Happy New Year, Drilling Deeper listeners! In the first episode of 2024, Kevin Yanik hosts a solo episode in which he looks back at developments that drove 2023’s performance including production totals, pricing, construction starts, the supply chain and more. Additionally, Kevin shares his insight on how he expects factors such as digitalization, electrification and autonomy to play out in the aggregate industry in the coming year.
Transcription
Kevin Yanik: Welcome back to Drilling Deeper. I’m Kevin Yanik, editor-in-chief of Pit & Quarry magazine, Happy New Year, everybody. I want to introduce our show sponsor before we dig in, Sykes Supply. With 80 plus years of truly personalized customer service, Sykes Supply offers competitive pricing on top of power transmission, conveyor and power tool brands. And with leadership that solves problems for customer partners supply is a difference maker. Visit sykessupply.com/podcast and experience this Sykes Supply difference today.
Again, we’re here in 2024, which is hard to believe. Hopefully everybody enjoyed the holiday season. If you’re watching at this point, you can see it’s just me here in the studio in downtown Cleveland. ‘Tis the season for illness and flu and COVID and all that and our Jack Kopanski is down for the count. But we’re hopeful that Jack will make it through and we’ll see Jack in Episode 6.
Here at the top of the new year, I was thinking a little bit about some of the things that kind of transpired on my own path with the magazine at the end of 2023. And I gave a couple of presentations in December, one to the South Carolina Aggregates Association, which is an organization that is in its third year down in Palmetto State. Had the opportunity to talk about innovations and quarry and plant technology, delivering a presentation for the SCAA. That was an exciting experience. And that group, SCAA, is really growing. They had about 350 people at their meeting in Columbia, South Carolina. Seems like that’s one of the fastest growing state associations in the aggregate industry and one to watch if you’re you’re not aware of. One to watch if you’re serving South Carolina with a presence in South Carolina, if you’re a producer. So that was one presentation I gave, and that’s not the one I’m going to share with you here today or reflect on some insights from that one, but I want to talk more about another presentation that I delivered toward the end of the year.
I had the fortunate opportunity to visit with Mellott and its customers and some of its partners. And really, with it being the end of 2023 at that time, when I delivered that presentation, it was an opportunity to reflect on the state of the industry and talk about the things that happened throughout the last 12 months. So, I wanted to really kind of work through that presentation with you here today, talk about where we are as an industry and some of the things that you could probably expect here in 2024. Anytime I really reflect on the year that was – because if you read our magazine, you’re familiar with the fact that we publish a year end state of the industry report in December every year. That’s in your mailboxes now. You should have received that at this point, you know, within the last several weeks. But we do publish the state of the industry report, and anytime we do that we kind of look at where we were 12 months prior. And you know, when I think back around this time last year, you know, think about January of ’23. A few things were going on at this point. Aggregate production or aggregate totals, when you think about crushed stone, sand and gravel, we really were peaking in terms of the last 10 to 15 years of production totals.
At the magazine, we’re regularly keeping tabs on what’s happening with aggregate production as put out by the U.S. Geological Survey. The latest numbers show that they’ve dipped, but you look back a year ago, and we were really reaching 15 year highs that had been slowly and steadily climbing since the great recession. If you look back at some of the data that USGS has put out, we really peaked, we were climbing nicely in the ’06-’07 years. And then in ’08 when the bottom kind of dropped out, we saw aggregate production really crashed. It was not a good time for the industry. And you know, the last 13 plus years, and we’ve really been climbing back as an industry to get aggregate production totals to where they were pre-Great Recession. Unfortunately of late we’ve seen those numbers dip a little bit, but when you think relative to the last 15 years, we’re still at a really good point in time for aggregate production.
Another factor that was really happening 12 months ago, starting to make some headway into our industry, not just our industry, but I guess every industry and into our economy is inflation. You know, that was a huge storyline 12 months ago, and it continues to make impacts on producers on the cost of equipment, on the cost of everything. You know, you go to the grocery store today and you get three items for $50 that a couple years ago you’re paying $30 for. So inflation has been in the impact, it was making an impact 12 months ago, and I guess the silver lining there is that producers have been able to make some headway with pricing gains of their own. And you know, I’ll get a little bit more into that as the podcast unfolds here.
