Kommer de utvinningsbara metallerna ta slut? Finns det en "peak metal"-tidpunkt? Patrik Söderholm från LTH svarar på alla frågor.

1. Metal Depletion:
How to Address the Issue
Patrik Söderholm
Economics Unit
Luleå University of Technology

2. Fears of impending metal depletion: past and present
• The Classical
Economists (e.g.,
Malthus): 1800-1880
• The Conservation
Movement: 1900-1920
• World War II and the
early post-war period:
1940-1960
• Club of Rome: 1972
• Peak oil and peak
metals: 2000-
Source: Laherre (2010).

3. Questions
• What do we mean by resource depletion, and how could it
be measured?
• Looking backward: is there evidence of metal depletion?
We address two different – but often-used – measures,
using the case of copper (Cu) as an example
• Looking forward: what can we expect from the future?

4. (1) Reserve-to-production ratio
For copper this ratio is about 30, thus indicating a 30 year life
expectancy at a 0 percent growth rate in consumption.
Model run from the
Club of Rome (1972)

5. (1) Reserve-to-production ratio
At current rates of consumption the copper found in the earth’s crust – i.e.,
the resource base – would last 120 million years. Reserves defined both
by knowledge and economic availability.
For copper the reserve-to-production ratio has been about 30 for decades.
A mining firm will not invest in reserve creation beyond its perceived
current needs. As with any inventory proved reserves have increased not
despite interim production but because of it!!
We need to consult economic measures of mineral availability!

6. (2) The long-run development of real prices
Copper prices, 1850-2010 (US cents per lb)

7. (2) The long-run development of real prices
Copper prices, 1850-2010 (US cents per lb)
Average Average Average
ore grade ore grade ore grade
~6% ~2% ~1%

8. Intepreting price changes over time
Copper prices, 1850-2010 (US cents per lb)
Periods of economy-
wide shocks

9. Copper prices and costs, 1998-2007 (USD $ per ton
Source: Radetzki (2009)

10. Copper prices and costs, 1998-2007 (USD $ per ton
Rio Tinto forecast for China in
2000:
•China’s steel production in 2000
was 125 Mt
•”We in Rio Tinto thought it would
plateau at 200 Mt”
•In 2006 it was 400 Mt
Source: Radetzki (2009)

11. More relevant? The Cost of Satisfying Human
Needs
Example: the real cost of ”light”
The real prices of kerosene and electricity fell by 25 and
97 percent over the period 1883-1993.
However, the real cost of a lumen fell by 99.9 percent
over the same time period.
Source: Nordhaus (1997).

12. The ”Peak” Guide to the Future
Builds on an estimate of Ultimately recovarable resources (URR) and
the notion that a drop in discoveries signals increased resource
scarcity, and ultimately a decline in production.
However, this approach tends to
downplay the importance of
acknowledging exploration and
production activities as
determined by economic
decisions, which will be heavily
influenced by prices.

13. With higher prices the rate-of-return on
exploration activities and mining R&D increases

14. More generally, higher metal prices will……
Demand
•lead to a decrease use and stimulate the substitution to other materials
and increase the rate-of-return on R&D for identifying cheap substitutes.
Supply
•Increase exploration activities and make abandoned deposits profitable.
•Increase in investments in new capacity.
•Increased efforts to improve current production and exploration
technology.
In this race between the cost-increasing effects of increased
scarcity and the cost-reducing effects of new technology,
the long-run outcome is simply unknown!!!
Also, this does not happen suddenly!

15. Karl Popper (1957)
”The total supply of any
mineral is unknown and
unknowable because the
future knowledge that
would create mineral
resources cannot be
known before its time”