Rising Silver Prices Put Shine On Economy Silver Valley Residents Confident Of Rebound

The silver lining missing from the clouds here for years has begun to shine through this week’s drizzle.

Silver Valley residents are daring to hope once again that rising silver prices may revive the valley’s moribund mining industry.

Not since the heyday of silver mining in the mid-‘80s have silver prices made this big a jump. Languishing at $4.38 an ounce on March 1, the metal topped $5.86 earlier this week, fueled by a weakened U.S. dollar that has investors looking for stable investments.

Silver has receded since then and closed Thursday at $5.68 an ounce. But analysts say that’s typical after a rally and prices aren’t likely to plunge soon, as they did after the short-lived rallies of recent years.

All of this is welcome news in the Silver Valley, where the mood often mimics silver prices. Local businessman Dusty Griffith has such confidence in the economy beyond the silver prices that he’s opening a second hardware store on West Cameron next month.

“I wouldn’t be doing this if I didn’t feel confident in the future of the Silver Valley,” Griffith said over a cup of coffee at the Sunshine Cafe, named after one of only two silver mines still working in the valley.

When silver plunged from $6.50 an ounce to $3.50 in 1990, the lifeblood drained from a robust mining economy.

An industry that had employed 1,553 in July 1990 now employs barely 450, according to Kathryn Tacke, labor analyst for the Idaho Department of Employment.

When the market dropped, mines began to lock the gates: first the Star Phoenix, then the Coeur and Galena mines. Unemployment topped 20 percent at times. New businesses became as scare as new mining jobs.

But now, Griffith’s new store reflects guarded optimism for the Silver Valley’s renewal. Residents quickly hail the benefits of a mining revival - mainly, high-paying jobs.

“There’s a heck of a lot of potential up here if prices go up,” said Lenny Hoyland, an eight-year veteran of the Sunshine Mine in nearby Big Creek. Lunch pail in hand, he was about to ride down the Jewell Shaft for another shift underground. “You bet I watch them every day.”

The 42-year-old Osburn resident’s pay at the mine is tied directly to silver prices, so every uptick means getting closer to “improving my things - better truck, better home, you know.”

Prices would need to continue rising and stabilize at $7 or $8 an ounce before Sunshine would consider reopening the silver-laden eastern workings of the mine, said Harry Cougher, manager of the mine site.

With higher prices, Sunshine possibly could increase its work force from about 130 to something nearer the 450 it employed before a massive layoff in March 1991.

Nearby, the Coeur and Galena mines, owned by Asarco Inc. and Coeur d’Alene Mines, are poised to reopen if prices stabilize at higher levels - but just how high, Coeur d’Alene Mines officials won’t say. Reopening could mean 200 or more new mining jobs.

But after having undergone a forced transition from a mining to a tourism-based economy, watching the roller-coaster ride of silver prices doesn’t obsess every Silver Valley resident.

“I watched silver prices every day without fail a few years back because it meant everything for my business,” Griffith said. “Today, it doesn’t mean as much. But I still follow the prices.”

Former Bunker Hill Mining Co. refinery worker Gus Sjogren, 67, has seen silver prices sail and swoon too often to get very excited.

“I think if it just sticks around $5.50 an ounce, it’ll be a good thing,” he said in the United Steelworkers of America union hall in Kellogg. “Mining’s going to come back here, and so will the union - it just has to.”

Analysts who are paid to follow the tricky silver futures markets say there’s reason to follow the market with optimism now.

For several years, the demand for silver for photographic film, computer parts and jewelry has outstripped the supply. Even without the currency turmoil around the globe today, simple economics would suggest higher prices. Long-term trends suggest prices of $7 an ounce and perhaps $8 an ounce next year, said Jeffrey Christian of CPM Group Ltd. in New York.

But for many who once made a living mucking ore from the tunnels in Silver Valley hillsides, any silver rally is too late. The future was too uncertain, the work too dangerous.

Bob McKay hung up his hard hat last August after 19 years of underground work at the Lucky Friday mine in Mullan, the valley’s other working mine.

Getting a beard trim Wednesday at the TrimTime Barber Shop in Kellogg, McKay reminisced about how a huge chunk of ice once fell 270 feet from a timber at the mine’s head frame and hit him on the head.

McKay survived, but an accident at the Lucky Friday on Aug. 30 shut the mine down for three months. The 75 miners there went without work for three months, and McKay, 51, needed a more permanent job from which to retire. Now, he delivers mail for the U.S. Postal Service.

“The doctor said the ice hit me perfectly - square on the head - or else I wouldn’t be here today,” he said. “I couldn’t see for three days. In this job, all I worry about are the dogs.”