Celebrating the Approval of the Skyline Conservation Bank

We are excited to announce the successful approval of the Skyline Conservation Bank, an achievement in conservation and habitat mitigation efforts made possible through a collaborative effort with Endangered Habitats Conservancy and the Bank Sponsor, Skyline Land Partners.  This achievement marks a significant advance in conservation banking, showcasing the union between environmental stewardship and economic benefit.

Achieving approval for the Skyline Conservation Bank required navigating a complex and challenging regulatory landscape.  Complying with the U.S. Fish and Wildlife Service (USFWS) and the California Department of Fish and Wildlife (CDFW) presented considerable challenges, underscoring the rigorous and often daunting task of meeting environmental compliance.  However, our persistence helped us overcome these hurdles without compromising the project’s goals.

The bank spans approximately 198.4 acres, meticulously planned to offset environmental impacts and provide sustainable conservation solutions.  The bank will preserve vital habitats for endangered species such as the Hermes copper butterfly and Engelmann oak.  This project not only protects invaluable natural resources but also underscores the economic advantages of conservation banks.  By ensuring the preservation of critical habitats, conservation banks serve as an essential tool for developers and agencies, offering a streamlined pathway to compliance and economic development that helps foster protection for important species.

We extend our gratitude to Skyline Land Partners for their pivotal role and foresight in recognizing the potential of conservation banking.  Despite the many delays and challenges posed by the agencies, Skyline Land Partners did not waiver in their commitment to seeing the project through.

As we move forward, EnviroMINE is excited to utilize our extensive experience from the Skyline project to assist more clients in navigating the complexities of mitigation banking.  We are committed to providing strategic guidance in establishing conservation and habitat mitigation banks, ensuring successful projects that are both economically viable and compliant with environmental standards.  It turns out, we’re not just good with rocks and dirt; we can handle butterflies and oaks with the best of them!

Congratulations to Skyline Land Partners and all parties involved in the Skyline Conservation Bank!  This project stands as a testament to the benefits of cooperative engagement in meeting the dual goals of conservation and economic development.

Revolutionizing Drone-based Stockpile Volume Measurements - James DeCarolis

In mining operations, accurate stockpile volume measurement is not merely a matter of convenience; it's a critical element that can significantly impact productivity, safety, and profitability. Traditionally, this task has been carried out using manual methods that involve time-consuming processes, including ground surveys and physical measurements. Not only do these methods demand substantial labor, but they are also prone to human error. Furthermore, safety is paramount at mines, and the traditional approach poses risks to personnel. 

At EnviroMINE, we’ve utilized the power of drone technology, since 2014, to create a stockpile measurement process that sets new standards for precision, efficiency, and safety.  In that time, drones have become a standard practice in the industry and have been widely accepted as the tool of choice for most companies. However, not all drones and their platforms are created equal and the technology itself does not guarantee an increased level of accuracy.  There is still a need for a competent methodology and understanding of the complications facing drone-based stockpile measurements. 

Most drone platforms offer a similar end-product for their customers.  As required by federal law, drone pilots must be licensed to fly at a mine.  Images from the flight are processed into a two-dimensional map (see below).  For the DIY variety, the customer can then outline the stockpiles on the map and get the results of the measurements relatively quickly.  This process can offer a fast and simplistic approach, but not all mines and stockpiles are suitable.  Below we will see how there are situations where a different methodology is necessary. 

Figure 1 – Typical 2D map on most platforms.

Example 1: Adjacent Stockpiles

At most mines, space is limited for stockpiled material and many operators end up stacking piles near or up against each other.  This can create a challenge when trying to measure a stockpile on a two-dimensional map.  As you can see in the example below, outlining the two stockpiles appears to give us a perfectly good measurement of them.  

Figure 2 – 2D view of two adjacent stockpiles.

When we look at that same measurement in a three-dimensional map, we can see that the outline of the stockpile is following the elevation of the pile (over the top of where the two piles meet) and the measurement is not capturing the full volume of both piles.

Figure 3 – 3D view of inaccurate base points.

Our solution?  Using our three-dimensional approach, we can measure both piles below the ground surface and confirm that we are capturing the entirety of both piles.

Figure 4 – 3D view of accurate base points.

Example 2: Abnormally Placed Stockpiles

At many of sites we fly, most of the stockpiles are placed against a slope at the site.  The piles are often too large to determine where the slope ends and the piles begin when looking at the two-dimensional map.  These stockpiles might go back as far as fifty feet past the edge of the slope in some instances. 

Figure 5 – 2D view of abnormal stockpiles.

Figure 6 – 3D view of abnormal stockpiles with inaccurate base points.

To circumvent this issue, we had a surveyor measure the placement of the base points of the stockpiles and calculate the elevation based on the historic topography of the site.  Using these base points, we can accurately adjust the bottom of the piles so that our measurement captures the full volume.

Figure 7 – 2D view of stockpiles with surveyed base points at toe of slope.

Figure 8 – View of the stockpiles below the surface shows how the surveyed base points capture the stockpiles material going back to the original placement of material (red is measured stockpile).

