User:Timdprior/Peak Minerals

The concept of peak minerals offers a useful model for representing the changing impacts associated with processing declining resource qualities in the lead up to, and following, peak production.

Peak minerals marks the point in time when the largest national production of a mineral will occur, with production declining in subsequent years. This peak is a symbolic marker of a continuing transition from cheap and easy extraction to complex and expensive. While most mineral resources will not be exhausted soon, global extraction and production is becoming more challenging. In particular, declining average ore grades are indicative of a shift from ‘easier and cheaper’ to more ‘complex and expensive’ processing – in social and environmental terms as well as economic.A consideration of the consequences of peak minerals leads to several important questions: How well are the impacts pre- and post-peak understood for national mining industries and economies? What role will technology play in moderating current peaks and unlocking the next generation peak? What role will peak oil and carbon constraints or other social and environmental constraints play in bringing the peak forward? How should communities, governments and industry respond to these challenges? To what extent will the minerals sector underpin national prosperity in years to come?

= What is peak minerals? = Peak minerals does not hinge on the fact that production will peak. It provides a framework within which the economic, social and environmental trajectories of the mining industry can be explored in relation to the continuing (and often increasing) production of mineral resources. It focuses consideration on the change in costs and impacts associated with processing easily accessible, lower cost ores before peak production for a given mineral. It also outlines how we might respond as processing becomes characterised by higher costs as the peak is approached and passed. Issues associated with the concept of peak minerals, include:
 * Average ore grades are in decline for most minerals, yet production is increasing.
 * Mines are becoming deeper, more remote and more inaccessible.
 * Easily processed ores are becoming exhausted.

Peak Minerals and Peak Oil
Given increasing global population and rapidly growing consumption (especially in China and India), frameworks for the analysis of resource depletion can assist in developing appropriate responses. The most popular contemporary focus for resource depletion is oil (or petroleum) resources. In 1956, oil geologist M. King Hubbert famously predicted that conventional oil production from the lower 48 (mainland) states of the United States would peak by 1970 and then enter a terminal decline. This model was subsequently proven to be accurate (although the peak year was 1971). This phenomenon is now commonly called ‘Peak Oil’, with peak production curves known as Hubbert Curves.

The concept of peak minerals is an extension of Hubbert’s model of peak oil (Figure 1). Although widely cited for his predictions of peak oil, Hubbert intended to explore an appropriate response to the finite supply of oil, and framed this work within the context of increasing global population and rapidly growing consumption of oil.

More importantly than focusing on when oil would run out, Hubbert demonstrated that as production approached a peak, it would become increasingly difficult and ultimately unfeasibly expensive, favouring alternatives. In establishing the peak oil model, Hubbert was primarily focused on arguing that a planned transition was required to ensure future energy services.

When applied to some minerals (as for the example of copper, figure 2), Hubbert’s peak curve fits well, however gold has experienced multiple peaks due to new discoveries and the uptake of new technologies. Notwithstanding, peak minerals provides a suitable metaphor in which to consider the future of the industry and its role in the Australian economy.

Peak minerals versus peak oil
There is limited substantive work being undertaken to examine how the relationships between the concepts and assumptions of Peak Oil can be applied to minerals. In establishing the similarities between peak oil and peak minerals, and utilising the peak framework as a model of resource exploitation, several factors must be taken into consideration: In understanding how these factors are important for modelling peak minerals, it is important to consider assumptions concerning the modelling process, assumptions about production (particularly economic conditions), and the ability to make accurate estimates of resource quantity and quality and the potential of future exploration.
 * Accurate estimates of easily accessible proven reserves;
 * Political and market stability;
 * Affordable, stable prices for consumers and enticing profits for producers;
 * Exponentially increasing consumption;
 * Independent producers focused only on maximising their immediate profits;
 * Perceived abundance of and availability of other reserves (e.g. US, Middle Eastern).

Cheap & easy in the past; costly & difficult in future
While most minerals are unlikely to be exhausted in the near future, they are becoming more difficult and costly to produce, and will reach a point when Australia’s comparative advantage in the global resources sector is diminished. The costs of mining, once primarily reflected in economic terms, are increasingly being considered in social and environmental terms, although these are yet to meaningfully inform long-term decision-making in the sector. Such consideration is particularly important if the industry is seeking to operate in a socially, environmentally and economically sustainable manner into the next 30-50 years.

Figure 3 provides a graphical illustration of the peak minerals concept. Production follows the typical Hubbert curve. Well before peak production, mining operations start to become characterised by lower costs (with high ore grades, simple ores and low mine waste), but as the peak is approached and passed, the costs associated with production increase (because of falling average ore grades, deeper mines, complex ores and greater mine waste).

Future production: difficult & expensive?
There are a variety of indicators that show production is becoming more difficult and more expensive. Key environmental indicators that reflect increasingly expensive production are primarily associated with the decline in average ore grades of many minerals (figure 4, inset). This has consequences in mineral exploration, for mine depth, the energy intensity of mining (figure 4), and the increasing quantity of waste rock (figure 5).

Adjusting to a higher energy intensity is challenging for the industry in light of peak oil and rising energy costs in a carbon constrained future. New deposits in remote locations will also be constrained by rising energy costs.

Although new mineral deposits are still being discovered, and reserves are increasing for some minerals, these are of lower quality and are less accessible. This reduces the competitiveness of new Australian deposits in the global sector, and necessitates the development of new technology to remain competitive.

The social context of peak minerals
Different social issues must be addressed through time in relation to peak minerals at a national scale (figure 6) other issues manifest on the local scale.

As global mining companies seek to expand operations to access larger mining areas, competition with farmers for land and for scare water is becoming increasingly intense. Negative relationships with near neighbours influence companies’ ability to establish and maintain a ‘social license to operate’ within the community.

Access to identified resources is becoming harder as questions are asked about the benefit from the regional economic development mining is reputed to bring.

Peak minerals in Australia
The minerals sector is currently one of the pillars of the Australian economy. The challenges for the industry are therefore challenges for Australia.

The concept of peak minerals highlights the need to identify and transition to new opportunities in the way we produce, use and reuse minerals in our society. What opportunities will come from new technologies for terrestrial or deep sea mining, from recycling? How should we invest to gain most benefit from these opportunities?

Publications and External Resources

 * The Institute for Sustainable Futures
 * Peak Minerals in Australia: a review of changing impacts and benefits
 * The Environmental Sustainability of Mining in Australia: Key Mega-Trends and Looming Constraints (Gavin Mudd, 2010)
 * Will Sustainability Constraints Cause ‘Peak Minerals’?
 * Mineral Futures Discussion Paper: Sustainability Issues, Challenges and Opportunities
 * The Oil Drum: Ugo Bardi