Minnesota’s Economic News – W/E 4/9/21
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The following article as written by Duggan Flanakin at CFACT.org:
History was made in March when federal officials gave the green light for construction and operation of copper mines in Arizona and Minnesota, in both cases after decades-long permitting processes that overcame huge legal challenges by environmentalists. Since 2000, the U.S. has seen only 14 major metal mines start up production – all after permitting battles that lasted a whopping 6 to 23 years (not including the pre-permitting exploration, environmental baseline studies, and feasibility studies that add another 10 to 15 years to the timeline).
The Army Corps of Engineers and Forest Service permits needed for these two mines came just as the U.S. Geological Survey issued its first-ever “List of Critical Minerals” survey. This report revealed the nation’s utter dependence on China, a geopolitical adversary, for 100 percent of the nation’s rare-earth minerals — minerals that are essential for wind and solar technologies, electric vehicles, smart phones, and other such important high tech products.
The USGS report, issued pursuant to Secretarial Order 3359, further showed that the U.S. is wholly dependent on imports, largely from unfriendly nations, for 21 mineral commodities. All told, the U.S. imports at least 25 percent of its supply of over half of the elements in the Periodic Table; China supplies 35 of these minerals, and Russia another 10. Meanwhile, the U.S. is sitting on what economist (and Federal Reserve nominee) Steve Moore calls “a multi-trillion-dollar treasure chest of minerals and valuable resources.”
Executive Order 13817
The springboard for this new interest in the nation’s minerals production deficit is the barely noticed Executive Order 13817, issued by President Trump on December 20, 2017. This order commits the U.S. government to reducing our vulnerability to supply disruptions for critical minerals. The order came just two weeks after Presidential proclamations that returned about 2 million acres of land that was previously locked up using “national monument” designations back to state management (and thus potential minerals development).
EO 13817, entitled “A Federal Strategy To Ensure Secure and Reliable Supplies of Critical Minerals,” opens with the acknowledgment that the nation’s heavy dependency on foreign sources “creates a strategic vulnerability for both [the U.S.] economy and [the] military to adverse foreign governmental action, natural disaster, and other events that can disrupt supply of these key minerals.”
America’s miners and producers are severely limited by a lack of comprehensive, machine-readable data concerning topographical, geological, and geophysical surveys; permitting delays; and the potential for protracted litigation regarding permits that are issued. These obstacles, said the President, fly in the face of the need for increased private-sector domestic exploration, production, recycling, and reprocessing of critical minerals and of support for efforts to identify more commonly available technological alternatives to these minerals.
Such actions, the Order notes, would reduce our dependence on imports, preserve U.S. leadership in technological innovation, support job creation, improve our national security and balance of trade, and enhance the technological superiority and readiness of our Armed Forces.
Recent Federal Actions
Some recent actions by federal agencies – including granting of final permits for the Rosemont copper mine in Arizona and the Poly Met copper-nickel-gold mine in northern Minnesota – suggest that this and other Trump Administration actions are making an impact. Recent federal decisions have the potential to expand domestic minerals harvesting, including rollbacks of prior “protections” that left far too much of the nation’s huge mineral reserves off limits.
In Arizona,, the Corps of Engineers issued a Section 404 water discharge permit to Canada-based HudBay Minerals Inc. in March that, together with approval by the Forest Service of the company’s mine plan of operation, have greenlighted construction and eventual operation of a huge (6,500 by 6,000 feet, with a maximum depth of 2,900 feet) copper mine southeast of Tucson that is expected to yield about 700 million tons of ore.
In Minnesota, also in March, the Corps issued a final, individual wetlands permit to Poly Met Mining, Inc., a subsidiary of the Canadian firm PolyMet Mining Corp., that opens the door for construction and operation of the NorthMet copper-nickel-precious metals mine and processing plant near Hoyt Lakes in St. Louis County.
Ashley Burke, who is senior vice president of communications for the National Mining Association, was encouraged by the permits for the two new copper mines. But, she added, “Unfortunately, the United States’ current inefficient permitting process delayed for too long the high-wage jobs and other economic benefits these projects will bring to rural Arizona and Minnesota. The broken process that currently exists can drag on for a decade – or even longer – while major mining countries with similarly stringent environmental regulations, such as Canada and Australia, grant permits within two to three years.”
Burke further noted that, “Mining’s contributions to the U.S. economy are significant – providing more than 530,000 direct jobs in the U.S. and another one million indirect jobs. The minerals and metals supplied through mining are at the tip of the domestic supply chain, are key components of consumer and industrial technologies, and play a critical role in our national security through their use in the development and manufacture of military equipment and technologies.”
Regarding the PolyMet project, Isaac Orr, a policy fellow at the Minneapolis-based Center for the American Experiment, recently noted that permit approvals are another example of how the U.S. economy is adding manufacturing jobs “with a change in regulatory policy from one of finding reasons to say ‘no’ to one of finding ways to make saying ‘yes’ environmentally and economically acceptable.”
Just a few months earlier, the U.S. Department of Agriculture (of which the Forest Service is a part) had announced it had removed a “major obstacle” to mineral leasing in Minnesota through the cancellation of an application that had blocked mineral exploration in the Rainy River Watershed in the Superior National Forest. As Agriculture Secretary Sonny Perdue explained, “It is our duty as responsible stewards of our environment to maintain and protect our natural resources. At the same time, we must put our national forests to work for the taxpayers to support local economies and create jobs.”
