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By D. E. Sullivan

The Minerals Availability Program of the Bureau of Mines conducts cost evaluations of current and potential mineral operations in the United States and foreign countries. The International Mining Cost Indexation System (IMCI) allows data of different time periods within a country to be updated to a common base year for analytical purposes. The IMCI comprises 12 factor cost indexes and an exchange rate series for 96 market economy countries, denominated in both local and U.S. currency. The IMCI for each country contains 12 time series indexes that measure the average annual rate of change in the cost of factor inputs to the mining industry within that country. Mining industry factor cost indexes include wages, plant and equipment, construction and mining materials, power and transportation, and other measures considered to comprise the majority of capital and operating costs. Cost data or proxies are collected in local currency. Index series within each country are constructed separately and indexed on a 1975 base year. The local currency index is converted to a U.S.-dollar-based currency index using an exchange ratio.

Jan 1, 1987

The Bureau of Mines human factors research program is directed toward reducing accidents and improving the overall efficiency of the person-machine environment interface found in surface and underground mines. The focus of the hum factors program therefore, is to insure that sound knowledge is available concerning human capabilities and limitations, and that this knowledge is applied to the design, of mining equipment, work tasks, and management procedures. The papers presented in these proceedings summarize some of the recent Bureau research in hum factors. The papers focus on two broad areas, human resource issues and human engineering of equipment, tools, and work procedures found in mines.

Jan 1, 1987

The U.S. economy continued to expand during 1986, although at the slowest pace since 1982 when the current business expansion began. Real gross national product (GNP) grew about 2.6%, slightly below 1985 growth but significantly below that of 1984. The continuing expansion was fueled predominantly by rising personal consumption expenditures as well as growing government purchases of goods and services. Fixed investment, although positive, failed to grow at the rate of the overall economy. The trade deficit, which increased more than 30% over the record 1985 level, continued to depress economic growth despite significant declines in the price of petroleum and the value of the dollar. On a more positive note, domestic employment continued to grow--increasing over 2 million from the 1985 level--and inflation and interest rates declined. The unemployment rate dropped slightly to 7.0%. Of direct importance to the minerals-producing industries, expenditures for consumer and producer durables as well as investment in residential construction each grew faster than the overall economy, but investment in nonresidential structures fell more than 10% from the 1985 level. The low level of real capital spending declined about 3% in 1986, following strong gains in 1985 and in 1984. Capital expenditures for new plant and equipment bottomed out in the second quarter and expanded in the third and fourth quarters. The decline in the first half of the year was partially attributed to uncertainty arising from the then-proposed tax bill. Also, there was little impetus for corporations to invest in new capacity since factories were operating at less than 80% of capacity during most of the year, in part because of continued competition from imports.

Jan 1, 1987

The goal of the Bureau of Mines diesel engine research program is to reduce exhaust emissions and minimize the risk of fires and explosions caused by the use of diesel- powered equipment in underground mines. This program has led to a fundamental understanding of the problems and to solutions that allow diesel equipment to be used safely and effectively. This volume contains reports of the presentations made at the Bureau Technology Transfer Seminar on Diesels in Underground &fines given in Louisville, KY, and Denver, CO, on April 21 and April 23, 1987. It also contains three reports of related research, not presented at the seminar, which highlight the significant achievements of a joint US.-Canadian research program on diesel emission control technology for underground mines. Topics covered in this volume include discussions of industrial hygiene problems associated with the use of diesels, accident statistics, fire and explosion control systems, measurement of diesel pollutants, emission control techniques including engine maintenance, fuel additives, diesel particulate filters, and ventilation of diesel sections. An alternative to diesel power, the hydrogen-powered mine vehicle, is also described.

