Document x12BK896ZMzv9w96Z1X6DR2DQ

) ST. JOE MINERALS CORPORATION ENVIRONMENTAL PLANNING 1982 ANNUAL REPORT September 1983 Gary E. Welch Thomas E. Daneck DR 5003433 1 0 oho ENVIRONMENTAL PLANNING 1982 Annual Report ' Table of Contents 1. INTRODUCTION 2. OVERVIEW 2.1 Statement of General Impact 2.2 Description cf Major Federal Laws 2.3 Legislative Events During 1982 2 .4 Legislative Outlook for 1983 2.5 1982 Legal Recap 2.5.1 Air Litigation U.S. Court of Appeals Upholds EPA's Conditional Approval of SIP's Environmentalists File Suit Challenging EPA Revision of "Source" Under the Clean Air Act EPA Ordered to Publish Radionuclide Regulations Appeals Court Rules Clean Air Act Permits Fee Awards to Non-Prevailing Parties 2.5.2 Water Litigation Schedule for Effluent Limitation Guidelines to be Approved 2.5.3 Solid Waste Litigation . Federal Court Rules EPA Has Authority to Regulate Non-Hazardous Mining Waste Federal Court Issues February Deadline for Hazardous Waste Lands Disposal Rules under RCRA February Deadline for Hazardous Waste Land Disposal Rules Stayed Page 1. 5 3 4 7 10 12 12 12 13 14 18 19 19 20 20 21 25 O DR 5003435 C/2 a. 4.3.3 Mine Safety and Health Administration A. MSHA Hearings on Metai/NonmetaJ Standards Review '* 5. MSHA Publishes New Civit Penalty Regulations 4.4 Regulatory Outlook 4.4.1 Regulator)' Outlook - Near Term A. Best Available Control Technology (BAT) Effluent Limitations B. National Emission Standarcs for Hazardous Air Pollutants (NESHAP5) Arsenic and Radionuclides C. OSHA Lead Standard Revisions 4.4.2 Regulatory Outlook - Crystal Ball Gazing A. Air Issues ' B. Water ' C. Solid Waste D. OSHA/MSHA 4.5 Corporate Environmental Programs 4.5.1 The Human Resource System (P. 3. Martin) 4.5.2 Leachabiiity of Solid Wastes (D. E. Freshcorn) 4.5.3 Environmental Consulting (3. A. Morgan) 4.6 Other Activities 4.6.1 Technical and Trade Association Relationships Exhibit I 5. DIVISION ENVIRONMENTAL REVIEW 5.1 St. 3oe Lead Co. Mining Division (3. E. Carter) ' 42-4 42-4 42-5 43 43 43 43 44 45 43 46 46 47 42 48 51 52 53 53 54 55 55 dr 5003437 5.4.3 Solid and Hazardous Waste Programs 5.4.4 OSHA-Relaxed Activities Figure 1 Figure 2 5.4.5 The Toxic Substances Act 5.5 St. Doe Resources Company, Zinc Smelting Division (j. D. Reese) 5.5.J Introduction 5.5.2 Administrative 5.5.3 Air Quality 5.5.3..1 Sinter Plant 5.5.3..2 Power plant 5.5.4 Water Quality 5.5.5 Solid Waste 5.5.6 Industrial Health Page 65 66 68 69 69 69 70 71 71 71 72 73 0 3 56 4 dr 5003439 54 Exhibit I Technical and Trade Association Environmental Committee .Membership Association LIA ZI ILZRO IL ZRO ILZRO SERA SERA AMC AMC AMC AMC AMC AMC AMC AMC IHF IHF NMA NCA ORC Committee Lead Environmental Health ' Cadmium Environmental Health Lead Environmental Health Zinc/Cadmium Environmental Health Board of Directors Board of Directors Scientific Advisory Committee Environmental Matters Nonferrous Smelter Subcommittee Water Quality Subcommittee Non-Coal Occupational Health Carcinogen Subcommittee Air Quality Subcommittee Manufacturer's Diesel Committee Solid Waste Subcommittee Engineering Committee Board of Directors Environmental Quality Committee Water Quality Committee MSHA Group * To be appointed. St. Joe Representative D. L. Vornberg T. E. Janeck D. L. Vornberg T.E. Janeck J. G. Sevick G. E. Welch T. E. Janeck G. . Welch G. E. Welch T. E. Janeck G. E. Welch G. E. Welch T. E. Janeck G. E. Welch T. E. Janeck G. E. Welch G. E. Welch J. G. Sevick * R. R. Voss DR 5003525 o Qjw" C/1 & ST. JOSEPH LEAD COMPANY Today more than 26 million Americans own common stock. This widespread stock ownership is unique to the United States, and of relatively recent origin. In 1952 there were fewer than seven million shareowners. The willingness of Americans, in large numbers, to invest in business and industry has many benefits. It stimulates free enterprise by providing a broad source of capital, it spreads throughout the economy the ownership benefits of industrial success. And it can provide