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MiningWeek Online
July 9, 2004 Volume 10, Issue 27
This Week's Issue:
Watzman: Looming shortages of highly trained miners prompt calls for action
A rapidly aging workforce in the nation’s mines threatens the industry with shortages of highly-skilled workers just as global demand for coal and minerals is booming, NMA’s Bruce Watzman told a House panel this week.
Watzman, Vice President for Safety, Health and Human Resources, told members of the Subcommittee on Energy and Mineral Resources that imaginative new partnerships between government and industry will be necessary to help supply skilled workers to an industry transformed by technology and mechanization.
“Just as the demand for mining workers appears poised for expansion, the capability to provide new mining professions has significantly deteriorated through downsizing and disappearance of university degree and other programs offering this very specialized education,” said Watzman. Since 1985, he said, ten mining departments in U.S. academic institutions have ceased operation and two others are tentatively scheduled to close their doors later this year.
A lackluster economy and government policies that have curbed new mining investment have contributed to the problem, said Watzman. By limiting employment opportunities, both factors have discouraged prospective students from considering mining as a career. These difficulties have been exacerbated by the growing sophistication in mining equipment, operations and management that require, more than ever before, a highly skilled workforce in underground and surface mines, he explained.
Watzman urged Congress to broaden research for mining institutions that train the next generation of engineers, ensure that research funding is long-term as well as adequate to maintain academic programs, and finally acknowledge the strategic importance of a sustainable mining industry to the health of the U.S. manufacturing economy.
“The challenge now is to attract and retrain a skilled workforce appropriate to a resurgent industry,” he said.
For the full text of Watzman’s testimony, visit www.nma.org/newsroom/congtest.asp.
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BLM, Phelps Dodge agreement paves way for new Arizona copper mine
The Bureau of Land Management (BLM) last week issued a Record of Decision agreeing to exchange land with Phelps Dodge Corp. to allow construction of Arizona’s first new copper mine in 30 years.
When completed, the land exchange will transfer to the public 3,866 acres in four counties of valuable, environmentally sensitive land near national monuments or wildernesses owned by Phelps Dodge in exchange for 16,296 acres of public land of equal value next to the company’s property near Safford, AZ.
The land Phelps Dodge will receive will be used primarily for support facilities and as a buffer to the proposed mining operations – two open pit mines about a mile apart in southeastern Arizona near the New Mexico border. The proposed project includes development of the Dos Pobres and San Juan copper ore bodies, located about eight miles north of Safford. The company is completing a feasibility study and continuing efforts to secure all necessary permits.
Construction on the mining complex, which is not expected to begin for about a year, is projected to take 15-to-18 months and to cost $350 million to $400 million, including engineering. The soonest the company could begin mining would be late 2007 or early 2008, said Phelps Dodge spokesman Ken Vaughn. The mine is expected to provide a major boost to the economy in Safford, bringing 250 full-time jobs and another 100 contract workers.
The BLM decision, which followed more than a decade of analysis, initiates an administrative process that begins with a 45-day period for public comment.
“This is really the classic win-win situation,” Vaughn said. “The public is getting some valuable, environmentally important land. We’re getting some land that is necessary to the operation of this mine.”
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Gerard: Realistic energy policy favors coal utilization in the enlarged Europe
The imperatives of improving economic growth and energy security argue strongly for realistic policies that favor greater coal utilization in the enlarged European Union (EU), NMA President and CEO Jack N. Gerard told EU coal industry officials and members of the EU Parliament this week.
Speaking at the European Parliament’s Clean Coal Seminar in Brussels, Gerard said cost, accessibility and security are inarguable factors favoring a prominent role for coal in energy policies designed to grow both mature economies as well as rapidly expanding ones in China and India. Energy use in developing countries is expected to soar by over 90 percent over the next two decades.
“Coal is not going away, the need for coal is not going away, and the will to use it among those who have coal is not going away,” he said.
As a consequence, Gerard called on EU policymakers to adopt a realistic view of coal utilization that integrates environmental aspirations with an appreciation for economic and security considerations. Fundamental to a more realistic view toward coal, said Gerard, will be a greater reliance on technological advances and research to reconcile the demands for growth with a clean environment.
“Carbon sequestration research, clean coal technologies and hydrogen research acknowledge the indisputable fact that fossil fuels like coal will continue for the foreseeable future to be the most reliable and lowest-cost energy resources,” said Gerard.
Gerard endorsed the U.S. climate policy, insisting the U.S. is not committed to the statue quo but to carbon reductions achieved through voluntary initiatives and technological innovation. This approach, said Gerard, “springs from the basic conviction that without economic growth environmental progress will falter.”
“Only by adopting policies conducive to economic growth will we summon the political will and provide the necessary investment for new technologies that are capable of controlling carbon emissions,” Gerard told conference participants.
A reliance on market forces to reduce carbon emissions can assure Europeans of satisfactory economic and environmental progress, said Gerard. The alternative is likely to be an unacceptable reduction in living standards and opportunities. “Economic stagnation is a high price to pay for a lack of innovation and imagination - all the more so because it’s unnecessary,” he concluded.
