| |
MiningWeek Online
August 13, 2004 Volume 10, Issue 32
This Week's Issue:
NMA: Kerry mineral fee proposal would export mining jobs, hurt economies of western states
Sen. John Kerry’s (D-MA) proposal to impose a $600 million fee on minerals operations on federal lands in the West would cost between 18,000 and 44,000 jobs and result in a net loss to the federal Treasury of $400 million to $500 million, based on independent analyses, NMA said this week.
The Kerry presidential campaign reportedly advised the media the $600 million would come from an 8 percent royalty, a doubling of the annual claims maintenance fee and revisions to the Mining Law governing sale of mineral rights. Monies raised by the proposal would go to maintenance in the nation’s parks and hoped-for jobs creation in associated service businesses.
The proposal was contained in a policy statement from the Kerry/Edwards campaign that was highlighted in an appearance at the Grand Canyon. The policy paper (available at www.johnkerry.com/pressroom/releases/pr_2004_0809.html) is vague regarding the terms of the fee, and how it would be applied. It is also unclear if the fee is in addition to a $1 billion tax on minerals operations on public lands that Kerry outlined in remarks at Georgetown University in Washington, D.C., earlier this year (Mining Week, 4-9-04).
“We support the National Parks, but funding minimum wage jobs on the backs of miners is bad economics and is bad for the country,” NMA President & CEO Jack Gerard said. “Sen. Kerry obviously has not done his math. He would destroy the highest paying jobs in Nevada, Arizona and New Mexico, for example, to pay for entry-level service industry jobs and devastate mining communities throughout the West in the bargain.”
Gerard added: “At the same time he is promoting energy independence, Sen. Kerry would force minerals exploration and production off-shore and would increase our reliance on outside sources for the materials that are critical to our economic and national security. Local, state and federal tax revenues would be depleted by hundreds of millions of dollars as mining operations are forced into closure.”
“This is the worst example of robbing Peter to pay Paul,” Gerard concluded. The plan follows additional announcements made by the Kerry campaign on Monday to tax parts of American industry to pay for some of his recent campaign promises, including using Superfund and gas and oil royalties to fund proposed energy programs.
Back to top
NMA supports EPA commitment, restated by Leavitt, to ‘level playing field’ for all coals under final mercury regulations
NMA President and CEO Jack N. Gerard said he “welcomes” the update offered by Environmental Protection Agency (EPA) Administrator Mike Leavitt this week on the process the agency is following in developing its proposed regulations for mercury emissions from coal-based power plants.
“Because these are the first-ever regulations by EPA to address these emissions, it’s important that all stakeholders remain fully informed about the progress of these proposals and upcoming milestones,” Gerard said. Leavitt delivered the update, during which he referred to the importance of ensuring a “level playing field” for all types of coal, as part of a keynote address at the Adirondack Water Quality Conference at Paul Smith’s College in New York state.
”Because of the importance of coal in meeting the nation’s electricity needs, we support Administrator Leavitt’s commitment to provide a level playing field for all types of coal under the final regulations,” Gerard continued. “The nation will need all the domestically available coal we can produce to meet our growing energy needs, and our entire economy will benefit from lower-cost, reliable electricity from all types of coal.”
Gerard noted that mercury emissions from coal-based power plants have been reduced by approximately 40 percent due to a co-benefit of existing emissions control technology. “These reductions will continue,” he said. “Looking to the future, NMA believes the market and technology based mercury-specific proposals under consideration by EPA will result not only in an additional 70 percent reduction in mercury emission here in the US, but also will lead to mercury reductions worldwide,” he said.
Gerard concluded: “These proposals, rather than inefficient command-and-control options, can provide more cost-effective technologies that could be embraced by other nations around the world. With the US contributing roughly 1 percent of worldwide mercury emissions, it’s important to find cost-effective and workable technologies that can be used by other countries that rely on coal to power their economies.”
