MiningWeek Online
February 13, 2004 Volume 10, Issue 6

This Week's Issue:

• Gerard: Modern gold mining practices contradict critics
• New energy bill introduced; ready for floor action
• Congress urged to adopt precious metals investment legislation
• Environmental groups seek to overturn 1999 EPA coal ash determination
• Dorgan expresses concern over proposed FutureGen funding
• Rogers: U.S. should enact national minerals and energy policy
• Women in Mining’s DC Chapter unveils “The House that Mines Built”
• Newsbits

Modern gold mining provides essential jobs and vital products for society while protecting the environment and its workers, NMA President and CEO Jack N. Gerard said this week.

“The U.S. gold mining industry is the world’s most advanced – using modern technology and stringent environmental safeguards to provide jobs and vital products for businesses and consumers,” Gerard said. He made the comments in response to allegations by several anti-mining organizations that the industry is “dirty” and its practices should be reformed.

“The ‘gold standard’ for objectivity and factual information has been abandoned by these groups,” Gerard said, referring to the Mineral Policy Center, Earthworks and Oxfam America. “The thousands of people who work at U.S. gold mines and make products that rely on gold are committed to compliance with the world’s most comprehensive environmental and worker safety laws and regulations,” he said.

“Scare tactics, out-dated and incorrect information should not be used to falsely characterize the fine efforts of these hard-working and knowledgeable men and women,” Gerard continued. “As one example, U.S. mining has just achieved its safest year on record, surpassing the performance of wholesale and retail operations. Furthermore, U.S. companies should be applauded for applying these high environmental and safety standards to their operations around the world.”

Gerard noted that U.S. gold mining operations are regulated by numerous federal and state environmental laws that are designed to protect air and water resources, including requirements that mandate land disturbed during the mining process be reclaimed to another beneficial use. U.S. safety laws, advanced technology and extensive worker training have made the U.S. mining industry the world’s safest,” he pointed out.

“Mining communities throughout the West benefit from the high-wage jobs and tax revenues providing by gold mining, and products as diverse as medical diagnostics, telecommunications, satellites and jewelry rely on gold’s unique properties to make their products work reliably,” he said.

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New energy bill introduced; ready for floor action

NMA staff was engaged in meetings with key leaders in the House and Senate as events unfolded during the week. The revised bill has around $15 billion in tax provisions over ten years, down from the nearly $26 billion in the version that fell two votes short of overcoming a filibuster last year. However, the tax provisions of S. 2095 include $2.2 billion in clean coal technology incentives. In addition to the tax items, the new bill also retains over $5 billion in authorized federal funds for clean coal, precious metal catalysis and uranium research programs. The new bill also includes important coal leasing language from last year’s legislation.

Senate sponsors hope changes in the bill, including the removal of controversial MTBE provisions, will rally bipartisan support. In introducing the measure, Domenici praised Frist and Daschle “for their work today to pave the way for a swift Senate vote on the bill. I think this bill addresses the concerns several senators had with last fall’s conference report,” he added.

The revised energy bill was introduced under a senate rule that allows it to come to the Senate floor without the need to go through the committee process. The new bill will be taken up after the Senate returns from the President’s Day recess.

The Bush administration has indicated it would prefer even further cuts to bring down the overall cost of an energy bill. House leaders, meanwhile, have indicated they will wait and see what happens in the Senate before taking additional action. Senate Majority Leader Frist (R-TN) decided earlier in the week not to add the revised energy bill to the highway bill, which passed the Senate Thursday evening despite veto threats from the White House due to the measure’s cost.

NMA will remain actively involved—encouraging movement towards final passage of the Energy Bill.

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Congress urged to adopt precious metals investment legislation

In its fiscal 2005 budget, the Bush administration requested that Congress simplify the taxation of capital gains on all collectibles. The administration has suggested reducing the current 28 percent rate to 25 percent for those taxpayers in the 35 percent tax bracket, and reduced rates for those taxpayers in the lower tax brackets.

While gratified the administration has recognized the complexity regarding taxation of collectibles, precious metals investment products do not belong in the collectibles category and should be treated like equities and mutual funds under the tax code because they trade like equities and mutual funds.

Further buttressing the argument for changing the tax code is the very low relative fiscal impact H.R. 574 and S. 611 would have on the federal budget.. The Congressional Joint Committee on Taxation has projected an impact of just $52 million in total over a 10-year timeframe. NMA is working with congressional sponsors of H.R. 574 and S. 611 on letters to Treausry Secretary Snow in support of the legislation. NMA is also meeting with the tax-writing committees in Congress to find an appropriate vehicle to move this proposal into law.

