Episode 66: Construction markets and MSHA insights with Reddin and Doran

FMI Capital Advisors’ George Reddin and Ogletree Deakins’ Bill Doran caught up with P&Q’s Kevin Yanik at the 2026 Pit & Quarry Roundtable & Conference to provide updates on the construction materials market and MSHA environment, respectively.

Watch or listen to our one-on-one interviews with these P&Q contributors, as Reddin offers an assessment of construction markets, the M&A landscape and more. Doran, meanwhile, details what’s happening at the federal agency overseeing mine safety and health and what’s to come.

Look for additional contributions from Reddin in the magazine, where he co-authors the Market Insights column. Doran is a regular Pit & Quarry contributor, too, crafting the monthly MSHA & The Law column.

For 108 years, Pit & Quarry magazine has been the premier monthly aggregate processing information source. Through multiple platforms, we deliver the very latest in equipment and technology news and information that is critical for safely achieving the highest level of efficiency and profitability. Editors Kevin Yanik and Jack Kopanski cover the market in print, online and through e-newsletters. As respected industry insiders, they moderate the annual Pit & Quarry Roundtable & Conference and speak at industry conferences and meetings.
 
Follow us on Twitter, Facebook, LinkedIn and Instagram. Also, follow us on YouTube to see full-length episodes of the podcast, watch our Road to Prosperity videos and see other clips from our travels and events.

Transcript

SPEAKER_03 0:06

Welcome back in everyone. We're taking a couple of in-depth looks today at what's happening in construction markets, as well as at the mine, safety, and health administration these days, and what you can expect as 2026 rolls on. To help us do that, we've got a couple of special guests today who are going to share insights on each key area. But first, let's hear a word from today's episode sponsor.

SPEAKER_02 0:26

For producers who can't afford downtime, Kemper designs, builds, and supports complete crushing, screening, conveying, and wash systems from the pit to the pile. With in-house engineering, custom solutions, and dependable parts and service, Kemper keeps your plant moving material safely and efficiently. Learn more at KemperSolutions.com or call 610-273-2066.

SPEAKER_03 0:52

All right. Well, thanks to Kemper for sponsoring episode 66. We appreciate their support. And and Jack, looking forward to talking about a couple of vastly different areas, I guess, here today, as we're going to talk about construction materials markets. We've got special guest and George Redden, and we're also going to talk about safety, specifically what's happening at the Mine Safety and Health Administration, what they're prioritizing these days. As we had Bill Duran with us, Bill's with Ogletree Deacons, and he's a regular contributor to Pit and Cory. We sat down with with those gentlemen at the 2026 Pit and Cory Roundtable and Conference, which was held right at the end of March, March 31, April 1. And, you know, as everybody listening knows, or probably many of you out there listening know, I mean, these are two of the foremost experts on on their their respective areas, you know, George Redden at FMI being the construction materials market, you know, what's happening out there, headwinds, tailwinds, MA, what's happening in the three core aggregates markets, Jack, and and Bill's going to get us some insights today on Emsha. So I mean we dove into a lot at the round table, and and you know, I know we heard from from George and Bill as a group down there too, Jack. So looking forward to hearing what these guys had to share with us when I got to sit down, sit down with them uh at La Playa down there in Naples.

SPEAKER_02 2:05

Yeah, no, absolutely. George, you know, George's presentation is always one of the most requested things I feel like we get. And now I think it's just to the point where we tell people we're like his presentation's gonna be available. Everyone wants to hear what George has to say. He always does a great job. And you know, Duran or or Bill, I should say, you know, does such a good job, I think, of making what can what can really be kind of a dull subject, you know, safety, obviously it's very important, but it's not the most exciting conversations to have. You can really make it engaging and really make it something that you know feels actionable and personal. So yeah, a couple of great conversations. I know you obviously led the Q ⁇ A with with Bill and uh Redden gave his presentation at the round table, and and I know we we heard a lot of good feedback um while we were down in Florida about that. So yeah, excited to hear, excited to uh share, I should say, should say, what uh what Bill and George had to say.

SPEAKER_03 2:51

We're gonna start off with our interview with with George Redden. And if you're not familiar with George, again, you can read him from time to time in the pages of Pitt and Quarry. But but George is the managing director of FMI Capital Advisors, where he advises construction materials producers as well as road building contractors on mergers and acquisitions and financial advisory services. And as I already mentioned, we talked a little bit about MA during our sit-down. We heard about what's transpiring on that front as well. But but if you're a producer out there, as well as if you're an equipment manufacturer or dealer or somebody out there listening who's just got a vested interest in the aggregates industry and and what's happening, how our business is going to perform here in 2026 and in the remaining months ahead. And there's there's a lot to go here on 26 as we're sitting here at the end of April, Jack. But but uh you know, George kind of lays out the entire landscape. And um, I could tell you based on the presentation he delivered, you know, there's there's a lot to be excited about, but there's certainly a lot a lot to watch, a lot to watch, some new potential headwinds as we have some new developments in the world these days. So um so without further ado, we're gonna play our interview with with George and then we'll come back. We're at the 2026 Pitt and Quarry Roundtable and Conference, and we've got George Redden from FMI Capital Advisors with us. George, great to be here. It's we're in Florida, it's it's sunny.

