The Age of Diminishing Returns

April 18, 2014

NOTE: Images in this archived article have been removed.

The Earth’s Mineral Supplies: The Age of Diminishing Returns
A Q&A with Ugo Bardi, author of Extracted: How the Quest for Mineral Wealth is Plundering the Planet

Q: Which of the rare earth minerals that fuel our industrial system are most likely to be depleted first (at current mining levels)? Are there any resources that we’ve already depleted beyond acceptable levels?
Ugo Bardi: We need to understand that “depletion” is a relative term. Nothing ever disappears from the Earth’s crust: everything we extract still exists, but once extracted it is widely dispersed—in products, in waste streams, and even in our land, air, and water.  The problem that we are facing is that most minerals become gradually more expensive to extract because high-grade ores are progressively depleted. The final result is that we are entering an age of diminishing returnsin the production of mineral commodities. So, within some limits, running out or not running out of something is a problem that has to do with what we choose to extract. When we deal with “critical” minerals, such as rare earths for magnets, platinum group metals for catalysts in chemistry, gallium for LED and other applications in electronics, and others; they are so important that we’ll probably choose to pay almost any price for continuing to produce them – as long as it will be possible (and even that won’t be forever).  So, a more pressing problem is with relatively common minerals, which are the lifeblood of the economic system: for instance metals such as copper, chromium, nickel, zinc, and more. They must be cheap to extract to be affordable but they are not cheap any more and will never be cheap again. The problem is especially critical for the minerals that are the true “Achilles’ heel” of the industrial society: oil and gas. They are relatively common minerals in the Earth’s crust, but their extraction is becoming more and more expensive and that’s setting up a vicious circle of diminishing returns.  That is placing a heavy stress on the world’s economic system and it is likely that, in the future, we won’t be able to produce fossil fuels at the same rates as we are today. This is the essence of the concept of “peak oil.”
Speaking of “Peak Oil,” will we experience such a thing as “peak metals” or “peak minerals”?
Yes, absolutely, there is such a thing as “peak metals” and, in general, “peak minerals.” As with peak oil, the production peak of any mineral commodity is generated by the increasing costs of exploiting resources that are becoming less and less concentrated and more expensive to extract. Right now, the main factor in these costs is energy; the more dispersed the metal, the more energy it takes to extract it. So, the prices of most mineral commodities follow the trend of increasing oil and gas prices. So far, we can still afford to keep production stable for most (but not all) minerals. But all the fossil fuels are peaking. That’s driving energy costs higher and, as a consequence, we are facing a general problem of diminishing returns for the extractive industry. If the trend continues (and it may be exacerbated because of political factors) we won’t be able afford stable metals production any longer. At that point, we’ll see the production of some of all mineral commodities peaking and declining. We could call this phenomenon “peak minerals.” Specific metals may peak at different times depending on financial and geological factors. Some commodities may be especially vulnerable to peaking, in particular some of the metals that carry heavy weight in our economy, for instance copper—vital for transporting electrical current— or the platinum-group metals so crucial to catalytic converters are already expensive to extract. Also, the accessible reserves of nickel and zinc, key ingredients in stainless steel and a host of other products—all of these metals could be tapped out in just a few decades, within a generation. In some cases peaking would have truly disastrous consequences for humankind, such as for phosphates, a vital nutrient for agriculture. 
Is it possible for a rare mineral shortage to exist and for one, or two, countries to hold more stock of these minerals and metals? If so, which countries are they?
The world’s mineral resources are unevenly distributed and some countries have a higher share of specific resources. For instance, 97 percent of the active rare earth mines are in China. Platinum group metals are mostly produced in Russia, cobalt in Congo, chromium in South Africa, copper in Chile, and so on. No country holds the monopoly of any resource, but in many cases if a government were to decide to use mineral resources as a political or strategic weapon, the result would be a considerable disruption of the world’s economic system. But such a strategy would first and foremost damage the producing country and this is the probable reason why resource wars have been threatened many times but rarely put into practice. China has already used rare earths strategically in its dispute with Japan over fishing rights. It halted all rare earths shipments in 2010 after the Japanese Coast Guard arrested a Chinese fishing boat captain. This event revealed two things: the Chinese know exactly where to hit foreign industries, and a country that owns strategic resources can decide to use them as strategic weapons. Only a few weeks with no supply of rare earths would bring Western production to a standstill. Many nations lack even a modest emergency stock of strategic materials as rare earths, though the risky dependence on a single supplier has spurred various governments and industries to research solutions to the problem. The present Ukrainian crisis, indeed, is another interesting test of whether one of the sides involved is willing to play the “resource card.” The risk of the card being played for one or another resource only becomes stronger with the progress of depletion.
