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Metals prices soar as China asks for more

Metals prices soar as China asks for more
By John Wiley, Associated Press
02/24/2006 8:54 PM PST

REPUBLIC, Wash. -- For now, Dave Sattler is a miner-turned-welder, biding his time fixing equipment in a Kinross Gold Corp. shop until a new gold mine opens.

A top miner at the Canadian gold company's K2 project when the mine near Curlew was placed in standby in November, Sattler and a handful of others were kept on the payroll so there will be enough experienced miners when the proposed Buckhorn Mountain mine opens in neighboring Okanogan County.

In late November, gold prices broke through the threshold of $500 an ounce for the first time since late 1987. Silver also is enjoying prices not seen for decades.

Frank Schwab Jr., president and CEO of Anderson & Schwab Inc., a New York mineral and business consulting firm, said U.S mining firms have China to thank for the rampup of metals prices the past 18 months.

Michael George, a U.S. Geological Survey gold commodities expert in the agency's Ruston, Va., headquarters, agreed with Schwab that China's ''insatiable'' appetite for metals is driving prices up.

Increased demand in India, the world's largest consumer of gold, along with speculation and investment hedge buying, are also contributing to rapid increases in precious metals prices, George said.

Nevada remains the nation's top gold state, churning out nearly 7 million ounces last year, making it the world's third-largest gold producer after South Africa and Australia, according to the USGS.

Mining firms in other states are benefiting from near record high prices for precious and industrial metals, such as molybdenum, lead and zinc.

In north-central Washington, the Colville Tribe of Indians will vote next month on whether to open up Mount Tolman on its reservation to molybdenum mining. The metal used for hardening steel and dyes is trading at about $30 a pound, up from the less than $5 a pound it fetched for the past two decades.

The referendum would lift a 1995 moratorium on mining on the reservation and allow the Colville Business Council to seek requests for proposals from mining companies. Teck Cominco, a Canadian mining and smelting company, is exploring for potential zinc deposits near its recently reopened Pend Oreille Mine near Metalline Falls after zinc prices doubled from about 50 cents a pound in 1996 to $1 per pound today.

In northern Idaho's Silver Valley, the closed Sunshine Mine is being reopened and pumped dry so Sterling Mining Co. can dig a tunnel linking to an ore vein in the nearby Sterling Summit mine. Hecla Mining Co. recently announced plans to expand its Lucky Friday Mine, also in northern Idaho.

From Wenatchee through the Okanogan to the Republic gold mining district, prospectors are drilling more test holes than they have in decades, Laura Skaer, executive director of the Spokane-based Northwest Mining Association, said recently.


LINK: http://www.pasadenastarnews.com/business/ci_3544850