Reforming the Mining Law of 1872 (U.S. House Committee on Natural Resources, Subcommittee on Energy and Mineral Resources)

Hearing	Reforming the Mining Law of 1872
Committee	U.S. House Committee on Natural Resources, Subcommittee on Energy and Mineral Resources
Date	May 12, 2022

 

Hearing Takeaways:

• The Mining Law of 1872: The hearing largely focused on the Mining Law of 1872 and proposals to reform it. This law allows for citizens to freely explore public lands for valuable minerals, to stake a claim if minerals were to be discovered, and to patent that claim for as little as $2.50 per acre.
  • Ability of Prospective Miners to Pursue Hard Rock Mining Claims: Rep. Diana DeGette (D-CO), Deputy Assistant Secretary Feldgus, and Mr. Kalen expressed concerns over the inability of the U.S. Bureau of Land Management (BLM) and the U.S. Forest Service (USFS) to challenge mining claims from private companies, including when a potential mine might be located on land that was sacred to a tribe.
  • Environmental Protection Considerations: Deputy Assistant Secretary Feldgus raised concerns that the Mining Law of 1872 did not account for the legacy of environmental degradation that mining would have on surrounding communities. Ms. Struhsacker asserted however that every single environmental law that applied to other industries also applied to the mining industry. She noted how the Mining Law of 1872 had been amended to include an environmental performance standard, which requires that mines comply with all other environmental protection regulations in existence.
• The Clean Energy Minerals Reform Act of 2022: Subcommittee Democrats, Mr. Stiffarm, Mr. Chen, and Mr. Kalen expressed support for the Clean Energy Minerals Reform Act of 2022, which would make various reforms to the Mining Law of 1872. They contended that the legislation would ensure that U.S. taxpayers were adequately compensated for mining that occurred on federal lands and improve the permitting process for proposed mines. Deputy Assistant Secretary Feldgus added that the proposed legislation embodied many of the Biden administration’s mining reform principles. Subcommittee Republicans and Ms. Struhsacker argued that the legislation would ignore the U.S.’s critical mineral supply chain challenges, permanently harm the U.S.’s domestic mining sector, and cripple the U.S.’s access to critical minerals. They further raised concerns that the legislation would drive more hard rock mining activity to Russia and China, which had lower environmental and labor standards than the U.S.
  • Imposition of a Royalty on Hard Rock Minerals Extracted from Federal Lands: One key element of the Clean Energy Minerals Reform Act of 2022 would be the imposition of a royalty on all hard rock minerals extracted from federal lands. This royalty would be assessed on a gross basis, which would prevent the producer from subtracting the costs of making a marketable product before a royalty rate was calculated. Supporters of the legislation argued that this royalty would treat hard rock minerals extracted from federal lands in the same fashion as oil and gas that were extracted from federal land. They also stated that the revenue generated from this royalty would be used to fund abandoned mine reclamation efforts. Opponents of the legislation argued that a gross royalty would be overly burdensome on miners and would discourage domestic hard rock mineral extraction. They argued that any royalty on minerals extracted from federal lands ought to be assessed on a net basis in order to account for the extensive processing that was required for hard rock minerals. They highlighted how hard rock minerals required significantly more processing than oil and gas, which made the royalty system used for these resources inappropriate in the hard rock mineral context.
  • Requirements for Tribal Consultation When Considering New Mining Projects on Federal Land: Another key element of the Clean Energy Minerals Reform Act of 2022 involved its reforms of the land management planning process in order to require that tribes would be consulted on prospective mining projects that could impact their lands. Mr. Kalen suggested that stakeholder consultation (including with tribes) would help to prevent conflicts and controversies surrounding mining projects from materializing, which would provide more certainty to the mining industry.
• Other Policy Topics: The hearing also focused on other policy topics related to the U.S.’s access to critical minerals and mining activities.
  • The Biden Administration’s Efforts to Promote Domestic Mining: Deputy Assistant Secretary Feldgus discussed how President Biden had outlined a “whole of government” approach for ensuring that domestic mining was conducted in a sustainable, responsible, and efficient manner. He noted how President Biden had recently announced his intention to invoke the Defense Production Act of 1950 to support the responsible production of five critical minerals needed for large capacity batteries. He further discussed how the U.S. Department of the Interior had recently formed an Interagency Working Group (IWG) on Federal Hardrock Mining Laws, Regulations, and Permitting that was tasked with reviewing existing mining laws, regulations, and permitting processes to make recommendations for reforms to the Mining Law of 1872. 
