“The ‘Not In My Back Yard’ folks have abused a flawed permitting process to block 381 energy projects, nearly 44% of which involve renewable energy,” said Kovacs. “They have organized local opposition, changed zoning laws, opposed permits, filed lawsuits, and bled projects dry of their financing. It’s like an anchor on economic growth and job creation.”

“Congress could improve the permitting process for energy projects by adopting the commonsense procedures used for transportation projects and shortening the statute of limitations in which project opponents can file suit,” added Kovacs, speaking on July 15.

For full story, click here.

The U.S. aggregate mining industry is hurting, our highways are crumbling, and Congress is making both problems worse.

The recession certainly has caused great pain within the aggregate industry, due in large part to the crash of both the housing market and commercial construction. In 2008, housing starts fell to the lowest level in 50 years.

These two factors severely diminished demand for aggregate, but they’d be survivable if Congress didn’t create a triple whammy.

In 2005, Congress passed the “Safe, Accountable, Flexible, Efficient Transportation Equity Act,” which called for investment by the federal government in a Highway Safety Improvement Program structured and funded to make significant progress in reducing highway fatalities. The act also sought to relieve congestion through highway construction, highway improvements, bridge improvements and other transportation infrastructure.

Funding for most of the program was earmarked to come from the Highway Trust Fund, established in the 1950s to make sure federal gasoline tax revenue was spent on highway maintenance and improvements.

The problem: The Highway Trust Fund authorization expired in September 2009. Since then, it has been extended on short-term resolutions, as opposed to the original 50-year authorization. Some in Congress favor not renewing the program and simply budgeting highway projects annually through the treasury general fund. The big catch with such an approach is that budgeting for highway improvements would be subject every year to politics surrounding the annual budget process.

Already, the lack of a committed funding source has kept many of the larger aggregate producers and complementary industries from being able to conduct long-term capital planning. Why invest capital resources to increase your reserves or make capital investments for large machinery when you can’t confidently project the demand for your aggregate products in the coming years?

The result has been a stagnation of investment, job creation and tax revenue from companies that mine the rock product that will be needed and from the companies that provide the machinery, trucks and other needed products for the industry.

Insiders on Capitol Hill are stating that the issue will not be addressed until a new Congress is elected in November 2010, and probably not until well into the new session of Congress.

So, the next time you are run across a pot hole-filled roadway, a bridge closed for repair (or not being repaired), or if you are just sitting in traffic, remember that part of the cause is a Congress that will not pass a bill that nearly everyone on both sides of the political aisle says we need.

Christopher Hopkins is senior vice president for aggregates and mining for The Saint Consulting Group, email hopkins@tscg.biz, phone, 615-656-3794

It has now been eight months since the expiration of the Federal Highway Trust Fund. While there have been short-term extensions put in place to maintain some of the road funding to the states, it has not been sufficient to keep up with our deteriorating infrastructure.

The Federal Highway Trust Fund was started in 1956 in order to maintain America’s roads and bridges. Through this act, the federal gas tax is earmarked for the maintenance of roads and bridges across the country. The federal gas tax is an incredibly fair user fee:  the more you drive, the more wear you cause on the roads; so, the more gas you use, the more you pay to repair roads and bridges. Americans drive approximately 3 trillion miles per year, but if you do not drive or own a car, you do not pay a cent towards the trust fund.

State and local governments are in dire straits, not knowing if and at what level, federal highway funds will be forthcoming.

In the private sector, construction and aggregate companies are unable to make long range capital plans and in turn are not able to participate more in the economy by adding jobs and capital outlays. And the delays are costing jobs; the U.S. Department of Transportation estimates that for every $1 billion of federal spending on highway construction, 28,000 jobs are created, this in a construction industry that is experiencing an estimated 21.8% unemployment rate.

There is a serious need for these road repairs. In 2007. the National Bridge Inventory listed 12% or 74,000 of bridges in America were “structurally deficient”.  In 2009, the American Society of Civil Engineers gave the overall infrastructure in the country a grade of “D”.