people with a measure of protec tion against erosion of the purchasing power of the dollar. St. Joe shareholders are typical of shareholders of any large company. Their confidence in St. Joe is reflected in the fact that their number has doubled within the past decade. Some of these shareholders are involved in the day-to-day operation of the Company, but there are many others, from every state. They are retired couples relying on an incomeproducing stock. They are young couples and parents looking to the future, colleges and universities, investors with a primary view to capital appreciation, members of investment clubs, and a variety of institutions. They are housewives, small chil dren and those to whom St. Joe stock has been handed down from generation to generation. AH of them are attracted to St. Joe as a Company with a record for steady growth, solid finances and a sound policy for future expansion. We are hopeful that in recent times our shareholders' ex pectations in St. Joe have been fulfilled, both by the substantial appreciation of the value of St. Joe shares and by the fact that the Company has been able to increase dividends steadily. In this annual report, we feature a few of the 20,957 St. Joe shareholders. We present them as representatives of Amer ica's shareholder community. TABLE OF CONTENTS Financial Highlights and Letter to Shareholders................ 2 An Investment in St. Joe..................................................... 4 Review of Operations......................................................... 6 Ten Year Sales Chart ..................................................... 21 Balance Sheet.................................................................... 22 Statement of Income and Retained Earnings................... 24 Notes to Financial Statements......................................... 25 Product Statistics ............................................................. 27 Ten Year Reviews................................................... . 28 & 30 Corporate Data......................................................... ^ <r? Jfallace J. Cropper, a shareholder YAJ and mine geologist, has been a St. Joe employee since 1951. Mr. Cropper, who earlier had Missouri and South American experience with St. Joe, was recently transferred from the Balmat- Edwards Zinc Division in ' New York, to St. Joe's expanding corporate exploration group. The 32 challenge of his new assignment is "getting involved in the search." DR 2801511 HIGHLIGHTS Sales of metals, etc. Federal and state income taxes Net income Dividends: Cash Stock (2 for 1 split effected in the form of a stock dividend) Shares of capital stock outstanding December 31 Net earnings per share Dividends per share Ratio of current assets to current liabilities Number of employees (U.S.) Number of shareholders Shareholders' equity (book value) Shareholders' equity per share . 1969 $178,974,343 $ 18,304,371 $ 37,462,561 $ 14,139,309 8,587,891 $4.37 $1.65 5.51 to 1 4,057 20,957 $160,037,778 $18.64 1968 $150,811,758 $ 12,448,865 $ 24,973,475 $ 12,308,873 100% 8,533,800 $2.89 $1,425 3.63 to 1 4,032 20,472 $135,667,395 $15.90 TO THE SHAREHOLDERS: St. Joe, benefiting from strong demand for its prod ucts and an expansion program that has made it the largest U.S. producer of lead and zinc, achieved rec ord production, sales and earnings in 1969. in August the Board of Trustees voted to raise the annual dividend rate to $1.80 from $1.50 a share. At its February 17, 1970 meeting, the Board voted a fur ther increase in the quarterly dividend to $.50, equal to $2.00 per share on an annual rate. This is the eighth consecutive year of dividend increases. Earnings rose 50% to $37,462,561 in 1969, or $4.37 a share, from $24,973,475 or $2.89 a share in 1968. Both domestic and world demand for St. Joe's major products were strong over the twelve months and 1969 average U.S. prices of zinc and lead were at the levels of the middle sixties. Lead at year end was 1672 