Mining’s Comeback is Slow and Uneven, But There is Improvement

Introduction The US mineral industry in 1983 participated in the recovery from the recent recession. Compared with 1982, the value of raw nonfuel mineral output rose 8% to $21.2 billion. The $218 billion worth of goods processed from this crude mineral output represented a 9% increase over 1982. Even in real terms, these figures reflect growth. Demand for nonfuel mineral materials, of course, depends on the overall state of the economy, which steadily improved each quarter in 1983. Of particular importance to the mineral industry were surges in key mineral-consuming sectors such as construction and automobile manufacturing. New housing starts rose one-third, to 1.7 million units, while automakers turned out about 35% more cars (6.8 million) and 25% more trucks (2.4 million) than in 1982. These are significant increases, even considering recent trends toward smaller, lighter vehicles, and multiple-unit housing. A comeback for the mineral industry, however, is bound to proceed unevenly, particularly at the beginning. Traditionally, the industry lags behind the rest of the economy during a recovery, and some mineral products respond to overall economic improvement more quickly than others. This pattern has been repeated many times and the industry is used to it. Mineral executives know it is best to be patient and cautious during the first stages of an economic upturn. Many experts say that it may take extraordinary toughness, patience, and caution this time around. Steel Improves Raw steel production - a major indicator of both material use and mineral production - rose 14% to 77 Mt (85 million st), stimulating a 7% rise in domestic iron ore production to 39 Mt (38 million It). Still, the iron ore industry operated at less than half capacity, with most major mines remaining closed for part of the year. Iron ore imports dropped 24% to 10 Mt (11 million st), so demand was partly met by withdrawals from stocks. Despite the increase in steel production for 1983, output remained far below levels of just a few years ago. For example, 1983 production was still 29% less than in 1981. Raw steelmaking capacity actually declined about 10% during the year to 122 Mt (135 million st). The industry continued to cite steel imports, especially those from developing nations, as a major cause of domestic capacity loss. As long as steel production remains weak, steelmaking metals suffer. Domestic producers of bulk ferroalloys of chromium, manganese, and silicon operated at about one-third capacity in 1983, with six of the 19 companies involved being closed all year. The US mined no manganese or chromium, and very little nickel, although the country's only nickel mine did resume production in November. Molybdenum production, at 13.6 t (15 st), was only about one-third as much as in 1982. The major molybdenum mines, Climax and Henderson in Colorado, remained closed all year. To meet demand, molybdenum stocks were halved to 19 t (21 st). Mine shipments of tungsten, another mineral tied to steel production, dropped 30% to 1.1 kt (1,200 st) of contained metal. One of the most positive responses to the general economic recovery came from the aluminum smelting industry. By the end of the year, it was operating at about 79% capacity, compared to 59% in January. Nevertheless, the 3.3 Mt (3.64 million st) of primary aluminum produced represented only a slight increase over 1982. Total bauxite imports were about 27% below 1982 levels. Production of magnesium metal rose 11% to 100 kt (110,000 st). But titanium was more typical of other