Some highlights from the society’s report card:

• Bridges got a “C,” with one in four rated structurally deficient or functionally obsolete.
• Levees, most of them older than their designed lifespan and privately owned, got a “D-minus,” with repair costs put at $100 billion.
• Dams got a “D,” with 4,000 dams deemed deficient and half of those considered to have “high hazard potential.”

• The nation’s roads got a “D-minus,” down from “D.” Americans spend 4.2 billion hours stuck in traffic a year at a cost of $78.2 billion, or $710 for each motorist, the report said.

The government needs to pass the Federal Highway Trust Fund renewal; it is a program that has bi-partisan support in Congress, but the partisan politics of Washington, D. C., will not let it be taken up during an election year. Rather it is placed into the general fund where it is raided for pet projects that have nothing to do with infrastructure.

Meanwhile, bridges and roads further deteriorate, people remain unemployed who should not have to, Congress goes on recess and the bickering continues.

Christopher Hopkins is senior vice president for aggregates and mining for The Saint Consulting Group, email hopkins@tscg.biz, phone 615-656-3794

The end may be in sight for part of the recession that has devastated sections of the mining industry over the past three years. Cemex and Vulcan Materials both recorded increased sales in April and are projected to have a further increase in May, according to Bloomberg Business Week.

The sales rise by two of the largest limestone producers in the United States was a result of increased housing starts and rail shipments of crushed stone. Production is expected to increase in the second half of 2010 as large portions of the $27 billion in stimulus funds authorized for highway and bridge repair comes on line.

This news comes on top of predictions that metals mining exploration will increase by as much as 40 percent in 2010. The increased spending in exploration is being driven by the stable price of gold and copper worldwide,  according to a Reuters report.

Click here for Bloomberg Business Week article.

Christopher Hopkins is senior vice president for aggregates and mining for The Saint Consulting Group, email: hopkins@tscg.biz, phone 615-656-3794

Rare earth minerals are a key element to the 21st century economy and beyond. With China currently producing the vast majority of the products, are we substituting one foreign dependency for another?

Here’s a link (click here) to an excellent New York Times article on the future of the rare earth mineral supply and the impact it will have on the “green economy.”

Chris Hopkins is senior vice president for aggregates and mining, The Saint Consulting Group, email hopkins@tscg.biz and phone  615-656-3794.

Read the article — Link

Read the article — PDF

By Christopher Hopkins
Senior Vice President, Aggregates and Mining, The Saint Consulting Group

Numerous arguments are made for and against mining. Public debate typically focuses on mining’s impacts on the environment, the economy, the landscape, home values and impacts on communities. Virtually ignored, however, is how the decline in mining in the United States affects national security.

When forced to consider mining’s contributions to national security, most people will identify the usual suspects — oil, natural gas, uranium and coal.  All are vitally important.

But it’s time for Americans to consider a different type of mining, what is often referred to as “rare earth” mineral mining. These are some of the world’s most obscure but valuable minerals, 15 elements used in a variety of ways to produce products that are vital to national defense, our economic future, our technological future, and even our environmental future.

The so-called rare earth minerals include such elements as lanthanum, neodymium, praseodymium, terbium, dysprosium and erbium. These minerals and the other nine are key in the production of essential products used every day. They are key ingredients in everything from the sonar radar used on Navy warships and submarines to the hydride batteries used to run the latest hybrid automobiles.

For example, the magnets required to operate a single wind turbine are composed of two tons of rare earth materials. According to a recent Reuters article, the Toyota Prius is fast becoming the largest user of rare earth minerals in the world. A Prius uses 2.2 pounds of neodymium for lightweight magnets that help power the electric motor, and 22 pounds of lanthanum in the battery. As Toyota seeks to increase productivity and fuel economy, these amounts will double.

China holds 53 percent of the world supply and currently produces 95 percent of the rare earths mined. But in each of the last three years, China has reduced the amount of rare earths that can be exported. Western governments and multinational corporations alike are alarmed by the possibility that China will further restrict exports. The Telegraph of London reported in August that China was considering a total ban on export of several of the rare earth minerals.

Just one active rare earth mineral mine is operating outside China (it’s in Australia). A second mine is scheduled to begin mining in Mountain Pass, California, in 2011. Mountain Pass had been an active mine until the early 1990s when China flooded the mineral market, driving down the price to the point where it was no longer profitable to produce.