Back to top
NMA aggressively responds to newspaper attacks on mining’s safety record
NMA aggressively responded this week to two separate newspaper reports containing serious/egregious distortions about the mining industry’s safety record as well as other negative allegations.
Letters-to-the-editor were sent to the Charleston Gazette and New York Times rebutting articles appearing Aug. 4 and 9, respectively. The lengthy Times story was headlined, “Friends in the White House Come to Coal’s Aid,” focused on alleged improprieties in safety and health and mountaintop mining regulation, while the Gazette piece, “Protect Coal Worker’s, Not Companies, Kerry Says,” quoted liberally from a Kerry-Edwards campaign statement.
Regarding the Times story, NMA President and CEO Jack N. Gerard wrote: “By omitting pertinent facts, your lengthy article suggesting a sinister collaboration between the coal industry and the Bush administration produces a grossly distorted picture of mining. The allegation that safety measures have been deliberately weakened is offensive and unfounded. Whether comparing fatalities or reported accidents – by absolute number or by rate per hour worked – U.S. government figures prove that mining is safer under this administration than under the previous one. In fact, the year-over-year trend reflects the success of on-going efforts to improve workplace safety.” A statistical chart accompanying the letter documented Gerard’s assertions with facts.
He also attacked a suggestion that the mining industry and administration had sought to weaken dust exposure standards as being “flatly contradicted by the facts,” emphasizing that the coal industry “has never, nor will it ever, advocate increasing the exposure limit for its workers.” The Times portrayal of mountaintop mining, Gerard said, was “also distorted by omitting important facts.” An environmental study cited in the article “did not conclude that impacts of mountaintop mining caused or contributed to the destruction of water quality,” adding that a rule change proposed last year “will strengthen, not weaken, regulation of excess spoil.” He emphasized that law – not current or preceding administrations – permits mountaintop mining, and “only under carefully controlled circumstances.”
The letter to the Gazette, signed by Bruce Watzman, NMA vice president for safety and health, said the article by Ken Ward Jr. “reads suspiciously like campaign literature from a presidential candidate, rather than the objective analysis of a serious subject (mine safety) your readers deserve.” Noting that U.S. mine fatalities have declined 34 percent since 2001, the period of which the Kerry campaign was most critical, Watzman said mine safety “must not be a partisan issue,” and that presidential candidates should “not expect their views to be passed off as news to Gazette readers in partisan reporting.”
Watzman emphasized that the mining industry “and its many highly skilled workers are dedicated to sustaining the trend of continuing improvements in mine safety, regardless of the administration in Washington. Achieving this goal will require not only sensible regulation and diligent oversight from federal agencies, but the application of new technologies and better safety training in the workplace. No administration has a monopoly on this task so long as a single fatality occurs in our mines.”
Back to top
Goodwin valley fill decision will likely have ‘discernible’ impact on West Virginia economy, Marshall researchers say
A recent court decision that the process used by the U.S. Army Corps of Engineers (COE) for authorizing nationwide permits (NWP) for coal mining activities involving valley fills violates the Clean Water Act (CWA) will likely have “discernible and predictable impacts” on both West Virginia state and local economies.
That is the conclusion of a preliminary discussion by Michael J. Hicks and Mark L. Burton of Marshall University’s Center for Business and Economic Research (CBER) regarding District Judge Joseph Goodwin’s recent ruling. The court enjoined COE from issuing NWP 21 authorizations in the Southern District of West Virginia and ordered it to suspend those authorizations for valley fills and surface impoundments for 11 specific mining projects where construction had not commenced. Burton and Hicks previously authored a 2001 study on the impact of a decision by the late-Judge Charles Haden, quantifying a $168 million annual loss of state and local revenues from significant restrictions on mountaintop mining.
The Goodwin decision, the authors note, “is markedly different in nature” from earlier federal court decisions that largely prohibited valley fills, and consequently more difficult to quantify. “Nonetheless, to the extent that the Goodwin decision increases the necessary level of environmental review for permit applications, it still has the potential to measurably impact the state of West Virginia.”