Another development that sort of was happening a year ago at this time was, you know, the nature of aggregates demand. What was precipitating aggregate demand 12 months ago? I think back to 2020-21. Those years, the residential really was taking off and we saw a lot of activity there with construction starts. Single family, especially, was doing well during those years and in the last 12 months. I think we’ve seen it kind of flipped in terms of residential construction and what’s driving that. ’23 was really the storyline for multifamily, where single family kind of dipped a little bit, but saw a forecast from the National Association of Realtors not too long ago, looking at ’24 as an opportunity to really grow on the single family side again. I think they’re calling for about a million starts in ’24 for single family and for multifamily to be about half of that. I think .48 million, or 480,000 starts in the multifamily segment. So we might see the nature of residential construction change a little bit.
And, you know, on the same front non-residential has been an ever-changing market for a while now. Think back a year ago, think back three or four years ago, and you know, warehousing was really big with Amazon putting facilities pretty much everywhere. Those are high aggregate intensive facilities. And kind of what transpired in the last year or two, I’d say even, on that front with warehouses is that Amazon identified that they have all their infrastructure in place, and they’re not building anywhere near the rate that they once did. Walmart was a big driver of warehouse construction as well, and warehouse construction, while it was driving on residential construction not too long ago, it’s not really the driver of non-residential construction anymore.
Now we’re seeing manufacturing kind of rise up, data centers, that was kind of the big one for for non residential construction in the early years of this decade. So non residential construction, you know, because it entails everything that’s really not traditional infrastructure, that being roads, bridges, highways. And then the residential sector, it’s kind of a catch all for all things, non infrastructure, non residential, so from year to year you can see something pop up there that helps to fuel demand. And it’s no different here, coming of ’23 where we saw that manufacturing kind of was a big driver there.
And, you know, another storyline thinking back 12 months ago, supply chain. When I think about the things that we’ve covered traditionally in my years on Pit & Quarry, supply chain wasn’t really front and center for us as a magazine. Not until 2020 and ’21, when you saw that manufacturers were were having some challenges sourcing materials, steel pricing was going up, lead times were soaring. And the nature of planning, if you’re an aggregate producer, planning your capex purchases was totally different.
We saw the just in time model of purchasing kind of go away, go by the wayside. Just having talked about that for the last few years, it’s not something that manufacturers and dealers anticipate coming back, I think a lot of lessons were learned as supply chain. We’ve seen some improvements in the supply chain fortunately, of late, but there’s still some slowdowns. Certain materials are hard to come by. But for the most part manufacturers have adjusted, producers our understanding of what’s happening in the supply chain and they’re just planning a lot better, much better than they did not too long ago. So that’s kind of where the industry was 12 months ago.
And where we are today, at least on the aggregate production front is, like I said earlier, the numbers are trending downward a little bit. Again, we’re keeping tabs on what the USGS is putting out there. We just got the latest numbers on the third quarter in recent weeks. And for the fourth quarter in a row, USGS is telling us that aggregate production is down. So that goes all the way back to the fourth quarter of ’22. We’ve seen four consecutive quarters of declining aggregate production. Not ideal, but it’s again, not like we’re seeing production go down to the levels that we saw in ’08-’09. You know, we’re seeing some dips. The dips in the third quarter were the 3 or 4 percent variety. I think crushed stone was down about 3% and sand and gravel was down about 4 percent for the months of July, August and September. And the fourth quarter numbers, I would anticipate again, to be down just because that’s been the trend here. Ideally, we could flatline those little bit as we’re coming into a new year. We’ve got IIJA money really coming online here in ’24. Came online more in full steam in ’23.
One interesting development on IIJA, something that hopefully will help to fuel activity and get us back on a positive growth path with aggregate production, is something I heard at the South Carolina Aggregates Association meeting where Vulcan materials Tom Hill – he’s the Chairman and CEO of Vulcan. Vulcan, of course, is the number one aggreagate producing company in terms of size in our country. And you know, he really kind of laid IIJA out rather plainly, because that’s a bill that we saw passed in November of 2021. And you know, for the last couple of years really, been hearing from readers, “Well, where’s this money? When’s it coming out?” And as Hill kind of explained it at the South Carolina meeting, you know, it takes time to get the funding out from a federal level. And here we are in ’24 now, and really we’re going to be in year two of full funds making their way out into real projects. $350 million was dedicated to core infrastructure, again, like roads, bridges and highways across our country. Hopefully, again, IIJA money coupled with increasing funding from a number of the states, you know, South Carolina being one of them, seeing a lot of IIJA money come out. But also some of the states are putting additional funds forward, recognizing that their infrastructure is in some cases in dire need of being addressed.
