As Zinc Mines Close, Prices Rise

WSJ:

The world is running low on zinc, sending some investors scurrying to buy mining-company shares and forcing the U.S. Mint to redouble cost-cutting efforts in search of a cheaper penny.
Prices for the metal have soared to three-year highs. Investors are betting prices will continue to climb as some of the world's largest zinc mines run dry just as demand is ramping up.
Zinc is used in everything from steel coatings to car tires to sunscreen, and the metal has few substitutes. The U.S. Mint reduced manufacturing costs to offset higher prices for zinc, which makes up 97.5% of every penny. However, steelmakers, which buy about half the world's zinc, are in a tougher bind. Zinc is one of several rust-resistant metals vital to the steelmaking process where costs have soared this year.
Zinc production is expected to fall short of demand this year for the first time since 2007, according to Goldman Sachs. Several large, aging mines are scheduled to close next year, and miners need higher prices to justify the cost of finding and developing new sources of metal. Miners may not produce enough zinc to meet the needs of steel companies and coin makers until 2018, analysts say. Meantime, a rebound in the U.S. property market and soaring global auto sales are creating new demand for galvanized steel.
Zinc for delivery in three months ended down slightly at $2,390 a metric ton on the London Metal Exchange, just below a three-year high. Futures are up 15% this year. BNP Paribas sees prices averaging $2,550 next year.
"There are a relatively small number of large zinc mines that are happening to be reaching the end of their useful lives," said Stephen Briggs, a metals strategist at the bank. "While there are mines to replace them, they're not that many and they're not that big…we're reaching the tipping point."
Next year, metal companies are expected to close two mines equal to 7% of global production. Replacing that supply won't be easy.

The poor penny takes another kick in the groin.  It would seem like issues like this would make folks question the eternal growth story line for the world economy, as we've pretty much used up most of the easy-to-get industrial metals and fossil fuels, but it persists.