Looking Ahead - Mining and the Environment: From Ore to Metal - page 834

TABLE 22.1
Worldwide Production of Common Metals 1900-2004 - Demand for most mineral commodities has increased substantially over the last 100 years.

Metal Production in 1900 (tonnes) Production in 2004 (tonnes)

Aluminium (as alumina) 6,800 29,800,000

Copper 495,000 14,600,000

Gold 386 2,430

Iron (as iron ore) 95,500,000 1,340,000,000

Lead 749,000 3,110,000

Nickel 9,290 1,390,000

Zinc 479,000 9,600,000

Source: USGS Statistics

requiring that new resources be discovered and developed at an ever increasing rate to
meet future demand.
In the past, there have been dire predictions that the world's resources would be
depleted to the extent that particular minerals would become unavailable in the relatively
near future. For example, in 1972 the Club of Rome forecast that the world would run
out of gold by 1981, mercury by 1985 and tin by 1987. In fact, the world has not run out of
any signii cant mineral commodity and shows no sign of doing so. Resources are closely
related to price so that any price increase leads to the identii cation of increased resources.
Given that even after use (nuclear reactions excluded) the inventory of metals in the world
is constant, this situation is never going to change. Only the technologies and economics of
extraction will change and, if past history is any indication, the cost of extraction for most
mineral commodities will continue to decline, in real terms.
The current (2008) high prices for most mineral commodities, which are well above long-
term trend lines, are due mainly to the rapid increase in demand, largely from China. This
followed many years of oversupply and has caught the industry unprepared. That the sup-
ply is taking longer than usual to catch up with demand is due to several factors, including:
●

If past history is any indication,
the cost of extraction for
most mineral commodities will
continue to decline, in real terms.

Relatively little exploration took place over the decade prior to the increase in demand,
so that there were fewer than usual projects in the planning stages;

●

The lead time required to develop a new project has more than doubled over the past
20 years, due in part to environmental permitting requirements, and

●

Major mining companies have shown a reluctance to develop large new projects that
could, in combination, lead to a return to an oversupply situation, with reduced prices
as a consequence. Rather, they have acquired other companies with existing or devel-
oping operations, particularly those with long-term strategic value.

Economies of Scale

For most major mineral commodities there has been a trend over the past few decades for
an increasing percentage of the world's production to be sourced from a few very large