But again, we haven’t seen aggregate production grow since the third quarter of ’22. It seems like that’s a long ways away at this point. I guess maybe one of the other notes I’d share about what’s happening with aggregate production of late is that it seems like sand and gravel is struggling a little bit more than crushed stone. The first half of ’23, for example, you know, we saw crushed stone was actually up overall, and sand and gravel in the first half of 2023 was down almost 6 percent. So, always keeping eyes on on those numbers. Again, the fourth quarter numbers aren’t yet available for ’23. We’ll probably see those come forward in February of this year, I would imagine. And we’ll be curious to see if those continue on the downward path if we can get on the upward trajectory once again.
But another storyline that I guess it goes back to ’22, I would say, but it really continued in ’23, was what was happening with aggregate pricing. Because, you know, as we’re continuously keeping tabs on the public reports, the public producers activity every quarter, they’re basically publishing press releases or sharing their financial reports on their business performance over the previous three months. Pretty much everybody was noting how aggregate shipments or aggregate volumes, however they characterize their sales, their sales were down. But where they were making really, really good gains, at least some of them were noting, was within the aggregate pricing segments. You know, you have companies like Vulcan Materials and Martin Marietta, Summit Materials being another company that it’s talking about what’s happening with the pricing of their aggregates on a quarter by quarter basis. And, you know, Vulcan, for example, in the first, second and third quarters, they talked about gains of 20, 15 and 15 percent, respectively. And Martin Marietta wasn’t wasn’t much different with their aggregate pricing in the first, second and third quarters. It was up 22, 18 and 20 percent.
So, those are sizable gains. I already talked about inflation is a storyline for our industry and ’23 and it’s certainly going to be in ’24. Curious, too, at the top of the year here that we might start to hear from companies like Vulcan and Martin Marietta about additional pricing increases as we’re at the start of the year, because we saw that at the start of 2023. It’s another opportunity, I guess, for producing companies to put forward some price increases. And kind of a narrative I heard around pricing over the last couple of years was that we were sort of undervaluing the value of our products. And this was long overdue to see some price increases on construction aggregates, on crushed stone and sand and gravel.
I think we saw the public sector really lead that, you know, companies like Vulcan, Martin Marietta, and Summit, among others. You know, many others were able to leverage price to their advantage in 2023. But, the industry as a whole really, on the private side as well, they were making those sorts of moves as well and it really had to happen. If you weren’t raising your prices, you’re simply falling behind. The industry was really successful in that and ’23, and the market was really welcoming – maybe not welcoming, that might be strong, I’d say – but they accepted those price increases. Perhaps in ’24 it’ll be of interest to me to see what sort of receptiveness there is to pricing increases, or if we’re able to pass along more pricing from the producer side downstream to customers.
I talked a little bit already about the construction markets, but maybe a little bit more detail in terms of what’s happening out there. I think what we’re seeing right now is that manufacturing’s helping to drive non residential construction. I mentioned manufacturing is really kind of leading the way there. What’s helping support that is some inflation that we’ve seen come forward in recent months and years. The CHIPS Act, for example. You think back a couple of years and the story that we were covering on the magazine was that we just couldn’t find chips for trucks or chips for equipment, because it’s so vital to how things run today. You need to have microchips to process things. So a lot of the manufacturing of that is starting to come home, or there’s legislation that’s in place there to help drive some new builds on that front.
And similarly, the Inflation Reduction Act is contributing to some gains on the manufacturing fronts. But for 2023, construction starts, they’re down 1 percent, or at least they were it’s the last look I had from Dodge Construction Network. Infrastructure was really holding up construction starts. Even though they were down, if we didn’t have good growth in the nonbuilding or infrastructure category, we would have saw really unfortunate slippage because residential and non residential were struggling a little bit. I think non residential, as Dodge put, it was down about 15 percent. And residential was down 7 percent. I might have those numbers actually flipped, but they were both down significantly, and that tells you what infrastructure was doing in 2023 for our industry to kind of keep it moving forward.
Mergers and acquisitions are another area that we’re continuously keeping tabs on at Pit & Quarry. It was interesting to follow the M&A activity that transpired in ’23 because on the aggregates front, I can’t say that we had really, really big deals going down, especially in the first half of the year. From a construction material standpoint, I don’t think we saw a lot of major deals take place. We did see bolt-on types take place. And when I say bolt-on, that’s an aggregate producer in a market acquiring a mom-and-pop or adding another producer in that market and kind of bringing them into the family or into the fold. That sort of activity almost always seems to be ongoing, and that certainly was the case in 2023. We didn’t see a ton of platform type deals take place, you know, platform being Martin Marietta, for example, making an acquisition that establishes itself in a new territory. There was some of that, but it wasn’t really of the nature or of the type that we saw going back several years. And certainly the thunderclap type deals or the big mega deals, those didn’t really happen on the aggregates front and 2023.
