Biden's big mining plans
We finally have President Biden's mining recommendations. They're essentially a punt to Congress and an attempt to placate the base.
Why it matters: With miners wanting more permits, environmentalists seeking guardrails on projects and tribes longing for more consent, the president's trying to make all sides happy.
Driving the news: The Interior Department today released its long-awaited report on changing the nation's legal and administrative system for hardrock mining on federal lands.
- The report calls for overhauling the 1872 mining law by replacing the current claim system with a leasing regime and creating a 4-to-8% net royalty on production depending on the project.
- It "encourage[s]" Congress to do a lot of other things, from giving money to hire and train staff for mine permit applications to letting regulators withdraw "sensitive lands" from being mined.
There's regulatory action recommended, too — including an agency-led effort to locate "high critical mineral resource development" areas.
- The government should "prioritize" applications from companies that "accepted voluntary standards and best practices" on the environment, social risk and tribal engagement, per the report.
- Agencies are also urged to have companies prepare climate change adaptation plans.
Of note: One big recommendation is that agencies update existing rules to require "the highest level of protection" for mine waste sites.
Reality check: Almost everything in the report related to Congress stands no shot of becoming law soon unless there's a seismic shift in political priorities.
- Biden's team says the recommendations will speed nine projects up by minimizing conflicts that upend permitting.
- They might do that. But industry is already bashing the report, which doesn't help.
- National Mining Association CEO Rich Nolan said in a statement the "recommendations contained in this report don't do anything to advance the ball" on domestic mining.
Our thought bubble: Mining investors love certainty and this ain't it. Projects can take decades to build and, trust me, financiers don't understand the minutiae of how Congress or regulations work.
- Many in the sector will see this news and think political instability is coming … even if much of this will never be enacted.