by William M. Kelly
Chapter 2: Aggregates in New York
Construction aggregates are the most widely used commodity mined in New York. These are hard, inert materials capable of forming a stable mass either by compaction or with the addition of portland or bituminous cement. When mixed with a cementitious binder, the aggregates comprise from 80 to 95 percent of the finished product. When used in their natural form, for example, for road base, they are 100 percent of the final mass (Herrick 1994). The main sources of aggregates in New York are crushed stone, sand and gravel, and recycled aggregates (concrete and asphalt). Secondary aggregates, in the form of blast furnace slag or recycled tires, are or have been used but are of minor volumetric importance. Recycled and secondary sources of aggregate are insufficient in quality and quantity to satisfy all of New York’s aggregate demand. Consequently, it is essential to maintain primary sources of construction aggregates.
For the past decade, construction aggregates have amounted to roughly half of the total value of mineral production in New York (Table 3). Demand is driven by the construction industry, which itself reflects the state of the economy. In 1999, crushed stone and sand and gravel comprised 42 percent of total value of state mineral production. This rose to 55 percent before dropping to 48 percent during the economic downturn caused by the recession of 2003. The value of construction aggregates rose to 50 percent of total by the mid-2000s and was 53 percent according to the most recent figures (2007) available (U.S. Geological Survey 2001, 2004, 2006, 2007). The southern Hudson River Valley region and Long Island are the largest consumers of both sand and gravel and crushed stone.
Value of Construction Aggregates and Percentage of Total Value of New York Mineral Products. (Source: U.S. Geological Survey.)
The number of mines and permitted reserves in New York is declining. Beginning in the 1990s, the trend in the industry has been a shift, particularly in sand and gravel operations, from small mining operations, often “family-run,” to larger, consolidated activities that involve fewer, larger companies. This is driven by economies of scale, cost of capitalization, and by governmental requirements for detailed studies of environmental and other impacts. Many small firms with limited initial investment capital are being eliminated. Figure 10 shows the trend in the number of permitted mines in New York for the past fifteen years.
Trend in the number of permitted mining operations in New York since 1994. (Source: NYS Department of Environmental Conservation Division of Mineral Resources Annual Reports: http://www.dec.ny.gov/pubs/36033.html.)
The costs of mining in New York, which in part drive the downward trend in the number of mines, are varied. Capitalization, land acquisition, and permitting costs have increased greatly in the recent past. Permitting costs can equal half of the overall costs. Included in this category are legal fees; engineering and geological analysis; and interpretation, drilling, and specialized studies of acoustics, viewscape, vehicular traffic, wetlands, wildlife, cultural resources, air quality, and seismic (blasting) impacts. In the mid-1980s, a permit for a medium-sized (≈60 acres) mine could be obtained for as little as $5,000 to $10,000 and higher. Currently, permitting costs for a similar mine are $50,000 and $100,000. In the 1980s, a mining permit could be obtained in a year or less. At present, the time between submission of an application for a mining permit and the issuance of the permit can be lengthy, and can extend into years in extreme cases.
The New York Court of Appeals has recognized the high cost of establishing a mine. Commenting in a legal decision on a western New York mining operation, the court held: “Indeed, in light of the stringent requirements imposed by the Mined Land Reclamation Act, such costs frequently, if not invariably, run into the hundreds of thousands of dollars or more, and represent a significant portion of the investment necessary for a landowner to devote real property to quarrying” (Glacial Aggregates LLC v. Town of Yorkshire 2010). After the investment of potentially large amounts of money in the application process for the mining permit, mining companies have no guarantee that they will be successful. Either the State of New York or the courts may find reasons to deny the permit. For example, in 1997, a Massachusetts company expended $600,000 on permitting activities for a crushed stone mine in Rensselaer County. The administrative law judge who oversaw the project recommended issuance of the permit based on the facts but the permit was denied (NYSDEC 1998).
Costs associated with permitting a large mine are considerably greater than those cited above. On average, the permitting process for a large mine in New York will cost approximately $2 million. For example, a company based in Erie County spent over $2 million during the permitting process for a sand and gravel mine that would ultimately affect 400 acres over a 100-year life-of-mine. A Vermont firm spent $2 million in acquiring permits for a mine in Rensselaer County in 1995. A Warren County company expended between $3 and $4 million for a permit to operate a 190-acre crushed stone quarry in Washington County. In addition to these costs, mining companies must finance land acquisition, development, and equipment costs. At current prices, a single-wheeled loader of large capacity can cost $1 million and a truck for haulage $500,000. The processing plant, used to clean and sort sand and gravel or crushed stone aggregate, averages $2 to $3 million and can cost up to $7 million for state-of-the art equipment.