capital intensiveness

• explain

  • Generally, high expensive and sophisticated technologies are essential at every stage of production 
  • Constructing a large base-metals mine, developing an oil deposit, or revitalising a struggling mineral industry can cost billions of dollars 
  • As a result, these industries require a significant amount of capital investment but employ relatively few workers compared to their size. 
• example

  • Eg. ExxonMobil, the largest non-state oil company, employs 42,000. In contrast, the retailer Walmart employs over 2.1 million workers, and the automobile company Toyota employs more than 300,000
• Finding new sources of supply (challenge)

  • Once an oil well or copper mine is depleted, it cannot be replenished, although technological advancements may allow for some additional extraction
  • Therefore, companies must continually seek new sources of supply, often using advanced geochemical, geophysical, and satellite remote sensing techniques
• Maximising yield from these sources (challenges)

  • Exploration periods can last up to a decade, with many investments ultimately proving unsuccessful 
  • Even successful developments face technical, market (related to demand and price forecasts), political (eg. changes in mining laws) and social/environmental risks
• Transporting products to the market (challenges)

  • A significant challenge is that most easily accessible resources have been exploited
  • New resources are often found in remote or difficult-to-access locations, increasing extraction costs
  • Additionally, resources found deep below the surface pose greater technical challenges