A hallmark of the “golden age of science fiction” is the idea of a strategic metal shortage.
That’s why Allen Steele wrote the book Oceanspace, about mining the ocean floor. Asteroid mining is at the center of James S.A. Corey’s The Expanse.
The problem is such shortages don’t exist in the real world. It costs too much to mine the asteroids or the oceans. They also don’t exist because the computing power of Moore’s Law lets us create substitutes.
Take copper, for instance. Every so often speculators decide there’s a copper shortage and bid its price up, most recently to nearly $5/pound. Then they spend the next few months or years telling small investors they better buy copper stocks now, right now. The most recent pump came in May, and there was one in 2022, too.
Copper pumpers will point to Freeport McMoran (FCX), up 400% in the last five years, and tell you to buy now. They won’t mention Rio Tinto (RIO), up just 30% in that time. Whether a “copper stock” is a good investment has more to do with its management than the metal.
Copper turns out to be like any industrial input. Sometimes we’re short on inventory, sending the price up. That brings in new supplies, sending the price down again. It’s in these trading places that brokers make their money.
The copper industry estimates there’s 870 million tons of copper reserves and we’re using 28 million tons a year. That sounds dire, but we keep finding new sources. There are usually 40 years of reserves. The total resource is estimated at 5,000 million tons.
Substitutes
There are also substitutes available. Aluminum is the most popular. It’s not as conductive and you need to use more but alloys can mitigate this.
Graphene, which comes from carbon, can already improve copper’s efficiency in motors and could replace it entirely in high power lines.
Copper is also easily recycled, and as less comes from China we do more of that.
While speculators will still bring in the chumps, real shortages of copper aren’t happening. Higher prices quickly bring in more supply and that will continue, as will work on bringing substitutes to the market.
Dollar for dollar, it sure beats mining the asteroids.
