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The Silver Users Association

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MARKET WATCH Month High Low Average December 8.03 6.69 7.10 November 7.77 7.01 7.50 October 7.36 6.74 7.15 September 6.92 6.13 6.40 August 6.67 6.52 6.69 July 6.71 5.94 6.37 June 6.17 5.63 5.85 May 6.19 5.51 5.85 April 8.21 5.82 7.06 March 7.94 6.71 7.29 February 7.94 6.04 6.47 January 6.63 6.20 6.36 back to top ASSOCIATION NEWS News: New Members: SUA is pleased to inform you that PlacerDome is the newest member of the association Press Releases: Please send us your press releases and/or company announcements, so that we can include them in SUA's monthly newsletter. Web Site: Take a look at the web site as it is undergoing a change http://www.silverusersassociation.org/directory/index.shtml. Meetings: MEETINGS: SUA Spring Meeting Dates Set May 17-18 in Washington, DC at the Army-Navy Club. Anyone interested in sponsoring, please contact Paul Miller at pmiller@mwcapitol.com. 2005 International Zinc & Silver Conference Feb. 27- March 1, 2005 in Nevada PMA 2005 February 17-19, Orlando, FL back to top EPA CREATING NEW SET OF REGULATIONS TO CONTROL AIR EMISSIONS OF HAZARDOUS AIR POLLUTANTS The US EPA has begun to create a new set of regulations for our industry, to control air emissions of hazardous air pollutants. These regulations are not coming out soon - they are planned for 2007 - but they are being created now, so we need to pay attention. I attended a "Kickoff Meeting" last week in Research Triangle Park, North Carolina, on behalf of the IPMI, and want to pass on some information. For general background, recall that the US Clean Air Act regulates sources of air pollution in several broad categories. The most prominent part of the program is aimed at "conventional pollutants" such as lead, carbon monoxide, nitrogen oxides and particulate matter. And most of EPA's efforts have been aimed at "major sources," such as electric power generating plants and large industrial plants. But the Clean Air Act also aims at specific hazardous air pollutants such as arsenic and beryllium, and at smaller "area sources" of air emissions, such as the furnaces that are used in our industry. And our time has come for specific EPA scrutiny and regulation. This is part of a somewhat larger new EPA program to control hazardous air pollutants from small companies in the secondary non-ferrous metals business, but a very specific regulation will probably address only the secondary precious metals industry. The EPA began its investigation of secondary non-ferrous metals industries earlier this year. It has identified 110 companies that fit within the classification of area sources of hazardous air pollutants. It sent a questionnaire to nine of these companies, four of which are processors of precious metals: Multimetco, Heraeus, Kodak, and Sipi Metals. In August 2004 the EPA visited three companies in California, including Gemini Industries. The EPA's current plan is quickly receive and review responses to the first questionnaire, to then send the questionnaire to all identified companies in early 2005, and if possible to visit some facilities in the northeast US. With that base of information, it hopes to issue proposed regulations in 2006 and final regulations in 2007. IPMI, as an industry association representing the secondary precious metal industry, has been asked to assist the EPA in gathering accurate information, and to assist our members in responding to information requests. We have also been requested to identify companies that fit within the regulatory category. EPA will provide me with a list of the 110 non-ferrous companies identified to date, and a copy of the questionnaire (for general reference), and I will send them to you. We will continue to participate in the development of these regulations, assisting EPA in understanding what standards might be rational and achievable, and of course what standards would not. Our furnaces are usually very small, and will probably be of less concern than furnaces for metals such as zinc and magnesium. The EPA is primarily concerned with emissions of hazardous particulate matter, and our industry generally does a good job of capturing particulate. So we may already be reasonably prepared for new regulatory controls. However the EPA is concerned with hazardous organic emissions that arise from contaminants and fluxes, and the list of hazardous air pollutants contains 33 substances (see below), only eight of which are metals. Because precious metals are recycled at much lower concentrations than other metals, we have other substances in our furnaces, and may present a complicated picture to the EPA. If any of you are contacted by the EPA, or would like additional information (although there isn't much), or have information or comments to provide, please let me know. The development of these regulations will be a regular item on the ERAC agenda, beginning with the meeting of 17 March in Providence. back to top AUSTRALIAN TARIFFS ON U.S. MANUFACTURED GOODS EXPORTS REDUCED TO "ZERO" On January 1, 2005, the United States-Australia Free Trade Agreement went into effect, making more than 99 percent of U.S.manufactured goods exports to Australia immediately duty free. In short, tariffs on almost all U.S. exports to Australia just went to "zero." What