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Mining in Utah: past, present, and future.


Mining has contributed significantly to the social and cultural diversity of Utah. Jobs and riches lured immigrants from southern and eastern Europe and Asia. Mining has been and continues to be a vital component in Utah's economy.

Charles W. Berry, professor of mining engineering at the University of Utah, cited a paper he just completed which estimated about $2 billion is generated by the mining industry. The revenue from metals is about $1.1 billion, and 4/10ths of a billion dollars for industrial minerals and coal represents about a half a billion dollars.

In terms of employment, according to Berry, another important factor in the mining sector is the large multiplier effect. "About 10,000 are employed in the industry. The average wage in the minerals industry is $34,000 per year, while the average overall is $19,000." These high-paying jobs, Berry said, create a lot of ripple benefits to the communities.

"As far as taxes are concerned, the minerals industry and its employees are responsible for about 10 percent of the taxes paid in the state."

Basically seven types of mining activities have played a part in Utah's past and are shaping its present and future. They are gold, silver, copper, coal, uranium, industrial minerals (magnesium, gilsonite, potash, beryllium, etc.), and building materials (sand, clay, cement, stone, gypsum).

Gold Rush

According to Utah State Historical Society historians, the beginnings of commercial mining in Utah are traced to Col. Patrick E. Connor and his troops who arrived in the Salt Lake Valley in October 1862 to establish Fort Douglas during the Civil War. Connor set about exploring and developing the territory's mineral wealth. He sent the men under his command out to prospect, and in 1863 they began locating deposits, staking claims, and establishing mining districts. Placer mining in Bingham Canyon began in 1865, and by 1871 a reported $1 million had been taken from these claims.

Lode mining was more successful. Mercur, Tooele County, began yielding rich production in the 1890s when a cyanide processing plant was built there. Gold Hill on the state's western border and Kimberly in Piute County also enjoyed short and gaudy careers.

Despite the short-lived nature of these early rushes, however, Utah has throughout its history been an important gold producer. In 1944 Utah gold amounted to 34.5 percent of the U.S. production. In 1983, Utah mines produced 238,459 troy ounces of gold valued at over $100 million and 12.2 percent of the nation's output. But most of Utah's gold has not been the primary product of gold mines, but rather the by-product of copper, silver, lead, and zinc operations.

There's Still Gold in the Hills

According to Greg Boyce, director of Government and Public Affairs for Kennecott Corp., 1991 gold production at the Bingham copper mine is forecast at 420,000 ounces of gold.

In addition, the 1990s seem to be developing as a new gold-rush era, due to recent technological developments in processing that allow the recovery of microscopic gold. Berry said "It's very, very fine. The process was developed about 1950, and the present primary gold operations wouldn't have been possible 50 years ago."

Berry also noted the rising price of gold since President Richard Nixon released it for public trading in 1971. It soared from around $50 an ounce to $150, and today it traders for $360 to $400 an ounce. These developments have spurred new activity in primary gold mining.

Kennecott Corp. expects to yield 120,000 ounces from its Barneys Canyon gold mine in the Oquirrhs in 1991. Getty Minerals reopened the Mercur mine with a new processing facility in 1982, and Berry forecast their 1991 mercur output at 120,000 ounces. Mercur was acquired by Getty Minerals in the mid 1980s. "Tenneco Minerals just opened up a gold mine about 40 miles northwest of St. George," he added and forecast this year it would produce 40,000 ounces of gold. These combined operations have made Utah one of the top five producers of gold in the nation today, according to the Utah Mining Association.

Market Factors

Things are looking pretty bright, according to Berry. "There's a lot of exploration going on, and there are a lot of possibilities in the Oquirrhs." The current rush may just be starting, depending on how gold fares on the international commodities market.

Utah Mining Association spokesman Jack Christensen was more cautious. He said the metals industry faces the challenge of increasing costs and environmental regulations. "Some operations will likely to be unable to meet increasing air, water, and ground regulations and could close."

Silver: The Past

Silver was the most important early metal mined in Utah, and it remained so until the early 20th century when copper eclipsed it. Silver was the metal on which family empires, industrial employment, and development of mining areas were based. In 1925, Utah mines produced 32 percent of the nation's silver.

Park City, the silver capital of Utah, had produced 23 millionaires by the early 1890s. David Keith and Thomas Kearns built their fortunes there and together launched the Salt Lake Tribune. Many Salt Lake City institutions were built with silver money, including Judge Memorial High School, McIntyre Building, McCormick Block, Kearns Building, Keith Building, Judge Building, and the public library building that now houses the Hansen Planetarium. Silver also paid for historic Exchange Place, built around 1910. Silver continued to be an important Utah metal unit the late 1970s, when the bottom fell out of the market.

