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MiningWeek Online
May 28, 2004 Volume 10, Issue 21
This Week's Issue:
From the editors...
On very rare occasions, the editors of NMA’s Mining Week take advantage of the privileges that come with publishing a newsletter—we comment. The last time we did so was immediately following the East Coast “blackout,” when it seemed to us an event with such enormous implications would, and should, force Congress to act on a National Energy Policy.
Since Congress remains deadlocked on this vital legislation, we approach our next topic with some humility—“The Day After Tomorrow,” the new special effects extravaganza, which opens in movie theaters across America today. It’s not our intent to debate the science presented in this movie. The movie’s screenwriters and scientists pro and con on the impacts of climate change all agree on one thing—“it’s pure science fiction.” Yet, many are lauding the merits of this movie as a “teachable moment.”
One scientist is quoted as saying, “It is going to do more for the issue of climate change than anything I’ve done in my whole life.” Proponents of climate change legislation say they are going to “use any publicity” they can get in attempts to move legislation in Congress. NRDC and Ben and Jerry’s Ice Cream are teaming up outside theaters to offer free ice cream to anyone who will write their Senators in support of the bill.
Maybe they have the right idea, and we should be writing our Senators. Let’s start with the costs of the proposal—the McCain Lieberman bill.
According to the U.S. Energy Information Administration (EIA), the measure would reduce U.S. GDP by more than three-quarters of a trillion dollars by 2020. Because the bill would trigger a near 60 percent reduction in coal production, regional economies relying on coal for electric power and manufacturing employment would be particularly vulnerable.
Should a summer popcorn movie really become the motivation for passing a bill with such staggering costs to the economy?
To disregard fact and embrace fiction as a rationale for setting public policy priorities is regrettable. Indeed, it may be inexcusable. And not just because of the consequences of ill-conceived legislation. Rather, at a time when we bemoan low voter turnout and increasing levels of cynicism and distrust among the electorate, such relentless opportunism can only feed the public’s suspicions.
That makes for a sad day, and unfortunately it—along with all the surrounding hoopla—is opening in a theater near you.
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Peabody once again largest U.S. coal producer, says NMA survey
Peabody Energy Corp. retained its ranking as the largest U.S. coal producer in 2003, with output (including sales) of 201.8 million short tons, approximately 18.9 percent of America’s coal production, according to NMA’s recently released Coal Producer Survey. The second largest producer was Kennecott Energy Company, with 119.1 million tons, 11.1 percent of total U.S. production, followed by Arch Coal, Inc. with 109 million tons, 10.2 percent of U.S. production.
The top ten coal companies accounted for approximately 69 percent of U.S. coal production in 2003, up one percent from 2002.
According to the 2003 survey, the top four underground mines in terms of production were CONSOL Energy Inc.’s Enlow Fork and Bailey mines in Pennsylvania, with 9.9 million and 9.4 million tons, respectively, followed by RAG American Coal’s Twentymile Mine in Colorado (8.1 million tons), and Arch’s SUFCO mine in Utah (7.1 million tons).
The major producing surface mines, all located in Wyoming, were: Peabody’s North Antelope/Rochelle Mine (80.1 million tons); Arch’s Black Thunder Mine (62.6 million tons); Kennecott’s Cordero Rojo Mine (36.0 million tons); and Kennecott’s Jacobs Ranch Mine (35.7 million tons).
Major U.S. coal reserve holders were: the U.S. government (91.0 billion short tons estimated); Great Northern Properties Ltd. Partnership (20 billion tons); Peabody Energy (9.2 billion tons); and CONSOL Energy (4.2 billion tons).
The entire survey, including numbers for multi-mine production complexes, a review of the 2003 overall market, and a general market outlook for 2004, is available at www.nma.org.
