With copper and gold production paving the way, Utah's mining industry could enjoy one of its healthiest years of the decade in 1989, a decade lean in jobs and earnings, says a University of Utah mining professor.
Dr. Charles W. Berry said copper production at the Bingham Canyon open-pit mine is expected to total about 400 million pounds this year, with the price likely to remain above $1 per pound.In an article published in the January 1989 issue of Utah Business magazine, Berry says BP Minerals' major modernization program significantly reduced the cost of mining and processing copper ore in Utah. (BP Minerals has agreed to sell its Utah mining operations to RTZ, Inc., a well-established British international mining firm.)
In 1988, the price of copper reached $1.65 per pound from a low of 60 cents two years earlier, when heavy financial losses forced closure of copper mining operations in Utah.
Berry said the production problems and labor strikes in South America and Africa that reduced inventories and drove up the price of copper are being resolved, indicating a possible return to higher inventories and lower prices.
As a result of plant modernizations by BP Minerals at Bingham Canyon and Magna and by Barrick Mercur at its Mercur mine, Utah is also becoming an important gold mining state. Bingham Canyon is expected to yield 300,000 ounces of gold this year and Mercur some 115,000 ounces.
"The price of gold is relatively insensitive to mine production changes. However, it is very dependent upon changes in inflation, war-peace developments and the status of the dollar in foreign exchange," said Berry.
He said that at $400 per ounce Bingham Canyon's estimated 1989 value of gold output would be $120 million and Mercur's $46 million. Gold mining operations are scheduled to begin this year at BP Minerals' Barney's Canyon property near the Bingham open pit copper mine.
Silver production is expected to total 2.5 million ounces at Bingham Canyon, which is also a supplier of molybdenum. Hecla Mining Co.'s operations west of Cedar City is expected to yield l.5 million ounces of silver this year, even though the mine has shut down. A sufficient ore stockpile is available to keep the mill operating beyond 1989.
Utah's coal production should reach 18.3 million tons in 1989, placing it at about the same level as 1988, said Berry. At an average price of $27 per ton, the total value of Utah-produced coal would be $495 million.
"Utah coal is relatively high quality, with high heating and low sulfur content, but comes from underground mines, which normally have higher mining costs per ton of coal than surface mines do," he said.
Berry noted that Chevron's phosphate mine in Vernal should produce about 1.4 million tons of phosphate rock, which is pumped in slurry form 96 miles to Rock Springs, Wyo., for eventual refinement into phosphorous fertilizers.
AMAX Magnesium Corp. expects to produce about 75 million pounds of magnesium in 1989, half from purchased brine and half collected from its Great Salt Lake brine ponds. Starting in 1990, AMAX expects to produce all of its own brine feed. Magnesium, a ductile, malleable metal, is used in aluminum-based alloys, as an agent to reduce compounds and in making magnesium castings.
Geneva Steel Co.'s iron ore mines west of Cedar City produced an estimated 550,000 tons in 1988, with the 1989 rate expected to increase slightly. Geneva also operates a limestone quarry in Utah County that yields 340,000 tons of limestone for flux, which helps minerals or metals melt together.
As a researcher in the University's Center for Advanced Coal Technology, Berry is studying hydraulic coal mining, which involves the use of pressurized water to cut coal from the working face of a coal seam.
He said hydraulic mining, in which coal is transported in slurry form, has the potential to reduce costs, improve safety, and extend coal reserves, thereby making Utah coal more competitive in the national and international markets.