Biden wants minerals, but mine permitting lags

Source: By Jael Holzman, Hannah Northey, E&E • Posted: Wednesday, August 10, 2022

Lithium mine in Zimbabwe

A grinding mill installed at the Arcadia lithium mine in Goromonzi, Zimbabwe. The Chinese firm Zhejiang Huayou Cobalt earlier this year said it would pay over $400 million for the hardrock lithium mine. Tafadzwa Ufumeli/Getty Images

Even as President Joe Biden calls for creating a U.S. supply chain to source metals necessary for the energy transition, his administration is approving few new mines on federal land.

The Biden presidency has been bad news for some expansive, high-profile mine projects in the United States, sidelining or stopping proposals like the Pebble mine near a prime salmon fishery in Alaska, the Twin Metals mine near the Boundary Waters wilderness in Minnesota and a titanium mine close to the Okefenokee Swamp in Georgia (Greenwire, June 6).

But the federal government is also not moving quickly on smaller mining projects. The Bureau of Land Management, which handles the bulk of mine permitting on federal lands, has formally approved 20 mine plans — 14 last year and six so far this year.

That total is decidedly lower than during the last three years of the Trump administration, when the number of mines approved ranged from 21 in 2020 to 29 in 2018, according to BLM data as of late June. Mine plan approvals allow digging to begin and are only advanced by BLM after they receive all the permits they need from the bureau and other agencies like EPA.

The BLM data doesn’t just tell a tale of mine permitting declining after the transition from a Republican administration to a Democratic one. The number of mine plans approved in the Trump era also lagged behind those that advanced during four years of the Obama administration.

Mining companies just are not as eager to dig into federal land. The number of applications over the last decade has declined almost every year since 2011, suggesting the matter is more complex than merely which president — and political party — is in charge of the federal government. Last year, BLM only received 32 new mine applications — a far cry from the 72 applications it received in 2011.

It’s a worrisome sign for a nation trying desperately to secure its own minerals and wean off the supplies offered by geopolitical adversaries like China and Russia.

The Biden administration has championed a policy initially adopted in the Trump era to bolster domestic production of “critical minerals,” a group of 50 metals that are essential to the nation’s economy and national security but are primarily mined and refined outside the United States.

Biden has messaged this policy as part of his agenda for climate action. Electric vehicles, for example, rely heavily on supplies of metals like lithium, cobalt, nickel, manganese and graphite, but the global supply chain for all five metals is dominated by Chinese industry.

The U.S. could hold enormous potential to produce these EV metals. Nevada is chock-full of lithium potential and experiencing a jolt in exploration for the metal. One company in Idaho is trying to mine the state’s “cobalt belt.” Others in Alaska want to develop a coastal graphite deposit that could be one of the world’s largest — a hypothetical boon for U.S. battery makers.

But mining these materials can often require a lengthy environmental review at the federal level. That could be because the deposits are found on federal lands, are located near an endangered species or pose a risk to protected natural spaces like wetlands — creating a tension between the need to get metals as fast as possible for climate action and rigorous U.S. environmental protection laws.

Whether this country takes far too long to permit mines — as industry maintains — or is sensibly rigorous with projects that could irreparably harm landscapes — as environmentalists insist — is a debate that could soon take center stage.

As part of Sen. Joe Manchin’s reconciliation deal with Democratic leaders on a climate and health care package, the West Virginian insisted the Senate pass a separate “suite of commonsense permitting reforms” this fall.

It’s unclear precisely how this legislation will shake out, but Manchin last week released a list of ideas he wants considered, such as time limits on environmental reviews, revamping permitting under Section 401 of the Clean Water Act and giving a federal permitting council explicit oversight of mining projects (E&E Daily, Aug. 2).

Representatives of the mining industry say the legal challenges to prominent projects like the proposed Twin Metals copper mine, combined with the permitting backlog — BLM’s is at more than 280 projects — has reduced investors’ interest in financing mine development.