cents per pound and zinc, 1572 cents. American process grades of zinc oxide rose from 1574 to 1672 cents per pound over the year. All St. Joe's production facilities operated without interruption in 1969. A major contributor to earnings was record production of 233,160 tons of lead, includ ing 9,620 tons tolled by other smelters. This was up 33% from 1968. In areas of new operational activities, St. Joein 1969: Commenced construction of the Brushy Creek mine and mill in Reynolds County, Missouri. Bottomed the new 3,225 foot mine shaft at the Balmat-Edwards Zinc Division in New York. Completed a new 300 ton-per-day sulfuric acid plant at the Herculaneum Smelter. Opened a new lead alloy pilot plant and a mercury recovery unit at the Zinc Smelting Division. initiated major exploration and research projects and expanded the budgets of existing programs. In connection with these and other projects, capital expenditures for 1969 totalled $11,319,108. Capital expenditures for 1970 are estimated at $25 million. * At its May 1969 meeting, the Board of Trustees elected Peter B. Nalle a vice president, responsible for St. Joe's domestic mining and milling activities. In addition, Norman H. Donald, Jr., John W. Hanselman, 2 DR 2801512 St. Joe Annual Report 1980 Energy and Metals in Key Areas of the World DR 2801863 St Joe Minerals Corporation c ^kt. Joe Minerals Corporation is a diversified natural resources L/ and energy company operating worldwide. The Company has significant interests in: Oil and Gas. St. Joe Petroleum in Houston, Texas, is the principal vehicle for petroleum exploration and development outside the United States and Canada. CanDel Oil Ltd., headquartered in Calgary, Alberta, holds interests in Canada and internationally. Coquina Oil Corporation, Midland, Texas, is active in the United States. Coal. Fifty percent-owned A.T. Massey Coal Company, Inc., Richmond, Virginia, and its subsidiaries produce coal from over 25 mining and preparation complexes in Appalachia. Massey, a major coal exporter, also sells coal produced by other domestic companies. Domestic Metals. St. Joe Lead Company in Clayton, Missouri, has extensive mining facilities in southeastern Missouri, and operates the largest lead smelter in the United States at Herculaneum, Missouri. The Lead Company also manages the Pea Ridge Iron Ore Company's iron mine and pelletizing plant near Sullivan, Missouri, and St. Joe Resources' zinc mining and milling operations in upstate New York. International Minerals. St. Joe International Corporation has a zinc, lead and silver mine and a large, undeveloped copper orebody ini Argentina; an 80% interest in a Chilean gold, silver and copper property; a zinc mine in Peru; and a one-third interest in an Australian copper, zinc, lead and silver mine. St. Joe International Trading Corporation in New York provides the Company with a trading subsidiary designed to complement its commodities marketing activities. California Gold. Placer Service Corp., based in New York City, is:; developing an alluvial gold prospect in California, and also is conducting exploratory drilling for gold on nearby property. Research and Development. Energy Research Corporation in Danbury, Connecticut, and Mansfield Carbon Products, Inc., in Nashville, Tennessee, conduct advanced research in the rapidly growing fields of energy conversion and storage. Corporate research supports St. Joe's existing operations and examines new business opportunities. Contents 1 Financial and Operating Highlights 2 Letter to the Shareholders 5 Oil and Gas 9 Coal 13 Domestic Metals 17 International Minerals 21 California Gold 23 Exploration 25 Research & Development 26 Timetable of Major Projects and Developments 29 Selected Fmanrial Data 29 M "* 33 Consolidated Financial Statements 37 Notes to Consolidated Financial Statements 53 Management Report 53 Auditors' Opinion 54 Corporate Data 56 Shareholder Information ' DR 2801864 St. Joe Minerals Corporation and Consolidated Subsidiaries