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US has resources to meet minerals needs public policies hamper competitiveness

September 24, 2019

first_img“America’s drift away from greater self-sufficiency for the basic building blocks of our economy compromises our economic and national security and ignores this country’s rich reserves of metals and minerals,” NMA President and CEO Hal Quinn told the House Energy and Mineral Resources Subcommittee in testimony yesterday.  “It is time for policymakers to meet head-on the larger issue of how our country can produce more domestic minerals to meet a greater share of our needs,” he recommended.Quinn pointed to several trends over the last two decades that have resulted in the US “punching below our global weight” in terms of domestic minerals production. Over that timeframe, he noted that the US had dropped from attracting 20% of global investments in metals exploration in 1993 to attracting only 8% of investments last year. As a result, US minerals production levels have remained stagnant even as demands have increased – doubling the country’s import dependence for key minerals – and worldwide demand has exploded.   He pointed to three areas of public policy that have “placed high hurdles in our lane of the global race to remain competitive,” including limitations on access to federal lands that hold much of the nation’s mineral reserves and calls for increased taxes or fees on US mining at a time when, according to an analysis by PricewaterhouseCoopers, US metals mining operations paid an effective tax rate of 41% in 2008 based on payments to local, state and federal governments. Quinn noted that many of the countries the US competes against for development capital have already instituted rate cuts or targeted reforms to attract investments in mining.He pointed most directly, however, at America’s inefficient regulatory process, which now consumes close to 10 years of lost opportunity to secure necessary government authorisations. He said, “The uncertainties and delays in obtaining permits to commence operations can crush the mining enterprise,” posing the highest hurdle for domestic mining.These policies have overwhelmed other inherent advantages, including a global-leading workforce, a top class electricity and transportation infrastructure, strong capital markets and an enviable resource base.  Because of flat domestic minerals production, the US has dropped from its position of global leadership in the value added of mining to the nation’s GDP-foregoing an additional $1 trillion in annual economic output and jeopardising the country’s current overall GDP rank. “When secure and reliable mineral supply chains disappear from our shores so do the downstream industries, related jobs, innovation and technology,” Quinn advised.  “If the US becomes increasingly marginalised, the consequences are severe for our nation’s global competitiveness as we become more reliant upon extended and unstable supply chains for what we can produce here.” Quinn urged Congress to look to “long-term solutions and strategies to address our nation’s minerals needs.”last_img

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