When talking about mined resources, there’s a difference between the amount of resources that exist, and the supply of those resources to different countries.
In this guide, we list the different factors that can impact the supply of resources out of or into another country.
Summary – Factors That Can Impact The Supply Of Mined Resources
- Firstly – it’s important to make a distinction between the resources that might be found in a particular country, and the producer that might mine or have ownership over certain proven resources. Supply of resources to different countries depends on the producers that service that country, or whether that country can afford those resources
- Factors that can impact the supply of mined resources might include (but aren’t limited to) …
- Which factories are built to produce different forms of ores
- Some resources are a product of other resources, and depend on other resources in certain ways
- Proven reserves (tested and proven) vs resources (rough projections vs actual amount (undiscovered resources)
- Recycling, product design, secondary sources, and other methods to extend or increase supply
- Production, and consumption/usage rates
- Prices of resources on the market
- Change in demand of both resources (lithium), and technology/products (EV batteries) over time
- Availability of substitute resources
- Geological abundance
- Where the resource is geopolitically located/concentrated
- The state of mining technology
- Regulatory oversight
- Geopolitical initiatives
- Regional instabilities, and economic policies
- Environmental implications of mining
Additional notes on supply of mined resources are:
- Some countries are very dependent on the supply of rare earth metals out of China right now
- China is reliant on the DRC for over 90% of its cobalt supply, and political unrest in the DRC could result in some form of supply disruption
- Having said the above, certain sources indicate that other countries have a certain ability to circumvent China’s control of the globaly supply of rate earth metals
Resources/Reserves vs Supply Of Resources
The proven reserves of a mineral in the ground, or estimates of the total mineral resources available worldwide, are different to the supply of those reserves and resources.
Supply involves mining those resources, processing them, and transporting them to another region or country.
Some countries supply majority of one type of mineral, or a group of minerals to many other countries throughout the world.
The countries that receive this supply could be classified as dependent (and not independent).
Obviously it can cause economic, social and other problems if the supply is disrupted of a particular resource or group of resources.
Supply of resources can be disrupted for a range of reasons.
Factors That Can Impact The Supply Of Mined Resources
These are just some of the factors that can impact supply:
- Which Factories Are Built To Produce Different Forms Of Ores – you can mine an ore, but different types of factories might help you produce different forms of that ore. An example of this is with nickel mines, and different factories that can produce different forms of nickel
- Some Resources Are A By Product Of Other Resources, & Depend On Other Resources – For example, in 2016 approximately 60% of cobalt mined was as a by-product of copper, 38% as a by-product of nickel, and the remaining 2% from primary cobalt mines. So, cobalt can depend on the availability and supply of other metals
- Proven Reserves (Tested & Proven) vs Resources (Rough Projections) vs Actual Amount (Undiscovered Resources) – proven reserves are tested to be economically feasible to mine. Resources are what is estimated to be out there without necessarily being tested or proven as a reserve. And, the actual amount out there are new reserves that we haven’t considered, estimated or even know exists yet. A country responsible for output of a particular metal or mineral might say they only have 20 years worth of supply left before they run out, but they might only be referring to the proven reserves number, and in reality, there’s far more of the resource left.
- Recycling, Product Design, Secondary Sources, & Other Methods To Extend Or Increase Supply – supply is only one part of the equation. There’s then using that resource in products, and recycling those products to recover the metal or mineral and re-use it. In addition, we are always developing new technology and methods (or improving current systems) to extend or increase supply or lifespan of particular resources. There are also secondary sources (to mines) where we can find different resources. Uranium is a prime example of this, where although it’s not economically feasible yet – scientists have found that trace amounts of uranium can be recovered from seawater and the ocean. One way recycling of certain metals can be drastically improved is by changing design of the products and technologies that use those metals to make them far easier and more efficient to recycle and recover resources from.
- Production, & Consumption/Usage Rates – when you hear that there is only a few decades left of supply of a particular resource, this is based on a forecasted usage or production rate of that resource in the future. If that usage rate appears to be too high, the estimated supply for the future is obviously going to be low and inaccurate (as a higher usage rate means supplies deplete more quickly). Most usage rates also do not account for recycling rates or future recycling rates.
- Prices Of Resources On The Market – higher prices can lead to supplies staying higher for longer if less people are buying. Conversely, lower prices can means supplies are diminished more quickly if more people are buying.
- Change In Demand Of Both Resources (Lithium), & Technology/Products (EV batteries) Over Time – there was nowhere near the demand for certain types of minerals and metals a few decades ago for electric vehicles that there is now. This is one such example that as times change and so does technology, demand of different resources changes with it. Higher demand means supplies deplete more quickly.
- Availability Of Substitute Resources – availability of substitute resources means that a metal or mineral supply may not be depleted as quickly if suppliers and producers switch to or incorporate that substitute.
- Geological Abundance – resources are abundant in some countries more than others. There can sometimes be issues or challenges supplying resources from one country to one, or a group of other countries. This can also impact how independent or reliant one country is on another.
- Where The Resource Is Geopolitically Concentrated – politics on a world, country to country, and state to state level can play a huge role in resource supply. Countries may decide to hide the true amount of production from other countries, or they may choose to restrict or cut off supplies from other countries.
- The State Of Mining Technology – mining technology can play a part in the capability of being able to access and mine different metals and minerals.
- Regulatory Oversight – there may be oversights in terms of regulating certain mining practices or supplies of different resources that can impact overall supply streams.
- Geopolitical Initiatives – different countries may have different initiatives they are pursuing in the short and long term. These initiatives can impact mining practices and supply chains.
- Regional Instabilities, and Economic Policies – some regions and countries are more stable economically, politically and socially than others. Countries with unrest or instability can cause supply issues to other countries.
- Environmental Implications Of Mining – mining may be restricted or shut down if environmental concerns are too great in one area.
Examples Of Countries That Supply Majority Of Mined Resources, Or Countries That Are Dependent On Other Countries For Certain Mined Resources
Other countries are currently very dependent on the supply of precious metals out of China:
- China is currently is the world’s largest producer of rare earth elements [more than 90% of rare earth production], and so a disruption of that supply for whatever reason would have profound effects on world markets and global industry
- [rare earth element such as dysprosium, neodymium and lanthanum]
Further to that:
- China controls the majority of refined global cobalt output and is reliant on the DRC [Democratic Republic of Congo] for over 90% of its cobalt supply
- There is a strong possibility of future geopolitical risk in the DRC resulting in significant material disruption to cobalt output with potential for a serious global cobalt supply squeeze
China May Not Have As Much Power With Rare Earth Metals & Metal Production As Some Think Though
There’s an interesting article that explains how ‘[other countries have] other sources for [rare earth metals other than what China produces], and [there are] ways to circumvent China’s control of the global supply’.
You can read it at https://www.theverge.com/2018/4/17/17246444/rare-earth-metals-discovery-japan-china-monopoly
Reasons We May Never Run Out Of Mined Resources