MiningWeek Online
April 16, 2004 Volume 10, Issue 15

This Week's Issue:

• Leavitt reiterates EPA position that 90% mercury reduction isn’t possible
• Cubin plans measure to reduce trona royalty
• Bush signs pension funding measure
• Senate panel kills port security fee; industry letter urges full COE funding
• NACEPT will review Superfund Subcommittee’s draft final report
• Gold will continue to rise, says Merrill Lynch analyst
• Montana Governor signs petition in favor of initiative to repeal cyanide ban
• Pierce: NCRA aimed at accurately assessing U.S. coal resources
• EPA proposes test procedure guidelines for pollution analysis under CWA, SDWA
• Arch Coal unit among winners of IMCC reclamation awards
• Representative Mark Green visits P&H Mining
• DOE to train specialists on pump system assessment at upcoming meetings
• EIA: Coal demand, production expected to continue to grow in 2004-2005
• Newsbits

In a question-and-answer session with reporters following an address at the National Press Club in Washington, Leavitt added that more effective Activated Carbon Injection (ACI) technology, pioneered by EPA scientists, and one of the technologies being tested, also will not be ready for commercial application for several years. “The new technology is coming,” he said, “but is not available and won’t be adequately tested until 2010.”

He also emphatically denied EPA has ever asserted that 90 percent reduction is possible. “We’ve searched the archives and it was never said – and if it was, they’d be wrong.” Leavitt added EPA will finish the mercury rule this year and will not postpone it.

ACI, which is currently being field tested, involves injecting activated carbon dust into flue gas, where particles of mercury cling to it and are subsequently trapped by filters. In a test at the Gaston 3 unit at Wilsonville, AL.

EPA’s cap-and-trade proposal – where companies can either control their own mercury emissions or buy “credits” from other companies that have done so – requires that overall mercury emissions be trimmed by 70 percent by 2018, with each plant cutting mercury by 30 percent by 2010.

Environmentalists have criticized the 2010 goal as too conservative, but EPA has maintained the proposal is more technologically realistic. Leavitt’s remarks this week echoed previous statements by EPA’s William Wehrum of the Office of Air and Radiation. “We don’t think ACI is going to be commercially available” by 2007, he told the Washington Post last month. Only after 2010 do EPA targets envision some use of carbon injection systems, he added.

In comments submitted to EPA last month, NMA noted EPA’s proposed alternative emissions trading program for mercury “recognizes the inherent benefits of emissions trading compared to traditional command-and-control regulation. 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,” NMA added, “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.”

Meanwhile, 31 governors were officially told by EPA this week that areas of their states do not meet new health standards for ground-level ozone.

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Cubin plans measure to reduce trona royalty

House Energy and Minerals Subcommittee Chair Barbara Cubin (R-WY) last week urged a drop in the tax paid on soda ash production by southwestern Wyoming companies.

Cubin said she would introduce legislation that will provide a reduction of the current federal royalty rate of 6 percent down to 2 percent in order to allow the trona industry to see increased export growth and competitiveness in the emerging world market. Soda ash is refined from trona ore and is used in the production of glass and detergents, among other things.

Cubin noted the industry provides more than 3,000 jobs in Wyoming and that the state’s share of soda ash mineral royalties in 2000 was $25.2 million. Cubin said, “Chinese and other foreign producers have an unfair advantage on Wyoming’s trona industry. Wyoming used to be the number one trona producer in the world. We need to reduce the tax burden on these Wyoming employers and get the Wyoming industry back on top.”

She said the world’s largest trona deposit is located in Wyoming’s Green River Basin. China, however “has a big advantage over U.S. producers due to cheap labor costs, lax pollution laws and lower transportation costs.” She said Wyoming trona companies “need a level playing field and I’m going to do everything I can to make sure they have it.”

Wyoming Mining Association Executive Director Marion Loomis applauded Cubin’s effort and said a reduction in the mineral royalty rate would help the state’s soda ash industry. “We really appreciate the support she would give to the industry, which has certainly suffered severe economic downturns from increased competition in recent years, “he told the Casper Star Tribune.

“With the expansion of China’s (soda ash) production, a (slump) in the markets for soda ash and the importance that this industry has for Wyoming . . . I think it’s very important we make sure this industry has every opportunity to thrive and be in a competitive situation when the markets do turn around.”

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Bush signs pension funding measure

The legislation, which amends the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986, would temporarily replace the 30-year Treasury rate (for plan years 2004 and 2005) with a rate based on long-term corporate bonds for certain pension plan funding requirements. It also provides partial, temporary relief from deficit reduction contributions and target relief to multi-employer plans.

Passage of the measure was considered crucial for many companies facing an April 15 deadline for the next round of defined benefit plan contributions. It allows employers, both pension plan sponsors across the board as well as those in specifically-targeted industries, to lower the amount of their required contributions immediately.

