DOI Working Group

The U.S. Department of the Interior has formed a working group to gather information and develop recommendations for improving Federal hardrock mining regulations, laws, and permitting processes.

Help ensure decision makers at the federal level hear from many in the mining industry during this comment period.
Comments must be received by August 30, 2022.

Key Points

Critical Minerals and Renewable Energy

• America is heavily, and increasingly, import reliant on both primary metals and critical minerals from adversary nations like China and Russia. As outlined in the SME technical briefing paper “Critical Minerals Importance to the U.S. Economy,” China dominates the production and processing of rare earth minerals needed for clean energy technologies, national defense and other uses.

• In fact, the U.S. is more than 50% import reliant on imports of 31 of 35 minerals needed to meet clean energy needs.

• Renewable energy use will more than double by 2050, yet the U.S. is import reliant on many of the minerals essential to the successful deployment of these technologies. A dramatic increase in the production of base metals like copper for electric vehicle technologies, well beyond our nation’s current capabilities is required to meet this demand.

Supply Chain Support From the Oval Office

• The Biden Administration's Executive Order No. 14017 (February 24, 2021) to secure a domestic supply chain for the mining and production of critical minerals, directly support the need for U.S. mineral and mining operation. Many of the policy options under consideration (conversion to a leasing system, imposition of punitive royalties, and others) would reduce domestic production, increase reliance on imported minerals, and directly oppose this Executive Order.

• The formation of the IWG followed the issuance of Executive Order (E.O. 14017) that was supposedly designed to address America's Supply Chains; and to reduce time, cost and risk of permitting.

• However, the DOI clearly demonstrates a bias in favor of policy alternatives that would actually increase the length of time required to obtain permits to mine and unnecessarily increase U. S. reliance on imported minerals to meet key domestic economic, national security and energy needs. This includes minerals used in the manufacture of products needed for any transition to electric vehicle and other clean energy technologies.

Responsible Mining – Permitting and Exploration

• Mining provides the raw materials required for nearly every industry and consumer product, yet it takes 7 to 10 years to secure a mine permit in the U.S. – one of the longest permitting processes in the world – while in Australia and Canada, permitting takes between 2 to 3 years.

• Only 11% of the world's exploration dollars are spent in developing projects in the U.S.

• Questions posed by the RFI reveal a deep bias against critical and other mineral production in the United States in a manner that is inconsistent with the Executive Order and America's energy and economic security. It will only lengthen these permitting delays.

• As outlined by Deborah Struhsacker in testimony submitted by the Women's Mining Coalition (WMC), the leasing program currently in place for hardrock minerals on acquired lands is not a good model. As documented in a May 2020 Government Accountability Office's (GAO’s), in FY 2018, this program had only 20 hardrock mineral leases nationwide that had operating mines, just seven of which generated an inconsequential $8.7 million in federal royalty payments. By contrast, the current process of self-initiation and the filing of claims is highly effective in developing those difficult to locate hardrock minerals in a manner that is free of acreage restrictions and arbitrary deadlines.

Leading the Way in Best Practices

• While the industry is always open to considering cost effective enhancements to mineral extraction and reclamation technologies, it must be noted that the U.S. mining industry – under modern mining regulation – is a world leader in environmental protection.

• There are literally dozens of statutes that regulate the environmental impacts of mining, including the Federal Land Policy and Management Act of 1976 (FLPMA), the National Environmental Policy Act (NEPA), the Clean Air and Water Acts, and others.

• Mining companies must also comply with state environmental laws that address the permitting, inspection, regulation and closure of mine sites. Mines must also post financial warranties (i.e., bonds) to ensure that reclamation will take place even if the operator does not fulfill its obligations.

Royalties

• The dramatically different geologic and market characteristics of oil, gas, coal, and hardrock minerals dictate the need for different approaches to assessing an appropriate royalty rate for these materials.  As outlined in the WMC testimony, a cookie-cutter approach that uses the 12.5 percent gross royalty applicable to oil, gas, and coal is overly simplistic and fails to consider the significant differences in how and where these minerals occur, how they are produced, substantial differences in processing costs, and marketplace realities.

• As outlined in the statement submitted by SME before the Senate Energy and Natural Resources Committee’s oversight hearing on Mining Law, neither a royalty on gross proceeds from mining nor one modeled on coal would be appropriate. 

• As SME said in its October 13, 2021 statement, “a one size fits all royalty” would curtail mineral production on federal lands.  Compared with the vast array of hardrock minerals subject to exploration and production, there are only four basic types of coal that are mined from seams that may range as high as 100 feet.  Coal is relatively easy to process, compared with hardrock minerals like gold which may be mined in ore bodies that contain microscopic quantities of the metal, and which must go through extensive and costly mining, crushing and flotation processes to develop a first level marketable product.

Resources

SME Technical Briefing Papers

• https://www.smenet.org/What-We-Do/Technical-Briefings/Meeting-the-U-S-Minerals-and-Metals-Needs-for-Ene
• https://www.smenet.org/What-We-Do/Technical-Briefings/Critical-and-Strategic-Minerals-Importance-to-the
• https://www.smenet.org/What-We-Do/Technical-Briefings/Rare-Earth-Elements;
• https://www.smenet.org/What-We-Do/Technical-Briefings/Improved-Regulatory-Coordination

NMA Video

• Responding to the Global Energy Crisis

About SME

SME is a professional society formed under Section 501(c)(3) of the Internal Revenue Code with more than 14,000 members serving the minerals industry. Its members include engineers, geologists, metallurgists, educators, students, and researchers.

SME advances the worldwide mining and underground construction community through information exchange, education and professional development. In supporting responsible mining, SME seeks to educate lawmakers, policymakers, and the public on the complex technical issues associated with mineral development through technical briefing papers, studies, scientific and engineering articles. The technical briefing papers cited in this statement are part of that effort.