Aggregates Manager January 2018 by Sandy Turner Jr

Cat’s Next Gen excavators PG6 | Optimize conveyors PG26 | MSHA’s new chief PG36

January 2018 | www.AggMan.com

Your guide to profitable production

Cover_AGRM0118.indd 1

Tips for ramping up production

New research on the science of safety

12/14/17 1:44 PM

A LEGACY OF

MANUFACTURING THE FAMILY-OWNED DEISTER MACHINE COMPANY ALIGNS ITSELF FOR LONG-TERM GROWTH AND BUILDS UPON ITS LEGACY WITH THE NEXT GENERATIONS OF LEADERSHIP. Representing the fourth generation of Deister leadership, Richard (Rich) M. Deister has recently been promoted to Executive Vice President of the company. Currently marking 30 years of company service, Rich began his career with Deister by learning the business from the ground up. Following his graduation from Purdue University in 1987, he began as an assembler in the company’s machine shop. A few years later, he took to the road as a service technician where he was hands-on in working with producers to install and fine tune each custom-manufactured screen and feeder for use in a variety of applications.

In 1990, Rich became the company’s service manager; and in 2002, he was named Director of Customer Relations, Parts and Service, ascending to vice president of that department in 2007. Also, that same year, he joined the company’s executive board of directors. Rich is a member of the National Stone, Sand and Gravel Association and is the immediate past chair of the Manufacturing and Services Division. The company is proud to report that its family tradition will continue into the fifth generation of leadership. Max Deister (Rich’s son) has recently joined the company as a full-time member. Like his father, he graduated from Purdue University, and had interned with the company since 2012.

“Our tradition of quality and customer satisfaction began with my great grandfather, Emil Deister, who founded the company in 1912. Each generation of Deister leadership continues to strengthen our performance history and our dedication to high standards. Our long-term customer relationships, which we have developed over years of support, consultation and service, have resulted in ongoing improvements and innovation in the design, engineering and customization of Deister screening, scalping and feeding equipment,” says Rich Deister

DEISTER MACHINE COMPANY, INC. P.O. Box 1 • Fort Wayne, IN 46801 • 260-426-7495 • Fax: 260-422-1523 email: info@deistermachine.com • www.deistermachine.com

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Overland conveyors can reduce fuel costs and labor expenses, but understanding how to size and care for the system will help operators achieve the greatest efficiency. On Our Cover: Aggregates producers are bullish on their own market. Cover illustration by Sandy Turner.

PAGE 26

The key to improving safety may lie with science. New research highlights four domains and 14 elements of safety leadership.

PAGE 33

TABLE OF CONTENTS JANUARY 2018 |

VOLUME 23, NUMBER 1

FEATURE ARTICLES

10 Great Expectations

Last year, operators told us 2017 would be a very good year for the aggregates industry. Fortunately, the results seem to have lived up to the hype.

26 Optimizing Overland Systems

Overland conveyors can offer big energy savings, but require the right approach to system setup and maintenance.

33 Leading Others to Work Safely

New research reveals the four domains of leadership.

OPERATIONS ILLUSTRATED

Ramping Up Production

When the goal is more stone in the stockpiles, operators must look at more than just crushing. Manpower, materials transportation, and maintenance are all important considerations as well.

TOC_AGRM0118.indd 1

COLUMNS & DEPARTMENTS 3 Editorial Gearing up for 2018. 4 Data Mining The latest financial analysis of issues impacting in the industry and Aggregates Manager’s exclusive aggregates industry outlook. 6 RollOuts Caterpillar’s Next Generation excavators, and other new equipment for the aggregates market. 36 Rock Law What does the future of MSHA hold under former mine executive David Zatezalo’s leadership? 38 Advertiser Index See who’s who and where to find their products. 39 Classified Ads Aggregates industry classifieds. 40 Carved in Stone Aggregates and time travel: a look back at 20 years of aggregates production as seen through ‘Carved in Stone.’

12/13/17 4:27 PM

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479-646-4711

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12/7/17 2:45 PM 12/11/17 2:08 PM

January 2018

EDITORIAL

Vol. 23, No. 1

by Therese Dunphy, Editor-in-Chief tdunphy@randallreilly.com

aggman.com /AggregatesManager

Gearing Up

/AggManEditor

Editorial

for 2018

Editor-in-Chief: Therese Dunphy Editorial Director: Marcia Gruver Doyle Senior Editor: Kerry Clines Online Editor: Wayne Grayson editorial@aggman.com

Design & Production Art Director: Sandy Turner, Jr. Production Designer: Timothy Smith Advertising Production Manager: Kim Knight production@aggman.com

Construction Media Vice President, Construction Media: Joe Donald sales@randallreillyconstruction.com

3200 Rice Mine Rd NE Tuscaloosa, AL 35406 800-633-5953 randallreilly.com

Corporate Chairman: Mike Reilly President and CEO: Brent Reilly Chief Operations Officer: Shane Elmore Chief Financial Officer: Kim Fieldbinder Senior Vice President, Sales: Scott Miller Senior Vice President, Editorial and Research: Linda Longton Vice President of Events: Stacy McCants Vice President, Audience Development: Prescott Shibles Vice President, Digital Services: Nick Reid Vice President, Marketing: Julie Arsenault

For change of address and other subscription inquiries, please contact: aggregatesmanager@halldata.com.

Aggregates Manager TM magazine (ISSN 1552-3071) is published monthly by Randall-Reilly, LLC copyright 2018. Executive and Administrative offices, 3200 Rice Mine Rd. N.E., Tuscaloosa, AL 35406. Subscription rates: $24 annually, Non-domestic $125 annually. Single copies: $7. We assume no responsibility for the validity of claims of manufacturers in any advertisement or editorial product information or literature offered by them. Publisher reserves the right to refuse non-qualified subscriptions. Periodical circulation postage paid at Tuscaloosa, Alabama and additional entries. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by an information storage retrieval system, without written permission of the copyright owner. POSTMASTER: Send all UAA to CFS. (See DMM 507.1.5.2); NON-POSTAL AND MILITARY FACILITIES: send address corrections to Aggregates Manager, 3200 Rice Mine Road N.E., Tuscaloosa, AL 35406.

Editorial_AGRM0118.indd 3

n mid-2004, our staff brainstormed the creation of the Aggregates Manager Industry Forecast. We wanted an analytical way to measure what we felt was taking place in the market. At the time, the industry was recovering from what we would now almost nostalgically describe as a recession. The industry hadn’t hit the production peaks of 2006 and had no indication of the impending trough that would stretch from 2008 to 2010. To capture data, we turned to you, our readers. Each year, you open your doors — figuratively and, sometimes, literally — to let us in and see your operations and glean insights into your operations and management practices. Thanks to all who answer the call and share what’s happening at your sites. You’ve helped us create a forecast that captures the condition of the market in an accurate and dependable manner, year after year. (For the full results of this year’s survey, turn to page 8.) As you’ll read, 2017 was a very good year for the aggregates industry. From a pure response perspective, business ratings were the strongest we’ve ever received in the 14 years we’ve gathered them. Of course, there are variations depending on region, commodity, and size of operation, but the overall sentiment is overwhelmingly positive. We share all that information so you can benchmark your own results against those operations with the similar characteristics. In addition to sharing viewpoints on business ratings and production, operators tell us that their confidence in the market is translating to significant investment in equipment. Nearly one in four respondents (23.9 percent) to the Aggregates Manager 2017-2018 Forecast Study said they expect their capital expenditure budget to increase in 2018, with an average increase of 11.6 percent. This anticipated increase marks a second year of increased investments. In 2017, nearly 30 percent of respondents said they boosted their equipment spending, with an average increase of 23.2 percent. Year-over-year growth means more new iron in many operations. Top categories for increased equipment investment in 2018 include: crushing and screening (33.3 percent), loading and hauling (31.7 percent), equipment and truck maintenance (30.8 percent), conveying and material handling (27.3 percent), and automation (26.4 percent). By region, respondents in the South (38.5 percent) and Northeast (36.9 percent) are most likely to invest in crushing and screening equipment, while those in the West are most likely to spend more on equipment and truck maintenance. North Central respondents reported a three-way tie (at 30.3 percent) on areas for investment, including crushing and screening, loading and hauling, and equipment and truck maintenance. With production on the rise, these equipment investments will likely pay dividends as operators prepare to meet the production demands that lie ahead. AGGREGATES MANAGER / January 2018

12/13/17 4:26 PM

Data mining U.S.

On-Highway

Diesel Fuel

Prices 12/4/17

United States $2.922 One Week -0.004 q One Year +0.442 p

STOCK REPORT Company Cemex, S.A.B. de C.V.

Ticker CX

Current Value

52-Week Low

52-Week High

$7.19 q

$7.15

$10.37

CRG

$35.28 q

$33.67

$41.31

Eagle Materials Inc.

EXP

$111.68 p

$86.51

$114.96

Granite Construction Inc.

GVA

$65.29 q

$45.14

$67.40

Heidelberg Cement AG

HEI

$105.99 p

$90.82

$110.71

LafargeHolcim Ltd. ADR

CRH plc

HCMLY

$10.72 p

$10.01

$12.34

Martin Marietta Materials, Inc.

MLM

$201.51 q

$191.09

$244.32

MDU Resources Group, Inc.

MDU

$27.50 p

$25.14

$29.92

Summit Materials

SUM

$30.64 p

$22.19

$32.69

United States Lime & Minerals, Inc.

USLM

$82.12 q

$71.61

$101.40

U.S. Concrete

USCR

$81.60 p

$57.95

$84.60

Vulcan Materials Co.

VMC

$121.11 q

$108.95

$136.82

Source: Wall Street Journal Market Watch. Currency conversion calculated on date of close 12/06/17.