But what did happen, I’d say in the third quarter in the fall, was we saw, while not aggregate type deals take place, you know, we did see some construction materials deals of the billion dollar plus variety go down. I think the first real big one that transpired was Summit Materials merging with Argos USA, or at least announcing that. They’re still working to close that here in the first half of 2024. You know, that’s really a deal centered around cement with Summit acquiring the USA arm of Argos. I think recently, Ann Noonan who’s the chief executive at Summit, she talked about how there’s great potential there that has not yet been fully tapped. So they’re identifying cement is a really growth path that they want to take going forward. Still growing in the aggregates sector, of course, but getting together with Argos in a deal that’s valued at about $3.2 billion, you know, that really says what they think about cement as an opportunity for them going forward.
Again, not on the aggregates front, but you know, we saw Vulcan and Martin Marietta make rather large deals toward the back end of ’23. CRH and Martin Marietta came to terms on a $2.1 billion deal toward the last couple of months of the year involving some Texas facilities on the readymix front. And then similarly, we saw SRM Concrete and Vulcan come to terms on some readymix deals with Vulcan offloading a sizable number of facilities to SRM. I think what you’re seeing there is that Martin and Vulcan are focusing on their core strength, that being aggregates. With them offloading some readymix that strengthen CRH and SRM on the readymix side.
The financial front is certainly having an effect on on the types of deal making or maybe the slower activity coming forward. I recently was talking about this on the presentation I did in mid December with Mellott, and I wouldn’t anticipate a whole lot of change. Having experienced M&A a little bit in my career and covering it, I would think that some of the trends that we’re seeing in ’23 are going to come forward and ’24 as well on M&A, because I think anytime we come into an election year, especially a big election year like 2024, everybody starts to get a little bit hesitant and while I think everybody’s optimistic for the most part, I think people are largely cautiously optimistic at this stage. So there may not necessarily be the types of deal making that took place in prior years come forward, and ’24. You know, those big type varieties. Well, who’s to say? I mean, we didn’t really see that that big deal go down on the aggregates front in ’23, so 2024 could be the year for that. We shall see.
Supply chain, just a little bit more fodder on on what we’re seeing there, and capex. You know, I think there’s similarities there. When I talk about cautious optimism on the M&A front, I think a lot of that feeling kind of bleeds into what happens with capex. It was very interesting to see in COVID, in 2020, that capex projects came to a screeching halt that year, just because of the uncertainty that was in front of everybody with the pandemic, and those came back online. Customers, aggregate producers, our readers, they’re still, I’d say, very bullish at this point to do projects and invest in facilities and spend money. You know, we see that there’s good backlogs on the equipment manufacturing front. That bodes well for our industry, with lead times, in some cases already stretching out into 2025. If you’re a producer, that’s obviously not what you want to hear, you want to get that equipment or you want to get that plant up and running as soon as you can. But there’s been some slowdown, unfortunate, but I guess the thing I’m kind of curious to see what transpires here is, if we see some capex dry up a little bit. Again, I don’t think it’s gonna go the route of 2020, where we saw things come to a screeching halt. But you might see people wait and see a little bit. I don’t think that’s going to be everybody, I don’t think that’s gonna be all of our readers. But certainly some caution, I think, might arise here if you’re a producer and planning a little bit for ’24 and ’25. Everybody’s awaiting the outcome of the November elections to come here, which is hard to believe we’re only 11 months or 10 plus months from that at this point.
I think we’re seeing, on the flip side, interest rates are coming down a little bit. It’s interesting when you look at or talk to different economists who are keeping tabs of our industry on construction, on construction materials. I think it’s kind of a mixed bag sometimes when you talk about potential for a recession, or what’s happening with interest rates, or what might transpire from the Fed in 2024 with interest rates. I would anticipate they would come down a little bit. I think that’s mostly what I’m reading and mostly what I’m hearing from sources, but we shall see. Again, another TBD, but something we’re going to be keeping an eye on the magazine.
Technology, that’s a core coverage area for us on Pit & Quarry as well. You know, we cover safety, business and technology, I guess, I would say is our number one pillar. If you look at the covers of Pit & Quarry, at the very top our tagline is “the authority on equipment technology”. And there’s plenty of content in this arena, within the magazine trends that emerged for 2023. And some things that we’ll certainly be carrying into 2024 here. I think sustainability is one, and in digitalization is another. Those are probably the two big trends that either emerged, I’d say, or accelerated and ’23.
