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ChAPTER 3 Availability and  Reliability of Supply INTRODUCTION The availability and reliability of the supply of mineral commodities re- late to the horizontal axis of the criticality matrix described in Chapter 1. Availability is dynamic but is generally considered to be a long-term issue, whereas reliability of supply is a shorter-term issue. Part of the mineral resource endowment that is often overlooked is the amount of material that is landfilled or scrapped but could be recycled. Net imports and exports of scrap for recycling should also be taken into consideration. In addressing the availability of critical minerals and materials the availability of both the virgin resource (primary availability) and the previously processed resource (secondary availability) must be considered. The committee defines five dimensions of primary availability in this study: geologic (does the mineral resource exist), technical (can we extract and process it?), environmental and social (can we produce it in environ- mentally and socially accepted ways?), political (how do governments influ- ence availability through their policies and actions?), and economic (can we produce it at a cost users are willing or able to pay?). Geologic availability includes consideration of the geologically appropriate terrains for a given mineral, mineral associations, depths, grade, tonnage, and geometry of the deposit. Technical availability considers the state of technology and knowl- edge to find, extract, and process the mineral resource. Environmental and social availability includes attributes of the environment in which the 

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MINERALS, CRITICAL MINERALS, AND ThE u.S. ECONOMY mineral is found or processed, such as endangered species, water and air quality, and scenic beauty. Social availability accounts for the community acceptance of resource development and may be more commonly referred to as “social license to operate.” Political availability applies at local, na- tional, and international levels and is a function of the predictability of laws, the independence of the judiciary, the limits on litigation, the protection of land tenure, the willingness of the host country to allow or facilitate development of the resource and repatriation of profits, and the military and economic stability of a region and the availability of an appropriate workforce. Economic availability considers the cost to discover the mineral deposit; to extract the minerals; and to process, concentrate, and purify the minerals balanced against the market value of the product. The availability of technical and skilled workforces is also a factor in economic availability. This chapter discusses the dimensions of primary and secondary availabil- ity and additional indicators of risk to the supply to clarify the input used to evaluate the risk to the availability of a mineral as a determinant of that mineral’s position in the criticality matrix. THE FIVE DIMENSIONS OF PRIMARY AVAILABILITY Geologic Availability Mineral deposits often have specific associations with geologic terrains and vary in abundance as a function of geologic time; a few examples of minerals and their global geologic associations are listed here. The major source of copper from deposits, known as porphyry copper deposits, are most prevalent around the Pacific Ocean, along the west coasts of South and North America and in the South Pacific islands of Indonesia, and in Papua New Guinea (Figure 3.1). The deposits in the United States formed 50 million to 75 million years ago, while the deposits in the South Pacific can be as young as 1 million to 3 million years old. Porphyry copper deposits are low grade (0.3-1.0 percent copper) and large tonnage (often greater than 1 billion tons), with the copper-bearing minerals finely dis- seminated throughout the large volume of rock. Platinum group metal 

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Availability and Reliability of Supply (PGM)-bearing minerals (those containing platinum, palladium, osmium, iridium, or rhodium) tend to occur in narrow veins that can exist as part of layered igneous complexes. PGM deposits in the layered igneous com- plexes of the Bushveld Complex in South Africa or the Stillwater Complex in Montana are around 2 billion years old (Figure 3.1), while those of the Nor’ilsk-Talnakh district in Russia are between about 240 million and 260 million years old. Carbonatite deposits (calcium-rich igneous rocks), some of which host rare earth (RE) metals, can range in age from 1.9 bil- lion years at Palabora, South Africa, to 1.2 billion years at Mountain Pass, California (Figure 3.1). Until recently, the two main mining locations for REs had been Bayan Obo in China and Mountain Pass in California; Mountain Pass was closed to active operation in 2002 (see Chapter 4). Carbonatite deposits such as Eden Lake, Manitoba, are also being explored for REs. There are hundreds of occurrences of RE-bearing mineralizations and several locations at which some RE metals could be produced as by- products from other minerals with the right economic, technological, and regulatory conditions. A common exploration approach is to look for mineral deposits in familiar terrain, in known geologic settings although new discoveries in unconventional areas are also made (Shanks, 1983). Additional research in an area of new mineral discoveries is completed to aid in the understand- ing of mineral and geologic controls on the deposit’s distribution with the potential to lead to emergence of new mineral trends or a complete map of the extent of the initial discovery. For example, in the world-class gold belt of the Carlin Trend in Nevada, more than 180 million ounces of gold have been identified since the late 1960s. New discoveries continue to be made as our knowledge and understanding of the mineral deposits advances (Figure 3.2). Even in districts or around mines that have been explored for a cen- tury, the knowledge of the geology can still be very incomplete and major discoveries of new resources have been made a hundred years after the original, due in part to improved mapping technologies and better under- standing of mineral and ore systems. BHPBilliton discovered the 1.5 bil- lion ton Resolution copper mineral deposit in 1995 underneath the Magma 

