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Resources Policy 33 (2008) 4–11

www.elsevier.com/locate/resourpol

Mineral economics: Overview of a discipline$

Richard L. Gordona, John E. Tiltonb,c,
a
Professor Emeritus of Mineral Economics, The Pennsylvania State University, USA
b
Profesor de la Cátedra de Economı´a de Minerales, Mining Centre, School of Engineering, Pontificia Universidad Católica de Chile, Chile
c
Research Professor, Division of Economics and Business, Colorado School of Mines, USA
Received 8 November 2007; received in revised form 12 January 2008; accepted 15 January 2008

Abstract

Mineral economics is the academic discipline that investigates and promotes understanding of economic and policy issues associated
with the production and use of mineral commodities. While its origins can be traced back at least 200 years to the writings of David
Ricardo and other early Classical economists, it emerged as a separate academic field only after World War II and then primarily in the
United States. As a separate academic discipline, its roots are found in mining schools that needed to consider the milieu in which
minerals are sold. While geologists, mining engineers, and others with technical backgrounds were largely responsible for creating the
first stand-alone mineral-economics programs, ultimately trained economists became participants as well. Moreover, even after the rise
of mineral-economics departments, most of the research in the field continued and continues to be carried out in other academic units,
including traditional economic departments and engineering schools, as well as in government agencies, nonprofit research organizations,
consulting firms, and international organizations.
In the decades following World War II, after early fears of a new depression and excess capacity evaporated, mineral economics
focused on the long-run availability of nonrenewable commodities and the threat of supply interruptions for strategic and critical
minerals from the Middle East, the Soviet Union, and southern Africa, concerns that persisted at least through the 1980s. The
relationship between mineral companies and governments (with particular attention on taxes and other ways of sharing the benefits from
mining) was another important issue, as were more traditional interests, including market analysis (mainly, price and demand forecasts),
project evaluation, and monopoly and antitrust issues.
Since then, the discipline has spread from its early North American base around the globe. The range of topics addressed has grown as
well and now includes the environmental impact of mineral production and use, the resource curse, the rise of China and India as major
consumers, the concerns of indigenous people and local communities, and a host of other economic and policy issues associated with
mineral commodities.
This article examines the nature of mineral economics, its emergence as a distinct academic discipline following World War II, and its
more recent evolution. It concludes with a few observations about the future.
r 2008 Elsevier Ltd. All rights reserved.

JEL classification: L71; L72; Q3; Q4

Nature

Mineral economics is the academic discipline that

conducts research and education on economic and policy
$
An earlier version of this paper was presented at the Mineral issues associated with the discovery, extraction, processing,
Economics and Management Society 2007 Santiago Symposium on use, recycling, and disposal of mineral commodities. As
‘‘Economic and Management Issues in the Mining Industry’’. Robinson (1989) shows, its roots can be traced back to the
Corresponding author at: Division of Economics and Business, Colorado
early development of economics as a formal discipline.
School of Mines, Golden, CO 80401, USA. Tel.: +1 303 273 3482;
fax: +1 303 273 3416. Chapter III of Ricardo’s Principles is ‘‘On the Rent of
E-mail addresses: [email protected] (R.L. Gordon), [email protected], Mines.’’ Malthus’s fears about resources are a still-recalled
[email protected] (J.E. Tilton). preliminary to the resource pessimism of subsequent years.

0301-4207/$ - see front matter r 2008 Elsevier Ltd. All rights reserved.
doi:10.1016/j.resourpol.2008.01.003
 ARTICLE IN PRESS
R.L. Gordon, J.E. Tilton / Resources Policy 33 (2008) 4–11 5