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House Science Committee holds hearing on U.S. metals industry
Last week the Energy Subcommittee of the House Science Committee held a hearing on H.R. 3890, a bill introduced by Rep. Melissa Hart (R-PA) to reauthorize the “Steel and Aluminum Energy Conservation and Technology Competitiveness Act of 1988.” H.R. 3890 would authorize annual funding of $10 million for the Department of Energy’s energy efficiency R&D programs, including the Mining Industry of the Future Program.
While both the bill and the hearing focused primarily on the steel industry, the original act (P.L. 100-680) directed “the Secretary of Energy to establish an industrial energy conservation and competitive technology program to conduct scientific research and development to enhance the energy efficiency and competitiveness of American steel, aluminum and copper, and other metals industries through public-private sector partnerships.”
During the hearing, the point was made by Ranking Member John Larson (D-CT) that the FY 2005 budget request for each of the industries, including mining, in the Industries of the Future Program is inadequate.
Also testifying at the hearing was Douglas Faulkner, Principal Deputy Assistant Secretary for the EERE at DOE; Richard Shulkowsky, Vice President of INTEG Process Group, Inc.; Lisa Roudabush, General Manager, U.S. Steel Corporation; and Dr. Ronald Sutherland, an independent consulting economist.
NMA members seeking additional information on the hearing may contact Susan Carver at scarver@nma.org.
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Russia moves to back Kyoto Protocol
During a European Union (EU) summit last week, Russian President Vladmir Putin agreed to back the Kyoto Protocol. The summit had been held to negotiate the terms of Russia’s entry into the World Trade Organization (WTO). Once the terms were settled, Putin promised to reward the EU’s action by backing the Kyoto treaty.
Mr. Putin said, “The EU has met us half way in talks over the WTO and that cannot but affect positively our position on the Kyoto Protocol.” He went on to add that he could not guarantee that Russia would ratify the accord, as the Russian Parliament would need to cast the deciding vote.
The pact needs the backing of developed nations responsible for 55 percent of greenhouse gas emissions in order to enter into force. So far, the treaty has been ratified by nations accounting for 44 percent of emissions and Russia’s ratification is seen as vital to make up the remaining amount.
The announcement came as a surprise. In April, an advisor to Mr. Putin announced the Protocol would “stifle economic growth” and that Russia had no plans to sign.
The United States pulled out of the pact in 2001, citing potential harmful impacts to the U.S. economy.
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Value of mining machinery and related equipment totaled $1.2 billion in 2003
The 2003 total value of machinery included $326.4 million in underground mining machinery equipment, a 1.0 percent increase from 2002 according to a U.S. Census Bureau report. Portable drilling rigs decreased 3.0 percent, from $403.8 million in 2002 to $391.8 million in 2003. Drills and other mining machinery, which totaled $160.2 million, were up 23.3 percent. Shipments of portable crushing, pulverizing, screening, washing and combination plants decreased from $67.9 million in 2002 to $56.1 million in 2003. The total value of shipments of selected types of mining machinery and related equipment in 2003 was $1.198 billion, representing an increase of 3.2 percent from the 2002 figure of $1.162 billion. Mining equipment demand increased in 2003 primarily in response to greater coal demand and to a stronger U.S. economy.
The U.S. Census Bureau’s Mining Machinery and Mineral Processing Equipment Report for 2003 is available electronically on the Internet through the Census Bureau’s website – www.census.gov/cir/www/333/ma333f.html.
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Corps of Engineers issues guidance on wetlands mitigation
After several months of review, the US Army Corps of Engineers this week issued internal guidance to its field operations on the Corps Wetlands Mitigation Policy. The guidance should have implications for Section 404 permit authorizations under the Clean Water Act (CWA) as they affect mitigation requirements and conditions placed on nationwide and individual permit authorizations for coal mining activities.
