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MiningWeek Online
January 14, 2005 Volume 11, Issue 2
This Week's Issue:
Annual NMA media briefing attracts news outlets, generates positive coverage
NMA third annual “Look Ahead” briefing this week for DC-based press that cover the association and its legislative and regulatory interests attracted interest from more than a dozen trade reporters, major news outlets such as CBS Market Watch and the Las Vegas Review Journal, as well as positive follow-up stories.
The briefing included a short overview by NMA President and CEO Jack Gerard; the industry outlook for the coming year by Senior Economist Connie Holmes; and the government affairs and regulatory perspective on NMA’s priority issues by, respectively, Senior Vice President for Government Affairs John Shelk and Senior Vice President, Legal and Regulatory Affairs Hal Quinn. NMA Senior Vice President for Communications Carol Raulston moderated the session, which included an extensive question-and-answer period. The briefing included release of NMA’s 2005 forecast (see separate story).
Gerard outlined several key industry highlights, including the increased demand for coal and minerals domestically and worldwide, the value of clean coal technology in the nation’s future, the need for a more efficient permit approval process and additional reforms, the opportunity to pass a comprehensive energy bill and Clear Skies legislation, the anticipated mercury rule, NMA’s Mine the Vote program and its impact in the 2004 election, and mining’s continually improving safety record and workforce needs.
Holmes outlined the forecast, noting 2004 “was a record year for many of our companies and for our industry as a whole. In 2005, we’re again going to have record years for the coal and minerals industries.” Shelk reported on the status of the energy bill and Clear Skies legislation, noting the importance of requirements that provide certainty for utilities, which are making decisions today about future capacity. “Public policies that promote the use of domestic coal are the context Congress should consider,” he said, noting, “We continue to believe that enactment of comprehensive energy legislation is critical.” Quinn said NMA is focusing on “continuing to strive for regulatory stability and to try to achieve greater regulatory efficiency” regarding minerals policy.
The briefing generated immediate positive coverage of the industry’s bright economic outlook for minerals, metals, coal and mining equipment and supplies — including pick-up of the theme “coal is the fuel of the future;” NMA’s strong support of a comprehensive energy bill and the administration’s Clear Skies proposal; and the association’s commitment to a national minerals policy, particularly to address permitting delays.
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NMA Forecast: Strong demand, production to continue
Expanding industrial economies and China’s voracious appetite for coal and minerals will continue to spur strong demand for U.S.-mined coal and minerals this year, NMA’s 2005 Economic Forecast released this week says.
In the report, released at the association’s annual media briefing in Washington, NMA predicts record-breaking U.S. coal production in 2005 and an increase in production at U.S. copper and gold mines.
“The mining industry has a very bullish outlook for 2005 based on increasing offshore demand for coal and minerals and greater electricity generation here at home,” said NMA president and CEO, Jack Gerard. “Our coal mines continue to fuel low-cost power and our mineral mines are responding to rising demand from basic industries here and abroad.”
Coal Outlook
NMA’s annual Forecast calls for U.S. coal production to total 1.138 billion tons, exceeding the 1.111 billion tons mined in 2004 and topping the previous record of 1.127 billion tons set in 2001. Eastern coal mines are expected to produce 498 million tons, driven largely by increased offshore demand for metallurgical coal used in steelmaking and by increased domestic demand for electricity generation. Western coal production is expected to reach the 640 million ton level this year, topping the previous record of 625 million tons in 2004.
In 2004, coal generated 51.8 percent of U.S. electricity available on the national grid and is likely to generate 52.4 percent this year. Persistent high natural gas prices and capacity limitations at nuclear plants will favor greater coal utilization to fuel the expected 2.2 percent increase in electricity demand in 2005. Electricity accounts for over 90 percent of all domestically-produced coal, said NMA. Consequently, U.S. coal demand in 2005 is expected to total 1.183 billion tons and exceed production for the third consecutive year.
Strong offshore demand and a relatively weak dollar will boost U.S. coal exports for the second year in a row, said NMA.
Mineral Outlook
NMA sides with projections from independent analysts that demand for copper, gold and other minerals and metals will remain strong in 2005. U.S. copper mines produced an estimated 1.1 million metric tons in 2004, equal to the 2003 level and the first year since 1997 that domestic copper production did not decline. U.S. production in 2005 could increase by 10 percent, said NMA.
As the world’s third largest gold producer, the U.S. will benefit from continued strong demand for gold in 2005. Geopolitical uncertainties coupled with investors’ growing appetite for gold as a hedge against a declining dollar are primary factors expected to offset a global decline in gold jewelry sales and sustain gold production.
