2022 Letter from the CEO
28 Jul 2023
Welcome to The Doe Run Company’s 14th annual Sustainability Report. Here, you will find information on how we balance our social, economic and environmental responsibilities while delivering a sustainable supply of select minerals, metals and services that meet the changing needs of a growing world population.
2022 marked my first year as both president and CEO of this nearly 160-year-old company. It was a challenging year stemming from a post-COVID-19 environment, including growing pressures from rising costs, supply chain challenges, workforce availability and volatility in commodity prices. Despite these challenges, we made significant capital investments in our operations in order to properly position the company for sustainable operations and growth. In addition, I have tasked our human resources department with ensuring that we provide more training and development opportunities for each of our employees.
Putting Employees First
As a natural resources company, our most valuable resource is our people. One of our goals is to be a preferred employer. Overall, Doe Run already provides wages well above average in the communities in which we operate, as well as comprehensive health benefits, but we understand that an employee’s experience at work is more than compensation and benefits. This past year, we surveyed our employees to understand what we are doing well and how we can help them feel more engaged. One of the biggest takeaways is that employees want to know more about all aspects of our business. So the Executive Team has been making frequent visits to locations and departments outside of their areas of responsibility in order to create opportunities for informal dialogue. I personally had the pleasure of visiting our operations over 50 times in 2022. The feedback has been positive, and we are looking forward to continuing these conversations.
We also worked to address employee informational needs by expanding employee communications, providing regular company-wide updates in monthly employee meetings, and building out our electronic communications opportunities. We intend to conduct follow-up surveys to measure the impact of these initiatives and identify other ways to support employees.
Employee skill development is another area of emphasis. One such example is our Mobile Equipment Training (MET) program. Today’s new employees often have less experience with hands-on trades and equipment use compared with previous generations. In response, our safety department developed the MET program, a more sophisticated training for new employees using heavy mobile equipment. This program graduated 72 employees in its inaugural year and has been expanded in 2023. Already, we are seeing a decline in equipment damage.
Keeping employees safe at work is our most basic tenet. Working safely is integral to our ability to deliver the metals and minerals our customers need. Employees completed 37,690 hours of total training in 2022, much of which covered health and safety topics. We are proud that our employees continue to meet notable safety milestones at several locations.
While we recognize these safety achievements, we know we must do better. In 2022, we tragically lost a valued coworker and friend in a fatality at one of our mines. We are redoubling safety education to prevent accidents like this in the future.
Government-Funded Opportunities for Advancement of Critical Minerals
Over the past several years, our federal government has taken steps to acknowledge and address the nation’s growing dependence on foreign sources for critical minerals. In 2022, the U.S. Geological Survey (USGS) published the “2022 Final List of Critical Minerals.” The list includes 50 mineral commodities as critical (an expansion from 35 in 2018). The U.S. is 100% reliant on net imports for 15 minerals, 12 of which are on the critical minerals list. China and Canada supplied the largest number of these nonfuel mineral commodities.
Many of these critical minerals are foundational to a carbon-neutral energy future, as they support electrification. These include antimony (83% imported), cobalt (76% imported), nickel (56% imported), tin (77% imported) and zinc (76% imported). Doe Run has access to these five critical minerals in our mineral resource or in the materials we recycle.
Although copper and lead are not identified as critical, they are essential to the electrification of the U.S. energy market. To meet global copper requirements, the National Mining Association estimates we will need to produce the same amount of copper in the next 25 years as humanity has produced in the last 5,000. The U.S. imports 41% of the domestic demand for copper. Lead demand in the U.S. is largely met through the recycling of lead batteries, yet lead imports are rising. In 2022, the U.S. imported 42% of the lead it used – the highest in several years. Surprisingly, the U.S. has no strategic stockpile for lead.
