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ARIZONA HOUSE OF REPRESENTATIVES
Forty-ninth Legislature – First Regular Session
AD HOC COMMITTEE ON MINING REGULATIONS
Minutes of Interim Meeting
Monday, November 2, 2009
House Hearing Room 1 -- 1:00 p.m.
Co-Chairman Jones called the meeting to order at 1:07 p.m. and attendance was noted by the secretary.
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Senator Sylvia Allen, CoChair |
Representative Russ Jones, CoChair |
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Senator Amanda Aguirre |
Representative Barbara McGuire |
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Senator John Nelson |
Representative Franklin Pratt |
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Chad Fretz |
Will Humble |
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Ben Grumbles |
Tom Lowry |
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Herb Guenther |
Dr. Madan Singh |
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Joe Hart |
Bill Staudenmaier |
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Kris Hefton |
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Maria Baier |
Yates Hudson |
Introduction of Members and Opening Remarks
Co-Chairman Jones stressed that the political and economic environment for mining is quite different today but that there is great opportunity predicated on how well the industry organizes itself to become more efficient. This Ad Hoc Committee will look at removing unnecessary regulatory barriers and at opportunities for consolidation among agencies. The industry must pursue a greater degree of public/private partnership. This Committee is to begin that process by holding three, perhaps four, meetings. Today’s meeting will be informational, with the agencies describing for the Members their statutory authority with respect to the mining industry and the different types of mining in Arizona. The second meeting on November 16, 2009 will be for the stakeholders to make their recommendations for regulatory changes. The third meeting on December 7, 2009 will be for reviewing possible legislation.
He and each of the Members of the Committee gave a brief introduction to the audience.
Presentations by Agencies
Ben Grumbles, Director, Arizona Department of Environmental Quality (ADEQ), distributed a letter sent by Governor Brewer to Secretary of the Interior Salazar regarding uranium mining in the Grand Canyon area (Attachment 1). He then introduced his Deputy Director to present for the agency.
Patrick Cunningham, Deputy Director, Arizona Department of Environmental Quality (ADEQ), addressed the Committee to discuss recent mine permits issued to Denison Mines for parts of three proposed uranium mines in Northern Arizona (Attachment 2). He explained that the statutory authority of ADEQ as regards mining is to issue air and water permits which are intended to protect air quality in the areas of mines and the roads servicing them and which are intended to protect groundwater and aquifer volume and quality from contaminants during the mining process. He added that measurements are taken during mining and that there must be financial assurance for clean closure at the end of the mining operation.
In response to questions, Mr. Cunningham explained that water is brought to the surface for testing in order to obtain reliable results. He described the general permit process which uses shorter licensing timeframes and that the process from first submission to granting could take from 9 to 14 months. He explained that closure means to return the acreage to its original condition.
Mr. Cunningham explained that the permits issued for uranium mining (Attachment 2) were issued only after consultation with three tribal leaderships, who expressed grave concerns about groundwater quality. He allowed that the leaderships were probably not satisfied at this time.
Discussion ensued regarding methods of monitoring (which include cameras and soil sampling) for PM10 (particles of 10 micrometers or less) and lead emissions from copper smelter and other mining operations.
Mr. Grumbles reiterated that ADEQ is committed to increasing predictability and consistency in the permitting and standards decisions for the mining sectors. He stated that the agency intends to make greater use of general permits and he stressed a commitment to communicate with the Legislature, the public, and the Tribes.
Ben Alteneder, Legislative Liaison, Arizona State Land Department, gave an overview (Attachment 3) of state trust land set aside in the mid-1800s to support education. In 1915 the Arizona State Land Code established the State Land Department to manage these trust lands. Every county in the state has trust land and the beneficiaries are mostly kindergarten through grade 12 students. Trust land can be secured by leases for mining minerals, but cannot be encumbered in any way. The Land Department holds the land in perpetual trust and is responsible for stewardship and conservation. The leases are not regulatory in nature, but are intended to make money for the beneficiaries and so are administrative only.
Joe Dixon, Minerals Leasing Section, Arizona State Land Department, explained that his Section’s task is to maximize revenues from mineral commodities on trust land, and that this revenue is a large portion of overall revenues. He described the procedure to obtain a 20-year mineral lease on State Trust Land; there are currently fifteen leases.
He described split estates, wherein the surface rights are owned by the state but the minerals are owned privately, and some which are the opposite situation. These require special land-use permits. Discussion ensued about bonding requirements, surface restoration, and surveying.
Joe Hart, Arizona Mine Inspector, explained that his agency does have regulatory authority and is charged with the health and safety of the miner. It is comprised of four departments which are defined by Arizona Revised Statutes (ARS) or the Code of Federal Regulations (CFR) (Attachment 4):
· Inspection – yearly inspections for compliance to ARS Rules and Regulations; enforcement of the statutes; shut down a mine if safety is compromised
· Training – classes in procedure and safety, often on-site
· Abandoned mines – locate, inventory, classify, and eliminate public safety hazards; in some cases the owner cannot be found to authorize closing the mine
· Reclamation – requiring a bonded plan to reclaim any facilities which disturb at least five acres in order to comply with regulations
Mr. Hart informed the Members that Arizona is first in the nation in non-fuel mining, generating $6.7 billion dollars, $3.8 billion of which is copper product.
