"SUSTAINABLE GROWTH" IS NOT A BUSINESS PLAN

The concept of "sustainable growth" has become so politically correct and fashionable that even mining companies are using the line in their advertising. And, that's okay if you are basing your public relations upon it. However, if you are using the concept of sustainable growth to develop your business model, you are guaranteeing failure. There are a lot of bankrupt companies and investors who counted on the concept of sustainable growth to make a profit. In fact, most of the companies who received grants from the Obama Administration were champions of the Sustainable Growth Business Model.

The concept of sustainable growth has been a poor business model ever since Reverend Thomas Malthus started writing over 200 years ago. He popularized the concept that population growth would outstrip the resources of the earth. He wrote, "The power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race." (Malthus T.R. 1798. An Essay on the Principle of Population. Chapter VII, p 61).

Businessmen who thought that Malthus was right bought land in hopes that arable land would become valuable. They lost money because over time, the cost of food has gone down, not up. That hasn't stopped the same sort of predictions in modern times. In 1968, the modern disciple of Malthus, Paul Ehrlich, noted in his book The Population Bomb, "the battle to feed all of humanity is over. In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash program embarked upon now. At this late date, nothing can prevent a substantial increase in the world death rate."

Ehrlich's solution was just as radical. In the book he states, "We must have population control at home, hopefully through changes in our value system, but by compulsion of voluntary methods fail." A couple of years later in the book, "How to be a Survivor," he states, "We must shift our efforts from treatment of the symptoms to cutting out the cancer. The operation will demand many apparently brutal and heartless decisions."

What happened? Since these predictions nearly half a century ago, food production has increased faster than the population. Today the world produces enough food for all of its inhabitants. The only famines that kill people today are politically caused.

For those who think that Malthusian concepts hold true for minerals, remember the late 1970s and early 1980s when people thought we would run out of natural resources like minerals and fuel? In 1972, the Club of Rome pushed the concept of sustainable growth by insisting that industrial production should be fixed at 1975 levels because the world was running out of everything. The report warned, "Failing to act immediately would result in disaster. Every day of continued exponential growth brings the world system closer to the ultimate limits to that growth...A decision to do nothing is a decision to increase the risk of collapse."

Many businessmen invested in the idea of limited raw materials and invested heavily in stockpiles of strategic metals and such. In fact, Paul Ehrlich bet an economist that prices of copper, chrome, nickel, tin, and tungsten would go up in the 1980s. He and other investors lost when metals dropped in inflation adjusted prices.

The concept of sustainable growth and development is still ruining companies and investors today. There is no better example than Solyndra, which went bankrupt after sucking up over half a billion dollars in taxpayer money. Like many companies getting loans and grants from the Obama Administration, they advocated a Sustainable Growth Business Model. Their website talks about "sustainable business practices" and says, "Solyndra embraces the environmental philosophies of extended producer responsibility."

Given all of these failures in the theory of sustainable growth, there is no reason for you to base your mine's business model on the sustainable growth theory. Don't assume that what you are mining will be more valuable a decade from now. Don't assume that there will be so many people on the earth that you can expect to hire cheap labor. Don't assume we will run out of energy. And, don't assume that the environmentalists who spout these theories will like you and your mine anymore if you do what they say.