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Court ruling imperils energy supply
The US District Court for the Southern District of West Virginia in Huntington ruled yesterday that the US Army Corps of Engineers process for authorizing Section 404 nationwide permits (NWP 21) for coal mining activities is contrary to the language and the intent of the Clean Water Act.
In responding to the ruling, NMA President Jack Gerard said, “This is a legally confusing outcome that imperils energy supply. The nation’s coal producers are working very hard to meet unprecedented demand for coal based electricity to serve a rebounding economy. The Nationwide Permitting process protects the environment while meeting the country’s energy needs. Coal production is already down in Central Appalachia—due to a backlog in needed permits resulting from court decisions that were overturned.”
In Ohio Valley Environmental Coalition (OVEC) v. Bulen (US Army Corps of Engineers), in which NMA intervened, US District Judge Joseph R. Goodwin objected to the Corps’ process of requiring pre-construction notification (PCN) and receipt of written notification from the District Engineer that the proposed project will result in minimal environmental effects both individually and cumulatively before moving forward with a project. Prior to 2002, there was a presumption of authorization within 30-45 days of PCN submission, assuming the Corps did not object within a specified period. It is this extra scrutiny by the Corps of proposed coal mining projects that the Court found contrary to the legislative intent of Section 404(e), which provides for a general permit authorization that does not require individual review by the agency. According to the Court, Section 404(e) was designed to allow certain activities to go forward with minimal involvement by the Corps.
Historically, the Corps treated NWP 21 authorizations similar to applications for discharge activities under other nationwide permits. But a prior decision by this Court questioned whether the nationwide permits were being reviewed adequately by the Corps. In response to that criticism, the Corps revised NWP 21 to require individual analyses and minimal impact determinations on a case-by-case basis. It is that closer scrutiny of proposed discharges that this Court now rejects.
Judge Goodwin also enjoined the Corps from issuing NWP 21 authorizations in the Southern District of West Virginia and ordered the Corps to suspend authorizations for valley fills and surface impoundments for the 11 specific mining projects challenged by the plaintiffs and on which construction had not begun.
NMA is reviewing the decision and considering further options.
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NMA assumes prominent role in opposing costly McCain-Lieberman climate amendment
NMA assumed a prominent role this week in opposing Sens. John McCain (R-AZ) and Joseph Lieberman’s (D-CN) climate change proposal, which was supposed to come up as an amendment to the class action reform bill this week in the Senate. The class action bill was pulled from the Senate floor late Thursday evening, but the climate amendment could come up again on another legislative vehicle later this month or when Congress returns in September.
Among other activities, the association played a leadership role in a coalition opposed to the amendment; government affairs representatives visited every swing and key Senate office to educate lawmakers on NMA’s position; and the association mobilized its highly effective ACT Online capability to encourage grassroots opposition to the amendment. State associations also played a vital role in mobilizing amendment opponents in key states.
An important component of NMA’s efforts was a letter sent to all Senate offices by association President and CEO Jack N. Gerard, which noted the amendment would be “too costly to the economy and ineffective as a climate change strategy.”
Gerard noted: “Nothing has changed since the Senate vote last October (when the Senate rejected to proposal on a 43-to-55 vote) to persuasively argue that the unilateral and arbitrary limits imposed by the amendment will be any less costly or any more effective. The fact is that this misguided proposal will drive up costs for manufacturers and consumers, and drive jobs overseas. As a result, economic activity – and the associated greenhouse gases – will merely shift overseas without any appreciable reduction in global emissions.”
Gerard said there was a “better way to address this important issue; a reasonable, cost-effective alternative grounded in advances in technology.” By merely placing a cap on greenhouse gases without doing anything meaningful to advance the means of reducing emissions while still meeting the nation’s energy needs, the amendment “is a slogan, not a strategy,” he said. “We urge the Senate to be serious about climate change in all its complexities and oppose legislating on this important issue on an unrelated bill on the floor.”
NMA will continue to contact Senate offices in strong opposition to the amendment and urges its members to do so on an individual basis. While most indications were that the amendment would have been defeated by a margin comparable to that of last year, Senator McCain has vowed to continue to press for another vote on the issue this year. NMA members seeking additional information should contact John Shelk at 202-463-2653, or jshelk@nma.org.
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Golden Phoenix acquires mill for Phase III operations at Mineral Ridge gold mine
Golden Phoenix Minerals Inc. said it has signed two option agreements for a processing mill that will treat its high-grade gold ores from the Mineral Ridge mine in southwestern Nevada. The acquisition sets the stage for Golden Phoenix to fulfill its Phase 2 plans to move into greater gold production by milling the higher grade gold ores from Mineral Ridge, the company said.
The mill and the land were jointly negotiated with two separate owners. Esmeralda Extraction Co., which owns the 1,128 acres of private land that the mill sits on, agreed to an option to purchase for the property. The individual owner of the mill equipment also agreed to an option to purchase for the mill, Golden Phoenix said.
The mill, which lies just north of Lone Mountain and about 15 miles west of Tonopah, was built in 1981 at a cost of about $7 million. It operated for nearly four years processing tailings form the old Tonopah silver district. During its operation, it processed up to 1,350 tons daily. When it was shut down because of falling silver prices, the operator decommissioned the facility so that it could be easily restarted with prices improved.