Example 3: Historic Stockpiles

Some mines require an even more unique approach.  At the mine below, a few of the stockpiles have been continuously expanding for over a decade.  The challenge arises from the prolonged accumulation, which has obscured the original terrain, making traditional methods of base point placement at the surface impractical.  Instead of relying solely on the new topography we capture with our drone, our methodology involves comparing it with an older topography. 

Figure 9 – Existing Topography of Current Stockpile.

Figure 10 – Historic Topography of the location where the stockpile would be placed. The stockpile was placed against a slope making it difficult to determine the true base without historic topography.

Figure 11 – Cross Section of the existing and historic topography.

While the concept of utilizing historical data for improved accuracy isn’t entirely novel in the stockpile measurement industry, surprisingly few drone services have integrated this approach on their platforms.  Most use an automated system to measure the stockpiles after they are circled on the map by the customer and don’t consider the need for further analysis.

Conclusion

In revolutionizing drone-based stockpile volume measurements, EnviroMINE's commitment to a three-dimensional methodology stands out, tackling challenges that traditional two-dimensional mapping often overlooks. From improving the accuracy of measuring adjacent stockpiles to handling abnormally placed ones against slopes and addressing historic accumulations, our precision extends beyond automated systems. Each stockpile undergoes meticulous review, setting us apart in an industry where technological advancements must be complemented by expertise. In a world where accuracy is key, our commitment to innovative methodologies positions EnviroMINE as a leader in drone-based stockpile measurements. 

Historic Review of Mining Regulation - Warren Coalson

Mining is an industry that has been both important and valuable to the development of the United States, and to this day creates products and goods that are essential to virtually all aspects of modern American society. However, it has also been the subject of much controversy over the past century, particularly based on historic issues of worker safety and environmental damage. While such controversies may have been warranted in the early 20th Century, advancements in technology and the proliferation of safety and environmental regulations, have significantly improved the conduct and significantly lessened the impact of modern mines, compared to historic mines.

In many ways, the controversy attached to mines now are a result of the legacy of the past, rather than the reality of mining in the present. In truth, the United States has some of the most extensive and protective environmental and safety regulations. Fully entitling an operational mine can take years, often at great expense to the project proponent. Operating mines are subject to stringent safety regulations and oversight. This article traces the development of safety and environmental regulations from their infancy to the present.

A Brief History of Mining Controversies

The history of mining in the United States dates back well before the Revolutionary War and includes all manner of resources. From construction aggregates, to coal, to precious and industrial metals and minerals, mining has a rich history in our country. Until the late 19th Century, there were no regulations, whether it be safety, environmental, and cultural, there were no controls over the conduct of mining operations. This has given mining a bad name, especially with regard to worker safety and environmental impacts. For example, some historic large scale mining operations throughout the United States dumped mine tailings, that sometimes were treated with toxic chemicals, on the land without drainage control. Toxic air emissions could also have negative (even lethal) effects on populated areas downwind of these operations. Additionally, mines were also dangerous for workers. In the early part of the 20th century, it was common for the industry to experience more than 3,000 fatalities in a single year. Many of the mines were underground, presenting dangerous working conditions often amplified by old and unsafe methods (such as candle or open flame lights), which sometimes caused explosions when gas was encountered.

While this past history, particularly as it has often been presented in this context, makes it understandable that mining may have a negative public perception, there have been many changes over the past 150 years that are often not considered when opposing these projects.

Early Environmental Regulation

The earliest documentation of environmental regulation came not from the government, but from a lawsuit brought by farmers against hydraulic mining companies in 1881 in, what is now, the Yuba River Gold Fields. This lawsuit resulted in an end to the hydraulic mining practices, which created debris and sediments that washed downstream and had a substantial negative effect on agricultural production downstream.

Early Safety Regulation

In 1842, the Mines and Collieries Act was passed. It prohibited all girls and boys under the age of 10 from working in underground coal mines. This was followed by a number of laws to protect workers. In 1910, the Bureau of Mines was established with the goal of reducing mine fatalities, followed by supporting safety legislation in 1941, 1947,1952, 1961 and 1966. In 1977, the Mine Safety and Health Administration ("MSHA") was created, and tasked with establishing codified regulations and undertaking regular mine site inspections. Mine safety regulation, mandatory worker safety training and improvements in technology have substantially improved the working conditions for miners.

The graph below identifies the effects of mining safety implementation in the United States between 1915 and 2015. From a high of more than 3,000 fatalities in 1915, mine related worker fatalities were reduced to 23 in 2022.

Modern Environmental and Safety Regulation of the Mining Industry

In the 20th Century, laws intended to reduce the environmental consequences of mining proliferated, but without the urgency that worker safety regulation enjoyed. Particularly in the American west, the population density of undeveloped portions of the United States was in the range of less than 1 person per square mile. As a result, there were abundant resources without a whole lot of people to be affected by mining's ground disturbing activities. Communities were also often found in relation to mineral resource extraction, and were often occupied for short time periods during mining.

