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Art Schweizer: An interview with the 2004 SME President Let’s start off with your assessment of the mining industry. Today, the status of the mining industry is stronger than it has been over the previous few years. Mining continues to be a major part of the world’s economic foundation. And the industry is now gaining strength due to rebounding metals and minerals prices. With these rising prices and the changes the industry instituted during the years when mining-related commodities were selling at low prices, our stronger, more productive and internationally competitive industry should flourish. Mining remains an essential business and the industry is far ahead of the game when it comes to the trend of globalization as a key to sustained growth. Also, the industry continues to realize increased productivity through technological innovations. And an increasing number of countries are moving towards capitalism, which opens doors for exploration and mining within their borders. After looking at all of these factors, I believe that the mining industry will only continue to gain momentum in the future. Changes you have seen in mining. Mining has changed considerably over the last several decades, and these changes will have a decided impact on the future of the industry. As far as I am concerned, the biggest of these changes is the fact that the United States has not maintained its status as being a safe and economic haven for mining industry investments. Mining operations in the United States have suffered significant costs from regulations and obstacles presented to them by communities that have potential metal and mineral deposits. Due to these environmental regulations, it is difficult to develop a new mine in the United States. As a result, companies are turning their efforts towards international operations. Internationally, environmental regulations do not exist to the degree that they do in the United States. In most countries, a new mining venture is welcomed and embraced as an opportunity to raise the standard of living for that locality. So I see the mining industry continuing with its focus on international development. The United States will be left with only its existing mines and a reliance on importation for its metal and mineral necessities. The results of this international focus? The mining industry faces several challenges with this move towards international business. To begin with, the Chinese and the countries from the former Soviet Union are starting to develop into industrial powers. This development means that their focus will continue to move from exporting their metals and minerals to consuming them. Furthermore, this international movement will dramatically affect the mining industry in the United States with these substantial consumption demands. The US mining industry will be forced to focus its efforts on technological advancements in order to increase production at lower costs from deposits of lower grade. In comparison, the development of new deposits in foreign countries seems to focus on sustained growth rather than technology, due to their higher grade deposits. All in all, I see this trend of international development continuing and forcing the United States to compete for its metal and mineral resources. How do you differentiate here between the metals and industrial minerals? There are several differences between the industrial mineral and metal sectors of mining. First, the metals side is controlled by global marketing, international economics and worldwide pricing set forth by the London Metal Exchange. Industrial minerals tend to be local-market commodities that depend on transportation and availability for their pricing structure. Having been involved in both sectors, I find that it requires different focus. The metals sector emphasizes cost of production, transportation to market and international competition. On the other hand, the industrial minerals business stresses marketing, product development and local consumer demand. I have also experienced differences in both sectors regarding the environmental regulations governing them. For years, the metals side of mining has taken the brunt of the regulations. And although recent years have brought many of these regulations to the industrial minerals sector as well, my familiarity with both sectors has been that an industrial minerals operation is far less scrutinized. Even though both sectors have big differences and require different focus, I have thoroughly enjoyed the challenges of both. What about the government’s role in mining? In my experience, the role of government in mining continues to make mining in the United States more and more difficult. Government regulations usually come about as a result of public outcry. The public develops false perceptions of mining due to a lack of education or as a result of some impact that mining has had on the environment of their community. In most instances, people tend to favor mining once they understand the impact that it has on their quality of everyday life. Therefore, it is the mining industry’s responsibility to educate people about the necessity of mining. The industry must not ignore its critics. Some environmental groups and organizations, formed for the good of society, have now become platforms for those who think their point of view should be acted upon as long as there is an economic gain enabling them to justify their position and keep their job. Instead, the mining industry must communicate more effectively than its critics. With such education, I believe that the industry can realize far less bashing and fewer environmental regulations. Your thoughts about the current state of SME. Over the past few years, the financial condition of SME has slowly deteriorated as a result of declining membership. Each year, we try to present budgets that do not accurately reflect the practical aspects of the business of SME. In fact, we have been relying on the investment income from our endowment for too many years. When the stock market declined, it became evident that SME must implement changes and focus on developing a new financial plan or face financial hardship. The new financial plan will produce a balanced budget that does not depend on gains from our investments. In order to do this, we will have to decrease the services that we provide or increase their revenues. Presently, the cost of registration for SME’s meetings and the SME membership dues are among the