1  Introduction

The mining industry is an important component of the national economy. Scientifically and objectively assessing trends in the mining industry is of great significance for countries, local governments, and enterprises in formulating relevant development strategies and plans, and in promoting the sustainable development of the mining sector. The theory of mining industry development provides crucial theoretical support for making informed judgments about mining industry trends; therefore, it is particularly important to summarize the underlying patterns governing the development of the mining industry. Among the theories concerning industrial development trends, the most prominent is the life-cycle theory of industries. According to industrial economics, most industries typically go through a complete biological life cycle consisting of the introduction phase, growth phase, maturity phase, and decline phase. ^[1~3] For example, most industries such as textiles, home appliances, and shipbuilding follow the theory of industrial life cycles. ^[4~6] ，

Does the mining industry also exhibit similar patterns worthy of in-depth study? Although there is currently no definitive research on the life cycle of the mining industry abroad, there is considerable research on the life cycle of demand for mineral resources. For example, in the 1960s, U.S. scholars proposed the life cycle of mineral resource demand in Western countries. ^[7] In 1978, Malenbaum further deepened his research on the life cycle of mineral resource demand, developing the theory of mineral resource consumption intensity and, for the first time, proposing the theory of the life cycle of mineral resource demand. ^[8] In 1990, Clark et al. proposed the theory of mineral resource consumption structure, further refining the theory of the life-cycle demand for mineral resources. ^[9] 。

Although research on the development patterns of the mining industry both domestically and internationally is still not very mature, there is relatively abundant research on the trends in the development of the mining industry. A particularly notable example is the “Limits to Growth” theory proposed by the Club of Rome in the early 1970s, during the first oil crisis. This theory estimated the years when certain mineral resources on Earth would be exhausted, leading to the conclusion that the mining industry as we know it would eventually decline and disappear. ^[10] In 1980, in his book "The Third Wave," Toffler referred to traditional industries such as mining as “sunset industries,” arguing that industrial civilization was like the setting sun, and that high-tech industries would drive a new wave of economic growth. ^[11] In 2012, Shi Junfa and others analyzed global mining industry trends and pointed out that “whether in developed or emerging economies, economic growth rates have slowed down. Sovereign debt risks have increased in some countries, triggering sharp volatility in international financial markets and subsequently causing dramatic fluctuations in mineral prices. As a result, the path to recovery for the global mining industry will not be smooth sailing.” ^[12] Meanwhile, many researchers have also proposed stage-based classifications of the global mining industry’s development history, with two main perspectives: the “three-cycle theory” and the “four-cycle theory.” ^[13~16] 。

The “Four-Cycle Theory” takes the end of World War II as its starting point: The first cycle saw mining development spurred by Europe’s postwar reconstruction; the second cycle was marked by a mining boom driven by Japan’s rapid economic growth in the 1960s; the third cycle was fueled by the rise of Asia’s “Four Little Dragons”; and the fourth cycle, beginning in 2003, has been characterized by global mining growth driven by resource demand from the BRICS countries.

The “Three-Cycle Theory” posits that the first cycle, beginning in 1885, was driven by U.S. industrialization and led to a boom in the mining industry, lasting for about 30 to 40 years. The second cycle, characterized by post-World War II European reconstruction and Japanese industrialization, lasted roughly 30 years. The third cycle, which began in the early 21st century, saw rapid growth in the mining sector, fueled by the industrialization drive of Asian countries, particularly China. Most of these studies tend to define the phase of rapid mining development as a single developmental cycle, completely neglecting the mining downturn periods. From the perspective of industrial economics theory, a sector’s development cycle encompasses not only the period of rapid growth but also includes a phase of decline.

Whether it comes to identifying historical cycles of mining development or forecasting future trends in the mining industry, whether it’s about assessing global mining trends or analyzing the development trajectory of a specific country’s mining sector, all these endeavors require a solid theoretical foundation in mining development. Guided by industrial economics theory, this paper conducts a systematic analysis of the economic and mining development histories of typical Western countries over the past two centuries, summarizes and proposes a life-cycle theory for the mining industry, and establishes three distinct models of mining development. Finally, drawing on China’s national conditions, the paper provides a comprehensive analysis of the trends shaping China’s mining industry.