SPEAKER_00 4:07

Beautiful place. Room looks right over the water, it was fantastic. It's hard to beat that. It was a rough winter, even a little rough where you are, I suppose. Wet, wet and cold and not good.

SPEAKER_03 4:17

Yeah. We'll we'll talk about some factors, maybe even the weather a little bit. I think that's something that's kind of always bled into conversations with aggregate producers, but but we're kind of an inching time here. I mean, as you know, George, our original round table was supposed to be scheduled in January, and here we are having this conversation March 31, looking into the second quarter already. And some things are are changing. The the world's a changing place, and it's a rapidly moving world as we're we're sitting here to the end of the first quarter. But but uh all in all, it it seems like people feel pretty good about where the industry's at. And at the same time, there's some things to monitor. So I know I'm kind of putting a big question to you off the top, but how how would you characterize kind of where we are as an industry right now? I mean, there's a lot of good, there's some things to watch. You assess it for us.

SPEAKER_00 5:00

Yeah, so you know, we've we've often referred to the publicly traded companies um because they give us publicly available information, right? And I deal with day-to-day, I'm dealing primarily with privately owned companies. But so what do we learn from the public companies? We've learned that uh after six quarters of declining volumes in Q3, we had as a country based on USGS and mimicked by the publics, we had just shy of 5% increase. We were basically flat, about a 0.7 increase in Q4, and slightly down for the year over year, 25 versus 24, of just shy of 1%, about 0.9%. USGS buckets the country into nine categories, geographic regions, five of them were up, four of them were down. So we're constantly reminded that all of our business, our construction activity, and our supplying materials into that is a local local business. Um so your specific market, how far you can transport those materials is what you care about. But nationally, at least we stem the tide and there's no more, no more declining volumes per quarter. The public companies report their earnings every quarter, continue to report excellent revenue, excellent profitability. So if you want to use that as one measure of how are we doing, you'd have to say pretty darn good. Um uncertainty as we get where we are now, um, you know, the war in Iran, um, Venezuela, Cuba, uh job creation, GDP, talks of recession, all these kinds of things. Uh the the concern, the big concern you have long term is people pumping the brakes on investment decisions and projects. Um obviously the cost of oil uh is sustained long term, big negative input to the economy and to our businesses, right? Liquid asphalt uh goes up because of the petroleum, it means less tons of asphalt, which means less aggregates going into asphalt. Shipping's constrained the import of cement, say from Turkey, which is 30% of our imports, that's gonna drive prices of cement up, less ready mixed concrete, less aggregates going into ready mixed concrete. Uh now the president says it's all gonna be done here in a week or two. And then if that happens, you know, we're off to a whole nother set of dynamics for for the industry.

SPEAKER_03 7:30

It's a fast-moving world, like I said, yeah. Yeah, I I mean again, we're sitting here March 31st and having this discussion, and and things may change by the time people are listening, but but by and all, I mean, you kind of laid a pretty pretty nice positive framework in terms of you know revenue and profitability have been there for a while. The the volumes have uh have stabilized a bit after six consecutive, I think, quarters of decline. And all in all, I mean, I think you're out in Las Vegas for the con expo, and for me, that's always kind of a just a good inflection point to kind of grab where we are, assess kind of where we are, just talk to people. And most people there and here at the round table at the end of the first quarter, like they feel pretty good about where things are at, and and you know, there's some things to watch, you know, and those things could potentially change the the landscape, I suppose, for the aggregate industry and construction materials in the not so distant future. But I guess as we're sitting here right now, things feel pretty good.

SPEAKER_00 8:24

Yeah, I mean, one of the saving graces has been the ability to increase prices, right? We have inflation coming out of COVID, gave us cover to get increased prices. Uh people are getting smarter with the data analytics uh that they've got, and price leadership is more effective. So when leaders in the markets move their price to cover themselves for the increased cost, uh the market's following. And so again, record earnings just about every quarter for the publicly traded companies, and we think that's what we see with our private clients as well, when volumes are somewhat flat, and it's been about price. You know, I mean there's been significant price increases. So one question will be how you know, with inflation now moderating, still not where you want it to be, what what are the price increases going to be going forward?

SPEAKER_03 9:13

Right. As you were starting to share your response to my last question, I was starting to wonder how much more price increase can we can can be had out there, because it's been a kind of a narrative for two plus years or just about two good years, right?