The guidance—which is consistent with the Bush Administration’s National Mitigation Task Force’s newly revised mitigation policy—provides more explanation for uniform implementation on compensatory mitigation requirements and policies for impacts to ephemeral, intermittent, and perennial streams, and other aquatic resources affected by fills at surface mining operations. The guidance does not diminish or expand the need to compensate for unavoidable impacts to the aquatic environment, but does acknowledge that impacts are to be evaluated on a case-by-case and regional basis in a watershed context. Nonetheless, permit applicants are still required to replace stream and wetland functions at a ratio that reflects the value of the lost resource.
The guidance references findings of the National Research Council in its report, Compensating for Wetland Losses Under the Clean Water Act, that states, “The committee endorses the watershed approach and finds that automatic preference for in-kind and on-site mitigation. . .to be inconsistent with that [watershed] approach.” The guidance states that, “If on-site mitigation opportunities are insufficient to replace the lost aquatic functions, off-site mitigation should be sought,” i.e., improving water quality in the watershed to enhance habitat and other functions. The guidance stipulates a sequence in which off-site mitigation ratios increase depending upon the distance involved and other watershed factors.
The guidance does not alter or modify the requirement to comply with applicable Federal laws, regulations or guidance, but could alleviate the burdensome conditions placed on some permit applications that have resulted in significant delays in the permitting process. While the guidance applies only to coal mining, it is entirely consistent with the with the national mitigation policy.
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NMA urges better evaluation of LAWR disposal options
In comments filed this week on the Environmental Protection Agency’s (EPA) advanced notice of proposed rulemaking, NMA urged better evaluation of a broader range of disposal alternatives for low-activity radioactive waste (LAWR) beyond the agency’s primary focus on Resource Conservation and Recovery Act (RCRA) Subtitle C facilities. NMA pointed to several other potential disposition pathways for disposal of LARW that provide “comparable, if not increased, protection of public health, safety, and the environment.”
Specifically, NMA asked EPA to consider and evaluate licensed low-level radioactive waste facilities, RCRA Subtitle D facilities, and most importantly licensed byproduct material disposal facilities. NMA referenced its White Paper, “Direct Disposal of Non-11e(2) Byproduct Materials in Uranium Mill Tailings Impoundments,” prepared jointly with the Fuel Cycle Facility Forum and submitted to the Nuclear Regulatory Commission (NRC) last week.
NMA urged EPA to extend the scope of its debate to include more detailed consideration of additional disposal options based on their respective licensed or permitted capability to adequately control radiological or hazardous constituent concentrations and the risk factors associated with such concentrations. In addition, NMA requested that EPA endorse the approach proposed in the White Paper of establishing generic waste acceptance criteria for disposal of non-11e(2) material in uranium mill tailings impoundments.
While NMA endorsed the need for a broader range of disposal alternatives, it cautioned that mining and beneficiation wastes, along with specifically exempted mineral processing wastes, are not subject to RCRA Subtitle C regulation. Therefore, such wastes could not be required to be disposed of in Subtitle C facilities, though permissive use of such facilities should be an option if the waste generator so chooses.
For NMA’s complete comments see: www.nma.org/pdf/legal/nma_comments_epa_anpr_final_052804.pdf.
For a copy of the White Paper see: www.nma.org/pdf/legal/white_paper_non11e2submission_052804.pdf.
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Maryland names new state gem with help from Women in Mining’s DC Chapter
Governor Robert Ehrlich recently signed into law a bill that names the Patuxent River Stone as Maryland’s new state gem. The designation was the result of the DC Chapter of Women In Mining’s (WIM-DC) work with the Health and Government Operations Committee of the Maryland General Assembly over the past several years.
The Patuxent River Stone, which is unique to Maryland, is an agatized gembone in which silica has replaced fragments of petrified bone material thought to be from dinosaurs. The stone was discovered by longtime WIM-DC member L. Courtland Lee, who said on the occasion of Governor Ehrlich’s signing: “This is a day of firsts for the geologic community. To my knowledge, the Patuxent River Stone is the first state gem to be named in at least 50 years, and can now be counted among those from 35 other states. It is the first gembone to be officially recognized as a gemstone for use as an ornamental stone in jewelry or carvings.”
