Mineral Resources Economy 1

The constant increase in the consumption of mineral resources, as well as the growing awareness of their exploitation, is causing deep concern within the scientific community. This concern is justified by the fact that the energy transition will increase the pressure on these resources, as renewable energies require an increased and more diversified quantity of mineral materials.

This book presents an overview of the exploitation of these mineral resources, where the natural, regulatory and environmental constraints interfere with economic, financial and geopolitical interests. By mobilizing the fields of the humanities, geosciences and engineering, it also analyzes the challenges that the energy transition will encounter, challenges related to the contradictory effects that the acceleration of the extraction of these resources will have on their physical availability, the economies that exploit them and the populations that live off of them

Introduction xi
Florian FIZAINE and Xavier GALIÈGUE

PART 1 Background 1

Chapter 1 Assessment of European Demand for Mineral Resources by Material Flow Analyses: The Case of Cobalt 3
Raphaël DANINO-PERRAUD, Maïté LEGLEUHER and Dominique GUYONNET

1.1 Introduction 3

1.2 Cobalt market: structure and operation 6

1.2.1 Diverse and highly concentrated resources 6

1.2.2 Production and actors 7

1.2.3 A market undergoing profound change 10

1.3 A method combining value chain analysis and material flow analysis 11

1.3.1 Value chain methodology 12

1.3.2 Material flow analysis, for a better understanding of cobalt demand 15

1.4 Results of and discussions on cobalt flow analysis in the European Union 17

1.4.1 Changes in flows and stocks: lessons from MFA 17

1.4.2 Value chain partnerships and flow analysis assistance 22

1.5 Conclusion 25

1.6 Appendix: quantities of cobalt contained in primary and refined streams, recycling rates, and cobalt waste management 26

1.7 References 28

Chapter 2 Financialization of the Minerals and Metals Market: Origin, Challenges and Prospects 35
Yves JÉGOUREL

2.1 Introduction 35

2.2 Dynamics of financialization: understanding the heterogeneity of the minerals and metals sector 37

2.2.1 Functions of a raw material chain and outsourcing price risk 37

2.2.2 Business practices and the role of futures 40

2.3 Effects of financialization: from price dynamics to value chain change 44

2.3.1 Financialization and dynamics of raw material prices 44

2.3.2 Effects of financialization on the structuring of commodity chains 48

2.4 Conclusion 49

2.5 References 50

Chapter 3 Geopolitics of Metals: Between Strategies of Power and Influence 53
Didier JULIENNE

3.1 Introduction 53

3.2 Natural resources doctrine 53

3.3 Abundant, sensitive, critical, and strategic metals 57

3.4 Competitive consumption 59

3.5 Proliferation of “unobtanium metals” 60

3.6 Strategy of influence, strategic stock, and exploration 68

3.7 Conclusion 69

3.8 References 69

Chapter 4 Mineral Wealth Endowment, a Construct 73
Michel JÉBRAK

4.1 Introduction 73

4.2 Mineral endowment, an attempt at clarification 74

4.2.1 Production and reserves 74

4.2.2 Resources and perception 78

4.3 Unequal distribution of resources 79

4.3.1 Copper 80

4.3.2 Tin 83

4.4 Discussion: building mining endowment 86

4.5 Conclusion 89

4.6 Acknowledgements 90

4.7 References 90

PART 2 Issues 93

Chapter 5 Modeling the Long-Term Evolution of Primary Production Energy and Metal Prices 95
Olivier VIDAL

5.1 Introduction 95

5.2 Relationship between concentration and production energy 97

5.3 Equivalence between energy and price 103

5.4 Technological improvement and evolution of production energy and metal prices over time 107

5.5 Application to copper primary production 109

5.6 Application to nickel, aluminum, silver, and gold 113

5.7 Conclusion 113

5.8 References 116

Chapter 6 Environmental Footprint of Mineral Resources 119
Jacques VILLENEUVE, Stéphanie MULLER, Antoine BEYLOT, Faustine LAURENT and Frédéric LAI