COMPANY SPOTLIGHT

East Coast $2.904 One Week -0.003 q One Year +0.405 p One Week +0.016 p One Year +0.371 p

Central Atlantic $3.062 One Week -0.012 q One Year +0.460 p

Lower Atlantic $2.794 One Week 0.000  One Year +0.379 p

Midwest $2.877 One Week -0.007 q One Year +0.446 p

Gulf Coast $2.713 One Week +0.001 p One Year +0.352 p

Rocky Mountain $3.019 One Week -0.007 q One Year +0.562 p

West Coast $3.373 One Week -0.007 q One Year +0.603 p

West Coast less California $3.301 One Week -0.007 q One Year +0.427 p

California $3.585 One Week -0.012 q One Year +0.742 p

ranite Construction Inc. (GVA) posted a strong third quarter with net income of $46.0 million, a 23.6-percent increase over the third quarter in 2016. According to company guidance, it anticipates full year consolidated revenue growth in the mid to high teens. “I begin by thanking Granite employees and teams for their effort and execution in the third quarter, which resulted in a top-line performance, as well as improved bottom-line results,” noted Granite Construction President and CEO James H. Roberts during a quarterly earnings call. “Our team continues to execute safely on record backlog, and our outlook remains extremely strong.” Third quarter consolidated revenue increased 19.1 percent to $957.1 million, compared to $803.9 million in the third Granite Construction Inc (GVA) quarter of 2016. Construction revenue increased 24.6 percent to $579.1 million, compared with $464.6 million in 2016. The segment backlog finished at more than $1 billion for the sixth consecutive quarter. At the same time, stronger external demand drove better margins for the company’s Construction Materials segment. Construction Materials revenue increased 9.1 percent to $98.1 million, compared to $89.9 million in 2016. The third quarter gross profit increased 33 percent to $16.8 million, compared to $12.6 million in the prior year. The gross profit margin of 17.1 percent was up from 14.0 percent in 2016. “Steady private market demand, combined with improving public funding trends, continues to provide our business with growth opportunities across geographies and end markets,” Roberts said. “We believe that we are in the early stages of this investment cycle, with much of the public market visibility tied to actions taken over the last few years at state and local levels to increase infrastructure investment. Today, we continue to challenge our leaders in Washington, D.C., to follow the example of their predecessors’ visionary action more than 60 years ago to invest in American infrastructure that we still rely on every single day. American workers and families, once again, are ready to rally behind a bold infrastructure vision backed by a significant funding commitment.”

Source: Market Watch

New England $2.897

Source: U.S. Energy Information Administration (dollars per gallon, prices include all taxes).

DataMining_AGRM0118.indd 4

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AGGREGATES INDUSTRY OUTLOOK The December Aggregates Industry Index surged to an overall score of 133.44, a 9.87-percent increase from November. Gains for the month nearly offset decreases reported over the previous three months. Good weather at the end of the year helped some operators extend their season. While the commercial market continues to perform well, infrastructure investments vary from state to state. Operators are increasingly calling on the federal government to take action on a long-term program.

Aggregates Industry Outlook 150

139.35

145 140 135 130

134.60

132.37

133.44 128.38

124.24 122.43

140.38

135.06

125

121.69

133.61

120

129.36

115 110 105 100 Dec. 2016

139.94

Jan. 2017

Feb. 2017

March 2017

April 2017

May 2017

June 2017

July 2017

Aug. 2017

Sept. 2017

Oct. 2017

Nov. 2017

Dec. 2017

82 While the commercial market seems stable, the lack of action on the Highway Trust Fund and state funding is concerning.

May we all count our blessings and spend time with our loved ones as we reflect back on the year and plan for next year.

— Bill Schmitz, Vice President, Quality Control and Sales, Gernatt Asphalt Products, Inc.

— Daryl Zeiner, Sales Manager, The H&K Group

For New England-area aggregate businesses, the greatest impact on sales during the last quarter of any year is the weather. This year’s warm and dry conditions through the fall and into December provided optimal conditions to extend aggregate and asphalt production for a longer period that usual, thus increasing sales. Now, we are hoping for snow (pennies from heaven) for the first quarter of 2018! — Karen Hubacz-Kiley, Chief Operating Officer, Bond Construction Corp.

California kicked off the holiday season with a gas tax increase due to the Road Repair and Accountability Act passed earlier in 2017. The Sacramento area is expected to benefit from significant repair and resurfacing projects, primarily on US-50 and I-5 in 2018. — Deric Harrington, Production Superintendent, Specialty Granules, LLC

Working with frac sand customers in Texas and the Midwest, all are very positive and selling sand before they get to them. From my small seat…we are renting, selling, and recommending machines and machine fleets to this industry segment more than we have in the past five years. — Jason Hurdis, Senior Market Professional, Caterpillar

Editor’s note: To join our panel, email Editor-in-Chief Therese Dunphy at tdunphy@randallreilly.com.

QUARTERLY CRUSHED STONE & SAND AND GRAVEL REPORT Region/Division

Northeast: Midwest:

South:

West:

New England Middle Atlantic East North Central West North Central South Atlantic East South Central West South Central Mountain Pacific TOTAL

Quantity Crushed Stone 1st qtr. 2017 15,100

Percent change vs. 3rd qtr. 2016 4.4

Quantity sand and gravel 1st qtr. 2017* 7,560

Percent change vs. 3rd qtr. 2016 -12.5

44,300

-3.9

13,700

-15.9

67,700

-5.1

37,100

-4.0

38,400

-2.6

50,200

3.2

82,100

0.7

17,800

-0.4

38,300

0.0

5,900

2.4

58,400

-4.0

26,800

-11.1

20,700

7.9

56,400

2.9

23,600

10.8

45,700

9.4

-0.9

269,000

-0.1

387,000

* thousand metric tons

DataMining_AGRM0118.indd 5

Source: U.S. Geological Survey

12/13/17 4:23 PM

ROLLOUTS

Your complete guide to new and updated equipment and supplies in the aggregates industry.

by Therese Dunphy | Editor-in-Chief | tdunphy@randallreilly.com

New excavators boost technology, fuel savings

Caterpillar’s Next Generation excavators — including the 320 GC, 320, and 323 — are said to offer 20 to 25 percent fuel savings over their predecessors. A new Smart mode operation automatically matches engine and hydraulic power to digging conditions to optimize fuel consumption and performance. Maintenance costs are also cut, by up to 15 percent over previous models, through extended and more synchronized maintenance intervals on the new machines. The excavators are equipped with Next Generation Cat Excavators cabs that offer standard features including keyless push-button start, an 8-inch touchscreen monitor with jog dial keys, and sound-suppressed rollover protective structures. The 320 and 323 models include what Cat describes as the industry’s highest level of standard factory-equipped technology. Both have Cat Connect Technology, which is said to increase operating efficiency by up to 45 percent over traditional grading operations. Cat Grade 2D is also standard and offers guidance for depth, slope, and horizontal distance to grade. Standard Grade Assist automates boom, stick, and bucket movements. Cat Payload offers precise load targets for increased efficiency, while Cat Link hardware and software connect sites to the office.

Caterpillar | www.cat.com

Product Specifications 320 GC

320

323

Cat C4.4 Acert

Cat C7.1 Acert

Gross Power (ISO 14396)

121 horsepower

162 horsepower

Operating weight

48,300 pounds

50,100 pounds

56,200 pounds

Max. digging depth, (18 feet, 8 inches boom; 9 feet, 6 inches stick)

22 feet, 1 inch

Max. reach at ground level (18 feet, 8 inches boom; 9 feet, 6 inches stick)

32 feet, 4 inch

32 feet, 4 inches

32 feet, 5 inch

Max. loading height (18 feet, 8 inches boom; 9 feet, 6 inches stick)

21 feet, 4 inches

21 feet, 3 inches

Engine

AGGREGATES MANAGER / January 2018

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Intelligently controlled drill rigs Atlas Copco unveils its newest drill rigs in the SmartROC series, the D50 and D55. The rigs are powered by low-emission engines, which adapt their output to the task at hand at all stages of production. The Rig Control System (RCS) allows for intelligent control of engine RPM and air compressor load for more effective penetration with lower fuel consumption and decreased wear on components. Automatic rod handling and uniform feeding also enhance productivity. The D50 is designed to drill holes with a diameter of 3 1/2 to 5 1/8 inches, while the D55 drills a slightly larger diameter of 3 1/2 to 6 inches at depths of up to 148 feet.

Atlas Copco | www.atlascopco.com

Motor grader simulation training pack CM Lab Simulations announces its new Motor Grader Training Pack. Available for deployment on any Vortex simulator, the new pack is powered by the manufacturer’s Vortex Studio simulation and visualization software. Designed to bridge the gap between classroom and field work, operators can manipulate and position the simulated blade in the same way as on the real machine, including a functional saddle locking bar and automated cross-slope control. Trainees can progress from basic control familiarization to advanced exercises and are scored on metrics such as blade efficiency, grade quality, idle time, cycle time, fuel consumption, and more.

CM Lab Simulations | www.cm-labs.com

Removes large rocks before screening Lake Erie Portable Screens introduces the Pitbull PB148 Static Grizzly. The new unit pairs with the Pitbull 2300 screening plant and is said to offer an economical option for applications where sorting oversize material prior to screening or crushing is necessary to prevent equipment damage. The grizzly includes features to allow simple bar removal or adjustments, as well as transportability. Each of the screen’s 18 bars are installed with two sets of bolts and nuts driven completely through the bar and support. This saves time during bar adjustment or replacement. The self-cleaning grizzly bars rest on an angle to create a diamond shape and tapered openings to eliminate material becoming stuck between bars. In addition, the grizzly is constructed with standard “D” ring lift lugs for ease of transportating and positioning.

Lake Erie Portable Screeners | www.pitbullscreeners.com

Drop-in carbides reduce maintenance time Drop-in carbides are available for all models of vertical shaft impactors (VSI) from Kolberg-Pioneer, Inc. (KPI). The manufacturer says the new industry-standard drop-in carbide wear parts will significantly decrease the downtime required for service and maintenance. The new carbides are estimated to reduce replacement time to approximately 20 percent of what it is with other solutions. They can also be retrofitted into existing VSI crushers from KPI.

Kolberg-Pioneer, Inc. | www.kpijci.com

AGGREGATES MANAGER / January 2018

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ROLLOUTS

Key size added to all-season OTR tire Goodyear Tire & Rubber adds a new size, 20.5R25, to its AS-3A all-season tire for construction, mining, and quarry applications. The addition completes the tire’s size line-up, which covers a full range of applications and conditions that require exceptional traction. The 20.5R25 has a 40/32-inch tread depth for enhanced traction. Other features include specially placed blades for optimized ice and snow traction; multiple groove edges for traction across all surfaces; flexible block elements for low stone retention; wide-base construction for high flotation, enhanced stability, and low ground pressure; and a unique groove shape for optimized self-cleaning in all conditions.

