Future Availability of Minerals:Sustainable Development & the Research Agenda Presentation to the Board on Earth Sciences and Resources, National Research Council of the National Academies By Jim Cress Director Sustainable Development Strategies Group Attorney, Holme Roberts & Owen LLP 10-18-10

2. Future Availability of Mi
F A il bili f Minerals:
l
Sustainable Development &
the Research Agenda
Presentation to the Board on Earth Sciences and Resources,
National Research Council of the National Academies
By Jim Cress
Director
Sustainable Development
Strategies Group
Attorney, Holme Roberts & Owen LLP

3. SDSG: Who We Are
Sustainable Development Strategies Group (SDSG) is a
p g p( )
collaborative group of researchers, consultants and other experts
whose goal is to demonstrate the effectiveness of sustainable
development concepts in solving real, practical problems at the
real
local, regional, national and international levels.
SDSG is both a research organization and a practical source of
policy, institutional, and capacity building advice.
SDSG is headquartered in Gunnison, Colorado,
but works with collaborators in
many regions of the globe
globe.

4. SDSG: What We Do
Research and teach about sustainable development and its concrete
application in the use and conservation of natural resources, on local,
regional,
regional national and global scales.
scales
Collaborate with governments, companies, communities and others to
develop solutions and build capacity for wise use and conservation of
natural resources.
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Utilize interdisciplinary, participative methods in which our partner
organizations develop and implement strategies, and SDSG delivers
g p p g ,
expertise as requested in managing conflict, building dialogue, and sharing
experience.
Implement sustainable development ideas and applications to promote
positive, broadly supported solutions in mining and mineral resources, oil
and gas, timber, energy and other natural resource industries.

5. Sustainable Development
Development that “meets the needs of the
present without compromising the ability
ih ii h bili
of future generations to meet their own
needs.”
“Needs” - The obligation to improve the
lives of the very poor
yp

6. What Does “Sustainable Development”
Mean in Mineral Development context?
Long-Term Supply of Minerals
Mineral development within the
carrying capacity of the biosphere
Long-Term Prosperity— mineral
exporting/developing countries as
well as mineral using/developed
countries

7. What Does “Sustainable Development”
Mean in Mineral Development context?
Long-Term Prosperity
Prosperity—
– Direct use of minerals supports human well being
(e.g.
(e g concrete for homes fertilizer for crops)
homes,
– Minerals are vital to the complex web of our
economy (e.g. rare earths for the “new energy
(e g new
economy”)
– Minerals generate wealth which can be used to
alleviate poverty (even if it always hasn’t been)
– Minerals are a generator of livelihoods
g

8. Sustainable Development And Minerals:
A Research Framework
h k
A sustainable development framework for
research i
h incorporates some traditional environmental
di i l i l
analysis, but differs from a traditional environmental
research framework in a number of ways:
• It is not just about eliminating and minimizing
negative impacts, it is about maximizing the positive
impacts
impacts, and maximizing the value to society
throughout the minerals cycle
• It has a focus on development benefits of a project,
such as the livelihoods that the project generates

9. Sustainable Development And Minerals:
A Research Framework
h k
A sustainable development framework for research (con’t):
• Aggressively looks for ways to create positive environmental
externalities – and finds that there are some, e.g., the use of
abandoned mines as habitat for endangered species of bats
• Distinguishes between short term environmental impacts and
those that reduce natural capital, i.e., that reduce the ability
ie,
of ecosystems to produce benefits
• Gives important weight to the social and human impacts of
p g p
projects; such as health, housing, education, impacts on
traditions and cultures

10. The Research Agenda: Eight Challenges
g g g
These are far from the only challenges, but these eight are
y g g
very difficult:
• World population is increasing –a 300% increase since 1950
• Per capita minerals use is increasing, and for some minerals
increasing
clearly needs to keep increasing if we are to meet the needs of
the poor (e.g., copper for electrification)
• I
Increased population creates increased competition with
d l i i d titi ith
other land uses – agriculture, housing, space for biodiversity,
watersheds are all under pressure
• Mining is very energy intensive, and somehow needs to
produce more with less energy

11. The Research Agenda: Eight Challenges
g g g
(con’t):
( ’t)
• Mining is very water intensive, and somehow needs to
p oduce o e w t ess wate
produce more with less water
• For many minerals, there is an important need to identify
additional sources of supply
• Mi i moves more material than any other human activity
Mining t i l th th h ti it
(except maybe soil erosion). It generates very large volumes of
waste and it is not clear how much the biosphere can absorb
• Where are the technologies that can meet our needs with
reduced amounts of minerals, to recycle and reuse more easily,
or to produce virgin materials with less footprint?

