Friday, March 30, 2007

Highways on the rise


There were a few bright spots in the construction market last month. "Total construction spending rose modestly in February, but that understates the sizzling gains in most categories other than single-family homebuilding," said Ken Simonson, chief economist for The Associated General Contractors of America. Simonson was commenting on the March 30 construction spending report from the Census Bureau. "Total construction spending rose 0.3 percent in February, seasonally adjusted, following two months of decreases," Simonson said. "That masks a 1.5 percent jump in nonresidential spending, a 2.7 percent increase in residential improvements, and no change in new multifamily construction. Those gains outweighed the freeze in new private single-family construction, which tumbled 2.9 percent for its 11th straight decrease. Compared to February 2006, private nonresidential construction was up 16 percent, public construction was 10 percent higher, residential improvements climbed 17 percent, multifamily edged up 2 percent, but new single-family construction was off 28 percent. The two big public categories--highways and streets, and education--accounted for a bit more than half the public total." In February, highway construction was 11 percent higher than a year before, and educational was up 7.6 percent, similar to the 2006 pattern. The next largest public category, transportation facilities, jumped 17 percent. "For the year, public construction should continue to rise, but some contracts will be delayed because materials costs are likely to push bids beyond the level that agencies had budgeted for," said Simonson. Your comment?

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Thursday, March 29, 2007

It's electric


It's electric! Caterpillar's mining division plans to start showing electric haul trucks to top customers as soon as later this year, and to introduce them commercially in late 2008, according to the company. "We have pilots running now. We're still a little ways away from delivering a commercial truck," said Chris Curfman, president of Caterpillar Global Mining. "We're going to be looking to the MinExpo in September 2008 for some fairly aggressive introductions." Competitor Komatsu already has an electric haul truck on the market, which it developed by forming a joint venture with a Mitsubishi subsidiary. Caterpillar is developing its electric trucks in-house. No word yet on whether or not the company will tarket the aggregates industry with the trucks. Your comment?

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Monday, March 26, 2007

Cement usage to decline


How things change in a year. According to the most recent forecast from the Economic Research department at Portland Cement Association, the on-going correction in residential construction is expected to drag down overall 2007 construction activity. Despite a record 18 percent growth since 2003, cement consumption this year is projected to decline by 1.5 percent. Chief economist Ed Sullivan anticipates gradual gains throughout the second half of 2007, but not large enough to offset the year's first half weaknesses. The increased construction activity that is expected to begin mid-year, however, will carryover to 2008 and contribute to an estimated 3.9 precent growth in consumption. Gains in nonresidential and public construction, says Sullivan, will not be large enough to offset the harsh downward trends in the residential market. Sullivan's 2007 projection reflects a nearly 6 million metric ton decline in residential cement consumption levels compared to 2006. "Single-family start activity and residential cement consumption will not recover until the existing inventory level of homes is reduced," he says. Your comment?

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Friday, March 23, 2007

Florida's future


The economy of Florida consumes an estimated 143 million tons of aggregate materials each year. Approximately, 120 million tons are produced from mines in the state, 8 million tons are imported from U.S. domestic sources, and 5 million tons are imported internationally. But there are problems on the horizon in the aggregates supply chain, according to a recent Florida Department of Transportation study. For example:
* Existing mining permits have been challenged in the Lake Belt. The output from sources around the state continues but the quality is declining for many engineering purposes.
* Florida limestone formations outside the Lake Belt are generally not as high in quality.
* Both large and small land developments are over-running the lands where limestone and sand deposits are found.
* Local land-use decisions fueled by homeowner and neighbor's complaints have made planning and permitting new mines extremely costly or impossible.
* Even expanding existing mines is impossible in some areas because the reserve lands have been hemmed in by development.
* The mega-mine complex in Lee County has seven years of remaining capacity and when it closes, the aggregates that it supplies to all of southwest Florida will need to be trucked in from other locations at a much higher price.
The state will certainly be setting off alarm bells in the near future if these issues are not resolved. Maybe Vulcan, which just purchased Florida Rock, will provide enough extra clout in the state to get the ball rolling in the right direction.

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Thursday, March 22, 2007

New MSHA penalties unveiled


Well, grit your teeth and bear it. Today, MSHA published its final version of the 30 CFR Part 100 “Criteria and Procedures for Proposed Assessment of Civil Penalties” rule in the Federal Register. Click here to read the official press release. The penalty change was a requirement of the Mine Improvement and New Emergency Response (MINER) Act, which was signed into law on June 15, 2006.
In the final rule, MSHA states that the penalties are an “across-the-board” change from the existing regulations. The rule goes on to state that “penalties increase more significantly for large mine operators, operators with a history of repeated violations of the same standard and for operators whose violations involve high degrees of negligence or gravity. The higher penalties in the final rules are intended to increase the incentives for mine operators to prevent and correct violations.”
The final rule implements the following requirements of the MINER Act:
* A civil penalty of $5,000-$60,000 for failing to report an incident/accident which poses a reasonable risk of death within the first 15 minutes of occurrence;
* A minimum penalty for 104 (d)(1) (or Significant & Substantial) of $2,000;
* A minimum penalty for 104 (d)(2) (or Unwarrantable Failure orders) of $4,000, and;
* The addition of “flagrant violations” with an assessed civil penalty of not more than $220,000.

