New Study Shows the Economic Effects of Permitting Delays on the U.S. Mining Industry

Posted on June 25, 2015 by Minerals Make Life

An eye-opening analysis by SNL Metals & Mining released today shows how delays in the U.S. mine permitting process diminish the value of a minerals project – underscoring the urgent need for a streamlined permitting process. The study, commissioned by NMA, finds that a duplicative permitting process that can delay mining projects a decade or longer is hindering the U.S.’s ability to meet a rising demand for minerals.

The study, “Permitting, Economic Value and Mining in the United States,” reveals that an average domestic mining project can lose a third of its value due to permit delays, and increased cost and investment risk resulting from the delays can in turn cut the expected value of a mine in half. This effect is compounded as the delays increase. As the value of investment goes down and the years go by, a project can become financially unviable.

Three U.S. mines in Arizona, Alaska and Minnesota served as case studies for the research. In one example, SNL found that after eight years of delay the value of Arizona’s Rosemont mine dropped $3 billion. And Alaska’s Kensington mine suffered 20 years of mining delays, while the capital cost of building the mine increased by 49 percent.

“This study now confirms the connection between the delays and their effect on companies’ decisions to invest in domestic mining projects. Hopefully it will strengthen the resolve of Congress to fix a broken permit system that threatens to break down a minerals supply chain that is critical for U.S. manufacturing,” National Mining Association NMA President and CEO Hal Quinn said in statement to the press today.

The report comes as both the Senate and House are working to make the U.S. mine permitting system more efficient. Sen. Lisa Murkowski (R-Alaska), and Rep. Mark Amodei (R-Nev.), have sponsored legislation in both Houses of Congress that would modernize the current U.S. mining permitting process and ensure access to our vast domestic mineral resources, promoting manufacturing, job growth and innovation here at home.

For an overview of the SNL study, click here.

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