Highlights .ir *. Financial Net Sales Operating Profit Gross Profit Margins Nonrecurring Item Tax Rate Net Income Net Income Per Share* Dividends Per Share*: Stock Cash Capital Expenditures Funds Provided From Operations Total Assets Long-Term Debt Shareholders' Equity Shares of Common Stock Outstanding (12/31)* Book Value Per Share* Current Ratio Operating Total Tons of Massey Produced Coal Sold Total Tons of Purchased Coal Sold Total MCFs of Gas Sold Net Proven MCFs of Gas Reserves Total Barrels of Oil Sold Net Proven Barrels of Oil Reserves Total Tons of Lead Metal Sold Total Tons of Zinc in Concentrates Produced (including lead operations) Troy Ounces of Gold in Ore Sold *After giving effect to the 1980 two-for-one stock split. H ^ WmMMmmWsMmm&i sMmmsmSmmwm ... 1980 1979 1978 (In thousands except per share data) % Change $1,279,083 $ 219,219 26% -- 35% S 117,082 $ 2.60 $1,148,105 $ 195,320 25% $ (47,545) 30% S 77,586 S 1.73 100% s J7Vi $ 383,738 $ 230,149 $1,764,891 $ 423,864 S 987,349 -- s .683/t s 210,811 $ 194,592 $1,108,600 $ 192,950 $ 568,199 45,335 $ 21.78 2.9 to 1 44,915 $ 12.65 1.6 to 1 $831,279 $101,466 22% -- 28% $ 49,754 $ 1.11 + 54% +116% + 18% -- + 25% + 135% +134% -- $ .65 $171,843 $134,623 $950,039 $169,803 $520,949 44,789 $ 11.63 1.9 to 1 -- + 19% + 123% + 71% + 86% +150% + 90% + 1% + 87% + 53% 14,196 8,293 23,466 355,560 1,432 28,729 202 59 93 12,767 5,548 20,529 314,555 1,414 27,450 223 28 45 8,695 4,117 17,725 280,308 1,409 25,845 251 45 -- + 63% + 101% + 32%) + 27% + 2% + 11% - 20% + 31% +107%) Growth in Shareholders' Equity (millions) S987.3 Growth in Dividends Per Share DR 2801865 1976 1977 1978 1979 1980 <" r-xv: - TV fr.a a ^^^^mMlSsSsSi gllE Producing mine ift Developing mine _ Mi, mnM C Joe Lead Company, the Lx nation's largest integrated lead producer, operates four mine and mill complexes in southeastern Missouri. Lead concentrates from these mines are sent to St. Joe's Herculaneum, Missouri, refinery, the largest lead smelter in the U.S. The Lead Company also manages operations at the Pea Ridge Iron Ore Company's iron mine and pelletiz ing plant near Sullivan, Missouri and St. Joe Resources Company's zinc mining division at Balmat, New York. 1980: Satisfactory Margins The lead market declined in 1980, and the iron ore and zinc markets remained weak. As a result, operat ing profits in the domestic metals group declined 32% to $99.3 million on a sales decrease of 26% to $301.6 million. Despite the downturn, St. Joe was able to maintain satisfactory margins because of its efficient, lowcost production of both lead and iron ore and good worker productiv ity. Lead profits were the second highest in St. Joe's history. As a result of the Monaca smelter closure in 1979, St. Joe's zinc opera tions were limited to mining and milling for most of 1980. Although sales were reduced sharply, losses were eliminated. Operating profit was $5.7 million, compared to a loss of $1.6 million in 1979. This improve ment was due to modestly profitable operations at Balmat, combined with sales of concentrates from inventory. The Markets for Lead St. Joe sells lead metal for four prin cipal end uses: batteries, accounting for nearly two thirds of total con sumption; pigments, used in indus trial applications; gasoline additives, being phased out by the federal government; and exports and mis cellaneous applications, including such products as ammunition and solder. In 1980, consumption of lead in the United States declined to about 1,225,000 tons, a drop of approx imately 16% from 1979's high level. This decline primarily was due to weakness in battery sales. The fall in new auto sales caused a drop in original equipment batteries, which account for about 20% of the market. Sales of replacement batteries, which take the remaining 80%, also declined, but were helped by the summer heat wave. St. Joe is a major supplier of lead for pigments and chemicals because of the high-purity of its product. This market declined slightly