Still Going Strong

Silver is still produced in Utah in large quantities. In 1991 Kennecott forecasts Bingham will produce 3.4 million ounces of silver, and the Mercur gold operations are expected to yield 200,000 ounces as a by-product. Utah's last remaining primary silver mine near Escalante closed a couple of years ago. Silver prices are depressed, and no recovery is in sight.

Factors influencing the demand for silver are numerous, Berry said. First, industry is recovering a lot more silver in recycling processes. Companies such as Kodak, for example, have trimmed the amount of silver necessary for the manufacture of print film, and photo-finishing plants have installed equipment to recover the metal in the development process. Second, miniaturization trends are continuing to reduce the amount of materials used in almost all manufactured products. Finally, silverware, silver tea sets, platters, and candlesticks simply aren't as popular as they once were.

Recovery a Long Way Off

Berry believes any recovery in silver prices is a long way off. "There is still an excess in the national defense stockpiles, and recycling trends will continue. In addition, two huge, huge copper mines are coming on-line in Chile, which are expected to produce large quantities of by-product silver when they get rolling."

Copper Helps Shape Utah

With the development of electrical power, demand for copper increased, and Utah's role became more significant. During the mid-1890s, Thomas Weir and Samuel New-house saw opportunity in Bingham Canyon and began attracting other investors. William Rockefeller and the Guggenheims helped establish the Utah Consolidated Gold Mines in 1896. The development of these mines led to the construction of smelters in Murray, Midvale, and Tooele.

Daniel C. Jackling, a metallurgical engineer, organized the Utah Copper Co. in 1903. He introduced open-pit mining in Utah and demonstrated that the mining of low-grade ores, containing about 2 percent copper, was profitable when mined and processed in large quantities. He also introduced new floatation technologies which proved profitable.

Copper mining in Bingham quickly vanquished all other operations. In 1910, the Guggenheims' Kennecott Copper Corp. merged with the Boston Consolidated Mining Co. and the Utah Copper Co. to form one giant corporation. Mills, power plants, and towns full of immigrant labor grew.

In the 1920s, Kennecott began to build a unique company town - Copperton - for company supervisors and skilled workers. It was to be a showplace for the use of copper, and today the town and it copper homes are on the National Register of Historic Places.

Copper production reached a high point during World War II when the mine is said to have the Allies during the war. By 1963, Bingham had produced approximately eight million tons of metal. An expansion project at that time led to the dismantling of the towns of Bingham and Lark. Garfield was also dismantled, and Copperton homes were sold to private individuals. The days of the company town were over.

The copper industry declined in the 1970s, and in the 1980s Kennecott was sold to BP Minerals America, a British-owned affiliate of the Standard Oil Co. of Ohio. Between 1986 and 1988, Kennecott invested $400 million in a modernization plan when copper prices were at an historic low. By 1989, the company dramatically decreased its number of employees while productivity increased as the new concentrator boosted capacity. In July 1989, RTZ Corp., a British-owned minerals company, acquired BP's interest and renamed the company Kennecott Corp.

Full Steam Ahead

Kennecott is moving full steam ahead in a challenging market. This year the company forecasts 260,000 tons (520 million pounds) of copper production, and it is investing in further expansion (see "Kennecott" on page 63). "Right now," according to Berry, "copper is selling a little bit above $1 a pound, and it'll probably punch through and get below a dollar." He expects that decrease due to two huge copper mines in Chile. The operations are open-pit operations like Kennecott, with a fairly high grade of ore.

Other negative factors influencing the market, said Berry, are miniaturization, recycling, and with the Cold War seemingly at an end, cuts in the defense industry. "The military industries are big users." New communications technology with fiber-optics cable replacing copper cable in telephone systems may also help depress prices. The construction industry, however, looks bright and may keep demand stable.

Coal: Challenges in State History

In the early 1860s, coal was found at Coalville, Summit County, 25 miles from Salt Lake City. The Mormons built a rail line to the deposit which was later purchased by Union Pacific when it entered the territory to construct the transcontinental line.

The Rio Grande began the large-scale development of Utah's coal industry in Carbon and Emery counties. They quickly acquired the Castle Gate and Sunnyside mines and bought the Pleasant Valley Coal Co. and Railroad. They imported labor and built towns.

