NEW YORK Federal environmental laws are hurting iron ore miner Cliffs Natural Resources Inc., particularly as uncertainty over new regulations has forced it to take a second look at new U.S. investments, the companys top executive said.
"I dont think anyone is trying to avoid good environmental regulation. But give us a clear and transparent process. Dont change the rules after many years of work," Joseph A. Carrabba, chairman, president and chief executive officer of Cleveland-based Cliffs, told AMM in an interview. "We need more transparency in the science of how the rules and regulations work. Were just not getting access to that."
Carrabba testified at a Commerce, Manufacturing and Trade Subcommittee hearing March 21 in Washington, where he said permitting processes are too burdensome, and federal and state agencies arent working in tandem to reduce environmental impacts.
The company, for example, said last month that it would have had to spend $400 million to bring its operations into compliance with the U.S. Environmental Protection Agencys new haze regulations, announced last fall, according to media reports. It has faced continued pressure on the haze issue, particularly at its United Taconite LLC iron ore facility in Forbes, Minn. (amm.com, Oct. 20, 2010).
"In northern Minnesota, we had an issue with regional haze. We worked to drop regional haze dramatically, and after two years of work and working very hard with the (regional) agencies, we finally came to an agreement on what to do with regional haze," Carrabba said. "Then, the (federal) EPA popped in and said, Thats not right and Were going to stick our nose into it. Were going to unwind all this work youve done. "
Cliffs has been forced to think twice about investing in the region as a result of such uncertainty and ever-changing regulations, he said.
"We had to pause new investments. Any of the investment opportunities we had on the board for northern Minnesota, we had to take a pause and figure out what this economically means," Carrabba said.
Cliffs isnt looking to embark on any major U.S. expansion projects in the coming year. While the company has about $1 billion in capital to spend across the board this year, it has slated around $300 million of that in an effort to keep its U.S. operations up and running and in compliance with environmental regulations.
Carrabbawhose term as American Iron and Steel Institute chairman ends in Mayalso said that action against currency manipulation remains a top priority this year. Other uncertainties that could hurt U.S. steelmakers include a "cumbersome" tax system, ambiguities within the Affordable Care Act, and a lack of leadership at the U.S. Trade Representatives office and Commerce Department, where the top posts remain vacant.
"We want balanced trade. Were not protectionist," he said. "We just want appropriate relief with currency trade laws and the enforcement of our existing trade laws."