Troy Mine sets example: Workers, managers weather tough time by compromise, work, willpower, loyalty

Missoulian editorial | Posted: Monday, February 8, 2010 7:55 am |

Something remarkable happened in Troy when a top employer in Lincoln County joined with its employees to weather – and ultimately survive – a potentially crippling downturn in the mining industry.

Like many in this troubled economy, the industrial mining sector has been faltering and mines have been closing throughout the U.S.

But not the mine in Troy .

To be sure, Troy Mine did have its moment when closing looked like a strong possibility. In December 2008, it even even went so far as to issue a Worker Adjustment and Retraining Notification, or WARN, letter to give its 180 employees advance notice that it might close

But instead of closing the mine, managers asked employees to work harder while accepting a 10 percent pay cut – and set the example by taking a

20 percent cut themselves. Together, they rallied. The workers succeeded in increasing production, and the executives at Revett Minerals, which owns the mine, succeeded in restructuring debt, settling safety violation and resolving a lawsuit brought about by the death of a worker in a 2007 mining accident.

And, as Missoulian reporter Michael Jamison wrote last week, “somehow, some way, in the space of one year, the crews at Troy Mine have emerged stronger than ever. No one lost a job, and it looks like no one will.”

Now, prices for copper and silver are going back up, and the mine workers’ wages have been restored to what they were a year ago, and if things continue to improve, managers at Troy Mine and Revett Minerals may have their wages restored as well.

What’s more, according to Revett chief executive officer John Shanahan, the company’s executives and workers have a stronger relationship than ever. And in turn, the company has a stronger relationship with the Troy community.

The Troy Mine’s workers are made up almost entirely of lifelong community members, thanks to Revett’s decision to hire and train residents instead of already-trained but not-from-the-area workers known as “tramp miners.” Should the company open its Rock Creek Mine in the future, as planned, it will have a ready work force of experienced mine workers.

And loyal. Despite the increased production demands and the lower pay, the mine experienced its lowest turnover rate ever.

That’s not to say that sheer loyalty and willpower were all it took for Troy miners to keep their jobs. If it were, many thousands of unemployed workers in Montana would have their jobs still. Many businesses now shuttered would never have closed.

But Revett and the people of Troy have been fortunate enough to come out the other side of a trying time together, having gained a new appreciation for one another in the process. They deserve our applause for all they have accomplished.

Posted in Editorial on Monday, February 8, 2010 7:55 am

Montana Tunnels sale final

By JOHN HARRINGTON, Independent Record | Posted: Sunday, March 14, 2010 12:05 am

The sale of the Montana Tunnels Mine in Jefferson County was completed last month — ahead of schedule and on different terms than when the deal was first announced last fall.

Elkhorn Goldfields, which already held a 50-percent stake in Montana Tunnels in addition to owning a prospective gold mine near the town of Elkhorn, recently completed its purchase of the rest of Montana Tunnels from Denver-based Apollo Gold.

Originally proposed as a series of cash payments followed by a metal royalty once mining resumed at the idle pit, Elkhorn instead swapped its interest in a Colorado mine for Apollo’s share of Montana Tunnels.

The transaction was necessary from Elkhorn’s perspective because that firm intends to process ore from its gold mine at the Montana Tunnels facility, an arrangement that could have become troublesome if Apollo had sold its stake in Tunnels to someone else.

Neither mine is currently active. Permits are in hand but dirt has yet to be moved at Elkhorn, while the Montana Tunnels pit has been idle since late 2008, with the processing equipment quiet since last April.

Patrick Imeson, chairman of Elkhorn Goldfields, LLC and manager of Black Diamond Financial Group, both based in Colorado, said it will cost between $65 million and $75 million to get both mines into production, but only about 10 percent of that is needed to start producing ore at the Elkhorn project.

“Our first step is to get Elkhorn into production,” Imeson said.

Once that happens, he believes it will become easier to find the investors needed to finance the expansion of the Montana Tunnels pit and resume production of zinc, lead, silver and gold at the Jefferson County mine.

“I think we’re targeting that we can start the Elkhorn process within the next couple of months, and Tunnels could follow three to four months behind that,” Imeson said.

Tim Smith, general manager of the Montana Tunnels mine, said third-party investors have checked out the property.

“Montana Tunnels is a very lucrative operation, but it still needs that $70 million cash injection to get it kick-started,” Smith said.

Montana Tunnels ceased production a little over a year ago, and its milling operation ran through the surplus of ore last April, resulting in layoffs for around 200 workers. The mine acquired the state and federal permits necessary for a large-scale expansion, but fluctuating commodities prices and a challenging environment for credit made it difficult to find investors to pay to expand the pit.

Imeson believes the global finance markets are stabilizing, and metals prices remain high enough to make Tunnels attractive to major mining firms and/or financiers.

“Both lead and zinc have improved off their lows,” he said. “Tunnels makes sense at anything north of 60-cent zinc and $750 gold.”

Gold traded around $1,100 an ounce this week, with zinc just over $1 a pound.