SPEAKER_00 9:25

So I think price increases were one, covering inflation, right? You got to at least cover your inflation. And and the inflation in the construction industry was arguably higher than CPI overall. And you could see that when you look at the the average selling prices of a Martin Mariette or a Vulcan who who give this information to us publicly available. Um it's gone up far greater than the CPI uh index has gone up because our costs in our sector have been much higher. Um But also I think people realize that the rock on the ground has a long shelf life, it's a scarce resource, and people aren't chasing volume, they're chasing price because they've learned what it means to the bottom line. We're getting smarter.

SPEAKER_03 10:09

Yeah. Yeah, no, you're right. George, let's get into the different construction markets. I mean, that's one of the things I always look forward to to hearing at the Pitt and Quarry Roundtable and conference every year is just kind of where these different markets are. And it's interesting historically. I mean, you've been covering the industry for for many, many years, and and the storyline and in you know, non-residential, residential, and and non-building or infrastructure, whatever you want to call it, it's you know, it's it's always kind of changing. And I feel like, you know, with the data centers and and the non-commercial right now and and some of the energy infrastructure and those big, big projects coming in. I mean, that's really driving demand in certain markets, some markets, because you again you point out that aggregates are a very local business, but that's really continuing to power a lot of producers who are here and and you know they're looking for those opportunities and they're seizing the day on those. But there's other storylines in these markets that are continuing to be worth noting.

SPEAKER_00 10:58

Yeah, look, the Census Bureau collects all the data on construction. And to make life simple, they try to bucket in three categories for us. They they talk about residential, and we'll talk about single family and multifamily. They'll talk about non-residential, which is kind of a hodgepodge of categories that they lump in there. And then we've got the non-building structures, and that's where think about roads, bridges, highways, the uh the public spend there. The public spend is still a beneficiary of the IIJA bill. There's, you know, you can argue that there's 40 plus percent of that bill still to be spent, even though it expires here at the end of September. Is that right? I didn't realize that. Yeah. Yes. Now, question then is where's that money going? And a lot of that's going to go to bridges. But still, there's a lot of money still to be spent. So September 30 comes and the bill expires, that's not the end because we've still got a lot of money to spend. Um, residential continues to be the drag, right? So think about your business. What are your end markets? If your end markets are predominantly into the residential sector, you're you know, you're supplying ready-mixed concrete producers that are pouring foundations and sidewalks and curb gutter for residential, uh, you're probably in most markets not doing so well. Um multifamily has has stalled uh for the investment dynamics aren't working for it right now. The non-res section is there's a couple real winners, and the rest is arguably in recession. Recession meaning a couple quarters of negative growth, right? That definition. Um and you mentioned the data centers. Manufacturing is still strong, even though down a little bit, but compared to where it was two, three years ago, it's it's phenomenal. Um, anything around data centers, the power generation to support the data centers, that's great. If you can supply materials to those projects. If it's in your market, right? Yeah. And you know, it's disproportionate to the south. Take it from the uh mid-Atlantic, the Virginia's Carolinas through Texas, that's probably two-thirds of the spend. Other geographies in the country aren't benefiting from that as much.

SPEAKER_03 13:03

Just to bring in the infrastructure side, the National Federal Highway Bill, you mentioned September 30th. That's obviously a big, big deadline. The 40% of the funds still remaining to be dispersed, that's of note and of interest to me. And you know, it makes me wonder how does that factor in potentially? And I know you know you're you're not on Capitol Hill daily and keeping tabs of that, George, but but is that a factor potentially in terms of getting the next highway bill done or not?

SPEAKER_00 13:28

So my takeaway in at uh con expo, I went to Napa, the asphalt guys, I went to the Ratamix guys, I went to the Stone, Sand and Gravel guys. I saw no sense of urgency compared to what we have seen in the past. So think about it, these bills started in the early nineties, 1991-92 with the first one AC, five, six-year bills. Uh when we struggled to get reauthorization, uh, they just did continuing resolutions at similar fund. So all indications are, especially with a midterm election, that they'll get they're gonna get started here about now in in DC in earnest. But all indications are the bet I think you'd bet talking about being in Vegas, I'd probably put my money on some form of a continuing resolution. And the good news is, like I said, we got the money from the IIJ, so there's no there's no real uh panic at this point about that, unlike in previous years where there was tremendous efforts to visit with your congressman and really lobby for getting another bill. Sure. Haven't seen that.

SPEAKER_03 14:31

Is the is the 40% remaining on the table? Is that abnormal versus some of these big pass bills? Yeah. Okay.