does this mean for you? It means that the products you manufacture are now more attractive in Australia than those of your foreign competitors, which gives you a leg up in the tenth biggest market for American exports. Don't miss this golden opportunity to increase your sales and find new customers! If you're already exporting to Australia, you can be exporting more. If you're not in the Australian market, you probably should be. With a standard of living similar to ours, Australia buys just about every kind of manufactured product. Among the many different types of U.S. products exported to Australia are: aircraft; vehicles and parts; electric machinery; sound and electronic equipment; optical devices; pharmaceutical products; medical equipment; plastics; chemicals; and paper. Each of the 50 U.S. States exports to Australia, and Australia is among the top export destinations for 48 of the 50 States. back to top TREASURY AND IRS ISSUE GUIDANCE ON NEW DEDUCTION FOR MANUFACTURING INCOME Treasury and IRS today issued interim guidance to help taxpayers calculate the new deduction for income from domestic manufacturing activities included in the American Jobs Creation Act. Under the AJCA, effective 1/1/05 , manufacturers are entitled to a tax deduction for a portion of income from domestic production activities, limited to 50 percent of wages. The deduction amounts to 3% of income in 2005 and gradually increases to 9% of income by 2010. The deduction applies to Subchapter C corporations, S corporations, sole proprietorships, partnerships, cooperatives, and estates and trusts. The activities eligible for the deduction include the manufacture of personal property such as clothing, goods, and food, as well as software development, film and music production, production of electricity, natural gas, or water, construction, and engineering and architectural services. The guidance issued today in the form of a Notice includes comprehensive rules and definitions on the new deduction. Treasury officials said they plan to issue proposed regulations incorporating the rules in the Notice. They also solicited comments on the rules in the Notice and on any additional guidance needed in the proposed regulations. back to top SILVER AMERICAN EAGLE BULLION COIN SALES SOAR IN 2004 (Washington, D.C. - January 11, 2005) Sales of Silver American Eagle Bullion coins posted their third best year last year since the program was launched; over 9.6 million coins were sold in 2004. In 1987 11.4 million Silver Eagles were sold and in 2002, 10.5 million were sold. In December of 2004 alone, over 2.6 million Silver American Eagle coins were sold, according to the United States Mint. "The popularity of this investment-grade coin continues to grow, demonstrating once again silver's unique roles as an investment vehicle, an important industrial metal, as well as being prized for its beauty and luster in jewelry and tableware," stated Michael DiRienzo, Executive Director of the Silver Institute. Congressionally authorized American Eagle Bullion coins provide investors with a convenient and cost-effective way to add physical silver to their investment portfolios. Since their launch in 1986, Silver American Eagles have become the leading silver bullion coin investment product worldwide. For the period 2000-2004, 3.8 percent of total silver demand was attributed to coins and medals. The Silver Institute is a nonprofit international industry association headquartered in Washington, D.C. Established in 1971, the Institute serves as the industry's voice in increasing public understanding of the value and many uses of silver. For Further Information Contact: Mike DiRienzo, The Silver Institute, Washington, D.C. 20005 back to top CHANGES FOR JEWELRY MANUFACTURERS The American Jobs Creation Act of 2004 passed during at the end of the 108th Congress and contains the following provisions affecting U.S. jewelry manufacturers: Implements deductions for income from U.S. production; Repeals exclusions for extraterritorial income; Increases expensing from $25,000 to $100,000; Institutes a 15-year cost recovery for qualified leasehold improvements; Simplifies S corporation rules, including increasing the maximum number of shareholders from 75 to 100 and treating members of a family as a single shareholder; and Implements tax reforms, including changes in interest expense allocation, recharacterization of domestic losses, and incentives to reinvest foreign earnings in the United States. To view a complete list of all effects of the American Jobs Creation Act of 2004 go to: http://www.house.gov/jct/ and click on the link for H.R. 4520. back to top WHAT'S NEXT FOR CONGRESS: LEADERS DEBATE PRIORITIES Representative Deborah Pryce (R-OH), Chair, House Republican Conference As we move past the elections and reflect on President Bush's victory and the success of Republicans at strengthening their majority in Congress, we are excited to get back to work on some of the key priorities for Republicans and the business community. Over the past 10 years of Republican rule, Americans have asked Republicans to write a new chapter in public policy positions. And we have done so, upending decades of big government policies. We have enriched the lives of millions of Americans by restoring limits and accountability to runaway government spending, freeing businesses