NOVEMBER 2004 NEWSLETTER: WEBSITE EDITION

From the Chairman

First and foremost, we are pleased to present another Henry Krumb Lecturer for our coming meeting on November 18^th.  Marshall Miller will be flying up in his personal jet up from Virginia to discuss expectations for coal.  Based on the price of crude oil these days, coal will probably become an ever-increasingly important player in the energy market, and with the abundance of Illinois coal reserves we should sit up and pay attention.  Please set aside the time to come and hear Marshall speak to us on this pertinent mining topic, and help us provide a good showing as a Section.  Well, we survived another presidential election season, and what a season it was.  I hope all of you were able to get involved in the political scene this year by voting.  Kudos to those of you who participated, and double kudos to those whom may have done so at other levels, too.  Finally, after this coming meeting we will not be officially meeting again as a Section until January 18th. So, I would like to take this opportunity to wish each of you a happy holiday season.  I know I have a lot to be thankful for, including your association and friendship.  May each of you find some measure of joy in your celebrations.-- Gordie Stevens

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From the Program Chairman

This Meeting

“The Expectation for Coal: Is Our Government and the Industry Prepared?”

With the prevailing assumptions that plentiful domestic coal reserves will be available for meeting our nation’s dependence for future coal-fired power plants, major government funding in Clean Coal Technology and Carbon Sequestration programs continues to be aggressive.  However, after more than a decade of cutbacks in funding for domestic coal related programs and personnel, there is a growing concern that adequate quantification and qualification of our Nation’s coal reserves is increasingly being compromised.  This paper will present the growing concerns and dichotomies that continue to increase and address the decreasing number of fossil fuel programs in Federal and State programs.

About the Speaker

Marshall S. Miller is Chairman and CEO of Marshall Miller & Associates, a geological and engineering firm that he founded in 1976.  After obtaining B.S. and M.S. degrees in geology form West Virginia University (WVU), he started his career in the Illinois oil and gas fields as a geophysical engineer with Schlumberger Well Services.  A five year reaserch stint   then followed in Charlottesville, VA as a fuels geologist for the Virginia Division of Mineral Resources.  There he authored several pioneering studies in the areas of geophysics, geology and mining, the most comprehensive of which was a 200 page book on the coal fields of southwest Virginia.  Following a two year interval as fuels geologist with Norfolk Southern Railway’s land subsidiary, Pocahontas Land, Mr. Miller embarked on an independent career, offering geological and geophysical services to the coal, oil, and gas industries in the central Appalachians.   With an advanced knowledge of coal geology and a specialization in the prediction of geological mining hazards in advance of mining, Miller was able to grow his company in the Appalachians, where avoiding mining hazards has reached the highest of priorities in among the coal industry.  

By 1993, he had authored over 25 professional publications and was recognized as a regional Entrepreneur of the Year by Inc. magazine, Ernst & Young and Merrill Lynch.  In subsequent years he has received the Distinguished Professional Achievement Award from the WVU Geology Department, and both the Sectional and National Distinguished Member Award by the SME.  For the past five years Marshall Miller & Associates has been listed among the top 500 Engineering Design Firms in the US by Engineering News Record and this year he was inducted into the West Virginia Coal Hall of Fame.  He was also recently selected as one of the panelists and advisors to the US Geological Survey.

Today his company employs over 190 professionals, maintains 10 offices in 9 states and works on an international basis with active projects in China, South America and Canada. The company website and newsletters are at:  http://www.mma1.com/

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Last Meeting

Wasn’t…  The last meeting was cancelled on short notice.  While the executive committee does not want to inconvenience anyone, sometimes the decision must be made at the last moment.  We hope no one was inconvenienced.

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GEM/PIE News 

MEYER MATERIAL OPEN HOUSE AT CRYSTAL LAKE OCTOBER 9th

The IDNR Rock Box was at Meyer Material's open house in Crystal Lake on Oct. 9.  Over 1900 people were in attendance on a beautiful fall day.  So many commented that they've driven by this gravel pit many times, but never really knew what happened there. The plant was running so people could see the whole operation from the stripping phase to the final stockpiles.  There was equipment to climb on from big front-end loaders to ready mix trucks.  Various display boards illustrated the reclamation plans. It was a wonderful opportunity for families to come out and learn what's happening behind the berm.

--Submitted by Linda Hiltabrand

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The Rock Box Rolls On....                   

The IDNR Rock Box was at Lincoln Elementary School in Ottawa, IL on Oct. 26th.  Seventy-five fourth graders and their teachers from Lincoln School learned more about aggregate mining and Illinois rocks and geology.  Besides viewing the Rock Box, they watched the Rock Man video and listened to a talk about consumer connections to mineral products.  The IDNR ROCK BOX trailer is an educational service of the IDNR.  If any of our members knows of schools or events who would be interested in having the Rock Box visit, contact Linda Hiltabrand for schedule availability and what expenses, if any, may be associated with arranging a visit to your event.  Contact Linda at the IDNR-Office of Mines & Minerals in Ottawa via:

e-mail:  lhiltabrand@dnrmail.state.il.us

GEM Committee Activities

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Section News

Don't forget to pay your 2003-2004 dues.  Click here for details.

