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MiningWeek Online
September 10, 2004 Volume 10, Issue 36
This Week's Issue:
NMA supports Potash Royalty Reduction Act of 2004
NMA this week urged Congress to enact the Potash Royalty Reduction Act of 2004 (H.R. 4984), which would provide a five-year reduction of 50 percent on royalties for potassium and potassium compounds from the mineral sylvite mined on federal lands.
“This reduction is necessary in light of the contraction of the potash industry resulting from bankruptcies, escalating natural gas prices and increasing competition from foreign producers,” NMA President and CEO Jack N. Gerard wrote in a letter to Rep. Barbara Cubin (R-WY). Cubin is chairwoman of the House Energy and Mineral Resources Subcommittee, which is considering the legislation introduced by Rep. Steve Pearce (R-NM).
“NMA commends Rep. Pearce for his leadership in addressing the important issues confronting the nation’s potash miners, farmers and their communities by introducing and advocating the passage of this important piece of legislation,” Gerard said.
Gerard noted while apparent domestic consumption of potash has remained constant over the last 12-to-14 years, “U.S. production from federal lands has continuously declined. This decline correlates with decreased employment and royalty revenues. In 1991, 1,011 people were employed in U.S. potash mines. By 2002, the number was 540. Production from federal lands during that period fell from 2.3 million to 1.3 million short tons, and royalty receipts fell from $3.9 million to $2.5 million.”
Gerard said this production/consumption dichotomy is “reflected by an approximate 25 percent increase in potash imports into the U.S. since 1991. The USGS (U.S. Geological Survey) states that the U.S. is reliant on imports for 80 percent of its potash needs. Over 90 percent of these imports come from Canada.”
Gerard explained that in addition to the stress that expensive imported minerals put on American manufacturing and, “in this case particularly, the agricultural sector, the loss of 470 high paying jobs in the potash mining industry has a devastating impact on local communities . . . . The loss of these high paying and, in many instances, high technology jobs affects not only the workers and their families, but the local economies with a commensurate drop in the consumption of local goods and services as well as local, state and federal tax revenues.”
“The temporary loss of a percentage of royalty income to state and federal treasuries over five years must be weighed against the effect of a potentially permanent loss of these high paying jobs if additional mines are forced to close because of deteriorating market conditions,” Gerard said. “Further, the royalty revenue that would be dedicated to mine reclamation under H.R. 4984 will create additional employment in the reclamation sector. The passage of this legislation will be a win-win situation,” he concluded.
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Republican platform includes mining provisions
The platform adopted by the Republican National Convention last week included a number of provisions on mining issues. NMA encouraged the inclusion of favorable mining language in the platform. Among the highlights:
- “The U.S. needs a national minerals strategy to supply the country with minerals and metals vital to national and economic security and to the competitiveness of U.S. manufacturing.”
- “. . . the President has already committed $2 billion over 10 years for clean coal research and development - which helps keep America’s coal industry strong and reduces the emissions associated with coal use. As part of that commitment, we support FutureGen, an international, public-private initiative to build the world’s first integrated sequestration and hydrogen research power plant that would burn coal more cleanly. President Bush’s Clear Skies Initiative would create a $50 billion private market to deploy these clean coal technologies.”
- In another reference to Clear Skies, the platform states that “These steps will lead to significant environmental improvements while ensuring a reliable, affordable electricity supply and keeping America’s coal industry strong.”
- “Republicans recognize the historical federal health care promise made to coal industry retirees. The Party will seek to ensure that health care needs of ‘orphan retirees’ in the coal industry will be covered and will seek to ensure the continuation of those benefits.”
The full text of the platform is available at www.gop.com/media/2004platform.pdf.
The Democratic platform adopted in July at the convention in Boston also 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. Among other things, it said, “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.” There was no specific mention of a minerals strategy or related issues.
The Democratic platform was covered in the July 30th Mining Week. The full text of the platform is at www.democrats.org/pdfs/2004platform.pdf.
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NOx budget trading program reduces emissions 30 percent, EPA says
The Environmental Protection Agency (EPA) said its NOx (nitrogen oxide) Budget Trading Program in 2003 reduced total ozone season NOx emissions from power plants and other large combustion sources 30 percent below 2002 levels, in eight northeastern states and the District of Columbia.
In addition, when combined with other NOx control programs, NOx Budget Trading Program cuts have reduced ozone season NOx emissions from sources in these states 70 percent below 1990 levels, EPA said. The NOx Budget Trading Program is a market-based cap-and-trade program created to reduce nitrogen oxide emissions from power plants and other large combustion sources in the eastern United States.
“Emissions reductions occurred despite power generation increases by the affected sources in 2003,” EPA added. “Reductions also have occurred for both average emissions and short-term peak NOx emissions that are a concern on hot, high electricity demand days conducive to ozone formation. More than 99 percent of the affected units were in full compliance in 2003,” EPA said.
