Minerals scarcity - a non-issue?

Transcription

1 Minerals scarcity - a non-issue? Gus Gunn British Geological Survey

2 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

3 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 mine anywhere!

4 Increasing global demand for minerals 2500 million tonnes Mt Iron ore 2.2 billion tonnes 212Mt Mt bauxite thousand tonnes (PGM in tonnes) Platinum Group Metals Lithium minerals Tantalum and niobium concentrates Data from British Geological Survey

5 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

6 Some fundamental terms for policy and investment decisions Resources Reserves Require clear, unambiguous and standardised terminology

7 Mineral resources and 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 Reserves Reserve Base Resources A related measure to reserves which is slightly larger than reserves Resource Base A concentration of a mineral commodity of which the location, grade, quality, and quantity are known or estimated from specific geological evidence All of a mineral commodity contained in the earths crust, discovered and undiscovered

8 Minerals scarcity how much is left?

9 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

10 residues and emissions major carrier metals Structural scarcity - the metal wheel (after Reuter et al and Verhoef et al. 2004) by-products with little or no own production infrastructure co- and by-products with own production infrastructure

11 The Limits to Growth Essay on the principle of population as it affects the future improvement of society (Malthus 1798) Rev Thomas Malthus The Coal Question and the Probable Exhaustion of our Coal Mines (Jevons, 1865) President s Material Policy Commission ( ) 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

12 On borrowed time? Metal stocks and sustainability (Gordon et al. 2006) Countdown are the Earth s mineral resources running out? Mining Journal (2008) Towards a world of limits: the issue of human resource follies (Sverdrup et al. 2009) Assessing the long-run availability of copper (Tilton and Lagos, 2007) Peak Minerals (Bardi and Pagani, 2007) Peak Minerals in Australia Giurco et al Rare metals getting rarer (Ragnarsdottir, 2008) Nature Earth s natural wealth: an audit (Cohen, 2007) The disappearing nutrient (Gilbert, 2009) Nature

13 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

14 Earth s natural wealth: an audit (New Scientist, 2007) Number Years left = Reserve base Annual global consumption Conclude - antimony will run out in 15 years, silver in 10 and indium in under 5

15 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 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 Reserves Reserve base Undiscovered Resources Resources identified undiscovered

16 Static life time the reality 16 1,6 Mio. t 12 8 Copper 2008: 14.4 Mio. t Mio. t 1,2 0,8 Nickel 2008: 1.5 Mio. t : 4.2 Mio. t 0,4 1960: 0.34 Mio. t years : 39 years 2008: 36 years years : 63 years 2008: 46 years t Indium 2007: 563 t t Cobalt 2008: 63,783 t : 66.4 t : t years : 15 years 2007: 19 years years : 125 years 2008: 111 years Mine production (for indium, refinery production) Static life time of reserve base* Static life time of reserves Data sources: USGS, BGR database, 2009 *Before 1988, the USGS only classified reserves

17 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 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

18 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? Source: British Geological Survey??

19 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

20 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

21 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 4 th largest remaining copper deposit 5 th largest gold deposit Other IOCG deposits known but no unifying genetic model Mauritania, Sweden, Chile, China, and Queensland

22 New frontiers, new terranes and old terranes

23 Resources on the seabed Polymetallic 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 % Cu and 4.8 g/t Au Manganese nodules and cobalt-rich crusts Resources of sea-bed cobalt and nickel are comparable in size to those on land

24 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

25 Old targets in old terranes Lumwana copper-cobalt, NW Zambia % Cu (2009, measured/indicated) % 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 % WO3 and 0.02% Sn (2010, most in measured category) very large, low grade deposit

26 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

27 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)

28 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

29 Thanks for your attention Acknowledge discussions and data input from Peter Buccholz, BGR