Behre Dolbear

As reported by Reuters, Caterpillar Inc will lay off of about eleven percent of the workforce at one of its U.S. manufacturing sites for mining equipment. The job cuts, necessitated by the need to bring to “bring production in line with demand,” according to Caterpillar’s announcement, will affect 460 workers at the Decatur, Illinois, plant.

This type of news is never welcome, but it is particularly disheartening when there are real growth opportunities in the mining sector – opportunities which are wasted due to an onerous and rigid regulatory permitting framework.

According to the National Mining Association, “mining’s direct and indirect economic contribution includes nearly 2 million jobs with wage and benefits well above the state average for the industrial sector.” That number could be significantly larger if it wasn’t for a permitting system which has once more given the U.S. the dubious honor of being tied with Papua New Guinea on permitting delays – an indicator of the time it takes to bring a new mine online – in the just-released 2013 “Where Not to Invest” report by the esteemed mining advisory firm Behre Dolbear.

Policy makers in Washington, DC would be well-advised to create a more predictable and expeditious regulatory framework for mining permits (without sacrificing environmental standards). In doing so, they might spare us from reading more headlines on layoffs in the manufacturing sector in the future, as such a framework would attract additional investment and allow the mining industry to increase its contribution to the U.S. economy at all levels.

The results are in, and unfortunately – though not surprisingly – the hot-off-the-press “2013 Ranking of Countries for Mining Investment: Where Not to Invest,” once again gives the United States the dubious honor of being tied for last place with Papua New Guinea when it comes to permitting delays.

Among various indicators, the instructive study released annually by the renowned mining advisory firm Behre Dolbear, ranks mining nations for the permitting processes to bring new mining projects online, and once more, it paints a troubling picture of the U.S. system (particularly when compared with countries like Australia, where the permitting process runs between one and a half to two years).

Here is American Resources Policy Network principal Daniel McGroarty’s statement on Behre Dolbear’s latest findings:

“Just 4 years ago, in 2009, the same study found that the U.S. permitting process took an average of 5 to 7 years. Today, it’s 7 to 10 years – a 40 percent increase in delays. Thanks to onerous federal rules on U.S. mine permitting, we are mired in last place with Papua New Guinea for the second year in a row. Meanwhile, other mining nations are leveraging their mineral resources to fuel manufacturing, drive economic growth, and create jobs without sacrificing environmental protections.

“This is deeply troubling at a time when other U.S. government agencies are recognizing the need to increase access to strategic and critical minerals. The Department of Defense recently released a study showing 23 metals and minerals in potential shortfall, and recommended for the first time since the Cold War that Congress take actions to stockpile them. And the Department of Energy has declared a dozen minerals critical to America’s green-tech and clean-energy transition.

“The Obama administration should take these findings very seriously. Permitting delays are handicapping America in the global resource wars. There is a direct link between domestic resource development and U.S. national security, manufacturing competitiveness, and the ability to innovate across numerous sectors of the economy.”

The 2013 Behre Dolbear report can be read in its entirety here:

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