Golden Phoenix plans to use the majority of the mill as it is presently designed, and will add a gravity and primary crushing circuit to handle the Mineral Ridge ore as metallurgical studies have defined. The reconditioning work along with the required permits may take up to a year before the mill can be commissioned, the company said.
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Washington Post: World Bank should finance more extractive industries projects in developing countries
In a strongly worded editorial, the July 4 Washington Post criticized the “utopian, denounce-everything mode” of some environmental groups regarding the World Bank’s (WB) funding of extractive industry projects, and concluded, “The real worry is not that the bank is doing too many projects. It is that it should be doing more of them.”
Entitled, “A Green Pragmatism,” the editorial focused on a challenge it said now confronts the international environmental movement: “Now that the world has accepted the basic message that the environment matters, campaigners have to move beyond denouncing everything that has an environmental cost; they have a duty to say which costs are most serious and how the expense of mitigating them should be apportioned.”
The Post pointed to the decision by the WB’s management to refuse an independent commission’s request to completely cease lending to oil and coal projects, noting the demand “overlooks the fact that poor countries need energy and that the alternatives to oil and coal may not be preferable . . . . Oil and coal will remain central to development, with or without the World Bank’s backing. To pretend otherwise is to imply that the poorest countries in the world must shoulder the cost of fighting global warming.”
The Post said by getting involved in oil and mining projects, the World Bank “can improve the chances that they will be well managed . . . . Today the bank’s involvement . . . represents the best hope that these will be responsible; but, partly for fear of NGO criticism, the bank has financed only one new investment in coal production in the past three years. The real worry is not that the bank is doing too many oil and coal projects. It is that it should be doing more of them.”
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Peabody Energy unit wins bid for more than 297 million tons of Powder River Basin coal
Peabody Energy said one of its units was the winning bidder for more than 297 million tons of high Btu, low sulfur coal reserves in the Powder River Basin (PRB). The winning bid for the reserves was 92 cents per mineable ton, made through a sealed bid auction process, and is subject to final evaluation by the Bureau of Land Management (BLM).
The reserves are adjacent to Peabody’s North Antelope Rochelle Mine, located in Campbell County, WY, which shipped more than 80 million tons in 2003. Peabody’s Powder River Coal Company mines last year shipped a record 106.5 million tons of coal and ranked number one, four and six among America’s most productive mines.
Peabody is the largest PRB coal producer and the world’s largest private-sector coal company, with 2003 sales of 203 million tons and $2.8 billion in revenues.
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Watch the Pete Dye tournament on the Golf Channel, July 15-18
Be sure to watch the Pete Dye West Virginia Classic, for which NMA is serving as a presenting sponsor, July 15-18 on the Golf Channel. Pre tournament practice and qualifying events begin July 12. The 250-acre Pete Dye is a unique course with a coal mine theme and is constructed on reclaimed mine land. For more information, visit NMA’s website (www.nma.org) or www.petedyeclassic.com.
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Newsbits
Glamis Gold Ltd. said a $45 million loan agreement has been completed between its wholly owned subsidiary, Montana Exploradora de Guatemala S.A., and the International Finance Corp., the private sector arm of the World Bank Group. The load will be used to partially fund development of the Marlin gold and silver mine, currently under construction in western Guatemala . . . .Ingersoll-Rand Co. Ltd. said it has sold its Drilling Solutions business unit to Atlas Copco AB, headquartered in Stockholm Sweden, for approximately $225 million. The transaction includes production facilities in Garland, TX; Roanoke, VA; Yokohama, Japan; and Xuan Hua, China; and Ingersoll-Rand Equipment Stores in Knoxville and Nashville, TN, and Clarks Summit, PA . . . . ABB Instrumentation has launched a new FSM4000 electromagnetic flowmeter for measuring extreme flow applications in the metals and mining industries. For more information visit www.abb.com/automation. . . . Arch Coal Inc. said it will invest $2 million in KFx Inc. stock with the goal of establishing a clean coal plant that will enhance 8 million tons of coal annually, using a process that removes moisture and impurities to create a cleaner-burning product. KFx also announced it would locate its first commercial “K-Fuel” plant at the idled Fort Union mine north of Gillette, WY . . . . The Colorado Mining Association will hold its membership forum, tour and coal/hardrock committee meetings in Nucla and Telluride, CO, July 29 and 30. Events will commence with a tour of the New Horizon Mine on July 29, followed by lunch and the committee meeting. On Friday, there will be a tour of Newmont Mining’s Idarado project in Telluride. For more information, contact Annie Kobernusz at annie@coloradomining.org, or call 970-626-5444 . . . . West Africa Gold Inc. said it has completed the acquisition of its first North American gold mining properties. The company purchased Gold Sierra Ltd., which owns the mineral rights to the Mockingbird and Great West Gold Project areas in Arizona. The company said previous sampling indicated an inferred resource of 10 million tons with gold grade of 0.1 opt with additional resources of silver and copper.
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