2  Factors Influencing Mining Development and the Historical Evolution of Global Mining Industry

2.1  Factors Influencing Mining Development

The development of the mining industry is primarily influenced by two key factors: resource endowment and demand. In theory, economic and social development first generates demand for mineral resources, thereby driving the growth of the mining industry. Second, the development of the mining industry must be underpinned by abundant resource reserves. For example, before the advent of industrial civilization, global economic development was dominated by agriculture and handicrafts, resulting in minimal demand for mineral resources and extremely underdeveloped mining industries. Thus, the state of economic and social development has been a crucial factor influencing the evolution of the mining industry. Another example is Japan—a major manufacturing country with a large population. Although its economic and social development has led to substantial demand for mineral resources, Japan’s limited endowment of such resources has kept its mining industry relatively small, and the mining sector’s contribution to the national economy has been virtually negligible. Hence, resource availability is also a critical factor shaping the development of the mining industry. Consider China as yet another example: prior to the reform and opening-up policy in 1978, China’s economy grew slowly, and demand for mineral resources remained extremely low, leaving the mining industry in a phase of slow development. After the reform and opening-up, as China gradually entered the stage of industrialization, demand for mineral resources surged rapidly, propelling China’s mining industry onto a fast-track of growth. Today, China has become nearly the world’s leading mining power—in terms of mineral resource production. From these examples, it becomes clear that both factors—resource endowment and demand—are indispensable for the development of the mining industry.

2.2  The Impact of Economic Factors on the Historical Trends of Global Mining Development

In fact, the world is an open system. If we were to treat the globe as a single country, the global economic and social development’s demand for mineral resources would inevitably drive the growth of the mining industry. This point can be fully validated by examining the historical trajectories of both the global economy and the mining sector. In this paper, we have compiled data on the global GDP growth rate since 1900, as well as production indices for the world’s major minerals—energy minerals, steel, copper, aluminum, and nickel—which together account for more than 90.0% of the total global mineral resource output. Our analysis reveals a remarkably strong correlation between global economic development and the growth of the mining industry.

Since 1900, global economic development and mining industry development have roughly been divided into five stages (Figure 1):

The first phase, spanning from 1900 to 1945, is referred to as the period of slow global mining development. During this period, Western countries were in a phase of gradual industrialization, and the global economy experienced slow growth, with an average annual GDP growth rate of only 2.0%. Total demand for mineral resources was low and grew slowly, resulting in extremely sluggish development of the mining industry.

The second phase, spanning from 1946 to 1972, is known as the golden age of the mining industry. During this period, postwar reconstruction, the rapid industrialization completed by Western countries, and the rise of the Japanese economy drove global economic growth at an exceptionally high pace. The global average annual GDP growth rate reached as high as 4.7%, fueling a massive demand for mineral resources. As a result, total consumption of mineral resources surged rapidly, marking the entry of the mining industry into its golden age.

The third phase, spanning from 1973 to 1994, is known as the mining downturn. During this period, Western countries had completed their industrialization, and the global economy entered a phase of sluggish growth. The average annual global GDP growth rate declined to 2.8%, and demand for mineral resources remained weak. As a result, the mining industry as a whole entered a prolonged downturn. During this time, the notion that mining was a “sunset industry” gained widespread acceptance among most people.

The fourth stage, spanning from 1995 to 2008, is known as the mining boom period. During this period, as China entered a phase of rapid industrialization, global annual GDP growth reached an average of 4.5%, significantly faster than in the previous development stage. Consequently, demand for mineral resources surged, driving rapid growth in the mining industry and ushering the global mining sector into a period of prosperity.

The fifth stage, from 2009 to the present, is referred to as the mining plateau period. During this period, affected by the financial crisis, the economies of developed Western countries plunged into a deep recession; China entered the mid-to-late stages of industrialization, and its economic growth rate began to decline sharply. As a result, the global average annual GDP growth rate dropped to 2.9%. Demand for mineral resources once again weakened, marking the onset of a plateau phase.