Specialists also note Jevons’s 1865 book on the dire Given the nonrenewable nature of the geological
consequences of depletion of British coal (see Bradley, 2007). endowment, mineral economics has focused in some depth
Despite such early work, the focus here is on the period on the optimal use over time of mineral commodities and
since 1945. Separate mineral-economics programs in acade- the prospects for mineral depletion and exhaustion.
mia arose only after World War II, and prior to this time, Ironically, these efforts suggest that the differences between
mineral economics was not considered a separate field. nonrenewable and renewable resources can easily be
Mineral economics borrows freely from many, more exaggerated. The world will never physically run out of
traditional disciplines, including economics, finance, man- nonrenewable resources. This is in part because some—the
agement, statistics, econometrics, geology, mining and metals, for example—are not destroyed in the process of
petroleum engineering, mineral processing, fuel science extraction and use and after use are still available at some
and technology, and metallurgy. The earliest participants cost for recycling. More importantly, long before the last
in university programs had formal training in engineering barrel of oil or last pound of copper is extracted from the
or the earth sciences. The next step was enlisting as faculty earth’s crust, demand would fall to zero. In the standard
graduates of mineral-economics programs, individuals who models of exhaustible resources, this is caused by a sharp
often had prior training in the earth sciences or engineering rise in production costs as high quality, low-cost deposits
as well. Next came the hiring of people (like the authors) are exhausted. However, demand can cease for other
trained in standard economics who had studied mineral reasons as well (see Gordon, 1967; Koopmans, 1974). For
problems. example, given the existence of effectively inexhaustible
With this evolution, the integration of skills took more resources, such as solar energy and nuclear fusion, the
varied forms. Good applied economics requires extensive fossil-fuel industries may simply fade away, like the whale
knowledge of the peculiarities of whatever is being studied. oil industry more than a century ago, as new technology
As a result, mineral economists must have a solid under- allows demand to shift toward cheaper substitutes.
standing of the important technical and institutional relation- For this reason, long-run trends in real prices, real
ships governing—and often constraining—the behavior of production costs, or other measures of what society has to
mineral markets and an ability to tailor their analyses to take give up to obtain another unit of a mineral commodity
such considerations explicitly into account. provide a better indicator of trends in availability than
Mineral economists trained as economists tend to master physical measures indicating how much is left in the
selectively the underlying earth science and engineering and ground. Indeed, the available estimates of physical supply
to concentrate on broader issues of market conditions and cannot be understood without recognizing the economics.
public policy impacts. Those with formal training in other Given the costs, it is worthwhile to develop reserves only
disciplines often utilize their fuller knowledge to deal with up to some multiple of current use—a 30-year supply at
more technical issues, such as investment appraisal. Many current production rates, for example. Estimates of
are initially trained in geology or other related technical potential reserves or resources are always highly spec-
fields, and then attend a graduate program in mineral ulative. As long as the pressures of exhaustion are modest,
economics or an MBA program to acquire the necessary improved data on undeveloped resources are at some point
tools in economics and business. not worth the costs. This is well illustrated by early U.S.
In any case, the conceptual tools and principles used by efforts to delineate more fully its uranium resources, which
mineral economists are the same as those used by other in the 1970s were made irrelevant by large discoveries in
economists. Mastery of these tools is the trickiest aspect of Canada and Australia.
the formal and informal practice of all kinds of economics. Over the long run, we know that trends in real mineral-
Those of us who have taught aspiring mineral economists commodity prices can be upward or downward depending
and interacted with noneconomists attempting to deal with largely on whether new technology with the assistance of
economic issues find wide differences in the ability to learn mineral substitution offsets the cost-increasing effects of
to ‘‘think like an economist.’’ depletion. Renewable resources are similar in the sense that
their real prices and hence availability can increase or
A separate discipline? decrease over time. Moreover, if renewable resources are
exploited beyond their regeneration rate, they can actually
The issue of whether mineral economics is best become exhausted in a physical sense, as the extinction of
considered a separate discipline or simply an applied field species illustrates. For more on this issue, see Tilton (2003).
of economics has never been totally resolved. Those To be sure, mineral commodities do entail a stage of
arguing for the former highlight the inter-disciplinary production not found in other industries: before mining
nature of the field. They note that much of the research and mineral processing can take place, known and
and teaching has always drawn heavily on fields other than economic mineral deposits must be identified by explora-
economics, such as finance. They also highlight the unique tion or created by new technology. The exploitation of
and critical importance of geological endowments and economic deposits is confined to specific geographic
exploration for the mineral industries (see Mackenzie, locations, dictated by the legacy of geological events
1987; Maxwell, 2006). occurring hundreds of million of years in the past. Mining
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6 R.L. Gordon, J.E. Tilton / Resources Policy 33 (2008) 4–11

