Could faster mining permitting help fuel future U.S. economic growth?
Mineweb | Dorothy Kosich
March 25, 2013
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The National Mining Association and its long-time loyal opposition, the environmental NGO Earthworks, recently sparred before a congressional subcommittee as whether the U.S. mining really needs HR 761, The Critical and Strategic Minerals Production Act of 2013.
Hal Quinn, CEO of the National Mining Association, told the House Subcommittee on Energy and Minerals Resources that the measure “addresses a key issue for the country’s future economic growth and manufacturing revival: the painfully slow permitting process for the miners that supply metals and minerals essential for our basic industries, our national defense and the consumer product we use.”
“The value added by major industries that consume the $77 billion of minerals produced in the U.S. was an estimated $2.4 trillion in 2012, or 15% of our GDP,” Quinn noted. “In addition, domestic mining generated $50 billion in tax payments to federal, state and local governments.”
“Mining’s potential is even greater than its current performance,” Quinn asserted. “The United States has an immense and enviable mineral endowment waiting to be tapped.”
“Overall, when view through the lens of resource potential, the U.S. is underperforming, a fact that will have increasing consequences as global demand for minerals becomes more competitive due to the demands of development economies, where millions are being propelled into a rising global middle class,” he noted.
Quinn argued the length of time consumed in obtaining mining permits is a major obstacle to the U.S. reaching its mineral potential. “In fact, the length, complexity and uncertainty of the permitting process are the primary reasons investors give for not investing in U.S. minerals mining,” he suggested. “In the U.S., necessary government authorizations now take approximately seven to 10 years to secure, placing the U.S. at a competitive disadvantage and forcing our economy to become increasingly reliant on foreign producers for mineral was can produce domestically.”
In 1993, Quinn noted that the U.S. attracted 20% of worldwide exploration investment dollars. “Today, our share has eroded to just 8 percent.”
In his testimony, Quinn observed that Canada “maintains an expedient, approximately two-year, permitting timeline by implementing a flexible system that seeks to minimize duplication, uncertainty and delays.” He estimated that 16% of all global exploration dollars were invested in Canada last year.
‘EXTREMELY FRIENDLY REGULATORY ENVIRONMENT’
Earthworks Executive Director Jennifer Krill, however, declared, “In reality, hard rock mining companies in the United States enjoy subsidies and loopholes that create an extremely friendly regulatory environment for them.”
A longtime advocate for reforming the 1872 Mining Law, Earthworks claimed a “trifecta of an outdated mining law, the ability to dump mine waste directly into fresh water and enormous tax breaks for the industry makes hard rock mining unique in this country, and renders HR 761 unnecessary and absurd.”
“The United States of America is one of the world’s best places for mining investment,” Krill asserted. “We have stable Democratic institutions, courts that enforce contracts, favorable tax and environmental policy, and an orderly and reliable process.”
She observed that the Fraser Institute annual survey of mining and exploration companies ranked Nevada, Utah and Wyoming among the top 10 most attractive jurisdictions for mineral exploration investment.
Krill also told the subcommittee that she disagrees with HR 761’s attempt to define gold as a critical or strategic mineral “for the simple reason that the majority of in the U.S.—54% in 2011, according to the USGS—is used in jewelry fabrication.”
“Since jewelry fabrication is neither a critical nor strategic use for gold, then no critical or strategic purpose is served by exempting its mining from our most basic environmental protection like NEPA [National Environmental Policy Act] review,” she asserted. “If not for NEPA, citizens would not know how badly the mining industry performs, nor be able to use this information to pressure permitting agencies to improve its behavior.”
Krill claimed that environmental reviews and legal challenges “do not substantially affect mining investment, emplo9yment or the reserves of certain critical minerals” because “the market has long ago priced in these costs and the result is that many of our western states are among the best places for mineral investment and have substantially lower unemployment rates than surrounding communities.”
“HR 761 is a bill in search of a problem that does not exist,” Krill declared.