Mining 1985

Demand for nonfuel minerals depends in large measure on economic activity, which rose in each quarter of 1985. However, despite 1.7 million new housing starts and a 7% increase in motor vehicle production, many domestic metal mining operations experienced continued difficulties as a result of import competition, greater use of newer engineered materials, emphasis on multi-unit housing, and downsizing of motor vehicles. Recognizing the continued difficulties of the domestic metal mining industry, many corporations made major efforts to retrench and rationalize - selling, closing, or spinning off less profitable operations, renegotiating labor contracts, and inviting increased participation by foreign firms. About 15% of US energy was imported in 1985. This included $52 billion worth of crude oil and refined products, adding significantly to the overall merchandise trade deficit of $149 billion. With the exception of a few large-bulk, low-value raw materials, most minerals move relatively freely in world trade. The strong dollar encouraged imports and made exporting more difficult US nonfuel minerals trade deficit totalled $17 billion. The US continued to rely on imports for many important strategic minerals in 1985 (see accompanying Table). Increased pressures for protection included major mineral products such as steel, ferroalloys, and copper. But President Reagan, in his Feb. 1986 "Economic Report to the Congress" stated: "Our international trade policy rests firmly on the foundation of free and open markets." He also stressed the need for fair trade and more open markets internationally. The National Critical Materials Council, created by law in the latter part of 1984, was activated in the latter part of 1985. Its first public hearing was held in January 1986. The Council is to review the nation's materials posture and advise the President on such matters. Compared with 1984, the value of US raw nonfuel mineral output rose 2%, to $24 billion. This supported the production of $244 billion worth of processed materials of mineral origin. Raw steel production - a major indicator of both material use and mineral production - fell 4% to 81 Mt (89 million st). Consequently, domestic iron ore production fell to 49 Mt (55 million st), about 97% pelletized. Iron ore imports fell 7% to 16 Mt (18 million st). Raw steelmaking capacity fell 4% to 117 Mt (129 million st). Pacts with 16 leading steel exporting nations have been negotiated in an effort to reduce import penetration of the domestic market. Domestic producers of bulk ferroalloys of chromium, manganese, and silicon operated at about 40% capacity. The US mined no manganese or chromium. Only a small quantity of ferronickel was produced from domestic laterite mining in Oregon. Molybdenum production increased slightly to 49 kt (54,000 st). Mine shipments of tungsten, another mineral tied to steel production, also fell slightly to 1.1 kt (1200 st) of contained metal. Even the domestic aluminum smelting industry suffered reverses as high stocks and low prices reduced production 16% to 3.5 Mt (3.8 million st). Similarly, imports of bauxite fell 7% and alumina 10%. Production of magnesium metal fell 6% to 136 kt (150,000 st), while titanium metal production remained unchanged at 22 kt (24,000 st). Copper mine production was unchanged at 1.1 Mt (1.2 million st). Copper refinery production fell slightly to 1.1 Mt (1.2 million st). Lead mine production rose 24% to 400 kt (440,000 st). Zinc mine output was down 10%, to 225 kt (250,000 st). Refined lead production increased 28%, to 510 kt (560,000 st). Primary slab zinc production fell 5% to 240 kt (260,000 st).