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IS MINERAL DEPLETION A THREAT TO SUSTAINABLE MINING?

by
John E. Tilton1

Abstract

For many people the term sustainable mining is an oxymoron. After all, mining
entails the exploitation of non-renewable resources. Eventually these resources will be
gone and mining will have to cease. As a result, many concerned individuals urge society
to conserve non-renewable resources and where possible to use renewable resources
instead.

Drawing on what we have learned from the debate over the long-run availability
of mineral commodities over the past several decades, this paper describes two, very
different mental models of mineral depletion. The first, known as the fixed stock
paradigm, relies on physical measures of availability, and does indeed suggest that
mining in the long run is inherently non-sustainable. Fortunately, for the mining industry
and even more importantly for humanity as a whole, the fixed stock paradigm suffers
from several serious shortcomings.

As a result, the second way of viewing depletion, known as the opportunity cost
paradigm, is more useful and appropriate. It assesses resource availability by what society
has to give up to produce another unit of a mineral commodity, for example, another a
barrel of oil or ton of copper. While over time depletion tends to drive the opportunity
cost of mineral production up, new technology and other forces can offset this upward
pressure. Indeed, for many mineral commodities this has actually been the case over the
past century, indicating that sustainable mining is possible.

1John E. Tilton ([email protected]) divides his time between Colorado, where he is

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Introduction

Sustainable mining means different things to different people. To some it means

mining carried out in a manner consistent with sustainable development. In particular, it

is mining in a way that preserves the environment, protects indigenous cultures, and

promotes the welfare of local communities. To others, sustainable mining implies the

extraction of mineral resources from the earth in a manner that permits this activity—that

is, extracting minerals resources from the earth—to continue indefinitely.

This paper focuses on this second definition and addresses the question: Is

mineral depletion a threat to sustainable mining? For many, the answer is obvious.

Indeed, they see the term sustainable mining, when defined in this manner, as an

oxymoron. Since mining depends on non-renewable, depleting mineral resources, by its

very nature it is unsustainable. Eventually the resources from which we produce copper,

tin, nickel, and other mineral commodities will be exhausted.

Some may contend that this is not a pressing issue, that known stocks coupled

with what we are likely to discover are sufficient for the foreseeable future. Still, fears

about depletion, even if misplaced, can alter the way society behaves today for good or

for bad. For example, concerns over the long-run availability of copper resources have

led Gordon et al. (2006) to suggest that society will need to do more recycling, and where

possible substitute more available resources for copper over the current century.2

2The International Copper Association, concerned that these conclusions might

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Another example concerns lithium batteries, which many believe will be widely

used over the coming decades to power hybrid and all electric automobiles. Fears that the

needed lithium may simply not be available have led some (Bradbury 2008, Tahil 2007,

and Tahil 2008) to recommend that society avoid developing better lithium batteries and

instead invest in new battery technologies that rely on more abundant metals.3

So the question—is mineral depletion a threat to sustainable mining?—has

implications and consequences not just for the distant future but for today and tomorrow

as well. To address this question, this analysis draws on the on-going debate over the

long-run availability of mineral commodities.4 In particular, it focuses on two very

different ways or mental models of looking at depletion—the first is known as the fixed

stock paradigm and the second as the opportunity cost paradigm—and it highlights their

very different implications for sustainable mining.

The Fixed Stock Paradigm

The most common mental model used to assess the threat of mineral depletion is

the fixed stock paradigm. It starts with the observation that the earth is finite. As a result,

the supply of copper, oil, or any other mineral commodity must also be finite and hence a

fixed stock. Demand, however, continues year after year, and so is a flow variable. This

means that demand eventually must exhaust the available supply. When demand is

review and assess the research of Gordon and his colleagues. See Gordon et al.
(2007) for their reply.
3 For a different perspective on the long‐run availability of lithium, see Yaksic and

Tilton (forthcoming).
4 For more on this debate, see Tilton (2003).

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growing exponentially, as has been the case for many mineral commodities in the past,

the end will arrive sooner rather than later given the well-known tyranny of exponential

growth.

This, for example, is the view of depletion found in Limits to Growth (Meadows

et al. 1972). Mineral scarcity due to depletion occurs suddenly and without warning. It is

like a car that that runs out of gas: one minute speeding down the highway, the next

stalled on the berm.

Despite its logic and intuitive appeal, the fixed stock paradigm suffers from four

critical shortcomings. First, many mineral commodities, especially the metals, are not

destroyed when they are consumed. As a result, recycling and reuse are possible. Of

course, recycling in some cases (such as the lead once used as an additive in gasoline) is

prohibitively expensive, but this is a question of costs, not of physical availability.

Second, for other mineral commodities, including oil and other energy minerals,

substitution can mitigate the threat of mineral depletion. Coal, natural gas, petroleum,

nuclear, hydropower, wind, and solar energy can all be used to generate electric power.

The mix of these resources used at any particularly time reflects their costs. If depletion

drives the costs of some up, their consumption will decline as society relies more on

alternative energy sources.

Third, the fixed stock of many mineral commodities is huge. At current rates of

consumption, for example, the copper and iron found in the earth’s crust would last 120

million years and 2.5 billion years respectively. These are very long periods of time. For

comparison, the big bang occurred about 13 billion years ago, our solar system is about 5

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billions old and already halfway through its expected life, and homo sapiens evolved as a

species only several hundred thousand years ago.

