April 2008 – AggBeat
The NMA says the new rule could result in disputes that have been amicably resolved in the past being subjected to “costly and protracted litigation.” The organization sent a letter on Feb. 6 to Richard Stickler, acting assistant secretary for mine safety and health, objecting to a Procedure Instruction Letter (PIL) issued on Feb. 4 by MSHA. The NMA says that the letter is both “bad public policy and unlawful.”
According to the NMA, the PIL directs MSHA district managers to deny all future requests and cancel any granted requests for a conference on a safety citation or order unless the violation involves an issue deemed to be an unwarrantable failure or involves a high negligence designation.
The NMA said in the letter that the conference procedure provides operators with an opportunity to “better understand MSHA’s views” and that the PIL is “directly contrary to the finding and purpose” of a rulemaking that was undertaken by MSHA last year to revise the conference procedure.
According to the NMA, MSHA found with this rulemaking that “the safety and health of miners is improved when, after an inspection, operators and miners or their representative are afforded an ample opportunity to discuss safety and health issues with a district manager.”
MSHA Revises Civil Penalties
The Mine Safety and Health Administration (MSHA) is revising its civil penalty assessment amounts to adjust for inflation. The Debt Collection Improvement Act of 1996 (DCIA) requires MSHA to adjust all civil penalties for inflation at least once every four years according to the formula specified in the Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation Adjustment Act). The revised penalties apply to citations and orders issued on or after the effective date of this rule. This final rule became effective on March 10, 2008.
According to the final rule, the operator of any mine in which a violation of a mandatory health or safety standard occurs or who violates any other provision of the Mine Act will be assessed a civil penalty of not more than $70,000. Each occurrence of a violation of a mandatory safety or health standard may constitute a separate offense. The amount of the proposed civil penalty is based on the criteria in sections 105(b) and 110(i) of the Mine Act.
Any operator who fails to correct a violation for which a citation has been issued under Section 104(a) of the Mine Act within the period permitted for its correction may be assessed a civil penalty of not more than $7,500 for each day during which such failure or violation continues. Additionally, any miner who willfully violates the mandatory safety standards relating to smoking or the carrying of smoking materials, matches, or lighters shall be subject to a civil penalty of not more than $375 for each occurrence of such violation.
Mergers & Acquisitions
On Jan. 14, New Enterprise Stone & Lime Co. Inc. (New Enterprise) of Pennsylvania announced the acquisition of Stabler Companies Inc. (Stabler). Stabler operates as a vertically integrated supplier of construction materials, a highway contractor, and a supplier of construction-related safety services throughout the United States. The company employs approximately 1,200 personnel at the 16 aggregate and sand quarries that it operates in the eastern part of Pennsylvania. The acquisition price and key terms and conditions were not disclosed.
On Feb. 7, Votorantim Cimentos North America (i.e., St. Mary’s Cement, Inc.), a subsidiary of the Brazilian cement and concrete giant Votorantim Cimentos, acquired Chicago market-leading Prairie Material Sales (Prairie). Prairie generated revenues of about $450 million in 2007 and employs approximately 1,800 personnel in various Midwest markets. The acquired operations include 81 ready-mixed concrete plants in four states, 17 aggregate operations in two states, and related hauling assets. While under the Votorantim umbrella, Prairie will maintain its operating and existing management personnel. The acquisition is in line with Votorantim’s strategy of vertical integration in the North American market.
On Feb. 13, Carmeuse North America (Carmeuse), a wholly-owned subsidiary of Belgian-based Carmeuse Group, completed its acquisition of Oglebay Norton Company (Oglebay). The $36 per share offer by Carmeuse placed an approximate $520 million valuation on Oglebay’s equity, representing an implied enterprise value of approximately $640 million and an approximate 11.7x trailing 12-month EBITDA multiple (through September 2007) for the company. The combination of the businesses will create one of the leading lime producers in North America, as well as a leading supplier of other chemical limestone and industrial filler products.
—by Bill Watkins, managing director, National City Capital Markets. Watkins is a contributing editor and may be reached at 216-222-7134 or at William.Watkins@NationalCity.com.
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