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MiningWeek Online
June 25, 2004 Volume 10, Issue 25
This Week's Issue:
Mining industry TRI volumes decline nearly one billion pounds according to EPA
The volume of materials reported by US mining operations under the Environmental Protection Agency’s (EPA) 2002 Toxic Release Inventory (TRI) declined by nearly one billion pounds compared to 2001 reported volumes, according to a release of nationwide data produced by the agency this week.
EPA’s analysis tracked the industry’s June 16 summary of its reports. EPA and NMA attributed the decline in volume to compliance with findings in a 2003 US District Court ruling. NMA noted that reductions in production levels at various mines, reflecting the general 2002 economic slow-down, also affected some results.
NMA also noted that EPA, in its explanation of anomalies in TRI results, pointed to the 2002 closure of an Arizona copper smelter. The smelter and the surrounding area were, in fact, undergoing reclamation, which necessitated the required and permitted destruction and disposal of certain processing and other structures along with other reclamation activities. EPA required those volumes to be reported under TRI.
The preponderance of mining’s TRI materials—over 98 percent—occurs naturally in the local rock and soil at mining operations and remains in low concentrations in the large amount of this material handled and managed at mines sites. This characteristic continues to set mining operations’ reports apart from those provided by other reporting industries.
In 2003, the Federal District Court for the District of Columbia ruled that EPA had improperly required metals mining operations to report low, or de minimis, concentrations of metals and metal compounds occurring naturally in the rock moved and stored at mining operations. The de minimis provision applies to other reporting TRI entities.
While the court’s decision helps make TRI reports from mining operations more meaningful to people who live near operations, many Western Governors, the mining industry, the US Chamber of Commerce and other groups continue to fault the TRI and related EPA reports.
In addition to the Western Governors Association policy resolution on TRI adopted this week (see related story, page 3), Alaska’s Department of Environmental Conservation Comissioner Ernesta Ballard editorialized that TRI’s “release” definition does not distinguish between permitted releases that are regulated under state and federal laws to ensure there is no harm to human health and the environment and uncontrolled releases. The commissioner said it is critical people receive accurate information.
In a related matter, the US Chamber of Commerce said this week that EPA must reform the way it conducts and communicates its analyses of risks to human health and the environment. The Chamber’s comments were in response to a 182-page self-assessment EPA released in March for public review.
While TRI is a volume-based report and is not intended to evaluate risk, many groups—including Earthworks (formerly the Mineral Policy Center) and others—attempt to use TRI results to improperly characterize health and environmental threats at reporting operations.
NMA’s analysis of mining operations’ TRI reports can be found on our web site, www.nma.org.
Nationwide 2002 TRI data are available from EPA www.epa.gov/tri/tridata/tri02/index.htm.
US Chamber of Commerce’s comments are available at www.uschamber.com.
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Grassroots efforts in Montana put cyanide ban reform on the ballot
Over 30,000 signatures were collected for a ballot initiative, I-147, that would encourage new mining ventures in the state by repealing and reforming the current cyanide-use ban in Montana. For what is believed to be the first time in state history, enough signatures were gathered to qualify the initiative for the November ballot in every county in the state.
“From Libby to Ekalaka, and from Dillon to Plentywood, Montanans from all 56 counties have signed on, saying ‘The time is right for I-147.’ Mining was once a vibrant and vital industry to Montana and it can be again. It doesn’t have to be jobs versus the environment. There’s no reason we can’t have both,” said Tammy Johnson of the group Miners, Merchants and Montanans for Jobs and Economic Opportunity.
The initiative would reform the use of solutions containing cyanide in gold and silver mining, allowing for its use under stringent new criteria, including:
- all leach pads and ponds that hold solutions containing cyanide must be designed to withstand 100-year storm events;
- tailing impoundments, leach pads and ponds that hold solutions containing cyanide must first have a synthetic liner backed up with a secondary liner and a leak-detection system;
- requires that a contingency system be put in place so that in the event of a leak, the solution is recovered;
- to address groundwater concerns, mine operators must have a Department of Environmental Quality (DEQ) approved program to monitor groundwater and surface water that could be affected; and
- state regulators can require additional requirements to ensure that ground and surface water is protected.