in 1980 as a result of a weak chemical industry. Use of lead in gasoline additives dropped sharply in 1980 to 120,000 tons from the 1979 level of 206,000 tons because of the government-re quired phase-out of lead in gasoline. A contributing factor is the growing number of cars that use unleaded gasoline. The gasoline additive mar ket now accounts for less than 10% of total'U.S. lead consumption and less than 6% of St. Joe's lead sales. Further declines, therefore, should not have a significant effect on St. Joe's sales or profits. DR 2801878 14 ST. JOE MINERALS CORPORATION ENVIRONMENTAL PLANNING 1977 ANNUAL REPORT 3d 20 April 1978 Gary E. Welch DR 5003637 -47- 5.3.3 physical examination and. environmental exposure monitoring was undertaken by St. Joe and should be completed during mid-1978. We are presently planning to extend this study to other St. Joe "underground" environments. f. Energy Research Corporation, Formet and Placer Services During 1977 we performed consultation services for Energy Research Corporation and Formet concerning needs and requirements related to industrial hygiene and occupational health. We also, during 1977, consulted with Placer Services Corporation concerning general environmental requirements for a proposed new mining venture in California. Other Activities a. Smelter Environmental Research Association In November 1975 St. Joe joined forces with other members of the nonferrous mining and smelting community to found a new organization, the Smelter Environmental Research Association (SERA), whose purpose is to promote research on occupational health and environmental problems of interest to the nonferrous community. Through 1977, SERA had funded over 20 research programs totalling over $400,000. Some of the SERA research programs of direct interest to St, Joe include: i Cadmium Workers Health Study A study to evaluate the relationship between inhaled cadmium and urinary cadmium excretion and to evaluate the possible presence of kidney effects associated with chronic exposure to cadmium. OR 5003687 -48 ii Review of NIOSH Smelter Worker Respiratory Morbidity Study A study to review the raw data collected by NIOSH in their study at Kennecott's Garfield Smelter and to prepare a critique of same for use in OSHA proceedings regarding a standard for occupational exposure to sulfur dioxide. iii Genetic Toxicological Evaluation of the Environment A program to develop a rapid method for assessing the carcinogenistic and mutagenistic potential of compounds and elements to which smelter workers may be exposed. iv Tank House Epidemeological Study ' A morbidity-mortality study of copper and zinc tank house workers. v Biological Impact of Heavy Metals in Aquatic and Terrestial Communities Near Lead Operations A study to determine the presence and extent of heavy metal accumulation in biological communities near lead mining, milling and smelting operations in Missouri. b. Technical and Trade Association Relationships To develop and maintain effective channels of communication with local, state and federal environmental agencies such that our views relative to environmental issues can be inputed during the formulative stages of legislative and regulatory development proceedings, St. Joe maintains representation on 12 technical committees in 9 separate technical and trade associations. A detailed listing of committee representation is shown in Exhibit I following. DR 5003688 -49During 1977 St. Joe participated in over 30 meetings of these various committees and organizations, c. Miscellaneous The corporate environmental function continues to serve as a "clearinghouse" for reporting to federal agencies regarding environmental activities. During 1977 we completed analyses and surveys of past expenditures and future costs for compliance with both the Federal Water Pollution Control Act and the Clean Air Act. These general industry-wide cost studies were sponsored by the American Mining Congress and a group of nonferrous smelter