Strong dollar and imports steal momentum from US mining recovery

Demand for nonfuel minerals depends on the overall state of the economy, which steadily improved each quarter in 1984. New housing starts rose to 1.8 million units. Automakers turned out about 15% more cars (7.8 million) and 30% more trucks (3.1 million) than in 1983. Nevertheless, many domestic mineral operations experienced difficulties in 1984. This resulted from import competition greater use of newer engineered materials, emphasis on multi-unit housing and downsizing of motor vehicles. About 15% of our energy was imported. This in cluded $36 billion worth of crude oil and $22 billion in refined products This added significantly to the overall merchandise trade deficit of $12; billion. On the bright side for mining, coal production rose 14% to 810 Mt (890 mil lion st). Three-fourths o: the coal was burned to generate electricity and more than half of our electricity was derived from coal-burning plants. With the exception of a few large-bulk, low-value raw minerals, most minerals move relatively freely in world trade. The strong dollar encouraged imports and made exporting more difficult. Consequently, our nonfuel minerals trade deficit rose 60% to $19 billion, reflecting imports of $39 billion and exports of $20 billion. There were increased pressures from some major segments of the minerals industry for some form of import protection. But President Reagan said, "Our goal is a system of free and fair trade in goods, services, and capital. We will work toward this goal through both bilateral and multilateral trading agreements." The US minerals industry consists of domestic mines, concentrators, smelters, refineries, mineral manufacturing plants, and recyclers. It also includes many wholly- or partially-owned operations in many parts of the world, providing employment and income for US citizens and others as well. Compared with 1983, the value of US raw nonfuel mineral output rose 8%, to $23 billion. The $253 billion worth of goods processed from this crude mineral output was a 14% increase. Major Metals Raw steel production - a major indicator of both material use and mineral production-rose 10%, to 84 Mt (93 million st). This stimulated a 36% rise in domestic iron ore production, to 52 Mt (57 million st), about 98% pelletized. Iron ore imports rose 44%, to 14 Mt (15 million st). Despite the increase of steel production, output remained well below levels of just a few years ago. For example, 1984 production was still 23% less than in 1981. Raw steelmaking capacity remained steady at 122 Mt (135 million st). The industry continued to cite steel imports as a major reason for low domestic capacity. In December, pacts with seven leading steel exporting nations were announced. This is an effort to reduce import penetration to about 18.5% of the domestic market. Domestic producers of bulk ferroalloys of chromium, manganese, and silicon operated at about 50% capacity. The US mined no manganese or chromium. Only a small quantity of ferronickel was produced from domestic laterite mining in Oregon. Molybdenum production, at 45 kt (49,500 st), rose threefold. Mine shipments of tungsten, another mineral tied to steel