Mines using these solutions under the initiative must additionally comply with all state and federal water and air quality regulations and have sufficient bonds in place with the state to cover reclamation costs.
“In the Legislature, we are reminded by the voters and the media to balance various interests and values. I-147 strikes the balance by encouraging good-paying jobs while at the same time ensuring our water, environment and taxpayers are protected. That’s a big step towards the day when Montanans can have a quality of life that includes clean streams and well-funded schools, and good jobs and lower taxes,” said Montana State Representative Scott Mendenhall.
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White House names Murdy and Owens to President’s Council
Two mining industry executives—Wayne W. Murdy, chairman and CEO of Newmont Mining Corporation, and James W. Owens, chairman and CEO of Caterpillar Inc—were named recently to the President’s Manufacturing Council.
In making the announcement, Commerce Secretary Donald Evans said, “While we have seen rising growth in manufacturing employment nationwide, the Bush Administration is providing manufacturers with a permanent seat at the policy table.” He noted council members will, “provide the real world experience needed to ultimately help strengthen the industry and create manufacturing jobs across America.”
The announcement fulfilled some of the recommendations made in a comprehensive report by the Commerce Department, “Manufacturing in America,” that identified challenges facing the manufacturing sector and outlined recommendations that will aid American manufacturing and create jobs.
Murdy and Owens join 11 other industry leaders on the President’s Council.
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U.S. continues to lose share of metals mining exploration investment
While worldwide spending for nonferrous metals exploration was up over 26 percent in 2003, and US investment increased modestly, the US share of exploration dollars continued to erode according to analyses recently released by the Metals Economics Group (MEG) and PriceWaterhouseCoopers (PwC). In 2003, $2.4 billion was devoted to metals exploration, with the US capturing 7.0 percent of the worldwide budget—down from 10 percent of total expenditures as recently as 2000.
Latin American countries continue to be the most popular destinations for exploration, but spending in Canada and Africa surged in 2003. Both reports attribute Canada’s improved investment climate to its recently enacted flow-through share tax deduction and its super flow-through share exploration investment tax credit for minerals exploration. Flow-through incentives allow exploration companies to transfer to their investors their rights to tax deductions for exploration—effectively lowering the net cost of the investment in such companies. While still commanding over 15 percent or worldwide expenditure, investments in Australia have declined over the last two-plus years. In response, the government commissioned four reports on the situation. One recommends flow-through shares similar to those in Canada.
Prior analyses have pointed to government policies—particularly to the many years and uncertainties involved in US permitting procedures—as the reason for diminished investments in this country. The PwC report also says that companies listed solely in the US are “at a serious disadvantage to their global peers in communicating their achievements and potential” due to the Securities and Exchange Commission’s stance of prohibiting resource disclosure and disclosure of proven and probable reserves.
“At a time when US and worldwide demand for metals is at historic levels, it’s unacceptable for this country to not have an effective minerals policy—especially when our neighbors and trading partners are doing all they can to attract investment. Without continued exploration, this country will cease to have a viable metals mining industry—losing jobs, technical expertise and billions of dollars in tax revenues and economic activity,” NMA president Jack Gerard commented in response to the reports.
Complete copies of the reports are available at www.metalseconomics.com/frame_exploration_reports.html and www.pwc.com/extweb/pwcpublications.nsf/docid/D9179FA18D34C5F285256EAD0063B24F.
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Western governors act on mining-related policies
Members of the Western Governors Association (WGA) at their annual meeting this week in Santa Fe, NM, adopted four policy resolutions affecting mining.
