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MiningWeek Online
March 25, 2005 Volume 11, Issue 12
This Week's Issue:
Brinzo praises Gerard’s leadership as he leaves NMA to head American Chemistry Council
NMA Chairman John Brinzo this week praised the four-year tenure of NMA President and CEO Jack Gerard as being marked by “strong leadership and a record of accomplishments,” following announcement that Gerard will go to the American Chemistry Council (ACC) in Arlington, VA, as president and CEO, effective July 1, 2005.
NMA’s Board immediately directed a search for candidates to replace Gerard, 47, who announced his decision to the Board of Directors meeting in Phoenix, AZ. Speaking on behalf of the board, Brinzo, who is chairman and CEO of Cleveland-Cliffs Inc., said, “We extend our thanks to Jack Gerard for his tireless service to NMA and to the industry. Jack came to the association with a mission—to make NMA more reflective of the modern mining industry—and he has been successful by every measure the board has set for him.”
“Among his many accomplishments, Jack moved the association to Capitol Hill as part of a comprehensive strategy to make NMA a more effective advocate for the industry. During his tenure, NMA tripled political giving, built a strong grassroots advocacy program, and modernized its communications capabilities. Jack focused the association on its core public policy objectives and solidified the merger of NMA’s two predecessor organizations, the American Mining Congress and the National Coal Association. He has helped forge an exceptional member company commitment to an organization that is well positioned to serve the U.S. mining industry in the days and years ahead,” Brinzo noted.
“Finally, Jack assembled an outstanding staff at NMA, and the board is confident the association is in capable hands while we conduct the search for Jack’s successor. We will miss Jack, and we wish him and Claudette every success as they begin a new chapter in their lives,” Brinzo concluded.
Gerard said, “We accomplished a great deal in these past few years to raise the awareness of an industry whose many contributions to our energy and manufacturing sectors are vital to the American economy,” he said.
Gerard’s leadership of NMA was marked by a strong emphasis on legislative, regulatory and public affairs advocacy, signified by the association’s move from its traditional downtown headquarters to its current location on Capitol Hill. Gerard quickly reorganized NMA to become a more vocal advocate on behalf of public policies that affected coal and mineral mining and directed the association’s efforts in aggressively supporting political candidates who espoused those policies.
Gerard, an Idaho native, has led NMA since December 2000 following a successful career in private business and close to a decade on Capitol Hill. Immediately prior to his position at NMA, Gerard was a founding partner, chairman and chief executive officer of McClure, Gerard & Neuenschwander, Inc., a Washington-based consulting firm formed with former U.S. Sen. James McClure (R-ID). Gerard serves on the boards of the National Capital Area Council – Boy Scouts of America Executive Board; the George Washington University Graduate School of Political Management’s Council on American Politics; the Mineral Information Institute and also chairs the National Energy Foundation’s Board of Directors.
At ACC, Gerard will replace interim President and CEO Tom Reilly who took over leadership of that association last summer.
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NMA urges House panel to support funding for FutureGen and coal R&D, as it considers budget
NMA last week urged the House Energy and Water Development Subcommittee to support funding for FutureGen and coal research and development, among other things, as it considers the Department of Energy’s Fossil Works budget and U.S. Army Corps of Engineers (COE) Civil Works budget for FY 2006.
In a statement for the record, NMA said it “strongly supports the $18 million requested for the FutureGen Initiative” in the Office of Fossil Energy, as well as the “deferral and designation of $257 million in prior year Clean Coal technology Program funds for FutureGen’s use in FY 2007, and the $283 million requested for base coal research and development programs.”
NMA noted, “The FutureGen facility will be managed and cost-shared by an alliance of coal and utility companies with extensive experience in building large-scale coal-fueled projects, while meeting budget and performance requirements. The industry alliance, currently negotiating a cooperative agreement with the Department of Energy, remains committed to moving the FutureGen Initiative forward, provided a multi-year funding scenario is secure and the funding does not come at the expense of other coal research and demonstration programs.”
NMA added it believed the $50 million requested for the Clean Coal Power Initiative “should be increased to $132 million, thus ensuring a robust demonstration program for advanced coal technologies.”
The FY 2006 request for $1.1 million for the Mining Industry of the Future program “represents a 72 percent cut from the FY 2005 enacted level of $3.9 million,” NMA pointed out. “Not only is the requested level not enough to allow any new solicitations or new starts for this important program, but it is unlikely that projects already approved under the Mining Grand Challenge will be given the promised funding.” Also, NMA said, the proposed level of funding “will jeopardize” the mining industry’s ability to meet the Mining Industry of the Future goals of its Mining Climate Action Plan.
NMA said it supports the FY 2006 requests for both the COE Civil Works program and additional expenditures from the Inland Waterway Users Fund, as well as the strategy to accelerate high-priority projects that provide benefits to the nation.
“However, NMA is very concerned that the proposed FY 2006 budget does not provide sufficient funding to keep critical navigation projects on schedule, allow for the start of new projects, and address the maintenance backlog for existing navigation projects.” Among other things, NMA recommended:
· A minimum of $5.5 billion should be appropriated in FY 2006 for the Civil Works program;
· Funding navigation projects at the full capability funding level of $40 million;
· Increasing the appropriations for the Corps’ General Investigations account from $95 million to $200 million; and,
· Increasing the proposed funding of $1.979 billion for the Operations and Maintenance functions by $100 million.
NMA also listed 12 specific projects in need of additional funding and requested $160 million for administering the Corps’ Clean Water Act, Section 404 permit program, and for implementing the Memorandum of Understanding.
