Chevron Mining

Walking the talkOperational excellence is a cornerstone for the way Chevron Mining does business, president and CEO Mark Smith explains to Gary Toushek. Chevron Mining Inc., headquartered in Englewood, Colorado, was created in 2007 as a subsidiary when parent company Chevron Corporation merged its mining operationsÔÇöthe former Pittsburg & Midway Coal Mining Co., which has been a subsidiary of Chevron for many years, and Molycorp Inc.ÔÇöinto one unit.  P&M, founded in 1885, was one of the oldest continuously operating mining companies in the US, with two surface coal mines in Wyoming and New Mexico and an underground coal mine in Alabama. Molycorp, formed in 1920, operated an underground molybdenum mine in Taos County, New Mexico, and a surface rare earth mine in Mountain Pass, California. It was part of Unocal, acquired by Chevron in 2005. Also through the Unocal acquisition that year, the corporation acquired Chicago Carbon Company, which operated a petroleum coke processing plant in Lemont, Illinois. The petroleum coke is used primarily in the making of aluminum, molybdenum is used in making steel alloys, and the rare earth mine produces lanthanides, which are used in communications equipment as well as aerospace, military applications and hybrid cars. ÔÇ£The merger under the Chevron brand has been a positive move, especially in terms of attracting the kind of people we like to recruit,ÔÇØ says Chevron Mining president and CEO Mark Smith. Most of ChevronÔÇÖs coal goes to steam-powered generating plants. ÔÇ£One of our mines is what we call a ÔÇÿmine to mouthÔÇÖ setup, where the power plant is located immediately adjacent to the mine; another mine is about an hour away from another plant by train; the third mine is a few hours away from a plant by train. We try to take advantage of the geographic niche we work in, serving our industrial and power customers on a local basis. We donÔÇÖt do much spot market or international trade.ÔÇØ One of his chief concerns about todayÔÇÖs energy market in the US is the importance that coal plays on the demand side, versus the perception the public has of the coal-burning industry. ÔÇ£ItÔÇÖs probably my major concern today,ÔÇØ Smith says. ÔÇ£Coal supplies about 50 percent of electricity produced in this country. Forecasts by various government agencies predict that by 2030 the demand for electricity will grow by about 60 percent. What bothers me is the negative perception that Americans have about coal. Can any other energy source come in and fill that gap in demand? I think we need to address this factually and head on, to make sure that everyone understands that we will need every form of energy available in the US, because relying on just one form or another wonÔÇÖt do it. WeÔÇÖll need a combination of coal, oil, natural gas, nuclear, biofuels, wind, solar, hydrogen fuelÔÇöeverything out thereÔÇöto provide enough energy. Conservation is also something weÔÇÖll need more of, to make sure there is enough energy.ÔÇ£The two aspects of the publicÔÇÖs perception that continue to hurt us are the environment and safety. We at Chevron Mining are absolutely committed to walking the talk, on balancing environmental issues with the safe operation of the mines.ÔÇØ He refers to a company initiative called Operational Excellence, which calls for implementing systematic approaches to dealing with health, safety, reliability, efficiency and environmental issues. This year to date there has not being a single lost-time accident in any of the mines or the coke plant. ÔÇ£We donÔÇÖt do short-term approaches,ÔÇØ says Smith. ÔÇ£Our Operational Excellence program encourages and supports our 1,500 employees doing a job properly and consistently. I am exceptionally proud of our safety record, because it takes every individual to make it happen.ÔÇØ When he goes out into the community for speaking engagements to various groups and organizations about the positive aspects of coal as an energy source, Smith welcomes interaction with audience members, even those who ask about sulfur and greenhouse gas emissions. ÔÇ£ThereÔÇÖs typically more than one critic in the audience,ÔÇØ he jokes, ÔÇ£and I think dialogue is very important, with every stakeholder, not just those who support the coal industry. We are advocates for developing technology that deals with every issue. We want to do it right. At Chevron weÔÇÖre absolutely committed to technology research. For example, we have a group of 30 or more PhD scientists at our corporationÔÇÖs research facility working exclusively on dealing with carbon dioxide emissions. ÔÇ£We also have a partnership with Penn State University; itÔÇÖs a $17.5 million commitment in which our research scientists are engaging with theirs to develop new technologies relative to greenhouse gas emissions and more efficient burning and use of coal. There are several other examples; these are two of our larger initiatives. We believe there are solutions, but they wonÔÇÖt happen overnight, and I suppose weÔÇÖre at the publicÔÇÖs mercy by asking for time to develop new methods and technologies for a cleaner environment.ÔÇØSmith is also concerned about what he calls ÔÇ£a real demographic issueÔÇØ in the mining industry, namely, trying to recruit qualified, skilled people to replace those retiring. ÔÇ£I think itÔÇÖs across many industries in the US, but we certainly feel it in a pronounced way at Chevron Mining. Sixty-one percent of our employees will be eligible for retirement in the next ten years, and weÔÇÖre doing everything we can to make sure that not only are we hiring new people to become part of our family, weÔÇÖre also trying to ensure that through the systematic approach to the way we do business, we capture the institutional knowledge. When you have veterans with 30 years of devoted service who have been passionate about their jobs, and they walk out that door to enjoy their retirement, their knowledge and experience leave with them. ÔÇ£So our Operational Excellence program is geared to capture that knowledge long before retirement day, so that our new recruits have the opportunity to be trained and ready to go, passing the torch, so to speak. Some of the more technical skills of mining are more difficult to find, such as mining engineers, mechanical engineers, electricians, and so on. We find that we have to develop in-house training programs for apprenticeship and certification processes, and allow education to occur on the job at our expense. It seems to be working well so far.ÔÇØ┬á Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;}  *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *   ┬áFirst published May 2008