J. Steven Gardner; An interview with the 2015 SME President

"What is your assessment of the minerals business?My experience with mining has been primarily in the coal sector until about 10 years ago, when I also became heavily involved in the aggregates and industrial minerals sectors. I have also had peripheral involvement through family and partners in the gold sector, with just enough exposure to gold to become fascinated. In 1994, I visited Ghana and considered the possibility of taking an expat assignment at a surface gold mine that had just been started.It is not news that the coal sector in this country has suffered tremendously in recent years. Especially hard hit is the central Appalachian region, where a number of factors combined have had a devastating effect on production, jobs and the economy. These factors include federal regulations affecting coal production and use, higher production costs and decreasing market share of Appalachian coal by the switch from lower sulfur coal in favor of lowercost, higher sulfur coal from the Illinois Basin, as utilities have installed scrubbers to comply with Phase II of the 1990 Clean Air Act Amendments. Nationally, the lower cost of natural gas has been a huge factor affecting coal use. In Kentucky, for example, which exports to other states around 70 percent of its coal, those markets are disappearing, as utilities close coal units in favor of natural gas. This is a structural change in the electricity market, and one that will become more pronounced as federal greenhouse gas regulations are implemented.We often hear the phrase, "the war on coal." While there are certainly a number of market factors affecting coal production and use, this phrase captures a different element that is all too real. The attacks have come from environmental activist groups for many years; from some in the media and, in the last few years, from a White House administration that believes strongly in alternatives to coal. Then, there really is an alternative to coal in the form of the previously untapped unconventional gas reserves that allowed utilities to move away from coal.Coal mining will continue in this country. In fact, it appears that our production is holding fairly steady at about a billion tons a year. And predictions that I have seen indicate this will continue for the next few years. What impact the Environmental Protection Agency’s Clean Power Plan will have beyond 2020 is another question.What do you feel is the future of the minerals industry - near term and longer term?Our society depends on the future of minerals in this country being strong. Near term, we are going through some of the typical cycles. Having also been involved in aggregates during the last few years, the business follows government infrastructure projects, such as highway construction and public and private sector development. Those sectors are heavily dependent upon government spending and a strong economy. Increased spending in those sectors, which appears to be on the horizon, should provide additional market shares for aggregates."