Sustainability is an interesting one, I’d say, because I think back 10 to 15 years ago and that was a buzzword that was kind of trending in ’08-’09. I guess when I kind of came into my career, I was working on another trade magazine and in a different industry, but sustainability, I suppose during the Obama years, became more of a term that people were putting out there and looking for alternate ways to power things or make things a little bit more carbon friendly.
I think that trend kind of faded away a little bit. The onus wasn’t really put on sustainability, we didn’t hear that a lot from companies. But, we certainly had the last couple of years. On the construction materials side it’s not really being driven by aggregates, although there’s certainly ramifications for for aggregate producers, and I would argue that our readers run their businesses very sustainably. We don’t necessarily promote the fact that we do, but that term is starting to make some traction here. And when it comes to technology, I think what we saw happen in 2023, I think back to ConExpo-Con/Agg, and as I’m going about covering the trade show walking the show, we’re covering press conferences, we’re going to booths and visiting with manufacturers and talking about the technologies and the equipment that they’re coming forward with. It seemed like as we went from booth to booth that companies were talking about electricity or electric as a way to power their machines. That could be rolling stock, that could be aggregate processing. But electric was really all the rage of ConExpo, and I think back to one press conference in particular where Komatsu’s, Rod Schrader – think he’s the Chairman of Komatsu, but he was also a leading voice for ConExpo-Con/Agg in 2023. He kind of laid out plainly kind of what’s happening with some of these alternate fuel pursuits by manufacturers like Komatsu. He said, “Electric is the first kind of start. I don’t think it’s the only and it may not even be the winner.” But again, as you see what’s coming out, what’s emerging from manufacturers, it’s electric equipment, it’s electric hybrids, it’s acknowledging the fact that they want to find the road forward with electric. I’m not sure the market is necessarily ready to adopt that sort of technology today. We’re very much conditioned to operating with diesel equipment or diesel ybrid-type equipment at best, I would say. I talked to some manufacturers and they say there’s some end users who love electric equipment, it’s more user friendly, it’s more maintenance friendly in some cases. I think that’s probably fewer and farther between in terms of the end users and their interest or receptiveness to electric equipment.
Like Schrader said, it may not be electric. It’s interesting to see what what’s happening on the on road front with the on road vehicles. Electric cars, obviously, are all the rage today. It’s interesting to see, too, some of the mandates that are coming forward from state governments and from other regulators. I think back just a few weeks ago, I saw a report from Michigan where Governor Gretchen Whitmer was basically mandating that all Michigan state vehicles be electric by the year 2033. These are some aggressive mandates that are coming forward. But on the flip side, then you see other reports from companies like Tesla, which I believe just did a recall or they noted that they had a couple million cars that had some sort of safety issue. Tesla, of course, is an electric vehicle manufacturer.
So we see these very aggressive mandates being put forward on the on road front. There’s a lot of interest there in governments and other entities trying to drive the road forward with electric, but are we going forward too fast? Are we being too aggressive there? Maybe, maybe not. But what’s happening in on road, I think, certainly is going to leak into off road. Manufacturers recognize that and that’s why they’re starting to make some developments. They’re starting to put the research in to understand where we could possibly go as the road forward for our industry for construction type vehicles. So again, it may not be electric, because we’ve seen other companies invest in technology like hydrogen. Caterpillar, for example, recently had an announcement related to their C13 engine, which is used on rock crushers and screens. They’re looking at hydrogen in a pilot-type project to see if they can take a more traditional engine that’s used in construction and agriculture and make that applicable with hydrogen fuel. And in their announcement related to the C13 they talked about natural gas is maybe another possibility. So again, electric may not be the ultimate winner. It seems like that’s where a lot of the money and resources and attention is being paid at this point in time. I don’t know that you’re gonna see an all electric industry in 2030, or 2040. Probably is coming at some point, probably is farther off, I would bet, than those other early years I just referenced. But again, it’s something that is going to be interesting to keep an eye on as regulation is going to drive some some change at some point for our industry.