  • The Biden Administration’s Restrictions on Natural Resource Extraction: Subcommittee Republicans argued that the Biden administration was limiting the ability of the U.S. to extract natural resources domestically through their shutdowns of mining projects and their cancellations of oil and gas leases. They stated that these actions would reduce U.S. access to natural resources and embolden adversarial countries (including Russia and China).
  • The Potential for Good Samaritan Legislation to Support Abandoned Hard Rock Mine Reclamation Efforts: Several Subcommittee Republicans, Ms. Struhsacker, and Deputy Assistant Secretary Feldgus expressed interest in considering Good Samaritan laws in order to support abandoned hard rock mine reclamation efforts by third parties. These laws would shield third parties from liability for their abandoned hard rock mine reclamation efforts.
  • Use of a Claim System for Hard Rock Minerals on Federal Lands: One key area of discussion throughout the hearing was how hard rock mineral extraction on public lands operated under a claim system while oil and gas extraction on public lands operated under a leasing system. Deputy Assistant Secretary Feldgus highlighted how other countries use leasing systems for their mining industries. He stated that the U.S. might be the only country in the world that used a claim system throughout the entire mineral production process. Ms. Struhsacker stated that a leasing system for hard rock minerals would destroy self-initiation and the security of land tenure that were necessary to justify the large private sector expenses associated with hard rock mineral exploration and development. She commented that the time-limited nature of leases made them ill-suited for hard rock mineral extraction given how it often took significant amounts of time to identify suitable hard rock minerals for extraction.
  • Involvement of Multinational Corporations in Hard Rock Mining on Federal Lands: Full Committee Chairman Raúl Grijalva (D-AZ) stated that most of the conflicts surrounding mine siting, operations, and planning involved multinational corporations. He commented that the extensive involvement of multinational corporations in U.S. mining activities reduced the likelihood that domestically extracted hard rock minerals would remain within the U.S. post-extraction. He further raised concerns that these multinational corporations could engage in environmental and labor abuses abroad and still have access to federal lands for hard rock mining. Ms. Struhsacker contended however that investor demands that companies make environmental, social, and corporate governance (ESG) considerations made it very unlikely that multinational corporations that demonstrated poor labor and human rights records when operating abroad could operate within the U.S. She stated that multinational corporations would need to demonstrate to their shareholders, local communities, and tribal communities that they were responsible corporate entities before they could pursue mining projects within the U.S.
  • Concerns Regarding the Length of the Mining Process: Subcommittee Republicans, Mr. Chen, Ms. Struhsacker expressed concerns over how long it took companies to obtain permits to mine on federal lands within the U.S. Ms. Struhsacker highlighted how the U.S. permitting process took between seven and ten years to complete while the mining permitting process in Canada and Australia only took between two and three years to complete. She commented that the U.S., Canada, and Australia all maintained similar environmental safeguards. She noted that this lengthy permitting process was in addition to the time it took for companies to identify mineral deposits that could be turned into mines. She further warned that the Clean Energy Minerals Reform Act of 2022 would increase the time it took to obtain mining permits.
  • Use of Critical Minerals in Renewable and Clean Energy Technologies and Electric Vehicles (EVs): Subcommittee Members and the hearing’s witnesses highlighted how increased demand for clean and renewable energy sources and EVs would in turn increase demand for critical minerals (which were key components of these technologies). They stated that this dynamic underscored the importance of bolstering the U.S.’s domestic critical mineral production.
  • Additional Ways of Funding Abandoned Mine Reclamation Efforts: Ms. Struhsacker remarked that Congress could require that mining claims fees that were in excess of what was required to administer the mining program be earmarked for abandoned mine reclamation efforts. She noted that Congress could do this through the appropriations process. She mentioned how these excess mining claims fees (which amounted to about $30 million annually) currently went to the U.S. General Fund.