As the population grew in the United States and western migrations began to slow, population density increased and environmental concerns took on greater significance. The majority of these laws took shape in the latter part of the 1960s and throughout the 1970s. These environmental protection laws included:

• 1918 – Migratory Bird Treaty Act

• 1948 – Federal Water Pollution Control Act

• 1963 – Clean Air Act

• 1969 – Porter-Cologne Act, a California-specific water quality law

• 1970 – National Environmental Policy Act ("NEPA")

• 1970 – California Environmental Quality Act ("CEQA")

• 1970 – California Endangered Species Act ("CESA")

• 1972 – Federal Clean Water Act (amending the 1948 Federal Water Pollution Control Act)

• 1973 – Endangered Species Act ("ESA")

• 1974 – Safe Drinking Water Act

• 1975 – California Surface Mining and Reclamation Act (SMARA), applicable to all mining in California.

• 1976 – Federal Land Policy and Management Act ("FLPMA")

• 1977 – Surface Mining Control and Reclamation Act (SMCRA), specific to coal mining nationwide.

• 1977 – Amendments to the Clean Water Act.

• 1981 – Federal requirements for approvals of Notice of Intent for exploration and Plan of Operations for mining operations on federal lands under FLPMA.

• 2001 – Federal requirements for Reclamation Plans and Financial Assurances.

Each of these environmental laws has been amended repeatedly to strengthen the intended result and most are subject to extensive implementing regulations, which taken together significantly reduce environmental impacts.

For example, in California, all operating mines must comply with SMARA where ground disturbance exceeds 1 acre and/or 1,000 cubic yards of resource extraction. All projects meeting the definition of mining are required to 1) obtain a permit or operate pursuant to vested rights 2) obtain approval of a reclamation plan, and 3) post financial assurances to ensure that reclamation can be achieved in compliance with the approved reclamation plan. Mines that meet the definition of vested rights, are not required to obtain a separate surface mining permit, but are required to comply with the reclamation obligations established by SMARA.

SMARA Section 2776 (a): No person who has obtained a vested right to conduct surface mining operations prior to January 1, 1976, shall be required to secure a use permit pursuant to this chapter as long as the vested right continues and as long as no substantial changes are made in the operation except in accordance with this chapter. A person shall be deemed to have vested rights if, prior to January 1, 1976, he or she has, in good faith and in reliance upon a permit or other authorization, if the permit or other authorization was required, diligently commenced surface mining operations and incurred substantial liabilities for work and materials necessary therefore. Expenses incurred in obtaining the enactment of an ordinance in relation to a particular operation or the issuance of a permit shall not be deemed liabilities for work or materials. The reclamation plan required to be filed under subdivision (b) of Public Resource Code Section 2770 shall apply to operations conducted after January 1, 1976. Nothing in this chapter shall be construed as requiring the filing of a reclamation plan for, or the reclamation of, mined lands for surface mining operations conducted prior to January 1, 1976.

SMARA has been revised repeatedly over the years to require (to name a few):

• Annual compliance inspections,

• Posting of financial assurances equal to the cost of reclamation in compliance with the approved reclamation plan,

• Requirements to identify specific performance standards to ensure reclamation adequacy.

• For certain metallic mines, requirement for backfilling mine pits with overburden to establish approximate original contour of the mined lands.

SMARA is implemented by local lead agencies to ensure that local standards are observed in the approvals and compliance mandates outlined in the reclamation plan. Each mine must be inspected on an annual basis to ensure compliance with permit and Reclamation Plan requirements. Financial assurances must also be revised annually to ensure that changes in site conditions and inflation are accounted for.

Since the adoption of SMARA, the number of mines in the state have been substantially reduced. This is, in part, the result of more stringent permitting requirements, but has also been affected by expanding urbanization. Reclamation of mined lands now results in useable land that is then suitable for other beneficial uses, including natural habitat uses or urban development.

In closing, early mining projects were unregulated and many were host to hazardous working conditions and left significant impacts on the environment. However, through time, as the population expanded, citizens pressed government to initiate controls to protect workers and eliminate environmental concerns. Over the past 50 years, significant regulations and practices have been implemented to improve the industry’s performance in both worker safety and environmental protection. As our country’s population continues to expand, the demand for mined products will only continue to increase.

Changing Conditions Affecting Pozzolan Availability

By Adam Berg

Introduction

Pozzolans are supplemental cementitious materials that are used to improve the performance of concrete.  Pozzolans are used in most concrete mix designs and have several potential benefits including buffering of reactive aggregates and weight reduction, among others.  The primary source of pozzolans used throughout the country is the ash produced from coal fired power plants (fly-ash). 

Climate change and pollution concerns are resulting in the closure of many coal-fired power plants.  With the closure of these power plants across the country, fly ash is becoming a less viable supplementary cementitious material (SCM) option for the concrete industry and an alternative will be required sooner than later.  Natural pozzolans are nothing new and date back to the early Romans where natural pozzolans have been used for thousands of years.  The term pozzolan is attributed to the town of Pozzuoli in the Bay of Naples just 25 miles east of Mount Vesuvius where the entire region is covered in thick beds of “pozzolana”, a volcanic pumice and ash deposit from previous eruptions of Mount Vesuvius.  Those pozzolans were used to build many of the Roman monuments that are still standing to this day, which is a testament to their durability.  

