Minerals scarcity - a ‘non-issue’?
Transcript of Minerals scarcity - a ‘non-issue’?
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Minerals scarcity - a ‘non-issue’?
Gus GunnBritish Geological Survey
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Talk outline• Introduction – key concepts
• Demand – past and present
• Supply challenges
• Resources and reserves – what are they?
• Mineral scarcity - how much is left? Models for mineral depletion
• Supply solutions – focus on increased technical availability of primary mineral resources
• Conclusions and future challenges
Boulby potash mine, England
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Supply of natural resources – mineral deposits
• “If it can’t be grown it has to be mined”
• A mineral deposit is an accumulation of a mineral(s) that may be economically valuable
• Mineral deposits are rare, concentrations in a small volume of the crust, unevenly distributed throughout the earth
• Value depends on quantity, quality, mining/processing costs, rarity, price, etc
• Minerals are where you find them – you can’t locate a mineanywhere!
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Increasing global demand for minerals
Iron ore
bauxite0
500
1000
1500
2000
2500
1950 1960 1970 1980 1990 2000 2010
milli
on to
nnes
0
100
200
300
400
500
600
1950 1960 1970 1980 1990 2000 2010
thou
sand
tonn
es
Platinum Group Metals
Lithium minerals
Tantalum and niobium concentrates
(PG
M in
tonn
es)
Data from British Geological Survey
212Mt
768Mt
58Mt
2.2 billion tonnes
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Supply challenges – accessibility and availability• Accessibility
- social and cultural constraints
- politics, legislation and regulation
- environmental issues
- economics
• Availability- new discoveries to replace depleted deposits
- exploration technology
- mining, processing and beneficiation technology
- recycling, substitution, increased resource efficiency will make major contributions
- artisanal and small-scale mining
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Some fundamental terms for policy and investment decisions
• Resources• Reserves• Require clear, unambiguous and
standardised terminology
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Resource Base
Mineral resources and reserves
ResourcesReserve Base
Reserves
The quantity of a mineral commodity found in subsurface resources, which are both known
and profitable to exploit with existing technology, prices and other conditions
A concentration of a mineral commodity of which the location, grade, quality, and
quantity are known or estimated from specific geological evidence
A related measure to reserves which
is slightly larger than reserves
All of a mineral commodity contained in the earths crust, discovered and undiscovered
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Minerals scarcity –how much is left?
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Three types of mineral scarcity• Absolute
- depletion of all resources (discovered and undiscovered)
• Temporary- supply cannot match demand, long lead times
for new capacity- many varied causes – new technologies,
politics, accidents, strikes, inadequate infrastructure, concentration of production......
• Structural- applies to technology metals (Ga, Ge, In, etc),
by-products from ores of major (carrier) metals (Al, Cu, Zn, etc)
- lack own production infrastructure; complex supply-demand patterns, technology and investment needs
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Structural scarcity -the metal wheel(after Reuter et al. 2005 and Verhoef et al. 2004)
major carrier metals
co- and by-products with own production infrastructure
by-products with little or no own production infrastructure
residues and emissions
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“The Limits to Growth”• Essay on the principle of population as
it affects the future improvement of society (Malthus 1798)
• The Coal Question … and the Probable Exhaustion of our Coal Mines (Jevons, 1865)
• President’s Material Policy Commission (1950-1952)
• The Limits to Growth (The Club of Rome, Meadows et al. 1972)- “only 550 billion barrels of oil
remained and that they would run out by 1990”
Rev Thomas Malthus 1766-1834
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“On borrowed time?”
Towards a world of limits: the issue of humanresource follies (Sverdrup et al. 2009)
Metal stocks and sustainability(Gordon et al. 2006)
Assessing the long-run availability of copper (Tilton and Lagos, 2007)
Earth’s natural wealth: an audit(Cohen, 2007)
Countdown – are the Earth’s mineral resources running out? Mining Journal (2008)
Peak Minerals(Bardi and Pagani, 2007)Peak Minerals in AustraliaGiurco et al. 2010
Rare metals getting rarer(Ragnarsdottir, 2008) Nature
The disappearing nutrient(Gilbert, 2009) Nature
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Fixed-stock paradigm
• Earth is finite; resources are finite – a fixed stock
• Demand does not cease: it continues and is generally increasing
• Physical depletion is the inevitable result
• Scarcity leads to escalating prices, reduced demand and thus economic depletion rather than resource depletion
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Reserve baseNumber Years left =
Annual global consumption
‘Earth’s natural wealth: an audit’(New Scientist, 2007)
• Conclude - antimony “will run out in 15 years, silver in 10 and indium in under 5”
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Shortcomings of the fixed stock approach• Only fixed stock is the resource base• Resources and reserves are not static, and are poorly known• Recycling, re-use and substitution are often ignored• Future consumption rates are unknown
Undiscovered
Resources
Resources
Reserves
Reserve base
identified undiscovered
RESERVES - the quantity of a mineral commodity found in resources, which are both
known and profitable to exploit with existing technology, prices and other conditions
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4
8
12
16
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
20
40
60
80
1987: 39 years2008: 36 years
2008: 14.4 Mio. t
1960: 4.2 Mio. t
Copper
Mio
. tye
ars
0,4
0,8
1,2
1,6
2060
100140
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Mio
. tye
ars
Nickel
1960: 0.34 Mio. t
2008: 1.5 Mio. t
1987: 63 years 2008: 46 years
0
10
20
300
200
400
600
t
1970 1975 1980 1985 1990 1995 2000 2005 2010
year
s
Indium
1972: 66.4 t
2007: 563 t
1989: 15 years
2007: 19 years
10
30
50
70
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
100
300
500
year
s1.
