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The House Majority recently introduced HR 4402 a bill called the National Strategic and Critical Minerals Production Act of 2012.  The authors cleverly spell out the purported purpose in a series of whereas clauses that form the bill’s preamble.  Ostensibly, the problem the bill wants to solve is a dearth of domestic production of so-called rare earth or critical minerals.  These minerals consist mainly of those elements in the bottom two rows of the periodic table and have varied applications in electronics, hybrid technology, renewable energy, and defense industries.

To begin, the term “rare earth” is a misnomer. In fact, these elements are plentiful.  The problem is that there exist very few economically viable deposits.  Many rare earths are mined as byproducts of some other valuable mineral, like uranium.  Right now, there is no domestic production of rare earths although many speculate that the Mountain Pass, California mine may again begin mining activities very soon.  Currently, China mines about 90% of the world’s rare earths- a fact that has stoked worries the Chinese seek to corner the market and led to the Obama Administration’s move to submit a complaint to the World Trade Organization.  The reason China produces so many rare earths is simply that they have little by way of labor and environmental costs.  Now, the US House of Representatives seek to move us closer to China in this respect.

This bill allows federal agencies to exempt mining projects from review under the National Environmental Policy Act of 1969 (NEPA).   The process established by NEPA requires agencies to consider the environmental implications of federal government decisions and consult with interested stakeholders throughout.  Regulators have progressed under this well-established framework for over forty years.  Conducting the community outreach, soliciting public comment, providing the scientific studies usually take a few years on top of the time needed to issue the necessary permits. 

And that’s ultimately the bill’s purpose: streamlining permitting, setting timelines, and eliminating environmental review.  The bill allows regulators to exempt mining projects from the Equal Access to Justice Act (EAJA) as well.  The EAJA is the legislation that makes nonprofit environmental law firms possible.  Usually, affected communities cannot afford to hire a lawyer, much less the litany of scientific and technical experts needed to mount a serious challenge to a major multinational corporation. 

Environmental reviews and legal challenges do not account for why America has no rare earths mines.  Those cause some delays but little more than a mine would normally take to conduct the necessary planning before commencing mining operations.  That is, it’s not a problem of too many lawyers or regulators; it’s an economics problem.  Mountain Pass operated for years before the owners ceased mining only because the price of their target minerals dropped.   

Now that we need more iPhones, solar panels, and predator drones, we need more of these critical minerals.  For this reason, our policy should emphasize research, recycling, and alternative sources. We all know the markets crave certainty.  More than forty years of NEPA has settled the market where major mining companies and their investors have priced in the cost of regulatory review and litigation. The economics of mining in the United States rest not upon environmental compliance costs but rather the world market for certain metals.  While China may have many wonderful qualities, the quality of their environment is not one we should emulate.

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