Giurco, ey al., reported in 2010 and other dates that the benefits and impacts of mineral resource extraction and processing in Australia are changing. As Australia’s largest export industry, mining brings financial benefits to the nation and whilst our vast endowment of minerals will not be exhausted soon, extraction and production are becoming more challenging. Declining 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. Declining resource quality has also lead to declining productivity and the energy intensity of processing has subsequently risen by 50% over the last decade.
Global demand for Australian minerals and metals continues to rise. However, as a mineral dependent economy facing the challenges of adapting to carbon constraints and a new tax structure, a comprehensive assessment of the industry’s current and future role in the Australian economy is imperative. The following questions are relevant in such an assessment:
What will the world need minerals and metals for in future?
What role will Australia play in the supply and reuse of metals?
How do we ensure benefits outweigh costs?
What will we do with the proceeds of mining to sustain longâ€term benefit?
Where are the opportunities for innovation and transition in technology and policy?
While peak oil will directly affect the minerals industry through rising fuel costs, it also offers a useful conceptual model for understanding the impact of going from ‘easier and cheaper’ to ‘complex and expensive’ resource processing, and critically, to planning a transition to new ways of providing energy services. There are fundamental differences between oil and many minerals (e.g. the recyclability of metals). Notwithstanding, this paper establishes a conceptual model of ‘peak minerals’ as a powerful tool for communicating the cross scale impacts (i.e. local, national, global) of ‘complex and expensive’ processing with respect to economic, social and environmental issues. As with energy services provided by oil, the peak minerals model helps to open the discussion regarding the ultimate use of minerals and metals. With an understanding of when processing becomes ‘very complex and expensive’, it then focuses on what transitions can deliver the same useful functions that minerals and metals perform (e.g. oceanâ€based resources, greater recycling or reprocessing, dematerialization, substitution with other materials); and which enabling technologies and policies can support these transitions. The key findings of this report are:
1. Mining represented approximately 7.7% of Australia’s GDP in 2008â€09 and combined mineral and energy exports of $160b represented nearly 56% of the total in that year.
2. Minerals processing faces higher energy costs and is becoming more energy intensive despite technological improvements, as a result of processing lower grade more complex ores in more challenging locations (i.e. refractory, more remote, deeper).
Peak minerals offers a useful model for representing the ‘easier and cheaper’ then ‘more complex and expensive’ impacts associated with processing declining resource qualities. As an example, copper fits the peak curve well and is approaching a peak in Australia. Gold reflects multiple peaks in production due to technological transitions that have occurred in the industry. This presents opportunities for innovative technologies, policies and business models along the production, consumption and reuse cycle for minerals and metals to underpin future prosperity.
Australia is heavily dependent on mining exports and should develop strategies to ensure longâ€term national benefits from minerals – social, economic and
environmental – while acting decisively to avoid the resource curse. The need to acknowledge the triple bottom line paradigm (economic, environmental and social pressure) has long dominated discussions concerning sustainable development. However, the relative importance of the factors identified within this paradigm are changing as we approach peak mineral production. Mining is becoming more expensive as we mine deeper, lower grade ores, in new, sensitive or remote areas. These changes are accompanied by growing environmental impacts and the costs associated with these impacts. More expensive mining, and more intense environmental impacts result in significant social flowâ€on effects. Peak minerals is changing the environmental and social impact profiles of traditional mining, and these changes will drive production costs higher still.
The Australian mining industry is dominated by multiâ€national organisations trading commodities on international markets. Our state governments administer the operations of these companies, and federal macroâ€economic policies largely promote mineral exploitation. Yet all mining operations are conducted at the local scale. Our mineral industry is strongly demarcated in the context of scale. Acknowledging and characterizing the crossâ€scale impacts of mining provides an avenue to identify the opportunities and constraints peak minerals will pose at each of these scales. This is extremely important given that the onset of peak minerals is likely to have a dramatic influence on the actual impacts of mining at particular scales, but also on the intensity of these impacts. Characterizing these impacts will ultimately contribute to our ability to manage and mitigate their consequences.
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