This edition of Engineering & Mining Journal (E&MJ) has a heavy copper influence. Four different articles shed light on the sector. Readers interested in the copper business should note the figure on the left hand page of CRU Copper Report (see p. 96), which shows how future copper demand will outstrip production with an inflection point starting in 2017-2018. That’s good news for an industry that seems hard-pressed for anything positive these days.
This month’s cover story, the Morenci Expansion (see p. 54), is a mining success story, but it was brought about in part by a failure in U.S. minerals policy. When Freeport-McMoRan was reviewing its list of copper mining and processing projects with the best future potential, Morenci had unused permitted processing capacity. The operative word being: Permitted.
During mid-May, Red Conger, president of Freeport-McMoRan Americas, on behalf of the National Mining Association (NMA), testified before the U.S. Senate Committee on Energy and Natural Resources’ legislative hearing on S. 883, the American Mineral Security Act of 2015. Since the Mining and Minerals Policy Act of 1970, Conger explained, the U.S. has struggled with establishing effective policies to “foster and encourage private enterprise” in the development of an economically sound and stable domestic mining industry. He discussed how an outdated, inefficient permitting system presents a major barrier to the domestic mining sector’s ability to perform to its full potential. “In the U.S., necessary government authorizations now take approximately seven to 10 years to secure, placing the U.S. at a competitive disadvantage,” Conger said. “This is not a new problem, but it is getting worse.” The current U.S. permitting process is plagued by uncertainties and delays arising from duplication among federal and state agencies, the absence of firm timelines for completing environmental assessments and failures in coordination of responsibilities between various agencies, Conger said.
Mining is a cyclic business and longer timelines could lead to lost opportunities. The lengthy process also increases the costs for U.S. mining projects, decreasing any competitive advantage in a global market where many of the actors do not play by the same set of rules. Make no mistake, the U.S. mining industry is not looking for leniency. What it needs is a fair, efficient process based on common sense. E&MJ has often reported on how other countries, such as Australia and Canada, which share similar principles toward responsible resource development, have streamlined their permitting process to the point where some projects are approved in less than two years.
As the world’s population grows, demand for metals and energy minerals will also grow. While the U.S. has a lengthy, expensive permitting process, other countries have issues as well, which range from an increasing regulatory burden to an unsustainable infrastructure to sociopolitical issues. By fine tuning its minerals policy, the U.S. could foster a more competitive business environment for domestic miners, secure low cost minerals for its domestic manufacturing base and provide high-paying jobs in rural areas that desperately need the income. Otherwise, the U.S. will miss an opportunity to become a more attractive investment destination for future mining and mineral processing projects.
Steve Fiscor, E&MJ Editor-in-Chief, email@example.com