Companions and competitors: Joint metal-supply relationships in gold, silver, copper, lead and zinc mines

Journal Article · 03 June 2017 · Resource and Energy Economics

DOI: https://doi.org/10.1016/j.reseneeco.2017.05.003 · OSTI ID:1361430

Jordan, Brett Watson  ^[1]

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1. Colorado School of Mines, Golden, CO (United States)

Firms that extract and produce multiple metals are an important component of mineral supply. The reaction of such firms to changes in their relevant output prices is tested econometrically for five metals using a panel representing more than 100 mines across the time period 1991-2005. Here, the estimation strategy is drawn from joint production theory, namely a flexible form, dual revenue approach with seemingly unrelated regressions (SUR) estimation. The results indicate that multi-product mines respond (in the short run) to higher prices of a particular metal by reducing output of that metal (indicative of low-grading behavior) and increasing and/or decreasing output of joint metal products (indicative of substitutes and complements in supply). As a result, the price responses are not readily explained by a metal's classification as a by-product or main product based on revenue.

• Research Organization: Iowa State Univ., Ames, IA (United States)
• Sponsoring Organization: USDOE Office of Energy Efficiency and Renewable Energy (EERE), Energy Efficiency Office. Advanced Manufacturing Office
• Contributing Organization: Critical Materials Institute, Ames, IA (United States); Colorado School of Mines, Golden, CO (United States)
• Grant/Contract Number: AC02-07CH11358
• OSTI ID: 1361430
• Journal Information: Resource and Energy Economics, Vol. 49; ISSN 0928-7655
• Publisher: ElsevierCopyright Statement
• Country of Publication: United States
• Language: English