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 FIGURE 3.1 Distribution of porphyry copper deposits (red), PGM deposits (black squares), and magmatic RE deposits (black stars); RE deposits are only those reported to have greater than 1 × 106 metric tons of contained RE oxides. Deposit locations after Singer et al. (2005), Sutphin and Page (1986), and Jackson and Christiansen (1993). Numerous other types of sedi- ment-hosted copper and placer-RE deposits also exist globally but are not plotted on this map. SOuRCE: http://veimages. gsfc.nasa.gov/2433/land_shallow_topo_2048.jpg. fig 3-1 Landscape view

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Availability and Reliability of Supply Gold Production 50 from the Carlin Trend Cumulative production Millions of troy ounces of gold 40 Annual production 30 20 10 0 1909-64 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 FIGURE 3.2 Annual and cumulative gold production from the Carlin Trend, Nevada. The trends from the late 1980s and early 1990s illustrate the effects on gold produc- tion of the discovery of deeper, sulfide-bearing gold deposits on the trend. SOuRCE: Thompson and Teal, 2002. fig 3-2 ore body in Superior, Arizona. This area had been mined for copper since 1911 (Paul and Knight, 1995); however, the Resolution deposit remained undiscovered until exploitation methods and mining technology allowed more efficient and accurate exploration for deposits in unconventional areas at great depth. The Superior area has seen a resurgence of exploration activ- ity, with additional copper resources being identified since the Resolution discovery. Thus, in addition to mineral exploration and discovery in new regions, new deposits may also be discovered in places where mines already exist. Technical Availability Mineral commodities can become more available over time if the cost- reducing effects of new technologies offset the cost-increasing effects of 

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MINERALS, CRITICAL MINERALS, AND ThE u.S. ECONOMY depletion (Tilton, 2003, 2006). Changes in mineral production technol- ogy have been dramatic and very important to the availability and cost of minerals, and they are likely to continue to be important (Box 3.1). Over the last 130 years, new technologies have kept the adverse effects of depletion in check, despite both population growth and a surge in the consumption of mineral commodities (Tilton, 2006). With many nations such as China, India, and Brazil emerging as principal drivers of material consumption, and the price surges and reduced stockpiles that have resulted for many commodities, we must now question both the availability and the reliability of mineral supply. Mineral depletion and its effects tend to be BOX 3.1 History of Advances in Mineral Production Technology Mining and mineral processing have generally been at the forefront of industrial inno- vation for millennia and, through development of extraction and refining technologies, were responsible for major improvements in lifestyle, beginning with the Bronze Age and the Iron Age. Copper smelting, for example, began at least 4000 years ago. until the mid-1800s, most aspects of mining and processing underwent progressive evolutionary improvements in technologies that had been applied successfully for centuries. however, the mineral industry then became a leading participant in the Industrial Revolution with important innovations in underground mining methods, improved gravity concentration equipment, and grinding mills. Cyanidation of precious metal ores was commercialized in the early 1890s and led to rapid improvements in such areas as solid-liquid separation that soon spread to other industries such as waste water treatment. Open-pit mining was developed early in the twen- tieth century, enabling low-cost bulk mining of ore bodies with grades too low otherwise to support the costs of underground mining. Concurrently, the introduction of modern electric hoists made underground mining cheaper and safer. Selective froth flotation of metal sulfide ores quickly supplanted gravity concentration and significantly reduced processing costs and increased metal recoveries. Through the remainder of the twentieth century, advances continued in all aspects of mining and processing, but with periodic lulls in the pace of innovation that were usually 