These aforementioned seven minerals, as well as non-metallic minerals, place Missouri in the top 10 states for total mineral value produced in the U.S. Armed with this information, the company spent untold hours with federal and state elected officials and regulators explaining how Doe Run can help the nation reduce its dependence on foreign minerals and metals through U.S. domestic resources. Many of these opportunities come from the advancement of technologies homegrown from Doe Run’s technology center or from our mineral holdings not currently under production. As money becomes available through federal and state programs, Doe Run’s government relations team is submitting applications for funding these exciting projects. We are also working closely with Missouri University of Science and Technology on supporting their critical minerals research funding opportunities.
Doe Run produces lead, copper and zinc concentrates, which are primarily sold on the international market. We also produce lead and lead alloys, which are sold domestically to battery manufacturers, the construction industry, the U.S. government (e.g., specialty nuclear cask pours produced by our subsidiary Fabricated Products, Inc.), defense contractors and others. Demand for lead, copper and zinc is largely tied to the energy sector, and in the case of lead, the battery industry. Lead batteries are used in nearly every vehicle in the world and provide back-up power to data centers, cell towers, and financial and medical institutions.
In 2022, global refined lead consumption was 13.7 million metric tons.
What does the future hold for lead? In order to transition to renewable and non-carbon energy sources, battery energy storage is projected to grow dramatically. By 2030, the global battery market will reach 3 terawatt-hours (TWH) and $440 billion, according to the Consortium for Battery Innovation. Driving this growth is not only vehicle electrification, but also wind and solar energy storage used to supplement the electric grid. Demand for battery power in these applications will continue to grow as battery power can help utilities level their load and decrease outages.
In order to reach zero carbon targets by 2050, the world will need a wide variety of available energy storage technologies. Compounding the competition for energy storage minerals is the fact that the green revolution is taking place across the globe at the same time. Unlike the relatively slow expansion of the industrial revolution, countries are actively competing to secure the minerals they require to expand their renewable energy infrastructure.
One thing is clear: it will take a variety of battery chemistries and other energy storage technologies to meet global carbon reduction goals. Lead batteries will no doubt capture a portion of this market, providing tremendous growth opportunities for the industry. Lead batteries are affordable, reliable, safe and sustainable. Their 99% recycle rate means over 3 billion pounds of lead batteries are recycled at 10 recycling centers across the U.S. every year.
According to 2021 research commissioned by Battery Council International, the production and recycling of lead batteries in the U.S. provided a total domestic economic impact of $32.9 billion, which was responsible for supporting nearly 121,000 domestic jobs and $8.5 billion in labor income.
When deployed in hybrid vehicles with start-top technology, these lead batteries are helping to reduce greenhouse gas emissions by 6.7 million tons annually in the U.S. We are proud that Doe Run is a significant contributor to this industry and the energy-storage solutions it provides.
Preparing Our Business for the Future
Key to supporting lead’s role in a more sustainable future is advancing the sustainability of our lead recycling process, such as advancing technologies that can recover valuable minerals from mining and smelting byproducts, as well as from mineral concentrates. Doe Run is working on proprietary technologies in both areas.
On the remediation front in 2022, Doe Run invested approximately $2 million toward repurposing the Herculaneum smelter. Yard remediation continued in St. Francois County, with our Soil & Land Services subsidiary completing a record number of yards in 2022. Homeowners and community members praised the work, sharing feedback through comments and letters of support.
While we address these historical projects, we are also looking to the future of Missouri’s lead industry. The Viburnum Trend is one of the world’s largest lead mining districts, and it continues to produce. We have completed extensive exploration in the northwestern portion of the Viburnum Trend, as well as in the Higdon Mine portion of our land holdings, to further define deposits of cobalt, nickel and copper.
While there are certainly challenges operating a mining and metal recycling company today, we are optimistic knowing that the minerals and metals we supply are critical to fulfilling society’s needs for essential products that help support a more sustainable world.
I hope you will review our Sustainability Report in full to learn more about Doe Run’s progress, and I invite you to share any comments with me via this survey. We value your feedback.
Matthew D. Wohl