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MiningWeek Online
February 27, 2004 Volume 10, Issue 8
This Week's Issue:
Supreme Court denies review of 522(e) decision, ending litigation
In a litigation-ending decision favoring the mining industry, the U.S. Supreme Court this week denied certiorari in the case of Citizens Coal Council v. Norton, involving Section (§) 522(e) of the Surface Mining Control and Reclamation Act (SMCRA).
The action by the High Court denying review means that the unanimous decision by the three-judge panel of the United States Circuit Court for the District of Columbia Circuit (D.C. Circuit) in favor of NMA and OSM will stand. The D.C. Circuit issued its ruling last year , and said that the district court was wrong not to uphold OSM’s interpretation that SMCRA section 522(e) does not apply to subsidence from underground mining. Prior to the Supreme Court’s denial of certiorari, NMA also succeeded in persuading the entire, or en banc, D.C. Circuit to deny the Citizen Coal Council’s request to reconsider the three judge panel’s decision.
These favorable judgments have removed a serious threat to more than half of underground coal mining production capacity valued at $4 billion-to-$5 billion annually, and preserved the substantial productivity gains (100 percent in the last decade) in the deep mining sector. They also diminished regulatory pressure for increased constraints on extraction ratios at room-and-pillar operations to avoid subsidence and averted serious economic consequences for thousands of mining jobs and supporting industries.
The end result of the Supreme Court’s action is that OSM’s interpretive regulation on the meaning of § 522(e) will stand. Accordingly, subsidence from underground coal mines will continue to be regulated under SMCRA’s § 516 and § 720, but will not be prohibited under § 522(e).
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Proposed EPA solid waste rule misplaces focus, NMA says
While encouraged the Environmental Protection Agency (EPA) is attempting to bring its regulatory definition of solid waste into conformance with the Resource Conservation and Recovery Act (RCRA) and case law, NMA is “disappointed” the agency’s proposed rule has “misplaced its focus,” the association said this week.
“Instead of zeroing in on the key statutory term ‘discard,’ the proposal instead focuses on “continuing process within the generating industry,” NMA said in comments filed with EPA. “In this way, the proposed rule clearly ignores the direction of the . . . court [in Association of Battery Recyclers v. EPA (208 F.3d 1047, D.C. Cir. 2000)(“ABR”)]not to parse a court opinion as one might parse a statute. There is real need for the agency to step back and re-focus on ‘discard,’ i.e., whether a material has been abandoned, disposed of or thrown away,” NMA said.
In Association of Battery Recyclers, the court reaffirmed its 1987 holding in American Mining Congress v. EPA that, unless it is discarded, a material cannot be a waste subject to EPA’s RCRA jurisdiction. The court in ABR held that secondary materials that are stored for recycling are “plainly not in that category.” The court then ordered EPA to “define ‘solid waste’ in accordance with this opinion.”
NMA said EPA’s “misplaced focus on the use of secondary materials ‘within the generating industry’ has led the agency to define various ‘industries.’ In the case of the primary metals and mining industry, the proposal has arbitrarily and artificially split this industry into several pieces. Having done this, the proposed rule then would impose very significant regulatory obstacles to the use of our own secondary materials in our industry’s normal production processes.”
NMA said EPA “needs to return to a more holistic approach to the primary metals and minerals industry, and to focus on whether or not a material has been discarded. It is clear that the current regulations require revision to bring those rules into accord with the ABR decision. As they currently exist, the regulations unlawfully classify some in-process materials as solid wastes. Contrary to both statute and case law, those materials are regulated based on how they are stored, not whether they are discarded,” NMA emphasized.
“As the courts have recognized,” NMA noted, “there is a ‘spectrum of recycling.’ Across this spectrum, as the courts have also recognized, ‘discard’ remains the key to whether or not EPA has any RCRA jurisdiction over the material or practice in question. As long as a material has not been discarded, then it is not a waste, whether or not it was generated and recycled within the same industry.” While the agency would therefore be justified in promulgating a broad exclusion for non-discarded materials covering both intra-industry and inter-industry recycling, NMA noted that a “one size fits all” exemption isn’t necessary and could be inappropriate. “In light of the case law’s focus on secondary materials generated in the primary metals and minerals industry, an intra-industry exclusion for [this] industry is entirely justified.” EPA also would be fully justified in excluding recycling carried out either “on-site” or within one company.