Shale gas, tar sands oil – don’t we seem to be able to find new, or replacement, resources when we need them most? If we run out of rare minerals, can’t we just substitute rare minerals with more common ones?
Human beings are smart, resourceful, and adaptable; their main limit is that they have trouble doing long-term planning. So, we are adapting to mineral shortages by finding new solutions: some are very smart but most are stopgap solutions that ease the problem in the short run but worsen it in the long run. Most people, in particular political leaders, do not seem to understand the simple fact that the “drill more” strategy is not a solution. The more you drill, the faster you run out.
This is a general problem with substitution. Very often, it involves substituting a resource that was once relatively clean and cheap—as long as it was available—with a more expensive and dirtier one. This is the case of shale gas, which has seen a remarkable production boom in the United States, easing the gas depletion problem in the short run. But it will not last forever, and, when the boom is over, we are back to square one, having just squandered a lot of resources and created a lot of pollution. So, one day we’ll look back at what we did with shale gas and ask ourselves: what the heck was that whole idea about?
Also substituting is expensive; it has to be, otherwise it would have been done already. For instance, we can substitute a rare mineral resource such as copper with a common one such as aluminum, which has a similar ability to conduct electric current. But if we look at the costs involved, we see that for the same performance, aluminum will cost about twice as much as copper in terms of the energy needed to extract, refine, and produce it. In the end, it may be cheaper to recycle copper than substitute it with aluminum.
That doesn’t mean that substitution is a bad strategy; not at all. It is just that we can’t expect miracles from it. In particular, we can’t expect technology to pull a rabbit out of the hat every time we need it. In some cases, it has been possible to considerably reduce – or even eliminate – the need for a certain mineral resource by a technological breakthrough. A good example is the substitution of silver-based photographic film with electronic image storage. But some mineral commodities cannot possibly be substituted. It is not a question of technology. Consider the use of phosphates as fertilizers, something discussed at length in Extracted. Unless we replace human beings with silicon-based droids, there is no way that we can replace phosphorous as a fundamental component of living creatures.
If we want to keep our industrial system functioning, we need to use renewable energy to recycle the materials we use, just as plants do. To do this we need to create a “closed cycle” or “circular” economy. It is expensive, of course and it cannot be obtained without profound modifications in the way our economy is run. So, we need to focus on a set of strategies that include substitution and recycling, as well as learning to use a lot less.
What role do global mining operations have on climate change?
When we tunnel deep within the earth, all sorts of substances that have been locked deep in the ground for eons—and that never would have seen the light of day had we not unearthed them–are suddenly in our midst. And many of these substances can cause a lot of problems either because they are toxic to us or because they alter the ecosystem’s cycles, as in the case of greenhouse gases that create global warming. In Extracted I try to make it clear that climate change and resource depletion are two sides of the same coin. The climate change problem is getting worse and worse as we continue extracting fossil fuels and doing that with less and less efficiency, as we are literally scraping the bottom of the barrel. In this way, we are increasing the amount of greenhouse gases emitted into the atmosphere and getting closer and closer to the point of non return where the state of the atmosphere will be changed forever, at least from the human viewpoint. Other mining operations have generated different kinds of damage, especially in terms of toxic metals dispersed into the ecosystem but in many cases we know little about their long-term effects.
What about the toxic legacy that the global mining industry has left for future generations to clean up? What toxins are likely to remain having a long-lasting impact on the health of ecosystems and humans?