Hearing Witnesses:

Panel I:

1. The Hon. Steven H. Feldgus, Ph.D., Deputy Assistant Secretary for Land and Minerals Management, U.S. Department of the Interior

Panel II:

1. Mr. Jeffrey Stiffarm, President, Fort Belknap Indian Community
2. Mr. Sam Kalen, William T. Schwartz Distinguished Professor of Law, University of Wyoming College of Law
3. Mr. James C. Chen, Vice President of Public Policy, Rivian Automotive, LLC
4. Ms. Debra Struhsacker, Environmental Permitting and Government Relations Consultant, Co-founder and Director, Women’s Mining Coalition

Member Opening Statements:

Full Committee Chairman Raúl Grijalva (D-AZ):

• He remarked that changes to the Mining Law of 1872 were overdue and asserted that the U.S. mining industry had taken advantage of this law’s antiquity in order to appropriate the U.S.’s public lands, environment, indigenous communities, and public health “without any semblance of accountability.”
  • He stated that the U.S. mining industry believed that it could choose where it would extract resources from without needing to pay any royalties to the federal government.
• He mentioned how he had introduced the Clean Energy Minerals Reform Act of 2022 to overhaul the Mining Law of 1872.
• He noted that the Clean Energy Minerals Reform Act of 2022 would impose a royalty on all hard rock minerals extracted from federal lands and reiterated how mining companies were currently not required to pay royalties for their hard rock extractions on public lands.
  • He highlighted how the oil industry by contrast was required to pay royalties for the oil that they extracted from federal lands.
• He also stated that the Clean Energy Minerals Reform Act of 2022 would protect special places and bring mining under the land use planning process.
  • He asserted that the current mining law advantaged the mining industry over land managers.
• He further remarked that the Clean Energy Minerals Reform Act of 2022 would protect tribal sovereignty and noted how the legislation would require “minimal” tribal consultation on mining projects.
• He lastly highlighted how the Clean Energy Minerals Reform Act of 2022 would provide a dedicated funding source for abandoned hard rock mine cleanup efforts.
  • He noted how the recent Infrastructure Investment and Jobs Act (IIJA) did not provide funding for such cleanup efforts.
• He discussed how the Biden administration was focused on the availability of critical minerals, especially those used in renewable and clean energy technologies.
  • He asserted however that the U.S. should not sacrifice tribal sacred sites, U.S. public lands, and public health because critical minerals could be used to support renewable and clean energy technologies.

Rep. Yvette Herrell (R-NM):

• She discussed how demand for copper, lithium, cobalt, and dozens of other minerals was “rapidly” outpacing supply and attributed this trend to the projected growth in demand for renewable energy.
  • She elaborated that EVs, battery storage, wind power, and solar power could not be built without these minerals.
• She stated that the “aggressive” renewable energy goals set by the Biden administration and other countries were exacerbating the coming shortage of critical minerals and asserted that the recycling of minerals would be insufficient for addressing this shortage.
• She mentioned how the International Energy Agency (IEA) had predicted that the demand for critical minerals could increase by six times by 2040 and contended that more mining activity would be necessary to satisfy this demand.
• She remarked however that the Clean Energy Minerals Reform Act of 2022 would ignore the U.S.’s critical mineral supply chain challenges, permanently harm the U.S.’s domestic mining sector, and cripple the U.S.’s access to critical minerals.
• She further contended that the Biden administration was undermining the U.S.’s ability to mine critical minerals, despite its public statements regarding the importance of mining for supporting renewable energy technologies.
  • She specifically criticized the Biden administration for threatening mining projects in Minnesota, Arizona, and Nevada.
• She stated that the U.S. was one of the best locations for mining in the world because of its rich resources, skilled workforce, and world class environmental and labor standards.
• She asserted that the Clean Energy Minerals Reform Act of 2022 would impede the U.S.’s ability to achieve its technological goals and undermine the U.S.’s international competitiveness. 
  • She commented that these outcomes would be especially dangerous in light of increasing international instability and China’s growing threat to the U.S.

Panel I Witness Opening Statements:

The Hon. Steven H. Feldgus (U.S. Department of the Interior):

• He discussed how the Mining Law of 1872 was originally intended to encourage the settlement of the American West through giving away public lands and resources at little or no cost.
  • He noted how this law allowed for citizens to freely explore public lands for valuable minerals, to stake a claim if minerals were to be discovered, and to patent that claim for as little as $2.50 per acre.
• He stated however that the Mining Law of 1872 did not account for the legacy of environmental degradation that mining would have on surrounding communities.
  • He also highlighted how the law did not provide for either royalties or a comprehensive system to evaluate, permit, develop, and reclaim mines to ensure sustainable mining and healthy public lands.
• He noted how the Mining Law of 1872 remains in effect to the current day.
• He indicated that while Congress had made updates to the laws governing minerals (including oil, gas, sand, and gravel), he stated that Congress had not made updates to the laws governing many of the most valuable and critical hard rock minerals.
  • He commented that many of these valuable and critical hard rock minerals would play a critical role in the transition to clean energy.
• He remarked that the Biden administration recognized the growing need for responsibly sourced critical minerals in order to achieve a clean energy economy, combat climate change, and ensure national security.
  • He asserted that the Mining Law of 1872 was outdated and would therefore be ill-suited for achieving the aforementioned goals.
• He discussed how President Bident had outlined a “whole of government” approach for ensuring that domestic mining was conducted in a sustainable, responsible, and efficient manner.
  • He highlighted how President Biden’s Executive Order (EO) on America’s Supply Chains had directed an assessment of U.S. supply chains for critical and strategic minerals essential to the economic and national security of the U.S.
  • He also mentioned how President Biden had recently announced his intention to invoke the Defense Production Act of 1950 in order to support the responsible production of five critical minerals needed for large capacity batteries.
• He discussed how the U.S. Department of the Interior had recently formed an IWG on Federal Hardrock Mining Laws, Regulations, and Permitting that was tasked with reviewing existing mining laws, regulations, and permitting processes to make recommendations for reforms to the Mining Law of 1872.
  • He testified that this IWG had just hosted a meeting that included mining companies, tribes, states, environmental organizations, and other stakeholders to discuss potential reforms to the law.
  • He added that the IWG would hold more public input and comment sessions.
• He remarked that the IWG was being guided by the Biden administration’s fundamental principles for domestic mining reform.
  • He commented that these principles would ensure that new mineral production met strong environmental, community, and tribal consultation standards during all stages of mine development while improving the efficiencies and outcomes of the permitting process.
• He also stated that the Biden administration’s mining reform principles would ensure that U.S. taxpayers would receive fair returns for the extraction of valuable minerals from public lands and provide the public with confidence that critical minerals were sourced under responsible social, environmental, and labor standards.
  • He commented that the Clean Energy Minerals Reform Act of 2022 embodied many of these principles.

