Serving Clovis, Portales and the Surrounding Communities
Serving Clovis, Portales and the Surrounding Communities
Clamp a hefty fee on every mineral mined in the United States? The House Natural Resources Committee, chaired by Rep. Raul Grijalva, D-Ariz., is backing a bill that would place new royalties and additional taxes on domestically mined minerals, while banning mining on some public lands that contain minerals critical to U.S. manufacturing and the production of Green technologies.
And the committee has voted to include language in the $3.5-trillion infrastructure measure that would block construction of the proposed Resolution copper mine in Arizona. This mine is considered one of the most significant undeveloped copper projects in the world. It could produce 40 billion pounds of copper over the next 40 years, capable of meeting one-quarter of the nation’s need for copper — which is one of the most critically important metals being used to develop clean energy technologies like storage batteries for electric cars and power transmission systems. This anti-mining provision is contrary to President Biden’s goal of reshoring mining in the United States, and it ignores the growing need for minerals and metals.
How is something like this even possible? Because climate action is taking a back seat to runaway NIMBYism, which has blocked the opening of new mines, the siting of new electricity transmission infrastructure for renewable power and even wind and solar farms themselves. Building any of the infrastructure required to combat the climate challenge has become troublingly difficult. Opening new mines to provide the essential materials for solar panels and batteries used in electric vehicles face alarmingly stubborn opposition.
President Biden has warned that reducing America’s dependence on imported minerals will be impossible without more mining. U.S. import dependence has doubled in the past two decades despite vast domestic mineral resources.
What’s particularly remarkable about the committee’s bill is that it seems disconnected not only from the real needs of the nation’s economy, but it would do just the opposite of what’s needed to reshore mineral production and build secure supply chains. Instead, it would have the unintended effect of increasing U.S. reliance on minerals imported from China and other geopolitical rivals. The last thing we need is legislation that would make U.S. import dependence on critically important minerals like lithium and rare earths rise even faster than they already are.
The bill’s provision for new royalties and taxes — an 8% gross royalty on new production, 4% on existing operations, and a new dirt tax on every bit of dirt moved — will crush the competitiveness of the U.S. mining industry. An 8% royalty would be one of the highest in the world. Besides, the mining industry is already paying between 40% and 50% of earnings in federal, state and local royalties, taxes and other fees. Together, more taxes and higher royalties will depress the industry. The cost in dollars and forfeited jobs would be enormous. And we would have a far weaker, less secure industrial base, offering nothing to reduce worldwide greenhouse gas emissions.
Without a policy that gives the United States more self-reliance and control of minerals, American manufacturers will be unable to obtain the resources they need for the transitionto clean energy technologies. Moreover, it comes at a time when the International Energy Agency projects demand for lithium used in electric-car batteries growing 40-foldby 2040, followed by soaring demand for graphite, cobalt, and nickel. Copper — the essential material of electrification — is going to see its demand double. There’s no getting from here to there without embracing the need for domestic mining.
America’s mineral import overreliance, the fragility of our supply chains, and the need to build an industrial base to meet the climate challenge all deserve a new commitment to responsible, domestic mineral production.
Unfortunately, we are poised to get just the opposite. Rep. Raul Grijalva’s bill isn’t just a job killer; it undercuts nearly every effort to rebuild the nation’s infrastructure, reshore manufacturing and scale up the production of the Green energy technologies that are the very foundation of the Biden administration’s climate plan.
Jim Constantopoulos is a geology professor at Eastern New Mexico University. Contact him at:
