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Striking ‘white gold’ with a mining business

When Joseph Bucci’s grandfather came to America, he ended up where a lot of people from his corner of Italy did: working in a Livingston County salt mine. Bucci’s father also was a career salt miner.
His father, who called salt white gold, Bucci says, rose to become manager of the mine where his grandfather had hauled salt topside with a cart and a mule.
Bucci has risen higher than his father. He is co-CEO, vice chairman and part owner of American Rock Salt Co.’s Hampton Corners Mine in Groveland, Livingston County.
The mine is one of Livingston County’s biggest employers. Depending on what kind of winter the region is having, it provides from 200 to more than 300 relatively highly paid jobs. The privately held company does not publicly state financial results.
For several years ending in 2008, however, bond deals required American Rock Salt to file earnings statements with the Securities and Exchange Commission. In 2008, such statements show, it booked sales of $190.2 million with $184.7 million of that amount coming from its main business, bulk sales of road salt, mostly to municipalities in the Northeast.
The mine’s sales in 2008 had risen from $92 million in 2007 and $63.8 million in 2006. Profits in 2006, 2007 and 2008 were $14.1 million, $10.4 million and $38.1 million.
Some 50 years ago, as a high school student, Bucci worked in the company store of the firm that ran the Retsof salt mine, the predecessor of the mine he now owns. As a college student, he worked in the Retsof salt dig as a mechanic’s helper.
"I never in 100 years thought I’d end up back in the mine," says Bucci, smiling at the twists of fate that brought him back.
He majored in history, graduating from SUNY College at Geneseo with a bachelor’s degree in 1967. During a brief stint as a high school history teacher, he taught a few of the miners who work for him, Bucci recalls. But, disenchanted with the low pay, he turned to real estate in 1968.
Bucci did well in business, establishing the Joseph Bucci Agency in Livingston County. In the late 1980s, when the Bank of Castile opened a branch in Retsof, he was recruited by the bank’s then-owners, the Van Arsdale family, to be a director. He still holds that position 26 years later.
"He’s a very special guy to me," says Bank of Castile chairman and president James Fulmer. "Joe has made good investments and has traveled a lot, but he’s always stayed very local and very engaged with this area. People have come and gone on our board, but he’s stayed. He almost never misses a board meeting. He’s a very understated guy, but he’s got a very sharp business mind."
Bucci had much to do with attracting real estate investor Gregory O’Connell, a college friend from SUNY Geneseo, to this area, Fulmer says.
A former New York City policeman, O’Connell has invested heavily in Mount Morris properties, where his investment has helped revive the community’s downtown.
Investing in Brooklyn real estate while he was still a police detective, O’Connell owned more than 100 New York City properties by the time he retired after 17 years on the force. Because of his friendship with Bucci, he bought a home in the early 1970s in Geneseo, where he now spends much of his time. 
"I was one of the first to invest in the (American Rock Salt) mine," O’Connell recalls. "I don’t know anything about salt mining. I put my money into it because Joe was in it."
The mine investment has turned out well. On Bucci’s say-so, he also put money into an ethanol plant Bucci and local entrepreneur Philip Saunders invested in. That turned out well too.
"I invested in Joe," O’Connell says.
Bucci, 68, was pulled back into salt mining after the 1994 partial collapse and flooding of the 6,000-acre dig in nearby Retsof. The new mine, which is one of the country’s largest producers of road salt, has been good to Bucci.
He lives with his wife, Elaine, in an impressive hilltop home on a 300-acre farm in York, Livingston County. He owns a second home in Hollywood, Fla. Bucci is slightly bothered by having bought the Florida home at the market’s peak. He is not planning on selling soon.
The Buccis have two grown sons. The elder, Joseph Jr., 40, recently started work at American Rock Salt-becoming a fourth-generation Bucci to work in salt mining-after working for the state’s Department of Environmental Conservation. 
Bucci’s acreage includes a working horse farm, where he employs a trainer, who helps manage a string of some 30 racehorses. A tenant farmer manages the farming end of the property, roughly half of which is in pasturage and hayfields and half in woods.   
"My uncle got me into racing years ago," Bucci says. "He used to take me to the track."
Last summer one of Bucci’s horses, a 2-year-old colt named J.C.’s Pride, set a track record at Saratoga Raceway, breaking a mark that had stood for 18 years. Bucci was contemplating entering the horse in the Kentucky Derby when it contracted an infection and had to be put down.
Despite his youthful expectation of staying out of the mines, Bucci never got very far from the salt-mining business.
Gunther Buerman, American Rock Salt chairman, co-founder and co-CEO, describes Bucci as having "salt in his veins."
When he was running his own real estate brokerage, Bucci made a comfortable, mid-six-figures income but sold few farms or houses. As owner, he got a cut from what the commission’s brokers working under him earned, but most of his income came from commissions on securing mining rights from local landowners for International Salt Co. and later for Akzo Nobel NV, the Netherlands-based most recent owner of Retsof mines.
The area’s mines tap into one of the largest salt veins in the world. As was its Retsof predecessor, Bucci notes, the Hampton Corners mine is the world’s second-largest producer of salt.