The Goodyear Tire & Rubber Co. | www.goodyearotr.com

DEF saddle tank for truck chassis Thunder Creek Equipment rolls out a DEF Saddle Tank — an industrial grade, ISO-compliant portable DEF system designed to be mounted to the frame rails of a truck chassis. Available in 60- and 120-gallon capacities, the stainlesssteel DEF tank features a lockable, weather-sealed enclosure, a 12V sending unit with gauge, a locking fill cap, and a skid base for mounting to the frame rails of a truck. The closed DEF system also features a lockable pump enclosure with an 8 gallon-per-minute industrial grade DEF pump and a 20-foot, 3/4-inch DEF hose with automatic shut-off nozzle. The tanks can be customized for northern climates with an optional Glycol DEF tank heater, a 120V DEF tank heater, and a 120V pump enclosure heating blanket.

Thunder Creek Equipment | www.thundercreek.com

New oil analysis kits available Fecon Inc. introduces its own brand of Oil Analysis Kits, which can be used on a wide range of equipment, in addition to the manufacturer’s own brand. The kits offer same day results; critical alarms reported via phone; diagnosis based on OEM specs, asset history, and mechanical changes; and easy-to-read reports delivered online.

Fecon Inc. | www.fecon.com

AGGREGATES MANAGER / January 2018

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12/13/17 9:43 AM

Dewatering pump range rapidly expanded Atlas Copco Construction Equipment North America expands its offerings to the dewatering market with the launch of more than 30 new heavyduty, high-capacity pumps. This includes the addition of three high-flow models to its PAS range of centrifugal dry prime pumps. The new pumps can accommodate flows of up to 6,164 gallons per minute. The range is Atlas Copco branded, but retains the Varisco name as part of the VAR range of centrifugal wet prime pumps. The Varisco brand will also continue to be used for the industrial pump range.

Atlas Copco Construction Equipment | www.atlascopco.us

At Unified, itâ&#x20AC;&#x2122;s not just a product. We solve problems.

Track sensor communicates with operator Continental unveils its proprietary track-condition monitoring concept for the Trackman. The track sensing technology incorporates a microchip molded into the tread of the track and communicates with a monitor in the cab to provide operators with real-time data. The track condition monitoring will enable predictive maintenance to prevent downtime, the manufacturer says.

Continental Corp. www.contitech.us

Screen media is an important part of the equation. We want our customers to rely on us not just for quality but for our industry experience, helping to meet the challenges they face on the job every day. Andrew Lentsch, Chief Operating Officer, former loom operator and stock truck driver

info@unifiedscreening.com www.unifiedscreening.com 866.968.3697

AGGREGATES MANAGER / January 2018

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12/13/17 4:41 PM

FORECAST by Therese Dunphy | Editor-in-Chief | tdunphy@randallreilly.com

Great

Expectations After a year of mixed business ratings, operators are optimistic about their odds in 2017.

ollowing the November 2016 election cycle, optimism was up — way, way up — in the aggregates industry. In fact, respondents to the Aggregates Manager 2016-17 Forecast Survey gave the highest rated predictions since we began tracking industry sentiment in 2004. The question was: could 2017 results live up to these high expectations? The answer is a resounding “yes,” according to the

results of the Aggregates Manager 20172018 Forecast Survey. The survey assesses production trends for the current year and asks producers their expectations for the coming year. Over its 14-year history, forecast responses have proven to be quite accurate, and last year’s rosy forecast was, once again, on target. A total of 48.1 percent of respondents predicted either an excellent or very good year in 2017.

Actual results show 47.9 percent (-0.2 percent) of respondents reporting excellent or very good results. The greatest disparity between the 2017 forecast and actual results were within the good and fair results. Good results were 3.4 percent higher than forecast, while 3.4 percent fewer than predicted reported fair results. While the percentage of respondents reporting poor results was slightly higher than anticipated (+0.2 percent), 2017

AGGREGATES MANAGER / January 2018

Forecast_AGRM0118.indd 10

12/14/17 9:20 AM

2017 Business Rating Trends Excellent

Very Good

Good

Fair

Poor

10.40%

32.40%

41.70%

11.60%

3.90%

12.40%

29.70%

36.60%

17.40%

3.90%

12.90%

32.20%

35.90%

15.10%

3.90%

6.60%

18.60%

35.70%

28.50%

10.50%

2.30%

9.80%

30.30%

35.80%

21.80%

2.90%

7.20%

23.90%

38.80%

27.30%

1.60%

11.20%

22.40%

38.40%

26.40%

5.70%

13.20%

24.50%

34.90%

21.70%

6.90%

10.90%

32.70%

37.60%

11.90%

3.80%

21.90%

37.10%

30.50%

6.70%

8.90%

26.60%

40.30%

20.20%

4.00%

12.00%

23.20%

45.40%

15.70%

3.70%

11.10%

28.90%

36.30%

20.00%

3.70%

11.10%

36.80%

42.70%

8.50%

0.90%

2018 (forecast) 12.80%

33.30%

42.70%

10.30%

0.90%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Business conditions, as considered in terms of sales and profitability, tracked very closely with last year’s predictions. While the percentage of respondents categorizing 2017 as excellent fell slightly short of expectations, it matched 2016 results. Significant growth was seen in the percentage of respondents describing 2017 as a very good year; that rating grew nearly 8 percent from 2016 results. Growth was also seen in the percentage of respondents describing 2017 as good — up more than 6 percent. The best indicator of industry strength, however, may be the 11.5 percent year-over-year drop in respondents who described business conditions as fair. And, for the first time in 14 years of forecasts, less than 1 percent of respondents described business conditions as poor.

Due to rounding, all numbers may not equal 100 percent of respondents. Source: Aggregates Manager Forecast Studies

results mark the only time business ratings in this category fell below 1 percent throughout the forecast’s existence.

2017 business ratings For more than nine out of 10 respondents, 2017 was a solid business year; 11.1 percent described it as an excellent year, 36.8 percent said it was very good, and another 42.7 percent said it was good. Results on the less favorable end of the spectrum were the lowest in the forecast’s history with only 8.5 percent describing business conditions as fair and another 0.9 percent rating them as poor. In terms of operator size, large operators — those producing more than 5,000,000 tons per year — were the most likely to report excellent (10.5 percent) or very good (57.9 percent) results; a 9.2-percent increase in top ratings compared to 2016 results in the same ratings categories. Conversely, small operators — those producing less than 500,000 tons

per year — were the most likely to report fair (13.5 percent) or poor (1.9 percent) business ratings. For perspective, this represents a more than 20-point decrease in the percentage of small producers who reported business results at the lower end of the spectrum from last year’s survey. By commodity, sand and gravel producers were the most likely to report excellent (10 percent) or very good (60 percent) results in 2017. They were followed by producers of crushed stone & sand and gravel with a combined 52.0 percent who reported excellent or very good results, then crushed stone producers with a total 43.7 percent who indicated excellent or very good results. From a regional perspective, operators in the Northeast were most likely to report strong business conditions, with 57.9 percent who described them as either excellent or very good. Operators in the South followed, with 51.2 percent who reported excellent or very good condi-

tions, while 45.5 percent of operators in the North Central opted for the top two business condition ratings. In the West, 38.5 percent of operators described 2017 business conditions as excellent or very good. In terms of year-over-year results, respondents in the North Central and Northeast regions each reported top rating increases of 14.1 percent. They were followed by respondents in the South, with 6.1 percent more who described business ratings as either excellent or very good than in 2016. The West was the only region to report a decline in the top two business ratings results, with a 0.3-percent decrease over 2016. The West was also the only region with respondents who recorded poor ratings results.

2018 forecast With a strong year behind them in 2017, operators continue to be optimistic when AGGREGATES MANAGER / January 2018

Forecast_AGRM0118.indd 11

12/14/17 9:20 AM

Regional Production Results: Northeastern Region

FORECAST

Regional Production Results: Northeastern Region

Aggregate Production Volumes

2017 v. 2016

2013 2014 2015 2016 2017 2018* Regional Production Results: Northeastern Region Increased Increased Increased Increased Increased Increase 31.6%

78.9%

54.5%

12.4%

52.6%

36.8%

Increased about the same

52.6% 47.4%

Increase about the same

36.8% 57.6%

Stayed Decreased about the same 26.3%

Decreased about 57.3% the same 0.0%

Stayed

Stayed Decreased about the same 9.1%

Stayed Decreased about the same 18.8%

Stayed Decreased about the same 0.0%

Stay Decrease about the same 3.0%

Decreased

Decrease

9.1%

18.8%

0.0%

3.0%

Increased:

31.6% 78.9% 42.1%39.3% 21.1%

48.7%

Stayed the same:

45.3%

42.1%

Decreased:

21.1%

3.4% Decreased

6.0%

Decreased

26.3%

Average increase: 16.6% Average decrease: 10.1%

0.0%

54.5% 36.4% 36.4%

12.4% 68.8% 68.8%

47.4%

57.6%

Source: Aggregates Manager Forecast Studies

2013 2014 2015 2016 2017 2018 * Stayed Stayed Stayed Stayed Stayed Stay

Regional Production Results: North Central Region

2018 Forecast v. 2017

Regional Production Results: North Central Region

2013 2014 2015 2016 2017 2018*

39.3%

Increased

Increase

50.0%

56.4%

48.2%

25.7%

42.4%

39.4%

Increased about the same

42.4% 51.5%

39.4% 57.6%

Stayed Stayed Stayed Regional Production Results: Southern Region Decreased Decreased Decreased

Stayed Decreased about the same 20.0%

Stayed Decreased about the same 6.1%

Stay Decrease about the same 3.0%

2013 2014 2015 2016 2017 2018 * Stayed Stayed Stayed Stayed Stayed Stay

Stay the same:

57.3%

50.0% 25.0%

Decrease:

3.4%

about the same 25.0%

Average increase: 14.5% Average decrease: 8.8%

about the same 12.8%

25.0%

30.8%

48.2% 44.4% about the same 7.4%

44.4%

Regional Production Results: Southern Region

25.7% 54.3% 54.3%

51.5%

Increase about the same

57.6%

Decreased Decreased Decreased Decreased Decrease 2013 2014 2015 2016 2017 2018 * Regional Production 25.0% 12.8% 7.4% Results: 20.0%Southern 6.1% Region 3.0%

