Mining industry hit with high tire prices

A worldwide shortage of industrial tires is pushing up costs for Alaska's mining industry, just as soaring metal prices are fueling the sector's resurgence.

The fast-growing economies of China and India combined with demand from the U.S. military and mining companies has led to a shortage of big tires, which costs tens of thousands of dollars.

The shortage will likely continue for several years, vendors and mining executives said.

Fort Knox, the state's largest gold mine, is wrapping chains around the giant tires its Caterpillar front-end loaders use. The chains are intended to guard against rough surfaces that could slice the rubber, said Dan Snodgreff, operations manager.

Chains for two tires cost $76,000. In the past, it wasn't cost-effective to chain tires but now, because they can extend a tire's life by almost a year, it's worth the expense, he said.

Like Fort Knox, the Usibelli coal mine in Healy is also taking steps to get more use out of its tires. Air pressure checks and tire rotations are more frequent and road maintenance to reduce rock cuts is more aggressive, said Colin Keith, purchasing agent for Usibelli Coal Mine,

Trucks sold without tires

The situation has gotten so bad that new trucks and earth movers are being sold without tires, buyers are paying new-tire prices for retreads, some companies are buying used heavy equipment just to scavenge the old tires and vendors say a black market for the tires is growing.

"Everyone knows there's a black market out there," said Brian Hewitt, manager of Tire Distribution Systems Inc. in Fairbanks. TDS, which services many of Alaska's mines, is a national tire vendor.

"Tires are going missing from shipments," he said. "People are paying $30,000 or $40,000 for a used tire that if it was new would cost $20,000."

Hewitt said he fields calls from desperate miners across the border.

"I've got people calling me from Canada saying, 'I hear you're getting these guys' tires. Can you get me some?' "

Tire company spokesmen have called the demand unprecedented in the industry's history.

Until the situation improves, Fort Knox's operations manager said, the mine will aggressively focus on extending the life of every tire.

"We can't afford to get complacent about it and start ripping up tires," Snodgreff said.