can also generate huge economic rents, drastically alter the tion have similarly been a part of mineral economics from
environment, substantially impact regional economic the beginning, largely because new projects generally
development, and where concentrated in just a few require substantial investments and often mineral com-
countries create security of supply problems for users. modities are expensive to transport.
Just how unique these characteristics are and to what Joint production of different commodities is also fairly
extent they justify considering mineral economics as a common. Distinctions are often made among main
separate discipline, however, are open issues. Some products that produce most of a mine’s income, co-
question whether anything other than the relevant tech- products that generate similar shares of the returns, and
nologies distinguishes the mineral industries from other byproducts that make minor contributions. Changes, of
industries. Is discovery different from any other form of course, can occur over time. In North America, natural gas
product development? Are mines more local or important has moved from waste product to byproduct to co-product
to their communities than farms, textile mills, or auto- for many wells. A similar shift is apparent in Russia.
mobile assembly plants? Is not any industry with a Many mineral commodities are recovered from recycling
dominant foreign supplier a potential security risk? scrap. Some are sold on competitive exchanges with
Yet whatever the rationale for separate mineral-econom- volatile prices; others are produced by only a handful of
ics programs, the effort worked. Strong faculties were built, firms and sold at stable producer prices. Since World War
excellent students were attracted (many of whom probably II, the mineral sector has experienced an increasing
would not have pursued other academic programs), and a dependence on organized exchanges, along with a growing
surprising number of these students went on to outstanding recognition by industry that formal markets and the use of
careers. price to equate supply and demand have their advantages.
Given these great differences among mineral commod-
Differences among mineral commodities ities, the scope of mineral economics is by necessity broad
and diverse. No one single model or analytical approach is
The vast array of very different commodities covered by appropriate for all situations. Good analysts must under-
the field of mineral economics is commonly separated into stand the production technology and other important
three groups—metals, nonmetals, and energy minerals. In characteristics of the particular commodities they are
North America, which is a major producer of energy fuels, examining and custom tailor their models accordingly.
the discipline has traditionally been defined to include all It is also worth noting that mineral economists work for
three groups. In particular, energy economics was and a wide variety of employers with interests in the mineral
continues to be an integral part of separate mineral- sector—government agencies, mineral-producing and pro-
economics programs. In the rest of the world, however, cessing companies, banks and other financial institutions,
differences in mineral-production patterns have produced law firms, consulting companies, international organiza-
alternative approaches. In countries such as Chile where tions, universities, and mineral-consuming companies. This
metals dominate, mineral economics includes only the list clearly shows that the economic and policy issues
metals and the nonmetallics. Conversely, those countries addressed are of interest to both the public and private
whose only significant mineral is oil create programs in sectors.
petroleum economics.
Regardless of how mineral economics is defined, it is The earlier years: World War II to the 1980s
important to highlight the wide diversity of mineral
commodities. Perhaps most significantly, they differ in The pioneers of the first academic programs in mineral
economic importance. At one extreme is the oil industry, economics, as noted earlier, were scientists or engineers in
which is so large that it contains several of the world’s colleges of mining and earth sciences. Those involved
biggest corporations. At the other end of the spectrum are consider a 1931 collaboration between the Brookings
metals used in minute quantities. Understandably, the Institution and the U.S. Bureau of Mines, along with the
more important receive most of the attention. book (Tyron and Eckles, 1932) resulting from the effort,
Mineral commodities differ in a host of other ways as critical to the emergence of a distinct field. According to
well. Some are extracted from open-pit mines, others from one pioneer, J.J. Schanz, Jr., creating the field was a
underground mines, still others from wells, and a few even natural extension of the mine-valuation courses that were
from the ocean and the seabed. The technology involved standard in mining-engineering curriculums.
can be simple but often is highly sophisticated. Some are
produced in only a few countries and then traded around Academic programs offering mineral economics
the world. Others are more ubiquitous and produced in
many countries. The Pennsylvania State University was the first to offer
The important mineral commodities are typically sold in academic degrees in mineral economics. In 1946, its School
international markets, so mineral economics took globali- of Mineral Industries (now the College of Earth and
zation for granted long before the concept became Mineral Sciences) created a Department of Mineral
prominent. The economics of investment and transporta- Economics and began awarding B.S., M.S., and Ph.D.
