| |
MiningWeek Online
March 4, 2005 Volume 11, Issue 9
This Week's Issue:
Gerard: Federal policy stifles western mining; expedited permit process needed
Regulatory uncertainty and bottlenecks for approving new mining permits “may limit the potential of U.S. metals and mineral mines to benefit from unprecedented demand from a worldwide commodity boom,” NMA President and CEO Jack N. Gerard said this week.
Speaking to the Society of Mining, Metallurgy and Exploration (SME) meeting in Salt Lake City, Gerard said industry’s economic fundamentals, fueled by China’s powerhouse growth and a strong recovery in developed economies, are brightening employment and investment prospects throughout the hard rock West. “But U.S. mines and their suppliers may be denied the full advantage of the global upswing unless Washington policymakers remove needless regulatory impediments,” he said.
Among the worst of these is the slow federal process to approve new mining permits, said Gerard. “NASA put a man on the moon in less time than it has taken federal agencies to approve some mining permits,” he told the audience of geologists and mining engineers. “A permit that can be approved in Chile in 18 months can take four to 10 years to approve here for a similar project with identical environmental safeguards,” he said. Forcing U.S. mining operations offshore increases our growing reliance on imports of important minerals that we can mine domestically and robs the western states of high-wage jobs.
The “analysis paralysis” from time-consuming, multiple agency reviews results in less exploration spending than would be expected from two years of booming demand for minerals and metals such as gold, copper, iron ore and nickel, said Gerard, who documented the toll on mining investment. “From 2001 to 2003, a period when global exploration spending increased by $346 million, U.S. exploration spending actually contracted to half the amount we spent in 2001,” he said. Exploration spending in the U.S. increased last year, he added, but paled beside the increases in Canada and other mining-friendly countries.
“We can unlock the great wealth of our mineral rich lands for the benefit of all without compromising environmental protection,” said Gerard.
In addition to working for enactment of an effective National Minerals Policy, Gerard said, the mining industry must “talk persuasively about what we do. The issue is really what face we present to the world, the credibility we’re able to muster on behalf of our opinions, the value we’re perceived to add to society, and ultimately the values we stand for. All of us have a responsibility.”
Interestingly, Gerard said, the critical role of minerals and metals in economic growth and quality of life has been “dramatically illustrated by the growing global demand for what we produce. Not long ago, our industry struggled to meet earnings targets and cut costs. Today, we’re struggling to keep up with the demand for minerals and for young mining engineers.”
What is ultimately needed, he concluded, is “full recognition from Washington that our industry has the potential to grow stronger still . . . that it can provide more high-wage jobs in rural America . . . and supply more vital metals and minerals to U.S. industries struggling to compete in a global economy . . . . Our message to Washington and to the American people is – if you help us, we can unlock the rich potential of our mineral lands under the most responsible mining practices in the world.”
Gerard appeared on the meeting’s Keynote session panel with Rep. Jim Gibbons (R-NV), vice chair of the House Resources Committee; Ann Carpenter of the Women’s Mining Coalition and Tim Wigley of PAC/WEST Communications. The panel was moderated by mining consultant Doug Silver.
Back to top
UNEP Governing Council decides against pursuing legally binding mercury agreement
The 23rd session of the United Nations Environment Program (UNEP) Governing Council (GC)/Global Ministerial Environmental Forum meeting in Nairobi, Kenya, last month decided against pursuing a legally binding international mercury agreement, although that option remains a possibility for consideration at the next GC meeting.
Under an expanded mercury program, the GC asked the United Nations Environment Program (UNEP) to conduct a study on the amounts of mercury being traded and supplied around the world.
Industry representatives attending the meeting report the proposal for a binding agreement was defeated primarily because the developing countries were reluctant to endorse such a significant new effort without considerable funding commitments. The current agreement adopts the voluntary partnership concept advocated by the U.S. government.
Among other things, the agreement encourages governments to develop priority partnerships as soon as possible, post information regarding the pilot programs on the UNEP web site, and requires the Executive Director to report on progress toward identified goals at the next GC meeting. The implication is that the success of these programs will determine whether a binding agreement is ultimately pursued at the next GC meeting.
In regard to gold mining, NMA’s efforts were successful in keeping the focus appropriately on artisanal and small scale gold mining. However, one section -- Paragraph 7(a) -- could be interpreted to apply more broadly to include any mining operation which results in mercury emissions. The language reads: “Requests governments, the private sector and international organizations to take immediate actions, to reduce the risks to human health and the environment posed on a global scale by mercury in products and production processes, such as: (a) Considering the application of and sharing of information on best available techniques and measures to reduce mercury emissions from point sources.”
