Though lower metals prices weighed on the value of Alaska’s mining sector, the production of minerals, not including coal and oil, in the 49th State topped US$3 billion for the sixth year running.

According to the United States Geological Survey’s annual report, “Mineral Commodity Summaries 2016,” Alaska mines produced roughly US$3.09 billion worth of non-fuel minerals during 2015. This reflects roughly a 12 percent decrease compared with the US$3.51 billion that USGS reported for the same category in 2014.

Zinc and gold account for roughly 83 percent of Alaska’s mineral production value and lead and silver account for most of the remaining 17 percent, while aggregates and other construction materials contribute roughly 1 percent of Alaska’s mine production value.

Thanks to increased demand for cement, sand and gravel, crushed stone and other such materials by a resurging construction sector, mineral production in the more populous “Lower 48” states fared better than in Alaska last year.

“A reduction in construction activity began with the 2008-09 recession and continued through 2011. However, construction spending continued to increase in 2015 – more than 10 percent compared with 2014, which benefitted the industrial minerals and aggregates sectors,” the USGS explained in its report.

As a result, the survey calculated that mineral production across the entire United States totaled US$78.3 billion in 2015, only a 3 percent drop compared with US$80.8 billion the previous year.

For 2015, Alaska was the seventh-largest non-fuel mineral-producing state in the nation. Nevada, which ranked No. 1, produced US$6.94 billion worth of gold, copper, silver, lime and other minerals last year.

In the latest commodities summary, USGS continued to place emphasis on the United States’ reliance on foreign sources for the majority of minerals needed.

“In 2015, the U.S. was 100 percent import-reliant on 19 mineral commodities, including rare earths, manganese, and bauxite, which are among a suite of materials often designated as ‘critical’ or ‘strategic’ because they are essential to the economy and their supply may be disrupted,” the survey noted.

Declining demand

While Alaska’s estimated 12 percent drop in mineral production for 2015 is much larger than the national average, it falls in line with the overall reduction in the value of metals production in the United States.

“Declining demand for metals – especially in China, reduced investment demand, and increased global inventories resulted in decreasing prices and production for most metals,” the geological survey explained.

As a result, metals production in the United States fell 15 percent from 2014, to US$26.6 billion.

Alaska, with most of its US$3 billion of mine production falling into the metals category, accounted for more than 11 percent of the domestic metals produced.

According to early calculations by Alaska Division of Geological and Geophysical Surveys, roughly 679,000 tons of zinc, 953,000 ounces of gold, 14.98 million ounces of silver and 147,000 tons of lead was produced from Alaska mines in 2015.

“Alaska’s worldwide significance in zinc, lead, gold, and silver production from five major metal mines increased despite a sharp decline from a 2013 spike in placer gold production,” summarized Larry Freeman, mineral resources section chief, DGGS.

While Alaska’s metals production held close to steady last year compared to 2014, other regions of the United States were hit harder by weak metals prices.

“In fact, several U.S. metal mines (were) idled in 2015, including the only U.S. rare earth mine at Mountain Pass, California. Rare earths are vital components in modern technologies like smart phones, light-emitting-diode (LED) lights, and flat screen televisions, as well as clean energy and defense technologies,” USGS said.

Growing reliance

Domestic mine closures are not helping to lower the America’s growing dependence on foreign sources for its annual mineral needs.

In December, the USGS released a report on the United States’ growing reliance on mines in foreign countries to supply domestic non-fuel mineral needs over the past six decades.

The number of minerals that the United States is 100 percent import-reliant has increased from eight in 1954 to 19 in 2014. The country also depends on foreign sources for more than half its supply of another 28 minerals.

Increased global trade and the distribution of minerals deposits has significant roles to play in this dependence.

“Because the global distribution of mineral reserves and resources is not uniform, the United States has always been import-reliant for some mineral commodities. It is important to recognize, however, that import reliance does not necessarily mean that there is a supply risk,” explained Steven Fortier, director, USGS National Minerals Information Center. “Essentially, the type of commodities imported and the countries from which they are sourced determine risk-related to import reliance.”

The United States’ reliance on China for its minerals needs has grown exponentially over the past 60 years – from none of the minerals for which the United States was net-reliant in 1954, to about 10 in 1984 and 24 in 2014.

Neighboring Canada, which has long been a source of minerals to the United States, supplied 16 of the minerals for which the United States is more than 50 percent import-reliant. Mexico, Russia, and South Africa also are major sources of these commodities.

Many of these minerals for which the United States is net-import-reliant have been deemed critical or strategic by the USGS and other federal agencies.

“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,” explained Larry Meinert, coordinator, USGS Mineral Resource Program.

“Will our children’s children have the resources they need to live the lives that we all want?” he asked.

Mineral-rich state

Many of these minerals for which the United States depends largely on foreign sources – such as rare earth elements, graphite, tin, antimony and platinum – are found across Alaska.

“Alaska has the potential to supply new materials to North American and Pacific-Rim markets with Graphite One’s Graphite Creek deposit, containing 9.9 million tonnes (metric tons) of large-flake graphite; and Ucore’s Bokan Mountain rare-earth element deposit, with 77.5 million tonnes of contained rare-earth oxides,” said Freeman.

These are two of some 3,323 lode prospects that have been identified across Alaska, a fact not overlooked by Gov. Bill Walker.

“Alaska has more mineral deposits than any other state,” Walker mentioned in his 2016 State of the State Address. “If Alaska were a country, we would be the eighth most mineral-rich nation in the world.”

Being a state, however, Alaska has the potential to be a domestic source of the United States’ mineral needs.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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