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degrees in the field. Later the Colorado School of Mines, At Paley’s urging, the Commission encouraged the Ford
the University of West Virginia, the University of Arizona, Foundation to fund the creation of Resources for the
and Michigan Technological University also introduced Future, a nonprofit organization based in Washington,
degree-granting programs at the graduate level. In addition, DC, dedicated to research and education in the develop-
some mineral schools, such as Stanford, Columbia, McGill, ment, conservation, and use of natural resources. Over the
and Queens, maintained mineral-economics programs with next several decades, RFF sponsored a number of
a single faculty member designing a student’s curriculum important studies in this area, including the seminal book
from courses offered elsewhere in the university. Scarcity and Growth by Barnett and Morse (1963). This
work along with the extension by contemporary econo-
mists of exhaustible-resource theory largely shaped the
Alternative academic programs
debate over resource depletion for the first generation of
mineral economists and even for many of us who followed.
The research and teaching of other academic programs
In brief, Barnett and Morse, somewhat to their own
have complemented the efforts of the stand-alone mineral-
surprise, found that mineral commodities despite their
economics programs. Indeed, traditional programs in
nonrenewable nature had over the past century actually
economics, responsible for much of the earlier research in
become less rather than more scarce. At least this was true
the field, have continued to contribute important theoretic
with respect to what really mattered: namely, what society
and applied work. Business schools have also been
had to give up to produce another unit of output. The reason
involved, as well as various specialized programs.
they argued was that the cost-reducing effects of technolo-
Specialized programs are organized in several ways. The
gical progress had more than offset the cost-increasing effects
broadest field is natural resource and environment
of depletion. In the ensuing debate, their conclusions for the
economics. Some practitioners of this approach consider
most part persevered, and most mineral economists (if not
one of the terms tacitly to encompass the other. Environ-
the public at large) today believe that the real prices of
mental economics can include all of resource economics, or
mineral commodities have generally been falling over the
resource economics can include the environment. Whatever
long run (Krautkraemer, 1998; Tilton, 2003).
the terms used, this approach had led to separate schools or
In the first decades of its operations, RFF was a prime
colleges devoted to natural resources as well as to including
sponsor of mineral-economics research—Adelman on oil,
broader resource issues into the traditional field of
Lovejoy and Homan and then McDonald on state oil
agricultural economics.
regulation, McDonald on oil and gas leasing, and Gordon
The crude-oil price spikes of the 1970s produced a
on coal. Important work was also undertaken by RFF
sudden rush by academic, governmental, and corporate
staff, initially by Schurr, Landsberg, and Herfindahl. They
economists to master energy issues. Although mineral
were followed by Russell, Bohi, Darmstader, Toman, and
economics at the time included energy, a strong conviction
Parry.1 After the Ford Foundation ended its financial
prevailed among the newcomers that they needed a
support, RFF had to rely more heavily on funding from
separate identity. Possibly the inclusion of other, less
other foundations and government agencies. Among the
glamorous minerals and the close association with long-
effects of this change was a sharp reduction in its mineral-
established entities were considered detrimental. Mineral
economics research.
economics at the time had strong associations with what
once were schools of mines, mineral engineering societies,
and the Department of the Interior. In any case, this led to Parallel developments: government agencies
the formation of the International Association of Energy
Economists (IAEE—now the International Association for Governments have altered both the substance and form
Energy Economics), several journals including that of of mineral policy. In the United States up to the 1970s, the
IAEE, and new academic programs in energy. Department of the Interior (DOI) was the only federal
cabinet agency with substantial mineral responsibility. This
was split among three divisions—the Geological Survey,
Parallel developments: the Paley Commission and RFF
the Bureau of Land Management, and the Bureau of
Mines. The first dealt with mineral endowment and other
Concerns over the long-run availability of mineral
geological questions; the second oversaw the use of the
commodities led President Harry Truman to create the
majority of the federal government’s large land holdings;
President’s Material Policy Commission, more commonly
the last was engaged in research, data gathering, and
known as the Paley Commission after its chair William
regulation of minerals broadly defined.
Paley. Its five-volume report, which appeared in 1952,
Governments of other developed countries also in-
played a formative role in the early development of mineral
creased their mineral expertise and research in the years
economics. It highlighted the critical role of economics and
promoted the perception that a market economy respond- 1
For more on the research program at RFF during its early years and
ing to economic stimuli can cope effectively with many for references to the many books it published in the field of mineral
policy issues. economics, see Resources for the Future (1977).
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8 R.L. Gordon, J.E. Tilton / Resources Policy 33 (2008) 4–11

