and relocation citizens to other homes is not a problem.