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American Resources Policy Network
Promoting the development of American mineral resources.
  • Op-ed: How the EPA Sticks Miners With a Motherlode of Regulation

    The following op-ed by American Resources Principal Dan McGroarty was published in the Wall Street Journal on January 3, 2014. The original text can be found here.

    Copper

    How the EPA Sticks Miners With a Motherlode of Regulation
    The years-long wait for mining permits in the U.S. is the worst in the world.

    On Dec. 13, the proposed Rosemont Copper project in southwestern Arizona—which would produce about one-tenth of all the copper in the U.S. every year—got the green light from the U.S. Forest Service to begin operations.

    It was a long time coming—more than seven years after the company presented its mine plan and began the National Environmental Policy Act review process. Then again, since the average time to get a mine permitted in the U.S. is a worst-in-the-world seven-to-10 years, Rosemont’s long wait isn’t the exception. It’s the rule.

    The Forest Service’s approval should be great news for our high-tech economy, powered by copper in, for instance, electric vehicles, smart homes and smartphones (about 10% of an average phone’s weight is copper). But that decision is overshadowed by the last remaining—and most formidable—governmental hurdle, the Environmental Protection Agency, the guardian of Section 404 of the Clean Water Act. Having run the gauntlet of state and local permitting requirements, Rosemont now faces two potentially fatal challenges from the EPA in the final stages of review: either death by a thousand pesky comments or an outright veto.

    In the bureaucratic equivalent of sticky riot foam—a substance meant to slow and stop people on the street—every few months, a couple of dozen pages furl out from the EPA to Rosemont’s managers. Past communications have included the suggestion that the project might jeopardize the leopard frog, or the Gila topminnow, or the water umbrel. One official worry was that the project might impede the opportunity for people to canoe in a desert region where summer temperatures reach 118 degrees.

    The EPA churns out concerns about potential impacts on 18 miles of streams and threats to the “water quality” of the Davidson Canyon Wash, a single gulch—filled intermittently by rain—in a state with 39,039 rivers and streams. The agency also lets Rosemont know it will be looking at the impacts of mining on air quality—but only after a preliminary process to determine which air-quality standard should apply. Each governmental query receives a Rosemont reply in the never-ending race toward a moving finish line.

    Even this snail’s pace doesn’t satisfy antimining advocates. Many environmentalists and anticapitalists (and many critics are both) would like to see the EPA simply short-circuit the review process and veto the mine proposal. After all, the agency has used Section 404(c) of the Clean Water Act to shut down a mine—famously, the Spruce Mine in West Virginia—even after it had received its operating permit.

    For the most vocal environmental groups, the EPA is perfectly suited as judge and jury. Jennifer Krill, the director of Earthworks, confirmed in congressional testimony earlier this year that her group has never supported or endorsed a single U.S. mine. The threat of an EPA Clean Water Act veto of various projects hangs over more than $220 billion in economic development, ranging from mines to agriculture and infrastructure projects.

    Sadly for communities around the proposed mine—about 30 miles southwest of Tucson in an area where unemployment is still stubbornly close to 10%—every day of delay means a longer wait for much-needed jobs, which would funnel much-needed revenue into local tax coffers. Mothers and fathers struggling to support their families may feel endangered, but unlike the leopard frog, they’re not on a government list.

    The nation, meanwhile, is losing the output of a mine with a projected yearly output of more than 100,000 metric tons. That’s Arizona copper the U.S. wouldn’t need to import from abroad, feeding a negative balance of trade, and providing political and economic leverage to nations that supply the metal we fail to mine ourselves.

    If we mine fewer metals, won’t manufacturing jobs leave the U.S. and go where the metals are? If we don’t mine in the U.S.—with arguably the world’s most stringent oversight, environmental and safety standards—won’t Americans end up importing products made with metals mined in other places under less-stringent standards (if any), leading to far more damage to the environment and the health of the miners? All of these questions are critical to determining whether a mine serves the public good. Surely they must matter to the nation as much as a topminnow does to the EPA.

    Finally, did Congress pass the National Environmental Policy Act to put in place a means of balancing the benefits of resource extraction with competing public goods? Or did it set up an endless bureaucratic gauntlet designed to delay, derail or economically exhaust mine developers?

    Seven and a half years on, Rosemont Copper is still waiting for an answer.

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  • Tesla Motors’ Gigafactory to Drive Critical Mineral Demand

    The graphite, lithium and cobalt industries are set for major demand surges as Tesla Motors prepares to break ground on its super-battery plant, the Gigafactory, next month.

    The high-end EV manufacturer is looking to double the world’s battery output as it seeks to bring the production cost of battery packs down in a bid to spark mass EV uptake.

    The company is aiming to begin construction on the Gigafactory in June 2014 with an old airfield in Reno, Nevada rumoured to be the favoured site.

    One of the biggest impacts of the Gigafactory will be demand for the critical minerals that will fuel it. Lithium, graphite and cobalt are all set to be key raw materials to make Tesla’s lithium-ion batteries, but the question remains whether the company can get the volumes and consistent quality it needs in time.

    What follows is an analysis on the potential volumes of critical minerals Tesla would need for a Gigafactory operating at capacity, which is expected in 2020.

