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Regulatory Issues that Most Impact Profit Potential

Mike Crowder, Board Member, New Tech Mining, Inc., USA will be speaking at Met Coke 2014 as part of Global Environmental & Regulatory Roundtable Dialogue on Coking Coal & Mining Perspectives. He shares his thoughts below:

I recently read this quote, "It is the characteristic of all absolute governments to become arbitrary."

What does it mean to be arbitrary? The dictionary says Arbitrary is "existing or coming about seemingly at random or by chance or as an unreasonable act of will."

In 2008 the Obama Administration declared war on the coal industry. Since that time regulatory agencies have expanded enforcement and increased inspections to the point where today there are more inspectors than there are active mines. Many mines in North America today have MORE INSPECTION HOURS THAN PRODUCTION HOURS.

'Arbitrary Enforcement' in the mining industry has taken on a whole new meaning. Several years ago, but particularly since Obama took office, the attitude of our regulatory agencies has shifted from an attitude of cooperation and working together to an attitude of strict 'arbitrary' enforcement with stiffer fines and stiffer penalties. The attitude of shutting down production AND writing the most serious violations possible regardless of the circumstances has become absurd.

Statistically the culture today has caused more S violations (Significant and Substantial) violations being written and more of those S violations later being changed to non-S violations (or vacated, dismissed or withdrawn) than ever before. Why is this? Because they Can! Because there is very little accountability where the agencies are concerned, with little to no repercussions within the Agency, allowing them to do whatever they wish as arbitrary as they choose. It occurs from the top down. The actions and attitudes found within the ranks of our current regulatory agencies have already ended or are currently endangering the jobs of thousands of men and women in the coalfields.

When Operators wish to discuss an issue or challenge an agency's decision, or even simply voice a concern, many times that Operator is met with resistance and increased inspections for no other reason than the REGULATORY AGENCY HAS THE POWER.

Ironically, within the circle of friendships that I have, I'm not aware of a single coal operator who does not consider the safety and well-being of their miners to be their first and foremost responsibility. Many of my 'executive' friends have family-run companies or have family members employed, as well as life-long friendships with their employees and safety is the number one priority of each and every one of these coal operators.
Pattern of Violations (POV) is the most serious regulation that Impacts Profit Potential
Under the new (2013) rules of Pattern of Violations (POV), a POV status is easier to obtain since mines can qualify based on citations that are merely issued, even if they are later contested, withdrawn or vacated. A mine with POV status is in danger of repeated and costly shutdowns. Increased Fines and shutdowns make it nearly impossible in today's market to succeed. Under the pre-2013 rule, only citations and orders that became final through a judge's order or were conceded and paid by mine operators could be taken into consideration before placing a mine on POV status. Further, the prior POV rule required MSHA to notify operators when a potential POV existed at their mines and to provide operators with an opportunity to clarify any errors in MSHA's data, raise mitigating circumstances or remedy their potential POV status.
New (2013) Rule
Under the new POV rule, MSHA may issue an actual POV notice without first issuing a potential POV notice. The rule also eliminates the requirement that MSHA consider only final orders in its POV review. It also puts the responsibility of monitoring POV status on mine operators by requiring that they monitor an online MSHA database.
Here are other regulations that are burdening coal operators (particularly small to mid size operators) and allow for "Arbitrary Enforcement."

1) Rock Dusting: 80% incombustible content in all areas of the mine not just the return(s).

2) Respirable dust standards reduced to 1.5 mg/cubic liter of air. Down from 2.0.

3) Full shift continuous respirable dust monitoring. Was only 8 hours. Now requires new types of instruments.

4) Self-Rescuers: At least two (2) per miner and one addition SCSR per miner per cache in both primary and secondary escapeways. At least one (1) additional SCSR for areas where persons work alone and along mine examiner travel routes.
Additional rescuers on the mantrips and personnel carriers - all fully functional, tested, and kept up-to-date with date stamps. A full-time job.

5) Gas Detectors: One (1) extra detector to be assigned to each conveyor belt man and other person(s) who works alone.

6) NIOSH Chest X-Ray and Pulmonary Function Surveillance for each miner including contractors which require Part 48 training to be on mine property and also, surface coal operations.

7) Underground Coal Miner Tracking system (functional, up-to-date, advancing) - a full time job.

8) Central emergency communications/miner tracking center, manned full shift and miner posted at the center must be specially trained for this job. - to fully comply we need at least 2 per shift.

9) Fire retardant conveyor belting

10) Underground Refuge Alternatives (facilities) and annual training on use of the units. This a significant extra cost for the standard Part 48 training.

11) Bathing Facility ("Bath House"). Waivers for this facility are rarely approved.

12) In addition to the standard mine pager (telephone) system between surface and section, additional pagers are required in the primary (at the refuge facility) and in the secondary escapeway.

13) Seals: 50 psi to 120 psi. Construction plan/drawings by certified engineer.

Shouldn't our government regulatory agencies focus more on cooperation and prevention rather than on increasing strict 'arbitrary' monitoring, accessing larger fines and pushing for patterns of violations?

As a side note: Prior to AND during the filming of the television show COAL that aired on Spike TV and Discovery Channels the executive producers of the show offered regulatory agencies a chance to participate and a chance to use video material for the advancement of coal Safety, Training and Prevention. The regulatory agencies declined.

Mike Crowder