SPEAKER_00 14:38

So the 40% is a guesstimate. Okay. So uh um you've heard people uh you know, in the last six months I've heard people talk in the low 50% range. So um, but again, we also have to think about where's that going because bridge bridge work will be less aggregate intense than the road work will be. Um and it is bigger. So so why'd that happen? Um, we come out, the bill was tied in with coming out of COVID. And what we found was great, we passed all this money, and the DOP DOT said, hang on a minute, guys, we're we're understaffed and overworked already. You know, how are we going to get all this new workout? So it took some time for the DOTs in particular to get to where they could get the work out. And then, of course, we had a lengthy permitting process. One of the nice things, in addition to if it's a continuing resolution concept, one of the nice things you're hearing from producers and contractors who are ahead of our producers, is the streamlining of the permitting process to get the regulatory environment is is getting better and better to get things out faster and faster. So even if you had not much of an increase, you'll get more out faster. And so I think a lot of people are looking favorably on that.

SPEAKER_03 15:56

George, what are some of the other dynamics that you're you're keeping tabs on these days? And I mean, I know I joked about the weather, but I feel like in your presentations from year to year, that's that's more of a factor, and and producers are kind of looking at that or leaning on that as a crutch, however, you want to describe it, but but there's so much that kind of that inputs or feeds into uh making or breaking a year, you know, just having another good solid year as a producer. So what are some of the other variables at play here at this point in 26?

SPEAKER_00 16:21

Well, weather's a good one, right? You had uh National Oceanic and Atmospheric Administration providing publicly available data. And so we said Q3 volumes were up nearly 5%. Well, when you look at Q3 around big producing states in the country, most of them fared really well in Q325 and didn't fare well weather wise in Q324. Now, the problem with that data, you gotta be careful with, is you're you're assuming that that is something that was steady every day, more rain or less rain, right? Rain can come in buckets or it can come a little bit every day. If I don't have the rain until after work hours and it doesn't interfere in my workday, it doesn't matter. If it's raining at the start of the day, the concrete guys can't do their pours, I can't sell the aggregate. So uh the data is, you know, I I you take it with a grain of salt, but the in you know the indication is one of the contributors to Q for Q3's strong results was weather.

SPEAKER_03 17:23

Can I ask you what what you're seeing right now on the on the mergers and acquisitions front? And you know, we talked about capital projects, I think we did, but just the market environment either makes a guy want to sell or makes a guy want to buy. I mean, so based on the dynamics that play out there right now, how is that affecting or not affecting merger and acquisition activity?

SPEAKER_00 17:43

So most of the sellers are private companies, not all, but most are are private companies. Uh it's a generational decision often, right? It's a business continuation planning effort or it's a family dynamic or something. So you're not typically trying to absolutely time a market. It's a generational thing. Uh 24 and 25 were very good years for people who do what we do for a living. There was a lot of work, everybody was doing well. You know, let's say 75%, just to pick a number of the deals that are uh publicly available, the information on them, are done by the publicly traded companies, right? So they had good stock prices, their stock prices were doing well, they had excellent balance sheets, and they had everything lined up to to grow, and they were pursuing growth in a strong way. And they're still trying to do that. I I think what we've seen a little bit, and it was a talk that the conversations we picked up in uh Con Expo as well, is that um with some of the uncertainty going on right now, some sellers are taking a pause and kind of watching this. So uncertainty we mentioned earlier, cripples investment decisions, but it also impacts people's decision to sell. Is this the right time?

SPEAKER_03 19:01

George, whether it was Vegas at Con Expo or or elsewhere in your in your conversations with producers or industry leaders, anything else that you want to leave our listeners with things to watch? I mean, there's all we probably talked about 20 or more different variables, but uh what are you what are you gonna be keeping tabs on? Like what's what's of interest to you here as we're getting into the second quarter?

SPEAKER_00 19:19

Yeah, I think part of the, you know, one of your questions is gonna be around, you know, technology and efficiency and things like that. The floor at the shows changes to me dramatically every time I go. Right? It's it's gone from just all being about iron to almost all being about laptops and technology remote and uh AI and whatnot, and how does that how's that gonna impact the industry? We're getting better, we're getting smarter. Um margins uh we I think are um you know, if you look at the publicly traded companies at their margins, and the margin I'm thinking about is EBITDA to net revenue. And uh they're they're they're doing really well compared to historic levels. I think we're all getting smarter with that data back to price leadership. Price leadership is much more uh effective. And um so you know, tech is technology and AI, they're they're they're making their marks. Labor's continuing to be a problem, right? How do we attract people? How do we keep people in this industry? Um, and that's part of what fuels merger and acquisition activity. A lot easier to go buy somebody than organically grow something. Right, right.

SPEAKER_03 20:32

A lot to watch as always, George. Yeah, we really appreciate your insights. Thanks for being here. Thanks for your partnership, and and best of luck to you and FMI Capital Advisors. Thanks, Kevin, appreciate it.

