Integrating sustainability into operations (Part 2)

FMI Capital Advisors’ George Reddin expects an emphasis on recycled asphalt and aggregates to continue. Photo: PamElla Lee Photography

The following transcript is from one of two concurrent discussions at this year’s Pit & Quarry Roundtable & Conference. The transcript from Part 1 begins here. Both conversations were edited for brevity and clarity.

P&Q: ‘Sustainability’ is a buzzword that’s been around for a number of years, but we’re seeing more use of this term and embrace of this concept within the aggregate industry of late. Sustainability, of course, means different things to different people. For equipment suppliers, sustainability might mean providing longer-lasting solutions. For construction materials producers, the term might mean developing more durable materials. For aggregate producers, it might mean fully maximizing the reserves of a pit or quarry. For your business, how does the concept of sustainability resonate? Is sustainability driving equipment suppliers’ offerings or how producers go about doing business? Also, at the end of the day, how does the idea of ‘financial sustainability’ fit into the equation when making decisions around the concept of sustainability?

KEATON TURNER (TURNER MINING GROUP): In my humble opinion, sustainability typically translates to an increased cost in some way, shape or form. Not all the time, but I’d compare it to batteries: You can buy a pack of AA batteries that you use and throw away, or you can buy some expensive lithium ion batteries. Most people buy the cheap ones that they use and throw away. Not super sustainable. But I think some of these sustainability initiatives take reeducating the end user. It’s sometimes an uphill battle to have those conversations just due to the cost.

KAREN HUBACZ (BOND CONSTRUCTION CORP.): As far as utilizing recycled asphalt, whether you’re putting RAP into your asphalt to cut back on the volume of the virgin liquid or whether you can use that as far as road base, that has increased over the last five years. I think it’s a huge part of what we’re doing to hold the raw materials back to utilize those where we absolutely need to and then supplement with recycling where we can.

TURNER: I think it geographically matters. For example, in California, you’re not going to get a new quarry permitted. It’s just not going to happen. So they’re going to have to recycle concrete and asphalt. But I think the end user in California is accepting of that and they know that. Reserves are depleted every year there in active quarries, but there’s more and more recycling going on. You go to Texas, depending on where you are in Texas, and it’s cheaper to use virgin material than it is to recycle. So, again, I think it’s just about the end user and if they are willing to absorb that increased cost most of the time.

JOHN SCEPANIAK (WM. D. SCEPANIAK): A lot of times, with the exception of some undercutting the market as far as their per-ton price on recycling concrete, the customers don’t want to pay what it costs because, more often than not, you go to sell a project, it looks great and then you get two to three days into it and you’re trying to crush a rebar pile. Virgin material is far easier to go after, and it’s more cost-effective to the customer. Right now, we have a DOT (Department of Transportation) that’s setting requirements of 100 percent recyclable base material that’s a combination of concrete coming off, millings getting hauled in and blending into that aggregate. In the private world, they’re not so apt to jump on the recycled things. But I think when DOT has required it, it’s a necessary evil.

GEORGE REDDIN (FMI CAPITAL ADVISORS): I think that you look at asphalt, which a significant amount of aggregate goes into, and the trend over the last 10, 15 years, especially on the DOT nexus, has been increasing the amount of recycled materials. Maybe 30-something percent state to state. So if you look at the natural asphalt volumes, they’re not growing significantly. Asphalt is growing, but it doesn’t have the aggregate in it that it used to because of the recycled materials. With ESG scores and whatnot, you’re going to see where they can get recycled concrete operations. So you’re going to have those two stress points in asphalt and concrete going against virgin aggregate.

MICAH TYSVER (U.S. EQUIPMENT SALES & RENTALS): We’ve seen more of a focus on recycling on the dealership side primarily. We’ve seen more of the folks on the environmental side focus on the asphalt and concrete recycling and other types of ceramic, shingles and things removed from building materials. A big one that’s on the radar right now is wind tower blades. They have a 20-, 25-year lifespan, and we’re trying to come up with a plan to crush and recycle them and utilize the fiberglass. So we’ve seen a much more significant focus on the environmental side of the equation in the last year.