California Leads the Nation in Production of Non-Fuel Minerals for Third Straight Year; State's Leading Industrial Mineral is Construction Sand and Gravel.

News Editors

SACRAMENTO--(BUSINESS WIRE)--June 18, 2002

Color graph of mineral production available "What's New" section

of www.conservation.ca.gov

California led the nation in the production of non-fuel minerals for the third consecutive year, according to statistics released jointly by the Department of Conservation's California Geological Survey and the U.S. Geological Survey.

The state's 1,000 active mines, which employ more than 9,000 people, produced minerals valued at $3.27 billion in 2001, slightly down from 2000's total of $3.30 billion. California's production accounted for about 8.4 percent of the nation's total. Thirty-two industrial minerals made up 96 percent of the total value; gold and silver accounted for four percent.

Construction sand and gravel was the state's leading industrial mineral with a total value of $953 million, a one percent increase from 2000. Vulcan Materials Company/Western Division's Boulevard operation in Los Angeles County was the nation's largest sand and gravel operation.

Portland cement was the state's second-largest industrial mineral commodity. The 11.2 million tons produced was valued at $768 million. Boron was the No. 3 mineral with a value of $557 million, followed by crushed stone with a value of $380 million.

California was the nation's only producer of boron, rare earth ore and asbestos, which in some forms can cause cancer but nonetheless is indispensable in the making of heat-resistant fabrics, such as those used by firefighters. The state continued to lead the nation in the production of sand and gravel, diatomite, and natural sodium sulfate. California ranked second in the nation in the production of Portland cement and fourth in gold production behind Nevada, Utah and Alaska.

Other minerals produced in California include several types of clay, crushed stone, gemstones, gypsum, iron ore, lime, magnesium compounds, salt, silver, soda ash, sodium bicarbonate and talc.

Some 2001 mining highlights:

-- Gold production totaled 449,200 troy ounces (slightly larger than a standard ounce and only used for precious metals), valued at $122.3 million. That's a 19 percent decrease in production and 21 percent decrease in value. In the next 2-3 years, California's gold production is expected to drop by about 70 percent. Many facilities are closing for a variety of reasons, mainly economic. Some of the state's largest gold mines are reaching the end of their economic lifespan as the ore bodies no longer contain sufficient gold content for mining to be profitable. The price of gold is relatively low, ranging from $270 per ounce a year ago to a recent high of $310 per ounce. Were the price to rise significantly to a sustainable level, interest in exploration and mining might also increase, and this would likely result in an increase in future gold production.

-- The Shasta County Planning Commission approved an expansion for Lehigh Southwest Cement Company's Gray Rock limestone quarry that allows an additional 48 million tons of high-quality limestone to be mined over a 50-year period from the existing site that has operated since 1960.

-- Teichert Aggregates submitted its final Environmental Impact Report for a 720-acre aggregate site located about four miles north of the Sacramento suburb of Lincoln in Placer County. The project calls for the extraction of 37 million tons of construction sand and gravel and 122 million tons of crushed granite aggregate over 85 years.

-- Mining began at Calaveras Materials Inc.'s Woolstenhulme Ranch sand and gravel mine in Merced County. About 15 million tons of aggregate will be mined at the site over the next 25-30 years.

-- CEMEX Inc.'s newly acquired Victorville cement plant (San Bernardino County) completed a one-million-ton-per-year expansion, increasing the plant capacity to 3.2 million tons per year.

-- After 75 years of operation, Hansen Aggregates Mid Pacific, Inc.'s Radum operation near Pleasanton (Alameda County) ceased mining in November 2001. It was the largest alluvial sand and gravel producer in Northern California, accounting for roughly 25 percent of the aggregate used in the South San Francisco Bay area. Hansen is making up a portion of the deficit by shipping aggregate about 1,000 miles from British Columbia to the Bay area. Aggregate is also shipped by bulk cargo ships from Canada to San Diego and Long Beach.

-- California's fourth-largest gold producer, Viceroy Gold's and MK Gold's Castle Mountain Mine in San Bernardino County, ceased mining. The mine has produced about 1.15 million troy ounces in 10 years of operation. The operators will continue to extract gold from ore that has already been mined until 2004.

-- Barrick Gold Corporation acquired Homestake Mining Company for $2.2 billion in December 2001. Homestake owned the McLaughlin Mine (in Napa, Lake and Yolo counties), California's largest producer of gold. Mining operations ceased at McLaughlin in 1996, but gold processing will continue through spring.

-- The California Geological Survey completed a Mineral Land Classification report in Lassen County and continues similar projects in Solano, Napa, Sonoma, Marin, San Bernardino and Riverside counties. The CGS' Mineral Land Classification Project has classified a little over one-third of the state for mineral resources, a service that helps local governments in land-use planning and mineral resource conservation.