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US mining industry hopeful for 2013

January 30, 2013
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The U.S. National Mining Association (NMA) is optimistic in its outlook for the industry in 2013, according to its president and CEO Hal Quinn. Speaking at press conference at the association's headquarters in Washington, D.C., on Jan. 28, he stated that global demand for coal and other natural resources will do the industry good, especially in developing countries.

Quinn predicted that coal is set to become the world's primary energy source, surpassing oil by 2015. In the United States, the total coal consumption is expected to increase by 50 million tons compared to the levels recorded in 2012, due to a combination of factors, including cooler weather and an anticipated 22 percent hike in natural gas prices, according to estimates from the Energy Information Administration (EIA). Moreover, demand for coal is growing in Europe, especially in the UK and Germany, where high natural gas prices are putting off buyers. Similarly, coal demand in Asia is likely to rise due to the continent's increasing electrification, which suggests that the United States might export a total of 111 million tons. The NMA expects the country's total coal production to amount to 1.016 billion tons in 2013, a more optimistic prediction compared to the EIA's forecast in early January.

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Other factors that are predicted to have a positive impact on the U.S. mining industry are the boost in car sales and new home building -- industries that require significant amounts of copper, palladium, molybdenum and other metals. U.S. copper production is set to grow by more than 10 percent in 2013, according to the U.S. Geological Survey (USGS). Iron ore demand will be boosted by infrastructure projects and stimulus spending in China, which is the biggest market for metals and purchases about 40 percent of the total global production.

In addition, the USGS analysis predicted that demand for gold is likely to remain strong, as global financial uncertainty pushes central banks to look for gold in an attempt to diversify reserve assets. In line with this prediction, the NMA foresees a slight increase in production over the course of the next 12 months. Silver usually takes the same course as gold but it also has a variety of industrial applications that will be strong in emerging markets, and China in particular.

Overall, the national mining industry will be focusing on three main issues in 2013 -- expanding mining on federal lands, coal export capacity and the EPA's greenhouse gas regulations. The NMA is expecting congressional allies to push for legislation that would shorten mine permitting periods and block attempts to regulate greenhouse gas emissions.

The NMA president also stated that the U.S. mining industry is continuing its work to improve mine safety and health standards. Last year was the second safest ever recorded in terms of mine fatalities but, despite that, the industry is failing to meet its goal of recording zero fatalities and reducing injury rates by half, Quinn concluded.

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