Fourth, and most important, long before the last barrel of oil or the last ton of zinc

was hoisted from the earth’s crust, costs would rise dramatically. This would first curtail

and then eventually eliminate demand. In short, the threat is not physical depletion, where

we literally run out of mineral resources, but economic depletion, where the costs of

producing and using mineral commodities rise to the point where they are no longer

affordable.

The Opportunity Cost Paradigm

For these reasons, a more useful mental model for assessing the threat of

depletion is the opportunity cost paradigm. The latter focuses on what society has to

sacrifice or give up in order to produce another ton of coal or pound of nickel. Several

measures are available for this purpose, including production costs and the value of

mineral reserves in the ground. However, the most readily available and reliable is price.

When the real price for a mineral commodity is rising over the long run, it is growing less

available or more scarce.

The opportunity cost paradigm completely changes our perception of depletion.

First, even in the absence of physical depletion, economic depletion may occur in the

sense that mineral commodities become too expensive to use.

Second, if depletion does occur, it will occur gradually over time as the real prices

of mineral commodities rise persistently, slowly eliminating their demand in one end use

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after another. Depletion will not be a surprise. We will not wake up one day and find the

cupboard bare or the car out of gas.

Third, and particularly important for the future of humans, mineral scarcity due to

depletion is not inevitable, as the fixed stock paradigm implies. While the need to exploit

lower grade, more remote, and more difficult to process deposits tends to drive the costs

and prices of mineral commodities up over time, new technology can offset this upward

pressure. In short, the long-run availability of mineral commodities is now determined by

a race between the cost-increasing effects of depletion and the cost-decreasing effects of

new technology.

Over the past century, this race has largely been won by new technology, as the

long-run trends in real prices for most mineral commodities have either declined or

remained the same.5 Of course, the past is not necessarily a good guide to the future, and

we have no guarantee that such benevolent trends will continue indefinitely.

Fourth, population growth no longer necessarily reduces the long-run availability

of mineral commodities. Every new baby is born with a brain as well as a mouth. While

population growth tends to accelerate the consumption of mineral resources, which

pushes costs and prices up, it also increases the human resources needed to generate the

new technologies that reduce costs and prices. As a result, population growth can

conceivably increase the long-run availability of mineral commodities, a possibility that a

few scholars suggest is actually the case.6 It also raises the likelihood that poverty and

discrimination (which prevent millions of people from developing their potential and so

5
See, for example, Barnett and Morse (1963), Krautkraemer (1998), Howie (2002), and
Svedberg and Tilton (2006).
6
See Simon (1981).

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contributing back to society) may pose a greater challenge than population growth per se.

In some countries, of course, population growth may impede development and contribute

to poverty.

Fifth, the United States and other developed countries consume a

disproportionately large share of the world’s resources compared to their populations. To

many this seems unfair to the rest of the world, where billions of poor people struggle

just to survive. Under the opportunity cost paradigm, however, the high levels of mineral

consumption in the developed world need not necessarily increase resource scarcity.

While this consumption tends to accelerate mineral depletion, the wealth that it creates in

the developed world supports the technological efforts that push the cost and prices of

mineral commodities down over time. It is not an accident that most of the new

technologies increasing the availability of many mineral commodities over the past

century have come from the developed countries. This raises the possibility that the poor

may actually benefit from the apparent profligate use of mineral resources in the

developed world, in the sense that today they have access to cheaper mineral

commodities as a result than the developed countries did at comparable stages of

development.

Conclusions

So the way one thinks about depletion matters. With the fixed stock paradigm,

physical depletion is inevitable and mining is unsustainable. The end will come suddenly,

and likely take us by surprise. Mineral consumption accelerates the day of reckoning.

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Both population growth and the widespread use of mineral commodities in the developed

world undermine the long-run availability of mineral commodities.

With the opportunity cost paradigm, if society can continue in the future as it has

in the past to create new technologies that offset the cost-increasing effects of depletion,

mining can be sustainable indefinitely. In this case, the primary production of steel,

aluminum, copper, and other mineral commodities from extracted mineral ores will

remain competitive with recycled materials and with substitute materials produced from

renewable resources. In addition, the costs and prices of these products will not rise

persistently over time, and consumers will not be forces to curtail their demand.

Thus, it is fortunate—both for the mining and for society as a whole—that the

opportunity cost paradigm is the more useful and appropriate way of assessing the future

threat of depletion to sustainable mining.

References

Barnett, H. J., and C. Morse (1963). Scarcity and Growth (Baltimore, MD, Johns
Hopkins for Resources for the Future).

Bradbury, D., 2008. “What is going to power our cars?” The Guardian, July 31.
Available at www.guardian.co.uk/ technology/2008/jul/31/motoring.energy (accessed on
August 10, 2008).

Gordon, R.B., M. Bertram, and T.E. Graedel (2006). “Metal stocks and sustainability,
Proceedings of the National Academy of Sciences, Vol. 103, No. 5, pp. 1209-1214.

Gordon, R.B., M. Bertram, and T.E. Graedel (2007). “On the sustainability of metal
supplies: a response to Tilton and Lagos,” Resources Policy, Vol. 32, pp. 24-28.

Howie, P.A. (2002). A Study of Mineral Prices: Analyzing Long-Term Behaviors and
Testing for Non-Competitive Markets, Unpublished PhD dissertation, Colorado School of
Mines. Golden, CO.

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