The economics of mineral extraction and development is foundational to the career of a mineral engineer. Mineral economics is commonly defined as the academic discipline that investigates and promotes understanding of economic and policy issues associated with the production and use of mineral commodities. (Gordon and Tilton 2008). Concernedly it is a discipline that is in decline. Many mining schools and programs have stopped offering mineral economic degrees. The void has been filled by general economics and policy programs. These generic programs do not always produce practitioners that have an understanding of the subtle and important pieces of mineral economics. Also very few mining companies have full time dedicated mineral economists. Usually economists focus on the scale of “macro-economics”. Macroeconomics model on larger horizons measured in terms of decades. This lack of long-term perspective has had significant impacts on the mining industry. These concerns have particularly been felt in coal mining however metal mining companies have also felt the pain of short term thinking. Many coal mine bankruptcies occurred due to short term concerns that trumped long term considerations of demand and supply trends. During the “supercycle” of increased commodity prices that occurred between 2003 and 2013 many coal and metal mining companies acquired risky assets. These assets became huge liabilities during the softening of commodity prices in 2014-2016. With some additional consideration of longer-term price projections and variation many of these assets would not have been considered. Mineral economics has become increasingly more difficult due to the necessity to consider sustainable development modeling. Mineral development and economics in the past considered mostly mineral commodities and mining costs while current and future projects must consider social and environmental costs. These additional dimensions have made modeling more challenging. Consider the following articles from the Wall Street Journal: attached below This analysis explores the impact that a lagging supply market will have on future commodity prices. How should companies and even investors respond to this information? Economist projections are rarely realized fully however they can be extremely good at analyzing trends. Decision-makers can then have additional information to make more informed decisions. One of the better articles on mineral economics and an overview of the pressures on mineral development can be found here: attached below This article looks at the sustainable development of copper mining. The authors analysis of supply pressures demand issues and socio-political pressures that impact copper mining. A similar analysis could be done with other commodities “State of Non-Fuel Mineral Resources: Supply Demand and Socio-Institutional Fundamentals” is the main source of reading. This review paper is a great overview of the considerations of modern mineral economics and sustainable development. A high-level understanding of these considerations will help you navigate modern commodity markets and the difficulties of permitting projects throughout the world. refer to the previous reading and the files attached to answer those quesions: How do the authors “characterize” sustainable development? How do technology and economic situations impact societys resource base? What is situational scarcity? In what ways has it increased? How can situational scarcity be better managed? What is the connection between situational scarcity and critical minerals? What does the comparison of critical minerals by different countries tell us about their perspective on the minerals? What are the supply issues considered in the article? What is the connection between electrification and the exploration of copper at the turn of the 20th century? What could be another comparison with a different mineral for right now? Why is an understanding of demand important to consider in mineral economics and exploration? What is “intensity of use” and how is it calculated as a function of demand? How do the stages of development listed by Menzie affect demand for mineral usage? How do these stages explain the difference in copper production between the U.S. and China between 1990 and 2009? What is an actor and stakeholder and how can they influence mineral development? Please answer questions in a Word file and submit organized answers. These questions will require some thought and critical analysis. Students work should be submitted as a professional document that is free of typos and grammar issues.
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