Mineral Economics and the Business of Mineral Supply

Abstract

Editor’s note: The aim of the Geology and Mining series is to introduce early career professionals and students to various aspects of mineral exploration, development, and mining in order to share the experiences and insight of each author on the myriad of topics involved with the mineral industry and the ways in which geoscientists contribute to each. Abstract The business of mineral supply comprises the costs, risks, and returns of converting natural capital to financial capital. As such, it represents the interface between economic geology and mineral economics. The traditional approach to studying mineral supply, however, is less an interface than a series of silos covering geologic, engineering, business, and social aspects of the conversion process. The challenges of meeting the ever-increasing demand for minerals and metals will require better communication and understanding across disciplines and stakeholder groups in order to mitigate discovery and development risks. For economic geologists, improved communication starts with an understanding of the essential economic tools and metrics that are used to assign value to projects and make decisions about their advancement toward production. Furthermore, economic geologists should recognize and build on the interface between the economic characteristics of valuations and the underlying geologic characteristics of deposits. The sizes and distribution of project cash flows are intimately linked to the underlying styles and distribution of mineralization within deposits. Understanding how geologic processes created and altered mineral deposits is incredibly useful in grasping the economics of undoing those processes to recover payable minerals and metals.