The General Council agreement also addresses risks from heavy metals, particularly lead and cadmium. The document’s request for completion of a study focusing on the long-range environmental transport of lead and cadmium “to inform further discussions on the need for global action in relation to lead and cadmium” indicates future activity on heavy metals is definitely contemplated.
Governments attending the UN forum agreed to review the success of the program in two years time. “Here they will assess whether further action is needed and, if this is deemed so, review a wide range of options including the possibility of a legally binding treaty,” the group said.
An upcoming meeting will be held to provide industry representatives who were in Nairobi an opportunity to report – NMA members will be provided with further information once the meeting is scheduled. In the meantime, members needing additional information should contact Karen Bennett at (202) 463-3240 or kbennett@nma.org.
Back to top
New East Kentucky Power Cooperative coal generating plant goes on line
The first new Kentucky coal-based power plant in 15 years officially went on line this week when East Kentucky Power Cooperative’s 268-megawatt circulating fluidized bed near Maysville began operating.
“It will be the cleanest coal-fired unit in Kentucky,” said Kevin Osbourn, an East Kentucky Power spokesman. The $400 million unit produces enough electricity to power the homes in 30 cities the size of Maysville.
The cooperative has also asked the Kentucky Public Service Commission to approve a second 278-megawatt unit at the Maysville facility. The power from both units would be shipped to East Kentucky Power’s 16 member electric cooperatives, which serve about 480,000 Kentucky homes, farms, businesses and industries across 89 counties.
Several other coal-based plants have received approval or are applying to the Kentucky State Board on Electric Generation and Transmission Siting, including an additional East Kentucky unit in Clark County, and an LG&E unit in Trimble County. Peabody Energy is planning to construct the Thoroughbred Energy Campus, a planned 1,500-megawatt coal-fueled electricity generation project near Central City, KY. The generating plant would use two 750-megawatt coal units fueled by up to 6 million tons of coal per year produced from a new adjacent underground mine, and would be among the cleanest coal-based facilities ever built.
Back to top
Coal is the ‘fuel of the future,’ Gerard tells Southern Coal Operators
Coal is no longer viewed as a significant component of America’s energy future, but as a “crucial component,” NMA President and CEO Jack N. Gerard told southern coal operators meeting in Cincinnati, OH, this week.
“Coal can – and will be – the fuel for the future,” he said. “It will be the primary fuel for the digital age, just as it was the primary fuel for our bygone industrial age.”
Numerous factors make a compelling case for coal’s continued dominance in base load electricity generation, Gerard noted. “Since 1980, electricity has tracked with U.S. economic growth more closely than any other energy use . . . . If electricity growth is the precursor to economic growth, and coal is by far the largest fuel source for electricity generation, then our continued economic prosperity will depend on coal utilization for the foreseeable future.”
Gerard pointed out the Energy Information Administration’s long-range forecast says the economy will become even more dependent on electricity over the next 20 years. “The only domestic energy source projected to increase production sufficiently to meet demand is coal.”
From an environmental perspective, “coal-fired generation is becoming increasingly clean,” he said. “Since 1980, major emissions from U.S. power plants have fallen by about 40 percent – during a period in which economic growth grew by 93 percent and electricity generation by 75 percent. Plainly, the advent of Clean Coal Technologies in the mid-80s has already made an impressive contribution to cleaning the air.”
Gerard stressed that over the next 15 years, “we’ll see an almost 70 percent emissions reduction on top of gains we’ve already made, and for the first time we’ll begin to target reductions of mercury, too.”
A key to coal’s fate, however, is the debate over energy and environmental policy. “We can take the path that allows our ingenuity to transform our most abundant energy supply into increasingly clean, reliable and low-cost power. Or we can take the path that will lead the nation toward greatly diminished fuel diversity and higher energy costs.” Gerard noted a few issues now before Congress – including proposed new standards for power plant emissions, the energy bill and how to control greenhouse gas emissions – “will go a long way toward deciding which path we take.”