SPEAKER_02 20:41

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SPEAKER_03 21:05

All right. Well, thanks again to George Redden for sharing some time sitting down at the Pit and Cory Roundtable and Conference. We were down at La Playa Beach and Golf Resort in Naples, Florida. And George has always uh he's always been at the round table as far as I've I've been with Pit and Cory, and that's 14 years. He's a great partner and we appreciate his contributions. And again, as as I mentioned early in the show today, George and his colleagues from FMI will contribute from time to time in the pages of Pit and Cory. So keep an eye out on that here in 2026 for more thoughts from George and the FMI team as the construction materials market evolves. In addition to George, we had with us Bill Duran of Ogletree Deacons. Bill, of course, is an expert on what's happening with the Mind Safety and Health Administration or MSHA. And in addition to George speaking at the round table, Bill sat down, did a QA with me across about 25 minutes of our opening or second day rather of uh of the Pit and Cory roundtable. And and we did sit down. Down on day one of the roundtable, just Bill and I to kind of talk about what's happening with EmSha, and that's what we've got here to share with you today. Um there's a lot happening, as always, Jack. Bill is gonna offer some insights on what's happening with the crystalline silica rule. There's actually some development this month here in April. You know, we're dropping this episode in May, but but uh Bill and I talked about that during our Q ⁇ A that you're about to hear. We have also got a semi-new assistant secretary at Emsha, as Wayne Palmer was confirmed late last year, I think it was in October, and and uh he's kind of getting some some momentum going at the head of the agency overseeing mine safety and health for the industry. So, you know, Bill and I talked about that and and kind of what his just general approach is as the head of Emsha. And we talked broadly too just about EmSHA's general posture in terms of how they're engaging operators these days and maybe what can be expected in terms of enforcement. And there's gonna be additional fodder as well from our interview on EmSHA. So without further ado, let's hear from Bill Duran of Ogletree Deacons. Well, it's so great to see you again. How are you doing?

SPEAKER_01 23:03

It's great to be here. This is a fantastic place to be. This great weather.

SPEAKER_03 23:07

It's not bad. It's been been a rough winter in the northern parts and you know, where you're at in DC, Virginia area, but but we're getting through. And hopefully by the time you know people are listening to those things, or spring has f finally sprung and and we're moving on and just putting rock on the ground. But but uh, you know, Bill, you're usually you're a guy giving us all the insights on on all things, EmSHA, the Mind Safety and Health Administration, and and uh there's a lot to talk about as usual. I mean you're keeping tabs on on a lot of things, but but uh one of the things I wanted to kind of tab up at the start here is just kind of the enforcement posture that that EmSHA has right now. I mean, we're already a year plus into the Trump administration, and we talk a lot at the round table and elsewhere about the pendulum swinging in terms of enforcement. And so I guess I wonder where we are here kind of early to mid-2026 on that, because it seems like you've seen some interesting developments.

SPEAKER_01 23:53

Absolutely, absolutely. I mean, it it is, believe it or not, it is still uh somewhat of a small sample size because uh Wayne Palmer, the new uh assistant secretary at Emsha, has only been there since October. So he hasn't had a whole lot of time to put his imprint on things. But uh but we've already seen a few changes. Uh I mean the citation-wise, I think we were uh in in the previous year we were somewhere around 94,000 citations you know, uh all around the industry, and now we're somewhere around 87. So not a huge uh change, but it is sort of a drop. And we're also seeing a um uh a reduction in the overall civil penalties. And I want to say it went from like 71 million to about 64 million, which uh anecdotally means that probably you're not seeing the same level of gravity on the citations, which is what produces the higher civil penalties.

SPEAKER_03 24:51

So that 7,000 that that difference there that's 71 million to 64 million.

SPEAKER_01 24:56

That that that shows you that you're not getting the same number of uh SNS citations, the same number of uh unwartable failures. And there has been sort of a slight drop in the number of SNS citations as well, which are the ones that produce the higher civil penalties. Sure. So from that standpoint, yeah, we've seen a change at the uh at the con ag uh uh Wayne Palmer uh gave a talk and and did say that uh you know that they were they were sort of focused more on collaboration with the industry. They were just gonna they were gonna still call balls and strikes, write citations and and orders, but uh uh his his I think his his uh statement was they weren't gonna be writing citations for statistics purposes. Um they were gonna be focusing on on sort of a different different type of type of mindset there. So that's probably a little jab at the previous administration, but um nonetheless that was that was the focus.

SPEAKER_03 25:53

We we've talked for years too, Bill. I mean, I know us one-on-one at our pit and quarry events and all those different things, um, just about having someone like from the industry who knows the under the industry and talks about being more collaborative collaborative with the industry, I suppose. And I guess Wayne Palmer kind of fits that bill a little bit more than what we've seen in the past. Can you provide some background about him for those of those of our listeners who aren't really aware of his history and where he comes from?

