January 11, 2013

Wisdom about mineral depletion in Nature magazine

I am very happy to share this rare event. Nature has published a bit of wisdom on the myth of mineral depletion. In response to the - perhaps faked - worries of investor Jeremy Grantham about the depletion of phosphorus and potassium, Tim Worstall patiently explains the difference between reserves and resources. Reserves are known mineral deposits that can be exploited at a profit given current prices. We deplete reserves and there is nothing scary about it. Higher prices act as incentives to find new deposits and develop novel, cheaper ways of exploiting them.
'Resource', by contrast, denotes the amount of the same ore or element that is out there, with prior knowledge of roughly where it is, how much there is and how it might be extracted. Resources are transformed into reserves by spending money — when that is strictly necessary. Every generation exhausts its reserves of almost all minerals, because the tendency is to convert only enough resources into reserves to last for a generation.
Resources of phosphate and potassium fertilizers are sufficient for thousands of years of current usage.
Nature then publishes a reply by Grantham, where he just repeats his worries.
Only about 0.5 parts per million of phosphorus occur in phosphate rock deposits that can be extracted economically, and the richest deposits are rapidly being depleted.
The price of phosphate rock has risen 4.3-fold in 10 years. The 'big agriculture' style of US farming is demanding ever-increasing quantities of phosphates. This must change, or millions more people will be priced out of the fertilizer and grain markets.
I think he just fakes not getting it.

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