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NEW MINE SAFETY CHAIR TO
IMPROVE LIVES OF UTAH'S MINERS

Mining is one of Utah's oldest industries and produces billions of dollars worth of minerals each year. To aid in the safe pursuit of this important enterprise, the University of Utah announced the endowment of the Western Mining Presidential Chair in Mine Safety.

The $1.5 million endowment is being created through an effort led by Brett Harvey, president and CEO of CONSOL Energy, and Greg Lang, president of Barrick Gold North America. "In establishing this Endowed Chair in Mine Safety, the University is sending an unmistakable message that the students who endeavor to acquire an education in the School of Mining not only will receive world -class training as mining engineers, but will graduate understanding that safety must be at the cultural core of any successful mining enterprise," said Harvey.

"This is what will be required of the engineering graduates if they are to become our industry's future leaders,"

The new chair will be part of the University's Department of Mining Engineering, in the College of Mines & Earth Sciences, and will be filled by someone with skill and experience in mining engineering, mine safety, or a closely related discipline, Chair of the Department of Mining Engineering, Michael G, Nelson, said the creation of the program is long overdue, "We are so grateful to the executives of these two companies, and our other donors, for their concern for the people involved with this important Utah industry," said Nelson, "Mining involves hazards that can be mitigated, and the knowledge gained and passed on through this endowment chair will do just that,"

The holder of the Chair in Mine Safety will provide specific instruction in the technology and practices of modern mine safety for university students, and the mining community at large. Frank H. Brown, dean of the College of Mines and Earth Sciences, is excited about the new mining techniques and preventative measures that are sure to come from the new chair. "The holder of this chair will conduct an active research program, emphasizing worker health and safety in the mining industry," said Brown, "It's more than just passing on the best mining practices already in place-it is hoped that, in addition, new life-saving mining techniques will be developed,"

The Department of Mining Engineering at the University of Utah is well known for academic rigor and the quality of its graduates, and it is the only program in Utah that leads to Bachelor of Science and advanced degrees in Mining Engineering, Graduates of this program design, operate, manage, regulate, and reclaim mines and mining facilities in a profitable, safe, and environmentally responsible manner.

SALAZAR NAMES INTERIM BLM DIRECTOR
(Source: National Mining Association, Mining Week)

Interior Secretar y Ken Salazar this week named Mike Pool, director of the Bureau of Land Management's (BLM) California office, as the acting director of BLM's national office.

Pool ' s appointment i s effective March 1 and he will remain acting director until Salazar names a permanent replacement.

Pool has led BLM's California office since 2000 and has served more than 34 years with the agency.

Pool replaces current BLM Acting Director Ron Wenker, who will return to his current position as BLM's Nevada state director.

"I'm honored by the new assignment and look forward to assisting the new administration care for the public lands under BLM's jurisdiction," Pool said.

OSM EXTENDS SURFACE MINING AWARDS NOMINATION DEADLINE TO APRIL 1
(Source: NMA Mining Week)

The Department of the Interior's Office of Surface Mining (OSM) recently extended the nomination deadline for this year's Excellence in Surface Mining Awards to April 1. Nominations must be
submitted to the state regulatory agency that oversees a nominated operation.

Nominations may be submitted by coal companies, regulatory authorities, state or federal mine inspectors, interest groups or landowners. Company officials and employees may nominate their own operations.

The awards recognize surface mining in three categories: the National Awards, the Director's Awards and the Good Neighbor Awards. More information is available at: http://www.osmre.gov/topic/awards/Awards.shtm

 

RIO TINTO ANNOUNCES PIONEERING STRATEGIC PARTNERSHIP WITH CHINALCO

South Jordan, UT – The Boards of Rio Tinto PLC and Rio Tinto Limited (together "Rio Tinto") announced that they are recommending to shareholders a transaction with Chinalco, a leading Chinese diversified resources company. The transaction will forge a pioneering strategic partnership through the creation of joint ventures in aluminium, copper, and iron ore as well as the issue ofConvertible Bonds to Chinalco, which would allow Chinalco to increase its existing shareholding in Rio Tinto from 9.3% to 18.0%. The transaction would allow the raising of $19.5 billion. These funds will significantly reduce Rio Tinto's debt and strengthen its balance sheet and increase the company's flexibility to pursue attractive investment opportunities throughout the cycle.