A deep vein
A remnant of a long-vanished sea that covered the region 300 million years ago, the salt vein runs south into Pennsylvania, north into Ontario and west to Detroit. In Geneva, it lies some 200 feet down. The Hampton Corners mine is a 1,200-foot ride in a fast elevator underground, a depth that falls within inches of the toppled World Trade Center towers’ height, Bucci tells a party of visitors on a mine tour as the elevator descends.
Bucci is comfortable in the mine’s depths, which to a visitor less familiar with the subterranean seem like a confusing warren of broad but dank and lightless corridors where the unnaturally still air feels lifeless.
Light from the party’s headlamps and the four-wheelers that propel them through the underground corridors glitters on the salty walls. At its lowest ebb in years, at the tail end of a nearly snowless and moderate winter, the dig is a ghostly and nearly empty series of tunnels big enough to drive trucks through.
Trucks occasionally rumble by, as do salt-laden front-end loaders. Heavy equipment, taken down in pieces and reassembled underground, stays underground once it is brought down. Because of the corrosive salt-laden air, much maintenance is required.
Stooping to pick up what appears to be a lump of grayish white rock roughly the size of a human head, Bucci smiles and brings it toward his mouth. He licks it, playfully demonstrating the lump is pure salt. He laughs.
A continually running conveyor belt stretches long into the dark and carries salt to an underground terminus where a giant magnet pulls stray bits of metal from the salt. The salt then moves up into a lift that carries it to the surface, where it adds to the mountainous grayish-white salt piles that sit above the mine.
"Our municipal customers would not be happy if this ended up in their equipment," Bucci says, pulling the blunted remains of a thumb-sized carbide-steel bit from a huge box of metal detritus pulled from the belt by the magnet.
The bit fell off a giant chainsaw-like machine used to cut into the mine’s walls where workers blast out new chambers.
Bucci tosses the bit back on the belt, where the powerful magnet, set some three feet above the belt, instantly draws it up and deposits it in the box, safely out of the streaming river of salt.

