February 19, 2013

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Around Utah
Around Utah


Buried Treasure

Underground Activity Brings Billions to the State

Marie Mischel

February 19, 2013

Utah’s mining industry is bringing to the surface more than silver and gold. Coal, potash, uranium, molybdenum, beryllium, rock aggregate and building stone are among Utah’s underground treasures.

Utah’s mining industry adds billions of dollars to the local economy. In fact, according to the Utah Geological Survey, nonfuel and solid energy mineral production was valued at $5.2 billion in 2011, including $2.6 billion for base metals, $1.2 billion for industrial minerals, $720 million for precious metals and $690 million for energy minerals (coal and uranium).

Kennecott Utah Copper alone produces about 300,000 tons of copper a year—97 percent of the copper mined in Utah—as well as 400,000 ounces of gold, 4 million ounces of silver and 30 million pounds of molybdenum, according to Kennecott.com.

Although the 1,900-acre Bingham Canyon Mine dominates the Oquirrh Mountain landscape, “the majority of mines in Utah are in rural areas and most of them are the small mines that are less than 10 or five acres,” says Dana Dean, associate director over mining in the state’s Division of Oil, Gas and Mining.

The level of mining activity depends heavily on the price that can be obtained for the product. “The market price will make or break a project, or some projects may have to run in the red to be available for when you can make the money in the market,” Dean says. “That’s always been the case with mining and other mineral activities.”

What’s Hot, What’s Not

“Right now coal is experiencing a soft market, so there has been some reduction there,” Dean says. “Most of the mines are staying at their current production rate, but a couple of them have either reduced production or have temporarily shut down.”

Currently, 10 mines in Utah produce coal. Carbon and Emery counties have the most coal mines, one of which crosses into Sevier County; Kane County also has one.

Among the contributing factors for the soft coal market, Dean says, are the comparatively low price of natural gas and the number of power plants being converted from coal to natural gas. “It wouldn’t have a huge economic impact on the state as a whole if things continue to slow down, but Carbon and Emery counties would be very hard hit if things continue to slow down much further—if they were shutting down mines and laying off more people,” she says.

Nevertheless, one coal mine recently was permitted but not has begun construction. “They’re ready to go when the market changes.” In contrast to coal, “potash is a very hot commodity right now,” Dean says, with worldwide demand for this product, which is used to make fertilizer. “Over the past year, we’ve gotten 10 applications for exploration projects in potash. We haven’t permitted any mines yet, but as soon as they’re done with their exploration we expect all 10 of these projects to move forward as mines.”

These potash deposits in southeastern Utah are deep, unlike the existing potash mines near the Great Salt Lake, Dean says, adding that her department expects to see more requests for this type of exploration when the Bureau of Land Management opens more land for leased mines.

Also anticipated are applications for mines for precious metals such as gold and silver. “Now that the price of precious metals is going up, we’re seeing a little more interest in those,” Dean says, adding that a permit was granted at the end of 2012 for a gold property in the west desert, and another company is proposing a small gold and silver operation near the Nevada border.

Only one uranium mine is currently operating in Utah, “but we have continued to see uranium exploration properties,” she says.

Meanwhile, the building stone industry “is struggling quite a bit; it did pick up a little after the 2008 crash, but now it’s down below crash levels. It’s at an all-time low,” Dean says.

These quarries are found statewide and are mostly run by small companies.

However, “Rock aggregate is still doing pretty well,” she says. “We’re not seeing as much permitting as we did during the I-15 core project or FrontRunner project, but the operations that are permitted are running pretty steadily and doing fairly well. There seems to be constant market for that.”

In the strategic metal area, Utah stands out for its beryllium deposits. “It’s one of the few places in the world where you even find beryllium, so we’re one of the major suppliers of that,” Dean says.

Industry Challenges

The tarnished legacy of past mining practices is proving difficult to overcome, despite the stringent environmental controls now governing the industry, says Mike Nadon, president of Cementation, an international company that currently subcontracts for Kennecott in Utah.

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