December, 2003
Year End Wrap
Adam Harper, Association Manager

With the holidays approaching it is time to reflect back on the achievements of 2003 and look forward to the challenges of 2004. The most significant news of 2003 was the recall of former governor Gray Davis and a large victory by Republican Arnold Schwarzenegger. Still the 2003 legislative session was controlled by a Democratic legislature and Governor Davis.

The Association’s number one challenge in 2003 was much the same as 2002. We worked diligently to defeat a power grab by Native American tribes via Senator John Burton’s SB 18, which would have granted them unprecedented power over California land use planning. This bill was on the governor’s fast track for signature during the recall campaign, but was temporarily defeated in the legislature by an industry coalition first formed by CMA to oppose SB 1828 (Burton).

CMA passed the leadership of the coalition to the California Chamber of Commerce but was instrumental in getting a key portion of SB 18 struck -- granting veto authority over lands within the California Desert Conservation Area, should a federal commission make specified findings.

And there was more good news. The coalition stopped the bill from passing off the Assembly floor with key Democratic votes abstaining or voting no outright. This measure was granted reconsideration in January 2004, but at this time the CMA considers it unlikely to move in its current form.

The Association and its advocates worked hard on a number of other bills. Unfortunately SB 649 (Sher) , over which industry was divided, passed. This bill will increase the SMARA fee cap from $2000 to $4000 per year, a feature of the bill which was not opposed by industry.

However, the bill also sets a disturbing precedent. California’s gold operators will be required to pay $5 per ounce of gold produced to help pay for abandoned mine remediation. The Association has always agreed that remediating these sites is important. We have also maintained that the cost of cleaning up historic mines is not the responsibility of current operators, but rather a societal responsibility where costs should be shared by the people of the state which benefited from the minerals.

CMA also noted to the legislature that California’s four remaining active gold mines will have ceased production in 2005 and the fee won’t go far in remediating an estimated 30,000 historic abandoned mines in California.

The situation was made worse with the adoption of a backfilling regulation that effectively makes all open pit gold mines uneconomic at current gold prices. Unfortunately some CMA members have already halted potential expansion plans and exploration as a result.

In 2003 CMA won a great legal victory with the Third Circuit Court of Appeals ruling in industry’s favor in the El Dorado County lawsuit. CMA intervened on behalf of the County of El Dorado when it was sued by the Department of Conservation, challenging the Department’s authority under SMARA to sue a lead agency and has now won at both the Superior and Appeals Court levels. The DOC has challenged the ruling and the California Supreme Court will hear the appeal sometime in 2004.

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INDUSTRY BRIEFS

ARB Eyes Idling Emissions

California Air Resources Board is presently gathering information on heavy-duty vehicle engine idling as a potential source for adverse health effects.

Staff is currently investigating idling practices in order to determine when idling is necessary and to look for possible alternatives, as well as for exemptions for emergency and other vehicles.

Applicability of a regulation is being considered for all model14,000-pound vehicles and for off-road engines greater than 50-horse power using any fuel type.

Public comment and participation are encouraged. For information, call John Gruszecki, Air Resources Engineer, 916-327-5601.

‘The House That Mines Built’

Members of the Washington DC Chapter of Women in Mining are assembling a dollhouse display with a mining message for installation at Smithsonian Institution National Museum of Natural History.

Dubbed the “House that Mine Built,” the exhibit will open in January of 2004, equipped with miniature furniture and household products. The goal is to educate museum-goers about the many minerals used in home construction and in everyday household items.

Chapter members will also make mineral samples available for viewing and tie them to products on display. Women in Mining is a nonprofit organization dedicated to educating students, teachers and the general public about the importance of minerals.
Member News

CMA Sends ‘Help Wanted’ Message

With bills introduced by state legislators threatening to break records this year, the Association is looking for volunteers to help review them.

Analysts can contribute to decisions on whether to support, oppose or stay neutral on issues significant to mining.“

We’ll supply the bills. You supply the review time,” says CMA Manager Adam Harper. Call him at 916-447-1977.

Harper reports another volunteer gap. The Air Quality Subcommittee of the Environment Committee is looking for a chair. Anyone interested may contact Harper. Environment Committee Chair Ben Licari will make the appointment.