“Groundbreaking” new book released
A new book by geologist Dr. Ned Mamula and Ann Bridges, Groundbreaking: America’s New Quest for Mineral Independence, documents four decades of self-imposed assaults on U.S. minerals dominance that have moved the U.S. from first place in mining output in the early 1990s to seventh overall today and spiraling ever downward.
Mamula and Bridges found that America’s dependence on foreign minerals has doubled in the past two decades. U.S. reliance on geopolitical rivals for critical minerals has had significant consequences that affect foreign policy and national security decisions and actions. Worse, domestic energy and environmental policy decisions have played into the hands of our economic and geopolitical rivals, leaving Americans vulnerable to blackmail – or to war
Mamula and Bridges cite three major reasons for this decline:
- Presidential proclamations that have removed millions of resource-rich areas from exploitation;
- a flawed legal framework that encourages lawsuits to thwart development of natural resources; and
- a federal (and in some cases, state) bureaucracy that stifles development through excessive regulations and even collaborates with anti-mining activists through sue-and-settle scams that rob the federal treasury and make mining operations unprofitable even if approved.
The Trump Administration addressed the excessive withdrawals of land via Presidential decree via Executive Order 13792, issued on April 26, 2017, which instructed former Interior Secretary Ryan Zinke to review any national monument created under the Antiquities Act since 1996 that spans at least 100,000 acres. His rationale was that “The Antiquities Act does not give the federal government unlimited power to lock up millions of acres of land and water, and it’s time we ended this abusive practice.”
President Trump took on regulatory reform via Executive Order 13777, issued February 24, 2017. That order required each federal agency to establish a Regulatory Reform Task Force to identify regulations that eliminate jobs or inhibit job creation; are outdated, unnecessary, or ineffective; impose costs that exceed benefits; create a serious inconsistency or otherwise interfere with reform initiatives and policies; rely on data, information, or methods that are not publicly available or are insufficiently transparent; or derive from rescinded prior orders.
In October 2017, then-EPA Administrator Scott Pruitt issued a directive that effectively ended the agency’s longstanding practice of settling lawsuits with special interest groups behind closed doors, and even paying the plaintiffs’ attorney fees. Just during the Obama Administration, the EPA chose not to defend itself in over 100 lawsuits brought by advocacy groups and paid out $13 million in attorney fees in those cases. Now, all potential settlement agreements must be preceded by a 30-day public comment period, and all attorney fees must be made public.
Americans Face a Decision
The fact that President Trump has had to rely on Executive Orders and policy changes, rather than legislation, to implement these geopolitically wise decisions means that all of these efforts will have been in vain if the powerful opponents of U.S. minerals independence – or, more to the point, all mining and processing of ores of any kind – regain power in the 2020 elections.
President Nixon’s choice to head the fledgling Environmental Protection Agency was William Ruckelshaus, who even today remains an outspoken critic of U.S. mining operations. But so are other former EPA Administrators who served under Republican Presidents. Ruckelshaus, William Reilly, and Christine Todd Whitman all have condemned the proposed Pebble gold and copper mine in Alaska, whose storied history is chronicled in Groundbreaking!
Al Gore wrote Earth in the Balance in 1992, just before becoming Vice President. President Clinton, whose campaigns were tainted by Chinese money, chose North Carolina carpet manufacturer Ray Anderson to head his Council on Sustainable Development. Anderson once told a Texas audience that all mining and oil and gas exploration are sins against Mother Earth.
President Clinton had also imposed onerous restrictions on U.S. mining activities, creating what mining industry officials at the time (according to Katharine Seelye of The New York Times) called “a hostile and inhospitable attitude” that resulted in a sharp drop in new U.S. mines during his term of office. Clinton had given the Secretary of the Interior the ability to veto permits for mines on federal lands if the mine could cause “substantial and irreparable harm” to the community – an action that could negate agreements worked out over a decade of hearings.
President Obama famously declared a war on coal, pledging that his policies would bankrupt any new coal mine or power plant as he sought to shut down existing coal operations. He also said and did nothing to address the increasing U.S. reliance on Chinese imports by our technology-dependent society. Meanwhile, China has taken an aggressive stance in the South China Sea, enslaved hundreds of thousands of its people (including an estimated 200,000 Muslims) and other human rights violations, relied on child labor, and manipulated markets. All of these actions make China an unattractive creditor.
Other powerful forces in the U.S. are demanding an outright ban on fossil fuels and nuclear energy, even hydroelectric dams, in favor of wind and solar technologies that rely entirely on Chinese imports. From a geopolitical viewpoint, the U.S. has boxed itself into a deep hole, made much worse by a $22 trillion national debt (that does not factor in future obligations).
In the face of this history and current political attitudes, the revival of the U.S. metal mining and processing sector remains a distant hope. Alaska Senator Lisa Murkowski is one of the few to acknowledge our plight: “This is our Achilles’ heel that serves to empower and enrich other nations, while costing us jobs and international competitiveness.”
It is no wonder that Mamula and Bridges indicate a much more aggressive stance is needed to reverse the decades-long erosion of U.S. mining and address the glaring need to reverse our self-imposed economic and national security vulnerability. The question is not just are we up to the challenge, but rather, do Americans even know that we are courting disaster?