The role of co-products in stabilizing the metal mining industry

The objective of this paper is to test the hypothesis that cyclical metal mining activity is more stable when multi-metal products are produced. A theoretical short-run supply curve for a metal is developed showing by-product, co-product, and main product behaviour. This curve is used to illustrate co-product pricing trends that are indicative of different cyclical behaviour patterns. The non-parametrical sign test is used to test co-product price trends for the US metal mining industry. The results indicate that multi-metal production stabilizes the mining industry in the short run but not in the long run.