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Vol. 16, No. 26 Week of June 26, 2011
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Critical minerals bills land in Congress

Murkowski, Lamborn introduce legislation aimed at bolstering domestic mining of elements most vital to the U.S. economy, security

By Shane Lasley

Mining News

As the United States scrambles to fill the rare earth elements supply shortage caused by China’s export restrictions on these technologically important metals, Sen. Lisa Murkowski, R-Alaska, and Rep. Doug Lamborn, R-Colorado, each have introduced legislation on Capitol Hill that seeks to revitalize domestic production of the minerals most critical to maintaining military security and a robust economy.

“It is critical that we have a national policy, and we are behind the power-curve. We have countries like China that sometimes have monopolies on rare earth metals or other critical and strategic minerals,” Lamborn told Mining News during a June 3 interview. “We need to have in place an assessment and inventory of what our national assets are, so that, at a minimum, we can use that up-to-date and vital information to formulate the next steps going forward.”

Though China’s restrictions on global REE supply is what prompted lawmakers to consider the need for a national policy on critical minerals, the bills introduced by Murkowski and Lamborn seek to establish a national course of action, not only for rare earth elements but all minerals vital to the nation’s well-being.

“That is one reason why my bill is so comprehensive and covers a number of things beyond just the rare earths, as important as those are,” the Colorado senator explained. “Some (minerals) may move in and out of those categories. Copper for instance; you would think it is a wide-spread substance, and in some ways it is, but if the industrialization of India and China takes hold even more in the future then current deposits may get consumed, and something we thought was common all of a sudden becomes critical.”

In its “Mineral Commodity Summaries 2011,” the U.S. Geological Survey reported that in 2010 the U.S. imported more than 50 percent of its consumption of 43 minerals and 100 percent of 18 minerals, continuing a 30-year trend of growing reliance on foreign sources of these commodities.

“Minerals are a fundamental component to the U.S. economy. Final products, such as cars and houses, produced by major U.S. industries using mineral materials made up about 13 percent (more than $2.1 trillion) of the 2010 gross domestic product,” the agency wrote in January.

Inclusive bill draws bipartisan support

Two of the primary objectives of the critical minerals legislation Murkowski introduced to the Senate on May 26 is to direct the U.S. Geological Survey to compile a list of any and all minerals vital to the U.S. and establish a comprehensive set of policies that ensure the nation is able to meet its own mineral needs.

Introducing S. 1113, Murkowski wrote, “Minerals shape our daily lives, our standard of living, and our ability to prosper.  We rely on minerals for everything from the smallest computer chips to the tallest skyscrapers, and yet the United States somehow lacks clear policies to ensure an affordable and abundant domestic supply.  The ‘Critical Minerals Policy Act’ will help solve that problem by modernizing our policies for production, processing, environmental protection, manufacturing and recycling.  Through this act, we will ensure more opportunities for domestic jobs, technological innovation, increased national security and greater competitiveness.”

S. 1113 includes provisions related to:

• Designations – creates a process for designating minerals as critical based upon a review of potential supply restrictions and the importance of their use.

• Policy – articulates a statement of policy regarding presidential leadership on the critical minerals supply chain.

• Resource assessment – seeks an updated assessment of critical mineral resources located in the United States, in coordination with state geologic surveys.

• Permitting – establishes working group to review permitting, quantify delays, assess environmental protections and recommend improvements.

• Manufacturing – facilitates memoranda of agreement between states and the federal government on coordinated permitting for manufacturing facilities.

• Recycling and alternatives – authorizes research to promote the efficient use and recycling of critical minerals as well as alternatives to them.

• Analysis and forecasting – builds upon existing capabilities to provide more forward-looking analyses of critical mineral supply chain trends.

• Education and workforce – provides workforce assessments, curriculum development, worker training and associated grant authorizations.

• International cooperation – reaffirms interagency coordination to share critical mineral information and practices via diplomatic channels.

“It’s my hope that a transparent and inclusive process – designed to gather feedback from stakeholders even prior to the bill’s introduction – will lead to a common-sense bill that draws broad, bipartisan support,” Murkowski said.

The Republican senator, who came out on top of rivals as a write-in candidate during the 2010 general election, drew support to her legislation from both sides of the aisle, with Democrats making up eight of the bill’s 17 original co-sponsors.

“Our dependence on foreign sources for critical minerals is unacceptable. The bipartisan ‘Critical Minerals Policy Act’ ensures the American critical mineral supply is stable and affordable to support next-generation manufacturing,” said Sen. Kay Hagan, D-North Carolina. “The legislation includes my Powering America’s Lithium Production Act, which increases domestic production of advanced lithium products that will power the cars and smart grid of the future. With gas prices sky high, it’s more vital than ever to support clean energy research and development.”

For nearly half a century, starting in the early 1950s, the world’s primary source of lithium was North Carolina, much of it from a mine in the town of Kings Mountain.

REEs on lawmakers’ minds

Recognizing the potential impact of China’s sharp restriction on exports of REEs on the economy and national security of the United States, Murkowski was among the first lawmakers to warn of the nation’s dependence on foreign sources of minerals.

“Rare earth metals again provide a good example of what’s at stake. China currently accounts for 97 percent of global production of these incredibly important metals and last month set off a wave of anxiety among clean energy developers by announcing its intention to decrease export quotas for the eighth time in as many years,” she said. “By cutting rare earth exports, China is seeking to ensure the manufacture of clean technologies within its own borders. But the implications for energy security and job creation in America are also apparent.”

Since Murkowski’s notice to fellow senators, China has increased limits on its exports of these metals.

The shortage of supply has caused the price of dysprosium – considered one of the world’s most critical strategic metals for military, high technology and clean energy applications – to skyrocket to a staggering US$1,490 per kilogram from about US$117/kg when Murkowski addressed fellow lawmakers late in 2009.