“The actions we have seen from the administration have really been contrary to providing that domestic mineral production,” said Mark Compton, executive chairman for the American Exploration and Mining Association. “Right now, permitting is still creating an unfavorable environment for attracting mining investment in the United States.”

Environmentalists believe that slow permitting for mines should not be a reason to chop up existing federal safeguards against potential air and water pollution. Aaron Mintzes, senior policy counsel for mining advocacy group Earthworks, said permitting delays could be related to a variety of factors, including an exodus of BLM staff during the Trump administration during a push to relocate the bureau headquarters.

“Also, permit delays occur when mining companies change their plans, often for perfectly legitimate reasons. Like commodity price fluctuations or changes in ownership,” Mintzes wrote in an email.

The White House did not respond to multiple requests for comment. While the Biden administration has made its own moves toward streamlining permitting regulations, it remains to be seen whether mining projects will be included in those efforts.

BLM spokesperson Brian Hires said in an email that the bureau conducts “careful, deliberate and rigorous reviews of all projects.” The time taken on these evaluations “can vary widely, depending on the size, locality, complexity of the project, and other factors such as litigation, economics and completeness of application.”

Hires also pointed to a 6-year-old study by the Government Accountability Office that found the average time taken to approve a mine plan of operations is two years. But the study also found a mine plan can range wildly between one month to 11 years for full approval.

The Forest Service, which oversees mine development in national forests and has not approved a single mine plan during the Biden presidency, also defended its pace.

Forest Service deputy national press officer Wade Muehlhof said that “many factors influence” how long a project takes to get approved.

“However, the Forest Service takes all practicable steps to process submittals in a timely manner in alignment with mission requirements and as capacity allows,” Muehlhof wrote. Specific data on the number of plans pending, rejected or approved historically isn’t available, he said.

‘Bottlenecks to achieving net zero’

Electric car charging
An electric vehicle recharges its battery at the East Crissy Field charge station on March 9 in San Francisco. | Justin Sullivan/Getty Images

On paper, the Biden years could be an ideal time to invest in an American mine, particularly ones that produce the kind of minerals necessary to make electric vehicle batteries.

Biden invoked the Defense Production Act to fund projects related to mining, and his Energy Department doubled down on a Trump administration move to use federal loans to jump-start domestic minerals processing and refining. He also helped shepherd passage of the bipartisan infrastructure law, which contained a smattering of potential provisions intended to grease wheels in the federal permitting bureaucracy.

And when Biden came into office, minerals seemed ripe for investment, as institutions like the International Energy Agency predicted a rapid rise in metals demand due to the transition away from fossil fuels. This could only increase in the U.S., as a provision of the climate spending bill that passed the Senate on Sunday ties a key electric vehicle tax credit to using domestic minerals (E&E Daily, Aug. 8).

However, as of late, mining companies haven’t announced many new projects in this country — or anywhere else. Instead they’ve been paying back dedicated investors and eschewing the risks of putting money into projects that could fall apart. This could have profound implications for the American energy transition.

One recent report by analysts at Bank of America Corp.’s global research division stated that in order to meet demand expectations for the world, the mining industry would need to spend a whopping $81 billion annually in order to prevent “bottlenecks to achieving net zero” by 2050.

“Mined raw materials are key to the energy transition but a dearth of many metals important for future technologies is putting Net Zero at risk,” the report stated. “The world is only slowly waking up to this threat.”

Some industry observers say a likely reason why mining companies are not committing the capital to build mines in the U.S. or elsewhere is the risk associated with going through a government approval process during an uncertain and perilous moment in the economic world order.

“Investors want clarity,” said Gabriela Herculano, CEO of iClima Earth, a green technology investment firm. “If you’re on the board or in the investment community of a listed company, you’re making this determination: Do I pay a dividend or invest in [a new project] and say, ‘Don’t you worry investors, you’re not going to be getting cash in your pocket now, but with the high returns I’m going to derive out of this [project]’?”

Biden’s administration has also identified mine development as a chief hurdle to accomplishing his climate goals. The Energy Department released a sweeping analysis of supply chain risks in February that listed streamlined permitting as the No. 1 recommendation to address scant supplies of raw materials for the energy transition.