Decreased

Source: Aggregates Manager 2017-2018 Forecast Study

2017 Work Force Trends

Increased

Increase

Increased Stayed about 48.6% the same

Increased Stayed about 69.8% the same

Increased Stayed about 46.3% the same

Increased Stayed about 49.0% the same

about Decreased the same

Decreased

Decrease

11.4%

4.6%

7.4%

15.7%

10.3%

5.1%

4.2%

40.0% Stayed

Increased:

38.5%

57.3%

40.0% 11.4%

25.6% Stayed 25.6% 4.6%

46.3% Stayed 46.3% 7.4%

35.3% Stayed

35.3% 15.7%

Increased Stayed

Increase Stay

about 53.8% the same 35.9% Stayed

about 35.9% the same 59.0% Stay

35.9% 10.3%

59.0% 5.1%

about Decrease the same

Source: Aggregates Manager Forecast Studies

48.6% 2014 69.8% 2015 46.3% 2016 49.0% 53.8% 35.9% * 2013 2017 2018

Decreased:

Stayed the same:

56.4% 30.8%

Source: Aggregates Manager Forecast Studies

Regional Production Results: North Central Region

Increase:

Regional Production Results: Western Region

Competition for Sales

32.7%

Aggregates Availability /Permitting

22.8%

Retaining Workers

5.9%

Regulatory Compliance

20.8%

Regulatory Fines

8.9%

5.9%

Community Relations

2.0% Safety

1.0%

Increased

Increased Stayed about 47.6% the21.4% same

Increased Stayed about 27.3% the same

Increased Stayed about 62.1% the same

Increased Stayed about 35.5% the same

Increased Stayed about 46.2% the same

29.1% about Decreased the same

about Decreased the same

Decreased Regulatory Fines Decreased

Decreased

10.3%

Source: Aggregates Manager Forecast Studies 19.3% 3.8% 3.8%

47.6% 2013 12.8%

Competition for Sales

38.1% Retaining StayedWorkers 59.1% Stayed

38.1% 14.3% 19.7%

Water Availability

Community Relations

2.8%

AGGREGATES MANAGER / January 2018

5.2%

Community Relations

Safety

4.8% 1.6%

Environmental issues *

4.6%

4.4%

59.1% 13.6%

Regulatory Compliance

Regulatory Fines

6.5%

27.3% 2014

Aggregates Availability /Permitting

Regulatory Fines

Forecast_AGRM0118.indd 12

Environmental issues *

2017 Increased

Regulatory Fines

Source: Aggregates 9.7% Manager 2017-2018 6.5% Forecast Study 5.9%

Water Availability

2013 2014 2015 2016 2017 2018*

Regional Production Results: Western Region

*Forecast8.5% figures

14.3%

13.6%

62.1% 2015 27.6% Stayed

27.6% 10.3%

35.5% 2016 45.2% Stayed

45.2% 19.3%

46.2% 2017

Increase

46.2% * 2018 Increase Stay

50.0% Stayed

about 46.2% the same 50.0% Stay

50.0% 3.8%

about Decrease the same Decrease

Source: Aggregates Manager Forecast Studies

2013

Nearly four in 10 respondents said they grew the size of their workforce 2014 2015 in 2017, while the percentage of 2016 Competition for Sales Competition for Sales Competition for Sales respondents who said they shrunk 13.7% 15.7% 17.0% their workforce fell by 12.8%. Aggregates Availability Aggregates Availability Aggregates Availability The /Permitting most significant/Permitting volatility was /Permitting 17.7% 20.4% reported in the category of service 17.0% and maintenance personnel. Retaining Workers Retaining Workers While Retaining Workers 6% lowered 17.7% employment 16.7%in this 19.3% area, another 28.2% of respondents Regulatory Compliance Regulatory Compliance Regulatory Compliance increased their workforce. 15.3%the size of 15.7% 14.1%

4.3% 6.8% Safety

2.8%

3.0%

1.7%

Environmental issues *

12/14/17 9:21 AM

57.3% Major Challenges Facing Aggregates Managers 2013

2014

2015

2016

2017

Competition for Sales

Aggregates Availability /Permitting

Retaining Workers

Regulatory Compliance

Regulatory Fines

Water Availability

Community Relations

32.7% 22.8%

13.7% 17.7%

5.9%

20.8%

17.7%

15.3%

8.9%

9.7%

5.9% 2.0%

6.5% 4.8%

Safety

15.7%

20.4% 16.7% 15.7% 6.5%

2.8% 4.6%

17.0% 17.0%

19.3% 14.1% 5.9%

5.2% 4.4%

Safety

12.8% 21.4%

29.1% 19.7% 8.5%

4.3% 6.8% Safety

1.0%

1.6%

2.8%

3.0%

1.7%

Environmental issues *

–

8.9%

10.2%

*Category added in 2014.

7.4%

9.4%

Source: Aggregates Manager Forecast Studies

Once again, worker retention was the most commonly cited major concern for survey respondents. It was the top challenge for three of four regions: North Central (30.3%), South (30.8%), and West (30.8%). In the Northeast, however, it fell from the top concern in 2016 to its third highest challenge in 2017. Instead, aggregates availability and permitting (36.9%) was the most significant challenge for respondents in the Northeast.

looking forward in 2018. More than 46 percent expect it to be either an excellent or very good year, while another 42 percent say it will be a good year. Less than 12 percent say it will be a fair (10.3 percent) or poor (0.9 percent) year. While similar to 2017 results, the ratings show growth at each end of the spectrum. When it comes to the relationship between operation size and business ratings, bigger is better. Just over 63 percent of respondents at sites producing more than 5 million tons per year anticipate either excellent (15.7 percent) or very good (47.4 percent) business conditions in 2018. This marks a 3.9-percent increase over last year’s

forecast results. Conversely, respondents at sites producing between 500,001 and 1 million tons per year were the least optimistic. No respondents in this size category call for excellent business conditions in 2018, and just 13.3 percent predict it will be a very good year. Combined results in these top two business ratings categories plummeted 39.3 percent compared to last year’s forecasts for operations in this size category. By commodity, sand and gravel producers anticipate a repeat of 2017 results, with 10 percent calling for excellent or very good (60 percent) business ratings in 2018. While identical to 2017 results, these ratings mark

an 11.2-percent increase over what sand and gravel producers projected for 2017 results in last year’s survey. Crushed stone producers report a slight decrease in expectations for 2018 with 37.4 percent calling for excellent or very good business ratings — a 2.6-percent decrease from the prior year’s forecast. Crushed stone & sand and gravel producers suggest the most significant decrease in top results, with a combined 6.9 percent fewer who expect excellent or very good ratings in 2018. From a regional perspective, operators were the most optimistic in the Northeast with 52.6 percent who expect excellent or very good business ratings

AGGREGATES MANAGER / January 2018

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FORECAST 2018 in 2018. They are followed by the North Central (51.4 percent), South (43.6 percent), and West (38.5 percent). Of the four regions, only respondents in the North Central region were more likely to report business ratings in the top categories for 2018 compared to the prior year. The region reported a 22.9-percent increase in strong ratings expectations. All other regions had more restrained expectations for 2018 than during the previous year.

2017 production volumes Nearly one in two respondents reported increased production volumes in 2017, compared to 2016, a 13.2-percent increase over 2016’s reports. Some respondents noted they are running more hours to try to keep stockpiles on the ground. In contrast, 6 percent noted decreased production in 2017, significantly lower than 17.8 percent who reported decreased volumes in 2016. The average production increase was 16.6 percent — 2.9 percent higher

than 2016 — while the average decrease was 20.1 percent — 15 percent lower than in 2016. Across all sizes of operations, production results were higher. More than half of respondents at operations producing 1 million to 3 million tons (56.6 percent) said they increased production. This size range was followed by respondents at sites with 3 million to 5 million tons (50 percent), up to 500,000 tons (48.1 percent), more than 5 million tons (47.4 percent) and 500,001 to 1 million tons (40 percent). The smallest sites — those producing up to 500,000 tons per year — enjoyed significant growth in 2017. Not only did nearly 20 percent more report increased production than in the prior year, but 31.3 percent noted that production increased by 30 percent or more. By commodity, respondents at operations producing crushed stone and sand and gravel were the most likely to report increased production volumes (61.5 percent), significantly higher than their

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2018 production forecasts Following widespread production gains in 2017, nearly four in 10 respondents (39.3 percent) expect another year of production growth. With just 3.4 percent who anticipate a decrease, stability and growth seems to be the wide-held expectation for 2018. Respondents are bullish on 2018 production predictions, but the optimism diminishes slightly based on operation size. Nearly half (47.4 percent) of respondents at sites producing more than 5 million tons expect growth. Small producers, with less than 500,000 tons per year of production, are somewhat more reserved with 32.7 percent who anticipate an increase in production. By region, the West expects a strong year in 2018, with 46.2 percent of respondents who predict higher volumes. They are followed by the North Central (39.4 percent), the Northeast (36.8 percent), and the South (35.9 percent). Respondents who predicted an increase estimated an average increase of 14.5 percent — virtually unchanged from 2017 predictions. Those who called for a decrease suggested an average decrease of 8.8 percent — 33.8 percent lower than last year’s estimate.

Tackling challenges While not without its pockets of weakness, 2017 was a strong year for the

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peers in sand and gravel operations (40 percent) and crushed stone operations (37.4 percent). By region, the South once again was the most likely to enjoy gains in production volumes. More than half (53.8 percent) reported increased production in 2017. They were followed by the Northeast (52.6 percent), West (46.2 percent), and North Central (42.4 percent). In terms of pockets of weakness, one in four respondents at operations with 3 million to 5 million tons per year of production reported decreased tonnages in 2017. One in 10 sand and gravel producers reported decreased production, while 10.3 percent of respondents in the South reported a decrease.

