Cautious optimism sweeps over the mining sector
From the SME Annual Conference in Denver, CO, to PDAC in Toronto, Canada to Washington State, the outlook for the mining sector is optimistic.
Commodity prices seem to have stabilized, investors are gaining confidence in the market and demand is slowly rising. Some of this optimism comes from President Trump’s ambitious infrastructure plans. However, there are still some very real challenges facing the industry, including the time it takes to get a new project permitted in the United States.
Phillips S. Baker, president and chief executive officer of Hecla Mining and incoming chair of the National Mining Association recently spoke with the Tribune News Service and added to the cautious optimism for the mining sector. Baker said he encouraged by plans to spend more on infrastructure, but warned that Congress must first clear the way for companies to get necessary permits to mine in the United States.
“At the end of the day, you can’t have the infrastructure and everything that goes with that if you don’t have the underlying commodities that go into the bridges and the roads and everything else,” said Baker, the soon-to-be chairman of the National Mining Association.
In a recent speech Trump pledged $1 trillion to infrastructure and on Capitol Hill, many Democrats have cited Trump’s infrastructure plan as one of the few areas where they might be willing to work with the new president.
But many Republicans may resist, more worried about the nation’s $20 trillion in debt.
In December, Senate Majority Leader Mitch McConnell, R-Kentucky, was among the first to express skepticism, questioning whether the plan was too expensive. But last month, he told reporters that infrastructure spending frequently gains bipartisan support in Congress, recalling how he and former California Democratic Sen. Barbara Boxer had teamed up two years ago to pass a highway bill, The Spokesman-Review reported.
Infrastructure projects are expected to play a key role in Trump’s “manufacturing jobs initiative,” led by a collection of business and union leaders charged with advising the president on how to create more jobs.
In Idaho, which has 626 active mines and more than 15,000 people working in them, Trump’s infrastructure plan will not have much effect if Congress doesn’t speed up the process to allow mining companies to move more quickly to extract minerals from the ground, Baker said.
Mining officials say it can take seven to 10 years, on average, to get the necessary approvals to open a mine in the United States, compared with only two to three years in Canada and Australia.
Baker said that Hecla, headquartered in Coeur d’Alene, wanted to open two copper mines in nearby Montana. But he said the projects had been delayed for 15 years, with the company still waiting to get the permits.
The plans for the new mines have run into heavy resistance from environmental groups who worry about the effect on groundwater supplies.
“Most projects don’t end up not getting done – they just end up getting done a long time after they were first proposed,” Baker said.