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Availability and Reliability of Supply key drivers in increasing the costs of and prices for mineral commodities, although these increases may be mitigated in response to new technologies (Tilton, 2003). The mineral resources of many mining districts or geologic regions are not known with certainty. As exploration technology advances and new geologic interpretations are produced, areas that were previously considered thoroughly explored are being revisited with new models and technologies at hand. For example, new drilling technology allows for deeper recovery of core and for holes to be drilled at subvertical angles. New analytical chemistry techniques allow more elements to be assayed at lower detection caused by cyclical metal markets. A notable exception was the global gold industry, which was very active until World War II when War Production Board Order L-208 closed primary u.S. gold mines in October 1942. Little happened technologically in the gold industry until the 1970s when a gradual positive response to decontrolling of the gold price began to take place. Since the 1960s, we have seen sweeping changes in production technology typified by the following brief list: • Cheaper, safer, and more effective explosives; • Bigger and more efficient excavators and haul trucks; • Larger ore crushers with lower operating and maintenance costs; • Cheaper and higher-capacity conveying systems; • heap leaching of low-grade gold ores; • Treatment of cyanide solutions with activated carbon for gold recovery; • A new generation of ultrafine grinding mills; • Flotation cells that have increased in volume from 200 to 4000 cubic feet; • Solvent extraction-electrowinning (sx/ew) for copper from leach solutions; and • Flash smelting for metal sulfide concentrates. These innovations and many others have enabled the mining industry to produce minerals, metals, and other elements at lower costs while making products of higher purity and greatly reducing the release of airborne and waterborne pollutants. 

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MINERALS, CRITICAL MINERALS, AND ThE u.S. ECONOMY levels. The QEMScan™ technology, for instance, uses a sophisticated scan- ning electron microscope with four X-ray detectors and a microanalyzer to map bulk mineralogy, mineral textures, and metallurgical properties. New satellite data and imagery, including those from hyperspectral reflectance surveys, allow for more refined coverage of Earth’s surface, contributing to better “remote” mapping of minerals. This type of technology assists in identifying regional mineral controls and trends, and zones of alteration that are prospective for certain types of minerals. Advances in many dif- ferent geophysical techniques allow deeper exploration, higher resolution, or more accurate interpretations. One such advance is the Falcon™, the first airborne gravity gradiometry system, developed by BHPBilliton. Bell Geospace transferred submarine technology from the U.S. Navy to develop a full tensor airborne gravity gradiometry system. Both have provided sig- nificant advances in imaging potential mineral deposits at depth. In 2002, the RAND Science and Technology Policy Institute pub- lished New Forces at Work in Mining—Industry Views of Critical Technologies  (Peterson et al., 2002). The report said, “The United States has the larg- est mining industry in the world, with a raw material production of $52 billion in 1997. Yet many industry representatives noted that . . . mining is relatively small in comparison with other industries, and its ability to finance R&D [research and development] specific to mining is limited. As a result, many technology innovations in mining are adopted from other sectors such as construction, automobiles, and aerospace” (pp. 9-10). Technological advances are increasingly imported from countries such as Australia and Canada where public investment in mining-related research is at present greater than in the United States. The volatility of mineral commodity markets, the long delay in return on investment, and the unique requirements of mining equipment contribute to the financial risks for the mining industry and create difficulties for private companies to invest in research and development projects (Peterson et al., 2002). Tilton (2003) has suggested that, like exploration projects, a few highly successful re- search projects can more than compensate for the many less successful efforts. Opportunities for research and technology development in explo- ration, mining, in situ mining, and mineral processing are presented in 

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Availability and Reliability of Supply the Peterson et al. (2002) report and ample discussion accompanies the recommendations. Environmental and Social Availability Objections to the development of mineral resources often focus on the disruption to the local environment and the impacts on communities re- lated to the boom-and-bust nature of historic mining districts. Stories of the gold rushes in California and the Klondike and the resulting shifts in population, inflated prices, environmental damage, and social problems still resonate with the public. The growing development of the oil sands in northern Alberta, Canada, and the rapid growth in population in Fort Mc- Murray, Alberta, highlight the issues that are faced when resource produc- tion expands faster than urban planning in an isolated community: housing may be in short supply, prices may become inflated, and the population may begin to feel torn between the improved economic prosperity and the disruption to the environment. Conflicts over land use in the rapidly urban- izing areas of the western United States often mean that the community must choose between the use of mineralized land for housing or recreation and its use for mineral resource development. The Bureau of Land Management (BLM) and U.S. Forest Service ad- minister 38 percent (393 million acres) of the land area in 12 western states, ranging from 76 percent of all land in Nevada to 23 percent in Washington State (NRC, 1999). In 1999, 0.06 percent of BLM land was affected by mining activity (current or planned) (NRC, 1999). However, not all pub- lic land is open to mineral entry and estimates from 1995 indicated that about 65 percent of western federal lands, or about 360 million acres, were restricted from mineral entry (Gerhard and Weeks, 1996). Since 1999, an additional 3.9 million acres have been withdrawn from mineral entry, and an additional 40 million acres have been proposed to be withdrawn. Wil- derness areas are examined for their mineral inventory prior to withdrawal, but generally speaking, detailed mineral exploration is not conducted. In some cases in the intermountain western United States, land with known ore deposits is effectively removed from mineral exploration by the 

