National view: Slow permitting devastating US mining, manufacturing

Imagine if significant gold deposits were found in northern Minnesota. That would be a boon for Minnesota mining, since gold is in great demand for use in such diverse products as smartphones and solar panels.

But what if it took 10 years for a mining firm to get the approvals needed to start extracting this gold? Imagine the disappointment in terms of lost job opportunities and lost tax revenue.

It’s not a far-fetched possibility, however, to expect a lengthy process before Minnesota could possibly enjoy any newfound gold wealth. Delays in mine permitting, like those experienced with PolyMet’s attempts to open a copper-nickel mine, can pose hefty bureaucratic challenges for even the most valuable mining projects.

Minnesota already has seen its share of mining jobs lost due to subsidized global competition. The idling of taconite mines on the Iron Range is, in part, due to China’s dumping of steel on the world market. Not only has China chosen to dump product in an effort to boost exports, but it continues to prop up its steel industry with massive energy subsidies that are actionable under world trade law.

In essence, this points to a larger problem. Unlike Beijing, Washington fails to understand just how important manufacturing and mining are as key wealth-generating industries. What Washington urgently needs to do is overhaul both trade policies and cumbersome regulations that hinder domestic manufacturing and, by extension, America’s mining sector.

The voters get it. The American people already understand that unless the United States maintains a strong and diverse manufacturing base, the nation’s overall economic standing will suffer. And so it’s doubly concerning to realize that, despite a popular trend toward “Made in America” in recent years, America’s mining problems only seem to be growing. And they’re now impinging on the viability of U.S. factories.

Longstanding permitting delays, like those facing the PolyMet project, are forcing America’s manufacturers to depend more and more on imported metals and minerals. Specifically, the United States is now completely import-

dependent for 19 key minerals and more than 50 percent dependent for another

24 important minerals.

It wasn’t always this way. As recently as 1990, the United States led the world in metals and mineral production. But now America ranks seventh and relies on roughly $27 billion worth of imported minerals each year.

Unfortunately, some in Washington may not fully understand the importance of mineral production. We need to remind our elected officials that metals like copper, gold, platinum and silver comprise some of the key components in the very smartphones and laptop computers they use every day.

America’s factory owners already are very aware of this growing dependence on imported resources. In a 2014 survey, more than 90 percent of U.S. manufacturing executives said they’re concerned about obtaining the minerals they need when they need them.

Here’s the real stunner, however: America possesses great mineral wealth and holds an estimated $6.2 trillion in mineral reserves.

So how is it that, despite this natural abundance, less than half of the minerals consumed by America’s manufacturers are actually sourced domestically? Well, the problem when it comes to extracting new minerals is, you guessed it, a bureaucratic one. Specifically, it now takes as much as seven to 10 years — or longer — for a U.S. mining operation to successfully navigate the permitting process needed to launch new operations.

A decade of permitting delays can eliminate half of a mining project’s value before production even begins.

In contrast, mine permitting in countries like Australia and Canada, which maintain environmental standards comparable to those of the United States, takes only two to three years.

If America’s manufacturers are to remain competitive, they’ll need more timely access to reliable mineral sources. This is particularly apparent when one considers that many of the nation’s existing mines are reaching the ends of their useful lives. And it’s why Washington urgently needs to overhaul the outdated permitting process that continues to hamper domestic mining operations.

Thankfully, Congress is catching on. The House of Representatives repeatedly has passed legislation to make the permitting process smarter and more efficient. Now the U.S. Senate finally is considering similar legislation.

An engaged Washington, and one that truly values domestic manufacturing, needs to give America’s mineral miners a fair shake. Otherwise, the cost of inaction will lead to a greater dependence on imported metals. And that’s simply bad business for American manufacturing.

Kevin Kearns is president of the Washington, D.C.-based U.S. Business and Industry Council, a national business organization that advocates for U.S. manufacturers.

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