The Act also helps keep solvent the Pension Benefit Guaranty Corporation (PBGC), which guarantees benefits for employees. Congress had been concerned about the potential liabilities facing the PBGC, which estimated that the total under funding in multi-employer pension plans is $100 billion and in single-employer plans is $400 billion.

NMA played an active role in seeking passage of the legislation, joining with 150 other companies and associations in urging Congress to act on a legislative replacement for the 30-year Treasury bond interest rate previously used for pension calculations.

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Senate panel kills port security fee; industry letter urges full COE funding

Meanwhile, members of the National Waterways Alliance (NWA), including NMA, sent a letter to appropriators for the 2005 Army Corps of Engineers (COE) budget, urging them to “provide the necessary funding to keep America’s water resources infrastructure functioning as a major contributor to the nation’s wealth and prosperity.”

During committee debate over the port security fees, several Senators spoke in support of using Customs duties to pay for port security, since industry already contributes $15.2 billion in duties that go directly to the U.S. Treasury. An industry letter opposing the user fee provisions, signed by NMA and 76 organizations, was prominent in the debate in emphasizing that industry was strongly opposed to the levy.

The letter noted industry shares the committee’s commitment to improving maritime security, but noted the proposed legislation “was developed without the involvement of the maritime industry,” without hearings and “no opportunity to examine or comment on the bill.” In addition, the bill “makes no attempt to identify what security expenses are appropriately borne by the federal government and what expenses are appropriately borne by the industry.”

The NWA letter noted the FY 2005 budget submitted for COE by the Office of Management and Budget “is inadequate to meet the growing needs” in vital civil works programs, including the maintenance of first-class ports and waterways. “The current FY 2005 budget proposal clearly indicates that on-going construction projects will have to be stretched out, slowed down or terminated . . . . Such unnecessary delays in construction schedules mean that projects cost more and that the realization of project benefits is delayed, effectively costing the nation hundreds of millions of dollars.”

The letter noted that fully funding waterways projects “offers a unique opportunity to take advantage of the high productivity level of our nation’s contractors, thus providing needed economic job growth, as well as enhancing the transportation network for international trade. At the same time, it provides the shippers of America’s building blocks – steel, coal, fertilizer, sand and gravel, cement, salt, petroleum, chemicals, etc. – a safe, cheap and eco-friendly transportation alternative.”

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NACEPT will review Superfund Subcommittee’s draft final report

The 264-page document, available at www.epa.gov/oswer/SFsub.htm, includes 17 consensus recommendations divided among five major topics:

• Increasing the transparency and rigor of Environmental Protection Agency (EPA) decision-making;
• Expanding efforts at coordination and collaboration;
• Measuring and communicating progress and performance comprehensively;
• Expensive cleanups deserve special attention; and,
• Spending resources wisely.

The panel is comprised of environmental, tribal, community group and industry representatives. Many of the environmental, tribal and community group representatives dissented from the report, with five refusing to sign onto the final document.

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Gold will continue to rise, says Merrill Lynch analyst

Gold prices, currently at a 16-year high, will continue to rise according to well-regarded gold tipster Graham Birch of Merrill Lynch, MiningNews.net reported this week.

Birch told news services in London he was repositioning his Merrill Lynch Gold and General Fund to take advantage of opportunities in China and cutting his exposure to South Africa. “The gold price has been rising broadly speaking since the technology boom peaked due to various factors,” he said. “In the last couple of years, most of the factors that affect gold have been improving,” he added.

Birch said there will be a continuation and a gentle improvement. “The price of gold is by no means stratospheric; it hasn’t even doubled from its low point, he said. Birch added that he was not concerned by any strengthening in the U.S. dollars as investors are diversifying their portfolios further than they were in the 1990s.

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Montana Governor signs petition in favor of initiative to repeal cyanide ban

Although she doesn’t usually sign petitions, Martz said, “this is one that needs to bite people in the backside.” She called those who are seeking to maintain the ban “obstructionists.” Canyon Resources Corp. of Colorado was attempting to open a large mine near Lincoln, MT, when the ban passed.

Backers of Initiative 147 now need to gather just over 20,000 signatures from Montana voters by the end of June to place the item on the November ballot. The signatures must come from at least half of the state’s 56 counties.

Tammy Johnson, head of Miners, Merchants and Montanans for Jobs and Economic Opportunity, a political committee supporting Initiative 147, said she thinks Montanans are ready to talk about legalizing cyanide leach mining again, especially with stronger environmental protections. “People want mining, but they want it done right,” she said.

Martz added that those who are seeking to keep cyanide mining out of Montana are only pushing the industry to other countries “where they have no environmental standards at all.” State Rep. Scott Mendenall (R-Whitehall), whose district has two of Montana’s largest gold mines, said he felt the state had an obligation to assure adequate environmental standards were met, but “you shouldn’t throw the baby out with the bath water.”

