Study Finds Permit Delays Harm Mining Investment, Minerals Supply Chain
Protracted delays in the permitting process reduce the value of investment; the longer the delay the greater risk to investors and ultimately to domestic minerals supplies.
WASHINGTON, June 25, 2015 /PRNewswire-USNewswire/ -- An eye-opening analysis by SNL Metals & Mining released today shows how delays in the U.S. mine permitting process diminish the value of a minerals project – underscoring the urgent need for a streamlined permitting process. The study, commissioned by NMA, finds that a duplicative permitting process that can delay mining projects a decade or longer is hindering the United States' ability to meet a rising demand for minerals. Three U.S. mines in Arizona, Alaska and Minnesota served as case studies for the research.
"For years, we have witnessed U.S. mines struggle to move forward due to an inefficient permitting system plagued by duplication, uncertainty and delays," National Mining Association NMA President and CEO Hal Quinn said. "This study now confirms the connection between the delays and their effect on companies' decisions to invest in domestic mining projects. Hopefully it will strengthen the resolve of Congress to fix a broken permit system that threatens to break down a minerals supply chain that is critical for U.S. manufacturing."
The study, "Permitting, Economic Value and Mining in the United States," quantifies how bureaucratic permitting delays impair and discourage investments in mineral development projects. Not only does the study reveal that an average mine can lose a third of its value due to permit delays, it further finds that increased cost and investment risk resulting from the delays can in turn cut the expected value of a mine in half. This effect is compounded as delays increase; the value of investment goes down and often a project becomes unviable after several years of delay.
In one example, SNL Metals & Mining found that after eight years of delay the value of Arizona's Rosemont mine dropped $3 billion. And Alaska's Kensington mine suffered 20 years of mining delays, while the capital cost of building the mine increased by 49 percent. "The results of our study show that the current U.S. permitting process is taking a significant economic toll on the mining industry," said Mark Fellows, study author and director of metals consulting at SNL Metals & Mining. "If things continue as they are, our projections show it increasingly less likely for new mines to advance into production."
The report comes as both the Senate and House are working to reform the mine permitting system. Sen. Lisa Murkowski, R-Alaska, and Rep. Mark Amodei, R-Nev., have sponsored legislation to modernize the current U.S. mining permitting process and ensure access to our vast domestic mineral resources. The House will hold a hearing on its bill today.
For more information, visit www.MineralsMakeLife.org.
For an overview of the SNL study, click here.
The National Mining Association (NMA) is the voice of the American mining industry in Washington, D.C. Membership includes more than 325 corporations involved in all aspects of coal and solid minerals production including coal, metal and industrial mineral producers, mineral processors, equipment manufacturers, state mining associations, bulk transporters, engineering firms, consultants, financial institutions and other companies that supply goods and services to the mining industry.
Contact:
Jamie Caswell
(202) 463-2667
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SOURCE National Mining Association
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