Natural pozzolans (Class N) are natural materials that have pozzolanic properties (examples are volcanic tuffs or pumicites, opaline cherts and shales, clays, zeolites, and diatomaceous earths).  Some of these pozzolans may require calcination, which refers to thermal treatment of a solid chemical compound (e.g. mixed carbonate ores).  The material is raised to high temperature without melting under restricted supply of ambient oxygen (i.e., gaseous O2 fraction of air).  This is generally done for the purpose of removing impurities or volatile substances, and/or grinding the material for further refinement.  Calcination produces large amounts of CO2 which is an issue currently being addressed. 

Typically, concrete is 60-70 percent aggregates, 15-20 percent water, and the remaining 10-15 percent is cementitious material (depending on the application).  In 2016, it was estimated that California produced 9.8 million tons of cement, while consuming approximately 9.5 million tons.  However, these are rough estimates since California does import and export some materials. 

Since fly ash is the most popular SCM used in concrete, Caltrans is concerned about its availability and continually adjusts their specifications as technology and testing changes.  Caltrans specifications require the use of SCMs to reduce alkali reactivity in concrete and greenhouse gas emissions in heavy concrete mixes.  Typically, Caltrans is calling for a minimum of 25 percent SCM/fly ash, unless the aggregate source can be shown to be harmless, in which case just 15 percent SCM/fly ash is required.  In addition, Caltrans changed its criteria in 2010 to allow for less energy-intensive concrete mixes.  This was done by eliminating minimum cement requirements, removing upper limitations on the quantity of fly ash & other SCMs, and allowing the mixing of up to three cement/SCM ingredients.

Fly Ash

Fly ash is classified either as class F or class C.  The primary difference between class F and class C fly ashes is the Calcium (Ca) content, where class F fly ash has Ca less than 10 percent, while class C fly ash has Ca content of greater than 10 percent.  Class F is typically derived from the burning of anthracite or bituminous coal, and Class C is usually derived from the burning of lignite or subbituminous coal.  Class F fly ash is pozzolanic, with little or no cementing value alone but which will, in finely divided form and in the presence of water, react chemically with calcium hydroxide at ordinary temperatures to form compounds possessing cementitious properties.  Class F fly ash can be used as a Portland cement replacement ranging from 20-30 percent of the mass of cementitious material.  Class C fly ash has self-cementing properties as well as pozzolanic properties, but class F fly ashes are more effective SCMs than class C because Class F has higher silica content.

Much of the current fly ash production is located on the east coast of the United States where there is a concentration of coal-fired electric power generation plants with some production located in Arizona, Nevada, Utah, and Wyoming.  One concern with the location of fly ash is the need for transporting these materials to California and the rest of the West Coast and a second is the potential for severe bottlenecks as it travels through the transportation network.

In Southern California, there are two primary suppliers of fly-ash: EcoMatrials and Salt River Materials Group.  Current prices (including delivery of the materials) are around $115 per ton, which is less expensive that current prices for traditional cement that is between $140-$160 per ton.

Natural Pozzolans

Natural pozzolans are mined from natural deposits located throughout the US (mainly where there has been prior volcanic activity or ancient sea beds), and with the potential for fly ash shortages throughout the Country, natural pozzolans may be an important alternative.  These alternatives are already widely used in other countries, where there are no coal-fired power plants, with good results.  

Calcined clay, like fly ash, can be used as a substitute for a portion of the supplementary cement mixture; typically, in the range of 15 to 35 percent.  Calcined clays can reduce permeability, increase resistance to sulfate attack and reduce alkali-silica reactivity expansion.  Metakaolin is made from high purity kaolin clay calcined at high temperatures and is typically used in addition to cement and can significantly reduce permeability and increase strength.

Class N natural pozzolans are located throughout the west coast as they are a byproduct of volcanic activity.  There have been numerous studies conducted on the location and viability of these deposits (EnviroMINE Inc. included) with some current mining operations in Arizona and California.

Locating and producing natural pozzolans near the market has two benefits: it would greatly reduce the emissions produced by reducing the distance needed to transport them, while also reducing the cost of transporting these materials to their final destinations.  The costs of transportation determine the maximum economic distance the pumice, pumicite, rhyolite, and zeolite can be shipped and still remain competitive with alternative materials.

Conclusion/Looking Ahead

While the prospect of using natural pozzolans has potential rewards for limiting greenhouse gasses and reducing costs associated with transportation, the question of scaling up to meet demand remains to be answered.  If production of natural pozzolans cannot meet the demand for these products, are we going to be stuck in the same situation as the fly ash bottlenecks that are currently experienced on the west coast?  Perhaps a little of both sources are the answer.

Emerging technologies are primarily focused on the elimination of the calcination process of natural pozzolans, which is the main contributor to the production of CO2 emissions.  Many of these technologies and mineral products are being studied and developed and may be the future of green concrete and may require the industry to follow stricter environmental standards and guidelines for use in future construction materials.

As the supply of fly ash decreases, an alternative will be necessary.  As regulations and environmental laws change, the need for carbon neutral SCMs will require a much closer look.

