Depletion and the Long-Run Availability of Mineral Commodities
John E. Tilton, 2005. "Depletion and the Long-Run Availability of Mineral Commodities", Wealth Creation in the Minerals Industry: Integrating Science, Business, and Education, Michael D. Doggett, John R. Parry
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The debate over the long-run availability of mineral commodities remains as polarized today as it was 30 years ago for three reasons. First, two different paradigms are used to assess the threat, which can lead to sharply contrasting conclusions. Second, the uncertainties regarding future changes in mineral supply and demand, which will govern the course of real mineral prices, are great. The geologic unknowns are particularly a problem in this regard. Finally, mineral commodity prices reflect only those social costs that producers pay. Just how much greater prices would be—and how their trends over time would be altered—if prices reflected all the costs of production and use is unknown. The available estimates vary greatly, and often reflect the values of individuals and groups rather than those of society as a whole. In light of the last two uncertainties, we simply do not know whether mineral commodities will become more or less available in the long run.
While this is disappointing, there is much we have learned about the nature of the threat from mineral depletion and its implications over the past several decades. For example, the world will not as a result of depletion abruptly run out of mineral commodities the way a car runs out of gas. If depletion creates problems, it will do so slowly over many years by persistently pushing real prices higher, and in the process making mineral commodities too expensive to use in one end use after another. We also know that this pessimistic scenario is not inevitable. If the cost-reducing effects of new technology more than offset the cost-increasing effects of depletion, mineral commodities will be more available a century hence, not less. Given the uncertainties, especially in forecasting technological change, we cannot predict with certainty the outcome between these two competing forces. However, a better understanding of the nature and incidence of mineral deposits that are, at present, subeconomic could provide useful insights.