Reporter John Harrington: 447-4080 or john.harrington@helenair.com.

Stillwater Mining Company reports pgm production increase

PGM production at Stillwater Mining Company, the only producer of platinum and palladium in the US, was up 6.2 per cent in 2009 on levels seen the previous year.

The company's results for 2009 show 529,900 oz of palladium and platinum were produced over the course of the 12 month period at the Stillwater and East Boulder mines in Montana.

At Stillwater, production increased from 349,400 oz to 393,800 oz on the back of improved efficiency and greater manpower following a staff transfer from East Boulder.

However, activity at the East Boulder mine tailed off as a result of downsizing and restructuring, leading to a decline in production from 149,500 oz in 2008 to 136,100 oz in 2009.

According to Stillwater chairman and CEO Francis R McAllister, the two mines' combined production in 2010 is expected to be 515,000 oz, which is slightly down on the figure reported for last year.

"Our management focus in 2010 will continue to center on strengthening our cost performance and improving mining efficiency, rather than on seeking to maximise mine production," Mr McAllister explained.

He added that safety performance across the company would also be the subject of management attention after Stillwater's record "deteriorated" over the last 12 months.

Meanwhile, combined sales realisations for mined palladium and platinum ounces averaged out at $539 per ounce over the 12 months, although the position improved as the year progressed.

By the fourth quarter of 2009, sales realisations averaged $579 per ounce, up from $498 per ounce in the equivalent period in 2008.

Source:

Platinum Today

Permits Drag on U.S. Mining Projects

With an Average Wait Time of Seven Years, Companies Look Elsewhere for Needed Metals, Minerals

AP Photo

Despite having vast reserves, the U.S. remains a major importer of metals and minerals.

Obtaining the permits and approvals needed to build a mine in the U.S. takes an average of seven years, among the longest wait time in the world. So despite having vast underground stores of raw materials, the U.S. is one of the last places miners go to start a project.

At the proposed Kennecott Eagle nickel mine in Michigan's sparsely populated Upper Peninsula, the wait is at seven years and growing. Global miner Rio Tinto says the project would fill a raw-material gap in the U.S. economy, but the company has yet to produce an ounce of nickel there.

Last month, a state agency issued a final order making state water, air and mine permits effective, but Rio still needs a federal water permit. And the company expects challenges from environmental groups.

Overall, the U.S. is tied with Papua Guinea for the longest approval process among the 25 top mining countries in the world, according to Behre Dolbear Group, an international mining and mineral advisory group. In Australia, a huge mining center, the process takes an average of one to two years.

The length of the mine-approval process means that the U.S., while having the reserves as well as the market appetite for metals and minerals, remains one of the top importers of the materials from Australia, Brazil, Canada and Africa.

"We are becoming more and more dependent on metal imports in the U.S.," said Luke Popovich, spokesman for the National Mining Association, an industry group. Imports into the U.S. for selected metals-including gold, copper and zinc-rose 8.7% from 1998 to 2008, according to the U.S. Geological Survey.

The time frame in the U.S. isn't necessarily reflective of tougher laws. Australia and Canada have environmental laws for mine building that are on par with U.S. rules. But mine building often draws more opposition in the U.S. than in those countries. Part of that is due to mining's checkered history and reputation for pollution, abandonment and sometimes-shoddy management. Mining companies in the U.S., have cleaned up their management for the most part, but reputations haven't caught up.

Emily Bernhardt, ecologist and assistant professor at the biology department at Duke University, says a focus on the length of the permitting process in the U.S. is misplaced. "The length of time it takes for permitting is almost irrelevant because they are not always looking at the right issues," she said.

This month, Ms. Bernhardt co-authored a scientific paper calling on the Environmental Protection Agency and the Army Corps of Engineers to stay all new mountaintop mining permits. One issue is the permits focus on mainly local mining-site environmental impacts but don't take into account impacts far from the mine site, she said.

Minerals are critical to economies, as raw materials for power stations, bridges, cars, appliances and computers. They are limited by nature and can't be mass produced. Having a domestic source means lower distribution and shipping costs. And mines generate jobs and taxes.

But mines also permanently change a landscape and community with new roads, heavy equipment and traffic. Their impact on water sources is increasingly being scrutinized both in local communities and through regulation and court processes. Environmentalists, conservationists and some scientists are studying whether minerals leaching into water systems can harm water purity or cause health problems. Other concerns for underground mining include the creation of sinkholes, soil contamination, loss of biodiversity and erosion.

Mining companies contend that laws and processes in place mitigate most of these concerns. They also say that a balance has to be struck between leaving land untouched and providing needed materials. But most people simply don't want a mine near where they live.

"Folks say it is just a little mine, but it is a loss of a place that I find so compelling a reason to stand up for," said Cynthia Pryor, a spokesman for the Yellow Dog Watershed Preserve, dedicated to stopping the Michigan nickel mine. "There is timber and blueberry and hunting and all the things that are of value to a local community."