right after World War II. In Europe and Japan, these activities before the BOM was created and assumed
public programs were largely dismantled in the 1980s. In control. In recent years, budget cuts have forced the
Canada and Australia, however, early efforts were main- Geological Survey to reduce these efforts.
tained and are found today in Natural Resources Canada
and the Australian Bureau of Agricultural and Resource
Economics (ABARE). These agencies along with newer Research agenda
ones in developing producing countries, such as Cochilco
(the Chilean Copper Commission), today support a wide Research in the field of mineral economics has focused
agenda of research in the field. on the important public and private policy issues of the
In the 1970s, predominantly in energy, a mind-numbing day. In the decades after World War II, the following
succession of policy changes occurred in the United States. topics received the lion’s share of attention:
Protection for the high-cost domestic petroleum producers
ended. In response to the price increases engineered by
OPEC, the government first introduced price controls and  Mineral commodity market analysis, including price
then excise taxes on domestic petroleum producers.2 In an and demand forecasts.
unintended and perverse manner, these measures actually  Project evaluation using discounted cash flow and other
constrained domestic energy production and fostered financial tools.
higher oil imports. As a result, many of these controls  International mineral companies and their relations with
and regulations were subsequently abolished. Nevertheless, the host countries in which they operated, including
U.S. energy policy continues to be characterized by an taxation issues.
assortment of regulations, subsidies, and studies for all  Strategic and critical materials from the Middle East,
areas of energy. southern Africa, and the Soviet Union.
Nonfuel minerals also endured considerable interven-  Depletion and the long-run availability of mineral
tion. Periodically, the country restricted steel imports. It commodities.
built up stockpiles of numerous materials considered  Monopoly and antitrust policy in the petroleum,
critical or strategic. It offered production incentives for aluminum, steel, and other mineral industries.
various metals and at times imposed price controls.  Regulation of the energy industries.
The Department of Energy was created with an Energy  Commodity agreements and in particular the Interna-
Information Administration (EIA) to improve the collec- tional Tin Agreement.
tion and reporting of energy data, maintain the forecasting
efforts developed by the Federal Energy Administration, Interestingly, this work drew upon a number of
and conduct independent analysis of energy problems. At conceptual and theoretical developments in economics
its highpoint, EIA maintained statistical reports far more and other related disciplines. Among the more important
elaborate than the Bureau of Mines (BOM) had provided were: (1) The revival and extension of Fisherian capital
on various mineral fuels and electricity, though this activity theory as a useable tool for applied financial analysis. (2)
has since been curtailed. The maturing of exhaustion theory from the early efforts of
Starting in the 1970s, the government in a series of steps Gray (1914) and Hotelling (1931) to the elaborate models
reduced the scope of BOM’s activities. The creation of a of the 1970s.3 (3) The development of a modern theory of
Department of Energy (DOE) involved the total transfer of externalities and their control, including the enormously
energy data gathering and much of the energy research to influential characterization of when externalities are policy
DOE. BOM’s regulation of mine safety ceased with the relevant by Coase (1960). (4) Advances in industrial
creation of a separate Mine Safety and Heath Administra- organization as a specialization using economic theory to
tion. These last activities were ultimately placed in the assess the performance of industries and their regulation.4
Department of Labor. (5) Finally, vigorous theoretical and empirical work on
When legislation established federal oversight of the international economics and development economics.
effects of surface coal mining, Congress entrusted control
3
to a new DOI branch. The final blow occurred in 1996, Natural resource economists in the 1960s relaxed many of the
when the government abolished the BOM. At the time, its restrictive assumptions of the earlier work and in the process made
data-gathering responsibilities were placed in the Geologi- critical contributions that greatly extended the theory. Numerous surveys
of the literature are available. Baumol and Oates (1975), a text on
cal Survey, the agency that had actually originated these environmental economics, includes a good survey of exhaustion theory but
only in its first edition. Other simple surveys are found in Gordon (1981)
2
These were called excess profits taxes. However, costs were not and Bohi and Toman (1984). Dasgupta and Heal (1979) probably provides
considered directly. Taxes were levied on the differences between actual the fullest available review, but it is quite complex.
4
prices and an allowable price specified in the legislation. To adjust crudely The pioneering case studies at Harvard that established the field of
for cost differences, production was divided into different categories industrial organization included Wallace (1937) on aluminum and Bain
subject to different allowable prices. Higher allowable prices and thus (1944) on oil. M.A. Adelman was teaching industrial organization at MIT
lower tax bases and lower tax rates were applied to categories considered when he undertook his studies of petroleum (see, for example, Adelman
higher cost. 1972, 1993, 1995) and motivated MIT’s extensive involvement in energy.
