The United States must revive its mining industry
Robert W. Chase
As policymakers seek a way to recharge the country’s economy, an important goal will be to create a stable and secure manufacturing base for advanced technologies – electric vehicles (EVs), renewable energy systems and strategic weapons.
It will take time and resources, but I believe we will need a major investment in national mining capacity to get the job done.
The United States is now increasingly dependent on China and other fast-growing countries for critical minerals and metals, especially the metals needed for lithium-ion batteries. Much like the erosion of manufacturing due to outsourcing, American mining has suffered a similar fate despite having world-class resources.
Today, automakers preparing to build electric vehicles or defense companies building advanced missile defense systems must obtain most of the raw materials they need from foreign sources. Too many of these essential metals come from supply chains controlled by China.
How then to relaunch the American mining industry and stem the tide of foreign imports?
The goal is to make mining in the United States more attractive to investors. In the changing manufacturing environment – driven by volatile energy prices and tightening credit conditions – the companies in Ohio and other industrial states that will succeed are those that use supply chains safe and secure for raw materials.
The fate of the US auto industry will depend on the availability and price of battery metals, which in most places are rising precipitously. Lithium demand is expected to grow 40-fold in less than two decades, and other high-demand metals like cobalt and nickel aren’t far behind.
Executives from major U.S. automakers recently warned that a shortage of battery metals could stall U.S. production of electric vehicles and give China a huge lead in production. As things stand, China controls the global supply of many of the most critical battery metals, including cobalt and rare earths.
One of the greatest dangers facing the United States is our inability to take advantage of our own mineral resources. They are plentiful and underground just about everywhere, from Maine and Michigan to New Mexico.
This realization finally hit home. The Biden administration recently added battery metals to a list of items covered by the Defense Production Act, which means mining companies will potentially be able to obtain grants and other types of government financial assistance for help boost mineral production in the United States. But the seriousness of the supply problem argues in favor of immediate action on a much larger scale.
In the short term, we can get the best results if Congress streamlines the mine licensing process. It currently takes an average of 10 years or more to get permission to open a new mine in the United States.
With fewer overlapping regulations and less red tape, it could be done in less than half the time. And it needs to be done much faster, as the growing demand for materials outstrips the ability of producers to supply the market.
Still, some members of Congress believe large parts of US mining law need to be rewritten. Never mind that Congress can debate mining policy until the cows come home. We hear the same arguments from anti-mining environmentalists as we did 40 years ago.
Let’s be clear: we need to increase domestic mineral production, not pass punitive legislation that cripples investment and boosts production overseas.
The United States’ overreliance on mineral imports – and our alarming dependence on China – is a problem we cannot afford to eliminate. Supply chain disruptions disrupting the supply of all kinds of essential goods are just a small taste of what could happen if we don’t take the relocation of mineral production and processing seriously.
Rebuilding America’s industrial base should begin with rebuilding America’s mining and putting in place the conditions to do so. Targeted government support in the form of loans and grants to solve our most pressing problems is a good start, but we need to think bigger.
We need a new commitment to competitiveness, lowering self-imposed barriers to mining investment, and ensuring our industry can meet the growing demand for minerals. A good mining policy will support the supply chain security needed for our defense sector, but will also provide the secure American industrial base needed to ensure that vehicles, solar panels, and wind turbines are made right here at home.
Robert W. Chase is Professor Emeritus at Marietta College and served as Professor and Chair of the Department of Petroleum Engineering and Geology from 1978 to 2015. He is a Fellow of the Society of Petroleum Engineers, Ohio Society of Professional Engineers, and Southeast Ohio Oil and Gas Association.