J. Murray Gillis, who teaches on mining issues at Michigan Technological University, says such concerns are often misplaced, noting that mining companies put up bond money to restore land.

"Mining companies have such great restrictions and everybody is watching them," he said.

Ms. Bernhardt, the ecologist, said mining companies, in general, have done what they have been asked to do but that the permitting process is flawed. "What the permits are allowing to happen, as in mitigating damage from mining, is not in fact mitigating damage," she said.

Seven years ago, Rio began working on developing the nickel reserve in the Upper Peninsula. It was considered ideal because it is concentrated in a relatively definable area. The 90-acre project anticipates 500 construction jobs and about 200 long-term jobs, both welcome in the Upper Peninsula, where unemployment stands at around 20%. The proposed mine is located underground, below a river bed.

Rio has obtained dozens of permits from several local, state and federal bodies that regulate water, air and pollution. Mining companies generally have to provide air- and water-quality samples, survey maps of potential water leaching, wastewater storage and plans for reclamation, such as reseeding of vegetation.

Rio says it will continue its efforts until the mine is opened. "Mining companies have to go where the minerals are," said a spokeswoman for Rio's Michigan project.

Write to Robert Guy Matthews at robertguy.matthews@wsj.com

Tuesday brought positive economic news to Jefferson County as Ash Grove Cement Co. announced plans to reopen in mid-February, calling back about 50 workers to do so.

It's important for the local economy to have a viable mining plant well into the future, and these are good-paying jobs that help the local economy flourish. In an area where so many jobs are tied to state and federal government, having strong private-sector companies is critical to a more diverse and healthy economy.

Back in October, the Overland Park, Kan.-based company announced that, due to "adverse economic conditions," it was suspending production at nine of its 10 plants. In Montana City, 50 of the plant's 79 employees were laid off, beginning around Nov. 30.

It wasn't the first time last year the employees faced layoffs, nor was it the first time last year Jefferson County faced troubling job losses.

In March, 57 of Ash Grove's workers were sent home for several weeks, including two with pay, while the company investigated a mineral thought to be asbestos in its Clark Gulch quarry. The quarry and plant were determined to be safe after dozens of tests by several government agencies and the company itself, and those workers were back on the job by the end of April.

That came on the heels of nearly 200 layoffs at Montana Tunnels mine, spelling a tough economic stretch for those hardworking individuals in the struggling Montana natural resources industries and an uncertain tax base future for Montana City.

Thankfully, those 50 employees at Ash Grove will be coming back to work by Feb. 15 as the demand for cement picks up after a sluggish two years. The projected decrease in U.S. cement consumption in 2009 was 22 percent, that on the back of a 16 percent drop in 2008.

Ash Grove calling back its work force might not be the ultimate signal that the recession is turning the corner, but it sure is good indicator that the litmus test of the upcoming construction season - the demand for cement products - is promising.

And any optimism in the economic outlook these days warrants a celebration, albeit small.

http://www.helenair.com/news/opinion/editorial/article_9f0a43ba-1152-11df-9032-001cc4c002e0.html

Apollo Gold Completes Sale of Montana Tunnels

DENVER--(BUSINESS WIRE)--Apollo Gold Corporation ("Apollo") (NYSE Amex: AGT) (TSX: APG) has completed the sale of Montana Tunnels Mining, Inc. ("MTMI") to Elkhorn Goldfields LLC ("Elkhorn"). Prior to the completion of this sale, MTMI was a wholly owned subsidiary of Apollo and owned Apollo's 50% joint venture interest in the Montana Tunnels mine and mill (located near Helena, Montana), the Diamond Hill mine and related mill and ancillary assets.

The sale was completed on substantially the same terms as set forth in the letter of intent with Elkhorn as described in Apollo's December 10, 2009 news release. In consideration for the sale of MTMI, Apollo received all of certain promissory notes held by Elkhorn and certain investors in Elkhorn or its affiliates from Calais Resources, Inc., Calais Resources Colorado, Inc. (together with Calais Resources, Inc., "Calais") and Aardvark Agencies, Inc. ("Aardvark") with an aggregate outstanding balance of approximately $9.5 million.

R. David Russell, President and Chief Executive Officer of Apollo, said, "We congratulate Patrick Imeson and Elkhorn for its acquisition of the Montana Tunnels assets. For Apollo, this completion of the sale allows us to focus on gold production at our flagship Black Fox Mine in Canada and exploration at the adjoining Grey Fox and Pike River projects and at the Huizopa gold-silver joint venture project in Mexico."

Patrick W.M. Imeson, Chairman of Elkhorn, said, "We are very pleased to conclude this transaction. Apollo has been an excellent partner in our recent joint venture. We see this transaction as an integral step in Elkhorn's development strategy of regional producing assets, including expansion of the M Pit at Montana Tunnels and the development of the Elkhorn Mine near Boulder, Montana."

Contacts

The little mine that did: Workers, owners save Troy Mine from closure

Tami Steiger still cannot forget that sudden feeling, way down there in the pit of her stomach, the quick twist of panic when she heard her job was on the block.

