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The Forum > Article Comments > The coming radical change in mining practice > Comments

The coming radical change in mining practice : Comments

By Simon Michaux, published 15/10/2013

Put these observable trends together and a compelling case can be made that our society is approaching an existential crisis that is systemic in nature and is in denial about the existence of that crisis.

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One factor that the article fails to discuss is the massive trade in recycling metals, which is a great deal cheaper to do than extracting them. For example, aluminium is just 5% as energetically costly to re-smelt as it is to extract and refine, even including the cost of collecting and sorting scrap. There are enormous smelters in Asia (most notably China, but also Malaysia has large capacity, owned by many of the same groups as the Chinese plant) that have specialised in recycling, to such good effect that some have been shut down deliberately to reduce the oversupply of some metals on the world market; aluminium re-smelt capacity has been reduced by over 600,000tonnes/annum in China this year. Copper is also in good supply.

www.lme.com

Our own re-smelting operations are much less significant and also shrinking. The Alcoa smelter at Geelong will soon be closed because of its age and won't be replaced. We have protective anti-dumping tariffs to protect those smelters, but it is hard to see how that is really justified, especially since it only applies to Chinese product and it's not really that hard for a Chinese operator to send ingots to Malaysia for re-shipping to Australia as though it was Malaysian product and thus avoid the tariff. The same goes for extruded product, which is considerably cheaper than our local product, for no really good reason other than the cost of capital, since labour is a tiny part of the cost of manufacture. The

An increase in the cost of extraction will make re-smelt even more attractive and changing technologies will change the supply and demand profile significantly as well, reducing the need for extraction, as well as increasing the supply of recycled material. I don't think that the rest of us need to worry too much, but the mining sector certainly has a problem. Sooner or later, possibly within the next few decades, there will no longer be a need for any mining of some metals, since the demand is driven by an increase in population/changes in living standards and that will not last.
Posted by Craig Minns, Tuesday, 22 October 2013 2:03:49 PM
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