Click here for the 2003-2004 Officers

Speakers for Next Spring's Meetings?

We have received suggestions for speaker topics related to mining without blasting and a session on recent technology advances in blasting.  We are actively working on developing these talks or recruiting speakers on these topics for after the new year.  If you would like to share any of the innovations or successes from your operation with the group, we would appreciate volunteers from within our own ranks.  If any of our vendors would like to present technical material in an educational format, this would be welcomed.

If you have any other suggestions, the Chicago SME is actively recruiting speakers for certain of our meetings for next spring.  Contact Frank Kendorski of Agapito Associates who is our Program Chair. 

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Upcoming Meetings & Events

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Member News

Richard Phelps of Patrick Engineering continues to write for the mining press.  -  Covers the Met Coke World Summit 2004 in Chicago

Patrick Engineering Inc.’s Richard Phelps, as editor-for-the Americas for Mining Magazine and Coal Magazine (London, U.K. based) attended the Met Coke World Summit 2004 in Chicago 18-20 October.  Phelps is the former Editor-in-Chief of the Engineering & Mining Journal.

One speaker wryly observed that, “This (marketplace) is where greed (coal suppliers) meets fear (cokemakers).”  With peak prices soaring from some $80/tonne up to $420/tonne (Chinese merchant coke), metallurgical coal producers have been chagrined in their inability to ramp up production to meet the demand. There has been > 50% rise in global coke trade since the mid-‘90s, with China providing much of the merchant coke supply in that period. Underlying those developments was the aggressive move by global steel prices over the past 18 months despite Chinese steel output more than doubling from ’00-‘04.

Analysis of the principal cokemaking nations’ capabilities and futures was presented. Among them India is poised to play a far more important role in coke making, in effect tolling Australian coals through its batteries and transshipping coke on to European or North American furnaces.

The article concluded with some observations about the met coal market over the long term.  The article concluded with some observations about the met coal market over the long term. U.S. coking coal may only last a few more decades. The USGS has shown that prior central Appalachian reserve figures were grossly overestimated (up to 6:1).   However, one thing appears certain:  the euphoria over the current prices will soon be dashed by a decline in demand, and many on both sides of the buy-sell equation will resume “business as usual”, forgetting to learn the lessons at hand.

For the entire article see the December 2004 issue of Coal Magazine (London, U.K)

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Industry News

Free Magazine Subscriptions 

http://www.mining-journal.com/cgi-bin/index.pl?m=mm

 COAL MAGAZINE

--Rick Ackermann

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From the Archives of E&MJ

A few weeks ago Richard Phelps shared a few interesting statistics with me concerning mining project cost-overruns.  An author-friend of his had done a survey of published data on mining projects around the world.   Some authors had looked at how well private-sector, western-hemisphere mining projects fared compared to the project budget.  The writers covered projects in two time periods, 1965-1981 and 1980-2001.   In the earlier time period (1965-1981) 18 projects had cost overruns vary from 0% to 100%, with an average overrun of 33%. There were 60 projects in the 1980-2001 time period.  The normalized cost data apparently included both over- and under-budget projects since the range was –43% to +50% with an average cost overrun of 22%.  The study also showed that most mining companies start only one new major project every 20 years.  If this is the case, it indicates how uncommon it is in the industry to have in-house, management teams that have had more than one startup together.  The second item of note is the high percentage of the cost overruns.  So, if your project is over budget, knowing you have a lot of company in the crowd may not help much with the boss. It should cause us as engineers at all levels to take a long look at what goes into our project estimates.   These statistics beg for an answer to why the large variation on what was supposed to be a relatively good engineering estimate.  However, how many companies do an after-the-fact analysis of projects to discover the variatiance’s source, so that the organization can learn from its own experience? --Rick Ackermann

Private Aggregate Source Barred from State Work Because Indians Say Land is Sacred

On September 1, 2004, the Ninth Circuit upheld the constitutionality of a decision by the Arizona Department of Transportation (ADOT) to bar the use of aggregate in highway construction projects from private land near Holbrook in east central Arizona, after local Indian tribes charged that the privately-owned land is sacred to the tribes. In the ruling, the Ninth Circuit rejected the claim by Dale McKinnon, who owns Cholla Ready Mix and the private land on Woodruff Butte where the aggregate is mined, that designating his land as “sacred” and barring its use violates the Establishment  (of religion) Clause in the Constitution. The Ninth Circuit opinion upheld a January 2003 ruling by an Arizona federal district court that ADOT’s action was not unconstitutional.

A series of rulings in the last few months by U.S. Courts of Appeals in the western U.S. have held that governments may close public and restrict use private land in response to demands by American Indians who claim the land is “sacred.” The rulings came in response to challenges to the closures, which assert that the closures violate the Constitution’s Establishment Clause, which mandates governmental neutrality regarding religion. Certain groups fear that the rulings will adversely affect not only their ability to use federal land for recreational and economic activity, but also their right to use their own land if American Indians say the land is holy.

Related information may be found at:  http://www.mountainstateslegal.org/litigator_home.cfm 

--Rick Ackermann

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