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MiningWeek Online
July 30, 2004 Volume 10, Issue 30
This Week's Issue:
NMA applauds administration’s greenhouse gas initiative
NMA this week applauded the Bush administration’s “leadership in announcing the international Methane-to-Market Partnership.” The program will focus on cost-effective methane recovery and promote its use as a valuable energy resource throughout the world.
“We think voluntary, market-based incentives and multi-national cooperation are the keys for addressing the climate change issues, rather than the mandatory target approach favored by some in the international community,” said NMA President and CEO Jack N. Gerard.
“The U.S. coal industry is a leader in coal mine methane recovery techniques and many of our companies have been working with EPA to improve recovery technologies. This partnership will help stimulate adaptation of these methane control technologies more broadly throughout the world, to countries with relatively high methane emissions. We will be pleased to work with EPA and others as this initiative goes forward,” Gerard said.
The partnership, announced by Environmental Protection Agency (EPA) Administrator Mike Leavitt, is a U.S.-led, multi-national initiative to develop and promote cooperation on the recovery and use of methane. Also involved are Australia, India, Italy, Japan, Mexico, United Kingdom and the Ukraine.
The U.S. will commit up to $53 million over the next five years to facilitate the development and implementation of methane projects in developing countries with economies in transition. EPA will play a central role in the partnership by building on the success of the agency’s voluntary domestic methane partnership programs.
Since 1993, EPA and other federal agencies have been working collaboratively with industry to identify and implement cost-effective methane emission reduction technologies and management practices. “These programs have helped bring total U.S. methane emissions in 2001 to more than 5 percent lower than emissions in 1990, in spite of significant economic growth over that time period,” EPA said.
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Energy saving R&D programs ‘critical’ for mining industry, PD executive says
The continued funding of effective research and development programs for energy-saving technology in the United States and globally is a “critical issue for the mining industry,” a Phelps Dodge (PD) executive told a House committee hearing earlier this month.
“The commitment of significant resources (financial and human) on a sustained basis into cross-cutting technology development is essential to the near-term and long-term viability of the U.S. copper industry,” said John O. Marsden, PD’s senior vice president-technology & product development. He testified before a July 15 House Resources Committee hearing on energy-saving technologies.
Marsden outlined PD’s “Quest for Zero” program, a “comprehensive, lean production program designed to, among other things, improve operating performance and income.” The elimination of waste and process variation, the reduction of energy consumption and improved energy efficiency and improved control of all critical processes were key factors targeted by the program, he noted. “By the fourth quarter of 2003, the Quest for Zero program had delivered operating efficiency improvements totaling $365 million on an annual run rate basis,” Marsden said.
He noted the company also participates in a number of collaborative research and development programs with third-party institutions, and has been a “strong supporter of the National Mining Association and Department of Energy’s ‘Mining Industry of the Future’ program.” He said PD has supported a number of projects proposed under Mining Industry of the Future, including the “Alternative Anode Reaction Copper Electrowinning” project led by INEEL (Idaho Nuclear Energy Electric and Technology Laboratory). “This project involved collaborative research that was conducted with support from a number of mining industry partners with common interests.”
Marsden said the Mining Industry of the Future program “provides significant value to the U.S. mining industry by funding relevant research and development projects within the United States.”
While PD “continues to devote significant resources to the development of technologies that we believe help us to maintain and improve our competitive position in the world copper market,” there is a need for “additional resources to be applied as we move forward in an increasingly competitive global copper market,” he said. “This is particularly important since the demise in the mid-1990s of the U.S. Bureau of Mines, which provided a significant and sustained research and development platform for the U.S. mining industry.”
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Roadmap outlines future technology needs, potential research projects for copper industry
A new technology roadmap sponsored by several major producers has identified more than 100 technology needs for the copper industry, with 11 priority issues, including mine-to metal optimization, an integrated sustainability model, intelligent comminution and more efficient use of water.
The AMIRA International Copper Technology Roadmap identifies technology needs and potential research projects for the industry over the next 20 years. According to AMIRA, it is the first industry roadmap that has been wholly funded by the private sector on a global scale – sponsors included Anglo American, Antofagasta Minerals, BHP Billiton Ltd, Codelco, Phelps Dodge Mining Co., Rio Tinto Ltd. and WMC Resources Ltd., with MIM Holdings Ltd and Teck Cominco Ltd as associate sponsors.
Five strategic goals for technology research and development were identified to plan and guide the roadmapping process, AMIRA said. These were: lowering the cost of production; achieving the balance of acceptable economic, environmental and social effects; managing technological risk and investment; improving safety, health and industry hygiene; and improving energy efficiency through the implementation of improved technology.
AMIRA said the resulting document “focuses on pre-competitive priorities on which companies can collaborate for mutual gain. It also identifies specific topics which are clearly competitive to certain companies for which it would be unlikely that collaborative development of technology would proceed.”
The roadmap, whose scope covers mining through to electro-won and electro-refined cathodes, complements the International Copper Association’s roadmap, which focuses more on the end product, AMIRA said.
