This category covers establishments primarily engaged in mining, milling, or other wise preparing lead ores, zinc ores, or lead-zinc ores.
212231 (Lead Ore and Zinc Ore Mining)
According to the U.S. Department of the Interior, U.S. Geological Survey, lead and zinc account for 2 and 3 percent of U.S. nonferrous metals production, respectively. In 2004 approximately 22 establishments were engaged in the production of lead and zinc ores. A lack of capacity in zinc refinery production in the late 1990s and early 2000s resulted in increased exports of zinc concentrates from 531,000 metric tons in 1999 to 830,000 metric tons in 2003, as well as decreased imports of zinc metal from 1.06 million metric tons in 1999 to 780,000 metric tons in 2003. This situation is projected to continue in the United States through 2005.
The special properties of lead, especially its resistance to corrosion, make it extremely useful for nuclear insulation and applications such as X-ray protection. Zinc is also used in the production of nonferrous alloys and is useful as a corrosion inhibitor, especially as a protective coating on steel.
Although global zinc consumption increased 3 percent between 2001 and 2002, U.S. zinc consumption in the U.S. declined. Nevertheless, U.S. consumption continued to account for 13 percent of world consumption. Only China consumed more zinc than that United States in 2002. A total of seven companies operating in five U.S. states produced zinc in 2003; the value of zinc production that year reached $664 million. Alaska, Missouri, and Tennessee accounted for 97 percent of U.S. zinc production, with the Red Dog Mine in Alaska accounting for 75 percent of that total.
Lead consumption declined roughly 2 percent between 2002 and 2003, while global demand increased 1 percent. Falling consumption in the United States was due in large part to diminished demand for lead by the battery industry. The value of mined lead in 2003 totaled $435 million. Lead mining is located primarily in Missouri, Alaska, Idaho, and Montana. Ninety-seven percent of U.S. lead product was extracted from nine mines in Alaska and Missouri in 2003; Alaska accounted for about one-half of total U.S. lead production.
The lead and zinc industry consolidated operations gradually after production peaked in 1970: where 88 establishments existed in 1977, the number fell to 36 firms in 1996, and only 22 remained in 2003. Manufacturers of lead and zinc intermediate products for industrial use are the principal purchasers of lead and zinc.
The mining of lead and zinc ores originated in Colorado in the early 1800s. The production of these base metals became closely intertwined because both were extracted from the same ores—although in different proportions. After recovery, lead and zinc are separated in the smelting process, whereby the ore is processed and reduced to a metal. Until the beginning of the twentieth century, lead and zinc production was strictly a U.S. affair, and before World War II, the United States was generally not dependent of foreign zinc suppliers. During most of that time, exports exceeded imports by a small margin. After World War II, the United States became a small net importer.
Zinc imports increased from 39,000 tons per year in 1939 to an average of 375,000 tons from 1946 to 1950 and 534,000 for the period from 1951 to 1953. The industry became heavily concentrated during this period, and by 1952 there were 912 lead and zinc mines in the United States, but only 193 of them accounted for 95 percent of the market. A few corporations dominated the industry, with ten companies controlling 65 percent of total U.S. lead output and ten companies controlling 62 percent of the zinc market. Of those corporations, seven dominated in both groups. Control of the smelting market for zinc and lead ores was even more concentrated.
U.S. firms soon lost their competitive position inter-nationally as the demand for lead and zinc expanded far faster than domestic production. Foreign producers expanded production and sent large quantities of their surpluses to the United States. The market shift coincided with the termination of price controls in the United States in 1946 and the suspension of import duties for several years following World War II. These tactics were needed because the war had depleted the country's stocks, yet demand from the U.S. government increased with the onset of the Korean War.
By the late 1960s imports of zinc exceeded domestic production by more than 50 percent, and domestic production of lead just barely exceeded imports in 1969. Secondary production of lead (essentially from scrap) overtook primary production, reaching more than one-half of total production in the late 1970s.
An overall downturn in lead and zinc mining began in 1970. By 1980 U.S. production of zinc fell to less than 10 percent of total world production, and Soviet and Japanese companies accounted for much of the world market. Total production indexes for the industry as a whole reveal a decline of nearly one-half from 1970 to 1986. During the 1980s lead production declined by more than 10 percent, but zinc production increased by more than 50 percent. The loss of several key markets for lead, including the abandonment of lead as an anti-knocking additive to gasoline and the discontinued use of lead as an insulator in water pipes, contributed to lower demand beginning in the 1970s. The use of lead in products that might come into contact with humans (such as paints and pipes) was gradually curtailed because of the risk of lead poisoning, and studies suggested that exposure to lead impaired brain development in children. The U.S. Bureau of Mines projected that annual lead demand to fall at a rate of 0.5 percent to 1.5 percent per year in the 1990s.