The magnitude of that impact, the authors say, “depends on a number of factors, including, but not necessarily limited to, future coal prices, changes in other inputs to the coal production process, the regulatory response” of COE, and “further judicial actions regarding existing 404(e) permits.”
The only certainty right now regarding the decision’s effect on coal output volumes over the coming years is that “scheduled production from the 11 previously permitted sites will not be forthcoming as soon as expected. Based on the permit applications, this amounts to roughly 33-to-44 million tons over the next two years.”
Ultimately, “policymakers have the means to anticipate the overall effects of judicially mandated revisions to the valley fill permitting process within the state of West Virginia,” Burton and Hicks said. “Moreover, the currently elevated price of southern Appalachian coal adds an urgency to the need to develop this information. The potential losses to commerce and government revenues attributable to the elimination of 404(e) permits may not be easily recoverable if coal prices return to predicted levels.
The study is available at www.marshall.edu/cber.
Back to top
Level of federal regulations back to
near-record levels, CEI official says
The volume of federal regulations is back to near-record levels, and the total regulatory burden approached $1 trillion a year in 2003, according to Clyde Wayne Crews Jr., vice president for policy and director of technology studies at the Competitive Enterprise Institute.
Writing in the August 2004 issue of Environment and Climate News, published by the Heartland Institute, Crews said federal government regulators issued 4,148 new rules in the 71,269-page Federal Register in 2003 – “The cost of those rules appears nowhere in the federal budget.”
“In his fiscal year 2005 federal budget, President Bush proposed $2.4 trillion in discretionary, entitlement and interest spending. Although that figure fully expresses the on-budget scope of the federal government, there is considerably more to the government’s reach. Federal environmental safety and health and economic regulations cost the economy hundreds of billions of dollars every year on top of official federal outlays.”
Noting the exact cost of federal regulations isn’t fully known, Crews said some of the costs, “although generally imposed on businesses, get passed on to consumers, just as firms generally pass along to consumers some of the costs of the taxes they are required to pay.”
He said data indicate that of the 4,266 regulations now in the pipeline, 127 are “economically significant” rules “that will have at least $100 million in economic impact. Combined, those rules will impose at least $12.7 billion in future off-budget costs every year.” He said the five most active rule-producing agencies, according to the Federal Register, are the Departments of Treasury, Transportation, Homeland Security, Agriculture and the Environmental Protection Agency – combined they account for 46 percent of the rules under consideration.
The study used as the basis for the article is available at www.cato.org/tech/pubs/10kc_2004.pdf.
Back to top
Mines Management Inc. says it will initiate re-permitting of Washington mining project
Mines Management Inc. said it will initiate re-permitting of the $236 million Montanore Silver-Copper Project in the Cabinet Mountains Wilderness Area on the Idaho-Montana border.
The project, containing an estimated 260 million ounces of silver and 2 billion pounds of copper, was fully permitted as recently as 2002, prior to the previous operator’s (Noranda Inc.) withdrawal and transfer of ownership to Mines Management, the company said.
“With the existing Environmental Impact Statement (EIS) as the basis for re-permitting, we believe the process will be significantly shorter than if we were starting from scratch,” said Glenn Dobbs, Mines Management president and CEO.
He said the proposed mine could pump $2 billion into western Montana communities over its life, and would employ about 250 people. The company projects Montanore would produce 8 million ounces of silver annually, and 64 million pounds of copper. It would take 30 months to build, and operate 15-to-20 years.
Mines Management said its interim revised mine plan was “designed to optimize the previous operator’s plan,” adding that the improved economics were especially encouraging. “The state of Montana, Department of Environmental Quality and representatives at the U.S. Forest Service have been helpful and encouraging as we have addressed the feasibility of moving the project forward. We look forward to taking this outstanding mining project the next step toward production,” Dobbs said.
Mines Management said it believes criticism of the Montanore project will be minimal, and anticipates a 20-24 month permitting period. For more information, visit www.minesmanagement.com.