Jan 1, 1987

The Bureau of Mines, through its Minerals Availability Program (MAP), investigates the mineral supply potential of the United States and market economy countries (MEC's) for a number of minerals considered essential to the U.S. industrial base. Major activities include identification of important mines and mineral deposits, estimation of their mineral resources and production costs, and availability and sensitivity analyses. Products include data print-outs of geological and engineering information, discounted- cash-flow rate of return (DCFROR) analyses of individual mining operations, commodity availability appraisals, and analytic services to Government agencies. These products are used in assessing the mineral supply position of the United States: in setting priorities for research aimed at reducing production costs and minimizing adverse environ- mental impacts and regulatory compliance costs of mining and mineral processing operations; and in formulating and evaluating Government policies that affect minerals. Bureau MAP data and analyses have been provided to the executive and legislative branches to aid in consideration of trade, tax, and stockpile policy issues. A study of the economic potential of selected seabed mineral resources supports the regulatory responsibilities of the Department of the Interior in the U.S. Exclusive Economic Zone. Analytic studies of mineral project viability, industry competitiveness, and import dependencies were also undertaken for, or in cooperation with, U.S. and foreign government agencies, industry and trade organizations, and international lending institutions.

Jan 1, 1987

This Bureau of Mines report and its companion report (Information Circular 9143) have been prepared to assist in the preparation of prefeasibility type estimates for capital and operating costs of mining of various types of mineral occurrences using current technology. The handbook provides a convenient costing procedure based on the summation of the casts for the unit processes required in any particular mining or mineral processing operation. The costing handbook consists of a series of costing sections, each corresponding to a specific mining unit process. Contained within each section is the methodology to estimate either the capital or operating cost for that unit process. The unit process sections may be used to generate, in January 1984 dollars, costs through the use of either costing curves or formulae representing the prevailing technology. Coverage for surface mining includes dredging, quarrying, strip mining, and open pit mining. The underground mining includes individual development sections for drifting, raising, shaft sinking, stope development, various mining methods, underground mine haulage, general plant, and underground mine administrative cost. This system can be used for estimating cost data for an undeveloped deposit or for checking or verifying mining costs from a developed deposit, with a minimum amount of background information.

Jan 1, 1987

The long-term outlook Tor Australla's traditional mining products is for flat demand and continuing low prices. This has come about because of three far-reaching changes since earlier boom days: 1. Continuing declines in intensity of usage of basic mine products; 2. The failure of newer western and third world developing countries to realise growth expectations; and 3. Continued production pressure from third world countries (and first-world primary producers) in an effort to earn foreign exchange and rectify trade balances. These trends have led to a general situation of excess supply and weak demand. In this environment, the prerequisites for survival in the mining sector are first-class mines, modern and efficient production methods, low unit costs, aggressive marketing, and products with reasonable operating margins. Many of Australia's mines meet these prerequisites. Following the A$ depreciation and widespread unit cost reductions, most of these mines will be moderately profitable at current depressed commodity prices. They are well placed to benefit from price rises if these eventuate. A new generation of mines is concentrating on a more profitable product range (gold, diamonds, uranium, mineral sands). Australia's balance of trade remains firmly dependent on the primary mining and agricultural industries (Fig. 1). Despite optimistic talk of high-tech developments, tourism and a resurgence of manufacturing, these will remain a small component of Australia's export structure.

Jan 1, 1987

Jan 1, 1987

By G. T. Lineberry

There is a critical need for effective instructional materials at the university level and for an upgrading of mine safety and health in the mining engineering curriculum. A fundamental approach to mine safety and health is recast into the familiar 3 E's: engineering, education, and enforcement, in that order. Each is briefly reviewed and their interdependence emphasized. A unique philosophy for successfully integrating safety and health principles into the mining engineering curriculum is offered. The concept of textbook ?tailoring? is discussed and defended, permitting rapid assemblage and synthesis of existing educational materials. Final recommendations are made for a u, comprehensive approach to mine safety and health education in the undergraduate curriculum.

Jan 1, 1987

By Selby J

South Australia's economic development has relied heavily on the mineral industry. In the late 1840s the rich copper deposits at Kapunda and Burra saved the Colony's economy when South Australia became a world copper producer. Copper lodes developed at Moonta-Wallaroo during the 1860s brought further prosperity when mining activities at Kapunda and Burra were in decline. In addition to those large mines there were many smaller workings scattered through the Flinders and Mount Lofty Ranges producing copper, gold, silver, lead and zinc. Most of the mines of this period were worked by Cornish immigrants who brought their own technology and mining methods with them. These people have left a cultural legacy unique in Aus- tralia. In this Jubilee 150 year (1986) the Department of Mines and Energy, working in conjunction with the Department of Environment and Planning, is helping to preserve and interpret selected historic mining sites, most of which have been neglected since their closure. This work is designed to draw people's interest to mining history by providing interpreted sites for them to visit and to demon- strate the importance of the mining industry in South Australia's cultural and economic develop- Ment.