Cyanide leaching of gold is a process where a weak cyanide solution is percolated through low-grade ore heaped on an impermeable liner. Gold is then extracted from the liquid in a closed-loop system. It is widely considered in the industry to be the safest process for extracting gold from rock and is carefully monitored and managed. It is a condition of a mine’s operating permit that process solutions must be treated to efficiently destroy or recycle the remaining free cyanide component.

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Pierce: NCRA aimed at accurately assessing U.S. coal resources

Brenda Pierce, USGS energy program coordinator, told the Washington Coal Club that NCRA is a multi-year effort to identify, characterize and assess U.S. coal resources. The agency is looking at “technically recoverable coal,” as opposed to the traditional measurement of demonstrated resources. This means examining what is recoverable given the level of today’s coal extraction technologies, adding that what is technically mineable will change as technology continues to advance.

“The next step after assessment is to look at coal quality,” she said. “With essentially a level budget year-to-year, it will be a challenge to fully implement this part of the program, because coal quality assessment work is very expensive,” she said. However, the interest in coal quality issues from an environmental perspective is very high and makes it important, she added, and so we will be looking for new ways to partner or otherwise obtain coal quality samples.

The NCRA is unique in that it requires coordination and cooperation between several different federal agencies, Pierce said, including the Security and Exchange Commission, Bureau of Land Management, Energy Information Administration, and others. She noted that coal will continue to play a large role in the nation’s electricity picture in the years ahead – “therefore, it is in the best interests of the industry and other stakeholders to keep the dialog open regarding its use. Answers can be obtained and issues addressed with science.”

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EPA proposes test procedure guidelines for pollution analysis under CWA, SDWA

The notice proposes extensive changes to the current sampling and analysis procedures, including new methods; updated versions of currently approved methods; revised method modification and analytical requirements; withdrawal of certain outdated methods; and changes to sample collection, preservation and holding time requirements.

Of particular interest to the mining industry is EPA’s proposal to approve a new procedure, the Microtox Test System (Microtox 1010) for measuring whole effluent toxicity (WET) in wastewater, receiving waters and other aqueous samples. EPA also proposed Mercury Method 245.7, a low-cost alternative to Method 1631 for mercury.

Comments on the proposed rule are due June 7, 2004. NMA’s Water Quality Subcommittee will analyze the proposals. NMA members seeking additional information should contact Karen Bennett at kbennett@nma.org, or 202-463-3240.

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Arch Coal unit among winners of IMCC reclamation awards

Arch of West Virginia’s (Apogee Coal Co.) Ruffner Mine, located in Logan County near Yolyn, WV, won the coal category for a reclaimed area that “exemplifies excellence in contemporaneous reclamation techniques and the elimination of pre-existing problems at the site, while creating several unique surface structures,” IMCC said.

The award will be presented at a banquet held in conjunction with IMCC’s annual meeting, April 25-28, at the Founders Inn in Virginia Beach, VA. Also honored will be two other winners – Chaney Enterprises Limited Partnership in the noncoal category for its Mardis site in Anne Arundel County, MD; and Penn-Ohio Coal Co. in the small operator category, for its Yorktown Pit in Tuscarawas County near Dover, OH.

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Representative Mark Green visits P&H Mining

Representative Mark Green, (R-WI) visited P&H Mining’s manufacturing facility this week. Mr. Green represents northeastern Wisconsin, an area whose economy is heavily driven by the natural resources industries.

From left to right, Neil Massey, VP Manufacturing Operations P&H Mining Equipment, Congressman Mark Green, Jim Chokey, Executive Vice President and General Counsel Joy Global Inc. and John Nils Hanson, Chairman, President and CEO Joy Global Inc.

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DOE to train specialists on pump system assessment at upcoming meetings

PSAT was developed by DOE with HI support to assist engineers and facility operators in conducting preliminary assessments of how efficiently their pumping systems operate. HI and DOE are holding the qualification workshops on June 23-24, preceding HI’s Spring Technical Meeting in Indianapolis, IN, and on Oct. 20-21, preceding the Fall Technical Meeting in Charlotte, NC.

Registration information for the PSAT training and HI’s Technical Meetings can be found in the “members” section of www.pumps.org.

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EIA: Coal demand, production expected to continue to grow in 2004-2005

“U.S. coal production is expected to increase by 2.8 and 2.9 percent in 2004 and 2005, respectively, as demand for coal increases,” EIA said. “Coal prices to the electric power sector are projected to increase by 3.4 percent (4 percent in the second quarter) this year. This is somewhat unusual,” EIA added, “given the generally stable nature of coal prices, and likely reflects the impact of high natural gas prices in the electric power sector on the prices of competing fossil fuels.”

EIA said electricity demand in 2004 is expected to increase by 1.9 percent, driven by “accelerated growth in the economy and weather-related increases in the first and the fourth quarters. In 2005, annual electricity demand is projected to grow by an additional 2.0 percent, as the economic expansion continues.”

The Short-Term Energy Outlook can be found at www.eia.doe.gov/emeu/steo/pub/contents.html.

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Newsbits

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