12. Eight Challenges to Sustainable
Development of Minerals
Growing Populations
G i P l ti
Growing Per Capita Physical Availability
Mineral Use
Mi lU of Minerals
Competition For Land Competition For Energy
Competition Technology
For Water Development
Biosphere’s Capacity To
Absorb Mining Waste Streams

13. Growing Populations

14. Who Needs Minerals?
• Developing and Developed Countries
• Greatest need in underdeveloped
Countries (growing populations, resource use
y)
intensity)
• Competition between developing and
developed countries o er
de eloped co ntries over minerals is
increasing

15. A Growing World Population

16. World Population Growth
Developing vs. Developed Countries
p g p

17. Global Income Distribution
Global Income Distribution
The richest 10% The richest 20% get
of the world gets 72.9% of the income
53.1% of all the
income
The bottom 10% get 0.6%
“Trends in Global Income Distribution 1970 – 2000,
and Scenarios for 2015,” UNDP Human Development
Report Office Occasional Paper (2005).

18. Poverty vs. The Environment
vs
• Ending extreme poverty is a moral imperative now that the means to
achieve this age old dream are within our grasp. Failing to grasp this
opportunity is morally indefensible
indefensible.
See Jeffrey Sachs, The End of Poverty (2005)
• We have critical world problems of environmental stress – changes in
p g
ocean chemistry, loss of biological diversity, massive soil loss in
agriculture, marine ‘dead zones,’ collapse of commercial fisheries, climate
change – that threaten our ability to survive on the only habitable planet we
know. If we don’t solve these problems, it won’t matter if we solve any of
p , y
the rest.
See Herman Daly, For the Common Good: Redirecting the Economy
towarCommunity,the Environment, and a Sustainable Future (1994).
• There is a widely shared idea that the more we reduce poverty, the
more we stress environmental systems, and the more we protect the
environment the more people must be doomed to poverty.
• Is this choice necessary, or a false choice?

19. Growing Per Capita
Mineral Use

20. Minerals Drive Development
Copper
– Essential for electrification and rising standard of
living.
living Also important to housing, auto
housing auto,
information technology & alternative energy
Steel (iron, molybdenum, etc.)
(iron molybdenum etc )
– Essential for construction/industrialization
Coal
C l
– Cheap plentiful source of energy for
industrialization/electricity
ind striali ation/electricit generation

21. Copper Consumption p Capita
pp p per p
(tons per person, 17 of 20 most populous countries)
• Table 3. Copper consumption per capita (tons per person) in 17 of the 20 most populous countries
in the world.
• 1970 1975 1980 1985 1990 1995 2000
• China 0.00022 0.00016 0.00038 0.00049 0.00051 0.00101 0.00168
• India 0.00010 0.00006 0.00009 0.00014 0.00013 0.00013 0.00040
• USA 0.01005 0.00794 0.00976 0.00664 0.00794 0.00962 0.01125
• Indonesia 0.00001 0.00005 0.00014 0.00009 0.00018 0.00043 0.00030
• Brazil 0.00054 0.00121 0.00229 0.00164 0.00119 0.00157 0.00225
• Russia 0.00239 0.00270 0.00394 0.00312 0.00342 0.00060 0.00138
• Japan 0.00894 0.00794 0.01060 0.01094 0.01279 0.01154 0.01034
• Mexico
M i 0.00098 0.00090 0.00191 0.00182 0.00140 0.00053 0.00580
0 00098 0 00090 0 00191 0 00182 0 00140 0 00053 0 00580
• Germany 0.01195 0.01308 0.01278 0.01398 0.01727 0.01255 0.01643
• Philippines 0.00011 0.00008 0.00010 0.00001 0.00032 0.00048 0.00022
• Iran 0.00012 0.00023 0.00003 0.00030 0.00085 0.00140 0.00159
• Egypt 0.00002 0.00009 0.00005 0.00005 0.00006 0.00007 0.00007
0 00002 0 00009 0 00005 0 00005 0 00006 0 00007 0 00007
• Turkey 0.00000 0.00027 0.00060 0.00180 0.000183 0.00250 0.00259
• Thailand 0.00000 0.00005 0.00010 0.00053 0.00097 0.00265 0.00259
• UK 0.01017 0.01001 0.00795 0.00724 0.00722 0.00509 0.00618
• France 0.00678 0.00773 0.0857 0.00684 0.00840 0.00993 0.00988
Some Implications of Changing Patterns of Mineral Consumption
By W. David Menzie, John H. DeYoung, Jr., and Walter G. Steblez, USGS
(2000)

22. Steel Consumption

23. Not All Minerals Are The Same
Over 90 minerals are commonly produced.
produced
They vary enormously in:
• Abundance
• What substitutes there are for them
• The environmental impacts of their
production
• How much employment they generate

24. Drivers of per capita Mineral
Consumption
Mineral consumption low in lesser-developed
countries with low income levels
Consumption increases very rapidly as
countries begin to industrialize and incomes
pass threshold level.
level
Per capita mineral consumption stabilizes
at higher levels when countries begin
to develop the service and information
p
sectors of their economies.

