NATURAL RESOURCES OF THE WORLD

NATURAL RESOURCE ECONOMIES

• “blessed with natural resources” – interaction of export markets, physical

geography, technological change, and institutional preferences for resource
sectors;
• the staple theory of development – staple production consists of exploitation
and initial processing of natural resources, or staples (fisheries, fur, timber,
mineral ores, petroleum)
– Optimistic view – exports of natural resources can finance the growth and diversification of
the national economy;
– Pessimistic view – national development could suffer from a reliance on staple production
due to the heavy dependence on a limited number of MNCs and a few domestic interests
that actually retard the economic diversification that would lead to greater economic stability.
• “the Dutch disease” – a result of fluctuating prices on international markets
due to inflation rise, concentration and specialization, currency appreciation;
• “the resource curse” – natural resource wealth hinders economic growth;
• natural resources and technological treadmill;
• natural resources and globalization.
 NATURAL RESOURCES OF THE WORLD

• Natural resource - a physically occurring item that a

population perceives to be necessary and useful to its
maintenance and well-being.
• “Natural resources are not; they become”.
• A natural resource is defined by three characteristics of
society:
– Cultural values that make people decide which commodities
are desirable and acceptable to use;
– Level of technology should be high enough to use the
resources;
– Economic system affects whether a resource is affordable and
accessible.
 NATURAL RESOURCES OF THE WORLD

• Nonrenewable resources – form so slowly that for practical

purposes they cannot be replaced when used. Examples
include coal, oil, gas, and ores of uranium, lead, copper and
iron;
– Depletion means the time it takes to consume a proportion of
a resource, typically 80% of it. It is not meaningful to speak
about completely running out of a resource, being uneconomic
to exploit marginal deposits because of either low quality or
inaccessibility.
– The substitutability of one substance for another is important
in stabilizing resource prices and limiting problems caused by
resource scarcity.
• Renewable resources – are replaced continually, at least
within a human lifespan. Examples include solar energy,
air, wind, water, wood;
– “the tragedy of the commons”
 CHARACTERISTICS OF MINERAL AND ENERGY RESOURCES

• spatial concentration of reserves

• high depletion curves

• unequal consumption level

• increasing level of dependency

• political and environment issues

• evolution of technology
NATURAL RESOURCES
STRATEGIC MINERALS
THE LIFE CYCLE OF NATURAL RESOURCES
HUMAN IMPACT ON NATURAL ENVIRONMENT
 TRAGEDY OF THE COMMONS: SHARED AND OPEN TO ALL
(HARDIN, GARETT,1968)

... multiple individuals,

acting independently and
solely and rationally
consulting their own self-
interest, will ultimately
deplete a shared limited
resource even when it is
clear that it is not in
anyone’s long-term
interest for this to
happen.
 EXAMPLES OF THE COMMONS

•Internet
•infrastructure
•institution
•fisheries
•environment
 MAJOR PRODUCERS OF MINERALS
Mineral Country* Percent of total Mineral Country* Percent of
world total world
production (%) production
(%)
Lead Australia 24.7 Copper Chile 33.2
China 22.4 United States 8.4
United States 15.5 Indonesia 8.2
Peru 10.2 Australia 6.3
All others 27.2 Peru 6.3
Total 100 Russia 5.1
All others 32.4
Total 100
Gold South Africa 15.6 Bauxite Australia 39.0
United States 11.9 And Guinea 11.3
Australia 11.1 Alumina Brazil 9.4
China 6.9 Jamaica 9.2
Indonesia 6.7 China 7.1
Russia 6.7 India 6.4
Canada 6.3 All others 17.6
Peru 5.5 Total 100
All others 44.9
Total 100

*Countries that produce at least 5% of world total production are listed.

Source: U.S. Geological Survey, 2007.
 MAJOR PRODUCERS OF IRON ORE

Mineral Country* Percent of total world

production (%)

Iron ore China 20.9

Brazil 20.0
Australia 17.3
Russia 8.0
India 7.3
Ukraine 5.5
All others 21.1
Total 100

*Countries that produce at least 5% of world total production are listed.

Source: U.S. Geological Survey, 2007.
 PROJECTED RESERVES OF SELECTED STRATEGIC
MINERALS
Resource Static Exponential US consumption as % % of US Sources of Major Resources
index* index* of world total consumption
imported

Aluminum 100 31 42 97 Guinea, Australia, Brazil, Jamaica

Chromium 420 95 19 73 South Africa, Zimbabwe, Finland

Cobalt 110 60 32 95 Zaire, Zambia, Canada

Copper 36 21 33 27 Chile, USA, Zambia, Canada

Gold 11 9 26 31 South Africa, Former Soviet Union,

USA

Iron 240 93 28 22 Former Soviet Union, Brazil,

Australia, India

Lead 26 21 25 16 USA, Australia, Canada

Manganese 97 46 14 100 Former Soviet Union, South Africa,

Australia

Mercury 13 13 24 57 Spain, Former Soviet Union, Algeria

Molybdenum 79 34 40 0 USA, Chile, Canada

Nickel 150 53 38 68 New Caledonia, Canada, Cuba

Platinum 130 47 31 92 South Africa, Former Soviet Union,

Zimbabwe

Silver 16 13 26 64 USA, Canada, Mexico

Tin 17 15 24 72 Malaysia, Indonesia, Thailand,

China

Tungsten 40 28 22 68 China, Canada, USA, South Korea

Zinc 23 18 26 69 Canada, USA, Australia

* Static Index refers to the number of years reserves will last to 80% depletion with consumption growing at current rates.
** Exponential Index refers to the number of years reserves will last to 80% depletion with consumption growing at 2.5% per annum.
Mineral % Imported Source
Arsenic 100 Sweden, Canada, Mexico
Columbium 100 Brazil, Canada, Thailand, Nigeria
Graphite 100 Mexico, China, Brazil, Madagascar
Manganese 100 South Africa, France, Gabon, Brazil
Mica (sheet) 100 India, Belgium, Japan, France
USA
Strontium 100 Mexico, Spain, China IMPORT
Yttrium 100 Australia RELIANCE
Gem Stones 99 Benelux, Israel, India, South Africa
FOR KEY
Bauxite 97 Australia, Guinea, Jamaica, Suriname
Tantalum 92 Thailand, Brazil, Australia, Canada
MINERALS
Diamond 89 South Africa, UK, Ireland, Benelux
Fluorspar 88 Mexico, South Africa, Spain, Italy, China
PT-Group Metals 88 South Africa, UK, Former Soviet Union
Cobalt 86 Zaire, Zambia, Canada, Norway
Tungsten 80 China, Canada, Bolivia, Portugal
Chromium 75 South Africa, Zimbabwe, Turkey, Yugoslavia
Nickel 74 Canada, Australia, Norway, Botswana
Tin 73 Brazil, Thailand, Indonesia, Bolivia
Potash 72 Canada, Israel, Germany, Former Soviet Union
Zinc 69 Canada, Mexico, Peru, Australia
Cadmium 66 Canada, Australia, Mexico, Germany
Barite 63 China, Morocco, India
Silver 57 China, Mexico, UK, Peru
Asbestos 51 Canada, South Africa
Gypsum 37 Canada, Mexico, Spain
Silicon 33 Brazil, Canada, Norway, Venezuela
Iron Ore 28 Canada, Brazil, Venezuela, Liberia
 KEY POINTS

• need to reevaluate the understanding of nature and humans

• importance of energy

•resources and commodities are created through technology, representation

•different perspective have to be considered in understanding economy