2017-12-07 3:57 PM 12/11/17 9:43 AM

12/14/17 9:22 AM

aggregates industry, and 2018 appears to be shaping up similarly. When asked about their major challenges, responses underscore the expectation of strong demand. After peaking as a top concern in 2013, competition for sales hit a fiveyear low in this year’s survey. Rather than competing against peers for work, finding workers to meet demand seems to be a more significant concern for most aggregates managers. Nearly 30 percent described it as a major challenge for them in 2018. Respondents noted that they are recruiting heavily at technical schools, considering increases in pay and benefits, and focusing more steadily on personnel tasks such as succession planning and developing young talent. Operators also have an eye toward future production needs as they rated aggregates availability and permitting as their second significant challenge in 2018. In anecdotal responses, many noted that they were actively conducting exploration activities and working to

either acquire or permit new reserves. While the importance of growing a qualified work force and identifying greenfield sites cannot be understated, these are the best types of challenges for the industry to face — ones predicated on strong demand and healthy business conditions. AM

Western Region

North Central Region

Northeastern Region

Southern Region

Methodology, Objectives, and Sources The objective of the 2017-2018 Aggregates Manager Forecast Survey was to determine business, production volume, spending, and workforce trends. In November 2017, Aggregates Manager emailed questionnaires to a random selection of readers in the crushed stone and sand and gravel, crushed stone-only, and crushed gravel-only industries. A total of 117 useable surveys were completed.

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AGGREGATE SYSTEMS

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OPERATIONS ILLUSTRATED By Tina Grady Barbaccia, Contributing Editor

Ramping up Production

Donâ&#x20AC;&#x2122;t postpone equipment maintenance.

Take advantage of mobile equipment options.

Know local ordinances and regulations.

Build up inventory during off-season.

OUR EXPERTS

Be honest with customers about ability to fill orders.

Lyle Bushman and his wife, Sandy, are owners and superintendents of Eagle Creek Quarries, located in Illinoisâ&#x20AC;&#x2122; Carroll and Ogle counties, near the Wisconsin border. Together, they each run their Milledgeville, Ill., and Polo, Ill., locations.

Paul Mclaren is a technical sales manager for the Kleemann division of the Wirtgen Group, where he has worked in varying capacities. Prior to this, he worked for other crushing and screening equipment manufacturers in assignments including monitoring and recommending ways to maximize production equipment efficiency and utilization, training of operation staff, and equipment recommendation for optimal productivity.

Patrick Pfeiffer is general manager of Consolidated Materials Inc., part of Sunset Logistics. He began working in a gravel mine when he was 12 years old, running a scale and helping his dad in the business every summer during school. After graduating from college, he returned to the aggregates industry and has worked in the business ever since.

AGGREGATES MANAGER / January 2018

OperationsIllustrated_AGRM0118.indd 17

12/13/17 9:44 AM

Increasing production goes beyond just crushing

hen gearing up to increase production, producers should evaluate the additional material needed and current plant assets, explains Paul Mclaren, technical sales manager for Kleemann/Wirtgen America. “This means looking at whether it is a short- or long-term requirement and whether it is something that can be done with the equipment currently in the plant or if additional equipment needs to be brought in.” If the current equipment at the plant is sufficient, producers also need to determine whether the aggregates operation has the capacity to produce the tonnage required. “Even if you add a shift, do you have the additional staff available to maintain the equipment?” Mclaren says. “It is not only about the equipment, but also the surrounding infrastructure.” This includes deciding whether to increase the number of hours worked or whether another plant with different staffing requirements is brought in to assist with producing additional material and if dump truck drivers and other equipment operators are available. “You need to have enough drivers to keep the plant properly fed,” Mclaren notes. “The cycle time of haul trucks also has to be at a consistent enough point to get material to feed the crusher.” If additional haul trucks would be needed on the road, whether the road has the capacity to handle the extra

traffic and weight — and if local ordinances would allow it — must be considered. When you take everything into account,” Mclaren says, “all the pieces need to fall into place.” Another key factor is taking care of the operation’s equipment and the crews, says Patrick Pfeiffer, general manager for Consolidated Materials Inc., part of Sunset Logistics. Pfeiffer says his operation will ramp up to 12 hours per day, if necessary. However, he makes sure to cap work at eight hours on a Saturday and 65 hours per week or less during the peak of the season. “You start to lose productivity after that,” he says. “You don’t want people to come to work and be like robots. The employees need to be focused on making a good product or you’ll sacrifice quality.” Producers also need to be realistic and not promise a customer material if they aren’t able to fulfill the order. “Sometimes you just have to tell the salesman, ‘No, we cannot do it,’” Pfeiffer says. “That’s an honest answer. You don’t want to disappoint the customer.” For example, if a customer says 60,000 tons of a specific material is needed, run the math to see if it’s possible, Pfeiffer suggests. “If we’re only capable of providing 40,000 tons I tell them that,” he says. “I think customers respect that. Give them an answer as quickly as possible so they can start looking elsewhere, if needed.”

Don’t overwork people or equipment

When the number of production hours are increased, ensure there is enough staff to cover the additional shifts without pushing both crews and equipment beyond their limits. Running equipment past its capacity or putting off necessary scheduled preventive maintenance to increase production tonnages may result in downtime and premature failure of bearings, which also means downtime and decreased production. Overworking crews, such as going from 10 to 16 hours per day, may cause burnout. This affects their ability to safely and efficiently perform the necessary tasks for production. Some jurisdictional ordinances may determine whether additional production hours are allowed.

AGGREGATES MANAGER / January 2018

OperationsIllustrated_AGRM0118.indd 18

12/13/17 9:45 AM

Assess overall plant capacity

Accurately assess the plant’s capacity to produce material and all elements involved with the overall production process. Even if a crusher is able to handle more throughput, consider whether the haul trucks can consistently achieve the cycle times necessary to provide higher capacities. Ensure that once the material has been crushed, it can be taken away using stockpiling conveyors. Otherwise, this becomes a bottleneck. If additional haul trucks are needed, check to make sure the roads throughout the operation can handle the additional loads. Also, consider whether the blasting and drilling crew can keep up with a schedule to feed the dump trucks.

Know available equipment and options

Determine if the added production will be a shortor long-term requirement and whether it can be accomplished with existing equipment, whether equipment needs to be replaced, or if additional equipment — such as a track mobile crusher system with a screen or a tertiary track impactor — or equipment operators need to be brought in to add haul trucks or loaders. Gauge if any adjustments to the surrounding infrastructure also are needed. When the decision is made to add equipment, confirm the additional maintenance staff needed to take care of it is available. If the size of the stationary plant is going to be changed, ensure proper steps are taken with the required engineering to do so.

Use slower times to build inventory

If there is a season or time when the aggregates plant is not as busy, use it to build up inventory or make additional products, such as concrete rock and other products that don’t require specifications. This creates additional potential revenue. If possible, identify equipment operators or other trained people who are able to help out if needed at a plant. Review sales projections and talk with customers about their needs so material can be produced to meet upcoming orders. This time can be used to modify equipment and adjust to the market.

AGGREGATES MANAGER / January 2018

OperationsIllustrated_AGRM0118.indd 19

12/13/17 9:45 AM

Voices of Experience Lyle Bushman

Paul Mclaren

Patrick Pfeiffer

or a small, independent aggregates operation, ramping up production means just trying to stay ahead of producing material, says Lyle Bushman, owner and superintendent of Eagle Creek Quarries. Bushman and his wife, Sandy, each run one of their two Illinois locations. As a small producer, keeping up with production is challenging, so ramping it up takes careful planning and close attention to details. “The biggest thing for me is running more hours if we’re short on material,” Bushman says. “The easiest way for me to compete is to stay ahead. It is hard to work from behind, because the harder you push equipment, the more it breaks down.” Bushman says when he decides to increase the hours of operation to make additional material, he brings in a local, retired aggregates operation manager who is “on call” to help load trucks when necessary. Having someone like this available is invaluable to a small operation, he notes. Both Eagle Creek Quarries locations try to keep stockpiles of inventory on hand so they are able to absorb an unexpected need for material and rebuild the stockpiles during a slow time, Bushman says. “Every once in while, we run out, but we try to stay ahead of the game,” he says. “We sometimes have to second guess what is needed.” Occasionally, a job requiring aggregates comes up that Bushman says he isn’t aware of until a contractor calls to bid on material. “When the contractors call and ask what I have on hand, some jobs will adapt to what I have in inventory,” he says. “If I don’t have it, they may go to another quarry or just take what is available. They usually don’t go away empty.” If a handful of contractors request a specific product and are able to market it well, Bushman says he’ll increase production to make the requested product.

ushing an aggregate plant’s equipment beyond its capabilities may increase production in the short term, but can cause problems in the long term — and, ultimately, negatively affect production. “If you push a plant or crew from 10 to 16 hours per day and expect the same guys to perform at the same level, it will cause problems,” says Paul Mclaren, technical sales manager for Kleemann/ Wirtgen America. “Their general ability to accomplish work is decreased. A lot of mistakes can happen when you expect a plant already at capacity to do more.” There is also the maintenance aspect. Each piece of equipment has scheduled maintenance and it comes up more quickly when production is increased. “If you forget about maintenance, you will have premature wear and failure of bearings,” Mclaren points out. “When working for production numbers, scheduled preventive maintenance sometimes gets pushed back, and equipment and crews are pushed past their limits.” This is when producers need to evaluate whether it makes sense to bring in a track mobile plant instead of relying on a primary stationary crusher, Mclaren explains. A mobile plant may only need two or three people to operate it, if it’s positioned directly at the quarry face. “You need to determine whether to bring in a track mobile crusher or change the size of the stationary plant,” Mclaren says. If the primary plant is already at maximum capacity, a secondary or tertiary crusher with screening incorporated can be brought in to help increase production and efficiency to fulfill customers’ needs. “A lot of it comes down to understanding what equipment and options are available,” Mclaren says. “Material volumes and being able to move material away is equally important. You can feed the crusher as much material as you want, but it becomes a bottleneck if you can’t take it away.”

s sales increase or a producer receives new projections, production needs to be balanced against the hours needed to work and adjusted accordingly, says Patrick Pfeiffer, general manager for Consolidated Materials Inc., part of Sunset Logistics. That being said, Pfeiffer explains, producers can’t only rely on sales projections. He says they are a “good tool,” but customers want product to be made for them so they overestimate the buy-ins. “They want to secure a commitment to get it from you,” Pfeiffer says. “Everyone with sales projections also knows that you have to be responsive when the time comes.” It becomes an issue of making the material, having it available, and selling it the next year if there is a surplus. “At a smaller company, you don’t have the option of always ramping up production,” Pfeiffer notes. “You have to build up inventory when you have the chance. You can cut back on it the next year, and you won’t have to work as hard in production.” There shouldn’t be concern about having a surplus, Pfeiffer adds, because, historically, material will sell if it has been produced. “My dad was in the business for 50 years,” he says. “I learned from him that you can’t sell it if you don’t have it. There is no need to think about cutting back until you have a really large inventory.” At Pfeiffer’s operation, the material production is seasonal. He says the plant uses the winter season to ship off stockpiled material, install different equipment, and adjust to the market choosing which products to make. “From December through March is when you really want to see projections, if the operation is seasonal,” Pfeiffer says. “Although it really comes down to crushing material, it’s not just about that. It’s also about life balance — not burning everyone out or sacrificing quality or safety.”

