Mining Economics

Abstract: The mining industry has always been an industry heavily steeped in its traditional culture, with production and other technical personnel being less involved than other industries in management, finance, and economics.  This technical focus has served the industry well and has led to major breakthroughs in technology for the finding of mineral deposits, production, and in mineral processing.  Over more than a century, the real cost of major metals has declined, despite orebodies becoming deeper, lower grade, and more complex.  This was accomplished, often painfully, amidst multiple booms and busts.

 

In the 1990s, in yet-another industry down-turn, Ian Runge recognized that better application of economics had the potential to improve decision-making not only for technical professionals, but also for senior management in decisions to start-up a mine, or manage a mine through such down-turns.  His book, Mining Economics and Strategy was published in 1998, and has become one of the biggest selling mining textbooks worldwide.

Since 1998 the mining world has undergone one of the biggest booms in its history, along with a subsequent bust, and much of the book has become dated.  In addition, the original book, being focussed on the mining production side of the industry (as opposed to geology/exploration, mineral processing etc) and left unaddressed many issues of a cross-disciplinary nature. 

Ian Runge is now in the process of updating the book, with content to include greater recognition of these other professional disciplines and increased content on handling decision-making under uncertainty.