While the affect of December’s tsunami disaster on developing economies is uncertain, the reconstruction of impacted regions is likely to spur the demand, and perhaps the production, of metals and minerals. Increased commodity prices are expected to bring more mineral mining production on line, said NMA, but the effect of any capacity increases will not be felt immediately.
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Listing sage-grouse as endangered or threatened is not warranted, FWS says
The U.S. Fish and Wildlife Service (FWS) this week published a Federal Register notice (Jan. 12) determining that listing the greater sage-grouse as either endangered or threatened under the Endangered Species Act is not warranted.
Because the sage-grouse’s habitat extends from New Mexico all the way to Washington state, the decision to not list the species will avoid lengthy delays and expensive consultations with the FWS for many mineral and energy development projects. NMA has been extremely active on this issue and submitted comments in 2004 explaining why the listing of the sage-grouse was unwarranted. NMA also described how the many existing state, federal, and local and private initiatives were effective in achieving habitat conservation and restoration.
The FWS had received three petitions for listing the greater sage-grouse and, in April 2004, made an initial determination that listing of the sage-grouse may be warranted. That initial determination triggered a thorough review of the species status, including a critical analysis of the best available scientific information as well as the information presented in the petitions.
The FWS has now completed its analysis and determined that based on the best scientific and commercial data, as well as efforts being made by states or other entities to protect the greater sage-grouse, listing is not warranted at this time. More specifically, the FWS found:
Although sagebrush habitat continues to be lost and degraded in parts of the greater sage-grouse’s range (albeit at a lower rate than historically observed), from what we know of the current range and distribution of the sage-grouse, its numbers are well represented. As a result, we find that the species is not in danger of extinction, nor is it likely to become endangered in the foreseeable future. We are encouraged that sage-grouse and sagebrush conservation efforts will moderate the rate and extent of habitat loss for the species in the future.
FWS said it will continue to monitor the status of the greater sage-grouse. NMA will also continue to closely follow the situation and greater ESA issues through the efforts of its new working group on Endangered Species Act reform.
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Colorado files amicus brief defending its regulatory program in Summit County case
The state of Colorado this week filed an amicus curiae (friend of court) brief in defense of its regulatory program in a case challenging a Summit County Board of Commissioners resolution banning certain mining technologies, including the use of chemical reagents.
The Colorado Mining Association (CMA) challenged the resolution, which it argues creates unacceptable anti-mining precedent generally because it completely conflicts with state law and regulations that authorize and regulate these same mining activities.
The state’s brief in defense of its regulatory program, which has governed the mining of hardrock minerals since 1993, is complimentary to positions advocated by the mining industry. Specifically, it asserts:
• Colorado has a compelling interest in ensuring the orderly development and effective regulation of hardrock mining operation using chemical reagents through uniform regulatory standards;
• In 1993, the Colorado General Assembly, rather than choosing to ban the use of chemical reagents following the Summitville mine abandonment, enacted legislation (Senate Bill 93-247) to impose specific requirements applicable to such operations;
• A county cannot enact an ordinance that conflicts with state law because counties are political subdivisions of the state; and,
• The Summit County resolution is preempted by state law, which specifically authorizes and regulates such operations through comprehensive permitting, bonding and environmental performance standards. Counties retain their traditional powers over local land use decisions.
Summit County and intervenors supporting its position (Sierra Club/ARM) have until Jan. 17 to file any reply brief or cross-motion for summary judgment.
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Bucyrus plans expansion of South Milwaukee operations
Bucyrus International Inc. says it is planning to expand its South Milwaukee operations to expand manufacturing capacity to support increased sales and anticipated growth.
Bucyrus, which has about 750 employees at the Wisconsin facility, said the expansion will create about 100 jobs. Some of the plant positions, such as welding and machinist work, pay more than $55,000 annually. The expansion is expected to begin soon and probably continue into 2006, said Kent Henschen, company marketing director.
“It’s actually going to start very quickly,” he told the Milwaukee Journal Sentinel, but it’s going to be a ramp-up.” Some of the timing will depend on how quickly the company can add machinery, employees and make changes to its century-old plant.
Bucyrus is one of the world’s biggest manufacturers of large-scale mining equipment and there is strong demand for its machines in Australia, South America, China and the U.S. due to increased demand for coal and minerals.
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EPA rule aimed at ‘streamlining’ TRI reporting requirements
The Environmental Protection Agency (EPA) this week proposed a rule intended to “streamline” Toxics Release Inventory (TRI) reporting requirements by modifying certain sections of TRI reporting forms – Form R and Form A.
