Thanks to all the recent headlines about the decline in commodity prices and the resulting difficulties being faced by virtually all companies involved in the mining sector, there has been a lot of speculation about the long term viability and sustainability of the industry.
To shed some light on the situation and to emphasize how critical the mining industry is to our way of life, below I have shared my personal opinion about the importance of mining and why it stands to be around for a very, very long time:
If it can’t be grown, it has to be mined
We need to start from a basic statement: The modern world simply can’t function without mining; Mineral products are essential components for cell phones, cars, energy towers, solar panels, wind turbines, fertilizers, machinery and all kinds of construction.
Just as an example, according to the US Mineral Information Institute, annually retired cell phones in US (around 130 million) contain almost 2,100 metric tons of copper, 46 metric tons of silver, 3.9 metric tons of gold, 2 metric tons of palladium, and 0.04 metric tons of platinum. Even knowing most of these materials can be recycled, it puts into perspective the amount of minerals required to build such devices.
In reality, the mining industry is just the starting point of an important value chain. According to another study, this one by the World Economic Forum, the entire mining and metals industry moves a 1 trillion dollar economy.
The mining industry is driven by fundamental forces
The population, urbanization and income growth will demand more buildings, cars, and consumer products, thereby increasing the needs for mined products as the building blocks of this growth.
Urbanization is a growth force for mining activities
Mineral substitutes are few and far between
One of the arguments for a potential decline in mining activities is around the use of substitutes – usually a mineral or metal product being substituted by other products of other origins. We have seen certain metals replaced by carbon fiber, and coal replaced by gas or other fuel sources. However, in general, there are limitations regarding metals and minerals substitution. A Yale study, after the evaluation of several metals used in various consumer products, reached the conclusion that “not one metal has an ‘exemplary’ substitute for all its major uses,” and for some of them a substitute for each of its primary uses does not exist at all, or is inadequate.
Many countries need mining to not only thrive, but also to survive
Mining is the economic foundation for a number of developing countries. According to ICMM (International Council on Mining and Metals), at least 70 countries are extremely dependent on the mining industry and most low income countries need it to simply survive. This same study shows that in many low-middle income countries, mining accounts for as much as 60–90% of total foreign direct investment!
Mining is already a high-tech and sustainable industry
The top mining companies have made and continue to make massive investments in breakthrough technologies, such as autonomous systems, IoT (Internet of Things) and sensing technologies, adaptative supply chain, simulation, and the use of drones for environmental and production management. This silent revolution not only provides many operational benefits, but it also helps to attract new professionals arriving in the market and meets the demand by local communities for miners to provide a sustainable operation.
Despite the recent roller coaster in commodity prices, the mining industry is unlikely to lose its place in the global economy, and thanks to the world’s constantly growing demand for the products that mining makes possible, it will even increase in significance as the years go by.
Want more proof of mining’s enduring staying power? Click the link to visit Ngwenya Mine in Swaziland, the oldest mine in the world. How old? 43,000 years old and actively mined as recently as 1979!