Reno Office for Chambers Group

Chambers Group Inc. with offices in Irvine recently opened an office in Reno, Nevada, to provide interdisciplinary environmental services in the region to private business, developers, industry and government agencies.

The Reno office is moving toward the goal of offering a full range of environmental compliance services, according to General Manager Jim Welch.

Services include impact assessments, natural and cultural resources management, air quality analyses, permitting and regulatory compliance.

IN THIS ISSUE

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Top BLM Award Goes to Vulcan

Industry Impact: New award reflects mining’s continued operational success in resolving environmental issues and in responding to community concerns.
CMA Action: The CMA congratulates member company Vulcan Materials for its innovative and cooperative efforts in reclamation.

The first Department of Interior Hardrock Mineral Environmental Award has been presented to Vulcan Materials Company for its reclamation program on the Morongo Indian Reservation in Riverside County.

The new award recognizes “effective environmental stewardship and a demonstrated track record of successfully meeting or exceeding federal, state or local reclamation requirements with minimal oversight.”

Vulcan has established a reputation as an award recipient, having been a winner of the CMA Excellence in Reclamation Award in 2001.

Vulcan Western Division President Jim Smack expressed pride in the award to the sand and gravel operation. He said: “Reclamation of Vulcan’s Morongo project demonstrated that by focusing on environmental and tribal concerns, using the best available revegetation techniques for native habitat restoration and returning the land to a productive and viable secondary use, both the Morongo Band of Mission Indians and Vulcan Materials benefited.”

In her letter of congratulation, BLM Director Kathleen Clarke commended Vulcan for “following through on your promises.” She said: “The panel recommended the project because of how Vulcan Materials responded to tribal concerns about mining in this sensitive area. The company actively engaged the tribe and created a new reclamation plan.”

Vulcan’s Western Division operates 76 aggregates production, asphalt and ready-mixed concrete facilities in California, Arizona and New Mexico.

CEMEX Wins in Endangered Species Case

Industry Impact: Ruling carries significance to other projects and slams the Center for Biological Diversity legal argument.

Judge Robert Takasugi of the U.S. District Court, Central District of California, has found in favor of CEMEX and U.S. Fish and Wildlife Service in a suit filed by the Center for Biological Diversity (CBD).

CEMEX intervened in the action to protect its interests in the Soledad Canyon Sand and Gravel Mining Project, which was approved by the BLM in August of 2002.

At issue was a CBD challenge to the Service’s alleged failure to designate a “critical habitat” for the unarmored threespine stickleback fish, listed as endangered under the Endangered Species Act.

Judge Takasugi relied on an argument raised only by CEMEX to rule against the CBD claim that the ESA approval was issued by the Service improperly, according to attorney Kerry Shapiro, who represented CEMEX. Shapiro reported the judge agreed with CEMEX that to follow CBD’s position would limit federal agencies in their actions based on provision of state law.

“This ruling is also important to other project proponents,” Shapiro emphasized, “because it clearly rejected the attempt by CBD to interpret the Endangered Species Act as requiring federal agencies to comply with state law requirements.”

Specifically, the CBD had claimed that an obscure provision of California law, designating the stickleback as “fully protected,” would prevent the Service from issuing a statement authorizing a certain level of impact to the species incidental to carrying out the project.

Governor Halts Pending Regulations

Industry Impact: The executive order suspends action for the present on changes in the Financial Assurance Release Regulation proposed by the State Mining and Geology Board.
CMA Action: CMA plans to submit to the administration a list of past and pending regulations it believes deserves review.

Governor Arnold Schwarzenegger’s executive order of Nov. 17 suspends all proposed state regulations and calls for review of all regulations amended or repealed in the last five years.

The suspension period is to extend for 180 days pending a “thorough review,” according to the order. In addition, each agency will conduct a 90-day review of all regulations adopted, amended or repealed in the last five years and submit a preliminary report to the Governor’s Legal Affairs Secretary.

Review is aimed at determining if the regulations are “necessary, clear, consistent and are not unnecessarily burdensome or cause undue harm to California’s economy.”

The governor’s order puts a stop to proposed changes in financial assurances by the SMGB. These have raised objections from the mining industry.

The Association has joined with the Construction Materials Association of California and Southern California Rock Products Association in recording opposition to the SMGB proposal as an expansion of the director’s authority, which conflicts with SMARA law. According to a review of the law, SMARA creates a very specific “box” in which the SMGB director is allowed to act and nothing more.

