Opinion: U.S. cannot put mineral mining in jeopardy

There is simply no credible way to address climate change without changing how we obtain vital minerals and metals needed for batteries to make electric vehicles and for storing energy generated by solar and wind.

That is why it is so appalling to see the Biden administration call for a royalty tax on mining and a fee on all material displaced in digging. The last thing we need is an increase in the cost of mining in the United States and an erosion of government support, resulting in greater dependence on China for critical minerals.

The new mining policy is the exact opposite of President Biden's stated objective of strengthening our nation's domestic supply chains. Among all its other impacts will be a loss of investment in new mines. This is at a time when demand for battery metals like lithium and cobalt is growing at an exponential rate.

Forget about meeting the needs of a new clean energy economy. Royalty payments of 8% of the net value of what is mined would cost $97 million annually and discourage investment in new domestic mines. Some in the industry are not opposed to a 2% royalty, but 8% is unacceptable.

If Congress approves a royalty tax, it will throw obstacles in the way of mining. A fee on the tons of material moved in mining, known as a "dirt tax," would cause enormous costs. Imposing a tax on material that has no value simply because it has been displaced is ludicrous. Material is repeatedly moved around a mine site for various purposes, including reclamation.

The irony is that the administration talks so much about diversifying our supply of minerals but does so little to expand our domestic production. Changes in mine permitting that Congress approved months ago and were signed into law have yet to be implemented. These changes are past due.

With the new system, there would be a lead agency for permitting review, offering improvement in speed and efficiency. There also will be a page count for scoping documents and implementation of a timeline to help ensure that endless litigation can't be used to stop the creation of new mines. The idea behind the changes is to seize the enormous opportunity offered by abundant mineral resources in America.

Part of the new approach is to streamline the permitting process for extracting vital battery metals like lithium, cobalt, nickel, copper, and rare earth minerals, which are in increasing demand by automobile manufacturers and other companies large and small.

S&P Global, a financial analytics firm, estimates that U.S. demand for lithium, nickel, and cobalt will be 23 times higher in 2035 than in 2021. It will be twice as high for copper since an electric car needs three times as much copper as a gasoline car. And huge amounts of the metal are needed for transforming the electricity transmission system.

The problem is that China now possesses about 90% of global capacity to process raw lithium, about 70% of cobalt, and 40% of nickel. China also has all of the manganese and graphite refining capacity. And it has a virtual lock on the supply of rare earths.

Securing enough metal resources to meet domestic sourcing requirements won't be easy. S&P Global looked at 127 mines across the globe that began production between 2002 and 2023 and found that a major new resource discovery today would not become a productive mine until 2040 or later. In this country, it takes an average of 16 years to progress from initial discovery to commercial production.

You can have a super-efficient permitting process, but if the Biden administration doesn't want to approve mines, they won't get built. And that's problematic because if we can't obtain minerals from domestic mines or those of friendly countries, we will continue to rely on imports from China, which supplies half of the battery metals and minerals and uses them for geopolitical leverage.

The demand for raw materials is going to grow no matter what happens. New mines are essential. Whether there are enough metals and minerals extracted to meet demand -- and where those materials come from -- is staggeringly important.

Jim Constantopoulos is a geology professor at Eastern New Mexico University. Contact him at:

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