‘Peak Metal’ Production:
... a dangerously pessimistic misconception By Magnus Ericsson & Patrik Söderholm
MINERALS AND METALS are necessary for economic development, and the depletion of these mineral resources in the near future has been predicted since antiquity. The most recent – and overall influential – prophecies of resource depletion are made by the proponents of the so called ‘Peak Metal’ or ‘Peak Oil’ concept. Advocates of this latter concept suggest that oil production and some metals (e.g., lead, mercury, cadmium etc.) are close to an unavoidable, geologically determined, peak that will have serious consequences for the global economy and society as a whole. From a geological point of view mineral
availability is indefinite. Only a few percent of the earth’s surface and sub-surface have been explored in detail and the potential for discovering new mineral deposits is vast. There are, for example, newly discovered continuous geological processes leading to the phenomena of ‘black smokers’ where ore deposits are being formed – while we speak – on the bottom of the sea. The first commercial concessions for deep sea mining of black smokers have recently been granted in Papua New Guinea. Simply put, for such reasons the ‘peak’ discussion is leading us in the wrong direction. The main weakness of the ‘peak’ approach lies
not only in its applicability to certain minerals or energy sources; it concerns the fundamental
The story about the rare earth metals starts in the end of the 18th century. A Swedish artillery officer and mineralogist by the
name of Carl Axel Arrhenius examined the pegmatite mine in Ytterby – ”The Outer Village”– 20 km east of Stockholm. He found that embedded in crystals of quartz and feldspar there were lumps of a heavy black mineral which he had never seen before. In 1794 he sent some specimen of the mineral to the chemist Johan Gadolin at the university of Uppsala. Gadolin analyzed the lumps and found that they con-
tained ”an unknown earth” which was named Yttrium after the village Ytterby. Later it was found that the mineral Gadolinit contai-
ned a number of rare earth metals. Today no less than four of the elements in the Periodic Table have names from the Swedish village Ytterby: Yttrium, Ytterbium, Erbium and Terbium.
problem of ignoring the nature of the causal effects in the minerals markets. Clearly, mineral discovery is but one necessary condition for mineral production and it is certainly not a sufficient condition. There must also be a demand for the mineral. This makes the ‘peak’ concept a poor tool for projecting future mineral production levels, and even more importantly, for providing relevant knowledge that can support future policy decisions and investments.
The main weakness of the ‘peak’
approach lies ... in the causal effects in the minerals markets
Most of the peak studies so far have focused on
the case of oil, but there are significant differences between oil and metals. Most importantly: metals are elements, indestructible and available for recycling. For example, steel production of the US has continued on a high level based on scrap even though iron ore production has not grown at the same pace. Both oil and metals show extremely low price elasticity of demand in the short-term but in the longer-term the elasticity increases and there are clearly possibilities of substitution and also for technical development resulting in savings and finding new sources. The outcome of this process is simply unknown. The slowdown in the growth
Pictures by Kaianders Sempler, Ny Teknik 2001. 82 December 2010
of production of lead, mercury and cadmium illustrates how important demand is. For each of these a sharp fall in demand that has resulted in a peak in production, and not geological availability. When the detrimental effects on health and environmental became known the metals have been banned by government authorities. The use of one metal could “peak” for other political reasons. Uranium is one example; after the end of the Cold War the use of weapons grade
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