This proposal is the first of two EPA intends to issue in 2005. The second proposed rule “will examine the potential for more significant reporting modifications with greater potential impact on reporting burden. The options which may be considered in that [later] rulemaking include increasing reporting thresholds for small businesses, or for classes of chemicals or facilities, expanding eligibility for Form A, introducing a “no significant change” option for chemical reports that have not changed significantly relative to a baseline reporting year, and expanding the use of range codes in section 8 of Form R.”
Among other things, this first proposed rule would eliminate some duplicative reporting requirements for certain facility data that are already contained in other EPA program databases. In addition, the proposal would remove reporting requirements for the total quantity of TRI chemicals in storm water and modify reporting requirements for on-site waste treatment methods and efficiency.
The agency also is proposing to eliminate 16 recycling codes currently used in Part II, Section 7C of Form R. Replacing them would be three more general codes drawn from the RCRA Biennial Report. In an effort to provide the public with more information from the TRI forms, EPA is proposing to add a “text box” to Form R. If a reporting facility wished to include additional information on its source reduction, recycling or other pollution control activities, it could make use of the textbox.
EPA estimates that the proposed changes, if enacted, would save approximately 45,000 reporting hours and about $1.85 million annually. Comments are due no later than March 11, 2005. NMA is studying the proposal to determine its potential impact on mining industry reporting burdens.
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Forest Service final rule sets out process for NFS land, resource management, development
The U.S. Forest Service’s (USFS) final rule on National Forest System Land Management Planning issued earlier this month sets out the process for the development and revision of land and resource management plans for the National Forest System (NFS).
The intended effects of the final rule are to streamline and improve the planning process by making plans more adaptable to changes in social, economic, and environmental conditions; to strengthen the role of science in planning; to strengthen collaborative relationships with the public and other governmental entities; and to reaffirm the principle of sustainable management consistent with the Multiple-Use Sustained-Yield Act and other authorities. The Forest Service believes that under the new planning process, forest plan revisions will take an average of two to three years as opposed to the five to seven years it currently takes to revise its 15-year management plan.
The major provisions of the final rule include the following:
Strategic Planning
Under the new rule, land management plans will be strategic in nature, generally not including specific project management decisions. Only in extraordinary circumstances will project and activity decisions be implemented at the time of plan development, revision, or amendment. If a plan does include decisions with on-the-ground effects, it will require an environmental assessment or an environmental impact statement as required by NEPA. Under the strategic planning approach, all plans must contain five key components: 1) desired conditions; 2) objectives; 3) guidelines; 4) suitability of areas; and 5) special areas.
Desired conditions
• Desired conditions are the social, economic and ecological attributes toward which the management of the land and resources of the plan area are to be directed.
• These conditions are long-term and aspirational.
Objectives
• Objectives are concise projections of intended outcomes of projects and activities to contribute to maintenance or achievement of desired conditions.
• Objectives are measurable and time-specific but aspirational.
Guidelines
• Guidelines provide information and guidance for the design of projects and activities to help achieve objectives or desired conditions.
• Guidelines should provide the recommended technical and scientific specifications to be used in the design of projects and activities to contribute to the achievement of desired conditions and objectives.
• Guidelines must normally be applied unless there is a reason for deviation and the rationale for any deviations must be analyzed and explained in the project decision document.
Suitability of Areas
• Plans must identify the general suitability of an area in an National Forest System (NFS) unit for a variety of uses.
• Areas may be identified as generally suitable for uses that are compatible with desired conditions and objectives for that area but the identification of an area as generally suitable for a use or uses is neither a commitment nor a decision approving activity or uses.
• Suitability for a specific use or activity is authorized through project and activity decision-making.
• Plans may identify all uses that are generally suitable, may identify the major or most prominent generally suitable uses and/or may identify criteria to be used to determine whether a use is compatible with the desired condition of the area.
• The new rule neither promotes nor discourages any particular forest use.
Special areas
• Special areas are areas within the NFS designated for their unique or special characteristics (e.g., wilderness, wild and scenic corridors, and research natural areas) should be discussed in plans.
• These areas may be designated through statute or plan or other administrative process.
Adaptive Management and Environment Management Systems
Under the final rule, plans must be adaptive; that is, they must be capable of adapting quickly to address changing conditions and new information. The final rule also provides, for the first time, an Environmental Management System (EMS) that will be used during the planning process to improve performance and accountability. The Forest Service believes that by systematically collecting and updating information about environmental conditions and practices, the EMS will provide the foundation for effective adaptive management. The final rule requires implementation of an EMS based on the international consensus standard published by the International Organization for Standardization as “ISO 14001: Environmental Management Systems – Specifications with Guidance for Use.” The EMS will also be a systematic approach to identify and manage environmental conditions and obligations to achieve improved performance and environmental protection.