What SMGB proposes is that financial assurance release would be allowed only with concurrence of the director that reclamation is complete and under the approved plan.

Existing SMARA provisions give the lead agency decision-making authority for release. The director is simply notified of completion of the reclamation plan.

BLM Solicits Award Entries

The Bureau of Land Management is seeking entries for two categories of Hardrock Mineral awards in its 2004 program—Environmental and Community Outreach and Economic Security.

This is the second year for the awards competition program open to solid mineral operations nationally without regard to land ownership.

Examples for which the Environmental award may be granted include minimizing environmental degradation, preventing pollution and minimizing noise and dust in operations, handling hazardous materials safely, erosion control through revegetation, leadership in good environmental practices.

For Community Outreach and Economic Security, examples cover an open and effective consultation process with the community, promoting health and safety on and off project site, investing in programs that improve skills and productivity of the work force and developing strategies for sustaining local economy after mine closure.

Companies, regulatory authorities, nearby landowners and members of the general public, can nominate operators in the solid mineral industries for either category. Company officials and employees may nominate their own operations.

As reported elsewhere in this issue, Association member Vulcan Materials received the first Hardrock Mineral Environmental Award presented recently in the nation’s capital.

The CMA encourages members to consider nominations in the current program. Deadline is March 1, 2004, other details are available at the BLM website.

EPA Appointment for Gorsen

Appointment of attorney Maureen Gorsen as deputy secretary, law enforcement and counsel in the Environmental Protection Agency was among the earliest announced by Gov. Arnold Schwarzenegger.

A partner in the CMA member law firm of Weston, Benshoof, Rochefort, Rubalcava, MacCuish, Gorsen has focused her practice on environmental compliance and land use with emphasis on counseling regarding the California Environmental Quality Act and Endangered Species Act.

“I am honored by the opportunity to serve in Governor Schwarzenegger’s administration,” Gorsen said. “I am eager to apply my legal knowledge and experience to help achieve the governor’s ambitious agenda for greater environmental protection for California.”

Her appointment does not require senate confirmation. Gorsen is a Republican.

While Association Manager Adam Harper has congratulated her on the prestigious appointment, he says Gorsen’s professional insight will be sorely missed by the Environment Committee subcommittee on which she served as legal lead.

Also appointed to EPA by the governor are Terry Tamminen, who will serve as secretary to the agency, and former State Senator and previous undersecretary for California Resources Agency James Branham, who will serve as agency undersecretary.

Other appointments include that of Peter Siggins as Legal Secretary. Attorney General Bill Lockyer formerly appointed him in 1999 as chief deputy attorney general for legal affairs and in charge of all legal work of the California Department of Justice.

Year End Wrap (continued)

In 2004 the mining industry faces a new political landscape. We now have a moderate Republican as governor and a liberal Democratically-controlled legislature. We expect that any legislation which makes it through the process and is signed by the governor will be the result of compromise and consensus. The process of informed debate with equal consideration of all information presented should be positive for industry

The challenge for CMA and its Environment Committee will be to continue to provide policy makers with accurate and detailed information of legislative impacts as well as science demonstrating the relative value of different legislative proposals.

On the regulatory front, the Governor has ordered a temporary halt to all pending regulations as well as a review of the cost impacts of existing regulation. While we cannot expect this to derail or sidetrack legislatively-mandated issues, we can expect a more thorough anaysis of cost impacts on business, something which has not always occurred in the past.

On the legal front, there are two major pending litigationsl: the El Dorado County case moving to the Supreme Court level, and the Coalition for the Reasonable Regulation of Naturally Occurring Substances (CRRNOS) litigation challenging the California Air Resources Board (CARB) adoption of the Air Toxic Control Measure (ATCM) for asbestos in surfacing materials. This litigation challenges the lack of data gathering as well as the economic analysis conducted by CARB for these ATCM’s.

Finally, I would like to wish each and every one of you a happy holiday season. CMA’s continued success is a result of your support, hard work, and dedication. We worked hard in 2003 and we’ll be working hard again in 2004, but for now let’s stop, take a breath, and be thankful for family, friends and fellowship.

Adam Harper
Association Manager
END