Congressional Question Period:

Rep. Yvette Herrell (R-NM):

• Rep. Herrell asked Deputy Assistant Secretary Feldgus to indicate whether the U.S. Geological Survey (USGS) had found that the import reliance of the U.S. on other countries for minerals had increased between 2021 and 2022.
  • Deputy Assistant Secretary Feldgus stated that he did not have the USGS report on hand and expressed his willingness to follow up with Rep. Herrell on her question.
• Rep. Herrell also asked Deputy Assistant Secretary Feldgus to indicate how long it would take to change and implement regulations to transition the U.S.’s mineral claim system into another system (such as leasing).
  • Deputy Assistant Secretary Feldgus stated that the USGS report on minerals did not look into the issue of access rights to minerals in the U.S.
• Rep. Herrell then discussed the importance of cleaning up abandoned mine sites and mentioned how her state of New Mexico contained many abandoned mine sites. She suggested that third party non-governmental organizations (NGOs) could help to support these cleanup efforts. She asked Deputy Assistant Secretary Feldgus to provide his opinions on the U.S. Senate-proposed Good Samaritan Remediation of Abandoned Hardrock Mines Act of 2022.
  • Deputy Assistant Secretary Feldgus indicated that he was unfamiliar with the Good Samaritan Remediation of Abandoned Hardrock Mines Act of 2022 and stated that the U.S. Environmental Protection Agency (EPA) was tasked with addressing the cleanup of abandoned mine sites. He remarked however that Good Samaritan laws were endorsed by the Biden administration’s fundamental principles for mining reform. He commented that these types of laws constituted an “excellent way” to support abandoned hard rock mine reclamation efforts.
• Rep. Herrell then asked Deputy Assistant Secretary Feldgus to address whether liability protections for third parties engaged in abandoned hard rock mine reclamation work could help to bolster the U.S.’s reclamation efforts.
  • Deputy Assistant Secretary Feldgus noted how liability concerns often hampered the ability of third parties to support abandoned hard rock mine reclamation efforts. He expressed the Biden administration’s interest in working with Congress to develop a Good Samaritan solution in order to enable third parties to support abandoned hard rock mine reclamation efforts.
• Rep. Herrell lastly noted how Deputy Assistant Secretary Feldgus’s testimony had talked about Americans and communities being beneficiaries of domestic critical mineral development. She asked Deputy Assistant Secretary Feldgus to clarify whether his testimony had meant the term beneficiary to refer to the ability to obtain critical minerals (and the products that rely upon them) or the ability to receive compensation for the critical minerals extracted from public lands. 
  • Deputy Assistant Secretary Feldgus remarked that his testimony used the term beneficiary to encompass several things, including the ability of local communities and tribes to receive royalties for extracted critical minerals and the ability of mining to support economic activity within these local communities and tribes.

