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United States Mining Report 2008 (Business Monitor International) Market: Agriculture, Farming and Raw Materials Published Date: 25/06/2008 Market Research Report Title: United States Mining Report 2008 Table of Contents: View Table of Contents Report Type: Market Report Country: US Number of Pages: 50 
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Summary: In November 2007 the US House of Representatives passed the Hardrock Mining and Reclamation Act 2007, designed to impose significant new royalties on gold, silver, copper, uranium and other minerals mined on public lands. But a series of press reports in January 2008 indicated that the Senate Energy Committee was posed to re-write and soften a number of its provisions. The House version of the law called for an 8% royalty on gross revenues from new hardrock mining operations and a 4% royalty on existing operations. One of the bill’s sponsors, Representative Nick Rahall of West Virginia (Democrat), said there were up to 500,000 abandoned mines in the US and it could cost up to US$70bn to clean them up. The White House, for its part, had threatened to veto the bill, warning that the imposition of royalties could ‘reduce the continued domestic production of hardrock minerals’. The mining industry lobby, the National Mining Association (NMA) said it opposed the bill because it would boost raw material costs and make US manufacturing companies less competitive with their foreign counterparts.
The US is the world’s largest economy, and mining is a significant US industry. According to the US Geological Survey (USGS), in 2005 the value of mining sector output was US$73.8bn, which BMI calculates as representing 0.6% of US GDP. Of this, total industrial minerals accounted for US$35.2bn, coal represented US$22.3bn and metal mining represented US$16.3bn. By individual commodities, after coal the most important were aluminium, copper, molybdenum and gold. The figure of 0.6% of GDP is a rather narrow measure of the industry. The USGS has also separately estimated the value of all mineral materials processed in the US at US$478bn. It said that this production in 2005 came from 1,879 coal mines and facilities, eight uranium mines and 1,965 mines and processing plants for 74 types of non-fuel minerals and materials.
The Bush administration, concerned about the country’s reliance on imported energy, has called for a major increase in the supply of traditional fossil fuels and nuclear energy in a bid to head off a looming energy crisis. This has important implications for coal, which currently accounts for roughly one-third of total US energy supply and, with reserves equivalent to 250 years of production at current rates, is one of the country’s most plentiful energy sources (although also one of the dirtiest in environmental terms).
Our forecast for the US mining industry is made in an environment in which metals and minerals prices fall back over the next couple of years, but nevertheless remain on something of a high plateau. The most important activity – coal mining – will continue to be influenced by strong energy demand and the current and most likely future government’s desire to diversify away from excessive reliance on oil. The key here will be the development of cleaner coal technologies, which we expect to take another four to five years.
For our 2008-2012 forecast period, we expect coal production to rise by an average of 0.6% per annum, reaching a total of 1,180mn short tonnes by 2012. The value of that production will rise to just less than US$40bn by the end of the period. The copper sector on the other hand will be influenced by the current slowdown in the US housing market, and we expect mine production to grow by a modest annual average of 1.1% (which will nevertheless be an improvement on the average growth of 0.9% registered over the preceding five years) reaching a value of US$4.78bn by 2012. Gold output will continue falling (-0.9% on average across the forecast period) while iron ore output will contract (by -1.8% per annum). Overall, we see US mining industry GDP growing by an annual average of 3.4% in the 2008-2012 period.
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