POLITICAL ECONOMY

U.S. House bill aims to reduce one of world's longest permitting processes

In a world where competition for mineral resources is increasingly fierce, America can't afford to neglect a permitting process that stalls investment say U.S. mining advocates.

RENO (MINEWEB) - 

National Mining Association CEO Hal Quinn told a House subcommittee the proposed Strategic and Critical Minerals Production Act (H.R. 4402) "tackles one of the highest hurdles for domestic mining: permit delays."

"The length, complexity and uncertainty of the permitting process are the primary reasons investors give for not investing in U.S. minerals mining," Quinn testified before the House Subcommittee on Energy and Mineral Resources Thursday.

"Permitting delays for mining project is not a new problem," Quinn observed. "What is new is the growing awareness of its implications for our nation, particularly in a highly competitive world economy in which the demand for minerals continues to grow, especially in fast growing economies led by China and India."

In his testimony, Quinn noted that international consulting firm, Behre Dolbear, "has identified the U.S. as having one of the longest permitting processes in the world for mining projects, placing domestic mining investments at a competitive disadvantage."

"More recently, the Department of Energy identified the 7-10 year period to obtain permits in the United States-as compared to the average 1-2 years in Australia-as one of the principal barriers to new mining ventures in the U.S.," he added.

Quinn stressed that the implications of permitting delays are real, as the U.S. import dependence on key mineral commodities has doubled in two decades. "Today, less than half of the mineral needs of U.S. manufacturing are met from domestically mined resources."

With domestic raw materials production below its potential, Quinn suggested "the mining industry is under-delivering on contribution to GDP and employment."

"When viewed through the lens of resource potential, we are punching below our global weight," he advised. "If we had produced to our resource potential for copper, molybdenum, and iron ore-basic ingredients for key sectors of or economy-an additional $32 billion of revenue would have been registered in 2008-and multiply that by the value added to the GDP by major industries that convert these materials into finished products, and U.S. mining could have been the start point for an additional $1 trillion in economic output."

"With worldwide mining GDP contribution expected to quadruple by 2030, our trajectory will worsen further without intervention," Quinn warned.

Quinn suggested the U.S. difficulty in competing with Canada and Australia is not a reflection on the fact the U.S. has some of the world's greater mineral reserves, "leading the world in the breadth of its commodity reserves."

"Furthermore, according to the USGS, when it comes to copper, silver and zinc and other key minerals ‘what is left to be discovered in the U.S. is almost as much as what has been discovered.' But our ability to put these minerals to work for America is hindered by a costly and inefficient permitting structure," he added.

"In a world in which the competition for mineral resources is increasingly fierce, American can no longer afford to benignly neglect a permitting process that stalls investment-threatening raw materials shortages and downstream economic activity."

"We need assertive measures, such as those provided by H.R. 4402 to reverse a 30-year trend of increasing import reliance for materials we have here at home and lend a much needed hand to the industries that will put Americans back to work," Quinn concluded.

Former Nevada Mining Association President Mark Amodei, R-Nevada, is the chief sponsor of the National Strategic and Critical Mineral Production Act of 2012. He told the House subcommittee it will facilitate timely permitting process for mining exploration and mine development projects by clearly defining the responsibilities of the lead federal permitting agency.

The bill will limit the total review process for issuing permits to 30 months unless signatories to the permitting timeline agree to an extension.

Amodei stressed his legislation will "ensure American mineral mining projects are not indefinitely delayed by frivolous lawsuits by setting reasonable time limits for litigation." It would set a 90-day time limit to file a legal challenge to an energy project, requires the litigation be filed in the judicial district where the project is located, and limits any preliminary injunctions to halt projects to 60 days unless the court finds "clear reason" to extend the injunction.