US starts battle to overhaul mine permitting

By Myles McCormick
Published: Friday, 27 November 2015

A bill which passed the US House of Representatives in October aims to expedite start-up of mining operations in the country. As the industry looks to the Senate to follow suit, Myles McCormick, Reporter, spoke to politicians and lobbyists about the issues surrounding the current permitting situation.

The National Strategic and Critical Minerals Production Act of 2015 (NSCMPA), seeking to address prolonged delays in the permitting of mines in the US, passed the country’s House of Representatives on 22 October 2015 by a vote of 254 to 177.

This is the fourth such bill to make its way through the lower house in the past three Congresses and with the mining and environmental lobbies still at loggerheads, it is far from guaranteed that the legislation will pass the Senate.

The problem

A report entitled "The impact of permit delays on the United States mining industry" by SNL Metals and Mining found that of all developed nations, "the US is afflicted most severely by protracted delays in obtaining mining permits". According to the study, it takes an average of seven-to-10 years to obtain permits to commence operations in the US, compared to two years in Canada and Australia. 

The problem is one of bureaucracy, rather than of higher environmental standards in the US, Katie Sweeney, general counsel at the US National Mining Association (NMA), told IM. "What we’re looking for is more efficiency," she said. 

The SNL paper also found that the US accounts for just 7% of worldwide spending on mineral exploration, "despite being home to abundant mineral resources" and that a typical mining project loses more than one third of its value as a result of bureaucratic delays in receiving the permits needed to begin production. 

A separate study, carried out by market research firm Edelman Berland, found that of 400 manufacturing executives surveyed, three in four believed the country’s existing permitting process to be too slow. "In the past 35 years, permitting delays have gotten worse," Timothy McCrum, a natural resources lawyer and partner at DC mining law firm Crowell and Moring, told IM, "the length and depth of the studies carried out had increased."

Laura Skaer, executive director of the American Exploration and Mining Association, described the process as "paralysis by analysis".

The bill

The NSCMPA aims to expedite the permitting process in a number of ways. It sets a 30-month timeframe in which the permitting review process must be completed (this can then be extended by mutual agreement). "It tries to give predictability and certainty. You have 30 months to make a decision. It doesn’t require a yes," Rep. Mark Amodei, a Republican congressman for Nevada and the bill’s sponsor, told IM.

The bill also aims to coordinate the process between the various federal and state agencies involved. It introduces the role of a lead agency, whose function is to bring the different parties together, preventing duplication of efforts.

It limits the relief available to litigants against prospective licencees, forcing them to "have some skin in the game" and bringing the process closer to the British "loser pays" system of Canada and Australia, where "you need to be pretty sure in order to file a case", Skaer said. 

Further, the legislation aims to address national security fears stemming from reliance on other countries for key minerals. "Why are we buying our rare earths from China?" Amodei asked, "Why buy them when you’ve got them here?"

Speaking to IM, George Byers, vice president for government and community relations at Rare Element Resources Inc., an exploration company developing the Bear Lodge rare earth project in northeast Wyoming, cited the example of the Ohio-class submarine replacement, which he described as America’s principal nuclear deterrent force.

"Where will the rare earths permanent magnets come from to enable this truly 'run silent, run deep’ technology?" he asked. "What are the odds that China will generously step up and give America a 'good deal’ on magnet elements?  Wouldn’t domestic sourcing through a complete home-grown supply chain be more sensible and secure?"

Criticism

But the bill has been criticised for its definition of "critical minerals" being overly broad. According to the bill: "The term 'strategic and critical minerals’ means minerals that are necessary (A) for national defense and national security requirements; (B) for the Nation’s energy infrastructure, including pipelines, refining capacity, electrical power generation and transmission, and renewable energy production; (C) to support domestic manufacturing, agriculture, housing, telecommunications, healthcare, and transportation infrastructure; or (D) for the Nation’s economic security and balance of trade."

"Not one of the witnesses during our House Natural Resources Committee hearing could name a single mineral that would not be considered a "strategic and critical mineral" under the all-inclusive definition in this bill," Rep. Alan Lowenthal, a Democratic congressman for California, told IM. "Sand, gravel, and every other mineral we know of would qualify as a "strategic and critical mineral" and receive environmental review short-cuts," he added.

But Amodei told IM that the definition was meant to be wide-ranging: "It is purposefully broad because critical doesn’t have the same meaning every day of the week or every month of the year." Amodei cited recent storms in South Carolina and earthquakes in California as examples of situations where the rebuilding of essential transportation infrastructure became critical and, as a result, so too did sand and gravel for freeways.

The bill has also been disparaged for reducing environmental protections. "As written, the bill would avoid proper National Environmental Policy Act review, with its accompanying public input, for any and all mineral extraction and, in addition, make mineral extraction the first-priority use of our public lands," Lowenthal said. 

But proponents dismiss this criticism out of hand: "This doesn’t lessen the environmental review; it just makes the process more efficient," Skaer said, "and it doesn’t change the substantive nature of environmental laws and regulations, it just makes the process more timely."

Final hurdle

Similar legislation is included in the Energy Policy Modernisation Act 2015, sponsored by Republican Senator Lisa Merkowski of Alaska and Democratic Senator Maria Cantwell of Washington, which passed out of committee by a vote of 18 to four and is expected to reach the floor of the Senate in the new year.

While the Senate legislation is slightly watered down compared to the House bill – for example, it doesn’t contain the 30-month time limit – industry participants hope that should it pass the upper house, a congressional conferencing session may be able to strengthen it.

But first it must pass a super majority Senate vote, requiring 60% support. When questioned on the chances of this happening, Lowenthal’s reponse was simple: "Zero."

Amodei was more optimistic: "Nobody’s crystal ball works really well," he said "They [the Senate] have done nothing in the past three or four years. The fact that they’re doing something now is a good thing."