Untitled - The Doe Run Company

The Lead Belt Heavyweight
Amid challenges, Doe Run’s foundation is solidly rooted 1,200 feet underground.
BY JACOB LUECKE
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MISSOURI BUSINESS
Working around the clock, the Buick Mine’s
100 underground workers produce 6,500 tons of
ore daily. All of this material is lifted to the surface for milling, which extracts 300 tons of dark,
deceptively heavy powder each day, resulting in
some of the world’s purest lead concentrates.
On average, lead concentrates contain approximately 45 to 50 percent lead, but Doe Run’s lead
concentrates far surpass the industry average,
containing more than 75 percent lead, says Steve
Batts, general manager of Doe Run’s Southeast
Missouri Mining and Milling Division.
Missouri lead has helped Doe Run grow into
one of the world’s top lead producers over its 150
years in business. The Buick Mine and five other nearby Doe Run mines comprise the world’s
second largest lead mining district.
But even with the company’s long track record of success, Doe Run today finds itself in
an era of transition. The company had to alter
its business model following the 2013 closure of
its Herculaneum primary lead smelting facility.
It’s also facing record costs from increasing environmental regulation.
Back underground, Vaughn surveys the work
ahead for the next shift at the Buick Mine. After
more than 50 years of mining here, the veins of
lead that glimmer against his flashlight beam
are thinner than they used to be—another issue
confronting the company.
Despite these challenges, it’s clear Vaughn
and the Doe Run workers around him have no
problem tackling a tough job.
“It’s not easy, and that’s one thing I like about
it,” he says. “You have to chase the ore. You have
to fight for it.”
THE VIBURNUM TREND
Route KK bisects the Salem District of the Mark
Twain National Forest. Scenic woodland vistas
line the road. The population here is sparse, but
the traffic isn’t.
Several large trucks pass through the forest
here each minute, hauling lead concentrate.
COURTESY OF DOE RUN COMPANY
T
hree miles into Buick Mine, Joe Vaughn
points his flashlight at a rock wall. A vein
of silvery-grey ore sparkles in the light.
“That’s the lead,” says Vaughn, mine superintendent at Doe Run’s Buick and Brushy Creek
Mines. “That’s what we’re after.”
Vaughn is 1,200 feet underground, nearly a
quarter-mile down. The wall in front of him is
pocked with freshly drilled holes that are filled
with explosives. An intricate web of ignition
wire dangles from the rock face.
Soon, a trained worker will detonate the wall.
Loaders will then lift the fresh boulders into
40-ton dump trucks that haul the ore through
miles of pitch-black tunnels until they reach a
surface shaft.
This is what modern mining looks like at the
Doe Run Company.
“I think lots of people still expect to see thousands of miners down here with picks and
shovels,” Vaughn says. “However, we are highly
mechanized.”
Doe Run's lead
concentrates average
75 percent pure lead.
The industry average is
approximately 45 to 50
percent lead.
Doe Run incorporates modern technology into its mining
practices. The company operates mines in Missouri's
Viburnum Trend, which is renowned for its high-purity
deposits of lead ore.
It’s a strong hint that there’s an industrial operation happening somewhere amid and below
the pines.
Doe Run began exploring the area for lead in
the 1950s and began mining it in the 1960s. The
district has been dubbed the Viburnum Trend.
Over the decades, these mines have produced
approximately 90 percent of the US lead supply.
They’ve also been critical to the local economies
in the region.
Doe Run employs more than 1,300 people
overall, including its headquarters in St. Louis. The company’s average total compensation is more than $70,000—well beyond what
most residents can earn in the rural communities where Doe Run hires its mine and
mill workers.
“Doe Run has been important economically to
our area for decades,” says Catherine Wynn, president of the Salem Area Chamber of Commerce.
“The company not only provides good jobs with
excellent benefits, but they do a lot of business locally that supports small business and provides
even more jobs. To say Doe Run is important to
our community is an understatement."
Companywide, Doe Run reports that it spends
$143 million in labor costs for Missouri residents
and disperses $9 million annually in royalty payments. The company estimates its economic
impact in Missouri is $1 billion a year. That economic impact has seen a major shift recently.
Just two years ago, most of industrial trucks
on Route KK were hauling lead concentrate
northeast to Herculaneum, where Doe Run’s
primary smelter refined the product. Doe Run
would then sell this refined lead to other companies, often for use in lead-acid batteries.
But in late 2013, Doe Run closed the Herculaneum smelter under an agreement with the
Environmental Protection Agency. The EPA had
targeted the smelter citing violations of the federal Clean Air and Clean Water acts.
Doe Run isn’t alone in feeling the effects of
increased regulations. The entire mining industry is facing similar challenges:
“Regulations, at least from this administration, are playing havoc with our industry,” says
Luke Popovich, vice president of external communications at the National Mining Association.
