Cool Times
Could Our Trade War Disrupt the Most Important New Technology in Decades?
The most important new technology today isn’t batteries. It’s not AI or even computer related. It’s a modern solution to an age-old problem – how do you make things cold.
And the new technology is competitive with conventional technology right now. But technology requires some new minerals that could prove troublesome.
Prior to 1834, if you wanted to keep things cold, you had to get ice from somewhere. Boston businessman Frederick Tudor, called the Ice King, became rich selling ice to wealthy Europeans in the Caribbean. As reported by the Boston Gazette on February 10, 1806:
“No joke. A vessel has cleared at the Custom House for Martinique with a cargo of ice. We hope this will not prove a slippery speculation.”
However, in 1834, Jacob Perkins developed the first commercially viable vapor-compression refrigeration. It’s effectively the same technology used in air conditioners today.
That system relies on a refrigerant gas, which changes phase when exposed to heat. The unit compresses low-pressure gas (the refrigerant). It’s then allowed to expand rapidly. That causes it to cool rapidly. The cold liquid pulls heat from the environment and evaporates back into the low-pressure gas, completing the loop.
The continuous cycle of heat absorption and release is refrigeration.
Unfortunately, refrigerants come with myriad problems. They pose health hazards and fire risks. Engineers developed the most notorious refrigerants, chlorofluorocarbons and hydrochlorofluorocarbons in the 1930’s, as safer alternatives to the original gases like ammonia, methyl chloride, and sulfur dioxide.
In 2025, there will be a shift in refrigerants that are safer for the environment. Unfortunately, the new refrigerants are much more expensive. That opens the door to what we believe will be the most impactful new technology right now – mechanical refrigeration.
According to researchers from the U.S. Department of Energy’s Ames National Laboratory, they developed a “magnetocaloric heat pump.” It uses magnets and exotic metal to do the same cooling process. And it matches conventional systems in cost, weight, and performance. This was the critical hurdle, because no one wanted a giant, expensive heat pump.
Historically, these magnetocaloric systems couldn’t match conventional systems. The breakthrough came from the material. In this case, gadolinium. It’s a rare earth metal that responds to magnetism. However, there is room to improve. Lanthanum Iron Silicates show even greater promise but are more difficult to source.
Magnetic refrigeration is coming. And with it will come even greater demand for rare earth minerals. Sources for gadolinium, lanthanum, and neodymium will become ever more important.
Today, most of that material comes from China. That’s problematic because the U.S. and China are neck deep in a trade war. China embargoed the sale of many of these critical minerals to the U.S. And the tariff duel caused all export prices to soar.
Either North America must develop a supply chain from mine to refinery, or we must settle our differences in trade. Without access, the U.S. will fall behind the technological curve on many things, including these new refrigeration techniques.
For the Good,
The Mangrove Investor Team
Numbers You Need to Know
1902
In 1902 Willis Carrier developed the first air conditioner. But not for comfort, but to control humidity at a printing plant in Brooklyn, New York. The system used chilled coils to cool air and reduce moisture, helping keep the paper dimensions and ink alignment stable.(williscarrier.com)
180 AD
2 Billion
Roughly 2 billion air conditioning units are now in operation around the world, making space cooling one of the leading drivers of rising electricity demand in buildings and of generation capacity additions to meet peak power demand. Residential units in operation account for nearly 70% of the total. (iea.org)
What’s New in Sustainable Investing
Minerals Supporting Sustainability: Why Ethical Investing Matters
Investing in critical minerals and metals is a venture that intertwines opportunity with risk. Investors have a chance to tap into the burgeoning demand sparked by the transition to clean energy, technology and sustainability. (Forbes)
Can Renewable Energy Stocks Prosper During Trump’s Second Term?
The election of US President Donald Trump in January 2025 changed the political landscape for renewable energy dramatically. Around 300 clean energy projects in the US are now under review as the new administration prioritizes fossil fuels, while grants worth billions have been canceled. (Morningstar)
Video Of The Week
How Magnetic Cooling Is Breaking All the Rules
What if I told you your fridge could be cooled without gas, without chemicals, just magnets? It not only promises higher efficiency, but solves a critical problem with the status quo.
