Prime Meridians – 4 Little-Known Facts About U.S. Mining

This week in Pierce Points:

Private equity boosted prospects for U.S. natgas. Big investors are financing a critical pipeline to export U.S. supply to Mexico.

Another big miner chose America. Silver producer Hecla is the latest firm making project acquisitions in the U.S.

Oil and gas production fell. Finally. Data from Texas show a substantial decline in output during January, perhaps signalling a market turnaround.

South Africa’s miners argued about 26%. Firms say they have met black ownership targets, but the government is sending the issue to court.

An unusual buyer descended on the gold sector. India’s largest jewellery maker is in Australia, looking to buy mines to secure supply.

4 Little-Known Facts About U.S. Mining

Further to the second item above, it’s increasingly looking like America may be one of the next hotspots for mining.

Progress is being made permitting new projects such as the Rock Creek silver-copper deposit in Montana. And big miners are noticing — evidenced by Hecla’s $20 million takeover of the project this week, from junior Revett Mining.

Of course, it’s no surprise geologically that America should be prime terrain for new projects. For centuries, the U.S. has been a leading global producer of copper, gold and even hard-to-find metals like platinum.

But the last 25 years have seen mining activity in many parts of the country fall off. Not for want of attractive projects — but rather because of difficulties in permitting mining and even exploration activity. The Rock Creek project being purchased by Hecla, for example, has been going through regulatory hoops for 10 years now.

All of that red tape means that many formerly productive mining districts have gone to field. Today it’s difficult to imagine that New York state was once America’s second-largest source of zinc. Or that, not so long ago, Texas was far and away the country’s top gold producer.

To get an idea of the potential in some of America’s forgotten mining districts, here are four surprising findings from historic U.S. mining data — showing there is still a lot of territory to be explored and developed here.

Fallen Silver Giants

Hecla’s Rock Creek isn’t the only massive silver project in Montana. In 1955, the state was America’s third-largest producer. At that time, Montana combined with its neighbour Idaho, along with Utah, Arizona and Colorado, to make up the five largest silver-producing states. 

Times have changed however. In 2013 — the last year for which the U.S. Geological Survey reported detailed state-by-state production — all of these states were simply lumped into “other”. And even output from these producers, along with the rest of America, still doesn’t total what these former silver powerhouses used to put out. 

Screen Shot 2015-04-03 at 1.21.05 PMSource: U.S. Geological Survey

The Amazing Disappearing Iron Ore Act

Fifty years ago, America’s iron ore mining sector was unrecognizable compared to today. The top five producing states in the nation included Alabama and New York — places that aren’t even on the mining map now.

As the chart below shows, a go-to producing state like Michigan has held its own. But even top-producer Minnesota has seen its production drop by over 50% — suggesting there is still a lot of undeveloped potential here. 

Screen Shot 2015-04-03 at 1.42.12 PM

Source: U.S. Geological Survey

This Gold Giant Has Completely Vanished

We all know about California’s rich history of gold mining — all but completely lost in recent decades. 

But fifty years ago, there was an even bigger — and perhaps more unexpected — state on top of the American gold mining industry.

Texas.

As the chart below shows, Texas’ 530,000 ounces of production in 1955 put it squarely in the lead for bullion output. Demonstrating high geologic potential, in a place no one thinks of today. 

Screen Shot 2015-04-03 at 1.50.30 PM

Source: U.S. Geological Survey

These Zinc Producers Have Gone to Zero

Quick — name America’s top zinc producers in the 1950s? 

If you said New York and Oklahoma, you’re absolutely right. Along with Montana, Idaho and Utah, these states mined over 260,000 short tons of the metal in 1955 — accounting for the bulk of U.S. output.

But today, that’s all changed. Idaho is the only state amongst these former giants still producing zinc. The other four former capitals of mining have all fallen to zero activity. And not because the prospects ran out. 

The bottom line is, America still has lots to do when it comes to exploration and development. And if permitting reforms in places like Montana, Minnesota, Michigan and even Maine continue to gain traction, we could see some of the biggest project opportunities in decades unfolding in a place few observers are betting on.

Here’s to a blast from the past,

dforest@piercepoints.com / @piercepoints / Facebook

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