And again, digitalization, you know, I guess when I say sustainability is technology trend number one for our industry and ’23 and coming into ’24 here. Digitalization is trend number two. ConExpo-Con/Agg is kind of an inflection point in terms of where we are as an industry. That, again, was the March 2023 trade show for construction and for aggregates. And I think just as we went in booths and heard for manufacturers at the pressers this year, or last year rather, you know, it seemed like more companies were digitizing or putting bells and whistles on their equipment that would allow for more insights and knowledge to come out of that so that end users, so that aggregate producers could react and make decisions based on that equipment. I think it’s been interesting to see the last seven to ten years of technology development, or digitalization for our industry, because historically our industry has been a little bit behind the curve in terms of technology adoption. But what happened seven to ten years ago, I’d say, or going back two or three ConExpo’s ago, we saw that all these digital products were coming out in support of rolling stock and aggregate processing equipment, because we finally came to the realization as an industry that we could extract information off of the equipment that was performing in the field. So the products, I feel like, came out at that time, again, seven to ten years ago, they are capturing all this data, all these insights, which is certainly interesting and maybe useful, but not necessarily manageable for the end user.
So kind of what happened, I feel, is that aggregate producers and other users of of excavators and loaders and rock crushing equipment, they basically went back to the people making the equipment and said, “There’s something to this digital technology, but what you’re giving me at this point is, is data overload. There’s so many data points, there’s so much information, I don’t know what to do with it. I don’t have the people on my staff, I don’t have the resources to be able to dive through all this data. Can you make this product a little bit more user friendly? So what basically happened, in my opinion, is we saw that 2.0 or version 2.0 of these technologies, of these digital products, came out. I think they’re a little bit more user friendly, or they are in design. I’m not sure how much of our readers are using it at this point, but I think we’re in a better place in time where producers can start to tap into their phone or their tablet as a means to react to their equipment when there’s a fault or a code that needs to be addressed.
Again, we don’t want all the information, we don’t need to know, necessarily, what the live temperature is of something. But if that temperature is overheating, or if something’s over pressuring, you know, that’s information that’s vital. I think the beauty of some of the technology that is coming forward is that it’s allowing users to react better. It’s allowing end users to be able to plan their maintenance little bit better, get more life out of the equipment, because the information is there. So, some good developments there on the technology front. But just like sustainability, I think it’s going to be interesting to see how our readers and how aggregate producers across the country embrace or don’t the digital stuff that’s available to them. So again, another storyline we’ll be keeping an eye on on ’24. And again, digitalization, just like sustainability, I think that’s here to stay and it’s something we’re going to be keeping an eye on with our industry in the years to come.
Maybe not so much a trend, but I think this is something that’s maybe in the early stages of something to talk about, something that I think I’ve touched on on the podcast in the past, but it’s autonomy. AI is not necessarily making tremendous headway at this point in our industry, but I think autonomous vehicles are something to keep an eye on because something that emerged at the very start of ’23, it’s going to be taking off a little bit here in 2024, is you know what’s happening with autonomous haul trucks. Luck Stone and Caterpillar are kind of leading the way for aggregates on this front. You know, they announced at the CES show in 2023 that they’re going to be pursuing the commercialization of a 777G haul truck the Caterpillar would produce by equipping it with Cat MineStar Command technology. That’s the sort of technology that’s being employed or deployed at mining sites around the country.
At the time when I put that story together about 12 months ago for Pit & Quarry, Caterpillar had mentioned that there’s 580 vehicles operating with Cat MineStar Command tech around the world. Those are operating in mining sites in Australia and some here in America and other countries around the world. But, the nature of those types of operations, the big copper mine, is a lot different than what you would typically see in an aggregate operation because you got long hauls in mine sites, some of which are of the miles long type variety. In some cases, I’d say fewer than what you’d see in mining, we see long type hauls like that in an aggregate facility, but most are much shorter hauls. Then the environment around haul trucks is much different than what you see at a copper type mine or a metal mine because you got a lot of moving pieces and parts. You got people, you got trucks coming in, customer trucks, dealer trucks, personnel of the plants. They’re moving around tending to equipment. Water trucks.
There’s there’s a lot of pieces and parts that need to be accounted for, and Luck Stone and Caterpillar here in ’24 and in the next couple of years are going to try to figure out can we actually put out in an aggregate environment, an autonomous vehicle? They’re gonna be doing that at the Bull Run plant, and we’re gonna be curious to see at Pit & Quarry if they can do that. And I think maybe the next step or the next thing to keep an eye on is, will the market respond if they can actually prove the technology is viable? Will other aggregate producing companies take to that? Again, just another reference from the South Carolina Aggregates Association Workshop and Exhibition, but Tom Hill was there from Vulcan Materials talking about a variety of topics. He touched on AI and autonomous vehicles, and his biggest concern related to autonomous haul trucks is safety. That’s certainly something that Luck Stone and Caterpillar are going to be prioritizing as they’re going about that Bull Run plant project, but Tom Hill’s seat at Vulcan, there’s concern that if you put an autonomous vehicle inequality setting, I mean, are you going to be able to keep the people operating in that jobsite safe?