25. Physical Availability
of Minerals

26. Physical Availability of Minerals
Minerals are only physically available where we find
them
- Lack of portability creates problems
Increasing consumption depletes natural capital on
which world economy is based
– Increase supply via recycling/substitution
– Increase size of mineral reserves
• New discoveries
• New technologies
• Price cues
• Regulatory cues
g y
– National concerns (re: strategic minerals
and energy security)

27. Replacing Reserves
Example: Copper
• 1.1 billion tons of copper must be added to
reserves to meet projected copper consumption
at present recycling rates
• Maintaining current reserve level will require
more than 3 times the amount of copper in the
5 largest deposits currently known
• Big discoveries, big problems
discoveries
(e.g., Oyu Tolgoi, Mongolia)

28. Replacing Reserves (cont.)
(cont )
Sufficient supplies of copper exist to meet
needs of developing countries
However, p
, production of these resources will
depend upon
– adequate levels of mineral exploration (
q p (where
more and more land is being removed from the
resource base)
– development of new technologies for mineral
discovery and production
– social and legal environments that allow for
mineral exploration and production

29. Exploration Requires Land and Community Acceptance
Community
Miner
How communities felt about
Uranium, ca. 1954

30. Competition For Land

31. Competition for Land
Competing Land Uses
– Agriculture
– Urban Development
– Retaining Land in State of Nature: Preserving Rare or
eta g a d o Natu e: ese v g a e o
Important Ecosystems
– Tourism
– Recreational Use
Relative economic value of competing uses
– Effect on land prices, making mining
uneconomic
– Thus mining disproportionately affects
Thus,
poor/rural people

32. Competition for Land (cont.)
(cont )
Comparatively High Impact of Mining on Land
– Current Land Uses
– Future Land Uses
– Dislocation of Indigenous Peoples and others
Social i
S i l issues in Land Compensation/Relocation
i L dC i /R l i
– Defects in land title systems
– Effect of corruption/rent-seeking/
disconnect between national and
local interests
– Perceived fairness of compensation

33. Competition for Land
Competition for Land
From Frontier Settlements . .
Settlements.

34. Competition for Land
Competition for Land
. . . To Ski Areas
-Is skiing more important
Is
than mining?
-In the Gunnison Valley?
-In the United States?
-To the poor in developing
countries?

35. Competition for Land
Competition for Land
• “What Every Westerner Should Know About
What Every Westerner Should Know About
Energy” by Patricia Nelson Limerick, et al.,
Center for the American West (2003)
– “Aren’t there any unloved and unlovely
places left?”
– Argues for reconciliation among competing
interests

36. Access for Expansion & Exploration: the “Roadless Rule”

37. Competition For Energy

38. Competition for Energy
Mining is energy-intensive.
g gy
– Drilling/digging; crushing, milling, refining;
pumping out water; transport, etc.
– Competitors for energy include urban users w/
rising standards of living, infrastructure building
and other industry
Energy represents about 5% of the value of all
E t b t f th l f ll
mining products.
R&D projects include technologies
for energy-efficient mining and
processing of coal, metals, and
industrial minerals.

39. Energy Availability per Capita
Cumulative Population (Millions)

40. Fuel Prices

41. Competition For Water

42. Competition for Water
Mining is water-intensive
g
– Dust control
– Reduce fire hazard: ex.: underground coal mining
g g
– Extracting ore; processing
– Transport: mineral slurries
Competing Uses
– Agriculture
– In-stream flows
– U b /i d t i l uses
Urban/industrial
– Tourism/recreation

43. Water: The Black Eye of Mining
Effect on water supply of existing
communities
comm nities
Use of pristine water where reclaimed water
would suffice
ld ffi
Long-term effects of mining
– Pollution of surface water
• Acid mine drainage
• History of catastrophic spills
– Pollution of groundwater
– Altering course of rivers;
destroying ecosystems

44. Technology Development

45. Improved Technology
More efficient production
– Beneficial effects
• Expand supply: now feasible to mine lower-grade ore
• Energy efficiency
• Possible to minimize ground disturbance
g
– Negative effects
• More mining of marginal deposits: increased impact
g g p p
on land, water, and local communities
• Consumptive deep water production

46. Technology Examples
Gold – Bulk heap leaching (1960 s)
(1960’s)
Copper
– S l t t ti / l t
Solvent-extraction/electro-winning method
i i th d
– low-cost production of copper from waste and raw
ore d
dumps
Uranium
– In situ Recovery
– Production of marginal resource without milling
and tailings
– Potential water impacts

47. Technology Issues
Socio-Economic
Socio Economic Impacts
– Reduced need for manpower/local hiring
–IIncreased worker safety
d k f t
R&D Funding Issues
– Low profit margin of mining companies limits
industry R&D
– Government technology programs
• Corporate welfare?
• Is the public getting its money’s worth?