Rep. Diana DeGette (D-CO):

• Rep. DeGette asked Deputy Assistant Secretary Feldgus to confirm that oil and gas extraction on public lands operated under a leasing system and that this system required oil and gas companies to pay for the resources that they extracted from public lands.
  • Deputy Assistant Secretary Feldgus answered affirmatively.
• Rep. DeGette asked Deputy Assistant Secretary Feldgus to confirm that mining companies (including international mining companies) did not need to request permission to mine public lands under the Mining Law of 1872 because these companies were not governed under a leasing system.
  • Deputy Assistant Secretary Feldgus answered affirmatively.
• Rep. DeGette asked Deputy Assistant Secretary Feldgus to indicate whether mining companies were required to alert nearby communities of their mining plans.
  • Deputy Assistant Secretary Feldgus stated that mining companies were not required to alert nearby communities of their mining plans during the early stages of their activities. He elaborated that these early-stage activities could include staking claims or performing smaller exploration work. He stated however that mining companies that had submitted a plan of operations to develop a commercial scale mine would enter the National Environmental Policy Act (NEPA) process, which would lead local communities to be notified.
• Rep. DeGette asked Deputy Assistant Secretary Feldgus to indicate whether the mining industry possessed unique features relative to other extractive industries (such as the oil and gas industries) that would make it impossible to transition to a leasing system that would require royalty payments.
  • Deputy Assistant Secretary Feldgus highlighted how other countries use leasing systems for their mining industries. He stated that the U.S. might be the only country in the world that used a claim system throughout the entire mineral production process.
• Rep. DeGette asked Deputy Assistant Secretary Feldgus to indicate whether the U.S. would need to create a new and unique governing system for the mining industry if the U.S. were to transition to a leasing system.
  • Deputy Assistant Secretary Feldgus stated that the structure of the new system for the mining industry would dictate how it would be governed. He elaborated that the U.S. could adopt a leasing system, a hybrid system involving claims and leasing, or an entirely different option. He stated that the U.S. could modify existing regulatory structures to accommodate new mining governance systems.
• Rep. DeGette asked Deputy Assistant Secretary Feldgus to confirm that the BLM has few options under current law to deny a proposed mine, even if said mine were to be located on land that was sacred to a tribe.
  • Deputy Assistant Secretary Feldgus remarked that there existed legal questions surrounding the BLM’s ability to object to a proposed mining project. He noted that companies had to comply with the BLM’s regulations in order to pursue a mining project. He stated however that companies possessed a right to engage in mining activity if they discovered a valuable mineral, which precludes the BLM’s ability to shut down a mining project.
• Rep. DeGette asked Deputy Assistant Secretary Feldgus to indicate whether there existed any regulations that permitted the BLM to regulate a mine on lands deemed sacred to a Native American Tribe.
  • Deputy Assistant Secretary Feldgus indicated that he was unaware of any such regulation.
• Rep. DeGette asked Deputy Assistant Secretary Feldgus to confirm that the mining industry was able to pollute water resources due to “loopholes” in the Clean Water Act, the Resource Conservation and Recovery Act, and other environmental laws.
  • Deputy Assistant Secretary Feldgus commented that he was not an expert regarding these laws. He stated that there existed other BLM regulations meant to combat water pollution.
• Rep. DeGette requested that Deputy Assistant Secretary Feldgus look into her question with the U.S. Department of the Interior’s legal experts.

Rep. Jerry Carl (R-AL):

• Rep. Carl mentioned how the U.S. Department of the Interior had just announced that it would cancel two court-ordered oil and gas leases in the Gulf of Mexico. He highlighted how gas prices were at an all-time high and expressed concerns that the cancellation of these two leases would only further increase gas prices. He further stated that increases in gas prices contributed to inflation. He called on the U.S. Department of the Interior to permit oil and gas exploration within the Gulf of Mexico. He asked Deputy Assistant Secretary Feldgus to address why the U.S. Department of the Interior was planning to stop oil and gas lease sales in the Gulf of Mexico that were court-ordered.
  • Deputy Assistant Secretary Feldgus first remarked that President Biden was very concerned about high gas prices and mentioned how the Biden administration had ordered one of the largest ever releases of oil from the U.S. Strategic Petroleum Reserve (SPR).
• Rep. Carl interjected to comment that the Biden administration’s recent SPR actions did nothing to address his concerns.
  • Deputy Assistant Secretary Feldgus stated that oil from the SPR could be produced more quickly than oil from new leases (especially from offshore sources). He commented that oil from offshore leases could take “many years” to be developed.
• Rep. Carl stated that the Biden administration ought to be engaged in long-term planning with regard to the U.S.’s oil and gas supply and asserted that the Biden administration failed to fully comprehend how high oil and gas prices were impacting average Americans. He reiterated his concern that the U.S. Department of the Interior’s recent cancellation of two oil and gas leases in the Gulf of Mexico would only exacerbate the U.S.’s oil and gas challenges. He called for increased oil and gas exploration in order to bolster labor force participation and reduce oil and gas prices. He asserted that limited releases from the SPR would be insufficient for addressing the U.S.’s current oil and gas shortages.