Dr. Madan Singh, Director, Department of Mines and Mineral Resources, explained that his Department is not a regulatory agency; its statutory mission is to promote the development of mineral resources in Arizona and to maintain a mining and mineral museum as the state depository (Attachment 5). The Department is responsible for many activities including creating and maintaining a database of reports and maps as well as a library of mineral and mining. It suggests target areas for exploration and development, operates the museum, and produces informational publications.
In response to questions, Dr. Singh explained that to date less than five percent of the library and archives are digitized. He expressed concern that 60 percent of the annual budget goes to rent for the museum facility, and that his Department has been asked by the Governor to cut its budget by 15 percent. This has severely affected staffing, and thus the tasks that the Department can perform.
Herb Guenther, Director, Arizona Department of Water Resources (ADWR), addressed the Committee to describe his Department’s interaction with mining, which is limited to permitting the use of groundwater for mineral extraction and processing in active management areas (AMAs). He explained that there are five AMAs in Arizona (Phoenix, Tucson, Pinal, Prescott, and Santa Cruz) and that any mining in these areas must obtain a groundwater withdrawal permit, which is issued if the applicant meets specific criteria (Attachment 6). He added that permitting is not required outside the AMAs.
Duane Huffman, Legislative Liaison, Arizona Department of Health Services (ADHS), explained that his Department does not regulate mining, but does have programs for assessing environmental exposure to public health risks, which can include mining operations. He described general public health authority as far as nuisances or inspections, but nothing specifically related to mining.
In response to a question, he replied that ADHS does not monitor exposure to radiation – there is a radiation regulatory board that handles this.
Senator Aguirre applauded the Department’s efforts to address lead poisoning affecting children.
Diane Echols, Environmental Health, ADHS, explained that the Department does not conduct direct surveillance, but relies on doctors to report on health issues with children in mining areas.
Co-Chairman Jones stated that the Committee would next hear presentations about the state of the mining industry and its future.
Presentations on the state of the Mining Industry and its Future
Lyn White, Director of Government Relations, Freeport McMoRan Copper & Gold, introduced Mr. Rick McMillan.
Rick McMillan, General Counsel, Freeport McMoRan Copper & Gold, presented an overview of the Arizona copper mining industry including locations and production statistics (Attachment 7). The industry has produced almost 2 billion pounds of copper with a value of $6.9 billion. He described the economic impact in Arizona (Leaming Report, Attachment 8). He explained that the industry is performing as stewards of the land, even though less than one-quarter of one percent of Arizona land is mined. He identified for the Members some of the trends the industry is following, expansion opportunities in Arizona, and the reopening of the mine in Miami.
In response to questions, Mr. McMillan explained that Arizona taxes on the industry are not out of line, but that regulatory costs are very high in this country. Representative McGuire commented that regulation in the mining industry is a huge cost that discourages the “little guy.”
Ms. White described various reclamation projects and distributed information to the Members (Attachments 9, 10, and 11). She explained voluntary reclamation projects (VRPs).
Mr. McMillan stated that he is looking forward to doing more mining in Arizona. Mr. Hart commented that the mining industry can contribute to pulling Arizona out of this current economic downslide.
Sydney Hay, Arizona Mining Association, discussed the Leaming Report (Attachment 8) in more detail. She informed the Members that this Report has been produced every year for the past 35 years; she stressed that the copper industry posted over $10 billion of economic impact for Arizona last year. Ms. Hay also distributed the following information:
Adam Hawkins, Resolution Copper, distributed an impact report from his company (Attachment 15) which supports the development of a deep underground mine located near Superior which will produce enough copper to meet 20 to 25 percent of the domestic demand for copper and will be in operation over a half-century. He described for the Members a VRP that Resolution Copper will undertake at the old Magma Mine site, which is over 100 years old. He discussed cooperation with ADWR, as well as other safety and regulatory compliance issues.
Representative McGuire inquired if there has been progress on the land exchange. Mr. Hawkins replied that Resolution Copper in 2005 introduced legislation for a Congressional land exchange which is stuck in Washington D.C. right now.
Co-Chairman Jones stated that the following two Agenda items would be covered in the next meeting, which will also hear input from the stakeholders:
· Discussion of the need of statutory continuance for the Ad Hoc Committee on Mining Regulations for continuing oversight of the mining industry
· Discussion concerning the Mining Department and Mining Museum and whether they need to be separate entities, continue under a different model or remain the same
Without objection, the meeting adjourned at 4:07 p.m.
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Jane Dooley, Committee Secretary
November 16, 2009
(Original minutes, attachments and audio on file in the Office of the Chief Clerk; video archives available at http://www.azleg.gov)
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AD HOC COMMITTEE ON MINING REGULATIONS
November 2, 2009
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