Is a metals shortage apocalypse coming?
Technology has the power to transform resource into reserves Metal Tech News Weekly Edition – June 17, 2020
Last updated 6/27/2020 at 6:30am
Over the last few decades, as technology has advanced and metal resources have been consumed, there have been predictions that we will use up our reserves of metals, especially those critical to modern technology, within the next couple of decades. What then? Do we prepare for an upcoming dystopian apocalypse in which mineral resources are only consumed by the super-rich while the rest of the world goes back to the dark ages?
The short answer is no. We aren't going to be divided into districts and send our kids as tribute.
The issue is that while there are plenty of the mineral resources on Earth to last for centuries for most metals, economically viable ways of extracting them – a prerequisite for elevating them to reserves – don't currently exist.
The novel coronavirus outbreak has provided us a clear example of this. When COVID-19 was first elevated to pandemic levels and we were asked to stay home, the hot commodity was toilet paper. Shelves were empty, people stood in lines and shouted at each other, and the price went up. There wasn't a shortage of toilet paper, there was a shortage in supply.
Companies don't want the extra cost of storing toilet paper, so they produce and buy what they estimate they will need. This is known as a reserve. There is more toilet paper resources – stores of the raw materials to produce this critical product – but the cost of producing and storing it outweighs the cost of making excess. It was more cost-effective for producer, retailer and consumer to produce only what was needed based on pre-COVID-19 trends.
The consumer, not finding toilet paper, had to make choices; do I buy the cheap stuff if I can find or do I travel from store to store until I find what I want? People were suddenly standing in lines for hours before the stores opened hoping to purchase something that a week prior, they would wait until they were using the last roll before even thinking about getting more.
Now people had to decide the value of their time and sanity compared to the value of toilet paper.
Likewise, when people talk about shortages in metal and energy production, they're often referring to reserves rather than resources. They must decide if it is cost effective to produce those resources. If so, then they research to estimate how long they expect the resources will be worth producing creating a reserve amount. There may still be resources in the ground, but at some point, they're no longer economically viable to extract under the current estimates based on supply, demand and value.
In order for our reserves to grow, two things typically have to happen: there has to be growth in demand and the price goes up or new technology has to be invented to extract the resources at a lower cost.
When the price of a resource such as gold rises or falls, mines must reassess viability. The reserves grow or shrink to the point that a mine might shut down because the price of production outweighs the long-term feasibility of the mine even though there are still resources in the ground. For them, it might be more cost effective to wait for the price to go back up.
So, the next time you hear about a shortage of mineral reserves, don't fall into dystopian despair. This doesn't mean we shouldn't be concerned, however, because when these reserves do dry up we must discovery new technologies to economically mine the resource or wait until the price of the resource goes up enough make it viable.
That means the cost of energy and technology hinges on two factors – the cost of extracting the minerals that make them possible and how much you value of your conveniences.