Mineral Resources: a Speculative Price Rise or Lasting Shortage?

For almost two years now the strong Chinese demand for fossil and mineral raw materials regularly hits the headlines of the economic press because of the impact it has on prices. Nevertheless, the preoccupation of the media and of some people in the developed countries is quite recent, according to Jacques Varet. In fact, the long-term trend had been towards declining demand for mineral raw materials: as developed economies were based less and less on physical goods and moved their manufacturing abroad, against a background of stable prices, it appears that firms and public authorities in the sectors concerned were led to believe that there was no risk of shortages of mineral resources and that economic growth depended less and less on these sorts of commodities. The recent sharp rise in the prices of certain metals (such as copper) are taken to be a first sign of the weakness of this view. As Jacques Varet argues, the problem had merely shifted towards the developing countries and has now resulted in genuine pressures on mineral resources and the extractive industries. Illustrating his argument with figures and graphs, the author stresses how mistaken it is to think that the way these resources are being exploited today is compatible with sustainable development over the long term. He also criticizes the European Union and France for giving up on the extractive sector and for failing to make adequate investments of both money (for exploration) and research. Unlike the United States or even China, both of which are very active in this area, Europe is no longer equipped to analyse the data or to search for new mineral deposits as the new situation requires. If Europe does not place this issue at the top of its political agenda, the EU risks falling behind in a sector that is once again of great strategic importance.