NMA said it “strongly agrees” with EPA that the agency’s recycling legitimacy criteria are factors for consideration, rather than mandatory requirements. To keep the requisite regulatory flexibility, NMA urged EPA not to turn these guidance criteria into actual regulations.
In addition, NMA noted that RCRA is a “prospective, not retroactive, statute. The proposed rule, however, would impose ‘after the fact’ liability on generators of secondary materials,” without regard to the lack of any fault on the part of the generator. “This amounts to the unauthorized imposition on the generator of strict liability, a fundamentally unfair action denying the generator any semblance of due process.”
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Investment in minerals development crucial to economic development, Stanford study says
Mining and minerals development has been a catalyst to wealth and broad-based economic development for both industrialized and developing nations, according to a new study by Stanford University economists, featured on Mineweb.
The research paper, “Mineral Resources and Economic Development,” also notes that mining “is one of the high-tech industries of the global economy . . . . Our position is that investment in minerals-related knowledge is a legitimate component of a forward-looking economic development program.”
The authors, Gavin Wright and Jesse Czelusta, contend that in many countries, “mining is considered a high-tech knowledge industry which . . . should be seen as a legitimate component of a forward-looking economic development program.” As a nation encourages investments in mineral exploration, new techniques and mining education, other domestic industries receive spillover benefits from new technologies, lower-cost natural resources and a technically-trained labor force, the authors said.
They also note it is “inappropriate to equate development of mineral resources with terms such as ‘windfalls’ and ‘booms.’” The study reveals mineral reserves are rarely exhausted as rapidly as expected, and that many resources are extended through exploration, technology, and advances in country-specific knowledge. In direct contrast to the notion of mineral deposits as non-renewable resource endowment, the study said, “new deposits were continually discovered and production of nearly all major minerals continued to rise well into the 20th century – for the country as a whole, if not for every region.”
The authors point out the United States has benefited from an abundance of natural resources, which played a significant role in propelling the nation toward world leadership in manufacturing. “It is fair to say that the minerals sector constituted a leading edge of the knowledge economy in U.S. history.” In addition, infrastructure in developing nations in the 19th and 20th centuries were created by massive investments by American mining conglomerates.
The study says Latin America is now the world’s fastest growing mining region, and that Australia is an example that “expansion of a country’s mineral base can go hand-in-hand with economic growth and technological progress.”
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NMA: EPA’s mercury proposals recognize emissions trading benefits, but lack certainty and technical achievability
The Environmental Protection Agency’s (EPA) proposed alternative emissions trading program for mercury “recognizes the inherent benefits of emissions trading compared to traditional command-and-control regulation,” NMA said in a statement this week.
“Generally, the flexibility inherent in a well-designed emissions trading program, such as the Title IV acid rain program, is preferable to the rigidities of unit or source-specific controls,” NMA said. However, in order to secure further emissions reductions with maximum flexibility, the alternative regulatory vehicles EPA is now proposing must lend themselves to a truly viable market for a national emissions trading program and create certainty in the assignment of emissions allowances.
NMA made the comments in a statement submitted yesterday to EPA public hearings on clean air proposals to reduce emissions of nitrogen oxide, sulfur dioxide and mercury from power plants. NMA focused its comments on the proposed rule to regulate mercury and said it would file detailed comments on the proposed rulemakings on March 30.
The EPA proposals, issued by the agency on Dec. 15, 2003, include two alternative control plans: a market-based cap-and-trade approach, requiring mercury emissions reductions in two phases; and a Maximum Achievable Control Technology (MACT) alternative that would establish emission limits for mercury at existing and new power plants.
EPA is asking for comments on the two alternatives, as well as comments on which alternative the agency should adopt. The agency will promulgate a final rule by December 2004.
Coal generates more than 50 percent of the electricity used in the nation today. NMA observed that significant additional reductions will be made in emissions of mercury as a co-benefit of technology installed by coal-based generators to control other air emissions. Beyond those reductions, NMA stressed that it is essential for mercury-specific standards to be “technically achievable for all types of coal-based electric generation sources and should not disadvantage one coal type over another. There should be a level playing field, as a technically unachievable mercury emission standard has the potential to disrupt national coal and electric power markets, strain the economy, and jeopardize energy security.”
