Abstract
This chapter evaluates copper reserves and resources. It assesses the long-run perspectives of availability and analyzes implications for the quantitative modeling of copper industry behavior.
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Notes
Prokop (1975: 10) quotes various sources estimating this figure, Other sources claim that the copper abundance averages 55 ppm (Bowen and Gunatilaka (1977: 3), 50 ppm (Bender (1976: 11), Brobst (1979: 123) or 33 ppm (Schröder (1966: 12)).
Seawater contains three tons of copper in one cubic kilometer (Wenck (1969: 167)). Copper’s abundance in the ocean crust is somewhat higher than in the continental crust according to sources quoted by Vokes (1976: 76).
For a general survey on origins, evolution and present characteristics of copper ore deposits see Tatsch (1975). This volume contains an extensive bibliography? but without economic references. For short descriptions of the geological characteristics of copper deposits see e.g. Kraume (1966), Prokop (1975: 10-11) or Gluschke et al. (1979: 45-46).
Copper deposits in the United States are the recorded best in the world. The U.S. Bureau of Mines conducted a series of mineral availability studies, covering also copper. For a general description of this program see e.g. Bennett, Thompson, Kingston (1977). Rosenkranz, Davidoff and Lemons (1979) appraised copper resources only. Ridge (1976) compiled a comprehensive bibliography of mineral deposits in Africa, Asia (excluding USSR) and Australasia. It includes many references to copper. Sources concerning copper deposits in the Soviet Union can be found in the bibliographies by Sutulov (1967) and Alexandrov (1980). For China see Wang (1977: 139-144). World mineral supplies in general are assessed e.g. in Govett and Govett (1976, 1977) and in the sources quoted by Brobst (1979: 117).
See Howe (1979: 219). Gluschke et al. (1979: 54, 62) refer to recently published literature, which indicates that the mining of lower grade ore does not necessarily lead to an increase in a deposit’s copper content.
Cf. Whitney (1854: 234). The ore grade declined to 6.6% in 1853.
Prokop (1975: 52-52) reflects about the future ore grade of copper deposits, depending on the technological developments and substitution possibilities. Rampacek (1977) describes the impact of research and development in the utilization of low grade copper deposits.
The ore grades are compiled from various issues of the Minerals Yearbook.
For an economic explanation of this phenomenon see e.g. Herfindahl (1967).
Excellent guides in interpreting data on copper reserves and resources are Gluschke et al. (1979: 45-62) and United States Geological Survey (1980).
See Mineral Commodity Summaries (1981: 184-197).
Loc. cit., p. 184.
Cf. Schroeder and Jolly (1981: 6) and Mineral Commodity Summaries (1984: 41).
I assume that Tilton’s (1977a: 10) estimate of 100 million tons of copper reserves in 1950 is correct.
The percentages in parantheses refer to 1983.
Calculated from Mineral Facts and Problems (1970: 541) and from Mineral Commodity Summaries (1981: 41; 1984: 41).
For evidence supporting this view see e.g. Bergsten (1978: 145-148), Crowson (1979) or Radetzki (1980, 1981).
In 1983, the total land-based resources totalled up to 1.6 billion tons of copper. Seabed nodules are estimated to contain 0.7 billion tons of copper according to Mineral Commodity Summaries (1984: 41).
See Sutulov (1979) for an evaluation of Chile’s copper resources.
I.e. Resources for Freedom (1952: 36).
The U.S. Bureau of Mines figures are compiled from various issues of Mineral Facts and Problems and from the Commodity Data Summaries.
Quoted from Gluschke et al. (1979: 57 and 61).
In an excellent study, Streissler (1980) discriminates 12 different notions of scarcity. See also, among others, Brown and Field (1978, 1979a), Fisher (1979), Pethig (1979), Siebert (1979) or Schneider (1980) for an analysis and critique of fundamental concepts of resource availability.
Tilton (1977b) discusses the relation between geologic exhaustion, which is final, and economic exhaustion, which may not be final, and their relationship to estimates of resource availability.
Inclusion of deep sea nodules leads to a resource / consumption ratio of 243 in 1980.
Cf. Meadows et al. (1972). For a more general critique of this study see e.g. Beckerman (1972) or Nordhaus (1973).
See Meadows et al. (1972: 60).
Cf. also Gluschke et al. (1979: 60).
Siebert (1979: 410) agrees with this conclusion. If a very naive Cornucopian fits an exponential trend to the data of table 5-2, he will be pleased about a high coefficient of determination and he will readily calulate that the total quantity of copper in the earth’s crust will be economically exploitable in some 2,000 years! Obviously, the high average annual growth rate of copper reserves (5.5% from 1950 to 1980) cannot be sustained indefinitely.
For a differing opinion see e.g. Barnett and Morse (1963: 225-227).
See Siebert (1981: 185-186) for a clear exposition.
Cf. Barnett and Morse (1963: 167).
For a thorough critique of the unit cost of extraction index see e.g. Brown, Field (1978: 230-232; 1979a: 220-224), Fisher (1979: 256-258) or Siebert (1979: 412). The critics of the concept are criticized by Johnson, Bell and Bennett (1980: 265-269).
Herfindahl (1959: 239-240) summarizes his results in more detail.
For more caveats see Brown, Field (1979a: 224-227) or Siebert (1979: 412-414). Additionally, in the studies quoted in the main text, I often miss an evaluation of the institutional and technological changes in the copper market, and I always miss statistical tests for the stability of the regression coefficients.
Sources are the U.S. Statistical Abstract for the BLS wholesale price index, and the Economic Report of the President (1982: 276) for the hourly wage rate in manufacturing. The construction of the unit cost index for mining and of the user cost of capital index is described in Appendix I.
This general availability of copper does of course not mean that supply security exists for all consuming countries.
Lenoble (1981) discusses and updates figures about deep sea nodules in the North Pacific.
Near Bornite, Alaska, on the Kobuk River above the Arctic Circle, prospectors recently have discovered a stupendous deposit of copper. Iskander (1973) deals with the economic impact of copper in the Canadian Arctic.
An official of the Princeton Plasma Physics Laboratory, where major experiments to develop nuclear fusion are conducted, told me that a fusion reactor could not be expected before the early 21st century. He guessed that even then the price of fusion energy would be 20% to 30% higher than the price of fission energy.
Examples are Park (1975) or Ehrlich et al. (1977).
To name just a few which have not been mentioned above: Netschert, Landsberg (1978: 51), Herfindahl (1967: 87-89), Banks (1976: 248), Radetzki (1977b) or Sies (1981a: 157).
This is e.g. Codelco’s upper limit of long-term planning (Codelco (1982: 21)).
Cf. the last column in table 5-1.
The amount of literature on exhaustible resources grew immensely since Hotelling’s classic study. A standard reference is Dasgupta, Heal (1979). Siebert (1983) presents an excellent analysis of natural resource economics in general.
See Arrow and Chang (1980) for an analytic treatment of this case.
In the last few years many extensions of the simple model have been published, which remove some of these simplifying assumptions. Devarajan and Fisher (1981) survey these developments.
For this and additional points see Mikesell (1979: 310-313).
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Wagenhals, G. (1984). Reserves and Resources. In: The World Copper Market. Lecture Notes in Economics and Mathematical Systems, vol 233. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-45585-8_5
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