The hardrock mining (think gold, copper, uranium, rare earths) trade lobby for years has tried convincing Congress that the the federal mine permitting process is so burdensome that it chases away domestic investment in mineral development. For proof, they repeatedly assert claims it can take the better part of a decade to permit a mine.
Under the guise of promoting investment, the mining lobby has pushed Congress to weaken environmental regulations and reduce the public’s ability to provide input during mine permitting.
Fortunately, two new reports definitively refute the mining lobby’s claims:
- A global survey of mining company (note, not the mining lobby) executives by a right-wing think tank just published its annual ranking of the mineral investment attractiveness of jurisdictions around the world.
- The Government Accountability Office published a report that examines how long it takes to permit mines.
To cut to the chase:
- it takes approximately two years to permit a mine; and
- The United States is one of the mining industry’s favorite places to dig.
Political Context
In the House, Rep. Amodei (R-NV) has introduced the National Strategic and Critical Minerals Act while the Senate’s Energy and Natural Resources Chairwoman Lisa Murkowski (R-AK) sponsored the American Mineral Security Act.
Mr. Amodei’s proposal places a 30-month limit on the environmental review process for mining permit applications. Senator Murkowski’s legislation would compel the Department of Interior (DOI) to set strict performance metrics designed to track progress toward reducing permit review times. Last week’s conclusion from the Government Accountability Office (GAO) obviates this misplaced focus on how long the government takes to review permit applications.
Mining Companies Dragging Their Feet
GAO surveyed the mining permit applications pending before DOI and the Forest Service over the last five years. After reviewing the 68 mine proposals, GAO concluded that, on average, these agencies require approximately two years to make a final decision. This time period places the United States exactly in line with Australia, Canada, and Chile- all advanced democracies with mature mining industries.
According to GAO, the main cause of delays is the poor quality of the plans mining companies submit. Even where the plans are fine, mining companies create delays by making changes (sometimes for perfectly legitimate reasons) to their plans after submission. GAO says this occurred 37 times over the last five years accounting for delays ranging from just a few weeks to seven years.
How Attractive Are We?
The second report comes from the Fraser Institute, a center-right Canadian think tank that annually surveys mining companies. They ask mining executives from around the world where they prefer investing their capital and what obstacles tend to discourage that investment. The survey ranks 109 national and sub-national jurisdictions according to their attractiveness for mineral investment.
And the Winner Is…
The Fraser Institute has been conducting this survey for more than a decade, and the United States of America is always at or near the top. Sadly, Western Australia replaced Nevada, which fell to third this year, as the world’s best place to mine. Nevertheless, the United States still has three states in the top ten, five in the top twenty, and Minnesota sits at 21. Furthermore, the survey of mining company executives makes clear that the U.S. regulatory regime is actually a competitive advantage relative to other places around the world. The exact opposite of what the mining lobby claims.
You Like Me; You Really Really Like Me
It is not surprising that mining companies want to dig here. The 1872 Mining Law allows them to privatize public lands for the paltry sum of $5/acre. Our precious metals they extract free of charge with no royalty to American taxpayers for our gold, silver, copper and other minerals. On top of that, the mining industry benefits from tax breaks and exemptions to our environmental laws that allow them to dump toxic mine waste in to our lakes, rivers, and streams while categorically declaring it nonhazardous material.
What’s In Your Wallet?
So, the tax breaks, exemptions, and free minerals mean that mining companies see our domestic legal and regulatory environment as a net benefit. The reason is that United States of America is the world’s oldest modern democracy. Our mature democratic institutions provide certainty to mining investors looking for places with a stable currency, the rule of law, courts that enforce contracts, and (even though it may not always seem like it) a well functioning political system.
In some nations, local opposition to mines sometimes results in formidable- even violent- civil unrest. In America, we have the National Environmental Policy Act (NEPA)- a statute more than two generations old that provides a clear, legal, and certain process for permitting. Where would you want to spend your money?
What Does It All Mean?
Taken together, the GAO report now puts to rest the repeatedly sited claim that government regulations create delays that harm our competitiveness. In reality, the mining companies cause permit delays and the government has steadily improved their efficiency and performance over the last few years. If you have any doubt, just ask the mining companies. The Fraser study does so annually, and every year, our nation remains among the best places to mine. Our process for including community input in permitting decisions works. Our government works. And the mining companies benefit greatly from everything we have provided them.