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MINERALS, CRITICAL MINERALS, AND ThE u.S. ECONOMY development of surface rights for housing or other uses. Many western cities were located to take advantage of natural resources such as water, minerals, or timber. As these cities have grown to be major metropolitan centers over the last half century, conflict between development of natural resources and preservation or urban use of land containing the resources has sometimes occurred. Figure 3.3 shows eastern Maricopa and western Pinal Counties in Arizona, with 20 known copper deposits located within the area of the satellite image. The urbanization of the area has begun to overlap many discovered copper reserves such as the Poston Butte deposit near Florence, Arizona. The Poston Butte deposit was initially planned as FIGURE 3.3 Satellite image of eastern Maricopa County and western Pinal County in Arizona covering an area with more than 20 discovered copper deposits. urbaniza- tion has effectively removed copper reserves near Florence from mining development. Source: Barton, 2007. used with permission. 0

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Availability and Reliability of Supply an in situ leach operation of a deposit that contained 730 million tons at 0.38 percent copper (approximately 2 years of U.S. consumption), but when copper prices fell, the land was sold to a land developer. From a mining company’s perspective, the social availability of a min- eral resource can be viewed as the need to obtain a license to operate. From a community’s perspective, the goal of discussions about social availability is to break the boom-and-bust impact of mining on a community by develop- ing a parallel economy and building independent capacity for development with power, water, transportation, communication, health care, and educa- tion infrastructure. Sustainable resource development is described by the Mining, Minerals, and Sustainable Development Project (MMSD, 2002) as the integration of economic activity with environmental integrity, social concerns, and effective governance systems. Even with the implementation of sustainable development principles, a challenge for the mining industry is overcoming its often-negative legacy of distrust among some communities and stakeholders, and although the legal system may provide authorization for mineral exploration and devel- opment, social tension and conflict in a community can negate those rights. The relative rights of the local community versus the national commu- nity to benefit from the development of mineral resources are unresolved in many countries. The committee concurs with the MMSD in that the social license to operate at the local community level should ensure that “interactions between the mine and community should add to the physi- cal, financial, human, and information resources—not detract from them” (MMSD, 2002, p. 198). Sustainable development definitions abound and are best defined at the local level, integrating social, economic, environmental, and governance concerns with a basis in the local needs. No “one-size-fits-all” definition exists, and any definition must account for the unique needs at local scales. Sustainable development likely encompasses elements of all of the follow- ing: (1) the concept that the present generation behaves in a way that does not impede future generations from enjoying a standard of living at least comparable to its own; (2) the protection of an ecosystem, a community, an indigenous culture, and biodiversity; (3) assistance to communities that 

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MINERALS, CRITICAL MINERALS, AND ThE u.S. ECONOMY Recycling metals from postconsumer (municipal solid) waste gener- ally is more costly than recycling materials from junked automobiles, demolished buildings, industrial machinery, and similar goods. The metal content of postconsumer waste is lower and more variable per unit of material that has to be processed. A market system, therefore, is less effective in dealing with postconsumer waste, if the objective is to maximize the amount of recycling that occurs. Citizens demand services and lower taxes from local authorities, while municipal waste managers and elected officials view waste diversion as an added cost, rather than an opportunity to avoid waste disposal costs and generate revenue. As a result, the metal content of recycled municipal solid waste varies widely, depending on programs put in place at a state or local level. With a range of approaches, there is an opportunity to examine the economic and environmental costs and benefits of alternative measures, including material recovery from unsorted municipal solid waste, source segregation by householders with curbside collection of recyclable materials, deposit- refund schemes for beverage containers, a variety of design alternatives for extended producer responsibility programs, and other models. In short, although recycling is already an important economic activity, there is a need to investigate whether more effective incentives and disincentives are necessary to increase recycling and reduce the rate of accumulation of secondary resources in landfills. Economic availability can be reduced substantially when different ma- terials are mixed. There is a need to carefully weigh collection and transpor- tation cost savings that may result from combining different waste streams against the revenue losses and cost increases that result from additional handling, processing, and impurities. In some cases, existing infrastructure can be used with limited pre-processing. For example, white goods can be shredded together with automobiles, provided that ozone-depleting substances and components that contain polychlorinated biphenyls are removed first. In other cases, collection and transportation cost reductions may eliminate the potential for profitable recycling activities unless other funding is available to support responsible material management. Policy measures may also be needed to ensure an economic incentive for respon- 