Rep. Debbie Dingell (D-MI):

• Rep. Dingell first remarked that the domestic production of critical minerals was an important issue for the U.S. automobile industry. She called it essential for the U.S. to secure a reliable and sustainable supply of critical minerals and materials for EVs and other advanced industries. She mentioned how the Biden administration’s review of the U.S.’s supply chains had found that China controlled an estimated 55 percent of the world’s rare earth mining capacity and 85 percent of the world’s rare earth refining capacity. She commented that the U.S. had fallen “far behind” China in this area. She asked Deputy Assistant Secretary Feldgus to address whether vulnerabilities within the supply chain for critical minerals and materials posed a threat to the U.S.’s economic welfare and national security.
  • Deputy Assistant Secretary Feldgus remarked that the Biden administration was “very concerned” about supply chain vulnerabilities and how these vulnerabilities would impact the U.S.’s economic welfare and national security. He stated that President Biden had issued his EO on America’s Supply Chains shortly after taking office in order to address these vulnerabilities. He further mentioned how President Biden had invoked the Defense Production Act of 1950 in March 2022 to address the current shortage in critical minerals. He remarked that the U.S. would need critical minerals in order to support its transition to clean energy technologies and highlighted how the IWG on Federal Hardrock Mining Laws, Regulations, and Permitting was formed to address this need. He stated that while the Biden administration was focused on the economic welfare and national security impacts of its supply chains, he asserted that the U.S. must also meet very high environmental and tribal consultation standards for new mining projects. He indicated that the recent Defense Production Act of 1950 invocation made clear that it would not impact environmental, health, or safety laws.
• Rep. Dingell expressed interest in convening discussion between environmental and labor groups to discuss EV issues. She stated that EVs would become more popular in future years and mentioned how China, the European Union (EU), and other countries had made investments in EVs and had prioritized EV infrastructure. She asked Deputy Assistant Secretary Feldgus to address whether the U.S. could compete with its geopolitical rivals on EVs without addressing its supply chain vulnerabilities for critical minerals and materials.
  • Deputy Assistant Secretary Feldgus remarked that all of the reports stemming from President Biden’s EO on America’s Supply Chains had addressed the importance of having the U.S. remain internationally competitive.
• Rep. Dingell applauded the work of the Biden administration and Full Committee Chairman Raúl Grijalva (D-AZ) to address the U.S.’s supply chain vulnerabilities. She also expressed support for the supply chain provisions contained within the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (COMPETES) Act of 2022, which would establish an Office of Manufacturing Security and Resilience.

Rep. Yvette Herrell (R-NM):

• Rep. Herrell mentioned how she had sent a February 2022 letter to U.S. Secretary of the Interior Deb Haaland regarding global military unrest that addressed how the unrest was impacting mineral supply chains. She lamented how Russia had since invaded Ukraine since her February 2022 letter. She criticized the U.S. Department of the Interior for its failure to heed her warnings and noted how the Department had left helium and uranium off of its critical minerals list. She asked Deputy Assistant Secretary Feldgus to explain why active military conflicts involving Russia (which is one of the world’s largest helium suppliers) were not considered when the U.S. Department of the Interior had finalized its critical mineral list. She noted how the Consolidated Appropriations Act, 2021 required that the U.S. Department of the Interior forecast future supply and demand trends for minerals.
  • Deputy Assistant Secretary Feldgus stated that he could not easily speak to how the USGS considered whether specific minerals would be included on its critical minerals list. He noted however that the U.S. is the world’s leading supplier of helium and commented that this fact could have led helium to be excluded from the critical minerals list. He stated that the USGS could provide a more complete answer regarding their decision to not deem helium to be a critical mineral.

Full Committee Chairman Raúl Grijalva (D-AZ):

