The Flow of Natural Resources and Raw Materials

There are many reasons why we should be harvesting our own raw materials that already exist in this country, rather than importing them, whenever it is feasible or possible. When there are reasons, which prevent us from doing the collecting of those natural resources within our own country, then and only then should we look towards our trading partners to supply us such raw materials and resources. When we can mine such raw materials within our borders and transport them short distances to the processing facilities, manufacturing factories, refineries, energy power plants and shipping ports or railroads for exporting at an expeditious and cost effective manner. In our country we have seen the loss of most of our mining in the last 40 years. Some was due to Federal Clean Water Act in 1972, which was to prevent the pollution from things like strip mining.

Many other mines, drilling rigs and plants were closed due to the cost. This was often due to the World market price for the minerals or natural resource. Much of the mining was shut down due to regulations, labor costs, labor unions, OSHA rules, etc. Some examples of the problems of cost in mining have been overwhelming. When reviewing the recent closing of the Gold Mine in Butte, MT we find that the mine was closed due to the increasing costs of energy to crush the rocks to get the gold out. There costs in energy went from $280,000 per month to 1.6 million per month. Sure there were other issues although imagine getting that electricity bill and trying to manage your expenses? Unpredictable energy costs are necessary for mining and other heavy industry, price spikes on top of over regulations is a death nail.

Now in many countries people have protested mines, gold and silver are easy ones to protest because it is associated with greed as those minerals are also considered legal tender. A great mine to visit is one of the first gold mines in the country, The Reed Gold mine in Charlotte. There were over 300 gold mines in North Carolina in the 1820’s. This of course long before the 49’ers of CA. The Reed Mine was active until 1912. A total of 13 gold mines closed in the past two years in response to depressed gold prices or ore exhaustion in Canada. Collecting the Gold under the conditions required in most of North America is no longer feasible, unless it can be collected along with other precious metals and the remaining material can be further sifted for iron ore, copper or another metal. There are several places on Earth where multiple metals appear within a very close proximity. Mining often, like many industrial endeavors can cause air pollution. When mining the excess which is not used is piled up and often causes leaching into the ground when it rains, those other minerals released are more concentrated than much of the normal downstream waters.

This is because the minerals have been buried for centuries underneath in layers from previous periods. In the old Berkeley Pit, a copper mine which is closed not far from the Sunlight Goldmine in Montana, the rain water mixing with the minerals left in the bottom of the Pit was quite toxic and contained arsenic, which is harmful in large amounts to humans and animals. Although arsenic is a poison, it is part of the natural occurring minerals in nature and common to that area. Small traces are not to bad, but once they become to high it is cause for alarm.

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Costs of transportation is also important in mining. Most mines still in business today are in very close proximity to major rail lines, even with all the regulations and rules that exist some mining still exists in the United States; Borax in Dagget, CA. The Borax mine was moved from the Harmony Borax Works mine in Death Valley, the second hottest place on Earth with temps up to 134 degrees, In the 1880’s, the famous 20 mule team borax trains hauled their loads a grueling 165 miles to the railroad in Mojave. This is an illustration of why the transportation factor is critical in the efficiency of mining to keep costs down for the factories, which use the raw material or natural resources.

If you look at the above ground mines in North America, those with rail service right to the site can compete if the economies of scale and market prices remain stable. There are many other factors to consider also, for instance if your other countries do not have the same rules for environmental controls they can often sell those raw materials to other countries who in turn can sell their finished products, such a specialty alloys, steel, etc. at lower prices than your companies can produce them. Which would appear to be dumping; selling their products for less it costs them to produce them. Many countries prop up such industries with huge tax incentives or subsidizing those industries and/or companies. There are many reasons for this, sometimes it is merely to insure that those companies are in business to sell products to the Countries government agencies for infrastructure projects. Other times it is to appease labor and provide jobs. Sometimes it is in retaliation for a perceived or actual trade war from another trading partner country, which is propping up one of it’s other industries. The dynamics of World Trade on; industry, peace, quality of life of populations, money flow, raw materials and natural resources; are quite extensive, as you might have guessed.

If you look at the above ground Coalmines in; Gillette, WY; you can see a perfect example of how mining works when everything is just right. Hundreds and hundreds of complete train loads leaving weekly for coal fired energy plants across the country. The economies of scale in such mines are incredible, fun to watch and very serious, every single second is accounted for, it is now a pure science in efficiency. It is incredible how far we have come in the past few centuries. The deepest Coal Mine in the world is over 5000 feet below the ground in the UK. Many in the United States are over 1200 feet deep, most of those are closed and now few are remaining. There is a mine in Alabama, which is the deepest vertical shaft coalmine in North America, with operations at 2,140 feet beneath the surface. It is hard for the coalmines in Washington State, Pennsylvania, West Virginia and Alabama to compete with the incredible economies of scale of the Gillette WY above ground mine. Below ground coalmines can be quite dangerous. There are gases underground and coal dust and if a fire breaks out it steals all the oxygen. Recently the rescue of the coalminers in PA caught the attention of the whole world as rescue workers and heads-up rescuees, worked non-stop to stay alive until every man got out.

Mining is dangerous business and safety is essential and comes at a high cost in productivity. Above ground machinery and robotics have made many mining efforts in the United States profitable and much safer. Also at issue as we have discussed are the environmental issues. Things in the mining industry have significantly changed in the United States in the past 25 years the only question is; did they change too fast? The reason we won the Second world War was because of our industrial output, we had the raw materials and the will and we were able to do it all here, are we positive we wish to lose such capability in the future, after all it is still a cruel world, the human race is surely not done killing our own species yet, there will be more wars. The key issue in mining is the competition between third world countries trashing the environment and our environmental regulations in place here. Today in the United States, we have new innovations to protect the environment without slowing the process. These new methods are costly on original capitalization of a project, but usually once started are amortized over a significant period. Many colleges are putting out environmental engineers specializing in mining. .

By doing this the job of doing mining correctly is feasible, but environmental laws are not the only regulations that mining operations have to deal with, there is also the OSHA laws and a myriad of other rules.

In this country we have Salt Mines, Uranium Mines, Zinc, Lead, Molybdenum, Iron Ore, Copper, Silver, Gold, Aluminum, etc. Some of what we ought to be mining is old computers, refuse and disposed of automobiles and the Aluminum on old airliners parked in the desert.

The United States can compete, if we will drop the attitude and the delays caused by frivolous lawsuits, bad law making and bogus regulations which are said to help people when in actuality they serve no free man. If you read the Ayn Rand books, you can get a sense of this. Different places in the world have all the same minerals we have here. All in all we need to change our attitude on issues of mining, there are some brilliant entrepreneurs out there, state of the art equipment, smart industry consultants who can and will get the job done without polluting, without hurting the environment and still turn a considerable profit. Who wins? We do, because the world prices of raw materials and resources dictate the cost and the efficiency of having it here in country before we start to make something out of these resources and materials is good for America. We should allow these brilliant problem solvers in the name of profits help us figure out how to do it right, presently we are over regulating and not listening to these new technologies and the thinking of those in the know.