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Availability and Reliability of Supply sible recycling within the United States, including landfill bans, advanced disposal fees, export restrictions, or other measures. SUPPLY RISK The previous section discusses primary and secondary availability over the longer term. This discussion now considers more specifically the factors useful in assessing the degree of supply risk for a mineral in the short and medium terms from a national perspective, and in the context of the global trends in the sources and production status of minerals. Short- and Medium-Term Factors for Supply Risk In the short to medium term (periods of a few months to a few years, but no more than a decade), there may be significant restrictions of supply, leading either to physical unavailability of a mineral, or more likely, to higher prices—for a number of reasons. First, as noted previously, demand  may increase significantly and unexpectedly, and if production already is oc- curring at close to capacity, then either a mineral may become physically unavailable or its price will rise significantly. Demand can increase more quickly than production capacity can respond. Second, relatively thin (or small) markets are another indicator of possible supply risk. The key insight here is that small markets may find it difficult to increase production quickly if demand increases significantly. This issue could be important when evaluating supply risk for some so-called minor metals—such as gallium, tantalum, or vanadium—that at present have demand concentrated in a small number of applications but could experi- ence rapid demand growth with development of a new application for the mineral or metal. Third, supply may be prone to restriction if production is concentrated. If concentrated in a small number of mines, supply may be prone to restric- tion if unexpected technical or labor problems occur at a mine. If concen- trated in the hands of a small number of producing countries, supply may be prone to restriction due to political decisions in the producing country. 

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MINERALS, CRITICAL MINERALS, AND ThE u.S. ECONOMY The previous discussion in this chapter of political availability and grow- ing resource nationalism is relevant here. If concentrated in the hands of a small number of companies, supply may be prone to restriction from op- portunistic behavior by companies with market power. Market power may allow a powerful firm to raise prices opportunistically to take advantage of a weak buyer. The Herfindahl-Hirschman Index (HHI) provides a measure of market concentration or power and is used by the U.S. Department of Justice when investigating possible monopolistic behavior. This index is the sum of the squared market shares of all firms in a particular market—for example, an industry with three firms with market shares of 40, 40, and 20 percent would have an index of 402 + 402 + 202 = 3600. Likely index scores range from about 1 to 10,000: the greater the concentration in a market, the higher the index number (and vice versa). The U.S. Depart- ment of Justice considers markets with index numbers between 1000 and 1800 to be moderately concentrated and those with numbers greater than 1800 to be concentrated. If a merger leads to an increase of more than 100 points in the index, the Department of Justice presumptively has concerns about possible anticompetitive consequences of the merger (U.S. Depart- ment of Justice, “Horizontal Merger Guidelines,” available at http://usdoj. gov/atr/public/guidelines/horiz_book/hmg.html; accessed June 21, 2007). Unfortunately, lack of sufficient data on company market shares made it impossible for the committee to calculate and evaluate HHIs for the minerals examined in this study. Fourth, the supply of minerals that come significantly from by-product  production may be fragile or risky. The key idea here is that the availability of a by-product is determined largely by availability of the main product (e.g., gallium as a by-product of bauxite mining). Thus, by-product pro- duction is relatively insensitive in the short term to changes in demand for the by-product. An increase in the demand for and, in turn, the price of a by-product may not result in significant additions to production capacity for the by-product. Likewise, a significant drop in demand for a by-product also may not result in significantly lower by-product production. As in the case of thin markets, minerals whose supply consists predominantly of by-products may not respond as quickly to demand increases as other- 00

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Availability and Reliability of Supply wise might occur. One exception would be a situation in which a signifi- cant amount of by-product mineral is not recovered at the time demand increases. Finally, markets for which there is not significant recovery of mate- rial from old scrap may be more prone to supply risk than otherwise. As discussed earlier in this section, old scrap consists of discarded products, whereas new scrap is created during the manufacture of products. Recov- ery of material from old scrap influences supply risk in the following way: significant recycling of old scrap means that there is a pool of available old scrap from which material can be recovered. Part of this pool represents material in products discarded this period, and part represents material in products discarded in the past but not recycled previously. Material in the pool of old scrap exhibits a wide range of recycling costs; some material is of relatively uniform quality and is located close to recycling facilities, and thus has low costs; other material is of uneven quality, perhaps contami- nated with other metals, is located at a distance from processing facilities, and thus has higher costs of recycling. As a result, recovery of material from scrap is particularly sensitive to price changes. When prices are high, it makes sense to recover material from the high-cost part of the pool of available scrap. When prices are low, much of the pool of available scrap remains unprocessed and is available for recycling later. In other words, the pool of available old scrap is an alternative source of supply should other sources become restricted and prices rise. The same argument does not apply to new scrap; almost all new scrap is recycled when or shortly after it is created because it tends to be of uniform quality, is not contaminated with other materials, is located close to reprocessing facilities, and thus tends to have very low costs of reprocessing. There are two other possible indicators of supply risk, which are com- monly cited and possibly useful—but only if interpreted with care. Both are commonly misinterpreted. The first is import dependence. The idea has been suggested that imported supply may be less secure than domestic supply. In fact, import reliance may be good for the U.S. economy, if an imported mineral has a lower cost and/or similar or better quality than an alternative domestic mineral. This is not to suggest that U.S. consumers should rely 0