• Chairman Grijalva asked Deputy Assistant Secretary Feldgus to estimate how long it took new critical mineral extraction to impact the prices of critical minerals.
  • Deputy Assistant Secretary Feldgus remarked that it took a long time before new critical mineral extraction would impact the price of critical minerals.
• Chairman Grijalva then discussed how most of the U.S.’s domestic mining activities involved multinational corporations and indicated that many of these multinational corporations were based outside of the U.S.
  • Deputy Assistant Secretary Feldgus expressed agreement with Chairman Grijalva’s assessment regarding how multinational corporations based outside of the U.S. were often involved in the U.S.’s domestic mining activities.
• Chairman Grijalva stated that most of the conflicts surrounding mine siting, operations, and planning involved multinational corporations. He commented that the extensive involvement of multinational corporations in U.S. mining activities reduced the likelihood that domestically extracted hard rock minerals would remain within the U.S. post-extraction. He noted how the majority of hard rock minerals extracted from the U.S. were currently exported.
  • Deputy Assistant Secretary Feldgus expressed agreement with Chairman Grijalva’s comments. He remarked that it was important for the U.S. to possess domestic refining and processing capacity and stated that the Biden administration had made this issue of capacity a key aspect of its approach to mining issues.
• Chairman Grijalva then asked Deputy Assistant Secretary Feldgus to indicate how many abandoned mines there were on public lands and to estimate how much it would cost to clean up these abandoned mines.
  • Deputy Assistant Secretary Feldgus indicated the U.S. was estimated to have over 500,000 abandoned mine sites and stated that the U.S. lacked a good inventory of these sites. He commented that there was not enough funding to assess the U.S.’s current abandoned mine landscape. He then mentioned how there were estimates that it would cost $50 billion to clean up these abandoned mine sites.
• Chairman Grijalva stated that abandoned mine site cleanup efforts would require funding beyond what Congress would be able to provide and suggested that a royalty on extracted hard rock minerals on public lands could be used to support these cleanup efforts.
  • Deputy Assistant Secretary Feldgus stated that a royalty on extracted hard rock minerals on public lands would be very helpful in supporting abandoned mine cleanup efforts. He mentioned how the coal industry had long paid a fee on each ton of coal produced in order to address legacy abandoned coal mines. He commented that this fee had been successful within the context of coal and suggested that this approach could work within the context of hard rock mining.

Rep. Garret Graves (R-LA):

• Rep. Graves criticized the Biden administration for blaming Russia and price gouging from oil companies for high oil and gas prices. He noted how it took many years from when lands were made available for oil and gas production to when the produced oil and gas would be made available to consumers. He asserted the Biden administration was blocking all domestic energy production and stated that the Biden administration was preventing renewable energy production through shutting down mines. He contended that the Biden administration was “solely responsible” for the U.S.’s current high energy prices. He further criticized the Biden administration’s recent announcement that it would shut down oil and gas leases in the Gulf of Mexico and Alaska. He noted how 20 percent of Americans currently could not afford to cover their electricity bills and asserted that the Biden administration had caused these challenges through “unforced errors.” He also stated that the U.S.’s current energy affordability challenges were exacerbating the U.S.’s supply chain, inflation, and labor force challenges. He then contended that the Biden administration’s policies were not helping to combat climate change and noted how emissions had increased during the Biden administration (after having fallen during the Trump administration). He attributed the recent uptick in oil and gas production to the Trump administration’s actions and stated that the Biden administration’s reduction in energy production approvals would lead to long-term energy cost challenges.

Full Committee Chairman Raúl Grijalva (D-AZ):

• Chairman Grijalva expressed interest in obtaining information about the principal ownership of the U.S.’s outstanding unused mining permits. He also called it ironic that states could impose royalties on hard rock mineral extraction on state lands while the federal government could not impose royalties on hard rock mineral extraction on federal lands.

Panel II Opening Statements:

Mr. Jeffrey Stiffarm (Fort Belknap Indian Community):

• He remarked that the Fort Belknap Indian Community had been adversely impacted by the U.S.’s lack of hard rock mining laws.
• He recounted how open pit cyanide heap leach mining had occurred near the Fort Belknap Indian Community and indicated that this mining activity had resulted in acid drainage leaking into the community.
  • He stated that there were no rules in place to hold this mine or its parent company accountable for their acid drainage leakage.
• He noted that the parent company of the mine declared bankruptcy after the Fort Belknap Indian Community had filed lawsuits regarding the mine’s acid drainage leakage.
• He mentioned how this bankruptcy filing had made the state and the federal government responsible for the mine’s clean up and indicated that the annual cost of this clean up ranged between $3 million and $4 million.
  • He commented that this situation imposed perpetual costs on taxpayers and harmed the health of his community.
  • He also highlighted how the pollution from the mine had damaged a sacred site for the Fort Belknap Indian Community.
• He stated that the Fort Belknap Indian Community was not opposed to mining and was instead opposed to the lack of accountability from mining companies for their impacts on neighboring lands.