"It was bad," she said. "It was the scariest day of my life. No one in the room said a word, I guess because everyone was just as scared as me."

It was a full year ago and more, she said, and management had gathered crews at Troy Mine to hear the news.

The economy was bad, the bosses said. Productions costs were rising. Metal prices were tanking.

"We'd always taken these jobs for granted," Steiger said. "Until we thought we might lose it, we didn't realize what we had."

What they had were 180 of the highest-paying jobs in Lincoln County. What they also had were mortgages, truck payments, kids in college.

"It was a nightmare," Steiger said.

But somehow, some way, in the space of one year, the crews at Troy Mine have emerged stronger than ever. No one lost a job, and it looks like no one will. Pay cuts are being paid back, "and we're like a completely different company coming out," Steiger said.

"We're definitely going to be tighter, as a company and as a community. Personally, I give a lot of the credit to the way management handled it."

By management, Steiger mostly means John Shanahan, CEO of Revett Minerals.

He's a Wall Street guy, with an office in New York City, a guy with an educated Australian accent whose skills have more to do with leveraging stocks than leveraging rocks - in short, not the sort of man you'd expect a bunch of Montana miners to embrace.

And yet.

"What this is," Shanahan said, "is a fantastic story about the little mine that could. The guys up there are tremendous, and what they've accomplished is nothing short of amazing."

*****

When Shanahan took over at Revett, the mine was running strong and getting stronger. By the middle of 2008, he said, copper was selling at $4 a pound, and silver at $20 an ounce.

"It was good," he said. "Very good."

"But it was amazing how fast it went bad," said Earlene Jellesed, who's in charge of accounts payable at the mine. "In a matter of about a week, the bottom just fell out."

That $4 copper plunged to $1.25, and the $20 silver collapsed to just $8.

By late 2008, Shanahan said, "the world sort of fell apart for mining companies. We were faced with a very clear decision to make. Do we close it down, or not? Clearly, it was not economical to keep it open."

Shanahan thought he knew about job losses. After all, he worked on Wall Street and had seen many offices go dark amid a global recession.

Mostly, he said, a job loss meant taking an ego hit at the country club.

But not so in Troy.

"For me, not being from that area, it was a real eye-opener how important those 180 jobs really were," he said. "That's a huge hole, 180 jobs out of Lincoln County. It hits families, schools, the whole tax base. I quickly realized that it wasn't about the company, or even the individual workers. It was about the whole community."

Shanahan was pushed hard by Tim Lindsey, the relatively new chair of Revett's board. Lindsey is an astute businessman, with a long and successful resume, but he's also a native son of Troy, and now calls the area home once again.

Lindsey made it known, Shanahan said, that the clear choice was anything but clear.

And so, as manufacturing and industrial jobs were shed by the hundreds throughout northwest Montana, and mine after mine closed down nationwide, "we crunched the numbers hard," Shanahan said. "It was tight, but we thought maybe we could do it, if everyone bent their backs and worked a lot harder and a lot smarter."

Which is how, in December 2008, Steiger and Jellesed and everyone else came to be sitting in that meeting room.

The first order of business was to issue employees a WARN notice, required whenever a large employer thinks it might fold. The second order to business was to make it clear that management had no intention of folding.

The workers agreed, in a shocked silence, to take a 10 percent wage cut. Management took a 20 percent hit. Shanahan's pay reduction was deepest of all.

Crews also agreed to work harder, and to eliminate every ounce of waste.

Steiger, who works at the underground crusher, said she often saw slightly used drill bits - expensive pieces of equipment - coming through the crusher. "Now, we sorted them all out, and they'd come down and pick out the best of the worst and use them again, until they were spent."

Maintenance, she said, swept through the mine, fine-tuning all the machines to avoid costly breakdowns. No one tarried - it was

100 percent, from clock-in to clock-out.

"We knew it," she said. "If we didn't rally, we'd be down for good. We did it together, because if one guy was wasteful, it cost everyone."

*****

The team effort, Shanahan said, was the surprising result of a decision made years ago, before he even came to Troy Mine. When the mine reopened in late 2004, management decided to spend extra time and money training locals - rather than hiring the usual "tramp miners" who tend to float from job to job.

The idea, Shanahan said, was to create an established work force for Revett's planned Rock Creek Mine, which the company hopes to open nearby.

"So what we have," he said, "are people working here who have a real stake in the place. They know each other. They went to high school with their shift supervisors."

Jellesed's husband works with her at the mine. So do her two sons-in-law, and a couple of nephews. Steiger has a couple of brothers with her at the mine, and a son and a daughter, as well.

"This place isn't about a job," Jellesed said. "It's about families. No one wanted to walk away and move out of state."

And so they did what they had to. This hardest year saw the lowest rate of turnover since the mine reopened.

The crews, Shanahan said, made less and produced more, straight through 2009. Shifts competed to outdo each other, and slowly the mine emerged from a sea of red into the firm footing of the black.