The Rio Grande's domination of the early Utah coal industry was challenged by the federal government. The railroad needed much more land for an efficient commercial mine. As a result, the Rio Grande and other early entrepreneurs obtained the land they needed by fraud. Federal agents found out about this around 1905, and Justice Department attorneys prepared what they hoped would be the national "landmark" case for coal land fraud based on what they found in Utah. Prosecutions continued from 1906 to 1932 when the Supreme Court heard the last case. Despite the government's efforts, the Rio Grande held onto its most profitable mines.

Independent developers were also beginning to challenge the railroad by the turn of the century. At first, the Rio Grande tried to squeeze them out by denying them railroad cars. Congress once again thwarted the company with the passage of the Hepburn Act of 1906, which forced the railroad to treat its competitors more fairly. As a result, many new mines opened.

A nationwide mining depression began in the 1920s, and it deepened in the 130s as railroads switched to diesel and homeowners to natural gas. This downturn ended only when World War II pushed demands for Utah coal through the ceiling to feed the hungry steel mills. But when peace came, hard times returned and lingered throughout the 1950s and 1960s.

The 1970s brought a turnaround. First, the Clean Air Act of 1971 was passed and improved demand for Utah's low sulfur coal. Next, the Arab oil embargo of 1973-74 proved a boon to the coal market worldwide, and during the 1970s and 1980s energy companies bought several Utah coal mines. Utah Power & Light purchased several properties from the LDS church in the early 1970s as a fuel source for its new Huntington and Hunter generating units, according to Dave Eskelsen, UP&L spokesman. At first the company operated its mines through contractors, Emery Mining being the most well-known. In 1987 the company elected to take over operations of the total coal mines itself because Emery had been unable to obtain enough liability insurance. UP&L is now the largest single coal mining company in the state.

Coal Output Increase

Jahan Banai, senior energy analyst with the Utah Department of Energy, said today there are 13 companies operating 17 coal mines in Utah. That is a 60 percent decrease from 10 years ago in the number of operating mines. This is due, he said, to new mining technologies with much greater efficiencies. Despite mine closures, Utah's coal output has increased. Long-wall mining allows operators to wrest much more tonnage from a single mine. Berry said that in 1980 "productivity in terms of tons per man shift was 15. Today it's 30."

Berry listed UP&L, Pacific Power, and the Intermountain Power Project as the top consumers of Utah coal. Small quantities are shipped overseas, but most is burned in the region and transmitted as electricity. Nevada purchases 2.5 million tons of Utah's 22 million output, according to Banai, and other nearby states are also customers. High transportation costs limit the competitiveness of Utah coal in more distant markets.

Stable Outlook

According to all sources, coal markets are forecast to remain stable for the foreseeable future. Banai described the outlook as great in terms of production. He predicted prices would not decrease any further from the decline since 1982 from $29 per ton to the present $22. "Prices may even increase, but not in real terms. They will still lag behind inflation." He also expects industry employment to remain at the current level of around 2,500.

Eskelsen of UP&L agreed with these forecasts. "Coal will continue to be the fuel source of plants now consuming it. Nuclear power is too expensive, and the regulatory situation is tight." However, while he believes coal will remain the fuel of choice for power plants, Eskelsen doesn't foresee any huge increases in demand. "People are consuming less power now. Conservation has really had an impact. Our feeling is that you won't see the construction of any more large central generating plants in the near future."

Uranium: the Miracle Element

Following World War II and at the beginning of the Cold War with the Soviet Union, uranium was suddenly the most critical material the United States had ever had.

The nation had been caught short-handed during World War II, when the Manhattan Project had to import most of the needed material from the Belgian Congo (Zaire) and a small amount from Canada. The only known domestic source then was in the Four Corners area. In the early 1900s, after Madame Marie Curie isolated pure metal radium from uranium salts for the treatment of cancer, the area experienced a rush and became the prime source of the "miracle element" until World War I.

Vanadium, a waste product of radium mines which was found to enhance the tensile strength, wearability, and elasticity of steel when added to the molten metal with iron, sparked the next boom as fortune-hunters once again descended on red-rock country.

After the development of the atomic bomb became known in 1947, Howard Balsey, of Moab, Utah, and Fendall Sitton, of Dove Creek, Colo., went to Washington to lobby for full-scale uranium exploration on the Colorado Plateau. The Atomic Energy Commission put out the call for prospectors.

The government was desperate for a domestic source of the mineral and willing to pay for it. As the only legal purchaser of the ore, the AEC established minimum prices, guaranteed the rates for each new discovery that led to production of high-grade uranium.

In 1952, Charles Sheen struck the biggest deposit of uranium ore in the country. Within the first six months, his Mi Vida Mine shipped a million dollars worth of ore that was so pure it assayed up to 87 percent uranium.

