The U.S. Economy is Paying the Price for Delays in Mine Permitting

This week Petroleum News reporter Shane Lasley delved further into SNL Metals & Mining’s new report, “Permitting, Economic Value and Mining in the United States,” which outlined the costly effects of mine permitting delays in the U.S. The report, commissioned by the National Mining Association, found that delays caused by the U.S.’ inefficient and duplicative mine permitting process can cause a mining project to lose up to half of its value before going into production. These bureaucratic permitting delays have come at a great cost to the U.S. mining industry, and by extension, the U.S. economy.

SNL Metals & Mining takes an in-depth look into three mines located in Alaska, Arizona and Minnesota to show how U.S. mining investment and our minerals supply chain are harmed by mine permitting delays. Take a look:

• Coeur Mining’s Kensington gold mine in Alaska didn’t receive its final permit approval until nearly 20 years after its initial bid for production. “By the time the mine opened, the capital cost of building the mine had increased by 49 percent, and the company had reduced planned gold production by nearly a third…”
• Arizona’s Rosemont copper mine is “expected to be one of the largest copper mines in the U.S., accounting for 10 percent of current U. S. copper production.” However, since 2010, the mine’s value has decreased by $3 billion because of the delayed permitting process.
• While in the early stage of the permitting process, developers of the Twins Metals mine in Minnesota have acknowledged that the delay in receiving permits, or the possibility of denial, is a significant business risk of the project. 

In the U.S., it takes on average seven to 10 years to receive approval for a new mining project. In other nations with equally strict regulations and environmental standards, like Canada and Australia, the mine permitting process only takes about two to three years. In explaining the U.S.’s long and arduous permitting process, Luke Russell, vice president of external affairs at Hecla Mining, said; 

“The U.S. process is fraught with duplication, inefficiencies, a lack of reasonable timeframes/sideboards, a lack of coordination among federal agencies and multiple, never-ending litigation.”

The long, drawn out mine permitting process discourages investment, and hinders the U.S.’ ability to meet the rising demand for minerals. This leads investors and manufacturers to look outside our borders for these essential raw materials. Increasing our reliance on mineral imports is costly and increases the susceptibility of supply disruptions.

Thankfully, there is growing recognition in Washington of the need for mine permitting reform to improve timely access to our reserves and secure our mineral supply. Legislation has been proposed in both the House and Senate to modernize our mine permitting system and put U.S. mining and manufacturing back on track. 

Take action here to support U.S. mine permitting reform, and read here to learn more about SNL’s study.