America Needs Mining Reform
July 18, 2014
While mining policy is far from the minds of most voters, the United States' increasing reliance on other nations -- predominately China -- for strategic minerals is a serious concern, explains Mark Perry, resident scholar at the American Enterprise Institute.
U.S. mining policy does nothing to encourage investment:
- The United States has a complex, delay-ridden system for mine permitting. It takes an average of seven to 10 years to receive a mining permit in the United States, five times longer than in Canada.
- The Environmental Protection Agency has asserted the right to take away mining permits that have already been granted, creating uncertainty and crippling investment.
- The government restricts, or has banned, new mining operations on more than 50 percent of federally owned public land.
The United States imports $119 billion worth of minerals each year, and our reliance on other countries makes domestic manufacturers vulnerable to supply disruptions and price spikes. In fact, the United States is solely reliant on imports for 18 different minerals. This is a problem as rare earth metals such as neodymium and dysprosium are critical parts of defense and energy technologies, as well as automobiles and electronics.
Both Indonesia and China, major minerals producers, have banned exports of certain metals, creating a pricing system in which American manufacturers pay an inflated price for certain materials. Some companies in the United States have moved their operations overseas in order to obtain these minerals at lower costs.
The United States needs its own mineral supply chain, writes Perry, but it cannot do so without strong mining investment. While the American share of world mining investment was 21 percent in the early 1990s, it sits at just 8 percent today.
Source: Mark Perry, "Don't neglect mining in America," Detroit News, July 10, 2014.
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