lowest of all similar professional societies. We are subsidizing these low fees through our investment income. In order to move away from this poor business practice, we must eliminate waste, reorganize the society, eliminate dormant committees, and find new ways to perform SME business at a reduced cost. We are already doing some of this. By reviewing all the services that SME provides, trying to project the needs to perform them, and developing new services that will generate income and attract new members, we have already started exploring a new financial plan for SME. However, we still have a long way to go. We must continue to emphasize this area so SME can thrive in the future. Membership is the critical element here. As I already discussed, a solid financial plan requires the expansion of SME’s membership base. We need to look into new ways of attracting more people to this organization. To do this, we need to change the requirements for membership in our society. Right now, SME is a society comprised of professional people. In my eyes, we should not limit ourselves to this designation. I feel that we could benefit greatly by becoming a society of the mining industry. This idea would open membership to people at all levels of mining. These people are already attending our local-section meetings, to better educate themselves about the industry. Even though many do not hold an engineering degree, they have on-the-job experience that could benefit the society. Expanding our membership will not only help us financially but can make us a more knowledgeable society, as well. Where would you like to see SME in 5-10 years? In the future, I think SME needs to accomplish several things to enhance its standing. Obviously, we must first become financially sound in order to run the business side of SME properly. Then, we need to focus on expanding memberships to help us financially and to build our voice and exposure in the community. Next, a more active role in joining with other international mining societies is necessary. A global mining society that can pool its resources together to educate people about mining will benefit this industry by providing a strong, educated voice against its opponents. And finally, I would like to see stronger corporate support from mining companies, to highlight the importance of SME. As with all business, a solid, future plan is required for this organization. During my year as President, I plan to implement ideas that will help us achieve it. What, then, are the goals for your presidency? As SME president, my first goal will be to work with the new Executive Director for the society. I am grateful to John Orologio for postponing his retirement to assist the society as acting Executive Director. With Orologio’s assistance, I hope to be able to educate and bring up to date our new Executive Director as soon as possible. With our new Executive Director, we can move forward with our future plans for the society. I also want to thank the SME Search Committee for their quick efforts in completing the unenviable task of find a new director. Secondly, I would like to put together a solid business plan for the society. This plan will undoubtedly help us become more financially sound by guiding our efforts for operating balanced budgets, providing services sought by membership, eliminating unnecessary services and committees to reduce the workload of the staff, and providing direction to our new Executive Director. As everyone knows, a solid business plan provides a blueprint for how an organization is run. Therefore, it is time that SME begin doing business in the same manner as all other businesses. In addition to finding a new director and developing a business plan, I look forward to continuing the initiatives developed by our past presidents. Former SME presidents Tom O’Neil and Ta Li stressed the idea of developing relationships with the other prominent international mining organizations in hope of someday forming a global mining society. I plan to continue this initiative through further development of these relationships and by increasing opportunities for our international friends to meet with us. By pulling the resources of all mining societies together into one global mining society, I believe that we can only strengthen our entire industry. What else? Next, I plan to continue the work of past SME president Mike Karmis and expand our membership within the aggregates industry. In order to appeal to the many mining engineers now associated with this industry, I feel that it is of utmost importance to continue growing our aggregates committee. We need to let the people involved in the aggregates industry know that SME is focused not just on hard-rock and coal mining. By providing professional development services to the aggregates industry, SME can only benefit from it by bringing in new members and retaining members who have moved into it. Finally, I plan to increase the use of the internet and electronic publishing. Former SME Executive Director Gary Howell and past SME President Don Ranta started the society in this direction, and it is has proven very beneficial. As far as I am concerned, I would like to see us use it even more. The internet has already proven itself as a great tool for communication and as a popular source for mining information. I feel that we can further the success of the internet by expanding the services we provide on it. As we move towards a paperless society, SME can move more of our services online, as well. My ideas include things such as electronic voting, listing of committee activity reports online, and providing a place to share technical information. Considering that providing these services over the internet would eliminate the time consumption of paper distribution, the result will be reduced administrative costs. Therefore, in sticking with my goal to be a financially sound organization, the internet will be a key tool. Any final comments? In closing, I would like to thank the members of SME for their continued support of our organization. SME and mining have afforded me many great opportunities and relationships. Truth is, I cannot even imagine my life without them. As President, I look forward to helping this great society give many others these same opportunities. Through hard work and determination, I know that the extraordinary people in all aspects of the mining industry will thrive and strengthen SME. Read Art Schweizer's Biography

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