Steen's strike sparked a rush that rocked the entire region. School teachers, insurance brokers, used-car salesmen, and shoe clerks from around the nation raced to seek their fortunes. By the mid-1950s, almost 600 producers on the plateau were shipping ore. Employment topped 8,000 workers in the mines and mills. Salt Lake City became the locale for the wildest speculative mania in the nation since 1929 - the "investment" in penny uranium stocks from 1953-55. The demand for stock kept brokers at work around the clock. The AEC had turned the tap and caused a flood, but in 1964 it just as abruptly shut it off. After producing almost 9 million tons of ore valued at $250 million, the commission announced the market was saturated. With reserves of 71 million tons, it put federal buying on hold and for the first time allowed private enterprise to purchase the mineral. During the late 1960s, there was a rally as nuclear power plants were being developed, but the furor was never the same. The boom was over.

Slow Future?

The Utah Mining Association says that today there are four uranium mines in the state with little or no production. One operation in San Juan County recently announced it was hiring 10 people and would reopen. However, the U.S. government is the sole purchaser, and an extensive stockpile presently exists.

The nuclear power industry has suffered tremendous setback since the Three Mile Island accident, and no new applications for nuclear power facilities have been filed in the nation.

Berry believes that nuclear power is a "gotta be." The French, he noted, have been safely using the fuel source for years. He blames Chernobyl, the recent Soviet nuclear disaster, on poor equipment, training, and safety standards. He predicts the nation will some day be forced to overcome its "psychological" aversion to nuclear power, and red-rock country may once again see uranium activity.

The Industrial Minerals: Salt

Soon after they arrived in the Salt Lake Valley, Mormon pioneers began obtaining salt from the lake. One group set up a salt boiling apparatus near the south end of the lake; however, the product was unrefined, and superior grades were still imported from England. A permanent salt-boiling operation was established in the spring of 1850 by Charley White. He produced 600 pounds of salt per day in his six 60-gallon kettles and operated until 1861.

The salt industry received a boost in the mid-1860s when silver was discovered in Montana. Used in the recovery process, this and other new markets created commercial demand, and production and refining methods improved.

Through the years there have been many changes in the way salt is produced, from boiling to the pumping of lake water into a series of crystallization ponds where most of the insoluble materials settle out.

Today, according to the Utah Mining Association, "while there are firms that recover only salt, others produce significant quantities as a by-product of recovering other minerals from the lake." Salt is also produced in Moab, as a by-product of Potash operations, and in Redman in central Utah.

Dave Butts, senior consultant for Great Salt Lake Minerals, says salt is a stable and mostly local market that grows very slowly. A harsh winter can increase demand for road deicing, he says, and in order to ease criticism about corrosion "we mix the salt with rust inhibitors and anti-caking agents."

Other Lake Minerals

Sodium sulfate, used in making paper and glass and as a filler in detergents; potassium sulfate, used as a fertilizer; and magnesium chloride, which is converted into the metal magnesium and used in fireworks and alloys, are also recovered from the lake.

Great Salt Lake Minerals, which extracts all of these minerals, began operations in 1970 after being purchased as a subsidiary of Gulf Resources. Butts said the company currently produces one million tons of salt annually; 210,000 tons of potassium sulfate; 25,000 tons of sodium sulfate, with a capacity to produce up to 100,000 tons pending a market; and 10,000 tons of magnesium chloride. The company is the largest producer of solar pond potassium sulfate in the world and "low energy costs make us competitive on the world market." The company exports much of its production to China, Japan, and other Pacific Rim countries. For the future, Butts said the company is planning to increase its potassium sulfate production to 350,000 tons per year.


Gilsonite was the name given to the lightweight, glossy black bituminous mineral found in the Uinta Basin south of Vernal and Roosevelt. Since 1888, it has been mined commercially in that area and nowhere else in the world. It is used in ink and certain resins, and work is being done to develop use in the asphalt sealant market.


Beryllium is used as an alloy to enhance electrical conductivity in other metals. "The deposit we have here is rather unique in the world," Berry said. "This is a primary beryllium source, while most of the other beryllium in the world is obtained as a by-product of recycling." The mine is located on Utah's western border near Delta, which is the location of a processing plant. Berry said the market is stable and reserves are great.

Free-lancer Rose Gilchrist is based in Salt Lake City.

PHOTO : Loaded cars of uranium ore are brought out of a mine in the Red Canyon district of southern Utah.

PHOTO : In 1982, cars coming out of upper Bingham were pulled up by mules, then coated down.
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Author:Gilchrist, Rose
Publication:Utah Business
Date:Sep 1, 1991
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