“A series of recent and pending regulations on power plant emissions from EPA
have already destroyed significant coal-fired
capacity, and more forced plant retirements are
on the way from EPA’s greenhouse gas reduction
rule. Our mineral and metal mines are stymied
by a grossly inefficient permit approval process
that typically requires 7 to 10 years for a decision.”
In Herculaneum, hundreds of workers lost
their jobs when the smelter closed. Doe Run
tried to blunt the impact to the local economy by
redeveloping part of the smelter property into
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25
Increasing
environmental
regulations have
forced Doe Run to
take a hard look
at its business. In
2013, the company
shut down its
Herculaneum
smelter.
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MISSOURI BUSINESS
a river port and commerce park. The company
also invested in local schools, including spending $500,000 on solar panels for Herculaneum
High School.
“Our history and our success are intertwined
with the history and growth of the city of Herculaneum,” Jerry Pyatt, Doe Run president and
CEO, says. “Construction of the smelter ignited
growth that led to a vibrant community, and because of our success, we were able to fund fire
stations, bridges, ball fields, railroads, educational opportunities, parks, and a golf course.
We will continue to honor that relationship
with our Herculaneum community.”
Inside Doe Run, the loss of the smelter caused
the company to revise its business model and
drastically reroute its supply chain.
Today, when trucks haul concentrates away
from the Doe Run mines along Route KK, they
now drive southeast toward Cape Girardeau,
where the concentrates are loaded onto barges
bound for New Orleans. From there, the concentrates are shipped overseas to smelters in
places such as Europe and Asia.
“You have to chase the ore.
You have to fight for it.”
Above: Crews transport blasted ore to the shaft area using
eco-friendly, low-emission biodiesel haul trucks. Right:
The Buick Mine produces 6,500 tons of ore a day.
—Joe Vaughn
“North America has had to adjust to the fact
that the United States no longer produces primary lead metal,” Pyatt says. “Imported lead is
predominantly secondary or recycled lead—not
the high-purity primary lead that Doe Run was
able to produce.”
WINNING THE FUTURE
Doe Run hopes to eventually reverse this trend.
The company made headlines in 2010 when
it announced its intentions to build a new type
of lead refinery. This facility wouldn’t create the
sulfur dioxide and lead air emissions that had
attracted EPA scrutiny to the former Herculaneum smelter.
The new plant would use an innovative
technology called electrowinning. Doe Run's
proprietary electrowinning process is a selfcontained, wet chemical process that selectively
dissolves lead concentrates into a solution and
then extracts lead from the solution using an
electric current. The process nearly eliminates
lead emissions.
“We believe our electrowinning process can
transform the global lead industry,” Pyatt says.
“We are aware of no primary lead smelting process that will meet the standard for ambient air
General manager of Southeast Missouri Mining
and Milling Division, Steve Batts, discusses
the daily operations of the mines.
in the United States. We believe the only existing technology that can meet today’s standards,
as well as potential future standards, is the new
electrowinning lead metal process.”
Building an electrowinning plant would allow
Doe Run to get back into the lead refining game.
But despite the promise this new technology
holds, the company has yet to begin construction or even hold a groundbreaking ceremony.
While Doe Run would like to invest in this
technology of the future, the company finds
itself instead spending hundreds of millions of
dollars on environmental compliance.
“Since 2010, we have spent $289 million on environmental expenditures,” Pyatt says. “Our 2016
spending is likely to be the highest on record.”
Doe Run’s environmental expenses include remediating old mining sites and treating the water it uses to comply with standards that, Batts
says, are more stringent than drinking water.
Today, the company says it can’t afford to both
build the new electrowinning plant while dealing
with these regulatory expenses.“Constructing a
full-scale plant—given other regulatory compliance spending requirements—would put our
company at financial risk,” Pyatt says.
Still, Doe Run intends to act on building an
electrowinning plant as soon as possible, even if
it’s not on the immediate horizon.
Despite the delay, Doe Run will likely see
business growth as is. The lead industry expects
to see 6 percent growth annually as people in
developing countries begin driving more vehicles, requiring more lead-acid batteries.
In addition, Doe Run and others in the industry are investing in new lead-based battery
technologies for hybrid vehicles.
Both General Motors and Ford Motor Company recently announced the use of advanced
lead-based batteries in hybrid vehicles. Batts
says the batteries are more affordable and safe
compared to others.
As demand grows, Doe Run expects Missouri
lead to remain a valuable global commodity.
“There is a great legacy behind Missouri’s mining and lead industry and looking to the future,”
Pyatt says. “Lead can play a significant role in
solving the world’s future energy challenges.
“When you consider that lead-based batteries can store energy from solar and wind farms,
start more than 800 million passenger vehicles
on the road today, and are also projected to
power hybrid vehicles of the future, it is easy to
be excited about a mineral we have access to in
Missouri.”
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