Through this transaction, Chinalco will purchase a 25% indirect minority investment in Kennecott Utah Copper (KUC). KUC is the only Rio Tinto U.S. business directly involved in the Chinalco investment. This type of investment is not unusual in Rio Tinto; KUC is the only Rio
Tinto operational copper resource that did not have outside investment. This overall transaction requires approval by Rio Tinto shareholders and various regulatory and government approvals. Kennecott Land, the developer of the Daybreak community, will not be impacted by the transaction and will remain 100% Rio Tinto owned.

"The transaction between Chinalco and KUC is purely commercial. Rio Tinto and Kennecott are retaining operational and management control," said Andrew Harding, President and CEO, KUC. "The transaction will not have any direct impact on local jobs, wages or taxes. Kennecott will continue to operate under the high standards that Rio Tinto currently has in place and that our communities expect," said Harding. Kennecott has had some form of foreign investment in its operations since 1987 when it became a wholly-owned subsidiary of British Petroleum. Kennecott has been owned by Rio Tinto since 1989.

Rio Tinto also announced full-year financial results for 2008, including underlying earnings of $10.3 billion, of which $998 million was earned at KUC. KUC's earnings are down from $1.6 billion in 2007. Although earnings during the first part of the year were strong, the later part was impacted by last year's economic downturn.

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2009 UTAH LEGISLATURE

Though budget issues have dominated this Legislative Session, there are many issues of importance to the Utah Mining Association being discussed on the hill this year. For the text of bills or bill status, you can go to the Utah Mining Association's website at www.utahmining.org/legislation.html. Below are quick briefs on various hot topics and bills.

Tax Issues:

SB 38 Severance Tax Amendments sponsored by Sen. John Valentine is a bill generating some concern. This bill attempts to earmark funds meant for the severance tax trust fund for various agency programs that would otherwise not survive in this time of budget cuts. Many worry that removing this money from the fund will deplete the legacy the trust fund is meant to provide.

SB 238 sponsored by Sen. Gene Davis would impose a severance tax on coal of .50 cents per ton on all coal used, sold or shipped out of state. This bill is now in the Senate Rules Committee and we are actively working to make sure this bill advances no further.

HB 255 Repeal of Sales and Use Tax Exemption Relating to Mining sponsored by Christine Watkins would remove the sales and use tax exemption used by mining operations in the state. The heart of this bill deals with the town of Wellington, which is struggling financially. A compromise has been reached that will involve an effort during the interim to find some solution for Wellington short of placing the mining exemption in jeopardy.

Health System Reform:

A year long task force on health system reform chaired by Speaker David Clark and Senate Majority Leader Sheldon Killpack has recommended a package of bills that are the first steps on a multi-year reform effort. The main bill, HB 188 Health System Reform-Insurance Market, expands access to the health insurance market, increases market flexibility and provides greater transparency throughout. It will create a new forum for interactions between employees and employers on health insurance purchasing decisions by creating a defined contribution market accessed through an insurance portal.

Transparency is also a key component addressed in the bill. The Internet Portal will provide a single shopping point for reliable information that can be compared in a side-by-side format for insurance purchasing as well as cost and quality comparison of health care providers. Consumers will have access to information regarding provider networks, wellness programs, and insurer solvency ratings. Cost was also an important consideration addressed in this bill by creating a lower cost health benefit plan called NetCare offered as an alternative to Utah's mini-COBRA and COBRA plans.

The Health System Reform Task Force will continue meeting during the 2009 Interim; building on the bills proposed this year.

Water Issue:

HB 241 Priority of Water Rights proposes a legislative fix to a contradiction in state code related to the longstanding western water law doctrine of first in time, first in right. This concept in water law commonly known as Prior Appropriation Doctrine manages water rights according to the date the water was allocated for use by an applicant. Prior appropriation philosophy and doctrine has been the method for distributing, managing and addressing water rights in the state since the 1860's. HB 241 would repeal section 73-3-21 of state code, which contradicts existing code by stating that prior appropriation doctrine only rules unless there is a "scarcity", and then domestic use takes precedence over all other rights regardless of the priority date of the water right. Left in place 73-3-21 puts at risk countless water rights that have been held, used and protected by beneficial use of water dating as far back as 1860.

