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Assessing the long-term supply risks for mineral raw materials--a combined evaluation of past and future trends

Author

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  • Rosenau-Tornow, Dirk
  • Buchholz, Peter
  • Riemann, Axel
  • Wagner, Markus

Abstract

This paper develops a method for identifying and assessing long-term supply risks for mineral raw materials. The method is based on a combined evaluation of past and future supply and demand trends. By analysing raw material boom and bust cycles over the past 50 years, we have quantified indicators and defined benchmarks for identifying critical market situations. By applying the method, risks for supply shortage may be identified at an early stage. In addition, a numerical evaluation model has been developed for better comparison between various mineral raw materials. Compared to other assessment methods this method uses specific benchmarks for each raw material to better assess supply risks. The method is embedded within a systematic and comprehensive analytical approach. Based on this model, companies can make better informed decisions for their market assessment and may use suitable risk mitigation instruments to counteract problematic developments. Understanding future supply conditions is especially useful when selecting new technologies for products which require an intensive use of raw materials. As an example, the method is applied to the copper market as of 2006. It is important to emphasise that nobody can foresee the future of raw material prices. But we may aim to better understand the weaknesses of these markets which may lead to future supply shortages thus influencing price.

Suggested Citation

  • Rosenau-Tornow, Dirk & Buchholz, Peter & Riemann, Axel & Wagner, Markus, 2009. "Assessing the long-term supply risks for mineral raw materials--a combined evaluation of past and future trends," Resources Policy, Elsevier, vol. 34(4), pages 161-175, December.
  • Handle: RePEc:eee:jrpoli:v:34:y:2009:i:4:p:161-175
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    References listed on IDEAS

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    1. Radetzki, Marian, 2006. "The anatomy of three commodity booms," Resources Policy, Elsevier, vol. 31(1), pages 56-64, March.
    2. World Bank, 2005. "World Development Indicators 2005," World Bank Publications, The World Bank, number 12426.
    3. repec:wbk:wbpubs:12425 is not listed on IDEAS
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    Cited by:

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    2. Vanessa Bach & Markus Berger & Natalia Finogenova & Matthias Finkbeiner, 2017. "Assessing the Availability of Terrestrial Biotic Materials in Product Systems (BIRD)," Sustainability, MDPI, Open Access Journal, vol. 9(1), pages 1-35, January.
    3. repec:spr:minecn:v:30:y:2017:i:3:d:10.1007_s13563-017-0114-y is not listed on IDEAS
    4. Shaoli Liu & Xin Li & Minxi Wang, 2016. "Analysis of Aluminum Resource Supply Structure and Guarantee Degree in China Based on Sustainable Perspective," Sustainability, MDPI, Open Access Journal, vol. 8(12), pages 1-17, December.
    5. Stepanek, Christian & Walter, Matthias & Rathgeber, Andreas, 2013. "Is the convenience yield a good indicator of a commodity's supply risk?," Resources Policy, Elsevier, vol. 38(3), pages 395-405.
    6. repec:eee:rensus:v:77:y:2017:i:c:p:899-915 is not listed on IDEAS
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    9. Glöser, Simon & Tercero Espinoza, Luis & Gandenberger, Carsten & Faulstich, Martin, 2015. "Raw material criticality in the context of classical risk assessment," Resources Policy, Elsevier, vol. 44(C), pages 35-46.
    10. repec:eee:jrpoli:v:53:y:2017:i:c:p:173-189 is not listed on IDEAS
    11. Goe, Michele & Gaustad, Gabrielle, 2014. "Identifying critical materials for photovoltaics in the US: A multi-metric approach," Applied Energy, Elsevier, vol. 123(C), pages 387-396.
    12. repec:spr:minecn:v:30:y:2017:i:3:d:10.1007_s13563-017-0119-6 is not listed on IDEAS
    13. repec:pal:assmgt:v:18:y:2017:i:3:d:10.1057_s41260-016-0038-z is not listed on IDEAS
    14. Helbig, Christoph & Bradshaw, Alex M. & Kolotzek, Christoph & Thorenz, Andrea & Tuma, Axel, 2016. "Supply risks associated with CdTe and CIGS thin-film photovoltaics," Applied Energy, Elsevier, vol. 178(C), pages 422-433.
    15. Gleich, Benedikt & Achzet, Benjamin & Mayer, Herbert & Rathgeber, Andreas, 2013. "An empirical approach to determine specific weights of driving factors for the price of commodities—A contribution to the measurement of the economic scarcity of minerals and metals," Resources Policy, Elsevier, vol. 38(3), pages 350-362.
    16. Dewulf, Jo & Blengini, Gian Andrea & Pennington, David & Nuss, Philip & Nassar, Nedal T., 2016. "Criticality on the international scene: Quo vadis?," Resources Policy, Elsevier, vol. 50(C), pages 169-176.
    17. Daw, Georges, 2017. "Security of mineral resources: A new framework for quantitative assessment of criticality," Resources Policy, Elsevier, vol. 53(C), pages 173-189.
    18. Lapko, Yulia & Trucco, Paolo & Nuur, Cali, 2016. "The business perspective on materials criticality: Evidence from manufacturers," Resources Policy, Elsevier, vol. 50(C), pages 93-107.
    19. Elshkaki, Ayman & Graedel, T.E., 2014. "Dysprosium, the balance problem, and wind power technology," Applied Energy, Elsevier, vol. 136(C), pages 548-559.
    20. Sanidas, Elias, 2014. "Four harmonic cycles explain and predict commodity currencies' wide long term fluctuations," Technological Forecasting and Social Change, Elsevier, vol. 87(C), pages 135-151.

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