1.1 Foundations of profitability
For those who keep their finger on the pulse of the coal-mining industry, a few names become very familiar. It doesnāt seem to matter whether one is reading a journal article spotlighting the most productive coal mines in the industry, browsing a web page recognizing the most recent Sentinels of Safety award recipients, or reading an email about coal mine operations receiving Excellence in Mine Reclamation awards. The same coal mines and coal-mining companies almost always rise to the top.
Coal mining is a business, and staying in business requires making a profit. The National Mining Association (NMA) is the self-proclaimed voice of the United States (US) mining industry in general and the coal-mining industry in particular. Their mission is to ābuild support for public policies that will help Americans fully and responsibly benefit from [its] abundant domestic coal and mineral resourcesā [1]. This is accomplished through being fully engaged in public (governmental) and private (business) processes that impact the mining industry's ability to safely and sustainably extract and process mineral resources in a profitable manner.
The NMA is one of the leading proponents of the CORESafety program, a business partnership among its member organizations, primarily mining companies. This program takes the approach that focusing on mine safety āis the right thing to do,ā but it is also good business [2]. CORESafety is focused on preventing accidents and eliminating fatalities by establishing the 0:50:5 target for individual mines, entire companies, and the industry as a whole. That standard is to have ā0 fatalities and a 50 % reduction in injury rates within 5 yearsā [3]. They cite US Mine Safety and Health Administration (MSHA) data in postulating that āsafer mines are generally more productiveā [2].
By its very nature, coal mining impacts the environment in ways that disturb its natural water cycle, decomposition, and erosion processes. While not as easy to statistically measure as are safety standards such as number of fatalities and injury rates, environmental impacts are arguably more visible. Therefore, it is important for the industry to show that these impacts have a productive purpose and will be mitigated in the long term. Regarding environmental sustainability, the NMA assists its membership in maintaining a strong commitment to ācontinuing the extraordinary progress that [has been] made in recent decades, with technological advancements that minimize mining's impact on the environmentā [4].
Relationships between productivity, safety, and environmental responsibility are difficult to quantify; however, one does not need mathematical proof when common sense and gut feeling confirm that definite correlations exist. Even the untrained (with respect to mining) mainstream media can pick up on it, as illustrated by the following excerpts from a 2010 New York Times article [5] (company names have been removed at the authorsā discretion):
Coal mining carries inherent risks, but [a history of] numerous and very public violations and fatalities at [one] mine may leave the impression that all mines are run this wayā¦ They [are] not. A comparison [of] safety practices [at the mine with the long history of violations and fatalities] and those of other operators in the coal industry shows sharp differencesā¦ And the attention to safety ā or the lack of it ā has ā¦ measurable results: Compared with the industry average, workers [at mines with fewer violations] spent much less time away from work because of injury [i.e., are more productive]; workers [at mines with more violations] spent significantly more [time away from work; i.e., are less productive].
A coal mining company's profitability is in large measure determined by what its customers are willing to pay for the product it mines. Customers are generally electricity generators, many of which are either publicly traded companies or municipal utilities. These organizations are under close scrutiny by investors, regulators, communities in which they operate, and the public in general. Furthermore, mining companies are in constant competition with other mining companies and other industries for potential employees. All of these entities look at the coal mining company's safety and environmental records as indicators of the stewardship it maintains for its employees, the responsibility it takes for the environment, and the relationship it has with the surrounding community. Consequently, effective health, safety, and environmental programs and procedures can improve mine productivity and thereby business profitability [2].