State of Your Industry For the past two years, NewsAccount has been talking to individuals from various industries that are an important part of the U.S., and Colorado, economy to get their views on the “state of their industry.” What’s happening today? What factors will affect these industries over the course of the next 12 months? In this issue: Mining. Mining Stuart Sanderson President & Chief Operating Officer Colorado Mining Association Denver www.coloradomining.org About Your Organization The Colorado Mining Association (CMA) has been around as long as Colorado has been a state. Established in 1876 – the year that Colorado achieved statehood ‐‐ the CMA is a trade association with 180 company members and 800 individual members. Membership is comprised of both small and large enterprises engaged in the exploration for, production and refining of, metals, coal, oil shale, and industrial minerals; firms that manufacture and distribute mining and mineral processing equipment and supplies; and other institutions providing services and supplies to the mineral industry. The CMA serves as a spokesman for the mining industry in Colorado and the west, working in cooperation with other state and national mining associations, keeping the industry informed on pending state and federal legislation, and promulgating constructive programs and actions that will adequately recognize and serve mining's special problems and needs. It serves the industry on a wide range of subjects through the expertise of its members on standing, ad hoc, and select committees. Much of Colorado’s history and heritage is intertwined with mining. What surprises people is that mining is not some vestige of Colorado’s past. Mining is very much a part of our state’s present and future. ******* http://www.coloradomining.org/mc_coloradomines.php ******* What role does mining play in Colorado’s economy? Recent data from PricewaterhouseCoopers reports that Colorado’s mining industry employs approximately 12,000 people directly and accounts for 48,000 jobs in the state’s general economy. Mining accounts for $6 billion in economic benefits for Colorado. People don’t realize the role mining plays in their daily lives. When you get up in the morning and brush your teeth, you’re probably not thinking about Colorado’s mining industry, but you’re using a product that may come from a Colorado mine: sodium bicarbonate, also known as nahcolite. Colorado is home to the only pure reserves of sodium bicarbonate in the continental U.S. The wall board in your house is made of gypsum which is also mined here. The state is the number one producer of molybdenum which is used in the manufacture of automobiles and other alloy steel products, not to mention light bulbs and computers. Molybdenum is even used as a solid lubricant and a high‐pressure high‐temperature anti‐wear agent. Limestone mined in Colorado is used for cement. Gold isn’t just used for coins and jewelry; it’s also used for industrial applications in the medical industry, computers and cell phones. Colorado is the nation’s fourth leading gold producing state. There are significant uranium projects underway in our state, although there was no commercial production in 2011. Colorado has extensive uranium reserves that could support clean nuclear energy. Nuclear energy currently accounts for nearly 20 percent of U. S. electricity generation, and the U. S. is the largest consumer of nuclear energy in the world. Colorado ranks ninth in the country for coal production. If you turn on a light switch, you’re using electricity powered by coal mined in our state. Coal is by far the lowest cost source of electricity in Colorado with an extremely high energy content. Our coal is also low in sulfur, mercury and other emissions. Coal also accounts for over 68% of electricity generated in Colorado and about 41% nationwide, highest among all energy sources. Coal mined here is called “super compliance” coal because it’s essential in helping utility companies meet clean air emissions standards. Colorado’s coal industry alone employs more than 2,500 workers who average $115,000 a year in salary and benefits – the highest among the state’s industrial workers. Federal royalties from coal fund Colorado public schools. Minerals are absolutely essential to everything we do in our lives. While other states may rank higher in terms of mineral production, no state matches Colorado’s diversity of mineral deposits. What challenges face the mining industry? The greatest issue we face is public perception of the mining industry. Traditionally, the industry hasn’t done enough to raise public awareness and consciousness of mining and its importance, and the stakes could not be higher. We are working to change that through public outreach and that includes raising public awareness of our increasing dependence on minerals produced outside the United States. We know that the U.S. is dependent on foreign oil. But did you know that our nation is also import‐
