Future of US mine permitting overhaul hangs in the balance

By Myles McCormick
Published: Friday, 26 August 2016

A bill to limit the amount of time taken to approve mining permits in the US is looking increasingly unlikely to be passed by the end of the current presidential cycle as time to conference legislation passed by the two houses of Congress runs short.

The chances of the US Congress passing a bill to expedite the country’s lengthy mine permitting process are slimming as the time before the end of the current congressional cycle runs out.

Legislation to reduce the country’s seven-to-10 year average mine permitting period is part of an energy bill now in conferencing stage following the passage of the National Strategic and Critical Minerals Production Act of 2015 through the House of Representatives last October and the Energy Policy Modernization Act of 2016 through the Senate in April (both bills were analysed by IM following their approval).

US legislative practice means that once both houses of Congress pass related bills they must be conferenced by negotiators on both sides, with a compromise bill ultimately agreed on for signing by the US president – if an acceptable middle ground can be reached.

It had been hoped that negotiations would have led to an agreement on a compromise bill by now, but this has not been the case and politicians are currently on recess, due to return early next month after Labor Day (5 September).

US Capitol_wikimedia
Mining groups had hoped the US congress would have passed conferenced legislation to expedite the country's lengthy permitting process by now. Time to agree on a compromise bill is running out. (Image Source: Wikimedia)
"We hoped something would happen before the August recess, but it hasn’t," Katie Sweeney, general counsel at the National Mining Association, told IM.

She added that the bills are "definitely conference-able" and said she was still hopeful of the permitting legislation going through.

Conferees from both parties and both houses have been named and the "easy decisions" as to what is on the table for negotiation from both bills have been decided, Laura Skaer, executive director of the American Exploration and Mining Association, told IM.

The provisions of both bills relating to permitting reform are among those that remain "on the table" Skaer noted, but the chances of a bill passing have dropped from 70:30 to 50:50 she said. And even if a bill is passed, there is no guarantee that the permitting elements will be included.

"My personal view is if they don’t get it done in the four weeks they’re back in September, it’s not going to happen," said Skaer.

An October break followed by the November elections will rule out further conferencing before legislators return to a "lame duck" Congress, where passing a bill to keep the government funded will dominate proceedings.

Once a new president takes office in January, both bills become void, meaning both houses would have to return to the drawing board.

Sweeney however believes there is a possibility of progress right up to the last day of Congress, driven by Senator Lisa Murkowski, sponsor of the Senate bill.

For her part, Skaer remains hopeful that a desire to appear active ahead of the election will push members of congress to complete the process as soon as possible, "especially with all the rhetoric about how Congress never does anything", she said.

The bills

The length of time taken to permit a mining operation has been a bone of contention in the US for some time, with a report by SNL Metals and Mining finding that 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 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.

The bill passed by the House of Representatives last year was the latest in a series of attempts to deal with the permitting issue. But in recent years the Senate had not followed suit, meaning that the passage of the bill in the upper house this year marked the "furthest the legislation has ever made it," according to Sweeney.

The two bills are markedly different, however.

The House of Representatives bill seeks to cap the time taken to approve or disapprove a permit at 30 months, coordinate the process better and limit litigation procedures.

"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 sponsor of the House bill, told IM at the time.

The Senate bill is a slightly "watered down" version of this, according to Sweeney. "It has process to stop delay, best management practices and a lot to whittle down bureaucracy. But it is a lot more aspirational in nature," Sweeney previously told IM.

The bills also differ in terms of their definitions of what minerals are "critical" – and, as a result, under the purview of the legislation.

The House bill proposes a broad definition, with proponents arguing that the critical nature of a given mineral may change quickly, something that provoked criticism from the environmental lobby.

The Senate bill calls for the US Department of the Interior to formulate a methodology to determine what is critical and apply and update it each year.

Which elements of each bill make it through to the conferenced compromise energy bill remain to be seen.

The Democrats, for their part, will be pushing for renewable energy and efficiency-related elements to appear in the final draft.

"We’ll see what kind of horse trading gets done," said Skaer.

Members of Congress return to legislative work on 6 September, following the Labor Day holiday. 

The US is home to a wide range of mineral resources, including lime, sand and gravel, vanadium, potash, phosphate, salt, diatomite, perlite, wollastonite, soda ash, barite, bentonite, bromine and lithium. 



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