AGGREGATES MANAGER / January 2018

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EVERYTHING IS BIGGER IN TEXAS.

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THE 2018 NSSGA ANNUAL CONVENTION

MARCH 4 – 7, 2018 | MARRIOTT MARQUIS | HOUSTON, TEXAS

“We continue to build a show that people want to attend every year, and people who miss an AGG1 Academy and Expo are missing a lot of opportunities to see the next generation of equipment and services that will make it easier and safer for our employees to do their job.”

E t f N r w p f h

MICHAEL W. JOHNSON, NSSGA PRESIDENT AND CEO

J r u r s

www.nssga.org

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CONVENTION HIGHLIGHTS

INSPIRE PEAK PERFORMANCE

NSSGA’s Annual Convention is an opportunity to renew old friendships, build new relationships and learn about the industry is addressing the issues and policies affecting our businesses. This is an unrivaled opportunity to come together as an industry and prepare to capitalize on the calls to invest in our nation’s infrastructure.

Entertainment and inspiration are important factors of general session keynote speakers, and in 2018, convention participants will hear from experts on leadership and cybersecurity.

REGISTER BY JAN. 13, 2018 TO SAVE! NSSGA’s Annual Convention features unique special events each year, and the Houston area offers a lot for attendees.

The Texas Lazy River at Marriott Marquis.

HOUSTON RODEO The Annual Houston Livestock Show and Rodeo is a Houston tradition since 1932 and a must-see for any visit to Texas! Browse the grounds and the retail area featuring a selection of authentic western wear. Your stadium seat allows you to enjoy the rodeo close to the action including mutton and bronco busting and calf roping with the world’s best cowboys and cowgirls. The rodeo makes way for a country-pop superstar to take the stage at 6 p.m. (artist to be announced early January). Saturday, March 3 | 3:30 p.m.

TOUR OUTSTANDING OPERATIONS Expand your horizons and learn from your peers with tours of two NSSGA member operations. With a special focus on transporting aggregates, you’ll visit CEMEX’s Navigation facility, where aggregates are brought in by rail, and Vulcan Materials Company’s Houston Yard, where material arrives by ship through Houston’s shipping channel. Attendees should wear steel-toed boots to fully participate in the tour, and NSSGA will provide hard hats, safety glasses and safety vests.

MICHAEL ABRASHOFF During the opening general session on Sunday, March 4, former naval commander and author of It’s Your Ship, Michael Abrashoff, will tell his inspiring story of turning around the worstperforming ship in the Navy. At the age of 36, the Navy selected Mike to become Commander of U.S.S. Benfold. At the time he was the most junior commanding officer in the Pacific Fleet – on a ship that was plagued by low morale, high turnover and abysmal performance evaluations. Few thought that the ship could improve – yet 12 months later the ship was ranked #1 in performance – using the same crew. This session will impart practical and usable ways to take organizational performance to new heights.

THERESA PAYTON It seems like every day we are hearing about a new major data breach. How do you protect your company’s digital data from hackers and insider threats? Theresa Payton, star of the CBS TV series, Hunted, will prepare you for success in the ongoing battle against cybercrime at NSSGA’s closing general session on March 7. Payton identifies emerging trends and techniques to help combat cyber threats, from the impact of the Internet of Things to securing Big Data. The first female to serve as White House chief information officer, Theresa is one of America’s most respected authorities on Internet security, data breaches and fraud mitigation. With real-world strategies and solutions, she helps public and private sector organizations protect their most valuable resources. Attendees will hear a proven blueprint to stay a step ahead with practical steps for thinking like the adversary, while managing cybersecurity risk.

Monday, March 5 | 12:30 – 3:30 p.m.

NSSGA COUNTRY CONCERT Join us at the George R. Brown Convention Center to reconnect with new and existing business partners. Kick up your heels to the sounds of two award-winning country rock superstar groups while enjoying Texas-sized food stations & libations from around the Lone Star state. Monday, March 5 | 7 – 10 p.m.

Get involved to be sure your voice is heard. Visit www.nssga.org/events for more information.

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ALL IN ONE PLACE. ALL AT ONE TIME.

With more education courses being offered than ever before, it only makes sense that the AGG1 Academy & Expo show floor is also NSSGA’s largest yet. This year, nearly 500 exhibitors will be on a sold-out show floor spanning a total of 140,000 square feet that will again be co-located with World of Asphalt. “I love getting a look at the new stuff, smell the fresh paint, see all the latest and greatest technology and get a chance to talk with the manufacturers,” said Bill Schmitz of Gernatt Sand and Gravel in Collins, N.Y. “It’s great for both of us. They get to show us what they have and we get to ask a lot of questions.” According to Pamala Bouchard, NSSGA vice president of meetings and membership, the 2018 AGG1 show floor sold out in record time. “By October, we ran out of space for exhibitors because people see so much value in our show, specifically the focus on aggregates operations,” she said. “It’s a great place for us to not only make leads but strengthen our relationships,” said Clark Penney, of Creative Information Systems. “You can’t see someone’s face over the phone, internet or email. So this show is important to meet old friends and make new friends and connect with our customers,” said Magnus Dahlgren, of Mellott Company.

ATTENDANCE AND SIZE

OF THE AGG1 ACADEMY & EXPO – has grown steadily over the years with aggregates-specific equipment manufacturers and service providers.

AGG1 ACADEMY & EXPO Net Square Feet

AGG1 2013: 37,080 AGG1 2015: 42,795 AGG1 2016: 46,500 AGG1 2018: 48,790

WORLD CLASS EDUCATION The 2018 AGG1 Academy will be the largest and most comprehensive yet. There are 56 education sessions planned over the three days of the show, covering a wide range of aggregates-focused topics in four targeted topic tracks.

For the first time, NSSGA will also offer a series of progressively more advanced operational topics, in response to feedback from past attendees.

“We wanted to build on the popularity of our 101-level courses and develop the next level of those topics for participants who are ready for a deeper dive,” explained Joel Galassini of CEMEX, NSSGA Meetings & Education Committee chairman. “The 201 and 301-levels also provide a logical progression for attendees to get an indepth look at a particular subject.”

OPERATIONS & PRODUCTION

These classes cover virtually every aspect of plant operations, production, and equipment maintenance, from 101-level courses to the latest technologies, processes and products that aggregate producers are using to produce aggregates and manage their fleets in creative and innovative ways.

BUSINESS MANAGEMENT & LEADERSHIP

Running an aggregates operation is about more than equipment and processes. These classes focus on the business of your operation and professional development, including understanding business and financial principles, dealing with the surrounding community, and ways to market and sell your product.

AUTOMATION, TECHNOLOGY & SOFTWARE

Automation and advanced technologies help companies improve efficiency, employee safety, product quality, information management, and cost reductions within the aggregates industry. Attendees of these sessions can learn automation basics, discover new ideas and technologies being applied to aggregate production, and find out how emerging technologies are changing the way you do business.

ENVIRONMENT, SAFETY & HEALTH

These sessions demonstrate best practices and techniques for the aggregates industry to be efficient, safe, healthy and environmentally responsible.

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2018 AGG1 ACADEMY CLASSES This schedule is subject to change. Please view www.agg1.org for the latest AGG1 Academy class listing and schedule. TUESDAY, MARCH 6 7:30 a.m. – 9 a.m.

THURSDAY, MARCH 8

Drones, Aerial Data and the Digital Job Site Community Relations: Implementing Educational Programs Conveyors 101 Medical & Recreational Marijuana: Will Your Workplace Go To Pot? Taking Ownership of Safety

7:30 a.m. – 9 a.m. ROI of Advanced Technology for Optimizing Sales and Operational Planning Be Prepared: Common Legal Issues in the Aggregates Industry Attaining the Highest Percentage of Pay Product Developing a Communications Strategy to Support a Journey to Zero Dissecting Maintenance

Aggregates Financials: Everything You Wanted to Know But Were Afraid to Ask Site Selection

Practical Approaches to the Prevention of Musculoskeletal Disorders and Slips, Trips, and Falls Bridging Soft Soils and Voids During

Methods of Underwater Excavation and Transport

9:30 a.m. – 11 a.m.

Reclamation

Training the Aggregates Worker Crushing 101 New Life for Abandoned Quarries Safety vs. Gun Rights in the Workplace What Color is Your Flag? A Visual Approach to Changing Your Safety Culture Plant Flow Design Sales Metrics: Are Your Measurements Driving the Right Behavior? Easy Tweaks to Achieve Optimal Off-Highway Haul Truck Efficiency

2 p.m. – 3:30 p.m. Attracting and Retaining Millennials Without Annoying the Baby Boomers A New Way to Improve Worker Health & Safety Performance Screening 101 Conveyors 201: Maximizing Conveyor Performance Looking Back, Looking Forward: MSHA Enforcement Update and Compliance Strategies Taking Safety to the Bank: Manage Your Equipment for Safety and Profits Increase Mine Worker Hazard Recognition and Risk Assessment Abilities Quality Control

Maximizing Screening Efficiency

WEDNESDAY, MARCH 7 10:30 a.m. – 11:30 a.m. Outreach is More Than Just Writing a Check Washing & Classifying 101 How to Get the Most Out of Your VSI Maximizing Screening Efficiency Steep Slope Erosion and Sedimentation Control Belt Conveyor Safety Making GHS Education Fun! Blasting 101

2 p.m. – 3:30 p.m. The ABCs of UAVs – Key Steps to Get Your Drone Program Off the Ground Legally Developing Employees from the Ground Up in the Aggregates Industry Conveyors 301 Maximizing Cone Crusher Performance

9:30 a.m. – 11 a.m. Employment Law Series: Hiring to Firing and Everything In Between Screening Maintenance Course How to Control Dust from Aggregate Processing Plants An Eye Opener: Why Culture Impacts Fatigue Risk & How Technology Can Help Mine Planning Operation Benefits of Using Thickeners and Presses Pit, Haul Fleet and Crushing Optimization

THIS EVENT IS TOO BIG TO PASS UP!

