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The nonfuel minerals industry in Montana.

The Nonfuel Minerals Industry in Montana

The mining industry in Montana as a whole in quite large and contains several distinct subsectors. It includes mining metals such as gold, silver, copper, and lead, and a wide array of nonmetal minerals such as vermiculite, talc, bentonite, barite, and common construction sand and gravel. It also includes mining fuels, such as coal. Extraction of fuels such as oil and gas also is generally considered part of the mining industry. This discussion focuses on mining Montana's metals and other nonfuel minerals.

After more than a decade of general decline, the state's nonfuel mineral mining industry is in the midst of an economic resurgence. As indicated in figure 1, the value of all nonfuel minerals produced has been increasing since hitting a low in 1985 of $212 million (real dollars). After a general turnaround in 1986, the total value of production has increased by about 50 percent in each of the last two years, reaching $553 million in 1988. With the exception of only one year, this is the highest level achieved by the industry since 1970.

The recent resurgence is largely attributable to improving prices for gold, copper, and other metals; increasing gold and silver production; resumption and expansion of copper-molybdenum mining at Butte; and commencement of several new mining operations including the Stillwater platinum-palladium complex.


Composition of


While the overall value of nonfuel minerals production is rebounding to levels similar to those of the early 1970s, the composition of production has changed considerably. As indicated in figure 2, copper production once dominated the industry, accounting for over 70 percent of the value of all nonfuel minerals produced in 1970. By 1980, copper's share of production value had dropped to 30 percent and, by 1985, had sunk to 11 percent, largely as a result of suspension of operations by the Anaconda Company in Butte.

Although recent data is withheld for proprietary reasons, copper production and value has rebounded with higher prices and resumption of mining in Butte by Montana Resources (MRI).

The role of gold and silver production in the industry has grown considerably over time. While only a small fraction of the industry during much of the 1970s, the value of gold and silver production shot up from $80 million in 1985 to $184 million in 1988 and now accounts for one-third of the industry's production value.

Metal mining as a whole has accounted for about 60 percent of the industry's production value during the 1980s. However, with the recent surge in metal mining, it now accounts for over 75 percent of the industry.

In 1985, Montana ranked thirty-second nationally in the value of all nonfuel minerals produced. However, the industry's resurgence pushed the state to twenty-fifth in 1987 and higher in 1988. The state ranks third in silver production and fourth in both gold and copper production.

Contribution to


Economic Base

Between the mid-1970s and early 1980s, employment in nonfuel mineral mining varied between 3,100 and 3,600 workers, including both wage and salary employees and self-employed persons. Mining employment declined to about 2,500 workers in 1985 before rebounding to over 3,200 workers in 1987 (largely as a result of a 65 percent increase in metal mining and exploration employment).

Employment in the refining of nonfuel minerals produced by Montana mines (which excludes those employed by the aluminum plant in Columbia Falls) fell from over 1,300 workers in 1980 to under 500 in 1982. Most of the loss resulted from the closing of two copper refining facilities during the period. Since then, employment in this "value-added" industry segment has generally stabilized.

Labor income or earnings by hired and self-employed workers in the industry has varied with these changes in employment. As shown in figure 3, labor income by the nonfuel minerals industry as a whole fell from $188 million in 1976 to $148 million in 1981, with declines in primary metals refining. Labor income fell to $78 million in 1985 largely as a result of declines in metal mining. Gains in metal mining labor income of $23 million since then pushed total labor income for the industry to $96 million in 1987.

Table 2 highlights how these changes affected wage and salary employees only in various segments of the industry. In 1987, the typical wage and salary worker employed in mining earned $27,000 and $28,000 a year. Annual pay for workers in metal refining averaged $21,500.

The nonfuel mineral industry's share of Montana's economic base has been steadily shrinking over time. Figure 4 relates labor income in the nonfuel minerals industry to total labor income by all of Montana's nonfarm basic industries. The nonfuel mineral industry's share of the economic base fell from 12 percent in 1976 to 9 percent in 1981 and to 7 percent in 1987.

How far the industry's current resurgence may go in reversing this trend and re-establishing nonfuel mineral mining and production in the state's economy remains to be seen.
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Author:Swanson, Larry D.
Publication:Montana Business Quarterly
Date:Mar 22, 1989
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