HB 187 Recreational Use of Public Waters on Private Lands asks the question, "At what point does an individuals right to recreate, fish hike, trump a landowners right to protect private property?" This bill would clarify the Conatser v. Johnson Case State Supreme Court decision by providing for access by the public to streams that are arguably "navigable" and allow access to those for recreational purposes and define those and provide for protections for private landowners who have had access granted to property that has heretofore been closed to public access. It strikes a balance between landowners and the perceived right to public recreation on private lands.

HB 366 Water Rights Addendums to Deed requires that a person recording a deed conveying title to land include information on the grantor's water rights and further requires that a person recording a deed conveying title to water rights include information on the grantor's water rights. Simply put this bill would help those engaging in real estate transactions involving water rights to clarify whether the water right is included in the transaction or not.

Environmental Quality:

Rep. Roger Barrus is sponsoring a series of bills related to environmental quality. HB 393 Air Quality Amendments, attempts to establish siting criteria rules for certain pollution sources. This bill is targeted at the new power generator near the Holly refinery in West Bountiful. Rep. Barrus was able to reach a compromise with the city and the developers of the generator to delay the project and seek a different fuel source. We will continue to monitor this issue.

HB 190 State Energy Policy Restrictions and HB 191 Air Quality Board Amendments are both attempts to limit the Governor's ability to bind the state to compacts like the Western Climate Initiative without the approval of the Legislature.

Worker's Comp:

HB 271 Worker's Compensation-Uninsured Employers Fund sponsored by Rep. Mike Morley would exempt collections of monies required to be deposited into the Uninsured Employers' Fund from collection by the Office of State Debt Collection. This would allow the collection of penalties and fines by agencies other than the office of debt collection because it would be more efficacious for the fund.

Immigration:

As you will recall, SB 81 Immigration Reform passed the Legislature last session, but had a delayed implementation date of July 1, 2009. This legislation is somewhat controversial because it would require employers with a state or local contract to conduct immigration checks on new employees among other requirements. During the Interim, a committee examined the legislation and potential impacts. The committee recommended SB 39 Immigration Amendments to provide greater clarification on which contractors would be subject to SB 81. There have been a few attempts this session to further delay the implementation of the bill, however they seem unlikely to pass.

Other legislation on immigration issues would create a strike force to target serious crime related to illegal immigration (HB 64 Deterring Illegal Immigration) and a joint resolution (SCR 1 Concurrent Resolution Requesting a Federal Waiver to Establish an Employer-sponsored Work Program) requesting federal waivers that would allow Utah to set up a guest worker program.

 

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MINE SHUTDOWN IS RULED CORRECT
(Source: Mike Gorrell, Salt Lake Tribune, 2/26/09)

Federal mine safety regulators did not abuse their discretion in shutting down a longwall mining machine at Murray Energy Corp.'s West Ridge coal mine after a series of "bounces" during the past month, a judge in Denver ruled Thursday.

Richard Manning, an administrative law judge with the Federal Mine Safety and Health Review Commission, determined the federal Mine Safety and Health Administration did not act unreasonably in ordering the company to stop mining.

"We are extremely pleased with Judge Manning's ruling," said Michael Davis, MSHA's deputy assistant secretary for operations. "MSHA was convinced that continuing bounces on the longwall panel posed an unacceptable risk to miners."

Kevin Anderson, a Salt Lake City attorney representing the company, took solace in statements by Manning that MSHA's evaluation was flawed. He said the company was considering whether to appeal the ruling to the full Review Commission or to resume negotiations with MSHA over alternate approaches to mining that section of the Carbon County mine.

On Feb. 13, MSHA halted mining and instructed the mine operator, a Murray Energy subsidiary, to move the massive longwall machine and to leave an estimated 800,000 tons of coal in place, saying the coal could not be cut without producing violent outbursts of material that could kill or injure miners.

One miner, Derek Manzanares, was injured in a Jan. 31 outburst near the tail end of the 800-foot-long machine.

After that accident, and two earlier equipment-damaging bounces, MSHA required the company to change its mining plan to continue.

The company devised a plan to mine the most bounce-prone area by remote control and installed other safeguards. But after a week of operating in that fashion, MSHA concluded that mining conditions still posed too much danger to the miners and stopped the operation.

Murray Energy's subsidiary challenged the decision, contending its engineers understand the West's deep underground mines better than MSHA's engineers, who are more used to the shallow mines back East. They insisted that removing the longwall partway through carving out a whole section of coal would be more dangerous than finishing it, then removing the equipment.