    Graphite demand up 152%

    Graphite will be the largest input raw material for Tesla. Should the company choose natural graphite, it would require as much as 126,000 tonnes of flake graphite each year in the form of 50,000 tonnes of the battery-grade material, spherical graphite.

    This is an increase of 152% on today’s battery demand for the mineral. It equates to 6 new graphite mines on the basis of today’s 30,000 tpa mine size average and the yield of suitable material gained from the mine.

    Graphite — both natural and synthetic — is used as the anode in a battery.

    China is the leading producer of flake graphite and the leading processor of battery grade spherical graphite today. But the country is aiming to consolidate operations which could see it withdraw somewhat from the international market place.

    Lithium demand up 50%

    Lithium, the second largest input mineral by volume, will see demand increase by 25,000 tonnes a year from a Gigafactory at capacity. This is an increase in demand from the battery sector of 50% on 2013 levels.

    Mined as a mineral and processed into a chemical, lithium is used as the cathode material in both hydroxide and carbonate form.

    Chile is the leading producer of battery grade lithium today.

    Cobalt demand up 17%

    Cobalt demand from the battery sector could rise as much as 17% on 2013 levels thanks to Tesla’s plans. This is the equivalent of 7,000 tonnes a year.

    The metal is also used as a cathode material in lithium-ion batteries.

    The leading supplier of cobalt is the war-torn country, DRC Congo, which supplies 55% of the world’s total. Tesla has stated it does not get its cobalt from the Congo; that highlights the lack of dedicated cobalt mines around the world, with most supply coming as a by-product such as is the case of copper mining in Africa.

    It is also important to note besides the Congo, there is no large producer of cobalt, but rather many countries producing very small amounts, varying from 3-7,000 tpa. Taken together, they collectively equate to the remaining 45% of global supply.

    Other less critical raw materials Tesla will need include nickel, bauxite(aluminium), and copper. The company will not be using rare earths, as its cars do not use a permanent magnet.

    A free special report, “Tesla’s $5bn question: What will Tesla Motors’ battery super-plant mean for critical mineral demand,” will be published next week via Twitter, Linkedin, and through ARPN and Industrial Minerals.

    Simon Moores is an American Resources Policy Network Expert. Learn more here.

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  • Resource-hungry China continues its global quest for minerals

    While the fate of even first steps towards implementing a strategic minerals policy in the U.S. remains questionable, China is expanding its mineral resource footprint virtually all over the globe. According to recent media reports, Chinese companies have made forays into Sri Lanka looking for copper, zinc and aluminium suppliers. While this search was unsuccessful, [...]
  • Anti-Mine Lobbyists’ Hypocrisy Exposed in the Arizona Copper Debate

    ARPN readers know the vehemence of anti-mining activists in the U.S., including groups like Earthworks, whose director admitted during Congressional testimony earlier this year that the group couldn’t identify a single mine that had ever met with its approval. But the cynical tactics on display in the debate taking place around a U.S. House bill [...]
  • U.S. House may take up strategic minerals legislation this week

    The U.S. House of Representatives may take up Congressman Mark Amodei’s (R, Nev.) H.R. 761, the “National Strategic and Critical Minerals Production Act of 2013,” this week. The bill ties into the overall context of mineral resource security and our growing minerals deficit, an issue that is of critical importance to our nation’s manufacturing base, [...]
  • McGroarty on The Hill’s Congress Blog: “The U.S. Government has it in its power to act now to close our “copper gap.”

    While China has taken steps to position itself in a “resource war that will increasingly define economic growth and national security in the 21st century,” the United States has subjected itself to a dangerous degree of import dependency for critical minerals – that’s the bottom line of American Resources Principal Daniel McGroarty’s new piece for [...]
  • White House solar panel installation fraught with irony

    With August generally being the slower part of the news cycle, one of the bigger stories last week was that the installation of solar panels on the roof of the White House had begun. Administration officials say in retrofitting the White House building to make it more energy efficient, the President is delivering on a [...]
  • Motley Fool zeroes in on Copper

    In a three-part series, Nick Slepko, a member of the The Motley Fool Blog Network, zeroes in on the importance of Copper. Considering the current controversy over the U.S. Environmental Protection Agency’s actions regarding what could conceivably be the largest deposit of critical minerals in U.S. history – the Pebble Deposit in Alaska – the [...]
  • Tellurium – a critical mineral to be watched

    In her latest piece for ProEdgeWire, Robin Bromby suggests that Tellurium may well be the newest critical metal. Citing two “throwaway lines” from recent reports and media reporting which indicate increased demand for the metal, Bromby goes on to give reasons why Tellurium should be placed on observers’ critical metals watch lists: “Tellurium is vital [...]
  • Op-ed: A Potential Copper Bonanza Runs Afoul of the EPA

    The following op-ed by American Resources Principal Dan McGroarty was published in the Wall Street Journal on July 5, 2013. The original text can be found here. A Potential Copper Bonanza Runs Afoul of the EPA The metal is essential for wind turbines, but a proposed mine in Alaska has set off Keystone-like alarms. By Daniel [...]

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