Public Involvement
The final rule contains a new emphasis on public involvement and collaboration, probably in response to the uproar over the de-emphasis of public involvement in the proposed rule. Under the final rule, the public will have opportunity to engage collaboratively in the development, amendment or revision of a plan, in monitoring and in the units environmental management system. In addition, the public will have an opportunity to comment on a plan, amendment or revision and object prior to approval if concerns remain.
Sustainability
In the final rule, sustainable management of NFS lands continues to be the overall goal of NFS planning. While the final rule emphasizes the interdependent social, economic and ecological elements of sustainability, it does not include many of the specific analytical processes and requirements contained in the proposed rule. These more specific requirements will be included in Forest Service directives in the future. The final rule also deviates from the proposal in the approach to ecological sustainability, providing additional flexibility to Forest Service personnel. As NMA had urged in comments on the proposed rule, the final rule contains no species viability requirement, and also recognizes that the Forest Service should focus on contributing to persistence of species where the agency’s management activities may affect species rather than on species management where the cause of species decline is outside the limits of agency authority or the capability of the plan area.
In 2002, the Forest Service proposed revisions to the planning regulations it adopted on Nov. 9, 2000. While the final rule does retain some of the concepts of the 2000 rule, the approach changed significantly enough that the Forest Service issued a separate final rule to remove the 2000 rules in their entirety to avoid confusion. The 2000 final rule was highly criticized and challenged by both industry and environmental groups, leading to a review of that rule and this final rule.
The 2000 planning rule established ecological, social, and economic sustainability as the overall stewardship goal for managing the National Forest System (NFS) and identified maintenance and restoration of ecological sustainability as the first priority for management of NFS lands. The new rule retains the emphasis on these goals and priorities but eliminates much of the detailed criteria on achieving sustainability, conducting monitoring, and using the best science. The elimination of these detailed criteria will give the responsible official greater flexibility to incorporate local forest-specific conditions into the planning process as opposed to the one-size-fits-all approach of the 2000 rule.
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Silver American Eagle bullion coin sales soar in 2004, Silver Institute says
Sales of Silver American Eagle Bullion coins posted their third best year last year since the program was launched; over 9.6 million coins were sold in 2004, the Silver Institute said this week.
In 1987 11.4 million Silver Eagles were sold and in 2002, 10.5 million were sold. In December of 2004 alone, over 2.6 million Silver American Eagle coins were sold, according to the United States Mint.
“The popularity of this investment-grade coin continues to grow, demonstrating once again silver’s unique roles as an investment vehicle, an important industrial metal, as well as being prized for its beauty and luster in jewelry and tableware,” stated Michael DiRienzo, Executive Director of the Silver Institute.
Congressionally authorized American Eagle Bullion coins provide investors with a convenient and cost-effective way to add physical silver to their investment portfolios. Since their launch in 1986, Silver American Eagles have become the leading silver bullion coin investment product worldwide.
For the period 2000-2004, 3.8 percent of total silver demand was attributed to coins and medals.
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Newsbits
McLanahan Corp., Hollidaysburg, PA, was recently named the 2004 National Family Business of the Year (medium business category) by MassMutual. The company, an NMA member, is a leader in the manufacture of processing equipment and systems. It is also ranked by Family Business Magazine as the 44th oldest family owned business in the country . . . . Jim Mockler, Montana Coal Council executive director for the past 29 years, has retired and is succeeded by Arthur R. “Bud” Clinch, a state government official for the past 12 years . . . . The board of Australian iron ore company Portman this week recommended shareholders accept Cleveland-Cliffs’ $605 million takeover bid. Cleveland-Cliffs Chairman and CEO John Brinzo, who is also NMA chairman, said the acquisition would allow his company a chance to tap into new markets, calling it a “strategic extension” into “new market share, and into a new market” . . . . North Dakota is ranked among 11 states as having the cleanest air in the nation, according to the 2004 report from the Corporation for Enterprise Development, a nonprofit corporation that promotes economic development in low-income and distressed communities. North Dakota, which gets 90 percent of its power from coal-based generation, met all the federal government’s ambient air quality standards, which includes sulfur dioxide, nitrogen oxides and particulate matter. In 2004, the American Lung Association also gave North Dakota an “A” for air quality.
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