Factor of Safety - MSHA and SMARA in Cut Slope Design - by Dr. Danny Sims

Incentive

Legal liability certainly provides incentive in decision making.  From my own experience, eight miners died in a 2.5-million-ton failure on a highwall that I helped to design years earlier.  Forensic investigation found that the failure mechanism was unique and there was no fault on my part.  The investigation made the sometimes-vague concept of potential liability very real and provided incentive for my future work.

The greatest incentive though is in knowing that people have been saved.  I once had a miner crying and thanking me that his children did not lose their father two days before Christmas after I cleared him and others from a work area minutes before a slope failed into it.   

Thus, our discussion on slope design and factor of safety is presented within a legal standards and liability framework because legal compliance drives much of decision making.  But we believe that safety truly is the foremost concern for operators and our goal is to help to make your workplace as safe as possible.  Our specific concern presented here is our observation and interpretation that MSHA-required safety catch benches are not incorporated into some reclamation plans.

SMARA 

All mines in California require a Reclamation Plan that conforms with California’s Surface Mining and Reclamation Act (SMARA).  The requirement for cut slopes is that “cut slopes, including final highwalls and quarry faces, shall have a minimum slope stability factor of safety that is suitable for the proposed end use and conform with the surrounding topography and/or approved end use” (SMARA Section 3704(f)). 

But keep in mind: 

“Even a simple engineering design concept such as the Factor of Safety of a slope, which most mine managers, superintendents and mining engineers would think of as an absolute number that is universally applicable, is in reality only a factor of the experience and expertise of the engineer involved in the design process. It is purely an index. …We only see what we know.”  (T. D. Sullivan, 2006)

MSHA

The final wall configuration that meets the SMARA requirements must be mined while adhering to the federal Mine Safety and Health Administration (MSHA) regulations.  “MSHA requires that a bench located immediately above the area where miners work or travel be maintained in a condition adequate to retain material that may slide, ravel, or slough onto the bench from the wall, bank, or slope” (MSHA Program Policy Manual).  This catch bench design requirement is a “Mandatory Health or Safety Standard”.

MSHA provides little specific guidance for compliance with this standard.  Design professionals must apply judgment and they typically look to literature regarding rockfall in mines and roadcuts for developing safety catch bench design criteria. 

Potential Criminal Liability for Operators 

The United States Department of Justice Criminal Resource Manual provides the following guidance for prosecuting a willful violation of a MSHA Mandatory Health or Safety Standard:

Title 30 U.S.C. § 820(d) provides criminal penalties for any operator who willfully fails to comply with a mandatory health or safety standard, or who knowingly violates or refuses to comply with an order under 30 U.S.C. § 814 or § 817. Section 820(d) applies to "operators" of mines subject to the Mine Safety and Health Act. Mines subject to coverage include coal or other mines, the products of which enter commerce, or the operations or products of which affect commerce. See 30 U.S.C. §  803. Note that the Act now covers all mines not just coal mines. See 30 U.S.C. § 802(h)(i). "Operator" is defined to include any owner, lessee, or other persons who operates, controls, or supervises a coal or other mine or any independent contractor performing services or construction at such mine. 30 U.S.C. § 802(d).

…

The leading case on the intent requirement of this statute approves a jury instruction that a failure to comply with a mandatory health or safety standard is willful, "if done knowingly and purposefully by a mine operator who, having a free will or choice, either intentionally disobeys the standard or recklessly disregards its requirements." 

SMARA Must be Applied Within Confines of MSHA

An issue that concerns EnviroMINE is that some approved reclamation plans have cut slope designs that meet the SMARA requirements but do not, in our opinion, meet the MSHA Mandatory Health or Safety Standards for catch bench design.  In these instances, it appears necessary that to achieve the reclamation plan design, an “operator” will subject themself to potential civil and criminal liability and their employees to undesirable rockfall hazard.  

For some operators, EnviroMINE has presented the safety issues and technical arguments to the lead agency to seek approval to amend their reclamation plans to be consistent with MSHA.  In some cases, a recommended proper catch bench design allows for steeper final walls than the prior design, allowing for greater resource extraction.  In cases where 45-degree bench faces were required by the reclamation plan, which is operationally difficult at best in hard rock, the operator benefits by steepening the bench faces to as steep as can be safely mined.   This is consistent with internationally accepted mining practice and well-supported by the mining literature. 

The take-away point is that mining to a SMARA-acceptable factor of safety without a proper MSHA-required catch bench design may not be safe. 

The reason for this apparent disconnect is that application of SMARA generally looks to deep-seated mechanisms that may cause an entire slope to fail.  The mining literature supports that these large failures rarely cause injury because they give advance warning and they are managed.  Conversely, most injuries related to mine cut slopes are from rock fall.  Fatalities have occurred where as little as a single 4-inch rock that fell from above is the likely killer.  This relatively common injury mechanism typically gives no warning, and is mitigated by MSHA’s catch bench design requirement.

MSHA and SMARA Combined are Consistent with International Standards

It is widely accepted as an international standard that a catch bench design is the first design to be performed.  The follow-up factor of safety analysis can require a shallower slope if the acceptance criteria are not met using a bench design, but the slope cannot be steeper than what the bench design allows, regardless of the factor of safety. 