dependent on many minerals, like uranium, silver, and rare earth minerals? Rare earth minerals are used in the manufacture of magnets for wind towers and other strategic and military applications. We are 100% reliant on imports from China. The U. S. is more than 90% dependent on imported uranium. Permitting delays are a big part of the problem. Congress is starting to recognize this problem and is considering legislation, the National Strategic and Critical Minerals Act (H.R. 4402), aimed at streamlining the permitting process for U.S. mining. It’s important that we do all we can to stimulate the domestic production of minerals. We are also concerned about rulemaking initiatives by the Environmental Protection Agency (EPA) that will discourage the use of affordable energy from coal and raise electricity rates considerably. EPA’s proposal for controlling greenhouse gas emissions from about half the nation’s electric power supply is a poorly disguised cap‐and‐tax scheme that will result in higher utility bills and fewer jobs. It is also an attempted end run on Congress, which has consistently declined to enact punitive caps on carbon dioxide emissions. EPA’s “war on coal” is unwise; we believe better strategies exist for developing technology based solutions. As the United States has 27% of the world’s coal reserves representing more energy than all the oil in the Middle East, we believe in promoting an “all of the above” policy that will promote the continued use of our most abundant energy resource. And utilities have a proven track record of success; although coal use has tripled in the last thirty years, emissions are down by up to 80%. Colorado‐specific issues include legislation enacted in 2010 that will result in the premature closure of Front Range power plants currently using coal and their replacement with facilities using higher cost resources at a projected cost of more than $1 billion to Colorado consumers. This will also displace tens of millions of tons of coal beginning in the near future. This means higher electric rates and lower royalty and tax revenues to support public schools and governments. CMA is challenging regulatory decisions to shut down these plants. The national Roadless Rule, passed in 2001, prohibits road building on federal lands for industries such as mining, logging and oil and gas development, including more than 4 million acres in Colorado. If allowed to stand, the rule will impact areas where mining has taken place for more than a century. We are supportive of a state alternative rule – recently approved by the U. S. Forest Service ‐ that would allow mining to continue in areas designated for multiple use. These areas are small – about 20,000 acres – but they are very important to mining’s future. What is your role within the Colorado Mining Association? In addition to serving as president and chief operating officer, I also engage public officials on various issues relating to mining’s future. CMA tries to do a significant amount of education through numerous speeches to civic organizations, television and print advertising campaigns. We are also working to develop a social media presence. We cooperate with the National Mining Association (NMA) in raising public awareness about mining through the NMA’s “Minerals Make Life” program. The CMA Education Foundation hosts a comprehensive four‐week summer course for teachers. Since 1968, more than 1,400 educators from Colorado and the U.S. have graduated from the program. If you are interested in enrolling a teacher, please contact the CMA. As an association, we focus on legislative and regulatory issues, but we also hold member meetings throughout the year. In February 2013, we’re teaming with the Society for Mining Metallurgy and Exploration to hold a national conference which will draw 6,000 people to Denver. It will be the largest mining event in the western U.S. in 2013, and we’re hoping to raise public awareness of mining. We want to alert our membership and the public to critical infrastructure needs. Half of the people working in the mining industry today will be retired by 2029. We are examining the implications of an aging workforce and how we replace the expertise necessary to meet demand. Above all, my role, and the role of the CMA, is to help our elected leaders and the public understand the importance of the mining industry. Is this a good time to be in the mining industry? Yes. We’re in a period of growth. Many people say we’re actually in a mining “super cycle” that will last for some time. There is definitely interest and a resurgence in mining throughout the world as demand, particularly in the U. S., China and India, grows. Mining was one of the only industries to add jobs to the nation’s economy during the recession of 2008‐
09. And we are adding jobs in Colorado. The historic Climax molybdenum mine has resumed production for the first time in more than 15 years and employs hundreds of workers. The Cripple Creek & Victor gold mine announced it will continue operations through 2025. The coal industry is experiencing a rough patch right now due to the warm winter (which has softened demand), and anti‐coal policies at the state and federal level. We are encouraged somewhat by recent political and regulatory developments in Colorado, especially the state’s adoption of the Colorado Roadless Rule which will allow mining to continue in Gunnison and Delta Counties, where coal mining has taken place for more than a century. It’s also a great time for other professions and industries to engage with associations that represent mining for networking, business development and working to accomplish goals. The city of Denver is the world’s leading international center for mining expertise, with literally hundreds of companies and thousands of workers engaged in mineral development throughout the world. The Denver area is home to the Colorado School of Mines and several leading professional societies. Regardless of whether a company is interested in mining in Colorado or elsewhere, the opportunities begin here in Colorado, the world’s mile high mining hub.