The final rule is effective April 23, 2007. Your comment?

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Wednesday, March 21, 2007

Field hearing


According to NSSGA, The Congressionally chartered National Surface Transportation Policy and Revenue Study Commission held a field hearing on Capitol Hill March 19 to study ways to reduce traffic tie ups and future ways to fund new road, bridge and transit projects. At the hearing, members of the commission, including U.S. Secretary of Transportation Mary E. Peters, heard testimony from various national transportation stakeholders. The day-long hearing consisted of seven panels that included groups such as state and local elected officials, transportation system planners, highway users, transportation providers, infrastructure providers, unions and policy analysts. The next field hearing is scheduled for Chicago on April 18 and 19. Your comment?

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Friday, March 16, 2007

Baseball's billionaire quarryman


It's spring training time, so how could we resist a story that starts like this: "Matt White, a journeyman pitcher trying to make the Los Angeles Dodgers, could become baseball's first billionaire player. It has nothing to do with his arm. He owns a rock quarry in western Massachusetts." Click HERE to read the rest of the story. Your comment?

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Thursday, March 15, 2007

Construction Materials PPI


"Construction materials costs are rising faster than producer price reports suggest," said Ken Simonson, Chief Economist for The Associated General Contractors of America (AGC). "Steel is getting especially hot and diesel is adding fuel to the inflation fire." Simonson was commenting on the latest producer price index (PPI) report from the Bureau of Labor Statistics. "This year, as in 2004, price hikes for other materials, such as diesel fuel and asphalt, are going to hit construction especially hard," he said. The retail price of diesel fuel soared 21 cents a gallon in the month since the PPI data was collected, according to weekly surveys by the Energy Information Administration. "Asphalt prices, which jumped 14 percent at the refinery level last month, will soon rise for paving and roofing contractors," Simonson predicted. "Paving asphalt also uses a lot of aggregate, or crushed stone. That PPI jumped 1.9 percent in February and 3.9 percent in the past three months. Road construction will bear the brunt of these increases, because highway and bridge contractors use so much diesel, asphalt, steel for bridges and guardrails, and concrete, which also is rising in price." Your comment?

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Wednesday, March 14, 2007

Fatality!


MSHA is reporting that on February 19, 2007, a 50 year-old truck driver (working as a car dropper), with 16 years mining experience, was fatally injured at a crushed stone operation. He was moving two loaded railroad cars, by gravity, from the plant area to the main siding. The cars struck a 35-ton haul truck as it crossed the tracks, pinning the car dropper between the lead rail car and the truck. The truck driver received only minor injuries. Your comment?

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Friday, March 09, 2007

Overpriced down under?


Big doings down under. Australian regulators have apparently cleared Cemex's $11.7 billion hostile takeover bid for Rinker Group Ltd. According to reports, Australia's Foreign Investment Review Board, which assesses proposals by foreign companies to invest in the nation, has approved the lucrative bid. Cemex has offered $13 a share for Sydney-based Rinker, which it has targeted for its businesses in Florida, Arizona and Nevada. The deal would make it the world's largest cement maker. If Cemex gets Rinker, it would be the second major Florida-based aggregates producer to be acquired, following Vulcan's purchase of Florida Rock. Your comment?

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Wednesday, March 07, 2007

Cemex 100th Anniversary


Just read this news story: "CEMEX celebrated its 100th Anniversary recently with a large dinner party at their headquarters in Monterrey, Mexico. An enormous 350 x 60 x 28 foot tent, purpose built for the occasion, was decorated in special gobo designs from 50 MAC 2000 Profiles and 100 conventional lights. The projected images were created with high-resolution greyscale glass patterns from Apollo and included several images each of clouds, trees, and leaves. Lighting designer for the event was Chicago-based Michael Dalton of Dalton Design whose concept "was to create a very organic, natural and warm feel for the function." The images changed every 1/2-hour and were programmed by Peter Moore of Lightspeed of Miami. All lighting equipment and crew for the event were supplied by Musica Moderna Iluminacion of Mexico City. The event was produced by Charles Marto of EVI of Atlanta." Is this a construction-materials event or a fashion show? Your comment?

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Friday, March 02, 2007

World of Aggregates


As expected, NSSGA announced at the convention that its first World of Aggregates show would be held in March of 2009 in Orlando. So, we're talking spring break, spring training, and a nice way to spring into action with their first foray into major expo territory. The location is certainly safe, second after Las Vegas for guarateed show traffic. Betweeen now and then, there is a lot of work that hass to be done to ensure that this show is a success. Your comment?

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Thursday, March 01, 2007

Making noise in Illinois


At the NSSGA convention in San Francisco, The Illinois Association of Aggregate Producers, headquartered in Springfield, was honored as NSSGA's State Association of the Year for 2006. "This recognition is NSSGA's way of displaying how highly we value and respect the work of our state counterparts and to reaffirm that we can achieve much more for the aggregates industry and the American public by working together than we can by working alone," said NSSGA President and CEO Joy Wilson. The Illinois association, I can attest, does a great job serving its members, many of whom have been highlighted in Pit & Quarry, and they do a great job keeping us informed of their activities. Congratulations to them on this award. Your comment?

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