WIM-DC plans to continue working with the State of Maryland to set up collection areas for the agate and hopes that the new designation will help generate positive interest on mineral resources within the state.
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Watzman highlights industry’s record safety achievements and future challenges
NMA Vice President for Safety, Bruce Watzman, this week told the 34th Annual Safety & Health Conference in Salt Lake City that the mining industry’s record safety performance has been due to seven key trends:
- Commitment by managements, workers and regulators to a goal of zero fatalities and injuries
- Conscientious safety awareness
- Better equipment design
- Technological advances
- Improved engineering methods
- Advanced and continuous training
- Strong oversight and assistance from the Mine Safety & Health Administration (MSHA) and state regulatory authorities.
During 2003, MSHA-recorded fatalities in the coal, metal and nonmetal mining sector were the lowest level since the reporting of statistics began, and the industry’s occupational injury and illness rates make mining jobs safer than those in manufacturing, construction, transportation, public utilities and the wholesale and retail trade, according to the National Safety Council.
Watzman noted, “Our industry has made safety and health a core value, meaning that it is integrated into company operations from top to bottom—evident in communications and procedures at the workplace.” He pointed to new health and safety challenges facing the industry, including the hiring, retention, training and retraining of new hires; the needs of an aging workforce and the continuing necessity to identify and introduce new technology to comply with federal and state safety and health regulatory requirements.
The full text of the speech is available at www.nma.org/pdf/speeches/2004/watzman_utah_symp_052804.pdf. NMA members seeking additional information may contact Bruce Watzman at bwatzman@nma.org.
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OSM to host forum on coal mining and the Indiana bat
The Office of Surface Mining (OSM) is hosting a three-day technical forum on the effort to conserve and maintain populations of Indiana bats and their habitats. The forum will be held November 16-18 in Louisville, KY and is co-sponsored by Bat Conservation International and the Illinois Coal Association.
The extensive program will provide an organized format for the discussion of issues concerning permitting, biological surveys, monitoring and protection of the Indiana bat during coal mining and reclamation and summary talks by speakers from local, state, and federal agencies; universities; and environmental consulting firms. Hard copy proceedings will be available after the forum.
For more information visit www.mcrcc.osmre.gov/bats.
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George Nicolozakes, founder of Marietta Coal Company, dies
George Nicolozakes, who founded and operated several mining companies, including the Marietta Coal Company, died on May 19 in Ohio.
Nicolozakes was a central figure in the coal industry, serving as President of the Ohio Mining and Reclamation Association, and on the board of the National Coal Association and American Mining Congress, as well as on numerous other industry and government boards and committees. He was 81 years old.
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Newsbits
Peabody Energy announced that a group of Midwest rural electric cooperatives and municipal joint action agencies have signed a letter of intent to acquire partial ownership in the Prairie State Energy Campus, which will provide the group with approximately one-third of the annual electricity output of the plant. The plant is a planned 1,500 megawatt generating plant and coal mine under development in Washington County, IL. The group includes the Indiana Municipal Power Agency, the Missouri Joint Municipal Electric Utility Commission, Wolverine Power Supply Cooperative and other municipal joint action agencies and cooperatives.…After erection and commissioning by P&H MinePro Services – Appalachia, a P&H 4100XPB recently went to work at Twilight Mine, owned by Progress Coal Company, a subsidiary of Massey Energy Company. The new equipment will be used to dig overburden and is the first P&H equipment on the site.…American Electric Power announced it is reorganizing its distribution and customer service operations into seven regional utility divisions, placing operational authority in the hands of division presidents and their support staffs. Prior to the reorganization, both distribution and customer service functioned on a centralized basis, reporting to AEP management in Columbus. State presidents focused primarily on legislative and regulatory issues.
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