INSIGHTS FROM SRK CONSULTING
Educating the Public is Key to Preserving Nevada's Mining Sector
EXPERT OPINION ARTICLE BY:
"US reliance on critical minerals has doubled from 1995 to today, with 17 minerals being entirely sourced from overseas."
Nevada’s fortunes have been tied to mining since its inception. The discovery of silver at the Comstock Lode in 1859 led to an economic and population boom that became the catalyst for Nevada’s creation and, ultimately, admission to the Union in 1864. Nevada’s official slogan, the ‘Silver State’, recognizes the importance of the metal to its history and economy.
Mining is still Nevada’s second-most important industry (after gambling, of course) and a major driver for rural economies. Nevada currently has 26 producing mines and is the number one mineral producer in the US, accounting for more than 11% of the total value of nonfuel mineral production in the country in 2020. It is the sole producer of lithium carbonate in the US, accounts for approximately 75% of US gold production, and is also a leading producer of silver, copper, molybdenum and other important raw materials.
The success of Nevada’s mining sector has been built on the state’s vast mineral wealth and the longstanding support of state politicians, regulators, and local communities. Nevada has competent, professional and apolitical regulators who are knowledgeable about mining and willing to work in good faith with operators. If a mine developer follows all the rules, presents all the data required, and prepares a strong environmental impact analysis, it can be reasonably confident of receiving a permit to operate.
It is therefore no surprise that Nevada was ranked the top jurisdiction for investment by the latest Fraser Institute Annual Survey of Mining Companies and fifth in the survey’s policy perception index, behind only Idaho, Wyoming, Finland and Ireland.
One threat to Nevada’s mining sector - and the US mining sector as a whole - comes from Washington, D.C. The Biden administration is pushing trillions of dollars into green infrastructure investments that will require enormous amounts of mined raw materials, while simultaneously taking steps likely to weaken the domestic mining sector.
There does not appear to be any focus on how the US can satisfy its mineral needs domestically while maintaining high environmental and social standards. The US has sufficient domestic reserves of many of the 35 mineral commodities deemed critical by the federal government, but these are not being exploited because it is either too expensive or too difficult. According to the US Geological Survey, US reliance on critical minerals has doubled from 1995 to today, with 17 minerals being entirely sourced from overseas. Adding red tape - as the current administration is attempting - will drive even more of our mineral supply overseas. When it sources minerals from other countries, the U.S. generally adds to global environmental issues rather than fixing them. The well-established American environmental, health, safety and human rights protection levels are among the best in the world, particularly in mining jurisdictions such as Nevada.
Many decision makers are unaware of the extent to which minerals are essential to achieving the very policy goals they are pursuing. Most importantly, initiatives from Washington that could increase the federal government’s authority to limit or prevent mining on federal lands, would affect 28% of the land surface in the US, including most major mining districts.
In Nevada, the federal government owns 85% of the land, by far the most of any state (Utah is second with 65%). Given that Nevada is the number one mineral producer in the country and the state with the highest percentage of federal lands, there is no reason to believe that projects in the Silver State will not become targets of federal government mining bans as mining projects in other states have been.
Soon after taking office, the Biden Administration announced a goal to conserve at least 30% of US lands, freshwater and ocean areas by 2030, in an initiative known as 30x30. Polling by various environmental groups has shown that a majority of Americans are in favor of the plan. While environmental protection is something we can all support, there has to be a balance between conservation on the one hand and acknowledgment of the irreplaceable contribution of mining to the Nevadan and American economies and to the achievement of environmental and infrastructure policy goals.
The only way to combat ignorance about the importance of minerals in our lives is through education. We each need to educate the public - our families, friends, neighbors and, yes, even elected officials - to an informed understanding based on facts and not on controversy or misinformation. We must strive to make sure that the American public understands the many ways in which mining serves their individual and national interests.
Image courtesy of Susana Isotupa