A summary of the roadmap is available from AMIRA – the full document is available only to the roadmap participants. More information is available at www.amira.com.au.
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Democratic Platform includes language on public lands, manufacturing, coal
The Democratic Party Platform adopted this week in Boston at the party’s convention included references to public lands, manufacturing and coal and indications about what types of policies would be implemented in those areas under a Kerry administration.
In a section entitled “Protecting Our Environment,” the Platform said the U.S. should use its natural resources to fuel the economy, but promised to “end Republican giveaways to special interests that exploit public lands without regard for environmental consequences. We will require companies to restore leased lands to their original state after their work is done.”
In another portion of the environment section, the Platform discussed climate change, claiming there is “overwhelming scientific evidence that global climate change is a scientific fact,” and accusing the Bush administration of rewriting government reports “to hide that fact.” The Platform added: “We will strengthen the Clean Air Act, by controlling all of the top pollutants and offering new flexibility to industries that commit to cleaning up within that framework. We will reduce mercury emissions, smog and acid rain, and will address the challenge of climate change with the seriousness of purpose this great challenge demands.”
The Platform included a promise to “reinvigorate manufacturing,” and promised “tax reform to create jobs,” including tax cuts for companies “that produce goods and create jobs here at home.” It said a Kerry administration would “establish new investment corporations to give small and medium-sized businesses access to capital” and would support the growth of “high-technology clusters that invest in new industries around research institutions.” The Platform said policies would “put jobs first,” with an emphasis on competitiveness, “honest budget choices” and investing in the future.
Regarding electricity, the Platform said: “Coal accounts for more than one-half of America’s electric power generation capacity today. We believe coal must continue its important role in a new energy economy, while achieving high environmental standards. Working with the coal industry, we will invest billions to develop and implement new, cleaner coal technology and to produce electric and hydrogen power. We will also work to make sure that our people have access to an affordable, secure and reliable supply of electricity at all times.”
These are just a few highlights from the platform, the full version of which is available at www.democrats.org/platform. The Republicans will hold their convention at Madison Square Garden in New York City Aug. 30–Sept. 2.
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DOE receives proposals valued at $6 billion for latest CCPI solicitation
The Department of Energy (DOE) said it received proposals for projects valued at nearly $6 billion in the latest phase of the Clean Coal Power Initiative (CCPI) program.
The Round 2 proposals represent the second wave of technologies offered by industry in response to President Bush’s pledge to invest up to $2 billion in federal funding over 10 years. The program aims at advancing technologies that can help meet the nation’s growing demand for electricity while simultaneously providing a secure and low-cost energy source and protecting the environment.
Earlier this year, eight projects were selected in Round One, the initial phase of CCPI. The newest proposals request about $1 billion in federal cost sharing for projects. Those eventually selected will demonstrate coal gasification system advances that enhance efficiency, environmental performance and reliability; and advancements that support the Clear Skies Initiative to reduce power plant emissions, particularly mercury, by about 70 percent by 2018, and the Global Climate Change Initiative to reduce carbon emissions growth over the next 10 years.
The projects will also support the technical foundation for the FutureGen Initiative to create the world’s first zero-emissions, coal-based power and hydrogen production plant, which will include carbon dioxide removal and sequestration.
DOE said 97 percent of the proposals offer advancements for power generation based on commercial demonstrations of gasification technology and improvements to efficiency, reliability, availability, environmental performance and economic performance. “These proposals also present opportunities to demonstrate potential readiness of energy technologies for carbon dioxide management,” the agency said.
DOE will review each proposal under the CCPI Round 2 solicitation against criteria established in the solicitation as prerequisites for detailed evaluation. Those prerequisites include the proposal’s plan to share at least 50 percent of the total allowable cost of the project, commitment to repayment of the government’s investment in the demonstration project and other aspects. More information is available at www.fossil.energy.gov.
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CLASS visits NMA
Representatives of the Children’s Land Alliance Supporting Schools (CLASS) visited NMA this week to discuss the group’s efforts to improve K-12 education through increased funding from school trusts. CLASS is a non-profit corporation organized to provide information and services to education communities in 24 states granted school trust lands by the General Land Ordinance of 1785. Leasing or selling the land surface or minerals is how the land generates revenue. Land use varies state by state from grazing, agriculture and timber to mining, commercial and rights-of-way.
In addition to Allen Freemyer, the group’s Washington counsel, CLASS volunteers Margaret Bird, Paula Plant and Karen Rupp, all from the Utah Office of Education, met with NMA’s Carol Raulston to discuss the group’s objectives. To learn more about CLASS visit www.schoollandtrust.org.
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Clean coal rountable shows how IGCC makes coal cool
Senior administration officials joined CEOs and engineers from the utility and coal industries this week to tout the advantages of integrated gasification combined cycle (IGCC) technology and to explore ways of facilitating its adoption more widely and quickly throughout the electric power industry.