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Reps. Pombo and Gibbons emphasize importance of natural resources to US economy
Speaking to NMA’s Board of Directors this week, House Resources Chairman Richard Pombo (R-CA) said the US, “is in danger of losing its natural resources industries” in part because most of the nation’s environmental laws are over 30 years old and have not kept pace with evolving science and technology. He noted that, “lawsuits [based on these outdated laws] are tying us up so we can’t move forward” to meet the nation’s energy and mineral needs. Pombo said high oil and gas prices have put enough pressure on the Senate that it, “looks like we’re finally going to get an Energy bill.” He also felt Clear Skies legislation would ultimately pass the Congress based on the need to provide a clear path for investments in needed electricity generation from coal—unencumbered by litigation.
Pombo offered the Endangered Species Act (ESA) as a key example of why the nation’s environmental laws need updating to “resolve conflicts with human activity and to make the Act effective.” He said the goal of the ESA should be recovery of species, not just controlling land, which is its current emphasis.
House Energy and Mineral Resources Subcommittee Chairman Jim Gibbons (R-NV) was equally emphatic in his concern for the diminishing share of worldwide minerals development that was occurring in the US. Noting that last year only 8 percent of total dollars for development and exploration was invested in the US, Gibbons said, “We need to revitalize our national minerals policy” and educate the public on the importance of minerals to our economy. Gibbons said it was “time to hold a serious debate” on minerals policy reform. He pointed to over 100 responses to his recent request for ideas for change. He noted that, “some are outside the box, and I encourage that,” and cover diverse topics, including reclamation bonding, abandoned mine cleanup funding and corresponding limits on liability under the Clean Water Act (“Good Samaritan” legislation).
Both Reps. Pombo and Gibbons asked for the mining industry’s help in achieving these important public policy objectives and praised NMA for its effectiveness and leadership.
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Two companies seek to reopen Utah uranium ore mill
U.S. Energy Corp. and Crested Corp. have filed a request with the state of Utah to reopen a uranium ore processing mill in Shootering Canyon closed since the early 1980s.
The mill, located about 15 mils north of Lake Powell near Ticaboo, is the last and most modern uranium mill built in the United States, according to U.S. Energy spokesman Don Warfield, and one of only four uranium mills left in the country.
U.S. Energy, which owns nearby uranium mining acreage, expects to eventually mine the property to provide feedstock for the mill. The company told the Casper Star Tribune it could take up to two years to secure the necessary permits to reopen the mill, which operated only a few months after construction was completed in 1982.
The companies said it will cost about $25 million to make the mill operational again. They hope to arrange financing while the license application is processed by the Division of Radiation Control, which is part of the Utah Department of Environmental Quality.
A factor in the reopening is the surge in uranium prices, which have more than tripled since 2001.
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Peabody Energy acquires coal reserves, surface assets in Illinois, Indiana
Peabody Energy said its subsidiaries have acquired selected assets from Lexington Coal Co. for $61 million in cash.
“Strong growth and long-term demand for Illinois Basin coal and increased investments in technologies allows Peabody to further expand its leadership position in the region,” the company said. “The acquired properties have significant synergies with other Peabody subsidiaries, enabling lower-cost mining and longer mine lives,” Peabody added. Purchased assets include:
• Approximately 10 million tons of reserves, a preparation plant, mining equipment and facilities near Coulterville, IL. The newly formed Coulterville Coal Co. may also access adjacent coal reserves owned by Peabody subsidiaries. The mine is expected to begin production in 2005 and will produce approximately 2 million tons per year when it reaches full capacity in 2006. The mine will supply coal under a new agreement with Northern Indiana Public Service Co. with terms that can be extended through 2015.
• Approximately 40 million tons of coal reserves, a preparation plant, facilities, a shovel and other mobile mining equipment in Knox County, IN. The assets will be operated by Peabody subsidiary Black Beauty Coal Co.’s Miller Creek Mine, which is expected to access these surface reserves in 2006.
• Approximately 20 million tons of reserves, a preparation plant, significant surface land reserves, a large dragline and other mobile mining equipment in Sullivan County, IN. The assets will be operated by Black Beauty’s Farmersburg Mine. Development of the operation is targeted for 2007.
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Newsbits
Pierre Lassonde, president of Newmont Mining Corp., has been named chairman of the World Gold Council (WGC). Lassonde, 57, succeeds Chris Thompson, chairman of Gold Fields Ltd., who served for three years as WGC chairman. Lassonde has been president of Newmont since February 2002, and previously was co-chief executive of Franco-Nevada Mining Corp., which Newmont purchased . . . . The city of La Oroya, Peru, said it is moving forward with plans to build a much-needed bus terminal on land granted to the city by Doe Run Peru, a subsidiary of The Doe Run Co. Last June, Doe Run transferred 7,300 square meters of land to the municipality to be used for transport services and a regional bus terminal . . . . Robert W. Shanks has been named president of Arch Coal Inc.’s eastern operations. Since 1998, he has served as president of Arch’s western subsidiary, which includes one of the world’s largest and most productive surface mines and three highly productive longwall operations . . . . Barrick Gold Corp. said it has started production at the new Tulawaka mine in Tanzania. The company expects it will produce approximately 70-75,000 ounces of gold at total cash costs of about $210-$220 per ounce. Tulawaka is 70 percent owned by Barrick and 30 percent by Northern Mining Explorations Ltd. . . . National Coal Corp. has named Mark Oldham as chief financial officer, effective April 1. Oldham previously served as CFO and board member at Pen Holdings Inc. and subsidiaries.
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