North Carolina floods threaten mines key to global electronics industry

Flooding in North Carolina has imperiled the operations of mines that produce the world’s purest quartz sand - an irreplaceable ingredient for manufacturing components at the heart of smartphones and other electronic devices.

The town of Spruce Pine, where these unique mines are located, remains in a dire situation, with power, water and cell service largely disconnected early Tuesday. While the floodwaters brought on by Helene have receded, local residents said many roads remained impassable. Some people were still trying desperately to confirm loved ones were safe.

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The calamity has devastated this small town of about 2,200 along the North Toe River but is also expected to affect people around the world. The high-purity quartz from Spruce Pine’s mines is key for the production of semiconductors - the brains inside computing devices - as well as solar panels, fiber-optic cables and other industrial products.

“I don’t think the nation really realizes how this little, small town is so critical,” said Michael Vance, a local real estate developer who has been informally coordinating some relief efforts for Spruce Pine.

Both major mine operators in Spruce Pine, Sibelco and the Quartz Corp., said they halted operations Thursday, the day before the center of the storm passed over western North Carolina, and did not yet know when work could resume. The companies said their immediate focus was ensuring employees were safe and contacting those who are still unreachable.

“Many people in the area, including our employees and their families, are facing displacement and significant disruption,” said Sibelco, a Belgian company. “We have confirmed the safety of most employees and are working diligently to contact those still unreachable due to ongoing power outages and communication challenges.”

Neither Sibelco nor the Quartz Corp. confirmed Monday whether their facilities were damaged or what kind of longer-term impact there may be to their output. The Quartz Corp. said that it had “no visibility” on when operations would restart, and that some of its employees had joined local task forces to help restore basic services to the area.

“We are in a phase of assessing the situation and it is far too early to comment on the impact to high-purity quartz production,” said May Kristin Haugen, head of communications for the Quartz Corp., which is jointly owned by French and Norwegian companies. “Our priority now is people and the families being affected by this terrible storm.”

Dan Hutcheson, a veteran semiconductor industry analyst, said that while the mines will probably bounce back in time, consumers can expect to see higher prices for electronics in coming months. Manufacturers could temporarily shift to other sources for quartz, but that would introduce extra refining expenses.

Vance said Spruce Pine was still in a state of emergency on Monday. Residents had been told it would take at least three weeks for power to return, and more than a month for water.

“They are in desperate need of food and water,” he said. “They are still trying to find people. We just don’t know where some people are.”

Some mine employees were counted among the missing on Monday. One post in a Facebook group said that two groups of Sibelco workers had set out Friday from Red Hill, a short distance from Spruce Pine, to clear trees and debris from the roadways. The post said that while most of the 26 workers had since been confirmed safe, some remained unaccounted for.

The resiliency of the semiconductor supply chain has become a focus in Washington in recent years amid growing geopolitical tensions with China. In addition to powering consumer devices, chips are also the brains inside smart missiles and any other advanced military weapons.

U.S. officials have warned that the island of Taiwan is a bottleneck in the semiconductor supply chain and have pushed for the reshoring of chip manufacturing in the United States to avoid being overly reliant on East Asia for the critical components.

But the North Carolina floods reflect that natural disasters at home can also disrupt industries crucial for national security.

Hutcheson, the semiconductor analyst, said the chip supply chain has generally been able to absorb the shock of natural disasters, such as the Japan earthquake and tsunami of 2011, without major shortages occurring. Manufacturers have some stockpiles in warehouses that they can draw on, he said, though disruptions can lead to elevated prices.

“It typically works its way out, and if you look at it on a year-over-year basis, you won’t see the impact,” he said of previous major natural disasters affecting the supply chain.

A fire in 2008 in Spruce Pine temporarily disrupted the global quartz supply.

According to Sibelco, the Spruce Pine quartz deposits were formed some 380 million years ago when the land masses that are now Africa and North America collided. A lack of water at the point of collision resulted in the unusual purity of the quartz in the area.

The minerals from Spruce Pine were already being used in electronics back in Thomas Edison’s era. More recently, the high-purity quartz is used to make crucibles, the containers used to melt down silicon to make silicon wafers for semiconductors.

Sharon McIntosh, a Spruce Pine resident, drove to Tennessee on Monday to purchase water and other supplies, and to find a cell signal to contact loved ones. She said that while the impact on the mines remained unclear, more visible infrastructure such as streets and the railroad had been washed out.

“The railroad won’t be coming through there for many months,” she said. “The downtown business district is destroyed. I don’t think it will recover from that.”

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