Even if China wanted to, it cannot in the near future produce the amount of material that will be required across the globe. In 1999, world demand for these materials was around 40,000 metric tons per year; in 2009, that demand grew to 125,000 metric tons. It is estimated that by the year 2014, demand will be 200,000 metric tons.

China’s virtual monopoly of the rare earth mineral sector allows it to manipulate the pricing structure of these minerals, increasing the revenue flowing into China from around the world and its ability to dominate the world economy.

This is recognized as a real threat to our economy and our ability to transition into the “green economy” that is being touted as the world’s next great economic boom. Jim Sims, president of the Western Business Roundtable, predicted that if China stops its exports, wind turbine production would cease entirely within 60 days.

The 47% of the world supply not located in China is primarily located in the United States and Australia. Any new restrictions on mining these minerals in the United States could threaten our future. Neodymium, the key element needed for wind turbines, is located in the Lemhl Pass in Idaho, but the site borders the Lemhl River, one of the largest producing salmon tributaries on the Salmon River. Any attempt to mine this area would undoubtedly meet strong opposition from environmentalists.

There needs to be an understanding and a balance between the environmental community and doing what is needed to ensure our national security, both militarily and economically. The key to the future may lie in the ability of these minerals to be mined in large quantities in the United States, with environmental community coming aboard in these efforts. With these materials being an essential ingredient in the coming green economy, it’s clear there is strong reason for cooperation and agreement on what is rapidly becoming an essential need for our future.

Chris Hopkins is senior vice president for aggregates and mining, The Saint Consulting Group, email hopkins@tscg.biz and phone  615-656-3794

In a cover story in Rock Products magazine’s November issue, Chris Hopkins writes that before breaking ground on a new quarry site, operators must be on the ground and behind the scenes at a local level.

Hopkins, the senior vice president for aggregates and mining for The Saint Consulting Group, writes that developers could be making a very costly mistake if they neglect to do their homework on the politics involved in the permitting process.

Politics is the great unknown in permitting any land use. What happens if a county commission or his other lives three streets away from the proposed quarry site? What if the mayor’s base of support resides in the surrounding neighborhood? What is the alderman’s brother-in-law operates a small family quarry in town? Even if that alderman recuses himself from voting on the application, what might go on behind the scenes when the board members talk?

Not knowing the answrs from the start can be fatal for an application. The full story is found on the Rock Products online edition. Click here and go to Examining Local Politics on page 16.

Chris Hopkins is senior vice president for aggregates and mining for The Saint Consulting Group, email hopkins@tscg.biz

Public anger has forced politicians in Whistler, a small British Columbia city preparing for this winter’s Olympics, to rethink the location of an asphalt plant near a new housing development.

 An article in Pique Newsmagazine regarding Whistler Mayor Ken Melmed sums up the effect that NIMBYs can have on the political process.

“The mayor’s position changed about two hours later in the wake of more unanswered questions, and more outrage about the plan,” reported Alison Taylor.

Prospective homeowners in Cheakamus Crossing were made aware of relocating asphalt operations in disclosure statements when they bought their homes. Grassroots efforts spread the word about potential air quality and toxicity concerns that might accompany the operations.

Open House on 26th November will give residents more opportunity to answer their questions.

Chris Hopkins is senior vice president for aggregates and mining for The Saint Consulting Group, email hopkins@tsc.biz, phone 615-656-3794

In a recent report, The Daily Telegraph in the UK looked at the decline of global gold production and efforts by Barrick Gold, the world’s top producer, to wind down the remaining 3 million ounces of its infamous hedge book over the next 12 months, an implicit bet on rising gold prices over time.

How will this affect the mining efforts in the United States?  In 2001 an ounce of gold sold for under $300 per ounce and on November 12, 2009 it closed at $1,106 an ounce.  Mining in the United States has decreased significantly during the same period of time. In 2000 there was 350 metric tons mined annually in the US, in 2009 it is estimated that the number has dropped to 250 metric tons annually. 

It can take years to obtain a mining permit in the best circumstances and with NIMBY and environmental opposition, that can add more years onto the process. For the full Telegraph report, click here