Management, meanwhile, was not idle. The company restructured millions in debt, even traded shares to buy down the balance sheet. They settled safety violations with federal regulators, hired new safety staffers, and resolved a lawsuit related to the 2007 death of a miner in an underground collapse.

*****

"We really have a fresh start in 2010," Shanahan said, and although management hasn't bounced back up from its 20 percent pay cut, worker wages will be fully re-established as of Feb. 1.

That last was huge for Jellesed, whose family could only watch "as the nest egg was getting smaller and smaller." Now, the extra 10 percent will once again be spread out among all the local merchants, trickling through the broader economy.

Mike Holcomb, a crusherman at the mine, already is looking at a new truck.

Shanahan also locked in metals prices with his buyers, hedging against future downturns. In fact, he said, he now has 50 percent of his copper production hedged for 2010, and 25 percent of his silver. Those price guarantees will cover 75 percent of the mine's operating costs, while still allowing him to play the rising market with about 65 percent of total production.

(Today, prices are back up to about $3 copper and $17 silver, and Shanahan could have bet it all on continued price improvement, "but after what these guys did for us over the last year, we were duty-bound to make sure we stayed open and healthy through 2010.")

But the real benefit, Shanahan said, is the new relationship between management and workers, and between company and community. They all, it turns out, need each other.

Shanahan has initiated an employee stock program, to make all the miners owners, and he's looking for ways to invest in community projects.

"He actually showed up, in person, and talked straight to us," Steiger said of her top boss. "If they'd just handed us a note, or posted a notice, then I think it would've been a lot different reaction. I don't think I'd be working today."

But she is, and Shanahan is planning a spring trip to Troy, to ride in a long-distance bicycle race. It was a challenge from his workers.

"I said if I can get my big butt around that mountain on a bicycle, then they have to join me in some Habitat for Humanity projects," Shanahan said.

"This is a story of perseverance and ingenuity during one of the toughest economic times this county's ever seen," he said. "To me, it's really remarkable what a band of 180 people can do when they come together and have some faith in each other."

He's still watching the quarterly numbers, of course, and watching them closely, but he's also watching for opportunities to partner with townsfolk on community projects.

"And in the long run," he said, "that will ultimately be the measure of just how successful a company we've become."

Reporter Michael Jamison can be reached at 1-800-366-7186 or at mjamison @missoulian.com

BILLINGS - As the prices for certain metals go up, so does the outlook for the nation's only platinum and palladium mine located in Montana.

Stillwater Mining Company said platinum group metal, or PGM, made an impressive recovery in 2009.

At present, palladium has risen about 157% to $422 dollars-per ounce from its 2008 low of $164 dollars-per ounce. Platinum presently is trading at about $1,600 dollars-per ounce compared to $763 dollars-per ounce.

The metals are mostly used to make catalytic converters for cars. Frank McAllister, mine chairman and CEO, credited the demand for automobiles overseas and PGM-backed investments worldwide for the increase. Stillwater employs about 1,200 people.

http://www.kulr8.com/news/local/81193292.html

Stillwater Mining Company is expecting to produce 495,000 oz of pgms in 2009, it was confirmed today (17th September). 

The Montana-based firm suffered a blow in July when its rhodium-palladium supply deal with General Motors was cancelled by the automaker as part of its bankruptcy petition.

However, Standard & Poor's claimed that the loss would only have a minor impact and the latest production estimate is higher than a previous prediction of 485,000 oz pgm.

Meanwhile, a senior figure at the company predicted on Tuesday that pgm prices will enjoy a dramatic recovery over the course of the next two to three years.

The auto industry provides the bulk of demand for pgms - which are mainly used in catalytic converters for vehicles - but the sector has struggled during the economic crisis.

However, Gregory Wing, Chief Financial Officer at North America's largest pgm producer, explained in an interview with Reuters that the tide has begun to turn.

"I really think that the worst of the price drop is over," he told the news provider at the Denver Gold Forum.

"A lot of what's keeping the price up right now is investment interest in those metals."

Mr Wing added that the expected improvement is rooted in the recovery of overall economic activities, rather than a surge in demand in any one particular industry.

Nevertheless, he expressed his belief that the US auto industry - which has been propped up recently by the 'Cash for Clunkers' programme - is now over the worst of its crisis.

Stillwater Mining Company currently has operations at East Boulder and its flagship Stillwater mine, both of which are located on the JM Reef in Montana.

http://www.platinum.matthey.com/media_room/stillwater_mining_to_produce_490000_oz_pgm_this_year_19365923.html

