Economics of the Mineral Industry - The Lead-Zinc Anomaly

Identified potential resources of lead and zinc are lower, relative to reserves, than the same ratio for other metals, Either there is little material below present grades or, if it exists, there are no data on it. The author examines both these factors in detail, and also introduces a third possibility. In their 1961 monograph, The Future Supply of the Major Metals, Bruce Netschert and Hans Landsberg noted that identified potential resources (that is, known but submarginal resources) of lead and zinc were much lower relative to reserves (that is, known and supermarginal resources) than was the same ratio for other metals.' Put another way, it seemed that for such metals as iron, manganese, copper, and aluminum, slightly more favorable economic conditions or modest advances in technology would greatly increase reserves by permitting the exploitation of vast quantities of leaner or deeper or otherwise less valuable mineral deposits. But for lead and zinc, Netschert and Landsberg concluded that either: "(1) there is relatively little material below present cutoff grades; [or] (2) such material exists, but for some reason there are no data.'12 This situation, which they called "the lead-zinc anomaly'' has been subsequently discussed by other authors. The purpose of this paper is to carry the discussion further by examining the evidence in favor of (1) and (2) and by advancing a third alternative. There are at least two reasons for devoting time to the lead-zinc anomaly. First, while it is unlikely that we shall have to turn to alternative lead or zinc resources in the near or middle-term future, the longer run resource picture for the two metals is not so certain.3 Both within the United States and for the world as a whole, new discoveries will have to come at a fair pace to keep up with growing rates of consumption. Thus, it is important to see whether there exist lower grade or nonconventional potential sources of two such useful metals that we could turn to at some time in the future. The second reason for studying the lead-zinc anomaly is also related to resource adequacy, but is of more general significance. Depending upon whether the anomaly is technologic, geochemical, spatial, or temporal in origin, we shall be able to draw some conclusions about the resource picture for other metals. Can we expect the apparent pattern of lead-zinc resources to be repeated? If so, will technologic advances in either exploration methods or mineral processing be able to alter the pattern? Or is the pattern unalterably set by geochemical distribution? Most important, are metals characterized by what seems to be an anomaly, different in any way from metals for which low-grade or nonconventional sources already have come to be exploited, as the porphyry deposits have for copper. In sum, investigation of the lead-zinc anomaly represents a case study combining both physical and economic aspects that may open up a neglected area in evaluating mineral resource adequacy. WHAT IS THE LEALLZINC ANOMALY? There are two dimensions to evaluations of the potential of any mineral resource? The first involves the degree of certainty that we ascribe to the estimate: how much do we know about the size of the resource as a result of geological mapping, exploration, and mine development? This dimension is expressed by the terms measured, indicated, and inferred reserves (and, if you wish, 'undiscovered reserves'), all of which terms carry with them the implication of exploitability under current cost-price conditions. The other dimension to evaluations of a mineral resource involves the economic limits of the estimate: how will the size of the resource vary with different (usually more favorable) cost-price conditions? (This economic dimension should be understood broadly to include all factors bearing on the cost-price relationship. In this sense it subsumes technology because any resource is exploitable at some cost; the role of technology is to bring cost down.) The latter dimension is expressed in the terms potential or sub-marginal 'ore,' and is logically quite independent of the former. For example, we have relatively good measurements of the tonnage of manganese in low-grade deposits in this country, though they are too lean to be considered reserves; on the other hand, we are much less certain of our measurements of new lead and zinc deposits in Missouri, though there is no question but that there is a sizable reserve. Thus, it may be uncommon but is not a contradiction to talk of measured submarginal ore or inferred potential ore.