Jan 1, 1987

By Tim Neil, O&apos

Acid rain legislation, the new tax package, excess coal capacity, the effects of low oil prices, how to increase coal exports: These were among the items discussed at the May 4-7, American Mining Congress coal convention in Pittsburgh. Some 2000 people attended the convention, which also offered 15 technical sessions. As always, the state of the domestic coal industry might be characterized as "long-term promise, short-term problems." And one of these problems is acid rain. Acid rain The proposed acid rain legislation in Congress could be the most costly piece of environmental legislation ever written. In its present form, the measure could cost the nation up to $110 billion over the next 15 years. Rep. Henry Waxman's (D-CA) bill, HR 4567, would mandate large reductions in sulfur dioxide emissions from coal-fired power plants. The bill has more than 150 Republican and Democratic cosponsors. Ed Addison is president of the Southern Co., one of the nation's largest utilities and users of domestic coal. Addison noted that America's electric utility industry buys and uses nearly 85% of the coal consumed in this country. He said Waxman's bill would drive up prices of low-sulfur coal, raise electric rates, and force miners out of work in high-sulfur coal regions. In repeating a standard coal industry response, Addison said the Clean Air Act is doing the job. In recent years, while coal use has gone up, S02 emissions have gone down. Current air pollution standards are producing cleaner air, he said. Despite concern over HR 4567, the bill's future is uncertain. Several coal industry executives and analysts predict the bill will die under weight of opposition from coal, utility, and steel interests. But the acid rain issue is gaining momentum. Future legislation of some kind is likely. Meanwhile, research continues to develop clean coal technology to deal with the S02 problem. Commercialization of these front-end technologies currently lags public sentiment for acid rain legislation. Ground water runoff and contamination is another area where future legislation would seem likely. Already, one bill has been introduced in Congress. A second is being drafted. The impact of such legislation may be significant according to Bruce Leavitt, a hydrogeologist with Consolidation Coal Co. He said if current proposals are adopted, there will be more federal, state, and local government involvement in ground water regulation. In any event, the coal industry can expect to see more emphasis on preventing acid mine drainage and on water replacement, according to Leavitt. He urged those in the coal industry to present information about mining and ground water. That is needed to prevent misdirected state and federal programs, he said. Another coal industry concern is excess capacity. The industry has the mines, equipment, and employees to produce 15% more coal than at present. Problem is, the markets are not there. Slower-than-predicted growth in electric utility coal use has kept sales sluggish. There are also tax uncertainties. Congress is considering repeal of the investment tax credit and elimination of black lung payments and excise taxes as deductible expenses. One analyst estimates the coal industry would lose $1.1 billion in five years, if the changes are approved. In addition, there are the usual concerns about excessive governmental regulations involving safety and environmental matters. Bill Kegel, for example, said these regulations mean extra costs and delays in developing mines. Kegel is president and chief executive officer of the Rochester & Pittsburgh Coal Co. More than half the electrical power in the US is generated by coal-fired plants. That percentage could slip by a couple of points as nuclear generators come on-line the next few years. About 1990, though, we will see the end of US nuclear plant construction. No new nuclear plants have been scheduled since 1978. So any growth in electric power use should benefit the coal industry. BethEnergy - High Power Mountain During 1985, BethEnergy - a Bethlehem Steel Corp. - subsidiary developed High Power Mountain, a 1.8-Mt/a (2-million-stpy) surface mine in West Virginia. Construction saw movement of more than 3 hm3 (4 million cu yds) of earth. A computerized 544 t/h (600 stph) heavy media cyclone prep plant and a 3.6-kt/h (4000-stph) railroad loadout facility were built in six months. And a 5.6-km (3.5-mile) railroad spur and loop bridging a major highway were constructed. Larry Willison of BethEnergy noted the project's ambitious construction schedule. It was forced by the need for the project to be market driven and - lacking available capital - externally financed. BethEnergy did several things before obtaining with Detroit Edison a market for 0.9 Mt/a (1 million stpy) of coal. Willison said his company prospected and proved the eastern half of its 8-km2