2.3  The Impact of Resource Factors on the Global Mining Landscape

Countries and regions globally rich in mineral resources include Russia, the United States, Middle Eastern nations, China, Australia, Canada, South Africa, Venezuela, and Brazil. Among these, the United States and China are not only among the countries with the richest resource endowments but also have high demand for mineral resources driven by their economic development; thus, these two countries rank among the world’s largest mining nations (Figure 2). Although countries and regions such as Russia, the Middle East, Africa, and Venezuela have relatively weaker domestic economic demand for mineral resources, their mining sectors still rank among the world’s top due to external demand. Meanwhile, Australia and Canada are traditionally major mining powers. Despite being developed countries, these nations have relatively low domestic demand for mineral resources owing to their sparse populations; therefore, influenced by external factors, their mining industries have long remained among the world’s leading ones. However, it is not necessarily true that abundant resources alone guarantee a thriving mining sector—without demand driven by economic development, the mining industry cannot possibly flourish. Historically, Europe’s rapid economic growth spurred the swift development of North American mining, while the rise of Japan and South Korea fueled the rapid expansion of Australia’s and Brazil’s mining industries. Similarly, the economic ascent of China and Southeast Asian nations has propelled the rapid growth of mining in regions such as Africa and Central Asia.

3  Mining Development Cycle Model

3.1  The Ideal Mining Development Cycle Model

The development of the mining industry is primarily influenced by factors such as a country’s own economic development, global economic trends, the country’s endowment of natural resources, international resource endowments, and environmental constraints. The relative importance of these factors varies significantly across different countries, making it difficult to derive general laws governing mining development simply by analyzing the historical trajectories of mining in certain nations. Therefore, under specific, constrained conditions, we must establish an idealized scenario to analyze the intrinsic mechanisms driving mining development. Subsequently, we can extend the insights gained from this idealized scenario to real-world situations, thereby identifying the underlying patterns governing mining development. This paper proposes four key assumptions: Assumption 1: There exists a country whose mineral resources are sufficient to meet its economic and social development needs, eliminating the need to import resources from abroad. Assumption 2: This country does not export its mineral resources to other nations. Assumption 3: The country’s economic development has undergone a complete industrial evolution—from an agrarian society through an industrialized society to a post-industrial society. Assumption 4: The country’s market is a perfectly competitive market, where supply and demand dynamics determine price trends, which in turn shape mining industry trends.

Hypothesis 1 and Hypothesis 2 are designed to isolate the impact of international economic development, international resource endowments, and domestic resource endowments on the country’s mining sector, ensuring that the country’s mining development is unaffected by external factors as well as by its own resource endowments. Hypothesis 3 provides a full-cycle framework for economic development under ideal conditions, offering a platform for analyzing mining sector development. Hypothesis 4 eliminates interference from economic institutions on the market. Overall, these four hypotheses depict a country with stable economic development, where economic growth directly fosters the steady development of the mining sector.

Under these ideal conditions, the development trend of the country’s mining industry will go through four distinct stages: The first stage: In the early stages of economic development—typically during the agricultural society phase—the economy grows relatively slowly, with an average annual GDP growth rate generally below 5.0%. At this stage, demand for mineral resources is low, and supply is also limited. The balance between supply and demand is stable, mineral prices remain relatively steady, and the mining industry is in its nascent stage, showing a slow-paced development trend. The second stage: As the country enters the stage of industrialization, the economy experiences rapid growth, with an average annual GDP growth rate typically exceeding 8.0%. Demand for mineral resources rises sharply, leading to a situation where supply falls short of demand. Consequently, mineral prices begin to increase at a faster pace. Given the long lag period associated with geological exploration and mine construction, the shortage of mineral supplies persists for an extended time, causing mineral prices to rise significantly. Meanwhile, mineral production expands rapidly, and the mining industry enters a growth phase. The third stage: As the country completes its industrialization process, the pace of economic growth begins to slow down to below 8.0%. Demand for mineral resources reaches its peak and then starts to decline gradually. Due to the lag effect in mine construction, the capacity to supply mineral resources continues to grow. As a result, the market shifts toward a situation of oversupply, causing mineral prices to drop sharply. The mining industry enters a transitional phase. The fourth stage: As the country moves into a post-industrial society, the GDP growth rate slows down to a lower level—generally below 5.0%. The secondary sector maintains a certain scale of activity, and the supply and demand for minerals tend toward equilibrium. Mineral prices fall back to relatively stable levels, and the mining industry gradually slows down. Overall, the mining industry enters a period of decline.