It is essential to avoid standards that will “prevent the construction of many new coal-fired power plants and prohibit the use of certain coal types in new units, which runs contrary to EPA’s desire not to encourage fuel switching,” NMA concluded.
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New mines will increase company production by 40 percent over three years, Barrick says
Barrick Gold Corp. this week said it is focusing on building four gold new mines in 2004 that “should result in a 40 percent increase in Barrick total production over the period 2004-2007.”
In addition, the company plans to spend $110 million on exploration in 2004 that will include exploration in Nevada, where Barrick operates the Goldstrike Mine north of Carlin, owns 50 percent of Round Mountain Mine in Nye Country, one-third of the Marigold Mine at Valmy and owns the Ruby Hill Mine near Eureaka.
Barrick President and CEO Greg Wilkins said the highlight “is that 2004 is really a year for building new mines” – Veladero in Argentina; Alto Chicama in Peru; Cowal in Australia; and Tulawaka in Tanzania. The facilities are expected to drive the company’s growth profile to a target of 6.8 to 7 million ounces of gold production in 2007.
Barrick also said it expects to make a development decision on its Pascua-Lama project in Chile/Argentina in the second quarter of this year, with production projected as early as 2008. Pascua-Lama contains proven and probable gold reserves of about 17 million ounces of gold and 580 million ounces of silver, the company said.
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NSF to discuss guidelines for
underground laboratory next month
The National Science Foundation (NSF) will invite scientists to Washington in March to discuss how it will choose the best site – including possibly the closed Homestake gold mine in South Dakota – for a proposed national underground laboratory.
South Dakota has joined with physicists to propose converting the closed Homestake mine in Lead into the deepest, most sophisticated underground laboratory in the world. Physicists use deep labs to detect elusive subatomic particles called neutrinos.
In addition to the Homestake mine, NSF has already received proposals for sites in California and Minnesota; however because all three proposals were unsolicited, NSF returned them earlier this month, in effect starting the selection process over with guidelines. The meeting with NSF officials in March is to discuss those guidelines.
However, Dick Gowen, the official in charge of South Dakota’s proposal, told the Rapid City Journal, “The science community recognizes Homestake really is the preferred site.”
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OSM extends comment periods for ownership and control, stream buffer zone/excess spoil rules
The Office of Surface Mining (OSM) this week said it was extending the comment period for the proposed ownership and control rule by 30 days until March 29, 2004, and also for the proposed stream buffer zone/placement of excess spoil rule, also by 30 days, until April 7.
The ownership and control proposal is supported by NMA because it is a direct outcome of a settlement agreement between the association and OSM on the litigation over the agency’s 2000 final rule. Regarding the stream buffer zone/excess spoil rule, OSM has also scheduled five regional hearings for March 30 in Charleston, WV; Greentree, PA; Hazard, KY; Harriman, TN; and Washington, D.C.
NMA members with questions or needing additional information should contact Bradford Frisby at 202-463-2643, or bfrisby@nma.org.
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Newsbits
Peabody Energy Executive Vice President of Legal and External Affairs Fredrick D. Palmer has earned the Erskine Ramsay Medal Award for distinguished achievement in coal mining from the Society for Mining, Metallurgy and Exploration (SME). He was given the award for “outstanding work in the legal and political arenas, as an advisor, operator and counsel, championing efforts to ensure that decisions regarding the future of fossil energy are based upon sound science and economics” . . . . Angela Nations has been appointed manager-community relations for The Doe Run Company. She previously served as human resources manager for Doe Run’s Primary Smelter at Glover, MO . . . . American Electric Power this week named Michael G. Morris chairman of the board; he is the company’s president and CEO. Morris, 57, joined AEP as president and CEO Jan. 1 following the resignation of E. Linn Draper Jr. . . . CONSOL Energy Inc. said it expects its Loveridge Mine near Fairview, WV, to begin full production ahead of the previously announced schedule of early March. The announcement was made by U.S. Secretary of Energy Spencer Abraham during a visit to the mine last week. DOE was one of several government groups that assisted the company in its efforts to extinguish a fire at Loveridge that started in February of last year.
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