These included resolutions that 1) Direct the WGA to work with Congress and the Administration on developing a National Minerals Policy to ensure a vibrant US minerals mining industry; 2) Call on the government to eliminate disincentives and establish incentives to voluntary, cooperative efforts aimed at improving and protecting water quality impacted by abandoned or inactive mines—including passage of a “Good Samaritan” provision in the Clean Water Act—and continued cooperative work with NMA, federal agencies and other stakeholders to examine other mechanisms to accelerate responsible cleanup and securing of abandoned mines; 3) Urge the Environmental Protection Agency to abide by congressional intent and remove naturally occurring substances in materials such as waste rock, tailing and ash, which exhibit low toxicity and are managed within facility boundaries, from future Toxics Release Inventory (TRI) requirements at mining and utility operations; and 4) Formation of a Clean and Diversified Energy Work Group that is charged with developing energy alternatives for the region, including clean coal technologies, renewable energy sources and energy efficiencies.
Eighteen western state governors participant in the WGA. The full text of these and other resolutions adopted at this week’s meeting can be accessed at www.westgov.org/wga/policy/04/index.htm.
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NMA requests additional funding for NIOSH safety and health program
The National Mining Association sent a letter this week to Chairman Ralph Regula and Ranking Democratic Member David Obey of the House Subcommittee on Labor, Health and Human Services, Education and Related Agencies requesting an increase in funding for the National Institute for Occupational Safety and Health’s (NIOSH) mining safety and health research program of $10 million above the agency’s baseline $42 million budget for the project.
The letter, which NMA sent in conjunction with the Bituminous Coal Operators Association, the Industrial Minerals Association of North America, the International Union of Operating Engineers, the National Stone, Sand and Gravel Association, the United Mine Workers of America, and the United Steelworkers of America, seeks to ensure that NIOSH’s critical work on safety and health in the mining industry is not eroded by a lack of basic research funds.
The letter makes the following requests:
- Ensure that the in-house NIOSH programs are not further diminished from inflation, so that important research into noise and dust controls, hearing loss and silicosis prevention and diesel-engine exhaust particulate matter can continue. To accomplish this goal, the letter states that $4 million is needed immediately to supplement the base funding of the NIOSH research program.
- Ensure that there is a sufficient extramural research program to complement the in-house mining activities. This includes the funding of research at mining universities, which in turn will continue to produce the mining engineers that are critical in maintaining the health and safety of the industry. An additional $1 million is requested to fund competitive contract activity.
- Provide new funding for emerging issues. The letter states that as issues develop, NIOSH’s mining program is in need of a modest funding increase so that it can respond proactively to these issues. $5 million is requested to face emerging issues, such as mitigating potential mining disasters and assessing and improving the emergency response capabilities of the mining industry.
NMA members seeking additional information on this issue may contact Bruce Watzman at 202-463-2657 or bwatzman@nma.org.
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$19.7 billion Interior appropriations bill passes House
The House approved a $19.7 billion Department of Interior and related agencies appropriations bill for FY ’05 on June 17. H.R. 4568 was approved by a vote of 334-86.
During floor consideration, an amendment was filed, but not offered, by Rep. Peter DeFazio (D-OR) that would have reduced the Fossil Energy Research and Development programs by $19 million to be used for “Wild Land Fire Management.” No other amendments were offered that would have threatened funding for any of the coal programs administered by the Office of Fossil Energy or the Mining Industry of the Future program in the Office of Industrial Technologies.
Another amendment filed by Rep. Nick Rahall (D-WV) would have codified a 1996 executive order by former President Clinton regarding Native American land claims. Protections on this issue are currently provided in the National Historic Preservation Act. The amendment was opposed by NMA and defeated by a vote of 209-215.
On June 16th, one day before the House vote, Rep. Mike Simpson (ID-2) engaged Interior Appropriations Subcommittee Chairman Charles Taylor (NC-11) in a colloquy on proposed hardrock claims fee increases and permit cost recovery, in addition to the need for an efficient mineral permit tracking system. Simpson asked that the Subcommittee work to include language during conference to require the Interior Department to establish an efficient permit tracking system.
