A model to assess industry vulnerability to disruptions in mineral commodity supplies

Abstract

Mineral commodity supply disruptions have the potential to ripple through and impact the economy in many ways. Industrial vulnerability is a crucial component of mineral commodity criticality tools as it provides guidance on the economic importance of these commodities to regional criticality indices. Using an economic model that links mineral commodity end-use data to input-output tables and a linear optimization routine, reductions in economic output of individual industries and of the overall economy may be calculated. Such a model can also help to identify industries, be they direct or indirect consumers of the mineral commodities in question, that are most vulnerable to specific mineral commodity supply disruptions at different disruption magnitudes. In this assessment, 56 commodities’ end-use data for the year 2012 were paired with the United States’ detail-level Benchmark Input-Output accounts to build an industrial vulnerability model. The model does not evaluate the likelihood of specific supply disruptions but can be used to assess potential industry impacts for a range of scenarios. The model findings indicate that when the supplies of mineral commodities such as mica, lithium, and fluorspar were disrupted, large overall economic decline was paired with a large decline in many industries. On the other hand, gold, lead, and rhenium disruptions resulted in low declines and few disrupted industries.