Jan 7, 1986

By Patricia Petty

If enthusiasm is a requirement, the coordinator of the Total Concept program is a dynamic, exciting leader with a lot of potential to keep the program a vital and progressive effort for many years. Art Meyer is entering his third year as the leader of the Total Concept. He is using his years of experience in the industry to emphasize the basics required for the course, and has also instituted new programs. Meyer began his career, after graduation from CSM as geological engineer in 1950, with St. Joe Lead. He held other responsible positions with Amax and Rocky Mountain Energy. He can answer any questions that may crop up or find the right resource person for those questions. Additions to the 18-year-old curriculum instituted since Meyer became coordinator are the study of industrial minerals and strategic minerals. The industrial minerals portion of the course includes visits to a major sand and gravel operation, in addition to lectures on the subject. Much of the strategic minerals requires study and lectures, since Colorado is not a big production state in these commodities. How does the director arrive at new additions or deletions to the program? "It's very simple," he says. "We listen to questions posed by the students, recommendations by industry people who know what is important, and feed-back from course alumni." Alumni feedback from this course has been extremely gratifying, according to Meyer. Other ideas are constantly surfacing, ideas that will be implemented as time and resources permit. One of the most gratifying results of the Total Concept program from an alumnus was the development of a complete teacher and student package by John Christiansen, a teacher at Cherry Creek High School near Denver. The course so excited Christiansen that he envi¬sioned an energy and minerals course to fill a perceived gap in science education on the high school level. The draft package was so attractive that it was sponsored and the publication costs guaranteed by the Society of Mining Engineers. Today, under the leadership of the Mineral Information Institute, the package is in use in several states and has gained enthusiastic acceptance. Other alumni have launched their efforts to broaden the scope of the existing science education by instituting courses or special seminars. One recent alumnus, Dick Will, class of 1984, who was sponsored by the Denver Mining Club, is conducting a science seminar based on his experiences with the Total Concept program. Meyer will be speaking at this seminar, as well as other industry speakers from the SME GEM Committee Speaker's Bureau. Jane Dianich, another alumna, brought her students at Kent Country Day school, also near Denver, into the mainstream of resource education by taking them on abbreviated field trips similar to those she experienced while in the program. She also has been a vocal supporter of the organization and available to speak to other teachers on the value of the experience. George Wright, of the Lake School and a second sponsoree of the Denver Mining Club, admits he came into the program because the six credit hours given toward his continuing education requirement were attractive. He then stayed on to become an ardent advocate of the mining industry. In his own words, "I'm a convert." Wright has developed a slide presentation and has lectured to teachers and students as well as presenting his views to the Denver Mining Club. He has also indicated a willingness to participate with other organizations who need speakers. The value of these speakers and teachers is obvious, according to Meyer. "They represent a respected segment of the public and are not too `tainted' by association with an industry that is too often under criticism from various groups. They represent, in effect, a citizen's advocacy of the industry, which is an invaluable asset to us all." One of Meyer's concerns about the program is that the out-of-state student rate attendance is declining. He is hoping that more AIME sections around the country will become involved in the scholarship program of the Total Concept. Total cost is about $1200 per student. "The rewards to their sections could be tremendous, with the same kind of participation we get here with speakers, citizen advocates, and interested persons," he said. Teachers say that the course improves their teaching and knowledge in a number of subjects including biology, history, economics, career planning, environmental data, science, math, geography, physics, and chemistry. The recent interest in hazardous waste management has sharpened the desire to learn more about this. And Meyer foresees another segment of the course to emphasize this subject. "One of the most valuable resources we have is the field trip program. The course would probably be meaningless without this opportunity to get out into the field where these folks can see what actually happens. George Wright, for example, was amazed at the very small amount of area actually involved in the mining operation - something contrary to what he had heard in the past." The 45 students are taken by van on eight trips, one each week, and the long trip to Colorado's Western Slope. During this long adventure, the students visit underground mines, including CSM's Edgar, open-cut and underground coal mines, precious metals mines, and oil shale properties. They also have opportunities to meet with mine personnel at each of these stops. These field trips fill another function. Living together and exchanging ideas helps the teachers come up with new concepts for the classroom work - expanding their horizons. "As long as we have a mining industry, this effort will continue to grow," Meyer said, "and will fulfill a need within the public education and public relations area of the industry. We need the support. I have dozens of comments from teachers who attest to the value of this program. They understand. The mining industry must continue to do its part."