“Coal is here to stay,” said conference host Thomas Kuhn, CEO of the Edison Electric Institute (EEI), who said utilities could no longer rely on natural gas, needed more coal for expanded base load capacity, and wanted continuous reductions in emissions.
Deputy Energy Secretary Kyle McSlarrow said new technologies like IGCC would help ensure that the nation has a reliable and secure fuel source, a strong economy, and a clean environment. But more innovative financing techniques and further demonstration projects were urgently required to help overcome the risks associated with IGCC, said Stu Dalton of the Electric Power Reliability Institute. EPA Deputy Administrator Jeff Holmstead said although his agency and DOE “don’t always see eye-to-eye” on energy policy, they are in complete agreement on the importance of IGCC technology because it allows coal utilization with impressive environmental benefits.
Senior engineers from several utility companies recounted their experience in permitting, building and operating IGCC power plants. An official from Excelsior Energy Inc. said her company’s IGCC plant in Mesaba, MN, dramatized several advantages of coal, including the appeal of contracting for a long-term supply rather than betting on a forecast price for natural gas, and IGCC’s environmental performance that “was virtually as clean as natural gas.”
Harvard University Professor Bill Rosenberg highlighted the findings of a study he and his colleagues prepared at the Kennedy School of Government titled “Three Party Covenant.” The study shows how federal and state governments can join equity investors in financing the construction costs of new IGCC plants, lowering capital costs by 30 percent. IGCC construction costs are typically 20 percent higher than for pulverized coal, he said.
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Strong iron ore demand causes mine expansion initiatives and shift
in production costs, analysis says
Surging Chinese iron ore consumption is causing a fundamental shift in the dynamics of world iron ore demand, with producers “scrambling to expand production in response to increased demand and higher prices,” according to a new analysis.
“Mine expansions and the development of new mines will result in a significant shift in iron ore production costs over the next five years, although CVRD and Rio Tinto will remain the lowest cost iron ore suppliers into Europe and Asia, respectively,” said MCIRS Mine Costing Investment Research Services (MCIRS).
The company said the depreciation of the U.S. dollar has impacted the margins of iron ore producers as they face “unique difficulties with depletion of high quality ore, increasing processing costs and higher stripping ratios.” MCIRS said it has developed detailed mine costing information that covers new and existing operations, providing historical and forecast production from 2002 to 2008, with product split breakdown into lumps, fines and pellets. Individual mine data sheets with detailed mine-site and non mine-site costs are also presented.
MCIRS said after consolidation in 2000, “the top three producing iron ore companies, CVRD, Rio Tinto and BHP Billiton account for about 70 percent of global seaborne trade. These companies also own the world’s best iron ore resources and they have well established infrastructure that allow for low cost, flexible capacity expansions and development of new mines to meet market demand.”
Compared with 2002, global weighted average FOB (free-on-board) costs increased by 3 percent as a result of “deteriorating operating conditions and the depreciation of the U.S. dollar,” MCIRS said. “However, capacity expansion initiatives, replacement of high cost mines with newly developed low cost operations and efficiency improvements in mining, processing and ore transportation will enable real costs of production to decline through 2008,” the company said.
More information is available from Dr. E.O. Sekyere, MCIRS associate director of business development, at >e.sekyere@mcirs.com. The company’s website is www.mcirs.com.
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Newsbits
Royal Gold Inc. said it has acquired 31 unpatented mining claims from Quicksilver Phenomenon LLC on lands located southeast of the Cortez area, Eureka County, NV. “These claims have a good address in the Battle Mountain-Cortez Trend of gold deposits,” said Stanley Dempsey, Royal Chairman and CEO. “We will actively explore the claims and, if our exploration efforts are successful, we will look for an operating company to bring the property into production, reserving a royalty for Royal Gold” . . . . American Electric Power and several other parties have recommended the Virginia State Corporation Commission (VSCC) approve the utility’s application to transfer functional control of its transmission assets in the commonwealth to PJM Interconnection. VSCC approval would represent the final state regulatory approval of AEP’s entry into the PJM regional transmission organization . . . . Cleveland-Cliffs Inc. announced that tentative contract settlements have been reached with the United Steelworkers Union representing approximately 2,000 hourly employees at its four managed iron ore mines in Minnesota and Michigan. Cleveland-Cliffs also said its affiliate, Cliffs and Associates Ltd., has closed on the sale to International Steel Group Inc. of the idled Circored Hot Briquette Iron facility located in Trinidad and Tobago . . . . P&H Mining Equipment Co. recently presented an historical photo of a P&H 1855 dragline to Rep. Ralph Regula (R-OH). In the late 1950s, Rep. Regula was general counsel of Blue Crystal Mining Co. in Millersburg, OH, and negotiated the purchase of a Model 1855 for the mining company. The photograph was presented to Regula for his support of the Washington Coal Club and the coal industry, P&H said . . . . Golden Phoenix Minerals Inc. said it has appointed Jeffrey P. Tissier to its board of directors. He was also appointed chairman of the Audit Committee and will oversee and approve all financial filings required by the U.S. Securities and Exchange Commission.
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