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Recent years: the 1980s to the present University of Chile, these programs are taught in
concentrated sessions to accommodate students working
Over the years, the field of mineral economics has full time in the industry, rather than as standard academic
evolved in two important respects. First, the geographic programs. In addition, the University of Dundee in
location of teaching and research has shifted from the Scotland offers a program in mineral law with a significant
United States (which, as noted earlier, was largely behind focus on mineral economics.
the emergence of mineral economics as a separate specialty) It is also important to note that government agencies in
towards producing countries. Second, the research agenda producing countries, including Natural Resources Canada,
has changed. the Australian Bureau of Agriculture and Resource
Economics (ABARE), and the Chilean Copper Commis-
Geographic location sion (Cochilco), today support a wide agenda of research in
the field.
Interest in the field of mineral economics in the United
States has waned in part because its domestic-mining Research agenda
industry has over time become less important, at least with
respect to the economy as a whole, and shifted location. Since the 1980s, mineral economics has continued to
Coal production, for example, has expanded in the Rocky maintain a strong interest in market analysis (particularly
Mountain states, particularly Wyoming, while declining in price and demand projections) and project evaluation, as
Appalachia. The general decline and reorientation of the these activities have remained important for producing
earth science and mineral engineering schools in which companies and the private sector more generally. Relations
mineral-economics programs have resided have also been with host governments and countries have also remained of
contributing factors. considerable interest due in large part to the evolving role
Resources for the Future continues to thrive but by of host governments. The petroleum sector witnessed the
focusing on global warming and other policy issues for nationalization of oil operations throughout the Middle
which outside funding is more readily available. Little of its East and in Venezuela in the 1970s. The metal industries
research is currently in the field of mineral economics. experienced a wave of nationalizations as well, starting
In the 1990s, the Department of Mineral Economics at even earlier in the 1960s, though this trend was largely
The Pennsylvania State University was renamed the reversed by the privatizations of the 1990s.
Department of Energy, Environmental, and Mineral Other significant changes have also occurred over the
Economics to make explicit the breadth of the program. past several decades, including a growing disenchantment
Even so, the University abolished the department in 2002. with government regulation. Yet in the energy sector,
At the time, the department was offering a minor in energy pervasive regulation persists. Continued political unrest in
business and finance whose persistent success led to its oil exporting countries and fears of global warming have
transformation into a full-fledged undergraduate major, made ending ‘‘addiction to oil’’ a slogan adopted on a
similar to the discontinued BS degree in mineral economics nonpartisan basis by politicians and others in the first
though without a focus on nonfuel mineral commodities. decade of the 21st century.
Even earlier the graduate mineral-economics program at In the realm of metals, major changes over the past
the University of West Virginia was absorbed by the several decades include the demise of the International Tin
agricultural-and-resource-economics program. The Uni- Agreement and UNCTAD’s Integrated Programme for
versity of Arizona scattered its three faculty members Commodities, the persistent long-run downward trend in
among three departments. The programs based on a single real prices for many mineral commodities (though the
faulty member also largely vanished. The Michigan recent rise in commodity prices has some suggesting the
Technological University has recently changed the name trend is now rising), the collapse of the Soviet Union and
of its degree from mineral economics to applied natural the end of the Cold War, the integration of China and
resource economics. The program does, however, continue other former centrally planned states into the global
to have a major mineral-economics component. This leaves economy, and the growing competition in many mineral
the Colorado School of Mines as the only university in the markets.
United States still offering degrees (M.S. and Ph.D. These changes have lessened concerns about monopoly
degrees) in mineral economics. and market power, about mineral depletion, and about
Simultaneous with its decline in United States, the field strategic and critical materials—all major research issues
of mineral economics has experienced growing interest in during the first decades following World War II. As
producing countries. Students can now earn degrees in interest in these topics has waned, the discipline has
mineral economics from the Curtin University of Technol- redirected its attention toward a new set of concerns:
ogy in Australia, the University of the Witwatersrand in
South Africa, the Catholic University of Chile, and the  The environmental effects of extraction, processing, and
University of Chile—most of these programs have been use of minerals, and the role of government policy and
initiated since 1993. With the exception of the Catholic corporate responsibility for controlling them.
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10 R.L. Gordon, J.E. Tilton / Resources Policy 33 (2008) 4–11