The acceptable factor of safety typically varies by the acceptable risk level.  The factor of safety for a slope with no critical infrastructure in harm’s-way can be lower than that for a slope that contains a ramp or other critical assets above or below.  SMARA is consistent with these international risk-based standards where it requires that the factor of safety be appropriate for the end use.

Do Local Standards Trump International Standards?

Where the reclamation plan design is not consistent with MSHA, Sullivan’s observation that “We only see what we know” certainly rings true.  Can the engineer/operator effectively invoke the often used liability limitation that states that the ordinary and reasonable care owed is that which is common on the same type of project, at the same time and in the same place, under similar circumstances and conditions?  Or is this a situation where, in considering local custom, “Courts must in the end say what is required; there are precautions so imperative that even their universal disregard will not excuse their omission”  (The T.J. Hooper, 60 F.2d 737 (2d Cir. 1932))?

Slope Stability Experience

Since 1994, Dr. Sims has worked on slope design analysis and recommendations for aggregate, limestone, borax, lithium, phosphate, diamond and large metal mines in North and South America and Asia. He has trained geologists and engineers for data collection and slope stability analysis at many world-class mines.

Legal Disclaimer

Because Dr. Sims is a member of the Arizona Bar, and this article discusses legal issues, the following disclaimers are provided:

*No Legal Services are offered and there is no intention to provide Legal Services or Legal Advice in this newsletter or in any communications with Danny Sims.
*No Attorney- Client Relationship can be created in communications with Danny Sims. 

Mineral royalty adjustments – What is the impact to your bottom line? - by Crystal Howard

When a construction aggregate company does not own the land being mined, a mineral lease agreement is negotiated with the landowner.  Within the lease agreement, a mineral royalty is established.  The mineral royalty represents the fee paid by the operator to the landowner for the right to extract and sell minerals from the property covered by the lease.

In the construction aggregates industry, royalty rates are commonly established using a couple of different approaches:

1.    Percent (%) of the Average Sales Price
2.    Dollar ($) per unit of volume (ton or cubic yard)

After the royalty rate is established, the lease agreement will generally indicate a method for adjusting the royalty over time to account for inflation.  Using the percent of average sales price approach, no additional adjustments are needed because the changes in price over time will naturally account for inflation.  However, for the $ per unit of volume royalty, an adjustment method needs to be selected.  There are two common indexes used for calculating these adjustments:

1.    The Consumer Price Index (CPI), and
2.    The Producer Price Index (PPI)

The CPI is a measure of the average change in prices for consumer goods, while the PPI measures the average change in prices of the inputs used to manufacture a final product. 

During lease negotiations, a royalty rate adjustment method is often selected without considering the long-term effects on royalty payments.  This article presents a comparison of each method to illustrate how important this decision is to the bottom line.

Two scenarios are used to illustrate the importance of choosing how to adjust the royalty for inflation.  For both scenarios, the average sales price for construction sand and gravel from 2000-2017 was selected by using the $/ton value reported in the California Non-Fuel Mineral Annual Reports published by the California Geological Survey.[1]  In the year 2000, the $/ton value for construction sand and gravel in California was $5.76. 

For comparison purposes, all royalties begin at the same value.  This value was calculated using 10% of average sales price (ASP); or $0.58/ton.  Each scenario begins at this value and were subsequently adjusted using the following methods. 

1. Royalty Rate = $0.58/ton; which is adjusted for inflation by:

   a. 10% of ASP: Naturally adjusted by changes in the ASP

   b.    CPI

   c.    PPI

Scenario 1 – Annual Adjustments

In the first Scenario, the royalties are adjusted annually.  Figure 1 illustrates the annual adjustments in royalties between 2000-2017 using % ASP, CPI, and PPI from 2000-2017.  The figure reveals that the % of ASP royalty is much more volatile than the other two methods.  Additionally, the royalty adjusted by PPI increased at a greater rate than if it was adjusted using CPI.

To measure the effectiveness of an operation’s bottom line, the total royalties paid over the same time period for an operation that produces 500,000 tons annually is calculated and presented in Figure 2.  When compared to % of ASP, adjusting the royalty by CPI resulted in payments 23% lower and just 8% lower with PPI.  The importance of choosing the method for adjusting royalties becomes much more clear after considering the total payments made over the long run. 

Scenario 2 – Adjustments Every 5 Years

Scenario 2 looks at the impact of choosing to adjust the royalty every 5 years as opposed to annually.  Many lease agreements adjust royalties over a longer period as opposed to annually.  Figure 3 illustrates how the royalties adjust over time.  Again, each royalty begins at the same rate and is adjusted based on the selected method.

Adjusting every 5 years evens out the dramatic fluctuations for the % of the ASP method but introduces a potential for substantial changes in royalties adjusted by CPI or PPI. 

The difference in total payments is less dramatic when royalties are adjusted every 5 years.  For instance, when compared to % ASP, the total royalties paid adjusted by CPI is 18% lower.  Adjusting every 5 years introduces less volatility and can potentially provide for more certainty for budgeting purposes.  Additionally, total royalties paid by each method can also be reduced when compared to annual adjustments.