Jan 3, 1986

By Charles Morris, Patricia Petty

Charles Morris Minerals engineers have a new opportunity to shape their industry's future. They can help secondary school teachers in their own communities improve their scientific knowledge and thus be better prepared to teach their students. Local sections of AIME and other groups are being asked to sponsor expense-aid scholarships for teachers who complete the summer field course A Total Concept of the Mining Industry. Now in its 18th year, the six-week summer course is presented by the Colorado Mining Association Education Foundation Inc., in cooperation with the Colorado School of Mines Office of Special Programs Continuing Education. The course will be held June 9 through July 18. "In the past, we have been successful in soliciting support for teacher-scholars from many organizations, corporations, and individuals within the industry," said John Robertson, Jr., Foundation chairman. "Now we hope to enlist the help of engineers at the grass roots level in identifying qualified local teachers and giving them what it takes to participate in this continuing education program." Robertson said the course provides secondary school teachers, counselors, and administrators with a working knowledge of the mining and metallurgical industries. It also helps teachers recognize career opportunities for their students. "With the industry facing a challenging new era, we must have teachers who can relate the excitement of this challenge to their students. They will inspire future generations of resource finders, developers, and managers," he said. More than 670 teachers in 27 states, including 45 graduates of the "class of '85" have completed the course and gained six semester hours of graduate credit. The Foundation's Planning and Curriculum Committee meets regularly to develop the course outline and recruit the faculty. Lecturers are selected on their ability to communicate with people not familiar with the industry. Last year, 67 faculty members came at their own time and expense to discuss their specialties, ranging from exploration to marketing. Normally, teachers receive scholarship aid in the form of tuition and fees, and transportation and meals while on field trips. Expense-aid scholarships cover room and board on campus for those beyond the Denver-Metro area, and travel to and from Golden. "We hope to broaden the appeal and the geographical range of the program," Robertson said. Inspiration for the field summer program for teachers came in 1967 from a mining engineer, the late C.L. (Lindy) Barker, a 1931 graduate of the Colorado School of Mines. Barker and a group of concerned individuals convinced the Colorado Mining Association to accept sponsorship of the course in 1968. The Colorado School of Mines and its Office of Special Programs and Continuing Education agreed to be a co-sponsor to give it accreditation and provide physical facilities and coordination. The first course was held in 1969. Operating funds were solicited from industry to pay tuition, course material, the cost of a course coordinator, field trips, and overhead. Through the years, personal contact by an industry representative has been the most effective teacher recruiting tool. Through expense-aid scholarships provided by local sections of professional organizations, such as AIME, as well as CSM alumni and other friends, there will now be a greater incentive for more teachers to get to know the minerals industry and pass that knowledge on in the classroom.

Jan 3, 1986

By Federick W. Miller

The Bureau of Mines has investigated the availability of columbium from 19 deposits (3 producers and 16 nonproducers) in 7 market economy countries (MEC?s). Brazil has the largest recoverable columbium resource, posessing approximately 2.39 million metric tons Wmt), or 69 pet of the MEC total (3.47 Mmt). The Western Hemisphere countries of Brazil, Canada and the United States contain 3.14 Mrnt of recoverable columbium or 90 pnt of the MEC total. Columbium recovered as a byproduct of tin mining is not included as part of MEC resources in this study. Currently producing mines are Araxa and Catalao in Brazil, and Niobec in Canada, These three mines have 2.42 Mmt of recoverable resources or approximately 69 pct of the MEC total. It is estimated that these mines, operating at full capacity, could satisfy cumulative MEC demand (based on an annual growth rate of 5.1 pct) for the next 20 yr. The United States is totally dependent upon foreign sources for its columbium supply. The majority of U.S. columbium is imported from Brazil in the form of steelmaking- grade ferrocolumbium. Canada has been the sole source of pyrochlore concentrates since Brazil discontinued exports in 1981. The United States also imports small (but important) quantities of columbium as columbite concentrates from Nigeria and Brazil, as columbite contained in tin slags from Thailand and Malaysia, and as synthetic concentrates from the Federal Republic of Germany.