from the heavy tax burden, and reversing the dangerous mind-set that America does not have enemies who seek our destruction. As a result, home ownership is at its highest rate. Violent crime is at its lowest. And more Americans are attaining college degrees than ever before. The Republican record has been nothing short of astounding, but the chapter labeled 1994 to 2004 is not the final word in this story. Our record of accomplishments provides us with a solid foundation upon which to build. Republicans will continue advancing a pro-growth, pro-security agenda by making tax relief permanent, strengthening Social Security, curbing frivolous lawsuits, expanding access to better health care, and continuing to vigorously fight the war on terror. Although these goals are aggressive and bold, they are reachable. The business community has been instrumental in helping drive a positive message of reform on a number of our key priorities, and we look forward to working with this group and to passing our optimistic, forward looking agenda. Senator Harry Reid (D-NV), Senate Minority Leader The 109th Congress must address the spiraling deficit and other issues that threaten our economic stability. Our country borrows more than a billion dollars a day, and this year we'll pay $159 billion in interest on the national debt - more than we spend on education, homeland security, law enforcement, veterans programs, and international aid combines. Businesses can't continue to spend money they don't have - and neither should our government. We must return to the pay-as-you-go approach of the late 1990's, when we started paying down our national debt and American businesses prospered. Health care costs are rising at double-digit rates, while the percentage of Americans without health insurance is increasing. I introduced a bill last year to give small businesses a tax credit for up to one-half of their employee insurance premiums. This would reduce health care costs for small businesses and help them provide insurance for more workers. Congress should also provide long-term financial stability by shoring up Americans' retirement security. This includes strengthening private pension plans and fulfilling our Social Security obligations. We must adopt a comprehensive national energy policy that harnesses American know-how to provide reliable power, protect our environment, and reduce our dependence on foreign oil. We must reauthorize the TEA-21 highway and transit bill. The Senate last year passed a $318 billion version of this bill, with strong bipartisan support. Reauthorization at this level would reduce traffic congestion, improve our transportation infrastructure, and create hundreds of thousands of jobs. Finally, we must keep working toward consensus on asbestos liability reform. back to top REGULATORS MURKY ON MONEY LAUNDERING The banking industry has called on federal authorities to spell out what they expect from financial institutions trying to comply with federal anti-money laundering laws and prohibitions against terrorist financing, according to a letter released earlier this month. "Our bankers want to work with regulators to address deficiencies whenever they occur, although it is difficult to do when the standards are unclear and unmoving," said the January letter by the American Bankers Association. The letter, which addressed to regulators, the Treasury Department, and the Financial Crimes Enforcement Network, marks the latest bid to settle an ongoing argument between regulators who want better anti-money laundering compliance, and bankers who say the government has been anything but clear on how to achieve that goal. The banking groups, which recommended several changes, complained of inconsistency and uncertainty on the part of regulators, saying bankers often face conflicting expectations from government officials. "In general, our members report that no standard appears to exist for a proper anti-money laundering compliance program. What we hear is often at odds with the information banks receive from field examiners," the letter said. Specific Changes Recommended: The letter made several specific suggestions. According to the ABA and its affiliated associations, the Treasury and regulators consider: Speeding up an interagency effort to develop consistent examination procedures on how to assess filings of suspicious activity reports; Establishing joint training for bankers and bank examiners when new Bank Secrecy Act procedures are released; Crafting a Bank Secrecy Act commentary, or some other "centralized regulatory guidance," to more consistently apply the law and rules; and Convening a new panel of experts from the government and the private sector that would focus on problems associated with suspicious activity reports. The panel would function as a subcommittee of the Bank Secrecy Act Advisory Group, a working group of regulators. back to top About SUA The Silver Users Association is a non-profit organization that was established in 1947 to represent the interests of companies that make, sell and distribute products and services in which silver is an essential component. The Washington Report is a member service of the Silver Users Association. If you want to be removed from this mailing list, please reply to this e-mail and include "unsubscribe" in the subject line plus your name and company.