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Vol. 22, No. 7 Week of February 12, 2017
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: 2017 mine values flat

USGS finds little growth for domestic miners; increased import reliance

Shane Lasley

Mining News

According to the United States Geological Survey’s annual report, “Mineral Commodity Summaries 2017,” the value of non-fuel minerals produced in the United States and Alaska during 2016 remained at similar levels to 2015.

Alaska mines produced roughly US$3.09 billion worth of minerals, excluding petroleum and coal, marking the seventh year straight that output from Alaska mines have topped US$3 billion.

Gold and zinc account for roughly 80 percent of Alaska’s mineral production value in 2016. Silver and lead account for most of the balance, while aggregates and other construction materials contribute roughly 1 percent of Alaska’s mine production value.

With steady output, Alaska holds as the nation’s seventh-largest mineral producing state – behind Nevada, Arizona, Texas, California, Minnesota and Florida.

Nevada, the top mining state in the nation, produced US$7.65 million worth of non-fuel minerals in 2016. This output was dominated by gold and copper.

The steady value of non-fuel minerals produced in Alaska is a reflection of the United States as whole. The overall value of 2016 non-metal mine production is estimated at US$74.6 billion, a slight increase from the US$73.4 billion produced here in 2015.

This raw production combined with roughly $600 million worth of domestically recycled minerals accounts for a significant percentage of the U.S. economy when you consider the products made from the materials.

“Industries – such as steel, aerospace and electronics – processed non-fuel mineral materials and created an estimated $2.8 trillion in value-added products in 2016, which contributed 15 percent to the total U.S. gross domestic product,” explained Steven Fortier, director, USGS National Minerals Information Center.

Foreign reliance

Despite the steady output of domestic mine production, USGS continues to highlight a trend of increasing U.S. dependence on foreign countries for many key minerals.

The number of minerals that the United States is 100 percent import-reliant has increased from 11 in 1984 to 20 in 2016. The country also depends on foreign sources for more than half its supply of another 30 minerals.

According to the data compiled by USGS, China is a major source of roughly half of the 50 minerals for which the United States is at least 50 percent import reliant.

Among the growing list of minerals for which the United States is fully import reliant are critical and strategic minerals such as rare earth elements, manganese and niobium; and important technology minerals such as graphite and yttrium.

“This trend, documented now by the federal government, is troubling as these metals are the building blocks of our supply chain and our infrastructure,” said National Mining Association President and CEO Hal Quinn. “Although we have these minerals and metals in abundance, an inefficient permitting process has slowed access to them and steadily increased our reliance on foreign sources such as China.”

Earlier this year, Rep. Mark Amodei and Sen. Dean Heller, both Republicans from Nevada, introduced similar legislation in both the House and Senate aimed at addressing mine permitting delays.

Known in both cases as the National Strategic and Critical Minerals Production Act of 2017, the permit streamlining bills were introduced in the Senate as S.145 and in the House as H.R.520.

Domestic rare earths

In its 2016 report, USGS pointed out that the United States lost its only rare earths producing mine when the Mountain Pass Mine in California was put on care and maintenance late in 2015.

As a result, the United States imported roughly US$120 million of this suite of elements that are used in a number of technological and defense applications. Most of these rare earths come either directly or indirectly from China.

Besides Mountain Pass, the United States hosts a number of potential sources of rare earths, including the Bokan Mountain project in Southeast Alaska.

In 2012, Ucore Rare Metals published a preliminary economic assessment for a small underground mine at Bokan that would produce roughly 2,500 tons of rare earth oxides per year during the first five years of operation; including an annual output of 105 tons of dysprosium oxide, 15 tons of terbium oxide, and 568 tons of yttrium oxide – three of the more critical rare earths to the United States.

While looking for a more economic and environmentally sound way to separate the 16 rare earth elements at Bokan Mountain, Ucore has helped pioneer a new technology that could transform the way rare earths and other strategic metals are processed.

