150 Years of Boom and Bust: What Drives Mineral Commodity Prices?

Stuermer, Martin

doi:10.1017/s136510051600050x

Cited by 72 publications

(42 citation statements)

References 54 publications

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“…Although the oil and gas surplus/deficit (BOT) is decreasing, non oil and gas surplus/deficit(BOT) balance with increasing trends. However, for the recent years non oil and is also decreasing, so total BOT is [27] and Sruermer, 2013 [44], the causes of this commodity boom is because of increasing demand that ignited by the next three reasons. Firstly, the fast economic growth in OECD countries.…”

Section: Resultsmentioning

confidence: 99%

Trend of Mineral Commodity Price and its Impact on the Indonesia Economy 1990-2025

Soelistijo¹

2015

EARTH

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Indonesia is one of the mineral rich developing countries in the world. Indonesia has a large quantity of mineral resources such as natural oil and gas, hard minerals (metallic, non metallic/industrial mineral, coal, and stone), because it is located in the Pacific ring of fire. Mineral and energy commodities have always been giving contribution to Gross Domestic Product (GDP) of Indonesia besides doing regional development, because of its potential mineral resources. Trade of mineral commodity aims is to gain from trade of mineral to increase economic growth through Balance of Trade (BOT). Mineral commodity markets have been volatile for a long time. The trends of mineral commodity prices have been fluctuated and recently it changed dramatically due to commodity prices to increase within only several years. The aims of this study are to comprehend recent contribution of mining sector to Indonesian economy 1990Indonesian economy -2014 and to analyze forecasting of mineral commodity future prices until 2025. The price trends of commodity mineral is increasing from time to time, but sometimes decreasing because of world crisis, scarcity, and other problems in the world related to mining, trade, and relationship between countries, such as fundamentals matter, including long-run demand growth, technical change that opens up new sources of supply, changes that transform the operation of financial markets, and macro-economic shocks, etc. Mining sector contribute about 6-12% of Indonesian Gross Domestic Product and increasing from time to time. Contribution of mining includes trade of mineral commodity, regional development by companies, etc. It is shown that mining is important for Indonesian economy. Methodology applied in this paper is data analysis using dynamic commodity and macroeconomic models and forecast using linear and polynomial regression with its trend line.

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Section: Resultsmentioning

confidence: 99%

Trend of Mineral Commodity Price and its Impact on the Indonesia Economy 1990-2025

Soelistijo¹

2015

EARTH

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“…Figure 8. Development of average mined copper grades worldwide [40] and real copper prices [7,41,43,44]. (The price data from 1865-1900 are not shown here, because no copper grade data for this period were available.…”

Section: Principal Considerationsmentioning

confidence: 99%

What Is the Optimal and Sustainable Lifetime of a Mine?

Wellmer

Scholz

2018

Sustainability

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Abstract:The first stage of the circular economy, mining, is examined from the perspective of sustainability. The authors discuss how to maximize the use of phosphate rock, a primary commodity. To attract investment capital in a market economy system, a mine has to operate profitably, i.e., its lifetime must be optimized under economic conditions, for example, according to Taylor's Rule. From a sustainability perspective, however, the lifetime should extend as long as possible and the grades mined be as low as possible. The authors examine methods for optimizing a mine's lifetime under economic conditions according to practical experience and learning effects to optimize exploration and exploitation. With the condition of sustainability, a recently developed concept of cut-off grade for a layered phosphate deposit is examined and considerations for prolonging a mine's lifetime are discussed. As there are big losses from the current and potential future value chains above and below the current cut-off grade, we argue that the losses and use efficiency of phosphorus are key parts of a circular economy.

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“…This work basically argues that increases in factor productivity drive up total output of an economy and, thereby, productivity in the use of natural resources. Stuermer (2016) is the first to build on these insights for the purpose of identifying different shocks to commodity prices based on long-run restrictions.…”

Section: A Identificationmentioning

confidence: 99%

“…Instead, we build on Stuermer's (2016) identification scheme which is based on the idea that booms in real commodity prices induced by increases in global demand for commodities set in motion two processes: investment in new productive capacity and productivity-enhancing technological innovation. This allows us to specify three orthogonal shocks to real commodity prices based on long-run restrictions, namely a commodity demand shock, a commodity supply shock, and an inventory or commodity-specific demand shock.…”

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confidence: 99%