Jan 1, 1986

Possible consequences of continuing internal political unrest and the imposition of foreign sanctions raise concerns about the traditional reliability of the Republic of South Africa as a major world supplier of important minerals. A recent Bureau of Mines' technical report (Open File Report 76-86) examined the impacts of temporary peacetime disruption scenarios for six key materials and mitigating options. Because of South Africa's dominant producer position for these minerals (except for cobalt), expansion of primary production capacity outside of South Africa is not a short term mitigative option. However, prospects of a longer term disruption would likely spur investment in capacity expansion in alternative Market Economy Country supply sources. This report identifies the resources, production costs, and burdens that would be placed on alternative MEC producers of chromium, cobalt, gold, manganese, and platinum-group minerals if South Africa's production were subject to a long term; disruption. When long term supplies from South African deposits are discounted, more than a few years reserves were found only for cobalt and manganese. Even for these two minerals, higher sustained prices would be required to increase manganese production capacity and to support means of cobalt transportation not through South Africa.

Jan 1, 1986

By Keith L. Harris

Buoyed primarily by growing consumer spending, the economy rebounded from a weak second quarter. According to preliminary estimates released by the Department of Commerce, real gross national product (GNP) grew $2 1.9 billion during the third quarter, producing a seasonally adjusted annual growth rate of 2.4%, compared with a rate of 0.6% in the second quarter of 1986 and 4.1% for the third quarter of 1985 (table 1). Third-quarter real personal consumption expenditures and Government purchases of goods and services rose $42 billion and $7 billion, respectively, but those gains were partially offset by the continuing decline of gross private domestic investment, off $16 billion, and the growing trade deficit, up $11 billion. Three quarters of the growth in consumer spending occurred in the durable goods sector as consumers responded to discounted financing offered by automobile manufacturers attempting to lower inventories of 1986 vehicles, Increased purchases of other durable goods, such as furniture and home furnishings, also contributed to the strength of the durable goods sector. The success of the automobile inventory reduction program as well as weak factory output led to a $20 billion decline in inventory growth. Investment for housing and producers' durable equipment expanded, however, and mitigated some of the impact of slower inventory depending on gross private domestic investment, Capital spending for nonresidential structures declined for the third consecutive quarter. The declining capital spending and the growing trade deficit continued to be significant and interrelated problems for the economy. Real capital spending for new plants and equipment during 1986 is expected to decline 2.5% after rising 8.7% in 1985 and 15.8% in 1984 (table 2). It is likely that capital expenditures bottomed out in the second quarter and that they will expand in the third and fourth quarters. The first-half decline was partially attributed to uncertainty arising from the pending tax- overhaul bill. Furthermore, there is little impetus for corporations to invest in new capacity since factories are operating at less than 80% of capacity (table 3) largely because of the continuing growth of imports. The growth rate of the trade deficit dropped sharply in the third quarter to less than half that of the previous quarter. Low oil prices, declining auto- mobile and steel imports, and increased exports of agricultural goods contributed to this decline. The continued low growth of the economy caused the Federal Reserve System to reduce the discount rate for the fourth time this year (in late August), drop ping it to 5,596, the lowest level in about 9 years. Inflation, as measured by the fixed- weighted GNP price Index, continues to remain low, but rose from the revised second-quarter level of 1.7% to 2.596, mostly because of rising food costs.

Jan 1, 1986

By C. M. Paiencia

The Bureau of Mines studied the potential availability of primary antimony (Sb) from demonstrated resources in 21 mines and deposits in market economy countries (MEC's). Twelve of these properties were evaluated as producers and nine as non- producers. The 21 studied properties contain 499,600 mt Sb as demonstrated resources, of which 304,000 mt is recoverable as antimony metal; another 973,500 mt Sb is contained in inferred resources. Recoverable antimony from demonstrated U.S. deposits is only 10,700 mt, just 3.5 pct of the MEC total. Domestic production of primary antimony from operating mines has averaged only 561 mt/yr over the 10-yr period 1975-84. This represents just over 5 pct of total U.S. consumption of primary antimony, which averaged 11,081 mt/yr during the same period. The United States will thus continue to rely on imported ores andlor concentrates, antimony oxides, and metal to satisfy domestic industrial requirements. At production costs up to $1.15/lb Sb, 110,000 mt of refined antimony is potentially available from 10 of the 21 studied properties. At $2/lb, 294,000 mt Sb is available, and at $3/lb, the total rises to 304,000 mt Sb available from all evaluated producers of refined antimony.