This basic comparison clearly illustrates that the royalty adjustment is a critical component of the mineral lease negotiation.  It is also important to consider that there are several different Index Series or types of indexes for both CPI and PPI.  As a result, the outcome can be different depending on which CPI or PPI Index Series is selected.  For example, there are multiple CPI indexes for California separated by geographic region.  However, there is not a PPI for California.  Additionally, there are several PPI indexes that represent mining.  Selecting the right index for an operation will depend on the location and type of products produced.

Additionally, the average sales price for a particular operation may adjust differently than the state average value presented here.  Thus, the royalty adjustment that is best for each operation may be different depending on the location.  Despite the site-specific conditions, the results of this analysis reveal that royalty adjustment methods have a dramatic effect on an operation’s bottom line.

If you want to gain some insight on what royalty adjustment is best for your operation, contact Crystal Howard for a consultation.  crystal@EnviroMINEinc.com

[1] https://www.conservation.ca.gov/cgs/minerals/mineral-production

Do I Want to Operate an Inert Waste Disposal Facility in California? - by Kristen Davis

For decades mining operations have accepted inert debris waste such as asphalt and concrete at their facilities to be recycled or used as a convenient, inexpensive place to dump construction related debris rather than taking it to a licensed landfill. In recent years waste diversion has become a codified goal throughout the state of California with accompanying regulations and required permits for disposal of inert debris waste. With these additional disposal requirements, new opportunities for mining operations are available that can extend product lines and provide new revenue streams.

What is inert debris and how can it benefit a mining operation in California? Inert debris can simply be defined as a material that is non-hazardous and does not contain putrescible wastes. Inert debris consists of material such as broken concrete, asphalt, glass, metals, clay products, wood, etc.

There are three types of inert waste disposal facilities: Inert Debris Engineered Fill Operation (IDEFO), Inert Debris Type A Disposal Facility and Construction and Demolition and Inert Debris Disposal Facility (also accepts construction and demolition debris). The differences in these three types of facilities are the specific types of material that can be accepted at each facility, compaction requirements, and the permitting process for each facility type. More detailed information for these types of facilities and permit requirements can be found at https://www.calrecycle.ca.gov/SWFacilities/CDI/

Benefits for accepting these materials at a mine operation can be explained by examples of how existing facilities currently use these inert debris materials. These benefits include:

• Charge tipping fees for acceptance of material at the operation.

• Create developable land.

• Provide a disposal location for company’s associated construction projects.

• The operation can continue after the SMARA Reclamation Plan has been closed, if an IDEFO or inert debris disposal facility is identified as an end-use; and

• Extend aggregate products rather than using 100 percent freshly mined sand or rock, such as in asphalt mixes or road base.

The operation of an IDEFO or inert debris disposal facility can also have its challenges. The operation will need to be a use that is allowed in the site’s zoning and additional permitting may be required. The mine operation would require the space for the IDEFO or inert debris disposal facility as well as material stockpiles and areas for material processing. Specialized equipment may be necessary to handle and compact material. Waste discharge requirements, load monitoring, and testing programs may need to be established and reported. These are challenges that may occur and should be identified prior to pursuing an IDEFO or inert debris disposal facility.

For assistance in answering your questions and permitting please contact Kristen Davis of EnviroMINE at kristen@enviromineinc.com or 619-952-9619.

New DMR Forms for Annual Compliance By April Balistreri

The 2019 Mining Operation Annual Report (MRRC-2) is due July 1, 2020. Updated forms are expected to be available on the Division of Mine Reclamation's (DMR) Website during the first week of May. Please complete and submit electronic versions of all reports and required fees, using the Online Reporting System to DMR through their website. A Login Code is required to file the electronic versions. The Login Code will be mailed the week of May 1st to each operator and designated agent or can be obtained by calling DMR. Filing electronically will help make the process more efficient since so many are working remotely now. As a reminder, if you plan to file for any exemptions, they must be filed on or before July 1, 2020, to be considered by DMR.

In addition, Lead Agencies will need to use the required Notice of Completion of Inspection (NOCI-1) form and updated Inspection Report (MRRC-1) form after the annual inspection is completed. These new forms went into effect in January 2020 and are required by the California Code of Regulations §3504.5.

For questions: call 1-916-323-9198 or by e-mail DMR-Reporting@conservation.ca.gov When available forms can be found at https://conservation.ca.gov/dmr on the Forms tab.

COVID-19 and Your Annual SMARA Inspection - By Dennis Fransway

The spread of COVID-19 around the country has disrupted our normal routines including the way our official work responsibilities are completed. As we prepare for the annual SMARA compliance requirements, it can be expected that certain compliance activities may need to be modified, or at a minimum planned for, to remain in line with public health recommendations and State orders.

To date, the Department of Conservation (DOC) has not made changes to the required due dates of Mining Operation Annual Reports (Form MRRC-2, due July 1) or the completion of lead agency annual site inspections during the pandemic. Although we all hope the COVID-19 pandemic ends quickly, it should be expected that your next inspection may be completed differently than it has in previous years.