 The impact of mining and energy production on downward secular trend. Rather, they portend a reversal in
indigenous people and local communities. the downward trend with increasing mineral scarcity on the
 The role of mineral exploitation in economic develop- horizon.
ment, including issues surrounding the resource curse, In another area, the recent merger wave in the mineral
the Dutch disease, and the links between mineral wealth sector, if it continues, may well resurrect concerns about
on one hand and corruption and conflict on the other. monopoly and uncompetitive markets. Similarly, growing
 China, India, and the growing global competition for mineral consumption in China, India, and other developing
mineral resources. countries already has some pondering the implications for
mineral supplies in the traditional consuming countries.
All of these issues are closely associated with the concept The rise of China as an exporter has as well inspired calls
of sustainable development. For many, sustainable devel- for protection. As a result of such developments, the
opment is now the overriding guiding principle for public United States and other consuming countries could
policy. For others, the concept is too ambiguous in practice discover a renewed interest in mineral economics in the
to be useful. coming years.
These new research issues, it is worth noting, are of Third, the interest of producing countries in mineral
greater concern to mineral-producing countries than the economics will persist over the foreseeable future. The
earlier topics that they have replaced. This presumably environment, indigenous people and local communities,
helps explain the shifting geographic location, noted and the other issues of concern to these countries discussed
earlier, of the discipline from the United States to major earlier are unlikely to disappear soon.
producing countries. Other contributing factors are im- All of which suggests that the locus of interest and the
portant as well, including the major role that the mineral research agenda of mineral economics is likely to evolve in
sector plays in the economies of many producing countries the future, just as it has in the past, but that the discipline
and the natural tendency for suppliers and support services will continue to have an important role to play in analyzing
(including education and research) to follow with a lag the the pressing economic and policy issues of the day
shifting location of primary production. Simultaneously, associated with mining and the use of mineral commodities.
the growing belief that mineral commodities are readily
available in sufficient quantities, fostered in large part by Acknowledgments
long periods of declining prices and excess capacity, has
undermined interest in mineral economics in the United We gratefully acknowledge two papers by John J.
States and other consuming countries. Schanz, Jr. (no date, 2006), two papers by Philip Maxwell
(2006, Chapter 1, 2007), and comments from Schanz and
The future Richard T. Newcomb in preparing this overview of the
field of mineral economics. We are also keenly aware of the
The present and the past are easier to document and difficulties of providing a comprehensive review of an
describe than the future. Still, a few concluding observa- entire discipline, and recognized this overview has a North
tions about the future are worth considering. American perspective. We would welcome hearing from
First, as long as consuming countries need mineral readers who feel we have failed to identify adequately
commodities to sustain their modern standard of living, as important developments in the field.
long as mining and mineral processing play a major role in
the economies of producing countries, and as long as firms References
and the private sector in general need market analyses and
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