Resource Type: Policy
Recently, National Mining Association’s general counsel, Katie Sweeney, was interviewed by Arizona Mining Review to discuss the cost of government permitting delays on mining projects. Referring to SNL Metal & Mining’s recent eye-opening study, “Permitting, Economic Value and Mining in the United States,” Sweeney explained how the seven to 10-year permitting process for opening new mining projects in the U.S. has adversely impacted the U.S. mining industry and our economy:
“The study finds that on average a mine can lose a third of its value while waiting for the permits that it needs to get in that seven to 10 year period. And if commodity prices change and construction costs go up, then it could mean half of the value of the mine is lost while waiting that seven to 10 year period.”
“You just cannot get the minerals out of the ground because the [U.S.] permitting system is so long,” Sweeney added. In other countries with equally strict environmental standards and regulations—like Canada and Australia, for example—the mine permitting process only takes on average two to three years. Why does the U.S. mine permitting process take so long? Because there are too many bureaucratic inefficiencies and duplications. This discourages investment in new mining projects because, over time, mining projects can become financially unviable due to volatile commodity prices and incremental construction costs that occur during the delays. The lack of investment in new mines ultimately puts the U.S.’ mineral supply chain at risk, which hurts U.S. manufacturing, our global competitiveness, the economy and job growth.
To show exactly how permitting delays impact a mine’s economic value and a community as a whole, Sweeney mentioned Arizona’s Rosemont copper mine, which is projected to account for 10 percent of the U.S’ copper production. Since 2010, Rosemont’s mine value has decreased by $3 billion due to extensive permitting delays. “It seems endless as they’ve gone through more than 450 technical studies there,” Sweeney said. If the Rosemont project continues to be prolonged, there will be less opportunities for employment and even less revenue for the state of Arizona.
“[Rosemont] is a great example of why you can see the U.S. is attracting less and less of the worldwide exploration dollars for mining, and a lot of that is tied to the fact that it takes so long to get a permit here in the U.S.,” Sweeney adds. “In the ’80s and ’90s, the U.S. attracted over 20 percent of the worldwide exploration budget. Today it’s under eight percent.”
What can the country do to become more competitive in mining and revitalize our domestic manufacturing? Push for reform in the U.S. minerals mining permitting process. Thankfully, there has been movement in Washington aimed at making the U.S. permitting process more efficient. Sweeney praises Rep. Mark Amodei’s (R-Nevada) bill, the “National Strategic and Critical Minerals Production Act of 2015,” which she believes will help solve the U.S.’ mine permitting problem.
“I believe that Rep. Mark Amodei’s bill… actually has some significant solutions and [makes] no environmental shortcuts,” says Sweeney. “It really focuses on ways to eliminate redundancies and duplication and require enforceable timeframes for the process. Under his bill you would have 30 months to complete the permitting for major mining projects.”
In order for the U.S. to become the top ranking mining country it once was, have a reliable mineral supply chain, and bring increased economic opportunities, Congress must pass policies aimed at making the U.S. mine permitting process more efficient and reliable.