This work resulted in the construction of SuperLig-One, a pilot plant that has successfully separated the most valuable and critical heavy rare earth elements contained in a solution derived from Bokan Mountain.

After separating the entire REE suite as a group, scandium, a valuable REE used in aluminum alloys for the aerospace sector, was isolated from the other rare earths.

Once scandium was skimmed off, the highly coveted and more expensive heavy rare earths were separated from the more common and less valuable light REEs.

By August, the SuperLig-One plant had achieved the ultimate goal for REE separation, the isolation of dysprosium.

According to a 2011 study by the U.S. Department of Energy, dysprosium is deemed the most critical of all elements in terms of its importance to clean energy and supply risk.

“This metal is deployed extensively in United States military, high technology and clean energy sectors, with 100 percent of the product currently originating from China,” the Ucore CEO said.

In fact, four rare earths – dysprosium, europium, terbium and yttrium – topped DOE’s list of five most critical and supply risky elements.

Ucore is now working to apply the technology it has developed to separate the rare earths at Bokan Mountain to other U.S. sources of rare earths and other strategic metals. The company is currently working towards building an industry-scale plant to recover such minerals from recycling, chips and filings from machining operations, and tailings generated by the automotive and rare earth permanent magnet industries.

Growing graphite need

Graphite, considered by many as critical due to its importance to lithium ion batteries, is another mineral which the United States is 100 percent reliant on foreign sources but is found in Alaska.

In fact, the Graphite Creek deposit near Nome is the largest known deposit of graphite in North America.

In January, Graphite One Resources Inc. published the results of a preliminary economic assessment, or PEA, that envisions Graphite Creek being a domestic source for roughly 55,350 metric tons of coated spherical graphite and other specialty graphite materials once the operation reached full production.

"This PEA shows the strong potential of our project as America's emerging producer of lithium ion battery-grade coated spherical graphite," said Graphite One CEO Anthony Huston.

The economic assessment outlines plans for mining and a recovery plant at the western Alaska site and an advanced material processing facility closer to potential buyers of the finished graphite products. Due to its maritime links to Alaska, low-cost power and proximity to markets, Washington is being considered as a potential site for the processing facility.

The portion of the deposit considered in the PEA hosts 744,000 metric tons of graphite contained in 10.3 million metric ton of indicated resource grading 7.2 percent graphite. This does not count the 5 million tons of graphite in 71.2 million metric tons of inferred resource averaging 7 percent graphite, or the large expanse of the deposit that has yet to be drilled.

"With the prospect of a low-cost, 40-year mine life using half of the identified graphite mineral resources, and given our projected production costs and conservative pricing assumptions, we are confident that Graphite One has the potential to become a reliable provider of graphite materials critical to clean-tech, high-tech and national security applications," Huston added.

According to USGS, there are currently no domestic sources of the graphite used in the United States, which resulted in manufacturers looking to other countries for 39,500 metric tons of the carboniferous material during 2016. Again, China was America’s largest supplier of this commodity, followed by Canada, Brazil, Japan, Mexico and Madagascar.

While the tonnage of graphite consumed by U.S. manufacturers last year is less than what Graphite One hopes to produce at its Alaska project, USGS see a major spike in demand when Tesla Motor’s Gigafactory, an enormous lithium ion battery facility being constructed in Nevada, is fully operational.

“The plant’s completion was originally projected for 2020, but the project is about two years ahead of schedule,” USGS penned in the report. “When the plant is complete, it will require 93,000 tons of flake graphite to produce 35,200 tons of spherical graphite for use as anode material for lithium-ion batteries.”

American miners hope new permit reform legislation will allow U.S. mining projects to more efficiently adapt to the shifting demand for domestic minerals.

“Today, less than half of the mineral needs of U.S. manufacturing are met from domestically mined minerals, a trend that will only worsen unless we reform the permitting process responsible for it,” explained NMA CEO Quinn.

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