He said NMA will officially unveil its “Coal Vision” for the future next week in Washington, which will also be a centerpiece of the industry’s testimony to the Senate Coal Conference on March 10. “Our vision will spell out in some detail why the technology pathway is the most promising approach for meeting the nation’s future electricity needs. It will outline how the industry will provide the 50 percent increase in coal-fired generation expected over the next two decades, as we simultaneously move toward the goal of near zero emissions. “
Gerard added: “We will make plain, however, that the realization of our Coal Vision will depend on a continuing partnership with the federal government to help underwrite the cost of developing and implementing advanced coal technologies. These technologies will include carbon capture and sequestration and advanced gasification systems that will bring coal to the threshold of a hydrogen economy.”
The question is, “will our politicians and regulators give our Coal Vision the time and resources to come to light? Or will they damage its prospects through over-zealous regulation, arbitrary caps on greenhouse gas emissions, or market distorting standards that slow the progress we’re making?”
Back to top
Feingold, Cantwell once again introduce percentage depletion repeal measure
As they have done in previous congressional sessions, Sens. Russell Feingold (D-WI) and Maria Cantwell (D-WA) this week reintroduced legislation to repeal the non-fuel minerals percentage depletion allowance.
Similar measures introduced in the past were unsuccessful. However, in the current fiscal climate of high budget deficits, NMA believes extra vigilance on revenue-raising measures is advisable.
According to an Earthworks release, the repeal would increase federal revenues by $1.5 billion over five years, which is what it would cost those in the industry impacted by the repeal, if it were enacted. Repeal is on a list of policy options to raise revenue recently published by the Congressional Joint Committee on Taxation.
NMA views the depletion allowance as an essential tax provision that helps mining companies recapture capital investment. The tax allowance lowers costs and is an incentive for the industry to invest in high risk projects. Consequently, the association will continue to actively oppose congressional repeal measures. NMA Government Affairs staff have already contacted mining state Senators to coordinate strategy.
Back to top
Newsbits
The Doe Run Company says its Herculaneum Smelter has passed the annual Maximum Achievable Control Technology (MACT) stack test conducted by the Missouri Department of Natural Resources. According to December 2004 test results, the smelter averaged 180.9 grams of lead per hour, based on a 12-month-average metric ton, well below the 500 grams of allowable emissions. “The annual MACT stack test reflects how well our equipment is controlling emissions,” said Rusty Keller, Doe Run environmental engineer . . . . The first commercial use of an advanced coal-cleaning system comprising two separation technologies will take place this summer when it is used to produced clean, upgraded coal from a large fine-coal waste pond located in southern West Virginia. The system, to be installed near Pineville, WV, at property owned by Pinnacle Mining Co., will create useable fuel from discarded “waste” – if successful, it could be used to clean up hundreds of coal-waste impoundments . . . . The second Industry Summit on Mining Performance, co-sponsored by Penn State University and the Colorado School of Mines, will take place Sept. 21 and 22, 2005, in Denver, CO. The conference focuses on the use of business process improvement (BPI) methods to analyze continually occurring processes and make changes that lead to permanent improvements in mining operations. For more information, contact Lisa Clapper at 814-865-7600, or lcc1000@outreach.psu.edu. . . . Hecla Mining Co. says former U.S. Congressman George R. Nethercutt Jr. has been named to the company’s board of directors, replacing the retired Joe Coors Jr. Nethercutt (R-WA) was a member of the U.S. House from 1995 to 2004 and is currently a principal with the strategic planning and consulting firm of Lundquist, Nethercutt & Griles LLC . . . . Newmont Mining Corp. announced the closing of the sale of its Ovacik mine, located in western Turkey, to a subsidiary of Koza Davetiye, a Turkish conglomerate. “Consideration for the mine included $20 million paid at closing, and various contingent payments that could total as much as $24.5 million if all conditions precedent are met,” Newmont said . . . . Greg Boyce will succeed Irl Engelhardt as CEO of Peabody Energy Corp., effective Jan. 1, 2006. Boyce will also retain his title of president, while Engelhardt will remain board chairman of the company. Boyce joined Peabody in October 2003 as president and COO after serving as a chief executive for energy for Rio Tinto PLC . . . . Golden Phoenix Minerals has appointed Earl Harrison as manager of mines, with direct responsibility for the Ashdown molybdenum mine and Mineral Ridge gold mine. The company said he will assume responsibility for all mine planning, permitting and operations . . . . CONSOL Energy said P. Jerome Richey has joined the company as vice president and general counsel. He previously was with the Pittsburgh law firm of Buchanan Ingersoll, where he was a shareholder and in-house ethics counsel.
Back to top
|