SPEAKER_01 26:17

Right. Well, I mean, I can give you a little background. I mean, he he certainly he he in the previous Republican administration, he was uh a deputy assistant secretary there at MSHA. So he's got the background in the agency, he knows how the agency runs. He also uh sort of the interim years uh working with uh in in the metal mon metal nonmetal industry. So it's it's kind of a unique situation that sort of, and we we've we've had a a few people have had some experience, but for the most part over the years, it's been it's really been a coal coal-oriented position, at least in terms of experience for the people coming into that slot. So it's it, you know, for this industry, it is kind of nice to have someone who's got a little more background uh in in some of the issues that go on on the metal nonmetal side, because that's I mean, coal is still very important, but uh on the metal nonmetal side, uh there are a heck of a lot more mines and miners in the United States uh than than on the coal side. So it's nice to have someone with that perspective.

SPEAKER_03 27:18

Bill, on the silica front, I feel like this is a rule we've been talking about for a couple of years. And I almost wonder historically, you've probably seen roles kind of get floated out there, and then they they either go in and they're they're you know enforced or they just kind of float around for a while. And I feel like that's kind of where we are with silica. Probably not the first time this has happened, but but you know, you and I are sitting here almost in into April 26th when that's the month originally they were supposed to be enforcing the compliance, and that rule is kind of just in a state of flux at this point. So can you provide an update? And and I guess I wonder if you're speaking to the the listeners out there on the on the operational front, producers, I mean, what do they need to know? What should they be doing at this point to prepare for a potential silica rule, if anything?

SPEAKER_01 27:58

Right. Well, it we're we're in wait and see mode right now. Uh uh the industry did uh challenge in court the uh uh the new rule, and not necessarily the obviously not focused on the the the Pell. Uh the drop of the Pell was not something that the industry was focused on. They're focused more on sort of the administrative aspects around it, sort of what you can do to comply. Um you know, administrative rotation using PPE, the types of things that you're allowed to do on the OSHA side, but you can't do on the EMSHA side. And uh so as you know, uh in that litigation, the judge has stayed enforcement of the rule and uh sort of indefinitely at this point. And through during that process, the agency announced that they were uh going to reopen the rule and and look at possibly making some changes. They've been very close to the vest. In fact, people try to get it get that information uh during the CONAG, but uh they've not told us w what they're thinking about in terms of changes. The thought process is that it's gonna relate to um the types of things I just mentioned, um giving uh giving operators a little more flexibility with respect to their compliance uh options with respect to PPE and rotation and and medical surveillance and and things like that. But um in terms of when this thing is going to actually be going to effect, uh they've got to go through this process of of of sending putting a rule back out there, publishing into the Federal Register, notice and comment goes along with that. And um there's uh every belief that once that rule is in place, there could be a whole nother set of challenges uh from the labor side of things. So um it could be a while before we see an actual rule that goes into effect.

SPEAKER_03 29:53

Aaron Powell What's the origin of that rule, Bill? I feel like we've been talking about that. I've been hearing about this for at least five years or so, at least interest in wanting to do it and then putting it together and then the challenges behind it. Is this like a half a decade process at this point?

SPEAKER_01 30:06

It's been a long process. And and the OSHA rule went into play sever several years ago and uh uh obviously went through the whole gamut of litigation and challenge. And there was a thought that uh AMSHA could avoid a great deal of difficulty if they stayed pretty close to that rule because it was already tested. Um and uh ultimately they didn't. They decided to go a different direction. And so that's sort of how we got into this stage right now where a rule that's sort of tested in every other industry is uh is now being uh is being challenged and could be challenged for some time.

SPEAKER_03 30:48

Yeah. Bill, let's go back to SNS. You mentioned that in some of your earlier remarks here, but but there was a federal mine safety and health review commission decision recently that had some implications for SNS and the MSHA approach to that. I guess. What's taking place right now? What what do we need to know about?

SPEAKER_01 31:04

That's that's the Casal case, and it's currently that that decision is currently being appealed in the DC Circuit Court. I have to be a little bit um uh circumspect uh or or careful in in my comments about this. My uh two of my colleagues, uh Zach Byers and Phil Contul uh put together the uh the amicus brief in that case uh for uh for the National Stone Sand and Gravel Association. So I I don't want to muddy the waters. But essentially what happened uh at a point in time where the review commission was down to three members, uh two of those members decided in this console case to uh change the S and S standard. And um uh without getting too much into the weeds, um uh when when a citation is marked S, it's basic there there's actually a four-part criteria that comes down from uh an old case called the Mathies case. But uh again, trying not to get into the weeds. Uh essentially when AMSHA decides to write an SNS citation, they're making a determination that there's a reasonable likelihood of a serious injury caused by the hazard that's been identified. Uh what this new decision has done is essentially said that, well, now you don't actually look at uh the type of injury, it's just whether or not someone is exposed to the hazard that can produce the injury. And they've also essentially knocked out this whole issue of likelihood. So as you can expect, the concern from the industry side is that this is going to produce a lot more S citations, which uh are the building blocks for bigger civil penalties, for pattern of violation notices and and and uh enforcement. And for uh things like 104 D citations and special investigations, you have to sort of start with the SNS before you move on to the more serious enforcement. So there's a real concern there. I think right now um uh about 17 percent, and I could be wrong there on the percentage, but it's pretty close to that. About 70 percent of every citation that's issued is S. And the concern is that now with this uh what's perceived to be a much lighter standard in terms of uh of the criteria, that you could end up with a much higher percentage of SNS citations. And that's really where that's really where uh the concern is in the um in in the in the circuit court case. And that's pending. So we've got to wait and see where that's gonna go.