While S. 1113 seeks to establish policy for all critical minerals, worries over current supply shortages of REEs continue to weigh on the minds of many of the co-sponsors of the legislation.

Sen. Dean Heller, R-Nevada, said, “Some of the largest concentrations of rare earth minerals are in the United States, but instead of developing our own resources, we are increasingly becoming more dependent on foreign countries. Our nation needs a policy that supports mineral development, not one that discourages it.”

“These elements have become increasingly important as global demand has soared.  Our ability to build fighter engines, missile guidance systems and space satellites will be jeopardized in the coming years if we don’t encourage entrepreneurship and innovation,” said Sen. Claire McCaskill, D-Missouri. “China’s chokehold on world markets diminishes our national security and threatens our economy.” 

Accessing federal lands

H.R. 2011, the legislation introduced by Lamborn, requires the Secretary of the Interior to conduct an assessment of the nation’s capability to meet current and future demands for the minerals critical to U.S. manufacturing competitiveness and economic and national security in a time of expanding resource nationalism.

“We don’t know which federal lands are open for mineral development. We also lack a decent assessment of the permitting timelines for projects on federal lands, associated litigation, and hurdles to domestic development,” Lamborn, who is chairman of the House Subcommittee on Energy and Mineral Resources, explained. “The National Strategic and Critical Minerals Policy Act of 2011 will increase our understanding of our national mineral needs and identify the barriers to meeting those needs. This way America can domestically produce the resources needed to produce energy, defend our nation, build our infrastructure, create jobs, secure our manufacturing base, and keep our economy healthy.” 

To ensure the U.S. maintains an adequate and stable supply of minerals during a time of increasing resource nationalism driven largely by the needs of the burgeoning economies of India and China, H.R. 2011 directs the federal government to:

• Facilitate the availability, development, and production of domestic mineral resources to meet national needs, including the demands of the manufacturing industry;

• Promote and encourage the development of economically sound and stable domestic mining, minerals, metals, and processing industries;

• Establish an assessment capability for identifying the mineral demands, supply, and needs of the U.S.; and,

• Minimize duplication, needless paperwork, and delays in the administration of federal and state laws and regulations, and issuance of permits and authorizations necessary to explore, develop, and produce minerals and construct and operate mineral-related facilities.

Lifting barricades

Lamborn told Mining News that one of the primary aims of H.R. 2011 is to address roadblocks to bringing domestic mining projects into production.

One such barricade is minerals located on federal lands off-limits to exploration or development. Lamborn’s bill also requires the Interior Secretary to work in conjunction with the USGS to assess the mineral potential of all federal land under the jurisdiction of the Bureau of Land Management and Forest Service and categorize “all such lands that have been withdrawn, segregated, or otherwise restricted from mineral exploration and development.”

In addition to gaining a better understanding of the mineral potential of federal lands, the bill proposes to investigate ways to streamline the permitting process in the United States.

“It is also important that we look at permitting problems and issues,” Lamborn told Mining News.

He said shortening the seven- to 10-year average it takes to permit a mine in the United States would provide multiple benefits to the domestic mining sector.

“No. 1, it produces jobs faster,” he explained. “Because our economy needs jobs and mining jobs are some of the best in the country.”

The Colorado senator said the ability to bring mining projects online quicker by having a more efficient permitting process also would reduce the nation’s vulnerability to foreign supply restrictions and encourage investment in domestic mineral projects.

“Mineral prices go in cycles,” he explained. “It is difficult for investors – when there is a seven- to 10-year window that they have to deal with – to commit to the investments needed for new mining projects, or expanded projects of current operations.”

S. 1113 also calls for federal agencies to assess “the impact of litigation on processing or issuing mineral exploration and mine permits, identification of the statutes the litigation was brought under, and the cost to the agency or the Federal Government, including for payments of attorney fees.”

Contending that the current judicial system in the U.S. is unfairly weighed in favor of organizations that utilize litigation to oppose development projects, many mining industry leaders have called for legislation that would strike a better balance.

“Litigation is something that needs to be streamlined and dealt with in such a way – by Congress and hopefully by this Administration – to strike a better balance, Lamborn explained. “There are legal issues that citizens are entitled to bring to court, but it should not be done for the purpose of simply delaying projects.”

Lamborn hopes the changes proposed in his legislation will create a more robust investment climate and help spur growth in domestic mining projects.

“It creates so much more uncertainty when you deal in longer cycles because you have to predict what the price of that commodity will be and investors may get cold feet about committing that far ahead and so the project never gets off the ground,” he said.

Due to the importance of having a critical minerals policy in place, the congressman also foresees the federal agencies involved adjusting quickly to provisions of the bill.

“There is usually bureaucratic inertia when you change an agency’s priorities. But, we expect, given the serious nature of this issue, that the agencies should adapt to the requirements of Congress, should this become law, and that they would act accordingly.”

Bills in committee

Both the House and Senate versions of the critical mineral legislation have been referred to their respected resource committees.

H.R. 2011 is in the House Subcommittee on Energy and Mineral Resources, which Lamborn chairs, and a hearing was held June 3.

Lamborn said a vote on his legislation could be held in the House Committee on Natural Resources by the end of June.

“I hope, and I expect, this to be on a fast track,” he said.

S. 1113 is in the Senate Committee on Energy and Natural Resources, of which Murkowski is the ranking member. This legislation was heard by the subcommittee on energy June 9.

“I have heard good things about her (Murkowski’s) legislation, and I would be honored to work with her on a House version of her bill and visa-versa,” Lamborn said. “I am hopeful that we can make progress together – I would be honored to do so.”



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