To avoid situations that may disrupt operations or the inspection, below are six suggestions to prepare for your annual SMARA inspection:

1. Contact the appropriate lead agency in advance of the inspection date that was identified on your previous Annual Report to discuss how the inspection will be completed. Identify areas of concern, who will attend, transportation, safety procedures and the use of Personal Protective Equipment (PPE) including Health Department recommended face coverings/hand sanitation, etc.

2. Try to minimize the number of inspection participants; this includes participants from the operator’s staff as well as participants that are conducting the inspection – operators should encourage lead agencies to bring only those who are essential for reviewing SMARA compliance.

3. Provide a map showing the inspection route and location of planned stops.

4. Conduct a health and safety meeting prior to the inspection. Cover the procedures that will be followed by all attendees.

5. If separate vehicles will be utilized by attendees, the opportunity to discuss the project between stops will not be available. Utilize the stops to provide project details and ask questions.

6. Request an inspection debrief at the conclusion of the field visit. Select a location where social distancing recommendations can be practiced by all attendees.

Site inspections will not go away. Communication, planning and preparation will help complete this process smoothly and efficiently.

Briefing: Annual Compliance During COVID-19

We have all been affected by COVID-19 and companies have had to adjust business as usual to continue operations.  With things seemingly changing on a daily basis, we wanted to gain some certainty on how COVID may impact Annual Compliance for operators.  This briefing will share information gained from calls to the Division of Mine Reclamation (DMR), State Mining and Geology Board (SMGB) and a sample of Lead Agencies.  The main take-away from our conversations with regulators is Plan and Plan Early!

Annual Reports to DMR by July 1, 2020. 

A call to DMR revealed that under current conditions, there will be no relaxation of the July 1, 2020 deadline.  To avoid submitting information late, because of unforeseeable delays due to COVID, the recommendation is to start planning earlier than later.

The advice from DMR was to submit the Annual Report by the July 1, 2020 date even if the Lead Agency has not provided a copy of the annual inspection report.  In addition, if the lead agency is unable to perform the 2020 annual inspection within 12 months of the prior inspection, DMR emphasizes operators prepare a FACE and submit it to the Lead Agency and subsequently provide a copy of the first page of the estimate to DMR.  (SMARA Section 2717 (b) 3 & Section 2773.4 (d) A & B)

Annual Reports to Lead Agencies:  Many Lead Agencies require several reports from technical experts to be submitted in addition to the forms submitted to DMR.  It is important to start planning for this now to ensure that company-specific safety measures can be complied with if site visits by these experts are necessary.  We suggest reviewing safety measures with those individuals prior to them arriving on-site.  At the end of this article is a list of safety procedures to consider, in addition to company-specific protocols, when working with consultants visiting the site.

Annual Inspections

Calls to several lead agencies regarding their plans for conducting inspections during COVID resulted in a variety of responses.  If a lead agency, like San Bernardino County, conducts inspections with one individual, no delays in their inspection schedules were expected.  However, a call to Irwindale was a different story.  Inspections by this lead agency can include up to 8 individuals.  As a result, they were unsure of how COVID would impact their inspection schedule and are in the process of evaluating how to move forward.  All other lead agencies contacted that conduct the inspection in a similar fashion were also in the same process of evaluation.

Recently an operator was faced with a lead agency inspection that arrived with more than 3 individuals.  This agency wanted to perform the inspection in a caravan of cars with each person in their own vehicle.  To ensure the safety of the caravan, the lead agency requested that the operation shut down during the inspection.  To avoid being asked to shut down, we again suggest operators plan and plan early.  In addition, reach out to the lead agency to plan for inspections and discuss safety protocols.

Calls to the State Mining and Geology Board also revealed they were in the planning stages and hoped to provide an advisory to lead agencies and operators soon.  They suggest signing up for their e-Blast News List at: (https://www.conservation.ca.gov/smgb) or check their website regularly.

Suggested Efforts to Plan for Inspections and other Annual Compliance During COVID

1.    Reach out the Lead Agency before the inspection to discuss the following.

• a.    To comply with social distancing requirements, it is advised there be one person per vehicle.

• b.    If more than one person is planning to attend the inspection, suggest staggering visits to allow for minimal vehicles driving through an active operation.

• c.    Ensure the lead agency staff and associated individuals come to the inspection with their own personal protective equipment (PPE) including hard hat, safety vest, safety glasses, gloves and face mask (PPE) if required.

• d.    There can be no sharing of pens, clipboards and other items.

• e.    Bring own hand sanitizer.

2.    Many, if not all, companies have adopted a tailgate COVID safety procedure with employees.  It is advised that this same procedure be performed with anyone visiting the site to perform tasks for the inspection.

We would also like to include some helpful resources:

MSHA and Inspections:
https://www.msha.gov/msha-response-covid-19

• MSHA recognizes that some mining operations are not running at full capacity and have limited crews working.  If a mine operator alerts MSHA to changes in production at a site, MSHA will, to the extent possible, limit the number of inspectors sent to that mine for a regular inspection proportional to the mine’s continuing operations.

OSHA: https://www.osha.gov/SLTC/covid-19/standards.html

Tools & Checklists: https://www.unitedcontractors.org/media-center/latest-news/3-news/1325-covid-19-resources