Take the Lead During an MSHA Inspection Safety by Choice, Not by Chance: A Case Study on Cultural Transformation Wet Frac Sand Processing

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EQUIPMENT MANAGEMENT by Alan Schmidgall

While truck transport is limited to grades of 6 percent or below, overland systems can take on inclines of up to 35 percent.

Optimizing Overland Systems Overland conveyors can offer big energy savings, but require the right approach to system setup and maintenance.

verland conveyor systems deliver cost-effective operation within a wide spectrum of capacities, while offering quiet and environmentally sound material transport. When used in place of loaders and haul trucks, overland systems allow operations to significantly reduce fuel costs and expenses associated with labor, workersâ&#x20AC;&#x2122; compensation, Mine Safety and Health Administration (MSHA) training, emissions, engine depreciation, ongoing maintenance, and more.

To optimize the time-and-moneysaving advantages of overland systems, producers should consider several top maintenance strategies.

Protect the belt On an overland system, the belt is the biggest investment â&#x20AC;&#x201D; and it must be adequately protected against costly and unnecessary damage. One of the most effective belt protection solutions is that of the V-shaped wing pulley. While extending pulley life, the V-shaped design is engineered to prevent material buildup

and belt damage while greatly minimizing noise and vibration during operation. Versus the conventional wing pulley, the V-shaped pulley design delivers several advantages. A conventional wing pulley is particularly susceptible to material buildup, wing bending, and noise and vibration during operation. Belts and tail pulleys are subject to damage and failures when fugitive material becomes entrapped between the belt and the tail pulley. If the material is not removed, several serious issues can occur. First,

AGGREGATES MANAGER / January 2018

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EQUIPMENT MANAGEMENT

Automatic return training idlers provide continuous alignment, centering the belt and reducing or eliminating belt damage.

degraded material, which breaks into smaller parts, can be carried between the belt and the pulley, causing excess wear and tear on the belt; as well as potential belt slippage and mistracking. Large entrapped material with sharp edges can create an uneven belt surface and can puncture, gouge, or rip the belt. Also, trapped material can be ejected back onto the return side of the belt and can become entrapped in the pulley repeatedly until it finally degrades â&#x20AC;&#x201D; or until it damages the pulley face, bends the pulley wings, or causes pulley or belt failure. Removing material buildup from the pulley or repairing or replacing pulleys and belts may result in significant downtime and maintenance costs. The V-shaped wing pulley deflects material away from the pulley and belt, minimizing the potential of pulley or belt damage. Its V-shaped wing

configuration also results in continuous belt contact, and its round-edged wings overlap along the length of the wing pulley to permit the conveyor belt to be supported by multiple wings along the belt width. This eases the transition of belt contact from one wing to the next, which, in turn, minimizes vibration to the belt, extends belt life, and reduces the amount of noise generated by the wings contacting the belt.

Ensure proper belt tracking There are numerous belt training products to choose from, the most common being self-aligning idlers, which are used to address mistracking caused by issues such as off-centered loads, wind, structural settling, belt splicing errors, idler installation errors, material buildup, and more. Self-aligning idlers are a lower cost belt training solution thatâ&#x20AC;&#x2122;s targeted to both

the carry and return side of the conveyor belt. When a belt mistracks, it contacts the side guide rollers, causing the selfaligner to pivot. This action brings the belt back to center. When choosing a self-aligner, look for designs with key features that protect belts from additional ripping, such as urethane (versus steel) side guide rollers that are softer on the belts and concave-shaped side guide rollers that are easier on belting edges. Another innovative belt tracking solution is the automatic return training idler, which provides continuous alignment, centering the belt and reducing or eliminating any belt damage. Consider how alignment issues may affect a multi-mile-long overland conveyor. For example, a maintenance crew is often required to continually monitor the system by driving back and forth along the conveyor route to

AGGREGATES MANAGER / January 2018

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EQUIPMENT MANAGEMENT

V-shaped wing pulleys deflect material away from the pulley and belt, minimizing the potential of pulley or belt damage.

systems. Since these motors perform most efficiently near their designed power rating, it’s recommended to run at between 75 percent and near 100 percent of full-load rating. Alternatively, when a system is running at 50 percent of capacity or lower, the efficiency of the motor drops dramatically. Motor size should be matched to the horsepower requirements of the load. Again, some producers may oversize a motor thinking that it will require less maintenance; however, the energy savings realized from a properly-sized motor will outperform any maintenance savings derived from a larger model — especially in regions where energy costs are high.

Monitor and minimize rolling resistance

Overland system capacities vary from a trickle all the way up to 30,000 tons per hour.

check for potential mistracking. Manual adjustments to the idlers are frequently needed. On the occasions that problems are not caught in time, belts can be damaged. By installing automatic return training idlers in varying intervals, alignment issues can be eliminated, freeing up maintenance time for key efficiency gains. When choosing a belt trainer, make sure that the return trainer is indeed automatic. If a trainer is not automatic, it requires frequent adjustments — and that really defeats the purpose. Also, depending on the brand one chooses, the return training idler is either a contact or contact-free product. Much of the industry prefers a return trainer that is contact free, as this eliminates wear parts and any side contact to the belt. So, a contact-free trainer leads to longer wear life and less maintenance. Additionally, look for models featuring rubber lagging which sheds material and increases friction, keeping the belt aligned. Note that certain

trainers operate by using the gravity of the belt weight. Using the weight of the belt to make the roller shift (and thus track the belt) is the optimum method. The misaligned belt puts pressure on one side of the training idler, and this pressure causes the training idler to tilt and guide the belt back to center.

Pay close attention to various features and benefits when specifying belts and idlers. For example, manufacturers are now designing belts with special covers that help to counter rolling resistance. As to idlers, they all may seem alike, but they vary in performance. Ask your conveyor manufacturer to recommend the right bearing and seal type for your application. Proper idler spacing is also important, as it affects both the shape and support of the conveyor belt. Consult with the Conveyor Equipment Manufacturers Association (CEMA) or your conveyor manufacturer for idler spacing and rolling resistance formulas.

Maintain preventive maintenance Avoid oversizing When specifying a system, bigger isn’t necessarily better. A common misconception is that oversized equipment lasts longer and requires less maintenance. Conveyors should be sized according to the expected load, yet allowing for a small capacity increase. For example, specifying a larger belt than what is truly required will ultimately result in additional belt and idler rolling resistance and less energy efficiency.

Use correctly-sized, efficient motors Manufacturers typically install new premium efficiency motors on overland

Bottom line: the efficiency of the overland system is only as good as one’s preventive maintenance program. As to motors, regular lubrication and cleaning helps minimize loss from friction and heat and extends motor life. Also, systems must be periodically checked for improper belt tensioning, belt slippage, non-rolling idlers, and material carryback. Each of these issues affects energy efficiency, while resulting in costly downtime and excessive wear and tear on overland systems and components. AM Alan Schmidgall is vice president of customer service for Superior Industries.

AGGREGATES MANAGER / January 2018

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SPECIAL REPORT by C. David Crouch

Leading Others to Work Safely New research reveals four domains of safety leadership.

afety incidents are the result of organizational culture, and culture is heavily influenced by leadership behavior. So, to create a strong safety culture, you must address leadership behavior. Leadership can be either positional or emergent, or both. Positional leaders are those who hold a leadership title, though a title alone does not make one an effective leader. Emergent leaders surface when they earn the voluntary and passionate involvement of those they lead. They lead by example and have a strong, positive influence on those around them. Emergent leaders, positional or otherwise, are effective leaders. But what does it really take to be an emergent safety leader? In 2012, Caterpillar Inc. launched a comprehensive research team to determine the answer to that question. With collaboration from behavioral assessment experts Development Dimensions International (DDI), the team discerned four basic skills a leader must demonstrate with a high degree of competence that lead to safety excellence. DDI Chief Scientist, Dr. Evan Sinar, has statistically validated these findings through rigorous data analysis. The team defined safety excellence as a team of people with strong leading indicator outcomes in the areas of effective safety meetings, near-miss, hazard correction and identification, incident investigation, and inspection processes. Research included surveys of nearly 1,000 employees, front-line leaders, middle managers, and top managers in the industries of construction, energy, forestry, and manufacturing with 133 questions about what they had observed in their immediate supervisor. The responses were scientifically correlated to the leading indicator outcomes listed above. The findings provided the first ever statistically validated results of exactly what it takes to lead others to work most safely. The research revealed four domains and 14 elements of safety leadership. To produce a safer workplace, leaders must drive accountability, create connectivity, demonstrate credible

consciousness, and build trust. The sample assessed 189 leaders (54 percent front line, 26 percent in middle management, and 20 percent top leaders), and data reveals some interesting information about safety leadership. • When a leader demonstrates the four domains in high degree, employees work more safely. • Leaders who have more than nine direct reports experience lower performance in leading indicator outcomes. • The domain of accountability provides the strongest link to leading indicator performance among the four domains. • Building trust is the highest predictor of reduced incidents and injuries and the success of any subsequent investigations. • The top three elements driving leading indicator outcomes are defined expectations, integrating safety into the business operation, and sharing relevant safety information with others, and showed a 15 to 20 percent stronger performance over the other elements. • Near-miss and hazard identification processes were the two leading indicator outcomes most impacted by safety leader behaviors. • Higher level leaders generally outperformed front line leaders. This is very interesting considering the front line is where most incidents occur.

The four domains Domain 1: Build accountability. Within the three main types of accountability — personal, team, and organizational — we focused on team accountability with the main question being AGGREGATES MANAGER / January 2018

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SPECIAL REPORT relevant safety information with direct reports. 3. Integrate safety. The emergent leader explains the relevance of safety to effective business operations, integrates safety into the business conversation, and explains the “why” behind the “what.”

