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ECONOMY, ORGANIZATION AND MANAGEMENT
ArticleName Circular economy: A threat or a driver of technological advance in the mining sector?
DOI 10.17580/gzh.2020.09.04
ArticleAuthor Knysh V. A., Ivanova L. V.
ArticleAuthorData

Luzin Institute for Economic Studies, Kola Science Center, Russian Academy of Sciences, Apatity, Russia:

V. A. Knysh, Chief Researcher, Doctor of Economic Sciences, knyshva@mail.ru
L. V. Ivanova, Senior Researcher, Candidate of Economic Sciences

Abstract

The actively developing concept of a circular economy affects directly the interests of mining companies. The analysis shows that the potential impact of the circular economy on the solid mineral mining sector is contradictory, and the productive capabilities of the circular economy within the sector are not completely clear. At the same time, the question of transition from a linear model to a circular model of using material resources has been entered on the global economic agenda in the context of sustainable production and consumption. The aim of this study is to disclose the modern concept of the circular economy, its impact on the sector of solid mineral mining and processing, and its capabilities within the sector. The analysis shows that the economy, which is based on the model of closed (circular) supply chains in the industrial production cycle, represents constitutes simultaneously a threat to mining companies and brings incentives for their technological development. Such a duality is caused by the fact that the implementation of the idea of replacing natural resources by secondary material resources by extending life cycle of materials and minimizing waste returned to the environment requires increasing manufacturability of industrial production. The decrease in the share of primary resources in production cycles does not fit well with the corporate strategies of mining companies aimed at expanding mining to meet the growing demand for the final products of mineral mining and processing. The study shows that the use of the adapted circular business models in mining and processing of mineral raw materials can become a driver of technological upgrading of mines, an incentive for involving accumulated waste in business circulation, while ignoring it threatens the mines with a loss of strategic competitiveness. The comparison of the concepts of the circular economy and the best available technologies (BAT) leads to the conclusion that the “circularity” contributes to introduction of BAT, increasing sustainability of mines and of the whole industry in the face of a growing uncertainty. Recognition of these concepts as a positive factor may trigger the mechanism of institutional support for the transition of mining companies to a next technological level against the background of decreasing quality of natural mineral raw materials and worsening conditions for their extraction.

keywords Circular economy, mining industry, sustainable development, circular business model, minerals, raw materials, life cycle of raw materials
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