What we have learned from the past and how we should look forward

From the vantage point of more than 50 years’ work in the raw material field, as well as working in the private sector, in the German federal ministry of economics, at a geological survey, and engaged in teaching and supervising research at a university, I draw a number of conclusions about the following aspects of the fields: development of long-term prices, the long-term supply situation, especially the expectation of an imminent peaking of supply, the frequent and mistaken prediction of shortfalls in supply, our understanding of reserves and resources, and the cyclic nature of success in exploration. I am solely dealing with geological aspects, not taking into account political inferences and supply disruptions. This is followed by an attempt to look into the future of raw materials demand within the framework of the accelerating green energy transition. These conclusions are: Conclusion 1: When two amplifying effects overlap, long-term price trends can be broken. Conclusion 2: All growth rates flatten eventually. Never extrapolate high growth rates too far! However, growth rates are learning curves that move in waves and can steepen again. In general, the higher the production the lower the growth rates, even in exceptional cases. Conclusion 3: It is unclear, whether we have already reached the stage when growth rates of the major metals have flattened, but sooner or later it will come. Conclusion 4: Sooner or later we shall see demand peaking for primary metals of all commodities (in contrast to peak supply) because the share of secondary metals will grow and the consumption per capita reaches saturation levels. Conclusion 5: The reserve/ production ratio (R/P-ratio) is only a snapshot of a dynamically evolving reserve/resources system. The learning effects during exploration so far are in step with ever-increasing consumption. Serious limits to reserves are nowhere to be seen. Conclusion 6: Rapid changes in production rates may be accompanied by significant decreases in R/P-ratios and it would appear justified to suspect that advances in exploration cannot always keep pace with consumption. However, as long as the R/P-ratios do not fall below 50 for stratabound deposits and 25 for other deposits and exploration activities continue apace as normal there is no reason to worry about future supply bottlenecks. Conclusion 7: The R/P-ratios are useless as indicators for lifetime; however, they are helpful as early warning indicators for looming problems of supply and for indicating the need for boosting exploration. Conclusion 8: Exploration discoveries show episodic behaviour. Therefore it is difficult to extrapolate into the future. So far all pessimistic forecasts have been proven wrong by ingenious advances to detect new ore bodies to replace mined-out reserves. Conclusion 9: Supply shortages have been forecast frequently in the past. They never actually happened. The self-regulating feedback control cycle of mineral supply safeguards adequate supply over time. There is no reason to assume that this system of self-correcting forecasts will not work in the future.