2017 Message from the CEO
25 Sep 2018
Doe Run is proud to be a natural resource company with more than 150 years of operation and a pivotal player in the circular economy of lead batteries.
We provide raw materials (concentrates) to produce lead, copper and zinc metals, and recover metals (lead) by recycling nearly 13.5 million lead batteries each year. Lead batteries are an essential energy tool that the world depends on. We recover and recycle the lead from spent batteries, and return that valuable resource to future batteries in a closed-loop, potentially infinite cycle.
Doe Run’s ability to contribute to the battery lifecycle successfully depends on our ability to balance social, economic and environmental responsibilities. Both our long-term and short-term decisions are made with these principles in place. We believe this makes us a stronger, more competitive business.
While our work is satisfying, it’s not without challenges. In 2017, the lead industry recovered from a two-year period of low lead prices due to slower economic growth in China. As prices recovered, we added back jobs and capital projects that had been reduced or cut, and expanded our exploration and underground mine development activities.
Despite the lower prices in 2015 and 2016, we continued work on our environmental projects-spending more than $192 million between 2015 and 2017. This includes building the last of five high-tech water treatment facilities at our mines and mills, and remediation work in the tri-state area of Kansas, Missouri and Oklahoma.
We’ve continued to complete our environmental project responsibilities, while still making critical investments in the business and in keeping our workers safe. In 2017 alone, we had nearly $58 million in environmental spending, while also paying $9 million in government royalties, $6 million in property taxes, and $21 million in capital spending to help sustain our business and maintain our safety standards. The fact that environmental regulatory spending is such a big part of our expenditures plays a major factor in our ability to spend money on new projects that make us more competitive and prepare us for the future.
Leading the Way in Employee Safety
Protecting our workforce is an ongoing strategic initiative and a responsibility I take personally. We measure, monitor and manage workforce safety primarily through good hygiene and safe working habits.
In 2017, our workforce achieved a new record low average blood-lead level for our exposed workers of 9.59 micrograms of lead per deciliter of whole blood (“μg/dL”). This is well under federal Occupational Safety and Health Administration (OSHA) requirements, which require a worker to be removed from exposure to lead if their blood-lead level exceeds 53 μg/dL.
Working safely is another way we protect our employees. Our employees achieved several safety awards in 2017:
- Buick Mine and Mill achieved the highest national honor for mine safety – the Sentinels of Safety Award.
- Brushy Creek Mill surpassed 10 years with no lost-time accidents.
- Seafab Metals Company, our manufacturing subsidiary, earned its 18th “Perfect Record Award” in a row from the National Safety Council.
We are proud of our safety record and the measures we have in place to protect employees, and continue to evolve to meet tightening regulations. In 2017, we were required to replace functioning designated points of safety chambers located in our mines with new refuge chambers, an investment of $640,000. We are required to install additional chambers in the coming year.
The Mine Safety and Health Administration required these new chambers to meet the same regulations required of coal mines. Our mines are significantly different than coal mines because hard-rock mineral mines like ours do not have the same fire risks as do coal mines for two reasons: they do not contain explosive methane gas, and the minerals and rock in our mines are not combustible, like coal. While the new chambers certainly address safety concerns, and are likely over-designed for hard-rock mines, changes in regulatory interpretation of various rules affect our ability to use limited resources to sustain our business. This is something we work hard to overcome.
In 2017, our workforce achieved a new record low average blood-lead level for our exposed workers of 9.59 micrograms of lead per deciliter of whole blood (“μg/dL”). This is well under federal OSHA requirements, which require a worker to be removed from exposure to lead if their blood-lead level exceeds 53 μg/dL.
Investing in the Future
Part of being a responsible business is understanding the needs of your communities. We conducted another community survey in 2017 to gauge our communities’ interests.
We’re pleased that respondents rated our ability to meet our environmental obligations as one of our top three performing areas. One common concern expressed was taxation. Doe Run has appealed certain local property taxes, and this appeal process has taken far longer than expected. We look forward to a decision that provides greater clarity, so that future disputes may be avoided. We are committed to paying our fair share and operating in a prudent manner, utilizing our financial resources appropriately, so that we can continue to provide jobs and economic benefits to the communities in which we work for years to come.
Our community members also noted the greatest issue facing the community is availability of good jobs. Mining jobs in Missouri – including Doe Run’s – outperform average Missouri wages. We increased our staff in 2017 and continue to look for the right talent to help us meet growing demand for minerals.
Our hiring decisions are based on a desire to improve how our business operates. We have to ask ourselves each day, how can we do something better, and what can help us do this?
One way Doe Run looks to improve its competitiveness is through effective use and management of current and historical exploration data. We put new data tools in place to help us analyze large volumes of data to improve our exploration results. Today, mining data is as critical as mining ore, if you intend to be prepared for the future.
Doe Run continues to invest in our regional exploration programs to ensure we have ore reserves for the future. Software programs provide three-dimensional modeling and mine scheduling to help us better understand the ore resource and determine the best development plans. This is critical for life-of-mine planning and securing our future.
Our research and technical development team continues to explore how we can get more value out of the minerals in our own backyard. We have a number of technologies in various stages of development that can help us with this.
We believe the future of mining will look quite different than how we mine today. New technologies that increase automation are already coming into play. Our future workforce will require strong science, technology, engineering and math (STEM) backgrounds, as well as analytic thinking. For this reason, we sponsor several university scholarships and fund STEM education in K–12 through support of Project Lead The Way.
Our future workforce will require strong science, technology, engineering and math (STEM) backgrounds, as well as analytic thinking. For this reason, we sponsor several university scholarships and fund STEM education in K–12 through support of Project Lead The Way.
Paving the Path for Lead Batteries
Finally, industry analysts continue to have a positive outlook on the lead industry. Although recycling lead meets a large percent of the domestic demand, new uses of lead in batteries for renewable energy storage mean we need more lead than can be met through recycling alone.
Lead batteries meet 75 percent of the world’s requirements for rechargeable energy storage. This safe, dependable battery starts approximately 1 billion vehicles every day, and supports energy storage demands for renewable energy, grid stability and uninterruptible power. And yet, some policymakers and regulators do not have a modern-day view of lead batteries’ benefits. For this reason, we joined the Advanced Lead Battery Communication Initiative with other lead producers, recyclers and battery manufacturers to educate key stakeholders of the success story of lead batteries. Read more about it here.
I invite you to learn more about lead batteries and their role as the essential, sustainable, innovative and safe energy storage device of the future at essentialenergyeveryday.com. I also encourage you to explore this sustainability report to learn how we at Doe Run strive to meet our commitments to be a good neighbor.
Jerry L. Pyatt
President and Chief Executive Officer