Column: Trump 2.0 won’t reverse Biden’s critical minerals push
Donald Trump has described the Inflation Reduction Act (IRA) as a "green scam" and vowed to repeal it after he returns to the White House in January.
(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)
The Biden Administration’s one-year review of US critical mineral supply chains came with some headline-grabbing announcements.
The Department of Defense will provide $35 million in funding for a rare earths processing plant at the Mountain Pass mine in California and The Department of Energy (DoE) will fund a $140 million demonstration project to process rare earths and other critical minerals from coal ash.
The DoE has another $3 billion to invest in refining green metals such as lithium, nickel and cobalt which are critical for decarbonisation.
All of which, ideally, will be fed by domestic mines.
Which makes it ironic that on the same day the White House was laying out its pathway to greater mineral self-sufficiency, the Department of the Interior announced it is re-opening an investigation into the construction of an access road to the prospective Ambler mining district in Alaska.
Last month the Department revoked two mineral leases for Antofagasta’s Twin Metals mine in Minnesota, effectively killing the copper and nickel project.
Such “incoherent policies” are aggravating the country’s lack of mineral security, according to Alaskan Senator Lisa Murkowski.
The incoherence is rooted in a set of laws that were introduced at the time of the Californian gold rush and are not fit for 21st century purpose.
It is time, to quote Secretary of the Interior Deb Haaland, “to take a hard look” at the General Mining Law of 1872.
The law covers all hardrock mining on US government land, some 350 million acres, much of it in Western states and Alaska.
It was born out of the California gold rush of 1849, when mining camps simply customised Mexican law in the newly-acquired state. In essence, they granted themselves the right to mine on federal land.
There were calls for the forced expropriation of these “illegal” mineral claims but Ulysses S. Grant ended up signing into federal law what had anyway become standard practice across the West.
Oil, gas and coal were excluded in 1920 and have operated on a lease-based system ever since.
But for pretty much everything else of mineral value on federal ground, the law is still moulded by the find-stake-mine mentality of the gold rush era.
There is no provision for royalty payments – a long-running bone of contention – nor any environmental, reclamation or financial guidelines.
The U.S. Forest Service and the Bureau of Land Management have been de-facto environmental arbiters of whether a new mine should be allowed to go ahead.
But the law’s bias in favor of mining – “the highest and best use” of federal land – sets the stage for repeated clashes with both environmental groups and Tribal Nations. The common outcome is protracted legal action and what can often appear random, or “incoherent”, court judgments.
The General Mining Law turns 150 this year and is now in for a major make-over.
The Department of the Interior has launched a new interagency working group “on reforming hardrock mining laws, regulations and permitting policies in the United States”.
It will be guided by the Administration’s “Fundamental Principles for Domestic Mining Reform,” top of which is a pledge to “establish strong responsible mining standards” from exploration through to reclamation.
The playing field will be tilted away from the laissez-faire gold rush age towards the new ESG age.
Some lands “must be off-limits to mining”, according to the Administration. “Our federal land managers (…) must have discretion to reject projects (and) agencies should retain and use their authority to withdraw lands from mineral entry, where necessary.”
The quid pro quo for mining companies is the promise of greater permitting certainty with all federal agencies working together with local communities and project developers at an earlier stage of the development process.
Agencies will themselves have to rebuild mining expertise that has been “lost due to retirement and downsizing”.
A core component of the Administration’s mining vision is a federal clean-up fund for the country’s estimated 500,000 abandoned mine-sites.
Mine reclamation didn’t feature in the original 1872 Mining Law and it was only in 1977 that the U.S. government introduced legislation requiring the reclamation of abandoned mine lands, but only explicitly for coal.
Western states are littered with old mining pits, often leaking hazardous materials into the surrounding water system. Around 40% of headwaters in western states have been polluted by mining, according to a finding by the Environmental Protection Agency in 2000.
Abandoned mines are a constant reminder of mining’s toxic past and an equally toxic ingredient in the debate around mining in sensitive eco-systems.
They may also contain minerals that were once discarded as waste but are now deemed critical.
It seems likely that any reclamation fund would complement an existing exercise by the United States Geological Survey to map and collect data on mine waste with a view to critical minerals recovery.
The Biden Administration is not the first to take a hard look at the country’s hardrock mining law.
There were legislative attempts to reform it in 2007, 2009, 2014, 2015 and 2017, both in terms of royalty payments and environmental safe-guarding. None were successful.
However, the combination of surging demand for energy transition metals and the United States’ desire to break its critical minerals dependency, particularly its reliance on imports from China, lend a unique sense of urgency to the current reform drive.
The federal government’s investment in critical minerals is largely flowing into the processing and refining stage of the supply chain.
This makes sense in the case of rare earths, given the US already has one of the world’s biggest mines but is currently shipping raw material to China for upgrade and input into permanent magnets.
But for other metals, particularly nickel, cobalt and copper, the domestic mine project pipeline is thin and the permitting process lengthy and often unpredictable.
Blaming the Administration for inconsistency in how individual projects are treated is missing the point.
The underlying problem is a 150-year-old law that was written for the wild west and now needs some serious updating.
(Editing by Kirsten Donovan)
4 Comments
Edward E. Gates
I believe that the General Mining Law of 1872 is not the problem that it is made out to be. A law that has lasted that long likely has many good attributes. It actually was an ingenious way of giving incentive to people to invest their time, labor and money in trying to find economic mineral deposits, and thus lead to the development of the western United States. Back in 1800’s it was difficult to find a mine. Of the thousands of prospectors that tried, very few were successful. But those that did succeed, brought great wealth to the west, creating cities, states and giving the country the resources to fight two world wars and build the greatest country in world.
Now, the investment needed to find a mine is orders of magnitude more than it was in 1872. Prospectors and companies need to know right from the start that if they invest in a piece of land that is open for exploration, that they will not be shut down by judges, bureaucrats or various interest parties, provided that they follow the many existing laws that protect the environment and communities. Anything short of this will cause investors to go to other countries, leaving the United States more dependent on foreign-sourced materials. Along with the investment dollars, good-paying jobs will also go elsewhere.
We currently have environmental protection laws on the books to keep from repeating the problems that mining caused over a half century ago. There is no need to change the mining law in this regard. Attempts to tax the amount of rock moved during mining are simply meant to eliminate mining, and will do just that. The proposed gross royalty on hard rock minerals will also lead to abundant mine closures and layoffs. It will turn what otherwise would be profitable rock into waste rock that cannot be mined. Only a net profits royalty will allow a mining company to survive the metal price downturns and will produce much higher revenues when metal prices are high.
One of the best changes that could be made to make the United States more competitive for mining investment dollars would be to improve and streamline the permitting process.
The 1872 mining law could use some adjustments, but in general, the country needs to have it stay intact. It has led to many important mineral discoveries that have helped build and strengthen the United States.
Leonard J Karr
The problem is not the mining law. The problem is the greenies blocking development and forbidding mining where they vacation
Kelly
It is ignorant and irresponsible to buy rare earths, copper or oil from other countries when we have the resources right here. We have the means to be self sufficient , we cannot make everyone happy when it comes to mining and drilling but it must be done..mining and drilling have come a long way from the way things use to be done even 10 years ago. I am a miner, I know this first hand, I also worked at the resolution mine which needs to re-open, continuing to move forward towards production and the XL pipeline reopened.
Travis Mickelson
More attacks on our freedoms every day. It’s like China has written this. We need to ease back laws and restrictions not make tighter. Every time we revise a law it takes more freedoms away and in powers other countries. This is why we are in situation we are in with Russia.