Story by Kimball Bennion | September 10, 2009

The story of Butte's rich 120-year history will be told at a screening of "Butte, America" Friday at the Wilma Theatre.
After ten years of interviews, research and fundraising, the documentary was produced and directed by Montana filmmaker Pamela Roberts.
The film spans Butte's unique story of a thriving copper-mining boomtown during the rise of the electric age - a town that now faces abandoned mines, lost jobs and an environmental wasteland.
Many of the interviews include families whose roots go back to Butte's first mines.
"I was attracted to the story because of the people to begin with," Roberts said.
The mining tradition in Butte has also established a tradition of community and place, Roberts said, which makes for a population that looks out for each other.
"Butte's history is so much a part of who we are as a nation," Roberts said.
Butte is a sort of microcosm of what happened to America in the industrial age, Roberts said, which makes its story of interest to a larger audience outside of Montana.
"Butte, America" will also air this October on the PBS series "Independent Lens," which features documentaries and dramas from all around the country.
Friday's screening at the Wilma will begin at 7 p.m. Admission is $10.

http://www.montanakaimin.com/index.php/news/news_article/butte_america_premieres_in_missoula/3889

As an industry dependent on natural resources, mining companies face their greatest environmental challenge in managing one: water.
Necessary for all components of hard rock mining - exploration, mining, processing, smelting and refining - this liquid is the source of intense investment, vigilant monitoring and great debate.

"As a company, we go to great lengths and expense to ensure we are responsibly protecting water resources," said Omar Jabara, senior director of communications and media relations for Newmont Mining Corp., which is primarily a gold producer with global operations in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand and New Mexico.

Newmont, the first gold company selected to be part of the Dow Jones' Sustainability Index in 2007, uses a number of tools to protect water including ongoing water monitoring to ensure water quality continues to meet or exceed established standards.

"Also, where necessary, we use dewatering and drainage solutions in addition to water treatment," he said. "Our internal standard on water management requires that discharged water serving as a drinking source meet the U.S. EPA's primary drinking water standards where the laws and regulations of the host country are insufficient or incomplete."

Access to water is critical to Rio Tinto PLC, the third largest global mining company specializing in iron ore, copper and aluminum. Rio Tinto owns and manages more than 110 operations around the world in six geographical regions across seven different climate zones.

"For more than a decade, we at Rio Tinto have sought to improve our water performance and to be a responsible water manager," said Tom Albanese, CEO of Rio Tinto, in a recent 32-page document published by the company titled "Rio Tinto and Water." "Tough economic times reinforce the need to recognize there is a cost to using water. Since 2005, we have adopted a more strategic approach that accounts for the social, environmental and economic aspects of water management."

Rio Tinto also recycles about 17% of its water across the Rio Tinto Group, with some sites recycling up to 70% - as well as sourced from external recycling and treatment plants.

According to the Organisation for Economic Co-operation and Development, by 2030, about 47% of the world's population will be living under severe water stress if no new policies are introduced.

Most of these people - about 3.9 billion - will be living in developing countries where undiscovered ore bodies likely will be unearthed in coming decades.

At the intersection of this issue is mining reform legislation currently being considered by Congress known as the Hardrock Mining and Reclamation Act of 2009 and the Abandoned Mine Reclamation Act of 2009, both of which are opposed by the National Mining Association, the voice of the American mining industry in Washington and the only national trade organization that represents the interests of mining before Congress, the White House, federal agencies and the judiciary.

Among other things such as use of federal lands, payment of royalties and creating a comprehensive program for permitting and enforcement, these bills as written, increase U.S. dependence on foreign mineral and threaten the development of renewable energy infrastructure and renewable sources of energy, the NMA contends.

Environmental groups such as Earthworks contend that proposed regulations don't go far enough when addressing water-related impacts of mining, which have resulted in polluted waters across the country and the globe.

According to the NMA, the mineral mining industry is among the most heavily regulated in the world, complying with scores of federal and states laws, including the Clean Water Act, Clean Air Act, Endangered Species Act and the Resources Conservation and Recovery Act, among others.

Steve Ralbovsky, U.S. Mining Leader for PricewaterhouseCoopers, said in the face of complex environmental issues such as land use and water quality, the mining industry is often misunderstood.

"There are a lot of people looking at what mining companies are trying to do in terms of getting permits and some of those people aren't in favor of those permits being granted," Ralbovsky said. "There are a lot of people out there who simply don't understand the industry, and say, ‘You're digging up the land,' yet they are sitting at their computer that is full of copper in a house with copper wire on a cement pad. There are people out there who have a negative view of mining without realizing how vital it is to everything we do."

Being good environmental stewards is important to sustainability of mineral mining companies like Rio Tinto and Newmont.

"The gold or whatever metal it might be is placed around the earth where God put it; we don't get to choose where it is," Jabara said. "There are lots of companies that can go and mine those resources wherever they occur. We want to establish our reputation as such so that when those deposits are found, that local government wants us to develop the resource."

Copyright 2009 Crain Communications Inc. All Rights Reserved.

NEW YORK (Reuters) - Shares of gold and silver mining companies rose on Thursday as the price of the precious metals rallied, with gold hovering close to the psychological barrier of $1,000 per ounce.

Analysts said that flight-to-quality buying has supported gold this week, as the metal is used as a safe haven in times of economic and geopolitical uncertainties.

"The equities markets look a little shaky to start this week. There is an element of nervousness, which was enough to spur gold buying," said Bill O'Neill, managing partner of New Jersey-based LOGIC Advisors.