Our descendants will inherit from us a planet much different from the one we had from our ancestors. The problems with the leftovers from our mining operations will be with them for a long, long time. Their major problem will be with climate change, as some of the carbon dioxide we are emitting today in the atmosphere will remain there for hundreds of thousands of years. Another problem will be with radioactive materials, often substances that have never existed in the Earth’s above-ground ecosystem and for which biological systems have no defense. Plutonium is the main one. But there will be plenty more toxic materials, in particular heavy metals such as mercury, which will remain dispersed in the ecosystem for hundreds of thousands or even millions of years. For instance, we don’t really know what the human-health consequences will result from having dispersed large amounts of heavy metals like mercury, cadmium, chromium, and so on, in the ecosystem. The ecosystem can surely adapt to these substances, in the long run, but it will not be without pain and our near future descendants will be the ones suffering most for the adaptation.  
What about recycling, cutting consumption, or using substitutes for some of these key minerals and metals — could that help us delay, if not stave off completely, depletion?
Everything is renewable if we decide to recycle it and if we efficiently recycle a mineral resource we’ll never run out of it. It is possible: after all the first miners of planet Earth, land plants, have been efficiently recycling the minerals they use for hundreds of millions of years, and they never ran out of anything. However, recycling suffers of the problem of diminishing returns, just like mineral extraction: the more you want to recycle, the more it costs. That makes it extremely difficult for us to increase the recycling rate over the present levels (around 50 percent or less for most mineral commodities) and creates the problem of “downcycling;” that is the degradation of the quality of recycled materials. So, how do plants manage to do something that looks impossible for us to do, that is recycling at nearly 100 percent? Well, they do that by being very thrifty: they use only what is strictly necessary, they use minerals with the maximum possible efficiency, and they use only minerals that are relatively abundant in the Earth’s crust. In this way they maintain the energy cost of recycling to an affordable level. We can do the same if we use the same strategy. We need to cut consumption, increase efficiency, step up the production of renewable energy, and focus on resources that are easier to recycle (that is, relatively abundant minerals which can substitute rare ones). If we do that, we can recycle our way out of the mess we placed ourselves in, but that will be neither easy nor cheap. In Extracted, the cheap and abundant mineral resources that have created our industrial society are described as “Gaia’s gift.” It is a gift that was made only once in human history and that will not be made again in the future. From now on, we are on our own and we must learn how to live with less.
Whenever space probes are launched, and land, on the moon, or Mars, or even view other planets and their moons – we often hear a lot about the minerals that comprise these objects. Are we scouting for interstellar mining operations?
Mining space bodies is part of the techno-magic fluff of the news. We hear of wonderful breakthroughs—solutions for this and that problem—but if we read carefully we normally find that the breakthrough is something that a scientist defined as “promising” after having tried it in her lab. And we should know that the cemetery of failed high-tech companies is littered with tombstones with the inscription “Worked fine in the lab.”
Mining space is one of many techno-magic illusions, an old science fiction idea that, unfortunately, doesn’t survive contact with the real world. Humans have been mining ores, but ores are formed by processes linked to plate tectonics, and, as far as we know, the Earth is the only body of the solar system that shows active plate tectonics (Mars may have been another one, but only for a brief period in the remote geological past). So, no plate tectonics, no ores. And, no ores, no mining. Mining, as we know it, is possible only on planet Earth. It is as simple as that.
Incidentally, the 2011 movie Cowboys and Aliens is based exactly on this concept: aliens land on the earth in order to find gold. It makes sense—and they even say that explicitly at some point in the movie, something like “gold is rare with us as it is here.” If there existed space-faring aliens they would find that the Earth is a good source of minerals – at least as far as humans haven’t completely emptied it. Also on this point, the behavior of the aliens makes sense, as they prefer to steal gold from humans rather than mining it. Much better than boiling humans in big cauldrons and eating them—at least I would think so if I were an alien. 

Ugo Bardi

Ugo Bardi teaches physical chemistry at the University of Florence, in Italy. He is interested in resource depletion, system dynamics modeling, climate science and renewable energy. He is member of the scientific committee of ASPO (Association for the study of peak oil) and regular contributor of "The Oil Drum" and "". His blog in English is called "Cassandra's legacy". His most recent book in English Extracted: How the Quest for Global Mining Wealth is Plundering the Planet (Chelsea Green”, 2014. He is also the author of The Limits to Growth Revisited (Springer 2011).

Tags: mineral depletion, mining, peak oil, peak resources, Pollution, recycling, Resource Depletion