About 290 miners have been out of work while Manning conducted a two-day hearing last Friday and Saturday and subsequently evaluated the testimony.

In his ruling Thursday, he said MSHA's evaluation of the company's remote-control mining plan had problems. But Manning added that "MSHA's concerns were genuine…MSHA officials were concerned that a bounce could occur when a miner was in the tailgate area and he could be injured despite all of the administrative controls that West Ridge had in place."

Anderson said he hopes the two sides learned enough about the others' position during the hearing that "we can work out some modifications to the plan. Nobody is going to do anything that is unsafe."

 

WEST RIDGE MINE: MSHA, MURRAY ENERGY RENEW BATTLE OVER SAFETY ISSUES
(Source: Mike Gorrell, Salt Lake Tribune, 2/19/09)

The on-again, off-again legal fight between federal regulators and Murray Energy Corp. over safe mining practices in the company's West Ridge coal mine is back on again.

A federal administrative law judge in Denver will hear arguments today in the company's challenge of a Mine Safety and Health Administration (MSHA) order Feb. 13 that halted longwall mining in the Carbon County mine. The order was based on the latest of several violent outbursts of coal over a three-week period that damaged mining equipment, injured one miner and, in MSHA's view, indicated "the current method of mining presented unacceptable risks to miners."

Through its subsidiary that operates West Ridge, Murray Energy contends MSHA has overstepped its authority in shutting down the voracious mining machine and insists its approach to coal extraction is better suited to protecting miners because it confines outbursts to specific locations.

Today's hearing extends an adversarial relationship that has existed between MSHA and Murray Energy since August of 2007, when an especially violent outburst fatally buried six miners in the company-operated Crandall Canyon mine. Three would-be rescuers, including an MSHA inspector, were killed by a second implosion 10 days later.

While today's proceeding will focus on conditions that exist in a block of coal that will be mined as "Panel 13," its outcome is important to a broader fight between MSHA and the company over the best way to ensure future sections of coal can be excavated safely.

MSHA wants the company to leave "barrier pillars" of coal, perhaps 500 feet wide, between each longwall panel to help hold up the mountain overhead and to reduce pressures that can propel chunks of coal out of mine walls. Miners call these outbursts "bounces."

The company contends its engineering shows that leaving barrier pillars makes it more difficult to predict precisely where bounces will occur, uncertainty that increases the threat to miners. It also argues that the amount of coal left behind as barrier pillars would cut the mine's production potential in half, possibly forcing its closure.

West Ridge has about 350 employees. Many have been in and out of work since Jan. 24, when MSHA issued the first of three orders temporarily shutting down the longwall after bounces. An earlier company challenge of one MSHA order was withdrawn the day before a scheduled Feb. 12 hearing before Richard Manning, the Federal Mine Safety and Health Review Commission judge conducting today's proceeding.

The company bases its arguments on the engineering expertise of its primary consultant, Agapito Associates, Inc. of Grand Junction, Colo., miners from West Ridge and outside consultants such as Syd Peng, a professor at West Virginia University.

In a news release issued Saturday, after the last shutdown, the company said its experts' understanding of roof-control practices in the depths encountered in Western mining far surpassed the qualifications of an unnamed "senior [MSHA] representative who has no actual mining experience with longwall mines in Utah."

The targets of that slam would appear to be Kevin Stricklin, who oversees coal-mine safety within MSHA, and/or Michael Gauna, a roof-control specialist out of MSHA's technical support division in Pittsburgh.

Gauna, who has been evaluating the West Ridge plan, also was a member of the MSHA team that investigated the Crandall Canyon disaster, which occurred while another Murray Energy subsidiary attempted to remove what was little was left of a barrier pillar adjacent to an old longwall section.

That investigation determined Crandall Canyon's mining plan was doomed to fail because of faulty engineering. MSHA assessed fines of $1.6 million against the mine operator for violations that allegedly contributed directly to the initial Aug. 6 implosion of the mine's walls, and $220,000 against Agapito Associates for showing reckless disregard in its analysis of the roof-control plan. The companies are appealing the fines.

MSHA's team analyzing the West Ridge plan also includes Pete Del Duca, a mining engineer in the agency's Denver district office, whose early warnings of problems with Crandall Canyon's engineering plan were overridden by his now-retired superior.