Jan 1, 1986

It is a pleasure to submit to the National Critical Materials Council (Council) some of my thoughts concerning the important tasks which lie before you. It long has been my belief that America's economic health and national security may depend to a substantial degree on whether we have available to us an adequate supply of critical and strategic materials at reasonable cost. To the extent the Council can contribute to the identification and implementation of wise public policies which facilitate the achievement of that goal, we and our children should be grateful. Even before assuming office, President Reagan warned of the danger of undue dependence on imported materials essential to the Nation's defense and economic well-being. After his election, he appointed a transition task force on strategic and critical materials, and he later directed the Cabinet Council on Natural Resources and Environment to prepare .a National Materials and Minerals Program Plan and Report to Congress, which he forwarded to the Congress in April 1982. In 1984, my predecessor, Secretary Clark, established the National Strategic Materials and Minerals Program Advisory Committee, popularly known as the "Mott Committee" because of its distinguished chairman, retired Admiral William C. Mott.

Jan 1, 1986

By Keith L. Harris

The economy continued to expand during the second quarter, but at a much slower pace than expected. According to latest estimates released by the Department of Commerce, the real gross national product (GNP) grew at a seasonally adjusted annual rate of 0.6% compared with a revised growth rate of 3.8%2 for the first quarter of 1986 and 2.3% for the second quarter of 1985 (table 1). The strong growth of personal consumption expenditures, Government purchases of goods and services, and residential investment was moderated by the growing trade deficit, declining investment in business inventories, and the continuing lag in nonresidential investment. Much of the decreased capital spending for the nonresidential sector for the first and second quarters resulted from reduced petroleum exploration and drilling in response to low petroleum prices. Capital spending and trade continue to be areas of weakness for the economy. Real new plant and equipment expenditures for 1986 are estimated to be 1.3% below those of 1985 (table 2). Real net exports of goods and services decreased $24.6 billion, as exports declined 5.6% and imports grew 16.5%. About two-thirds of the $19.3 billion increase in imports was in petroleum and petroleum products, which, because of their lower prices, should help the economy in the future. In response to the sluggishness of the economy, the Federal Reserve System reduced its discount rate from 6.5% to 6% in early July. Inflation, as measured by the fixed-weighted GNP price index, declined from a revised 2.5% in the first quarter to 1.9% in the second quarter because of significantly lower energy prices.

Jan 1, 1986

The U.S. economy continued to expand during 1986, although at the slowest pace since 1982 when the current business expansion began. Real gross national product (GNP) grew about 2.6%, slightly below 1985 growth but significantly below that of 1984. The continuing expansion was fueled pre-dominantly by rising personal consumption expenditures as well as growing Government purchases of goods and services. Fixed investment, although positive, failed to grow at the rate of the overall economy. The trade deficit, which increased more than 30% over the record 1985 level, continued to depress economic growth despite significant declines in the price of petroleum and the value of the dollar. On a more positive note, domestic employment continued to grow--increasing over 2 million from the 1985 level--and inflation and interest rates declined. The unemployment rate dropped slightly to 7.0%. Of direct importance to the mineral-producing industries, expenditures for consumer and producer durables as well as investment in residential construction each grew faster than the overall economy, but investment in nonresidential structures fell more than 10% from the 1985 level. The level of real capital spending declined about 3% in 1986, following strong gains in 1985 and in 1984. Capital expenditures for new plant and equipment bottomed out in the second quarter and expanded in the third and fourth quarters. The decline in the first half of the year was partially attributed to uncertainty arising from the then-proposed tax bill. Also, there was little impetus for corporations to invest in new capacity since factories were operating at less than 80% of capacity during most of the year, in part because of continued competition from imports.

Jan 1, 1986