Overall, under ideal conditions, the development trajectory of a country's mining industry can be divided into four stages: the nascent stage, the growth stage, the inflection stage, and the decline stage. This pattern aligns with the industrial life-cycle theory in industrial economics, which we refer to as the Mining Development Cycle Model (Figure 3). It is important to note that the "demand" and "supply" referred to in the ideal scenario both represent capacities; in the real world, these are reflected in actual production volumes and apparent consumption levels. There is a certain difference between production volume and production capacity, as well as between apparent consumption and actual demand. Nevertheless, the phased nature of the supply-demand relationship does indeed exist.

3.2  Realistic mining development models

The mining development cycle model described above is a theoretical model that assumes ideal conditions; however, in the real world, no country actually fits this ideal scenario. Therefore, it is essential to refine and improve the mining development cycle model by taking into account actual circumstances. Since Assumptions Three and Four represent conditions that are typically required of a market economy, most countries already meet these assumptions to a large extent, so there is no reason to discard them. On the other hand, Assumptions One and Two do not exist in the real world at all. Consequently, the following discussion will focus primarily on the cyclical patterns of mining development after these two assumptions are removed. Based on resource factors, countries around the world can be categorized into three types: countries rich in resources and capable of large-scale exports; countries lacking in resources and heavily reliant on imports; and countries whose resource endowments largely meet their domestic needs, requiring neither exports nor imports. In fact, the third category corresponds precisely to the idealized country scenario described earlier. Below, we will build upon the mining cycle model under ideal conditions and conduct an in-depth analysis of the distinctive features of mining development in each of these three categories.

3.2.1 The “Australia-Canada” Mining Model

The first category of countries comprises resource-rich nations that not only meet their own domestic demand for mineral resources but also possess export capabilities. After these countries have completed their industrialization, the development trend of their mining sectors is primarily influenced by global demand for foreign resources. If export demand remains strong, the mining industry will continue to thrive; if export demand weakens, the mining sector will follow a trajectory similar to that of countries in an idealized scenario. These countries typically have relatively large-scale mining industries. For example, in Australia and Canada, per capita mining output ranges between US$5,000 and US$6,000 (data from the Groningen Growth and Development Centre [GGDC], 1990 GK [GK] dollars; the same applies hereafter). Such countries are referred to as adopting the “Australia-Canada” mining model (Figures 4 and 5). Analysis of the mining situation in these countries must take into account the broader global mining economic context.

3.2.2 The “Anglo-Japanese” Mining Model

The second category of countries are those that suffer from resource scarcity and rely heavily on imports to fuel their industrialization. Due to their relatively limited endowment of natural resources, these countries’ mining sectors reach their peak before industrialization is fully completed and then gradually begin to shrink. The scale of the mining sector in these countries is comparatively smaller than that in the first and third categories; for instance, the per capita output value of the mining industry in the United Kingdom and Japan peaked at only $800 and $100, respectively. These countries’ mining industries go through three distinct cycles: an embryonic stage, a growth phase, and a contraction phase. Since these countries never experience a situation where mineral resource production exceeds demand, they do not have a turning point. As a result, the peak of their mining industries arrives relatively early and remains relatively low. We refer to this type of mining development model as the “British-Japanese” model.

3.2.3 “Virtue”-Type Mining Model

The third category of countries is characterized by relatively abundant resources that can basically meet their domestic resource needs—such countries are neither capable of importing large quantities nor of exporting significant amounts. These countries come closest to the ideal mining development cycle described earlier. After completing their own industrialization, their mining sectors will reach a peak and then enter a period of decline. On average, the per capita mining output in these countries is lower than that in the first-category countries but higher than that in the second-category countries. For example, the per capita peak mining output in the United States and Germany stands at $2,500 and $800, respectively. The mining industries in these countries typically go through all four stages of the mining cycle—namely, the nascent stage, the growth stage, the turning point, and the decline stage—leading us to refer to such countries as exhibiting a “U.S.-German-style” mining model.