EPA said the data demonstrate the trading program “is successful in reducing summertime NOx, a prime ingredient in the formation of ground-level ozone,” in the eight participating states and DC, which began implementing the program in 2003. Sources in 11 additional states across the East and Midwest joined in May 2004. All in all, the program includes 19 states and the District of Columbia and will add two more states in 2007. “When fully implemented, the program will reduce a projected one million tons of NOx and improve air quality for more than 100 million people,” EPA said.
The results also show “that the cap-and-trade mechanism is an effective and efficient way to control pollutants over broad regions in the United States,” EPA said. The agency has proposed a similar approach as one method of reducing mercury emissions.
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Newmont: Indonesian operation no threat to human health, Buyat Bay water quality
Contrary to allegations in a Sept. 8 New York Times article, Newmont Mining Corp.’s Minahasa Mine in North Sulawesi, Indonesia, has “never posed a threat to human health,” nor polluted water in Buyat Bay, the company said in a statement released this week.
“The facts, the science and the independent laboratory results all confirm Minahasa’s strict environmental practices protected the people and waters of Buyat Bay,” said Newmont’s David Baker, vice president, environmental affairs and sustainable development.
The Minahasa operation began production in 1996 and recently ceased operating when it finished milling all remaining ore. During the planning and permitting for the mine, Newmont said its PT Newmont Minahasa Raya (PTNMR) unit “retained the world’s foremost authorities in submarine tailings placement (STP) to determine the feasibility of and assist in the design of the STP system. These authorities were involved in the design and monitoring of the STP system at another company’s mine on Vancouver Island, British Columbia.”
Newmont said Minahasa “was among the first, if not the first, mine in Indonesia to undergo a comprehensive environmental permitting process prior to breaking ground for construction. After in-depth review and investigation of STP technology by the Indonesian Government, Minahasa’s final environmental permit was granted in 1996.”
Newmont added that throughout the life of the operation, “Minahasa has extensively monitored the environment adjacent to the mine, including Buyat Bay, using scientific techniques accepted worldwide. These monitoring results have been reported on a quarterly basis to the Government of Indonesia, which has reviewed, monitored and inspected the operations numerous times. The monitoring and sampling data clearly show that the STP system has performed as it was designed and as was anticipated during the environmental permitting process.”
Newmont said recent additional testing by Australia’s prestigious Commonwealth Scientific and Industrial Research Organization (CSIRO) “reconfirmed that the quality of the waters in Buyat Bay is within applicable standards designed to protect human health and the environment. The New York Times failed to report that PTNMR took duplicate samples with the Indonesian police and that testing of these samples by an independent laboratory produced results consistent with those of CSIRO and well within applicable standards.”
Finally, Newmont said when false accusations of Minamata disease were raised several weeks ago, “Newmont welcomed the Indonesian authorities’ decision to bring in experts from the World Health Organization (WHO) and the Japanese Minamata Institute for independent testing and assessment. The Minamata Institute quickly determined that there was no Minamata disease at Buyat Bay. The WHO is completing this testing, and we are hopeful that the results will be released soon.”
“The New York Times reporters chose to ignore the presence of the WHO as well as all scientific data that PTNMR provided proving there has been no health impact on the people or waters of Buyat Bay. These reporters also chose to mischaracterize the position of the Indonesian Minister of the Environment, who has consistently maintained, based on government testing, that Buyat Bay is not polluted.”
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New team promotes reforestation of Appalachian coal mines
A newly formed team including coal producers, state regulatory authorities, academia, private groups and the Office of Surface Mining (OSM) is promoting planting more high-value hardwood trees on reclaimed coal mine lands in Appalachia.
The Appalachian Regional Reforestation Initiative (ARRI) is a partnership to reduce barriers to reforestation and provide assistance and encouragement to get more quality trees planted correctly on mined lands. “This regional effort is aimed at successfully planting trees on active and abandoned mine sites,” said Jim Taitt, chief of OSM’s Federal Programs Group in Pittsburgh, PA.
OSM said it has identified three barriers that need to be overcome to achieve effective reforestation: technical, including soil compaction, competition from other plants and establishing a suitable growth medium; cultural differences between the mining industry and regulators; and the perception that regulatory barriers make obtaining bond release for areas planted in trees more difficult.
For more information on the partnership, contact Victor Davis at 865-545-4103, ext. 139, or vdavis@osmre.gov.
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Newsbits
Wayne E. Rich has been appointed assistant treasurer for The Doe Run Co. in St. Louis, MO. He will be responsible for the company’s cash management, leasing credit management and property casualty insurance. Rich has been with Doe Run since 1998, most recently as director of treasury operations and financial compliance . . . . Rich A. Bowen has joined Peabody Energy as corporate senior vice president and president of generation. He will be responsible for Peabody’s generation activities, including project and business development for planned electric generating projects in Illinois, Kentucky and New Mexico. Bowen previously was executive vice president for marketing and trading at Dynergy Inc. . . . . Tim L. Dieringer has been named director of the Office of Surface Mining’s (OSM) Knoxville Field Office, effective Dec. 12, 2004. Dieringer is currently chief of OSM’s Federal Reclamation Programs Division in Pittsburgh. He has worked for OSM since 1987 and has experience in both the regulatory and abandoned mine land programs.
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