H.R. 4568 includes $840.4 million for the Bureau of Land Management (BLM), which is $2.9 million above the requested level. $106.9 million of this ammount was approved for the Energy and Minerals programs ($2.5 million above the requested level). Mining law administration was provided $32.6 million.
The Office of Surface Mining (OSM) would receive $108.9 million for Regulation and Technology and $194.1 million for the Abandoned Mine Reclamation Fund, which is $49.7 million lower than the Administration’s request.
The U.S. Geological Survey (USGS) would receive $944.4 million, with geologic resource assessments receiving $78.6 million.
In the Office of Fossil Energy, the FutureGen Initiative replaced the Clean Coal Technology section of the bill, and the $237 million in unused program funds will be deferred until FY 06 and beyond for the FutureGen project. The bill also permits the use of $18 million in unused funds from the Clean Coal Technology Program for the FutureGen project in FY 05. The bill language also provides that 20 percent of the funding for planning and research stages of FutureGen should come from non-federal sources and 50 percent for any demonstration component.
Also in the Office of Fossil Energy, the House approved $601.8 million for fossil energy research and development, $33.9 million below the budget request. The Clean Coal Power Initiative was provided with $105 million (an increase of $55 million over the requested amount), and fuels and power systems would receive $276.6 million, which includes $46 million for carbon sequestration research and development.
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Royal Gold ranked 4th on Fortune Small Business magazine’s list of fastest growing small companies
Royal Gold, Inc. has been named one of the fastest growing small public companies in America by Fortune Small Business magazine, marking the second consecutive year that Royal Gold has been included in the top five.
The rankings are based on analyses done by FORTUNE in association with Zacks Investment Services, a financial research firm, which evaluated all public companies traded on major exchanges with $200 million or less in annual revenues. Rankings were based on earnings growth, revenue growth, and stock performance over the past three years.
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Lyle Taylor, Northwest Mining Association president, dies
Lyle Taylor, president of the Northwest Mining Association and president and CEO of Geotemps, Inc. died on Friday, June 18th in a single car accident, while en route to his Reno home from Northern California.
Taylor was a member of the Mackay School of Earth Sciences Executive Advisory Board at the University of Nevada, Reno. He was an avid supporter of the Nevada Mining Association and the Colorado Mining Association, as well as a variety of additional industry associations and community organizations. He was recently awarded a lifetime membership to the Geological Society of Nevada.
Taylor was a U.S. Air Force veteran, a past president of the American Legion, and a graduate of the University of Nevada, Reno.
He was the founder, president and CEO of Geotemps, Inc., which for the last twenty years has provided temporary staffing and direct placement services to the mining industry.
Services will be held tomorrow in Reno. Donations in Mr. Taylor’s memory may be made to the Lyle Taylor Memorial Scholarship Fund at the Mackay School of Earth Sciences.
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New palladium coin commemorates Lewis and Clark expedition
A new coin, minted with palladium from Stillwater Mining Co.’s south-central Montana mine, commemorates one of America’s greatest adventures with one of America’s rarest natural resources.
Palladium was discovered in 1803 – the same year that Thomas Jefferson requisitioned Meriwether Lewis to explore the possibility of a navigable waterway across the newly expanded country. Stillwater operates the only palladium mine in the U.S.
“It’s uniquely Montana. [Lewis and Clark] spent more time in Montana than any other state. Furthermore, Clark probably went right across our property when he traveled along the river,” Stillwater CEO Frank McAllister told the Billings Gazette.
McAllister initially approached the U.S. Mint with the idea, but found that the earliest release date would be 2006. “We needed to have something now to help celebrate,” he said.
Instead, McAllister approached the Northwest Territorial Mint in Auburn, Washington to produce the coin. The front of the coin bears the likeness of Lewis and Clark and the reverse features a bison, a staple food source of the expedition.
The Lewis and Clark coin is available from the Northwest Territorial Mint at www.nwtmint.com.
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