In afternoon trading on the New York Stock Exchange, shares in Canada's Barrick Gold (ABX.TO) (ABX.N), the world's largest gold producer, were 4.9 percent higher at $39.75. Denver-based Newmont Mining's (NEM.N) stock was up 4.5 percent at $45.80.

The gold bugs index .HUI was up 6.2 percent and in Canada, the S&P/TSX global gold index .SPTTGD, which tracks major gold stocks traded on several exchanges, rose 4.9 percent.

Silver miner Coeur d'Alene (CDE.N) saw its stock soar 10.9 percent to $17.18.

The markets reacted as December gold rose to $13.10, or 1.3 percent, at $991.60 an ounce on the COMEX division of the New York Mercantile Exchange.

U.S. silver futures rallied to a three-month high above $16 an ounce, fueled by gold's sharp gains and increased investment buying, traders said.

U.S. silver for December delivery was up 69.5 cents, or 4.5 percent, at $16.060 an ounce on the COMEX. The session high was $16.105 an ounce, which marked the highest price since June 3.

(Reporting by Steve James and Frank Tang in New York and Doris Frankel in Chicago; Editing by Lisa Von Ahn, Leslie Gevirtz)© Thomson Reuters 2009 All rights reserved

http://www.reuters.com/article/reutersEdge/idUSTRE58245D20090903

The Bureau of Land Management (BLM) published a final rule that increases the location fee for mining claims from $30 per claim to $34, and the annual maintenance fee from $125 to $140 per claim.

The BLM is promulgating this rule to make statutorily authorized adjustments to its location and maintenance fees for unpatented mining claims, mill sites, and tunnel sites. This rule implements 30 U.S.C. 28j(c), which authorizes adjustments to the location and annual maintenance fees "to reflect changes in the Consumer Price Index published by the Bureau of Labor Statistics of the Department of Labor every 5 years after August 10, 1993, or more frequently if the Secretary determines an adjustment to be reasonable." The BLM last adjusted the location and maintenance fees in 2004.

The adjustments made in this rule are based upon the change in the CPI from December 31, 2003 to December 31, 2008 (11.93%).

Mining claimants must pay the new location fee for any mining claim or site located after today, June 29, 2009. Mining claimants must pay the new maintenance fee to maintain mining claims and sites starting from the 2010 maintenance year. These fees are due on or before September 1, 2009. Those of you who have already submitted maintenance fees for the 2010 maintenance year will be given an opportunity to pay the additional amount without penalty upon notice from BLM.

A copy of the final rule is attached here for your reference.

Montana Public Radio
JULY 2, 2009

• Good afternoon - I'm Pat Downey and I run the Montana Operations for Rio Tinto Minerals near Ennis and Three Forks. Proudly, we are the largest talc mining operation in the United States.
• Today, I want to talk about sustainable development - at first glance, sustainable development may seem like an odd concept for a mining company - we basically take minerals out of the ground and don't put them back
• But we do contribute to sustainable development through responsible business practices including:
­ Providing good jobs and a safe working environment for employees
­ Partnering with our neighbors to address issues that affect our communities
­ Minimizing our environmental footprint and maximizing how our talc products contribute to a cleaner, greener world; and,
­ Creating value for our customers, shareholders, employees and local economies
• So let's start with safety, which is our most important value as a company
­ The foundation of our safety program - which was recognized last year when we received the Montana Governor's Safety Award - is our people
­ We start every meeting and every shift talking about safety ... and we hold everyone accountable for identifying and addressing the risks associated with every part of every job we do, and we look out for one another.
­ Our commitment to safety doesn't end at the gate - we also try to influence our families and communities; in fact, we held a safety fair last year and invited a motivational speaker in to share our best practices with our neighbors
• The next part of our social commitment to sustainable development is our support for the local communities
­ We recently surveyed community leaders surrounding our operations - as well as our employees - to find out what they all think are the most important issues we face
­ Based on what we learned, we direct our contributions of time, money and in-kind services to programs that make our communities safer and healthier, that support education, and that protect the environment
­ Two of the programs that are nearest to my heart are our support for the Museum of the Rockies, and their work to make science interesting to kids. As well as our support of the Teachers Minerals Education Workshop, where the teachers come for the continuing education credits and they leave with a better sense of the importance of minerals and mining for our society.
­ This is a little bit selfish as well - I want the next generation of scientists to come and work for me at our operations, and I also want to be able to rely on their knowledge to reduce environmental impacts
• Another important part of our commitment to sustainable development is how we treat the environment
­ First of all, the environment is the source of our livelihood - and its why we love living in Montana - so this is a commitment our entire workforce shares
­ We work to reduce the water and energy we use to make our talc products, and to lower our own greenhouse gas emissions
­ We have successfully lowered our GHG emissions by 25 percent or more in different parts of the operations by making major investments in better equipment
­ We are also proud of our products' contribution to the environment - most people think of talc as only baby powder, but it's so much more and is used in thousands of other products you use every day
­ For example, the talc we mine here in Montana is used to make the plastics, catalytic converters, diesel filters and tires that, in turn, make cars and trucks lighter, more fuel efficient and reduce emissions ... it may surprise you to learn that the average car contains more than 8 pounds of talc
­ Our talc is also used to make construction materials like paint and decking longer-lasting and more environmentally friendly
­ Finally, almost all the paper you use every day contains talc - paper manufacturers use it in the paper itself, as well as the process where it helps them increase their use of recycled paper
• Making products that are the building blocks of a good standard of living is part of economic contribution, but we also contribute more directly by
­ Providing good jobs here in Montana for more than 70 years
­ We rely on local businesses for goods and services whenever possible, such as our relationship with A.M. Welles of Norris, MT who have been hauling talc form our mine for five decades.
­ Our customers depend on the purity and quality of our talc to differentiate their own products in the marketplace
­ And finally, we are part of a global talc business that has been profitable for shareholders for more than a century
• I hope that gives you some idea of how we look at - and live up to - our commitment to sustainable development - we welcome your questions and comments
• Please visit us on the web at www.riotintominerals.com
• Or give me a call at 406 285 5307 to schedule a tour of our mining and processing operations
• In the meantime, thank you for listening - and thank you for making safety your top priority as we enter the Fourth of July weekend.

