Value of U.S. metal mine production drops 15%
The United States earned less from its mines in 2015 and became more reliant on outside sources for critical metals, according to a new report from the U.S. Geological Survey (USGS).
The data comes from statistics gathered by the USGS on about 90 mineral commodities considered essential for the U.S. economy and national security.
Concerns have been raised for years that the United States is too dependent on other countries, namely China, for rare earth elements deemed essential for its aerospace and electronics industries, leading to suggestions that the U.S. create a strategic minerals reserve. However that plan was scotched with the closure of the only rare earths mine last year in the United States, Molycorp's (OTCMKTS:MCPIQ) Mountain Pass facility in California. The mine operated in the red for years and was finally felled by low rare earth prices.
Around 95 percent of rare earths are produced in China and according to the USGS the situation has only gotten worse. In 2015 the United States was 100%-dependent on other countries for 19 minerals commodities including manganese, bauxite and graphite. A map from the report shows Canada and China as the countries the U.S. is most reliant on, followed by South Africa. The U.S. is also over 50 percent dependent on Australia, Brazil, Ukraine, Russia, UK, India, Argentina, Peru, Bolivia, Chile and Mexico for between 4 and 6 commodities.
This dependence on foreign sources of critical minerals illustrates both the interdependency of the global community and a growing concern about the adequacy of mineral resources supplies for future generations.
“This dependence on foreign sources of critical minerals illustrates both the interdependency of the global community and a growing concern about the adequacy of mineral resources supplies for future generations. Will our children’s children have the resources they need to live the lives that we all want?” asked Larry Meinert, mineral resources program coordinator with USGS.
It won't come as much as a surprise considering the withering effects of low commodity prices, but the value of minerals extracted from American mines fell by 3 percent in 2015. According to the USGS, U.S. mines produced an estimated $78.3 billion of raw ore in 2015, which represents $2.5 billion less than the $80.8 billion produced in 2014.
Metal mines were worst hit, with a 15 percent fall in values, or $26.6 billion, compared to 2014.The USGS blamed declining demand for metals especially in China as well as a global supply glut for several commodities. It also notes the closure of a number of U.S. metals mines including Mountain Pass. The value of processed mineral materials was also lowered from $659 billion in 2014 to $630 billion last year – a 4 percent drop.
However one bright spot in the report was industrial commodities, whose mined values gained due to higher construction spending. The USGS says the estimated value of U.S. industrial minerals production, including aggregates, was $51.7 billion, or 4 percent more than the value in 2014.
In 2015, 14 states each produced more than $2 billion worth of nonfuel mineral commodities. These states were, in descending order of value—Nevada, Arizona, Texas, Minnesota, Wisconsin, California, Alaska, Utah, Florida, Michigan, Missouri, Colorado, Wyoming, and Illinois. Wisconsin and Illinois are new to the list in 2015.