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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: Sarmad Y. Hermiz who wrote (430)	7/4/2001 3:02:54 PM
From: craig crawford	Read Replies (1) \| Respond to of 1643

>> At the time, the rich iron ore fields of Minnesota had approx 8% concentration of iron in the dirt. And at that concentration, let's say there are x tons of ore available for feasible extraction. However, at the next level of concentration, say 7% there were 10 times x quantity of ore available. And I think the same relationship holds for most metals. << that sounds like a reasonable assumption. however the most highly concentrated deposits always get mined first. people go for the quick easy money. the more marginal deposits with lower concentrations oftentimes aren't profitable to mine at depressed prices, so production is halted, thereby reducing supply. i'm not suggesting we will run out of metals to mine in the near-term, but if prices keep falling or remain depressed for extended periods of time the marginal deposits will be halted and exploration will taper off. we have already seen announcements from mining companies who have idled or completely shut down mines due to low prices. low prices for long durations also tend to discourage investments in technology which could increase the productivity for mining and extraction.