Back to top
Tomsett named Placer Dome President and CEO
Peter Tomsett was named president and CEO of Placer Dome Inc., effective Sept. 15. Tomsett replaces Jay Taylor, who announced his retirement in March and will remain with the company in an advisory capacity.
Tomsett has been with Placer Dome for 18 years, most recently as executive vice-president of Placer Dome Asia Pacific and Africa. Under his leadership, the Asia Pacific region grew to become the company’s largest operating unit through successful exploration, development and acquisition, Placer Dome said.
Tomsett is director of the Minerals Council of Australia and the Australian Gold Council. He will be relocating with his family from Brisbane, Australia, to Vancouver, Canada.
Placer Dome has interests in 17 mines on five continents and employs nearly 13,000 people in Canada, the U.S., Chile, Australia, Papau New Guinea, Tanzania and South Africa. In 2004, the company expects to produce 3.6 million ounces of gold and over 400 million pounds of copper.
Back to top
EPA says proposal would apply more stringent rules for certain coke ovens
In its first foray into residual risk review for a Hazardous Air Pollutant (HAP) standard, the Environmental Protection Agency (EPA) this week proposed residual risk standards that it said include more stringent requirements for certain by-product coke oven batteries and address health risks remaining after the 1993 implementation of regulations. The agency published the proposal in an Aug. 9 Federal Register notice.
Section 112 (f) (2) of the Clean Air Act (CAA) requires EPA to determine for each §112(d) source category whether the Maximum Available Control Technology (MACT) standards protect public health with an ample margin of safety. If the MACT standards for Hazardous Air Pollutants (HAP) “classified as a known, probable, or possible human carcinogen do not reduce lifetime excess cancer risks to the individual most exposed to emissions from a source in the category or subcategory to less than one in one million,” EPA must promulgate residual risk standards for the source category (or subcategory) as necessary to provide the ample margin.
EPA must also adopt more stringent standards to prevent an adverse environmental effect (defined in Section 112(a) (7) as “any significant and widespread adverse effect to wildlife, aquatic life, or natural resources”), but must consider cost, energy, safety and other relevant factors in doing so.
The notice is available at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-17787.pdf.
Back to top
Newsbits
A second longwall mining section has started regular production at CONSOL Energy Inc.’s McElroy Mine, located south of Moundsville, WV. The start-up is the final piece of a two-year, $200 million expansion project that is expected to increase the facility’s capacity by 70 percent. Other parts of the project included expansion of the mine’s preparation plant and upgrading of the load-out facilities . . . . Bucyrus International says its Bucyrus Peru S.A. unit’s efforts at the Antamina mine in Peru has received recognition for safety excellence from Compania Minera Antamina S.A. The award recognized the Bucyrus team for their excellent safety record, occupational and environmental health management systems and for obtaining over 600,000 man-hours without any lost time accidents . . . . A private equity consortium has completed acquisition of RAG American Coal Holding Inc., the fourth largest U.S. coal producer. First Reserve Corp., the Blackstone Group and the owners of American Metals and Coal International acquired the stock of RAG American from RAG Coal International AG, effective July 30. The new parent company formed to complete the acquisition is Foundation Coal Corp. . . . Hecla Mining Co. has appointed Ian Atkinson as exploration and strategy vice president. Atkinson, who has more than 30 years of experience in international exploration and mining management, had been assisting Hecla as an independent management consultant on due diligence and exploration activities and auditing resource replacement data for the past 18 months . . . . Carmeuse North America presented the Ohio Coal Development Office (OCDO), a program of the Ohio Air Quality Development Authority, with a $5,000 royalty check for a completed project, which subsequently has become commercially available technology. The project, funded through a $716,401 OCDO grant, presented a means of recovering magnesium hydroxide and gypsum from a magnesium enhanced lime flue gas desulfurization process . . . . Peabody Energy has named Jeff Quinn as vice president of tax. Quinn previously was director of tax at Solutia Inc., formerly Monsanto Co.’s chemical business.
Back to top
|
