Global Scan of Disruptions to the Mine Life Cycle: Price, Ownership, and Local Impact

Abstract

Criticality and supply risk models seek to address concerns of potential disruption to global metal supply. These models need to incorporate disruption events that arise from within the mining industry’s market structure. In this paper, we review what we refer to as events of “mine life cycle disruption”. These include project abandonments, premature closures, care and maintenance, and ownership changes. Life cycle disruptions not only cause production disruptions but also embed social and environmental risks in global metal markets. They arise from the highly variable business environment in which the resources sector operates. Changing commodity prices directly influence mining revenues and drive decisions on whether to halt or push forward a project. While some disruptions are involuntary and induced by external economic conditions, others are purposefully triggered by certain mining companies that use them to their advantage. We examine the frequency of these disruptions based on a contemporary global inventory of 35,000 mining projects and present the findings against recent developments in the research literature. We conclude that life cycle disruption events are an important consideration in balancing the demand for metals and the social and environmental impacts of mining and propose pathways for managing these events and their effects.

A Mine Closure Risk Rating System for South Africa

“…Global assessments show that mining often operates near biodiversity-protected areas [43], water bodies [44,45] and sensitive land [46]. Mine closure can have significant social and economic impacts, including direct and indirect job losses; economic downturn in the communities and even the wider region; basic services disruption if the mining company was supporting or supplying services; and illegal mining which creates an unsafe environment for local residents [36,47,48]. Illegal mining in South Africa is focused on closed gold and diamond mines near populated areas.…”

Appropriateness of Reduced Modified Three-Parameter Weibull Distribution Function for Predicting Gold Production in Ghana

“…Several fields, including structural engineering, finance, earth sciences, traffic prediction, and geological engineering, frequently employ extreme value analysis [30] [31] [32]. It should therefore be noted that production and price of gold fall within the jurisdictions of geological engineering, earth sciences and finance respectively [33]. Therefore, modifying the distributions…”

Corporate social irresponsibility, hostile organisations and global resource extraction

“…Care and maintenance can enable recommencement at some future point, without having to formally close and then apply to reopen. When mining companies face market constraints, such as available labour or technology, or uncertainty with respect to commodity price, care and maintenance enables companies to pause until market conditions are favourable (Lèbre et al, 2021). A decision to move a major asset into care and maintenance can be accompanied by a decision not to disclose the underlying strategy to local people.…”