“What does it take for a leader to create an environment whereby all individuals voluntarily and accurately work safely, no matter who is watching?” We validated five core elements: 1. Clearly define expectations. Emergent safety leaders ensure that every person who reports to them knows exactly what is expected of them to keep themselves and others safe. This element provides the strongest statistical link to the leading indicators of all 14 elements. 2. Train to ensure competence. The emergent safety leader ensures that every direct report knows how to do their work safely and accurately. 3. Measure the accuracy of execution. The emergent safety leader follows up with every direct report to ensure accurate execution of all defined expectations. 4. Deliver appropriate feedback. The emergent leader frequently recognizes safe work and coaches to improve unsafe work relative to defined expectations. 5. Provide necessary resources. The emergent safety leader provides all direct reports with the resources of time, supplies, equipment, labor, and budget in order to work safely. Domain 2: Create connectivity. Connectivity involves integrating safety into the business operation. When a leader creates connectivity, everyone on the team understands that an effective business operation is a safe operation. There is no separation between safety, operations, budgeting, quality, and customer service — they are all integrated into an effective business and must all be accomplished to a high degree of quality. Employees are involved in identifying and solving safety problems and in the creation and maintenance of a strong safety culture. Every team member is kept informed of all pertinent information, enabling them to work safely and productively at all times. There are three elements of connectivity: 1. Involve employees. The emergent leader directs, creates, and facilitates employee involvement in the safety process. 2. Share information. The emergent leader openly shares

Domain 3: Demonstrate credible safety consciousness. Credible safety consciousness is believable, reliable, and convincing awareness and understanding of what it takes to be safe. When leaders demonstrate credible safety consciousness, it is apparent to others that they understand the safety processes within the team, have the necessary information to make informed safety decisions, effectively appraise risks where they exist, internalize safety concepts and apply them personally, and continually learn and grow in their ability to lead a culture of safety excellence. There are two elements of credible consciousness: 1. Knowledge. The emergent safety leader knows what needs to be done to keep everyone safe. 2. Reasoning. The decisions and choices made by the emergent safety leader make it a safer place to work. Domain 4: Build trust. Trust is reliance on the integrity, strength, ability, and surety of a person or thing. It is confident expectation of something and involves authenticity, integrity, genuineness, transparency, and sincerity. There are four elements of trust: 1. Care for the safety of others. Effective leaders demonstrate concern for the safety of others. 2. Value safety. Effective leaders demonstrate that safety is a core principle that guides their decisions and behaviors. 3. Demonstrate openness. Effective leaders are accessible and available to discuss safety concerns and foster an environment of transparency and free-flowing communication. 4. Interact effectively. Effective leaders communicate in a way that enables others to rely upon them to respond and behave in a manner that builds confidence and surety in relationships. This new safety leadership model provides a statistically validated approach to assessing and improving emergent safety leadership. When a leader drives accountability, creates connectivity, demonstrates credible consciousness, and builds trust, safety excellence is the result. In subsequent articles, we’ll explore each of the four domains in more detail to reveal further insights into exactly what it takes to be an emergent safety leader. AM

C. David Crouch is director of research and development for Caterpillar Safety Services.

AGGREGATES MANAGER / January 2018

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Ross J. Watzman

ROCKLAW Meet the New Assistant Secretary What does the future of MSHA hold under former mine executive David Zatezalo’s leadership?

Ross J. Watzman is a counsel in Jackson Kelly PLLC’s Denver office, where he practices in the Occupational Safety and Health Group. He can be reached at 303-3900189 or ross.watzman@ jacksonkelly.com.

n Nov. 15, 2017, the U.S. Senate voted 52-46 to make former mine executive David Zatezalo the Department of Labor’s assistant secretary for mine safety and health. Once he is sworn in to lead the Mine Safety and Health Administration (MSHA), Zatezalo will be responsible for safety across all of the nation’s mines. He takes the position last held by Joseph A. Main, a former United Mine Workers of America safety official. By the time you read this, Assistant Secretary Zatezalo will have figured out the lay of the land and possibly started putting his stamp on the agency. Zatezalo earned a mining engineering degree from West Virginia University in 1977 and an MBA from Ohio University. He later became a mine foreman and, subsequently, general superintendent for Southern Ohio Coal Co. He moved to Australia, where he worked for Broken Hill Proprietary as a general mine manager. Finally, Zatezalo returned to Lexington, Ky., to head Rhino Resources GP LLC until his retirement in 2014. Having begun his career as a coal miner and having worked his way up the ranks to president and CEO, Zatezalo has a keen understanding of the needs of the mining industry. So what will likely be Zatezalo’s focus in the remaining three years of his term and what is in store for the future of MSHA? First, in a previous column, I mentioned that we may potentially see an MSHA that stresses compliance assistance and regulatory reform rather than concentrating strictly on enforcement and rule promulgation, as had been the emphasis of

the prior administration. For the past eight years, MSHA has maintained an aggressive regulatory agenda, focusing on topics such as workplace exams, silica exposure, and pattern of violations. It has also been continuously regulating by policy without notice-and-comment rulemaking. However, in his first week in office, President Trump issued Executive Order 13771, which aims to “manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations.” It requires that “for every new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.” In light of Executive Order 13771, MSHA issued a notice on Oct. 23, 2017, indicating its desire to seek stakeholders’ assistance in identifying those regulations that could be repealed, replaced, or modified without reducing miners’ safety or health. While input from stakeholders is certainly welcome and necessary, it remains prudent to couch any recommendations in the correct light given the requirements of the Mine Act. Section 101 of the Mine Act proscribes that “no mandatory health or safety standard promulgated under this title shall reduce the protection afforded miners by an existing mandatory health or safety standard.” Thus, opponents of the new administration’s regulatory reform effort will undoubtedly explore utilizing Section 101 in legal challenges to situations where either regulations are reformed

AGGREGATES MANAGER / January 2018

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or two existing regulations are eliminated to make room for a new standard. Second, MSHA will likely begin to work with operators to ensure the protection of all miners instead of simply emphasizing compliance above all else. While compliance implies safety, it is important to realize that they are separate sides of the coin that need to be addressed by the industry. As such, we expect an increase in MSHA training materials and guidance documents similar to the MSHA guarding presentation that was published in October 2012. We also expect MSHA to establish a conference process prior to issuance of penalties, wherein operators will have a chance to discuss and address any safety issues with MSHA before penalties are issued. This cooperation with MSHA does not end with compliance. It will likely extend to MSHA working with individual mines instead of lumping the entire industry together. Thus, we anticipate a return to the development and implementation of mine plans arising from an operator-specific approach where there is a fair weighing of all evidence concerning the suitability of the plans for the particular mine, rather than a one-size-fits-all approach. This cooperative-based approach will be further necessitated by the potential changes to agency deference. As historically established, courts are required to defer to an agency’s interpretations of its own regulation “unless that interpretation is plainly

erroneous or inconsistent with the regulation.” This is generally known as Chevron and Auer deference. However, on Jan. 11, 2017, H.R. 5 – Regulatory Accountability Act was introduced in the House and would repeal both Chevron and Auer. Without the unbridled ability to both promulgate and interpret its own laws, it will be imperative that MSHA work with industry to find common ground in regulatory interpretation or otherwise become susceptible to legal challenges. Finally, at his confirmation hearing, Zatezalo expressed support for rebuilding and reorganizing MSHA. This would likely include a much-needed reallocation of resources. From 2011 to 2014, there was an 18-percent decrease in the number of coal mines throughout the United States. Despite the substantial decline in the number of coal mines, the amount of money and number of inspectors allocated to inspect those mines has remained fairly consistent. MSHA should work to move personnel to other areas of need and increase training for all inspectors. Proper training and the appropriate allocation of personnel will enable MSHA to enhance safety in all mines through improved inspections and cooperation with operators. Because of the ease in which this can materialize, it is highly likely that this type of administrative reform will be the first order of business for Zatezalo. Only time will tell how much, or how quickly, regulatory overhaul and compliance assistance will occur. AM

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Aggregates and Time Travel Twenty years of aggregates production as seen through ‘Carved in Stone.’

penned my first ‘Carved in Stone’ column 20 years ago this month. Just for the heck of it, I re-read all my articles. Wow! A lot has happened over the years. This year, I will choose from past articles and talk about how things have changed. The accompanying graph shows per capita aggregate production for Australia, Canada, China, the European Union, and the United States. Production is strongly related to population, and there is a huge difference in populations among these areas and each country’s aggregate production. To normalize the graph, I plotted per capita aggregate production. Probably the biggest thing that happened to the aggregate industry over the last score of years was the Great Recession, a period of general economic decline in world markets during the late 2000s and early 2010s. You can see that during the first 10 of the last 20 years, aggregate production in Australia, Canada, the European Union, and the United States pretty much chugged along with some slight ups and downs. Then, around 2008, the aggregate industry in Canada, the EU, and the U.S. took a pretty big hit. In the U.S., this relates to the burst of the housing bubble and the failure of the subprime mortgage market. Per capita aggregate production in neither Canada, the EU, nor the U.S. has fully recovered from the recession. It is a completely different story with China where, during the last 20 years, per capita aggregate production quadrupled from 4 to 17 tons. Unless you pulled a Rip Van Winkle and slept for the last 20 years, you probably are aware that China’s economy has been booming since the 1980s. Part of that growth involves a population shift from rural areas to the cities. With its population of 1.3 billion people and thirst for new housing and other infrastructure, it’s little surprise that China’s per capita aggregate demand has steadily increased. But how do you explain aggregate production in Australia? During 2008 and 2009, while per capita aggregate production in Canada, the EU, and the U.S. were plummeting, production in Australia increased. Australia avoided the recession due to a number of factors, one of which is the country’s proximity to the booming Chinese economy. Exports to China, and the related mining boom in Australia, helped keep its economy growing throughout the worst of the recession. China’s strong economic growth has inspired other low and middle income countries such as Brazil, and other countries with large populations, such as India, to emulate its economic models. So how did aggregate production in other countries fare during the Great Recession? Because economic growth is closely related to aggregate production, this map showing the economic condition of countries during 2009 can be used as a proxy for aggregate production. Countries colored green had economic gain from 2008 and 2009, whereas countries colored brown had economic losses. The darker the green or brown, the greater the economic gain or loss, respectively. Let’s see if it works. The U.S., Canada, the EU countries (except Poland, where aggregate production increased during 2008-2010) all had decreases in aggregate production and economic losses. Australia and China had increased aggregate production and economic gains. Yup, it seems to work. I wonder what this map will look like 20 years from now? AM

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