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MINERALS, CRITICAL MINERALS, AND ThE u.S. ECONOMY on foreign supplies if the source of the foreign cost advantage is a result of policies regarding environmental quality or worker health and safety that are below minimum international standards. At the same time, the United States needs to be cautious in imposing its environmental and labor stan- dards on other countries; there may be good, local reasons for differences among countries in these standards. Thus import reliance is a potentially useful indicator but one that must be interpreted with care. Analysts must understand the definition. The USGS reports U.S. net import reliance as a percentage of U.S. consumption for a large number of minerals and met- als. Net imports represent the physical quantities of imports less exports, adjusted for changes in inventories held by industry or government. In essentially all cases, dependence is measured either at the stage of mineral ore or concentrate or as refined metal. Thus, measured import reliance represents the dependence of mineral processors (in the case of ores and concentrates) or product manufacturers (in the case of refined metal)—and not the import dependence of final consumers. The perspective of the final consumer would have to include mineral quantities embodied in imported goods and exclude mineral quantities in exported goods. One also needs to be cautious in interpreting actual estimates of im- port dependence. Just because measured import reliance is high does not necessarily imply that supply is at risk. In fact, in several situations, high measured import reliance may be no less risky than domestic supply if imports come from a diverse set of countries and firms or imported min- eral or mineral product simply represents intracompany transfers within the vertical chain of a firm (e.g., imported concentrate to be smelted at a company’s domestic smelter, imported refined metal to be transformed into a semifabricated shape or form at a domestic plant). The second possible indicator of supply risk is the reserve-to-production  ratio. As described earlier in this chapter, reserves are that portion of the Earth’s stock of resource for a specific mineral that is known to exist and technically capable of being extracted at a profit under current market conditions. Dividing a mineral’s reserves by current (annual) production gives a measure of how long reserves will last at current rates of produc- tion. The interpretation would be that the shorter the estimated lifetime of 0

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Availability and Reliability of Supply reserves, the greater is the supply risk. However, just as in the case of import dependence, this indicator of supply risk easily can be misinterpreted and must be used with care. As reserves become limited, firms have the incen- tive to explore for and develop additional reserves. Given that it costs time and money to develop reserves, firms do not fully explore and develop a mineral deposit at the time of initial development. Reserve development is an ongoing activity at mines, and mineral exploration for previously unknown mineral deposits is an ongoing activity as well. Moreover, tech- nological innovation often makes it technically and economically feasible to extract minerals from what previously was geologically interesting but uneconomic rock—in effect, converting a mineral resource into a reserve. Changing economic conditions (prices and extraction costs) also continu- ally influence what is—and what is not—a mineral reserve. With these qualifications, nevertheless, reserve-to-production ratios provide some use- ful insight into a mineral’s availability and supply risk. A related measure is the ratio of a mineral’s reserve base to production, which provides a similar but slightly longer-term view of a mineral’s availability and supply risk. The USGS defines reserve base as the inplace demonstrated (measured plus indicated) resource from which reserves are estimated. The reserve base includes resources that are currently economic (reserves), marginally economic (marginal reserves), as well as some demonstrated subeconomic resources (USBM/USGS, 1980). The same caveats apply to this possible measure of supply reliability. SUMMARY AND FINDINGS This chapter has focused on the horizontal axis of the criticality matrix— the availability and reliability of mineral supply. The committee considered both primary and secondary supply in its assessment. The five dimensions of primary availability over the longer term (greater than about 10 years) include geologic (does the mineral resource exist?), technical (can we ex- tract and process it?), environmental and social (can we produce it in envi- ronmentally and socially accepted ways?), political (how do governments influence availability through their policies and actions?), and economic 0