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Environmental groups seek to overturn 1999 EPA coal ash determination

At issue is the management and disposal of power plant coal ash in closed mines, surface impoundments or sedimentation ponds. The groups want a federal ban on the placement of coal combustion byproducts (CCBs) into water until EPA promulgates Subtitle C hazardous waste regulations, which the agency determined in May 2000 were not necessary.

EPA previously found that the characteristics of coal ash, the management of these materials by utilities and the existing state regulatory programs were adequate to protect public health and the environment. EPA also said it would craft regulations, enforceable by the states or citizen suit, to address possible gaps in state regulatory programs. This process is currently underway, an effort industry observers said the environmental groups’ petition would likely undermine.

If successful, the petition could endanger about 42 percent of the nation’s coal-fired generation, or about 16 percent of all the electricity produced in the United States, according to the Edison Electric Institute (EEI). In addition, the alternative to the coal ash management practices objected to by the groups would take years to permit, EEI said.

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Dorgan expresses concern over proposed FutureGen funding

Dorgan, a member of both the Energy and Natural Resources and Appropriations committees, said while he supports the project, “I believe lumping it with the clean coal budget is wrong and falls far short of where I believe the administration should be.” He said funding for clean coal technology needed to be more aggressive because “clean coal technology will help many states that depend on coal.”

He stressed that coal “is a very, very important energy resource for us” and that the proposed clean coal program budget only looks larger than last year because unspent money has been redirected from retired clean coal programs to FutureGen. In reality, he said, the budget for clean coal programs has been reduced from $170 million to $50 million in the current budget.

NMA is already working with the House and Senate Appropriations committees on FutureGen, basic core research and development programs, Mining Industry of the Future and other budget priorities for the mining industry.

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Rogers: U.S. should enact national minerals and energy policy

The U.S. should enact a national minerals policy and an energy policy, as part of a multi-layered approach to bolster America’s manufacturing sector, Rep. Mike Rogers (R-MI) told a National Association of Manufacturers (NAM) conference this week.

Rogers, who is the deputy majority whip for coalitions and an Energy and Commerce Committee member, noted that manufacturers “are responsible for almost two-thirds of all private sector research and development, and are the foundation for good jobs, stable jobs, good benefits jobs and the promise of prosperity. Manufacturing is America and American manufacturing is worth saving,” he said.

Rogers outlined foreign and domestic problems impacting manufacturing production and manufacturing jobs and said the challenges can be met if manufacturing, labor and government unite. His multi-layered approach includes:

• Passing a national energy and minerals policy;
• Aggressively fighting “illegal, subsidized Chinese imports entering the U.S. commercial stream;”
• Bringing an end to “Asian currency manipulation, which puts U.S. manufacturers at an extreme competitive disadvantage;”
• Continuing to reduce anti-manufacturing taxes;
• Making health care affordable for workers and employers;
• Enacting substantive tort reform; and,
• Reforming pension laws.

“America has long been the world’s manufacturing leader,” he added. “Working together we can keep it that way.”

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Women in Mining’s DC Chapter unveils “The House that Mines Built”

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Newsbits

Mine Safety Appliances Co. has elected Ronald N. Herring Jr. as vice president. He most recently served as director of marketing for the Safety Products Division . . . . The Environmental Protection Agency has announced locations for public hearings on the proposed interstate air quality and utility mercury reductions rules. The hearings will be held concurrently on Feb. 25 and 26 at the Hilton Chicago, Chicago, IL; Wyndham Philadelphia at Franklin Plaza, Philadelphia, PA; and Holiday Inn Raleigh-Durham Airport, Research Triangle Park, NC . . . . An international conference on mining environmental management and sustainable development – Mines & Money Vancouver – will be held May 19-21 at the Fairmont Hotel in Vancouver, B.C., Canada. For more information, visit www.minesandmoney.com. . . . Peabody Energy’s Rivers Edge Mine has earned the Mountaineer Guardian Award for outstanding safety performance from the West Virginia Office of Miners’ Health, Safety and Training. The mine is operated by Peabody’s River s Edge Mining subsidiary . . . . The Ohio Coal Development Office has been recognized by the U.S. Environmental Protection Agency (EPA) as a national model in diverting tons of landfill waste into marketable and useful products. EPA praised the office for its commitment to promoting the environmental benefits of coal combustion products as substitutes for conventional raw materials in highway applications, the manufacturing industry and in agriculture applications . . . . South Dakota Tech’s School of Mines and Technology says it will begin offering a new mining engineering and management major in the Fall 2004 semester. For more information, contact Steve Buchholz at 605-394-6082.

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