Thoughts about mining & scarcity

Mining from an individual mine gets more expensive with time because the useful component of remaining ore decreases as the higher grade ore is removed. Eventually a mine must close because the concentration of useful ore becomes too dilute and, therefore, uneconomical to extract. We also see this sort of lifecycle trend in petroleum wells. Old, tapped mines and wells must close, and, to keep up production, prospecting geologists survey for new ones with fresh bounty to tap.

But can we ever run out of new mines and thus new raw material? Well it seems we can. Slate.com ran an interesting article about the demise of cryolite. This mineral was used in aluminum processing and has become too rare to mine. Don't worry, though, aluminum processing continues. Cryolite has been replaced by a synthetic substitute. And of course, anyone familiar with the Hubbert Curve and Peak Oil has heard about predictions of the global decline and eventual depletion of petroleum resources. In the United States, oil production has been on the decline since about 1973. But these predictions haven't come true globally yet, and seem to be constantly postponed, in part, due to discoveries of additional resource reserves.

As mines or wells are exhausted, there are a couple of strategies to maintain production. First, mining/drilling operations may spread out to new places with new reserves. We have observed this in the petroleum industry. Drilling for petroleum now occurs commonly in the ocean and in ever deeper waters. Sometimes with disastrous results, i.e BP oil spill in the gulf. Second, mining/drilling operations may upgrade equipment that can economically extract even lower grade ores and ever more depleted wells. We have also observed this trend as the oil industry uses new equipment capable of drilling sideways underground or pumping gases into wells to force out more oil.

There is one other trend that can occur, although it isn't exactly a strategy: the price of the commodity that is being extracted can rise. This makes extracting from low yield mines and wells economical once again. So mines that were closed because the ores were not of high enough grade can be re-opened.

These prices can rise for many reasons, but one especially worrying reason is on display now: China's rare earth mineral trade embargo. China is demonstrating, perhaps, the first of a recurring pattern of material embargoes undertaken for economic dominance and the country's own manufacturing security. China is suspending exports of rare earth minerals which are an ingredient in all kinds of electronic products today. China produces about 97% of these minerals globally, according to the Scientific American article. The US is responding by reopening rare earth mineral mines that had been closed for decades, due to the poor economic return of those mines. This could be an early example of a much more common problem in the future. Certain minerals will be of military and economic importance and will be too valuable to export. As a result some materials will be scarce in parts of the world not endowed with their own domestic sources. This can create pressures to innovate on mining strategies. Recall the two strategies that mining operations can use: mine new locations and mine with better equipment.

Due to the various pressures mentioned above, mining could be finding itself in new territory in the future. Mining for certain materials could be following the petroleum industry into the oceans eventually.What is to stop mining companies from remotely surveying and prospecting ocean floors for neodymium, terbium, dysprosium or even gold and platinum, among other minerals if the price becomes high enough and those minerals scarce enough. The other option, if remaining on land is a priority, would be for mining companies to begin prospecting landfills. Mining landfills his advantageous since we have a decent idea of the potentially useful materials that are there.

The idea of mining the ocean makes me shudder. I can't imagine such an operation that doesn't stir up massive amounts of sediment which is then transported by ocean currents half way around the globe. Roiling the ocean waters on a global scale must have consequences on ocean life.

I'm not sure which will prove to be more economical for mineral mining: digging the ocean floors or digging old landfills. But I think for the sake of the ocean, we'd better hope we start mining landfills first.