Troy Mine seeing light at the end of its tunnel

By MICHAEL JAMISON of the Missoulian

TROY - Troy Mine has both a new lease on life and new leadership, as metals prices rebound and the company restructures its board of directors.

“Things have improved,” said John Shanahan, president and CEO of Revett Minerals Inc. “We are no longer making the month-by-month assessment” as to whether to remain operational. “Now, it's really more like quarter-by-quarter.”

Last winter, Revett management informed the 185 miners at Troy that the silver and copper mine could close by mid-February. The company blamed plummeting metals prices, rising operational costs and burdensome debt, “and it looked like it was going to be impossible to stay open, at one stage,” Shanahan said.

But miners took a 10 percent cut in pay, while management absorbed a 20 percent salary reduction. The operation, Shanahan said, tightened every belt, restructured its debt and increased ore production at the same time.

“The efforts by our people here at Troy have really been herculean,” Shanahan said.

When the closure deadline arrived in mid-February, Revett chose to maintain operations until March. Then, as metals prices inched upward, they chose to run until April.

Now, Shanahan said, Troy Mine no longer is on the brink, and the monthly decisions have given way to longer-term planning. Copper has bounced to about $2.15 per pound, from a low of $1.25. And silver, which had sunk to $9 per ounce, now hovers in the $13 range.

“It's not perfect,” Shanahan said, and nowhere near the high prices of last year, “but it's sustainable. We still have debt, and we still have issues, but at these prices we can start to relax a little. We can make it work.”

Part of making it work, he said, is the installation of Tim Lindsey as chairman of the board at Revett.

“He has tremendous experience,” Shanahan said, “and he grew up on these mines.”

Lindsey calls himself a “Troy boy,” adding that despite his 30 years away he's “never really left the area. My heart's always been here.”

Lindsey was raised in the area, and worked as a driller's assistant at the mine during college. In the mid-1970s, as an economic geology graduate student at the University of Montana, Lindsey supervised exploratory drilling at both Troy Mine and the site of the proposed Rock Creek Mine.

The controversial Rock Creek plan, proposed by Revett, would tunnel beneath the Cabinet Mountains Wilderness. Shanahan remains optimistic about Rock Creek's prospects, despite many legal obstacles - including a recent state Supreme Court decision that stripped the project of its water discharge permit.

Those legal challenges - and the economic challenges at Troy Mine - will prove a rigorous testing ground for Lindsey, who comes to the board with 30 years in the oil and gas business.

“Troy Mine is in a tight spot,” Lindsey said, “and I'd like to do what I can to help the mine, and this area. If they can control costs, then they can keep the mine up and running, and profitable.”

As to Revett's long-term future - pegged on Rock Creek - and its persistent legal hurdles, Lindsey calls the court delays “frustrating” and “unfortunate.” He also considers them temporary, however, and believes the deposit will one day be mined.

Lindsey's background, Shanahan said, includes expertise in both exploration and production, and spans the globe from North America to Africa, Europe and Asia. Lindsey is CEO of Canadian Sahara Energy Inc., and serves on the boards of Rock Energy Resources, Daybreak Oil and Gas, and Challenger Energy.

He also runs a Houston-based consulting firm, Lindsey Energy and Natural Resources.

Although the bulk of Lindsey's work has been in oil and gas, rather than hardrock metals mining, his childhood ties with Troy and early studies of the Revett Formation there make him “an ideal choice to lead our board,” Shanahan said.

Lindsey spent Thursday at the Troy Mine site, meeting workers and touring the facilities.

His final appointment as board chairman remains subject to approval by the Toronto Stock Exchange, where Revett shares are traded.

Copyright © 2009 Missoulian (http://missoulian.com/articles/2009/04/18/news/local/news04.txt)