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MINERALS, CRITICAL MINERALS, AND ThE u.S. ECONOMY (can we produce it at a cost users are willing or able to pay?). Second- ary availability incorporates the same set of factors with the exception of geologic availability. Instead of virgin ore, secondary availability must rely on inflows and outflows from the stock of material available for recycling, which includes material discarded in landfills, material that is no longer in service but remains in place, material hoarded in anticipation of future shortages or price increases, and stockpiles of material awaiting reuse or recycling. In addition to these longer-term factors, the short- to medium-term (a few months to no more than 10 years) risks to mineral supply include significant and unexpected increase in demand for a mineral; relatively thin (or small) markets; concentration of mineral production (in the hands of a small number of mines or producing countries); significant derivation of the mineral as a by-product (of the production of another mineral); lack of significant recovery from old scrap; import dependence; and a mineral’s reserve base-to-production ratio. Whether evaluation of the mineral supply risk is with respect to long-, medium-, or short-term interests, several of the availability factors often interact to varying degrees, and the associated data used to interpret these factors and their interactions require cautious analysis. The committee re- affirms the conclusion of the report Mineral Resources and Sustainability:  Challenges for Earth Scientists (NRC, 1996) that the federal government should facilitate activities that sustain mineral supplies with respect to exploration, development, technology, and recycling because these may be longer-term issues to which the private sector and market forces alone are likely not sufficient to meet challenges of sustainability. Finally, ef- ficient and environmentally conscious development of mineral supplies can be accomplished in a regulatory framework that is adaptive to change, including advances in technological capabilities and sound environmental and mining research. With respect to the availability and reliability of mineral supply, the committee found the following: • The uncertainties in knowledge of the nature of inferred mineral 0

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Availability and Reliability of Supply resources lead to uncertainty about the actual resource base for critical minerals. • The stocks and flows of materials are inadequately characterized and difficult to determine, especially import and export as compo- nents of products and losses upon product discard (e.g., Wilburn and Buckingham, 2006). This lack of information impedes plan- ning on many levels. • Of the short- to medium-term supply risk factors, those most dif- ficult to interpret are import dependence and a mineral’s reserve base-to-production ratio; the data available to evaluate these fac- tors are neither easily collected nor always quantifiable. • Remanufacturing and recycling technology is a key component in increasing the rate and efficiency of material reuse, yet little research effort has been expended on developing this technology. REFERENCES Barton, P., 2007. Presentation to Committee on Critical Mineral Impacts on the U.S. Economy. Washington, D.C., March 7. BCI (Battery Council International), 2005. National Recycling Rate Study: Chicago, Illinois, Smith, Bucklin, and Associates, Inc. Available online at http://www.batterycouncil.org/BCIRecylin- gRateStudyReport.pdf (accessed August 7, 2007). CIM (Canadian Institute of Mining ), 2005. CIM Definition Standards for Mineral Resources and Mineral Reserves: Prepared by the CIM Standing Committee on Reserve Definitions. Adopted by CIM Council on December 11, 2005. Available online at http://www.cim.org/committees/ StdsApprNov.pdf (accessed October 31, 2007). Cox, D., and D. Singer, 1987. Mineral Deposit Models. USGS Bulletin 1693. Washington, D.C.: U.S. Government Printing Office. 379 pp. Craig, J., D. Vaughan, and B. Skinner, 2001. Resources of the Earth. New York: Prentice Hall, 395 pp. Das, S.K., 2006. Emerging trends in aluminum recycling: Reasons and responses. In T.J. Galloway (ed.), Light Metals. Warrendale, Pa.: The Minerals, Metals, and Materials Society, pp. 911-916. Available online at http://www.secat.net/docs/resources/Emerging_Trends_in_Aluminum_Recy- cling0.pdf (accessed September 2007). Fenton, M.D., 2006. Iron and Steel Scrap; chapter in Minerals Yearbook 2005, U.S. Geological Sur- vey. Available online at http://minerals.usgs.gov/minerals/pubs/commodity/iron_&_steel_scrap/fes- crmyb0.pdf (accessed October 31, 2007). Gerhard, L.C., and W. Weeks, 1996. Earth resources data: A basis for resource analysis and decision- making. Environmental Geosciences 3(4):76-82. 0