Tariffs on zinc were phased out gradually as part of the U.S.-Canada Free Trade Agreement of 1989. That situation, combined with the rollback of world trade barriers, encouraged competition on the part Mexican and Peruvian zinc products to seek duty-free markets in the United States. Finally, after the fall of the Soviet Union in 1989, lead and zinc from its former member states flooded the world market, putting downward pressure on prices. The Bureau of Mines estimated world reserve base of zinc at 400 million tons and reserves at 150 million tons, with the United States having the largest reserves. The world reserve base was approximately 120 million tons at the end of 1995.
A series of circumstances caused lead and zinc prices to fluctuate in the early 1990s. Initially, a strike at Doe Run Company, one of the country's primary producers, created a decline in production; but a subsequent strike at the Trail smelter in Canada led to price increases. Later, in 1996, Doe Run experienced a loss of an estimated 5,400 metric tons of lead production as the result of a shutdown for a furnace repair at a secondary lead smelter in Boss, Missouri. Around that same time ASARCO, Incorporated announced the indefinite closing of its Leadville, Colorado zinc-lead-silver mine but reversed that decision in early 1997 and resumed full production. Zinc prices, which had dropped during 1996, turned steadily upward in early 1997 as the U.S. economy began to recover from an earlier recession, and consumption rose by 8 percent.
Lead. The primary demand for lead in 2003 resulted from growing demand for rechargeable automobile batteries. In fact the transportation industry accounted for 76 percent of U.S. lead consumption in the early 2000s. Additionally, lead-acid storage batteries served as the primary component in uninterruptible power supplies for computer backup systems, a market projected to increase particularly in China. Use of lead shielding for protection from X-ray exposure and lead glass for computer displays and television tubes also contributed to increased demand. The expansion of the secondary (recycled) lead supply—70 percent of total production—combined with improved methods for primary production contributed to a market surplus in the late 1990s. However, by the early 2000s, decreased production at smelters and refineries in the United States, as well as in Europe and Australia, prompted the International Lead and Zinc Study Group to forecast a balanced supply and demand of lead in 2003.
Zinc. The properties of zinc as a corrosion inhibitor make it valuable for the galvanizing process, and the rubber industry uses zinc oxide in making white paint and pigments. In the early 2000s, low interest rates fueled new home construction in the U.S., which boosted zinc consumption by industries such as construction that use galvanized steel extensively. In fact, this industry proved to be the only consistent U.S. market for zinc in the early 2000s. Although worldwide zinc consumption increased by 3 percent in 2002, weak domestic demand prompted seven zinc mines in the United States to shutter operations in 2001. As a result, zinc production in 2002 declined by 7 percent.
Nearly all of the leading companies in the industry engage also in other types of metals mining. ASARCO Incorporated of New York is a conglomerate with a major interest in copper as well as lead and zinc and the manufacturing of specialty chemicals. Sales in 2002 totaled $514 million.
Doe Run Company of St. Louis, owned by New York's Renco Group, is also a major player in the industry. The company led the world in the production of primary lead at the turn of the twenty-first century. Also prominent is Teck Cominco Ltd., formed by the C$1.5 billion merger between Canada-based Teck Corp. and Cominco Ltd. in 2001. Prior to the merger, Cominco had operated as parent company to Cominco Alaska, operators of Alaska's Red Dog Mine. Red Dog was the largest known zinc ore body worldwide at the close of the 1990s. The total zinc reserves at Red Dog were estimated at 138 million tons at end of 1995, with new deposits discovered in 1999. Total zinc and lead production at Red Dog was reported at 600,000 metric tons annually in 1999. As of 2003, Teck Cominco was the leading zinc producer in the world.
World prices for lead and zinc fell during the late 1990s as a result of Asian monetary crises and resultant slowdowns and outright stoppages of production in southeast Asia. The crisis, manifested most severely in Thailand, Malaysia, Korea, and Japan, caused significant reductions in the demand for metals. The countries affected by the crisis accounted collectively for 25 percent of world lead consumption and 30 percent of zinc. Earlier, in 1995, Japan and South Korea alone accounted for 22 percent and 21 percent respectively of U.S. lead and zinc ore exports. The emergence of China into the lead/zinc market just prior to the crisis contributed to an international product deficit in that market as a result of work stoppage associated with the crisis. The situation was further aggravated when Canada, a major supplier to the United States, experienced a 3 percent reduction in zinc mine output in 1998. In 2002 zinc prices dropped to a 15-year low on the London Metal Exchange.
In 1999 the Asturiana del Zinc in Spain prepared to increase operations by 37 percent, to become the second largest producer of zinc worldwide. Zinc production in Australia, Canada, China, Mexico, and Peru increased between 2002 and 2003, as did lead production in Australia, China, Peru, and Sweden over the same time period.
"About Doe Run." Doe Run, 2004. Available from http://www.doerun.com/ENGLISH/html/about_doe_run.html .
Plachy, Jozef. "Zinc." Mineral Commodity Summaries. Washington, DC: U.S. Geological Survey, 2002. Available from http://minerals.usgs.gov/minerals .
Smith, Gerald R. "Lead." Mineral Commodity Summaries. Washington, DC: U.S. Geological Survey, 2002. Available from http://minerals.usgs.gov/minerals .