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Slow US mine permitting tops Senate hearing discussion

In tackling the question of U.S. dependence on foreign sources for some critical metals, a hearing of the U.S. Senate Committee on Energy and Natural Resources focused on slow U.S. mine permitting.

Several witnesses who gave statements and took questions during the hearing agreed that the U.S. was at a competitive disadvantage relative to countries such as Canada and Australia, where permitting timelines and regulatory certainty are better for miners while providing a similar level of environmental scrutiny.

The hearing was held March 28 to address the U.S.'s dependence on foreign sources of some minerals, such as rare earths, and was chaired by Sen. Lisa Murkowski, R-Alaska.

The six witnesses were Murray Hitzman, associate director of energy and minerals for the U.S. Geological Survey; Alf Barrios, CEO of Rio Tinto's aluminum division; Chris Hinde, director of reports in the metals and mining division of S&P Global Market Intelligence; Randy MacGillivray, vice president of project development at Ucore Rare Metals Inc.; Kevin Cosgriff, president and CEO of the National Electrical Manufacturers Association; and Roderick Eggert, a Colorado School of Mines chair in mineral economics.

"When it comes to permitting delays for new mines, our nation is among the worst in the world," Murkowski said in her opening statement. "So fixing our broken system is one of the single most important steps that we can take."

The subject of the hearing was on critical metals, such as rare earths that are used in some high tech applications. It's an issue wrapped up in U.S. national security and supply chain vulnerability as, in the case of a handful of critical metals, the U.S. depends on foreign sources completely.

Murkowski has for years championed the issue in Congress, pushing legislation that would see the U.S. lean away from its reliance on some metals, especially rare earths.

During the hearing, the conversation often steered to more general issues faced by miners in the U.S., and witnesses often flagged permitting in their responses.

Rio Tinto's Barrios said the U.S. reliance on a score of critical metals should "set off alarm bells" at the White House and in Congress.

"The trend is troubling," he said, noting the dependence was at a record high, double what it was two decades ago.

"This drift away from greater self sufficiency for the basic building blocks of our economy compromises our economic and national security," he said, pointing to the damage that supply disruption can wreak on consumer- and defense-related manufacturers.

Like other, Barrios highlighted permitting in the U.S. as a key issue.

The U.S. permitting process is one of the most time consuming in the world, he said, with average mines taking seven to 10 years to be permitted. That, as others noted, compared to two to three years in Australia and Canada, both developed nations with large mining industries.

"An outdated, inefficient permitting system presents a major barrier to the domestic mining sector's ability to perform to its full potential," said Barrios, who also argued against trade barriers to solve metal dependence issues.

President Trump and Congress should look at ways to pare permitting timelines back to boost the mining and smelting sectors, he said.

Other witnesses hit on similar arguments.

S&P's Hinde also underlined permitting as a critical issue holding back the U.S. mining sector. The U.S. offers some advantages, including a stable political environment, Hinde acknowledged. But other countries "offer a much more certain permitting process."

Like Barrios, he cited relatively long regulatory time lines in the U.S. versus peer countries Canada and Australia and stressed the need for confidence in the process for miners to make large investments.

"If there's one thing we're looking for it's certainty," Hinde said.

Eggert agreed. And Barrios, to underscore the difficulties miners face in the U.S., pointed to Rio Tinto's experience in trying to permit the Resolution copper project in Arizona. He noted that US$1.3 billion has been invested in the permitting process since 2013 but that the project was still far away from getting potential approval.

Sen. Mike Lee, R-Utah, called the US$1.3 billion figure shocking and argued the permitting process in the U.S. is prohibitive especially for non-Fortune 500 companies.

Lee, hitting on the theme of unwieldy regulation, also raised the issue of a proposed Environmental Protection Agency bonding rule (Financial Responsibility Requirements under CERCLA Section 108(b) for Classes of Facilities in the Hardrock Mining Industry). The rule would add a federal layer to bonding in the U.S., which already occurs at the state level.

Lee asked Barrios to comment on the rule and its impact on the mining industry in the U.S.

"It's a duplication," he said, adding, "This is really an area where we could see some simplification."

As for potential legislation on the issue of critical metals, Murkowski said she intended to reintroduce a bill like S.883, the American Mineral Security Act, which among other things aimed to track U.S. dependence and sources of critical metals.

"We're not making headway on this issue," she said, adding that she "feels like a voice in the wilderness on these issues."

Other key issues that witnesses raised during the hearing included a need for the U.S. to support more mining-related education and fund academic, geological and technological research.