So, safety has always been priority number one, or it has been for a number of years for our industry, as long as I’ve been around the magazine. So if we can prove that technology viable, will we see buy in? Will we see people continue to express concerns about safety? That’s a story that’s not going to be fully told in 2024 here, but I think in the coming years we’re gonna have a little bit more information. We’ll see if other big producers that are operating on 100 ton type haul trucks, if they want to buy into that if they can prove the cost value of the technology, so something we’re going to be keeping an eye on for aggregates.
So, I’ve talked about business and some of the things that are transpiring with mergers and acquisitions and what’s driving demand for aggregates in different markets. I talked about equipment technology, and then safety, I suppose, is the other pillar of the magazine that we’re continuously feeding with content. Part of that content pillar involves covering the Mine Safety & Health Administration and what’s happening with that. Again, we’ve got an election year here, so if you see the presidency go to the Republican candidate, you may see priorities from MSHA shift in 2025 and beyond. Because as we’ve seen in the recent past, it takes a while for a new assistant secretary to actually get into the position at MSHA, even a year in some cases. The priorities of the current MSHA may continue for the next couple of years, but 2024 on the rulemaking front for MSHA, this may be the year for MSHAs crystalline silica rule to come forward. It may be the year that the mobile equipment rule comes forward as well.
The latest column that Bill Doran and Margo Lopez – our Ogletree Deakins partners – they wrote about MSHA and how the Office of Inspector General basically produced a report about MSHAs performance of late, and they want to see a little bit more expedited activity on several fronts. I think there’s an expectation there that they get some rules passed. They’ve identified that silica has kind of been in the bag there for a while, but they just can’t get across the finish line. So maybe, again, why we’ll see 2024 as the year for silica to come forward, and that obviously would have ramifications for aggregate facilities everywhere. What sorts of things or conditions will have to be accounted for in terms of silica around rock crushing plants and other things that are producing silica? And then on the mobile equipment front I think there’s some urgency as well to get things pushed forward. You know, again, on the rulemaking front. But OIG or the Office of Inspector General, it’s not just concerned about the the rulemaking front, I think there is concern about what’s happening with inspections and is MSHA actually fulfilling their obligatory duty of visiting mine sites, surface operations twice a year and underground four times a year is there they’re expected to? As the OIG noted or accounted that MSHA is actually coming up a little bit short, and they have to meet those marks every year.
I know MSHAs been having some issues with departures in recent years of inspectors, because people are retiring, getting a little bit older, and we’re bringing some new inspectors into the fold onto the front lines. I think there’s always concern there. We saw that kind of transpire when coal was going through a radical change with reduction or elimination of a lot of coal operations around the country. So, that kind of created, or forced, this shift of inspectors who were largely inspecting coal facilities to go into the aggregate arena more fully. And you know, what you see in coal isn’t necessarily what you see in metal/nonmetal. You know, and again, metal/nonmetal would be aggregates. So in visiting with producers in recent years, too, talking about that change with the coal side, talking about new inspectors coming online as well, there’s concern that they have to be the ones, in some cases, educating the inspectors about what they’re seeing, about why things are positioned or structured or why a guard is in place, those sorts of things. So, that’s not necessarily a good thing. If you’re MSHA, you want your people to be the more educated or the most educated people going out there in terms of safety and health, but those are just some of the things that are developing or will be developing on the front lines for Mine Safety & Health – or MSHA – here in 2024.
I think the other storyline that we kind of were keeping tabs on and ’23 and will continue to do so and ’24 is a storyline, too, that MSHA was certainly fully aware of in ’23, and that was what was happening with fatalities across mining. They were they were certainly up in 2023. They were at 38 at one point. It’s been a while since I checked, but I think we had gotten to mid December and the fatalities number for the year for our industry, for the mining industry was 38. That number may have gone up – hopefully not – by the end of the year. But MSHA, in May they had a Stand Down for Save Lives day to kind of build awareness of the nature of accidents and the things that cause accidents across facilities. By and large, I mean, our industry, like I said earlier, safety is priority number one.
