Engineering & Mining Journal

AUG 2013

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USA MINING Hiding in Plain Sight The value of mining to America Editor's note: This is a speech that Hal Quinn, president and CEO, U.S. National Mining Association (NMA), delivered during a luncheon at the Haulage & Loading 2013 conference, which took place during May in Phoenix, Arizona, USA. It's good to be here in Arizona—a major mining state. In fact, it's an ideal vantage point for my topic. Arizona leads the U.S. in copper production—and ranks second in value for U.S. production of minerals and metals. Mining is also a significant employer here in Arizona—with about 70,000 Arizonans owing their livelihood to mining. And these are high-wage jobs…the kind many states, indeed today many countries, are eager to attract. I suspect few outside this room know this about Arizona: the home to a world-class industry…a major employer…a vital supplier for consumers and industries. And yet all this goes largely unseen, unrecognized. We're like a stealth industry—our value hiding in plain sight. In this respect, Arizona could be a metaphor for the U.S. mining industry as a whole. This brings me to several observations I would like to share with you this afternoon. The long-term fundamentals for our industry are strong—the opportunities immense. The question remains whether American mining will be allowed to perform to its full potential. If Americans today are unaware of the contributions that mining makes to their well-being, then tomorrow they will be awakened by what is unfolding before them globally. In the near term, the global slowdown is causing the developing world to pause and catch its breath. This will be temporary. The demand for resources has never been greater in our history. • Developing countries constitute more than three quarters of global economic growth. • By 2050, they should account for almost 80% of global GDP. • Consider that in the space of the last 25 years, China's GDP grew by a factor of 10—it took Great Britain the better part of the 19th century to grow by a factor of 4. • But China is only one chapter in the story unfolding—other developing countries have growth and their urbanization rates are equally impressive. • In India, the labor force is estimated to grow by 1 million people a month—for the next 20 years! • And there is plenty of head room left. Despite the enormous growth over the past decade, the developing economies' per capita commodity and energy intensities are still just a fraction of the developed world. So it is clear that resource competition will be fierce. And, according to a recent PWC survey, some 70% of the CEOs in basic and high tech industries identify minerals and metals scarcity as a major threat to their companies' success. If your company is located in the U.S., should this be a concern? After all, we are endowed with one of the richest mineral resource bases in the world—with an estimated value of $6.2 trillion. And the U.S. Geological Survey tells us that when it comes to copper, silver, zinc and many other key minerals and metals, "what is left to be discovered in the U.S. is 76 E&MJ; • AUGUST 2013 almost as much as what has been discovered." Under our feet is the largest single energy resource in the world. Our coal resources alone contain more energy than the proven oil reserves of the Hal Quinn, president and CEO, NMA. entire Middle East, Russia and Africa combined. Perhaps coal is not a renewable resource, but for all practical purposes it is almost inexhaustible. So with such a rich mineral potential, why is it then that our domestic mining industry supplies less than half of the mineral needs of our manufacturing sector? Why have we as a nation continued on a 30-year path becoming more import reliant for our mineral needs? Success Breeds Complacency Clearly we are punching below our weight. We have what our country needs…and what the rest of the world wants desperately in volumes that are unprecedented in human history. So again, the question: Will we perform to our potential? Part of the answer lies with us and no one else. And part of the answer lies outside our industry, where our control is more limited, yet where we have some influence. Let's start with what we can control—and that is the welfare of our people. How we manage our business starts with how we protect them. Our industry finished last year with the lowest fatality and injury rates in the history of U.S. mining. While that may be a milestone we momentarily celebrate, it is not something we should be satisfied with. Mario Longhi, president and COO, U.S. Steel, shared recently with the NMA board of directors the reasons why, when it comes to safety, vigilance must rule every day. First, he said, success breeds complacency and complacency breeds failure. Second, if zero harm is our goal, then we must acknowledge that establishing a culture of zero incidents is no accident. I am hardly qualified to advise you on how to reach the goal of zero harm. But I will offer another tool for your consideration—the National Mining Association's CORESafety framework. CORESafety draws from the systems deployed success- "If Americans today are unaware of the contributions that mining makes to their well-being, then tomorrow they will be awakened by what is unfolding before them globally." www.e-mj.com

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