‘Critical Minerals’ Bill Has Support, but Democrats Wary of Changes to Permitting


Lauren Gardner, CQ Today

Despite broad agreement with the aims of a Republican draft bill designed to jump-start domestic production of “critical” minerals, Senate Democrats are withholding support over concerns about a provision to explore ways to expedite mining approvals.

“In its current form, we’re not there yet,” said Bill Wicker, a spokesman for Energy and Natural Resources Chairman Jeff Bingaman, D-N.M.

The draft circulated by the panel’s top Republican, Lisa Murkowski of Alaska, would direct the U.S. Geological Survey to compile a list of minerals designated as critical to the U.S. economy and would set out policies to assure a stable domestic supply.

Bingaman supports a “large percentage” of the proposal but has serious concerns about a provision to create a working group within the Interior Department that would explore ways to streamline the permitting process for exploration and mining operations, Wicker said. While the language says the working group would be charged with upholding environmental protections, Democrats worry it could be used to circumvent requirements.

Democrats have been working with Murkowksi, and it remains possible they could revolve their differences before a bill is formally introduced.

Murkowski spokesman Robert Dillon said the proposal would not change the permitting process outright but would require the executive branch to explain how long it takes to issue permits — and why. The working group, which would include representatives from the Energy, Commerce, Defense and State departments, would draft a metric that would allow the government to measure progress in making the permitting process more efficient.

Murkowski believes environmental protections should be required wherever mining takes place, but is concerned about delayed projects that strand capital and alienate investors, Dillon said.

Mining and manufacturing stakeholders cite a lack of manpower by regulators, rather than onerous environmental standards, as the top reason for the sluggish U.S. process. It can take about 10 years to issue permits for new operations.

“It’s not that the process is broken — it’s that it’s extremely bureaucratic and extremely slow,” said Jeff Green, counsel for the U.S. Magnetic Materials Association.

China’s move in 2010 to begin limiting its export of “rare earth” materials to the United States and other countries focused attention on the lack of domestic production. China now controls as much as 97 percent of the world’s supply of the 17 rare-earth minerals used in the manufacture of a variety of technologies, including personal electronic devices, computer disk drives, hybrid cars and weapons systems.

The potential for economic blackmail and a domestic shortage sparked new interest among lawmakers about reviving the domestic rare-earth industry, but a handful of proposals could not gain priority on a crowded agenda in the waning days of the 2010 session.

“Feedback from a broad range of stakeholders made it apparent that a modern critical minerals policy must account for a long list of minerals — in addition to rare-earths — and that addressing the supply chain comprehensively would more effectively facilitate job creation in everything from mining and processing to manufacturing and recycling,” Murkowski said.

Broadening the scope of legislation allows government and industry to look ahead at clean-energy trends and other factors, such as foreign political risk, in order to prepare for other mineral problems “instead of just reacting once things go wrong,” said Christine Parthemore, a fellow at the Center for a New American Security.

“The goal should be to get out ahead of what’s going to be the next problem,” she said.

Murkowski said that was one of her objectives. “I want to make sure that our federal agencies aren’t so focused on near-term needs that we fail to pursue longer-term opportunities,” she said.
House Alternative

While other lawmakers have sponsored minerals-related measures with little fanfare, the industry has paid the most attention to the efforts of Murkowski in the Senate and Colorado Republican Mike Coffman in the House.

Coffman has introduced a bill (HR 1388) that draws from legislation he wrote last year to revive the domestic rare-earths industry. The more narrowly targeted measure, which he calls the “RESTART Act,” includes loan guarantees for companies engaged in various processes in the rare-earth supply chain. Coffman has concentrated his proposals on the role of rare-earth materials in the national defense supply chain, drawing from his military background and seat on the Armed Services Committee.

Loan guarantee programs were the hallmark of rare-earth bills introduced in 2010, but the widespread view among industry insiders was that many of these proposals — including one in Coffman’s 2010 bill — were designed specifically to help Molycorp Inc., a Colorado-based company expected to relaunch operations next year at a California mine. The company raised almost $400 million through an initial public stock offering in July 2010, raising questions about its need for federal assistance.

Molycorp has applied for a loan guarantee through an existing Energy Department program and has advanced to the second round of consideration.

Murkowski has a good chance of getting a hearing on her legislation once she formally introduces it, as she and Bingaman have a history of bipartisan cooperation. Should Republicans and Democrats on the panel reach a consensus and report the bill with little disagreement, it could quickly move through the chamber.

Another option would be to add the measure as a rider to the Energy-Water appropriations bill. As the ranking Republican on the relevant appropriations subcommittee, Murkowski is well-positioned to push her measure as a rider.

Comprehensive critical minerals legislation also may find an ally in Senate Majority Leader Harry Reid, D-Nev., whose father worked at the mine in California now owned by Molycorp.