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PUBLICATIONS :: NYSM RECORD :: Mineral Industry of the State of New York

cover Mineral Industry of the State of New York 2007–2010

by William M. Kelly


Preface

The ultimate source of wealth and the basis of modern society is the earth. It is said, “If it can’t be grown, it has to be mined,” which implies that all of the goods, and the services based on those goods, that support New York’s standard of living are derived either from agriculture or mining. The Mineral Information Institute currently states that each citizen of New York will be responsible for the consumption of 3.3 million pounds of minerals, metals, and fuels in their lifetimes. In addition to recycled materials, nearly 38,000 pounds of new minerals must be provided every year for the things that each person in the state uses. These minerals are in addition to the approximately 1,000 gallons of petroleum, 7,000 pounds of coal, and 76,000 cubic feet of natural gas consumed per capita annually. However, fuels are not the subject of this report and will not be discussed further. Some of the mineral products needed are exotic and are not part of New York’s natural resources, but many are. Volumetrically, the bulk of the minerals needed to sustain modern life are those used to build things. Crushed stone, sand and gravel, and cement producers comprise over 90 percent of the mines in New York. These products are vital for roads, bridges, buildings, airports, schools, and homes.

Historically, the New York State Geological Survey produced publications dealing with the state’s mineral industry. In the early twentieth century, there were annual publications on the topic. By mid-century these were published less frequently, for instance, every five or more years. For most of the latter half of the century, the Survey cooperated with the U. S. Bureau of Mines to produce an annual review of the mineral industry of New York, published in the Minerals Yearbook, Volume II, Domestic series. With the demise of the Bureau of Mines during the Clinton administration, the Survey continued to work with the U. S. Geological Survey to produce the reports, which are currently published by the federal government.

However, the information provided in the Minerals Yearbook is very limited in scope. This bulletin provides a deeper overview of the mineral industry in New York and a review of the current state of the largest portion of that industry, specifically the construction materials – crushed stone, sand and gravel, and cement. The status of other currently mined commodities is reviewed herein but no attempt has been made to discuss all commodities ever mined in New York. The primary users of the construction materials are the concrete and hot mix asphalt industries. The status of these in New York is surveyed as well. In addition, included here is an investigation of the economic impact of the industry performed by economists at the Center for Governmental Research located in Rochester.

The New York State Legislature recognized the importance of the mining industry in promulgating the Mined Land Reclamation Law (MLRL) in 1975:

The legislature hereby declares that it is the policy of this state to foster and encourage the development of an economically sound and stable mining industry, and the orderly development of domestic mineral resources and reserves necessary to assure satisfaction of economic needs compatible with sound environmental management practices.

A study of the economic impact of New York’s mining and construction materials industry performed by the Center of Governmental Research, an independent nonprofit organization, is included in this report as Appendix 1 and demonstrates the importance of the mining industry to the state and local economies. The mining, concrete, and hot mix asphalt industries contribute over $5 billion annually to New York’s economy. These vital industries are responsible for 30,000 jobs paying above-average wages of $48,000. Total annual wages generated by the mining industry equates to approximately $1.3 billion. In addition, the mining industry contributes at least $101 million in taxes to the state coffers every year.[1] In 2009, permit fees paid by mine operators to the state equaled $4,026,545. The Department of Environmental Conservation holds $190 million in financial security to ensure successful reclamation of the approximately 2,100 permitted mines in the state (NYS Department of Conservation 2009a).

The importance of this industry to the state and local economy is significant and should not be hastily discounted. The direct economic impacts to localities include above-average-wage jobs, a reasonably priced supply of aggregate for municipal highway departments, and property tax revenues. The legislative policy to “foster and encourage the development of an economically sound and stable mining industry” is more important today than ever before.

The mining industry in New York is currently beset by a growing number of issues that are jeopardizing its economic stability and vitality. If left unresolved, these issues, described below, have the potential to produce a profound impact on New York’s future economy and derail the legislative policy set forth in the MLRL.

  • Mining uses are being “zoned out” from local communities that adopt land-use laws prohibiting these uses based upon community pressure and a “Not in My Backyard” mind-set. New York’s mineral resources are finite and mines can only be developed where suitable resources exist. Relatively few geological materials are suitable for construction materials, the main products mined in New York. There are portions of New York where suitable geological resources do not naturally occur. In addition, there are areas where the suitable resources have been depleted or cannot be mined because the reserves have been built on by other uses, the local zoning does not allow mining, or environmental constraints prevent mining.

  • There is an unspoken misperception that mining resources are unlimited or can be imported from more distant locations with no significant economic or environmental impact. Local governments should be encouraged to give sufficient consideration to the importance of mineral resources, the economics of the industry and the need for mines to be located within in a reasonable distance to markets (including municipal highway departments), in the comprehensive planning process.[2] Lack of proper planning for mineral resources has and will result in permanent loss of mineral resources available to future generations, serious shortages, and increased costs of construction aggregate, which will need to be brought in from more distant sources and eventually from outside the state and country.

  • The number of permitted mines has decreased from approximately 2,500 in 1995 to about 2,100 in 2009. This dramatic decrease is largely attributable to prohibitory zoning measures and increased difficulty and costs of obtaining permits, leading to the depletion of existing mines faster than new mines can be permitted.

  • Mining is one of the most heavily regulated industries in New York. New environmental regulations have increased the difficulty and cost of obtaining permits.

  • Public misconceptions of mining, often expressed in the form of a “Not in my Backyard” attitude, are widespread and have led to longer and more costly environmental reviews.

  • Mining companies frequently expend millions of dollars to obtain a mining permit in addition to the millions in capital expenditures in land and heavy equipment needed to begin a mine.

  • Smaller mining companies cannot afford the cost of obtaining and keeping a mining permit and are being bought out by larger companies. This reduces the level of competition, which puts upward pressure on construction material prices.

  • Construction materials must be transported to areas where suitable resources do not exist or are in short supply. There are local shortages of materials; this has gotten worse in the last few years and will become more widespread if appropriate actions are not taken.

  •  As an example of the economic consequences of a local shortage, concrete sand that sells for approximately $8/ton in much of upstate New York sells for up to $25/ton in the New York City area. Concrete sand is one of the most common construction materials and is transported to the metropolitan market from Canada, New Jersey, the Capital District, the Adirondacks, and central New York. The increased cost is a result of the increased transportation distance.

  • New York’s infrastructure is aging and requires significant reconstruction. Increased aggregate costs will reduce the amount of infrastructure work that can be done or will require taxes to be raised.

  • Transporting construction materials for long distances causes unnecessary wear and tear on the infrastructure, which increases the need to raise taxes.

A careful balance needs to be reached between protection of the environment, landowners’ rights, and the need for mining. Like agriculture, mining is a necessity of modern life. Careful and comprehensive planning, including identification, classification, and protection of valuable geological resources, is required to ensure that supplies of mining resources are available to future generations.


William M. Kelly
June 2010


[1] “The Economic Impact of the New York State Mining and Construction Industry,” June 2009, prepared by the Center for Governmental Research for the New York State Geological Survey.

[2] The Economic Impact Study (Appendix 1) found that a decrease of a quarter of the mines in proximity to the NYS Thruway would result in a 42% increase in the cost of construction aggregate, a cost directly attributable to having to transport the resource greater distances. A decrease of one-half the mines would result in a 59% increase in costs.

 






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