Quantitative risk of earthquake disruption to global copper and rhenium supply

Abstract

Earthquakes have the potential to substantially affect mining operations, potentially leading to supply chain disruptions and adversely affecting the global economy. This study explores the quantification of earthquake risk to copper and rhenium commodity supply by examining the spatial concentration of high earthquake hazard areas and the commodity-specific mining, smelting, and refining operations across the globe. Because many of the largest facilities are concentrated geographically near the highly seismic regions of South America, East Asia, and the Pacific, there is a potential for cascading effects on the entire supply chain. The analysis indicates that the expected annual disruption of global production is 0.3–1.1 percent for copper mines, 1.8–4.0 percent for smelters, and 1.5–3.3 percent for refineries. Expected annual disruption of global rhenium production capacity is 0.32–1.32 percent. The research highlights that the potential lost revenue from earthquake disruptions is from $315 million to $1.29 billion for copper mining, $1.92 billion to $4.33 billion for copper smelting, $2.06 billion to $4.52 billion for copper refining, and $337,000 to $1.40 million for rhenium production capacity.