And again, I’ll reference Tom Hill, because he talked about safety is one of his touch points during his presentation in the Q&A down in South Carolina. And he talked about why accidents happen in mines. You know, we’ve heard this notion time and time again at the magazine, you out there have as well, but you know, it just takes a momentary lapse or a loss of concentration to really create a risky situation or for somebody to put themselves in a spot that they don’t want to be in. That sort of scenario continues to drive some of the unfortunate incidents that happen across the mining industry. I think it’s why you see more emphasis on training, not just from MSHA but you know, making sure that the people that we’re bringing into our industry are well trained and well aware of the things that cause accidents. I think it’s why you see some of the top companies in the industry getting creative and regularly or daily having conversations about safety before people are going out. Just making sure that safety is something that’s top of mind when you get into the cab of a machine or you’re walking around the plant. So again, a variety of things we’re keeping tabs on with safety in our industry in ’23. So, I think we’ll keep tabs on those things in ’24 as well.
For the magazine, we’re going to be digging into a few new things here in the New Year. New but old, I’d say. Our roundtable is actually going to be taking place here in the next month, February 1st and 2nd. We’re gonna be down at PGA National Resort in Palm Beach Gardens, Florida. I feel like our roundtable has been in Florida for four or five years in a row now, and we typically are in Florida, which is great just to get out of the cold here in Cleveland. But, we’re excited about that and we’re going to be having some coverage in the magazine coming out of that in April. That’s, again, an event we host every year. If you’re interested in participating in that, I’d say there might be an opportunity for you to participate, but reach out to me today. You know, if you’re listening to this, you’re in early January or mid-January.
But coming out of our ’24 roundtable, we’ll likely be announcing the site and dates for our 2025 Roundtable. It’s usually in January or February, so if you miss us in February down in South Florida, perhaps you can catch us in 2025. We’d love to talk to you about joining us at the Pit & Quarry Roundtable & Conference. Our other Pit & Quarry event that’s going to be taking place here in the new year, the first quarter even, is the Pit & Quarry Hall of Fame. Our induction ceremony will be taking place March 24 in Nashville in conjunction with AGG1. We haven’t had our Hall of Fame Induction Ceremony since 2022. And for those of you who aren’t aware the Pit & Quarry Hall of Fame was established in 2013. I think by now we have about 36 inductees to our Hall of Fame from over the years. We no longer have induction ceremonies during ConExpo-Con/Agg years just because there’s so much demand on people. There’s so many things and events and activities that take place in Las Vegas, so we’ve limited our Hall of Fame ceremony to AGG1 years only, and we’re going to be announcing our 2024 class here very soon. You can look for that on pitandquarry.com.
And in the February edition of Pit & Quarry if you’re, again, a print subscriber to the magazine, excited about what’s potentially going to transpire there with our 2024 class. If you are interested in joining us in Nashville, you can certainly purchase a ticket on our website. It’s a black tie ceremony. We’re not necessarily a black tie industry, but we’ve had some success with this, like I said going back to 2013, with tuxes for the men and evening wear for ladies. But again, that’ll be March 24th in Nashville, and really excited about bringing the industry together here in the next couple of months for that.
First quarter, too, those are what’s happening on the Pit & Quarry event front, but looking forward to getting up to Ontario, getting into Canada here in the next few weeks. I’m going to be going to the Ontario Stone Sand & Gravel Association’s Operations Health & Safety Seminar. It’s been a while since I’ve been to that, I think it’s been four or five years even, because as I remember, I supposed to go in 2020 I think. That was the COVID year and I think there was a snowstorm that kind of prevented me from getting up there, but looking forward to visiting with Julie Harrington and her team at OSSGA. It’s always a good event. So I’ll be traveling up there with with Rob Fulop, our group publisher on Pit & Quarry.
I know our team’s looking forward to getting to some other events here in the coming weeks. SME’s MINEXCHANGE is one. I should be getting down to the Georgia Construction Aggregates Association’s annual meetings taking place in February, so I’ll plan to get down to Atlanta. Our managing editor, Jack Kopanski, I think he’s covering C&D World for us here at the end of January into early February. So, we try to divide and conquer as a team and we want to be out in the industry keeping tabs on what’s happening, having conversations. That helps us be knowledgeable and that allows us to impart the knowledge that we acquired, share that with, you know, our listeners here on the Drilling Deeper podcast.
Again, I want to thank our show sponsor, Sykes Supply for their support. And again, we’re here in episode five of our podcast. Be sure to visit Sykes Supply’s website at sykessupply.com/podcast for your power transmission, conveying equipment, power tool needs and much more. Again, hopefully Jack will be back to 100% by the time episode six drops in a couple of weeks. We should have that for you around mid-January. But, in the meantime, Happy New Year. Happy 2024, everybody, and we’ll see you again soon.
