Interagency Working Group releases report that outlines mining reforms
The U.S. Department of the Interior’s Interagency Working Group on Mining Laws, Regulations and Permitting released its long-awaited “Recommendations to Improve Mining on Public Lands,” report with its recommendations to reform and improve the way in which mining is conducted on U.S. Public Lands.
The 168-report broadly encouraged Congress to reform the General Mining Law of 1872 and recommended imposing royalties on U.S. hardrock mining for the first time, a move it said could increase domestic production by providing funds for the agencies in charge of issuing new mining permits.
In addition to recommending royalties of 4 to 8 percent, the interagency group advocated for moving to a system of leasing federal lands for mining and encouraging mining claimants to develop claims in a timely manner by increasing fees over time.
The working group said such changes would put the industry on more even footing with those like oil and gas and coal. Increased funds could both shore up agency staff needed to speed mine permitting, engage with local communities and protect taxpayers from the cost of cleaning up abandoned mines.
Rich Nolan, president and CEO of the National Mining Association responded to the report by saying it is unworkable and unreasonable.
“It’s clear that when it comes to the global minerals game, the U.S. is critically outmatched—by our geopolitical rivals and allies alike, and the administration acknowledges this. Unfortunately, if the Biden-Harris administration’s stated objective is to secure our nation’s domestic mineral supply chains while supporting responsible mining, the recommendations contained in this report don’t do anything to advance the ball,” Nolan said in a statement. “In fact, most of the recommendations made by the IWG reveal a fundamental lack of understanding of our industry and the laws that govern it, and will throw insurmountable obstacles in the way of responsible domestic projects and would-be investment.”
As the demand for critical minerals increases the demand for a more efficient permitting process has also increased. Automakers have joined the mining industry in its push for improved permitting. A number of project such as Resoltion Copper, Northmet and Twin Metals have been stalled in the permitting process for more than a decade. Conversely, some tribes have asked for greater transparency and engagement around mine planning, while others and environmentalists have called for more studies on the pollution and safety risks of hard rock mining, pushing the federal government to limit mines.
In his statement, Nolan points out some of the NMA’s concerns with the recommendations. These include the proposed leasing system, the royalties, dirt tax and permitting reform.
Nolan notes that there are significant differences between hardrock mining and other extractive industries where information is known about the extent of the reserves to allow prospective lessees to understand the potential rewards prior to bidding on the lease. When it comes to hardrock mining finding viable mineral deposits can take years and hundreds of millions of dollars, making the proposed leasing system unreasonable.
The issue of royalties is not new and Nolan points out that industry has long said it would be open to a compromise but that a royalty of up to 8 percent for existing operations that has never accounted for such a royalty in its mine plan could erase profitability, potentially leading to an early mine closure.
Nolan said of the dirt tax that, “applying a tax to material that has no value simply because it has been displaced could carry enormous costs and is nonsensical. Over the last decade, there have been executive and legislative proposals to impose a new tax or fee on the tons of materials displaced by hardrock mining operations. The proposals have not limited this dirt tax to material displaced at mining operations on federal lands and would be applicable to operations on public, state or private lands. None of the proposals have explained how this tax would work on the ground or if they would be repeatedly imposed every time material is moved around a site for a variety of purposes, including reclamation efforts.”
On permitting reform, Nolan said, “The IWG’s recommendations on permitting represent a missed opportunity for the administration to act aggressively to address the severity of the permitting problem while maintaining our world class environmental and safety standards. Separate from the work in the IWG, Congress specifically directed the administration in Section 40206 of the Infrastructure Investment and Jobs Act, to implement specific permitting improvements and to report to Congress (by Nov. 15, 2022) on further recommended improvements. Department of Interior (DOI) and USDA ignored this statutory requirement. The IWG report provides no definitive direction or answer on when these already enacted permitting reforms need to be implemented nor does it address how the National Environmental Policy Act permitting improvements included in the Fiscal Responsibility Act will contribute to permitting improvements."
The committee is led by the Interior Department and includes representatives from the Environmental Protection Agency, the Agriculture, Energy and State departments, the White House and the Advisory Council on Historic Preservation.
Photo: Resolution Copper headframe. Courtesy of Resolution Copper.