The new mine
The salt mine’s importance to the local economy had a lot to do with his decision to resuscitate the industry after Akzo decided to shut down the Retsof mine, Bucci says.
After water started rushing into the old mine, Akzo spent a year trying unsuccessfully to plug the leak before conceding it was not salvageable.
Kenneth Payment, a retired Harter Secrest LLP partner who represented Akzo at the time, recalls being recruited as oarsman on his last descent into the Retsof mine while officials and experts in a rowboat tried to gauge the likelihood of a further collapse. Water filling the cavity continued to dissolve the salty pillars holding up the remnants of a roof separating the mine from an aquifer overhead.
"We were lucky," Payment says.
As it turned out, the water in the mine had become saturated with salt. The remaining pillars were safe.
Akzo at first intended to dig a new mine at Hamptons Corners, Payment says. It already owned mining rights covering the site, most, if not all, of which Bucci had secured.
"Joey was quite good at getting farmers to sign away rights," Payment recalls. "He was a local boy and knew the territory."
When Akzo decided to reverse course on Hamptons Corners, it came as a blow to the local community. 
"I’ll never forget the day they announced they were giving up," Bucci says. "Grown men, guys 50 years old who’d worked in the mine all of their lives, were crying."
In his grandfather’s day, Bucci says, there were several mines in the area. There was a mine in Cuylerville and one in Le Roy. In 1975, Bucci’s father died in a methane gas explosion at the Cuylerville mine, where workers were trying to remove obstructions from an old shaft. 
"They told him there was no gas there, so they put a light down the shaft to look at it," Bucci says.
Payment, who worked with Bucci’s father, recalls the day well. Some, including Bucci’s father, were killed instantly, while others standing next to them were uninjured. A mine manager who was hospitalized with severe injuries died within a week.
"I went to visit him in the hospital," Payment says. "It was pretty bad." 
Akzo had sunk some $18 million into preliminary work on the Hampton Corners site but had yet to start digging a shaft. A dig would cost tens of millions. Bucci decided to sink some of his own money into a new mining venture and look for partners and financing to propel it forward.
Buerman, a lawyer who was then managing partner of Harris Beach PLLC, was representing a couple whose home lay above the flooded mine and had become acquainted with Charles Van Arsdale, then president of the Bank of Castile. Van Arsdale put Bucci and Buerman together.
Bucci was lining up investors but needed more money to pull off a deal. Buerman was instrumental in lining up money through the offices of Neal Cohen, a New York City-based financier who is now an owner of the mine.
After Akzo pulled out of the Hamptons Corners site, others were angling for rights to develop the mine, a profitable plum the Buerman-Bucci group picked up for a bargain price of some $3 million.
"We were in the driver’s seat because I knew Akzo," Bucci says.
Development of the new mine did not go smoothly and cost some $80 million. The mine started producing ahead of schedule in 1997 but experienced a series of problems, including an explosion that slowed production. A testy court battle between the mine and the contractors it hired to dig a shaft went on for several years with American Rock Salt eventually triumphing.
An official of the mine from its inception, Bucci has held various positions, including operations manager and vice president of acquisitions. 

Snow business
The past winter was one of the slowest the mine has seen; sales were virtually non-existent.
"It’s a double bind," Buerman says. "Our customers are sitting on inventory, too. They won’t need to order more until they use up the salt they have."
Another twist: Despite the lack of demand, the mine has to stay in operation, adding to American Rock Salt’s overflowing inventory. If operations were to shut down, Bucci says, unworked equipment would seize up as the ever-present salt ate away at it.
He has seen early snow years and late snow years, mine manager Gregory Norris says, but he has never seen a winter like the one just ended.
"What we need," Bucci says, "is an Oct. 1 winter next year."
Even with an early winter next year, he adds, it will take the mine two years to work off the extra inventory it is piling up now. Last year at this time, American Rock Salt employed 318; its complement of workers now is around the 200 mark.
Largely because of the 2010 winter’s heavy snows and persistent cold temperatures, the company is not in a financial bind, Bucci says. That winter New York City depleted its road salt stores.
There is usually some hedging on both sides in municipal road-salt contracts as parties agree to buy and sell a certain amount of tonnage at a given price. Depending on how the weather goes, such contracts can work in either a buyer’s or seller’s favor. In the 2010 salt shortage, the contract with New York City worked in favor of American Rock Salt. The city was desperate for salt, and only American Rock Salt had it. It was in a position to name its price.
"We made out pretty well," Bucci says. 
Still, asked what a second straight snowless winter would do to the mine, Bucci scowls but then brightens, apparently deciding such an event would be unthinkable.
"It will pick up," he says. "It has to. We’ll be calling people back to work."

Joseph Bucci
Title: Co-CEO, vice chairman, American Rock Salt Co. LLC
Age: 68
Education: B.S., history, SUNY College at Geneseo, 1967
Family: Wife Elaine; sons Joseph Jr., 40, and John, 37
Home: York, Livingston County
Activities: Raises and races horses
Quote: "What we need is an Oct. 1 winter next year."

3/23/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.


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