SPEAKER_03 33:42

And that could be months onward, you're saying, Bill?

SPEAKER_01 33:44

Could be. Could be, yeah. I mean the briefs have uh my understanding the briefs have been filed, um, and uh I'm not sure about where it goes from there.

SPEAKER_03 33:54

Bill, let's take a step back and kind of look back at at 2025, I guess, because I wanted to kind of glean some thoughts from you on EmSHA enforcement as it relates to to mining fatalities. It's something we're kind of continuously keeping tabs on at Pitt and Quarry. And and last year there were 33 mining fatalities, so that was up about 27 percent, I believe. And and I feel like as events happen, then you see MSHA react. Um, this year it's been a minute since I looked at the numbers, but I know January and February were a little light on the fatalities to start, which is you know a good trend in the right direction for for the industry, and hopefully it doesn't lead to added enforcement for producers nationwide. But but uh what what are you seeing on on that front or any expectations in terms of any any initiatives or any new approaches by MSH as related to some of that activity?

SPEAKER_01 34:38

I don't know that we've seen new approaches yet. Um you're right. Last year was was not a good year, and uh I'll tell you the month of March, we've had three fatalities in the month of March, so it's not been a good month. Um and and I guess total for the year so far is five fatalities, and four of those are in the metal non-metal side. So um you're you're absolutely right that there's that that uh um notwithstanding what party is in you know is in the White House, um when a when a a spike in fatal accidents occurs, it really does the politics really don't matter at this point. Whoever is in you know in control of the agency tends to up the ante on enforcement and things get more aggressive. Um and so I think you can expect that in situations where there's been a spike. I don't know that the agency is looking at at last year as uh a spike yet. Um it depends, I think it's gonna depend on how things go in this uh in the beginning of this year. Uh but traditionally what's happened is that um AMSHA has uh gone to the uh um uh uh uh impact inspection. So they've they've focused on impact inspections where you you send three or four inspectors out to an operation that's showing something um, you know, some problem in their violation history or some concern that's been there uh from from the enforcement people. And they write a lot of citations. And uh this this administration has has has said that that's really not an area that they're focused on. They're not focused on impact inspections anymore. But um that that waits, you know, again, if if there's a spike, there will be heightened enforcement, but I haven't seen anything specifically that they've been focused on at this point uh to deal with last year's numbers.

SPEAKER_03 36:37

Okay. It's interesting. I haven't heard the term impact inspection in a while. I feel like that was more of a go-to a decade ago, but I guess that's still a tool in the toolbox.

SPEAKER_01 36:44

Yeah. Uh at the end of the last administration, we saw a lot of impact inspections, and they were and and the other aspect of those impact inspections is that they were being then being reported on the IMSHA website, um, you know, sort of an indication. Usually they would then pinpoint one or two operators from the five, you know, the eight or nine or ten impact uh uh operators that had received an impact inspection and focused specifically on them, uh, which was was which was a point of uh concern from the industry. But uh that's still that's not something that this administration is focused on at this point. Uh so it it seems like that is sort of a significant change between the two two administrations.

SPEAKER_03 37:27

Sure. So Bill, as always, there's a lot to watch, there's a lot to keep tabs on. It keeps you busy, I can imagine, and your and your colleagues at Ogletree Deacons. But you know, think about the year ahead, and if you want to leave mess a message for our listeners, producers and operators out there, something they can do to stay ahead of enforcement this year and beyond. I mean, what would your word of advice be, Bill?

SPEAKER_01 37:47

Yeah, well, um, I I you know I can tell you that the um the clients that we have, the mine operators that we work with, uh they don't necessarily uh they don't necessarily make dramatic changes from administration to administration. They've got they've got sort of procedures and policies that go above and beyond the minimum standards that MSHO lays out and that the Mine Act lays out. And they sort of keep that going on an even keel and they don't try to react to too differently to different things that are happening. Um I will tell you one thing, one thing that I've seen over the years that uh uh companies that uh take advantage of the opportunities they have out there, for instance, informal conferences, and and develop a um a dialogue with with the district offices so that they're not just going in when something they're not the the district's not just seeing them when bad things are happening, they're they're they they're talking to them, they're getting an idea and and giving the uh the uh the MSHA enforcement people a chance to know who they are and all the things that they're doing well. Uh that really stems the tide in bad times. And I I always recommend our clients uh to do to do the informal conferences and to take advantage of that system because it it solves a lot of issues, not just the instant citation that's in front of you. And um I continue to recommend that as well.