However, what BLM has approved since Biden came into office is largely irrelevant to the energy transition. A majority of mining projects formally approved on BLM lands were relatively small gold operations. Others approved were plans to mine gemstones, clay and calcium. One of the projects wasn’t even a mine, but a treasure hunting club in Utah called the Septarian Dragon Egg Nest, where recreationists look for rocks shaped like real-life “dragon eggs.”

BLM did allow one lithium mining development to move forward — an exploration project in Nevada overseen by Pure Energy Minerals Ltd., a Canadian mining company, and Schlumberger Ltd., the oil services giant. Their project would use direct lithium extraction, an experimental form of filtered lithium extraction that is preferred by environmental activists for its lower environmental impact compared with more traditional lithium mining practices.

In the data provided by BLM, the agency also credited the Biden administration for approving the Thacker Pass lithium mine in Nevada, although that project received its final environmental impact statement and record of decision in the final days of former President Donald Trump’s tenure (Climatewire, April 19).

BLM said the decision to approve the mine’s plan “spanned into President Biden’s administration, which approved the project.”

What is Biden doing?

Although Republicans have generally supported the idea of reworking permitting for all kinds of projects, including mines, several senators have expressed skepticism that Democrats will follow through with the proposal roughly sketched out by Manchin (E&E Daily, Aug. 3).

Some observers, however, said that even if the Senate isn’t able to agree on legislation, the Biden administration has taken some steps to move infrastructure projects along more quickly that could benefit the mining industry.

Biden oversaw passage of the bipartisan infrastructure law that permanently extended the FAST-41 permitting steering program, which the Trump administration expanded to include large mining projects in a bid to fast-track approvals. The infrastructure bill also set a two-year goal for permitting projects that are covered under FAST-41 (Greenwire, Jan. 8, 2021).

The administration in May also outlined a multi-pronged “action plan” to fast-track complex infrastructure projects by directing resources to the White House interagency permitting council, reducing duplication at federal agencies, reforming outdated permitting laws, and convening sector-specific experts on issues like sourcing critical minerals and materials (Energywire, May 11).

What’s unclear is whether these efforts will actually truncate the complex and time-consuming environmental reviews that mine developers face.

Much of Biden’s plan builds off the permitting changes under the Fixing America’s Surface Transportation Act, which led to the creation of the permitting council and a dashboard to track reviews of critical projects.

Andrew Otis, a partner with the law firm Kramer Levin Naftalis & Frankel LLP, said he’s waiting to see what strategies a sector-specific team assembled under Biden’s plan produces. While the Biden administration is poised to craft new regulations to establish clear and consistent standards around climate change, ensure science-based decisions, and prioritize environmental justice under the National Environmental Policy Act, Otis said those changes aren’t focused on speeding up mining projects.

Otis lauded parts of Biden’s plan — establishing schedules, initial scoping and public outreach — as potentially helping expedite complex and cumbersome environmental reviews by identifying challenges early. Permitting a mine, he said, can take a decade and even longer if litigation is involved.

“If you’re not going to change any laws, this is probably as far as you can go,” he said.

Bracewell LLP partner Ann Navarro called Biden’s plan a serious effort aimed at better organizing the federal government and prioritizing complex projects, one that envisions a more robust role for the permitting council and the sector-specific teams.

Navarro said it’s unclear whether the administration intends to beef up staffing or merely assemble additional interagency teams to help the permitting council track and facilitate projects. For mines on public lands, adding staffers with project management experience at agencies like BLM would help accelerate and streamline the process.

The council is most valuable for resolving disputes and interagency coordination, she said, and may be able to more efficiently quell disagreements among agencies when it comes to complex mining projects.

Navarro cautioned that the effort, should it include the crafting of new regulations, could slow down already complex and time-consuming reviews — at least at the outset — as staff members within federal agencies reorient themselves.

“It’s certainly possible to permit a mine in less than several years, but as a practical matter, if an agency has to undertake complex environmental reviews under several statutes, it tends to take awhile,” she said.