48. Biosphere’s Capacity To Absorb
Mining Waste Streams

49. Carrying Capacity of Biosphere
Capacity to absorb waste streams
– Mining generates high concentrations of waste and
effluents: long term waste management and acid
long-term
mine drainage issues
– Impacts on land, surface water and groundwater,
air, forest, biodiversity
Legacy of historic mining sites

50. Improving Capacity of Biosphere
Reduce waste streams
– New technologies to mine, process, transport
– Life cycle pollution management
Life-cycle
– Shift from high-polluting minerals
Reduce energy consumption
R d i
– Mining, processing, transport
– New sources of energy
– Energy-efficient products with mineral
components

51. Improving Capacity of Biosphere
Land reclamation & post-mining monitoring
– Improve predictive abilities for water impacts
– Funding
– Enforcement
Reduce mining
R d i i
– Recycling
– Substitution
– Place ecologically sensitive areas
off limits (exploration vs. mining)

52. Legal Environment
Voluntary corporate codes
Lender policies
International Law
i l
– Transboundary impacts
– Environmental human rights
– Rights of indigenous peoples
Climate Change regimes:
national & international

53. Legal Environment (cont.)
En ironment (cont )
Host country regimes
– Evolving regulatory infrastructure and capacity
– Gradual priority shift: development--environment
Increasing role of NGOs

54. Improved Models for Action
Model mining agreements
Model community participation projects
Industry Best Practices

55. The Research Agenda

56. Eight Challenges: Examples are
Everywhere
h
• Molybdenum under Mt Emmons Colorado
Molybdenum under Mt. Emmons, Colorado
• Rare Earths at Mountain Pass, California
• C
Copper/gold deposits at Tampakan,
/ ld d i k
Philippines

57. Needed Research
• There may be no more important issues for the
future of minerals development than community
acceptance, the “social license to operate.” Yet while
there is an enormous amount of propaganda out
there on all sides, there is almost no rigorous
there on all sides there is almost no rigorous
research that shows the impacts on communities:
– When they go from a pre‐mining state to the potentially
When they go from a pre mining state to the potentially
disruptive construction phase
– When they move from the large scale construction phase
to a more steady state of production
– When the mine closes and the community is left without
an activity that is central to the local economy.
an activity that is central to the local economy

58. Needed Research
There is very little attempt to understand in a rigorous way
the risk‐benefit calculation for communities
• What costs are going to be externalized onto the community?
• What will be the direct and indirect benefits?
What will be the direct and indirect benefits?
• What benefits will be externalized?
• What risks will the community be asked to run?
• Above all, does the community have any kind of say over the
outcome? If so, what?
• Can community needs be balanced with tenure systems and
Can community needs be balanced with tenure systems and
commercial needs and expectations to attract mining
investment in the first place?

59. Needed Research
Community concerns about the distribution of the benefits, risks, and impacts of
large mining projects have led to considerable opposition to mine development in many parts
of the world.
Greater access to information and communications technology, more open societies,
greater access to legal remedies and other factors, not all of which have been identified, have given
communities more leverage, and have in rich and poor countries alike prevented projects from
going forward
forward.
Are there things that can be done to improve the balance of risks, benefits,
opportunities and impacts so that communities will accept and want these projects when
society needs them?
To what extent is the problem simply a function of defects in our systems of
consultation and community engagement?
Are these facilities so important that we need legal provisions to facilitate development?
Is that politically viable in a democratic context?
1. Where are the gaps in our knowledge?
g p g
2. What research do we know of that is relevant to this problem?
3. What kind of research approaches make sense?
4. Who can undertake this kind of work?

60. Questions?
Luke Danielson, Principle
Sustainable Development Strategies Group
108 W. Tomichi Avenue, Suite D
Gunnison, Colorado 80123
Phone: (970) 641-4605
( )
danielson@sdsg.org
www.sdsg.org
Jim Cress, Partner
Holme Roberts & Owen LLP
1700 Lincoln Street, Suite 4100
Denver,
Denver Colorado 80203-4541
80203 4541
Phone: (303) 866-0290
Jim.cress@hro.com
www.hro.com
Special thanks to SDSG intern Kimberly Jackson, 3rd year student
at DU law school, for her assistance with this presentation