000
t Cobalt
1960: 14.734 t
2008: 63,783 t
1988: 125 years 2008: 111 years
Mine production (for indium, refinery production) Data sources: USGS, BGR database, 2009*Before 1988, the USGS only classified reserves
Static life time of reserve base*Static life time of reserves
Static life time – the reality
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• Application to metals (Bardi and Pagani, 2007):− examined 57 mineral commodities
− “11 cases where production has clearly peaked and is now declining” (e.g. Hg,Te, Pb, Cd, phosphate rock)
− “most minerals should be peaking in the coming decades”
Peak minerals - scarcity of supply or scare story?
• Hubbert's Peak Theory:− production of a commodity peaks when half the extractable
resource has been extracted− following ‘peaking’ there will be an inevitable decline in production of
a depleting resource
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Source: British Geological Survey
Peak metals – a useful tool?• metals are ‘graded’ resources• when prices are high, reserves
include lower grade ores • “Ultimate” global peaks?• some fundamental assumptions
not valid - URR is known and fixed; that the sum of all producing deposits is a normal distribution, etc
• ignores recycling, substitution and technological advance for increasing metal stocks
• peak concept is not a useful tool for modelling future metal production
• production level reflects demand not depletion
?
??
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Resource estimations – what do we really know?
• USGS – global leaders in the field
– Mineral Commodity Summaries(reserve and reserve base – latter discontinued)
– range of sources (inconsistencies)
– vary widely with time (as would be expected) e.g. copper “recent assessment of U.S. copper resources indicated 550 million tons of copper in identified and undiscovered resources, more than double the previous estimate”
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How has demand been met up to now?
• Increased exploration expenditure
• Improved understanding of how deposits form - used to predict where deposits are located
• New deposit classes
• New technology for new ore types, lower grade ores, deeper deposits (exploration, mining, processing, etc)
• New baseline geoscience datasets
• New frontiers, new target areas / revisit old targets
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New deposit classes - Iron oxide-Copper-Gold (IOCG)
• Large, multi-commodity deposits– >1000 Mt– Fe, Cu, Au (REE, U, P, Ag, F, Ba, Co)
• Type example is Olympic Dam, South Australia– discovered in 1975 beneath 600m of cover – largest uranium deposit in the world– 4th largest remaining copper deposit– 5th largest gold deposit
• Other ‘IOCG’ deposits known but no unifying genetic model– Mauritania, Sweden, Chile, China, and
Queensland
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New frontiers, new terranes and old terranes
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Resources on the seabedPolymetallic massive sulphides
• Cu-Zn-Au-Ag deposits in SW Pacific, New Zealand, Japan, etc
• Nautilus granted mining licence offshore Papua New Guinea, January 2011
• Solwara 1 - 50 km offshore, 1600 m water, resource 2.2 Mt @ 6.8% Cu and 4.8 g/t Au
• Resources of sea-bed cobalt and nickel are comparable in size to those on land
Manganese nodules and cobalt-rich crusts
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‘New’ terranes• Application of existing geological models to previously
unexplored terranes– political restrictions or conflicts e.g. Soviet Union, Iran, DRC,
Afghanistan, Zimbabwe
– inaccessibility e.g. Mongolia
– lack of perceived mineral potential e.g. Baluchistan
– lack of data e.g. diamonds in Arctic Canada
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‘Old’ targets in ‘old’ terranes
• Lumwana copper-cobalt, NW Zambia– 342.5 Mt @ 0.74% Cu (2009, measured/indicated)– 563.1 Mt @ 0.63% Cu (inferred)– with Co, Au and U– copper production 172,000 tpa (37 years from 2009)
• Hemerdon tungsten, Devon, UK– operated during World War II– Amax re-evaluated the deposit in late 1970s;
permission granted in 1986– Wolf Minerals updating feasibility – 218.5 Mt @ 0.18% WO3 and 0.02% Sn
(2010, most in measured category)– very large, low grade deposit
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Research for improved supply security• Metallogenic studies, both in deep and surficial
environments (low C deposits, more easily processed)
• Exploration technology, especially for deep, buried deposits
• Improved knowledge of indigenous resources
• Mining and processing technology for primary ores – cleaner and more energy efficient
• Focus on critical minerals – knowledge base limited for many because historical consumption minor
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Conclusions• Metal scarcity is a ‘non-issue’, but access to resources is not• Primary ores will continue to be the main source of future
supply of metals• Current reserves are unreliable indicators of future
availability of minerals• Fixed stock approach and peak metal concept are flawed.
Falling production is not the same as resource depletion• Investment and policy decisions should be based on high
quality data and clear terminology• Research is required on all parts of the commodity life cycle –
from cradle to grave• Focus on critical minerals and on indigenous resources to
ensure security of supply (production of some metals highly concentrated in a few countries at present)
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Challenges for sustainable minerals supply
• What should be of concern is not the limited extent of reserves, but how reserves are replenished
• Particular attention should be given to the technology metals which currently lack own production infrastructure
• Energy, environmental and social costs may be the main constraints on future consumption and production
• Can we afford the carbon cost of recovering low grades from primary and waste materials?
• Decarbonation of resource use presents a major scientific and technical challenge
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Thanks for your attention
Acknowledge discussions and data input from Peter Buccholz, BGR