SPEAKER_03 39:15

That's great advice, Bill. Appreciate you as always answering all my questions as it pertains to EmSHA. And really, great to see you at the Pitt and Cory Roundtable and Conference.

SPEAKER_01 39:23

Absolutely. Glad you're here, glad you had me.

SPEAKER_02 39:26

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SPEAKER_03 39:53

Again, that was Bill Duran of Ogletree Deacons. You can read Bill's work in Pit and Quarry each month. He's been a contributor in recent months alongside a couple of newer contributors at Ogletree Deacons to Pit and Quarry, those being Zachary Byers and Philip Contul. We appreciate all three of them regularly contributing to Pit and Cory with the Emsha and the Law column. And Bill's always gracious being at our round table every every year, every other year or so. And um, it was great to see him again, just as it was. Great to see and engage George Redden down there. So we value our partnership with Oakletree Deacons and thank Bill for being a speaker at our roundtable. We actually had a third speaker at the 2026 round table, and that was Evan Bender of the National Stone Sand and Gravel Association. Evan is the director of government affairs at NSSGA, and we sat down, he and I, just in a similar fashion that that George Redden did, and same with Bill Duran. We've actually cut some of that content already for for your viewing pleasure. You can check it out at piddenquarry.com/slash video. Our interview with with Evan Bender really got into what's transpiring on the legislative and regulatory front pertaining to the aggregates industry. We talked about the highway bill. You know, Jack, we've talked a lot in recent weeks and months about the Infrastructure Investment and Jobs Act or IIJA, and that's obviously going to be expiring here at the end of September. And and Evan at the end of March again at our round table, we sat down and Evan offered some some good insights and and kind of what the road ahead looks like here this spring and summer. Is that bill is going to be coming to an end and what potentially may be beyond I IJA? So I would encourage you again again to check out some of our interview with with Evan Bender of NSSGA. Check it out at pit and quarry.com/slash video. Well, what else can you expect on Drilling Deeper in the coming weeks? Jack is sitting down with a couple of folks at Superior Industries for our next show, and that's going to be appearing on episode sixty-seven. So, Jack, give us a sense of what our listeners can expect from Superior.

SPEAKER_02 41:46

Yeah, I'd love to. Uh I'm going to be joined by Riley Arnt and Joe Gibson from Superior. Uh, we're going to be talking about how to optimize conveyor performance. Um, obviously a super uh super critical topic in the aggregate industry. Uh Riley and Joe are gonna offer insights into the importance of conveyor maintenance and the basic how-tos. Uh they'll talk about how you can identify issues and solutions with your conveyors as well as maintenance schedules and best practices. Um, you know, Riley and Joe, I've gotten to know these guys pretty well uh over my time at Bit and Quarry, especially Riley. Um, you know, they're they're a wealth of knowledge in general, but you know, also when it comes to conveyors and conveyor performance. So if this is something that you know you're you're interested in, or if you want to learn more about you know uh optimizing conveyor performance, you definitely won't want to miss this episode uh here in two weeks.

SPEAKER_03 42:33

And Joe actually contributed uh a piece or was a source in a piece about load zone dust containment that's going to be appearing in the June edition of Pit and Quarry. So not yet available, but but as you said, you know, a great source. Um Riley's a great guy, so we'll look forward to hearing what they have to share on episode 67, Jack. Absolutely. And if you enjoyed today's interviews from the Pit and Quarry Roundtable and conference, we'd encourage you to check out our May edition. That's out now if you receive it in your mailbox. Hopefully it's there by now. If not, check out pit and quarry.com. Our digital edition should be online as we're dropping this in the first week of May, this podcast episode. We've got our panel discussion QA there. We've got some additional insights that you can check out in terms of what happened down in Naples this year. And uh look for that in May. And we're gonna have additional round table content for you to come in the June issue, and probably in July as well, because there's so much that that kind of emerged from the round table discussions that the you and I moderated, Jack. And and again, I'd encourage everyone to look at pit and quarry.com slash video because we're cutting additional content from not only the round table, but we're still kind of sifting through some of our sit-downs from Connecticut Con Ag, which was at the beginning of March. So a lot of content here to come this this spring and summer, and and we're continuing to keep tabs on all things aggregates for you. Absolutely. Beyond that, Jack, just want to thank again George Redden from FMI Capital Advisors and Bill Duran of Ogletree Deacons for for appearing as our featured guests on today's show, and and we'll look forward to hearing more from Superior Industries next time. Absolutely. Say, see ya.