operators. DR 5003689 -50- Exhibit I Technical and Trade Association Environmental Committee Membership Association LIA ZI ILZRO ILZRO SERA SERA AMC AMC AMC AMC AMC AMC APCA IHF IHF NMA NCA Committee St. Joe Representative Lead Environmental Health D H. Beilstein Cadmium Environmental Health G, E. Welch Lead Environmental Health D H. Beilstein Zinc/Cadmium Environmental Health G E. Welch Board of Directors J G. Sevick Technical Advisory Committee G E. Welch Environmental Matters J G. Sevick Nonferrous Smelter Subcommittee J G. Sevick Water Quality Subcommittee G E. Welch Non-Coal Occupational Health G E. Welch Air Quality Subcommittee G E. Welch Manufacturers Diesel Committee J M. Blankenhorn Nonferrous Smelting and Refining G E. Welch Engineering Committee G E. Welch Board of Directors J G. Sevick Environmental Quality Committee Water Quality Committee J G. Sevick * *To be appointed. DR 5003690 ST. JOE MINERALS CORPORATION ENVIRONMENTAL PLANNING 1978 ANNUAL REPORT 30 March 1979 Gary E. Welch DR 5003547 DISTRIBUTION New York_________ _____ J. G. Sevick - 3 J. W. Horton c. M. Whitten c. E, Barnett J. L. Afton c. T. Beatty J. M. Blankenhorn R. G. RedeIfs G. E. Welch Zinc Company J. L. Broadhead J, M. Cigan - 2 C. 0. Bounds J, G. Reilly - 2 Lead Company J. A. Wright E, J. Krokroskia D. H. Beilstein - 2 D. DeClue J. E. Kennedy - 2 A. T. Massey E. M. Massey 0. B. Bucklen G. M. Osborne - 2 R, J. Watkins - 2 Other J. McN. Cramer Extra - 5 DR 5003548 5) Biological Impact of Heavy Metals in Aquatic and Terrestial Communities Near Lead Operations ($25,000) A study to determine the presence and extent of heavy metal accumulation in bio logical communities near lead mining, milling and smelting operations-in Missouri. 6) In-situ Toxicity Tests of Mine/Smelter Effluent on Aquatic Organisms ($54,000) Study to determine impact of mine/ smelter waste water discharge upon local aquatic organisms (conducted at Anaconda, Mt. ) . Technical and Trade Association Relationships To develop and maintain effective channels of communication with local, state and federal environmental agencies such that our views relative to environmental issues can be inputed during the formulative stages of legislative and regulatory development proceedings, St. Joe maintains representation on 12 technical com mittees in 9 separate technical and trade associations, A detailed listing of committee representation is shown in Exhibit I following. During 1978 St. Joe participated in over 30 meetings of these various committees and organizations. Miscellaneous The corporate environmental function con tinues to serve as a "clearinghouse" for reporting to federal agencies regarding environmental activities. During 1978 we completed analyses and surveys of past expenditures and future costs for compliance with both the Federal Water Pol lution Control Act and the Clean Air Act. These general industry-wide cost studies were sponsored by the American Mining Congress and a group of nonferrous smelter operators. DR 5003608 -58- Exhibit I Technical and Trade Association Environmenta1 Committee Membership Association LIA ZI ILZRO ILZRO SERA SERA AMC AMC AMC AMC AMC AMC APCA IHF IHF NMA NCA ORC St. Joe Committee________________________________ Representative Lead Environmental Health D. H. Beilstein Cadmium Environmental Health G. E. Welch Lead Environmental Health D. H. Beilstein Zinc/Cadmium Environmental Health J. M. Blankenhorn Board of Directors J. G. Sevick Technical Advisory Committee J. M. Blankenhorn Environmental Matters J. G. Sevick Nonferrous Smelter Subcommittee J. G. Sevick Water Quality Subcommittee Non-Coal Occupational Health Air Quality Subcommittee G. E. Welch J. M. Blankenhorn G. E. Welch Manufacturers Diesel Committee J. M. Blankenhorn Nonferrous Smelting and Refining Engineering Committee Board of Directors G, E. Welch G. E. Welch J. G. Sevick Environmental Quality Committee J. G. Sevick Water Quality Committee * MSHA Group G. E. Welch *To be appointed. DR 5003609