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MINERALS, CRITICAL MINERALS, AND ThE u.S. ECONOMY Heig, R., 2007. Presentation to Committee on Critical Mineral Impacts on the U.S. Economy. Wash- ington, D.C., March 7. Jackson, W.D., and G. Christiansen, 1993. International Strategic Minerals Inventory Summary Re- port—Rare-Earth Oxides. U.S. Geological Survey Circular 930-N, 68 pp. Matos, G.R., 2007. Effects of Regulation and Technology on End Uses of Nonfuel Mineral Commodi- ties in the United States. U.S. Geological Survey Scientific Investigations Report 2006-5194. Available online at http://pubs.usgs.gov/sir/00//pdf/sir00.pdf (accessed October 29, 2007). McMahon, F., and A. Melhem, 2007. Fraser Institute Annual Survey of Mining Companies, 00/00. Vancouver: Fraser Institute, 91 pp. MMSD (Mining, Minerals, and Sustainable Deveopment Project ), 2002. Breaking New Ground. London: EarthScan Publications in association with the International Institute for Environment and Development, 441 pp. Müller, D.B., T. Wang, B. Duval, and T.E. Graedel, 2006. Exploring the engine of anthropogenic iron cycles. Proceedings of the National Academy of Sciences 103(44):16111-16116. NRC (National Research Council ), 1996. Mineral Resources and Sustainability Challenges for Earth  Scientists. Washington, D.C.: National Academy Press. NRC, 1999. Hardrock  Mining  on  Federal  Lands. Washington, D.C.: National Academy Press, 247 pp. NRC, 2006. Managing Coal Combustion Residues in Mines. Washington, D.C.: The National Academies Press, 256 pp. Paul, A., and M. Knight, 1995. Replacement ores in the Magma Mine, Superior, Arizona. Pp. 366-372 in F. Pierce and J. Bolm (eds.), Porphyry Copper Deposits of the North American Cordillera. Tucson: Arizona Geological Society, 656 pp. Peterson, D., T. LaTourrette, and J. Bartis, 2002. New Forces at Work in Mining—Industry Views of  Critical Technologies. Santa Monica, Calif.: RAND Science and Policy Technology Institute. Shanks, W., 1983. Cameron Volume on Unconventional Mineral Deposits. New York: Society of Eco- nomic Geologists, Society of Mining Engineers, American Institute of Mining, Metallurgical, and Petroleum Engineers, 246 pp. Singer, D.A., V.I. Berger, and B.C. Moring, 2005. Porphyry Copper Deposits of the World: Database, Map, and Grade and Tonnage Models. U.S. Geological Survey Open File Report 2005-1060. Available online at http://pubs.usgs.gov/of/00/00/of00-00.pdf  (accessed October 31, 2007). Steel Recycling Institute, 2005. The Inherent Recycled Content of Today’s Steel, Fact Sheet. Available online at http://www.recycle-steel.org/PDFs/Inherent00.pdf (accessed August 8, 2007). Sullivan, D., J. Sznopek, and L. Wagner, 2000. Twentieth Century U.S. Mineral Prices Decline in Constant Dollars. USGS Open File Report 00-389. Available online at http://pubs.usgs.gov/ of/000/of00-/of00-.pdf (accessed October 31, 2007). Sutphin, D.M., and N.J. Page, 1986. International Strategic Minerals Inventory Summary Report— Platinum-Group Metals. U.S. Geological Survey Circular 930-E, 34 pp. Taggart, A.F., 1927. Handbook of Ore Dressing. New York: John Wiley & Sons, 1679 pp. Thompson, T.B., and L. Teal, 2002. Preface to Gold Deposits of the Carlin Trend. Reno: Nevada Bureau of Mines and Geology, p. 8. 0

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Availability and Reliability of Supply Tilton, J.E., 2003. On Borrowed Time? Assessing the Threat of Mineral Depletion, Washington, D.C.: Resources for the Future. Tilton, J.E., 2006. Depletion and the long-run availability of mineral commodities. In M.E. Doggett and J.R. Parry, (eds.), Wealth Creation in the Minerals Industry: Integrating Science, Business and  Education. Littleton, Colo.: Society of Economic Geologists Special Publication 12, pp. 61-70. USBM/USGS (U.S. Bureau of Mines and U.S. Geological Survey), 1980. Principles of a resource/re- serve classification for minerals: U.S. Geological Survey Circular . Reston, Va.: U.S. Geological Survey, 5 pp. USGS, 2007. Mineral Commodity Summaries 00. Reston, Va.: U.S. Geological Survey, 195 pp. Wilburn, D.R., and D.A. Buckingham, 2006. Apparent Consumption vs. Total Consumption—A Lead-Acid Battery Case Study. U.S. Geological Survey Scientific Investigations Report 2006- 5155. Available online at http://pubs.usgs.gov/sir/00//sir00.pdf (accessed October 31, 2007). 0

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