6.1 Introduction 119

6.2 Notion of environmental footprint 119

6.2.1 Beginnings of the footprint 119

6.2.2 Lifecycle assessment and impacts 121

6.2.3 How are impacts translated into a footprint? 122

6.2.4 Towards a more integrative impact footprint 123

6.3 Principles of input–output analysis 124

6.3.1 Input–output tables: summary tables of the economy 124

6.3.2 IOTs and redistributions within the economy 126

6.4 Towards IOTs extended to the environment 128

6.4.1 Current extensions 128

6.4.2 Inclusion of direct environmental extensions in IOTs 130

6.4.3 Imports and environmental extensions 131

6.5 Calculation of environmental footprints of metals by MRIO analysis 132

6.5.1 Basic principles of MRIO analysis 132

6.5.2 Available databases 134

6.5.3 Metal requirements for French final demand 136

6.5.4 Environmental footprint of metal production 139

6.6 Conclusion 140

6.7 References 141

Chapter 7 Why Should We Fear Energy and Material Savings? Deconstructing a Sustainability Myth 143
Romain DEBREF

7.1 Introduction 143

7.2 Conceptual critique of the “eco-efficiency” principle 145

7.2.1 Historical review of the rise of eco-efficiency, or how to “produce more with less” 145

7.2.2 Conceptual evolution and broadening the boundaries of eco-efficiency 148

7.2.3 Eco-efficiency and environmental preservation: an equivocal synergy 152

7.3 Rebound effects or unintended consequences of “producing more with less” at the macrosystemic level 154

7.3.1 Optimizing to “burn” better, returning to the origin of rebound effects 155

7.3.2 A compilation of rebound effects according to the development levels of our societies 156

7.4 Conclusion 161

7.5 References 162

Chapter 8 The “Resource Curse” in Developing Mining Countries 169
Audrey AKNIN

8.1 Introduction 169

8.2 How to take into account the contribution of exhaustible resources to sustainability and measure the “resource curse” 170

8.2.1 From natural resources to natural capital 171

8.2.2 Natural capital, sustainability and the “resource curse” 172

8.3 Mining activity and the “resource curse”: macroeconomic and sectoral issues 173

8.3.1 Mining economics and Dutch disease 174

8.3.2 A long-term economic handicap 175

8.4 Mining income: an unstable and toxic income for States 175

8.4.1 Hypothesis of a deterioration in the terms of trade 176

8.4.2 Weight of history 177

8.4.3 Sharing the rent 177

8.4.4 Institutional weaknesses 178

8.4.5 Armed civil conflicts 179

8.5 Is the “resource curse” inevitable? 181

8.5.1 (In)effective public policies 183

8.5.2 Promoting traceability and transparency 184

8.5.3 Necessary governance of mining industries 185

8.6 Conclusion 187

8.7 References 188

Chapter 9 Industrial and Artisanal Exploitation of Natural Resources: Impacts on Development 195
Victoire GIRARD and Agnès ZABSONRÉ

9.1 Introduction 195

9.2 Impacts of industrial extraction 200

9.2.1 Presentation of industrial extraction 200

9.2.2 Macroeconomic impact of industrial extraction 201

9.2.3 Local impact of industrial extraction 203

9.3 The case of artisanal mines 206

9.3.1 Presentation of artisanal exploitation 206

9.3.2 Local impact of artisanal enterprises 209

9.4 Conclusion 213

9.5 Acknowledgements 213

9.6 References 213

Conclusion 219
Florian FIZAINE and Xavier GALIÈGUE

List of Authors 229

Index 231

Florian Fizaine is assistant professor in economics at the University Savoie Mont Blanc and visiting professor at the IFP School and Mines ParisTech in France.

Xavier Galiegue is associate professor in economics at the University of Orléans and a member of the Orléans Laboratory of Economics (LEO) in France.