Mr. James Chen (Rivian Automotive, LLC):

• He noted how his company, Rivian Automotive, developed all-electric trucks and sport utility vehicles (SUVs) and indicated that his company currently produced three EVs within the U.S.
  • He testified that the company had invested nearly $2 billion to revitalize an Illinois facility that employs nearly 5,000 employees in direct manufacturing jobs.
• He discussed how the battery was one of the most important components of an EV and noted how batteries accounted for the vast majority of the EV supply chain.
• He stated that an EV battery’s raw materials, their processed derivatives, and the assembled cells themselves still largely exist outside of the U.S.
• He remarked that Rivian Automotive was working to create a strong, reliant, and transparent American battery supply chain.
  • He mentioned how Rivian Automotive was investing billions of dollars in manufacturing operations in Illinois and Georgia, working closely with domestic suppliers and other suppliers from allied nations, and investing in their in-house development of new battery technologies.
• He stated that the Clean Energy Minerals Reform Act of 2022 could help to expand and accelerate the U.S.’s domestic mineral development while also upholding the U.S.’s environmental standards and protecting national parks and monuments.
• He commented that the legislation recognized the impact of mineral extraction on rural and tribal communities and indicated that the majority of the U.S.’s nickel, lithium, copper, and cobalt reserves were located on or near tribal land.
  • He called tribal consultation “essential” to any updates of the U.S.’s domestic mining laws.
• He remarked that the U.S. possessed the allies, resources, and industrial capability to create a strong and safe domestic mineral supply chain.
  • He stated that the federal government must adopt laws and policies to promote responsible mineral development and extraction, as well as to encourage the domestic supply of minerals.

Mr. Sam Kalen (University of Wyoming College of Law):

• He remarked that the Mining Law of 1872 was anachronistic and called on U.S. policymakers to work to reform the law.
  • He mentioned how calls for reforming the law dated back to 1880 and noted how these calls had been persistent over time.
• He also highlighted how Congress had routinely rejected the Mining Law of 1872’s royalty-free approach in its work on other types of public land resource extractions in subsequent laws.
  • He testified that he was unaware of any other countries that possessed laws like the Mining Law of 1872 that did not provide some form of valuation method for lands owned and administered by a federal, state, or provincial government.

Ms. Debra Struhsacker (Women’s Mining Coalition):

• She stated that the U.S. could either produce minerals from domestic mines (which had the world’s highest cleanliness and safety standards) or import minerals from adversarial countries.
• She warned that Russia and China could weaponize access to critical minerals against the U.S. to jeopardize the U.S.’s national security and economy and thwart the U.S.’s transition to clean energy sources.
  • She asserted that the Clean Energy Minerals Reform Act of 2022 would enable Russia and China to take such actions.
• She remarked that the Clean Energy Minerals Reform Act of 2022 would not promote the responsible development of critical minerals because it was designed to restrict mining on federal lands for all hard rock minerals.
  • She commented that many of these critical minerals were key to the development of clean energy technologies.
• She noted how the U.S. Department of the Interior’s IWG on Federal Hardrock Mining Laws, Regulations, and Permitting was soliciting public comments on ways to incentivize critical minerals production, structure a royalty to reward U.S. taxpayers for mining that occurred on federal lands, and improve permitting processes.
  • She contended that Congress’s advancement of the Clean Energy Minerals Reform Act of 2022 prior to the IWG’s public comment deadline would render the IWG’s work irrelevant.
• She asserted that the Clean Energy Minerals Reform Act of 2022 was premised on an “anachronistic mischaracterization” of mining that ignored the environmental safeguards for mines under federal laws.
  • She stated that there did not exist either exemptions or “loopholes” in the Clean Air Act, the Clean Water Act, the Endangered Species Act of 1973, or any of the other federal environmental laws that were applicable to mining.
• She then discussed how the Mining Law of 1872 governed land tenure and how citizens could obtain mineral rights on certain Western public lands.
• She noted how claimholders faced daunting odds in terms of finding mineral deposits that could be turned into mines.
• She indicated that the claimholders that did find such deposits would then need to secure environmental permits and provide the federal government with financial assurances to guarantee that the mine would be reclaimed before they commenced any mining activity.
  • She highlighted how the U.S. permitting process took between seven and ten years to complete while the Canadian and Australian mine permitting process only took between two and three years to complete.
  • She commented that the U.S., Canada, and Australia all maintained similar environmental safeguards.
• She remarked that the lengthy U.S. permitting process for mines meant that there did not exist any “shovel-ready” projects and commented that this process was responsible for the low number of mines in Nevada.
• She asserted that the Clean Energy Minerals Reform Act of 2022 would further increase the time it took to obtain mining permits through creating unachievable standards, which would enable opponents of mining projects to declare many areas as unsuitable for mining.
• She then recounted how the EPA had concluded in a 2018 final rule that U.S. hard rock mining regulations and bonding requirements provide comprehensive and effective environmental protections.
  • She commented that the Clean Energy Minerals Reform Act of 2022 would ignore the EPA’s finding.
• She remarked that the U.S. hard rock mining industry had long supported a royalty structure for minerals extracted from federal lands.
  • She asserted however that the Clean Energy Minerals Reform Act of 2022’s proposed gross royalty and fee structure were intended to make mining unprofitable in order to curtail mining activity.
• She stated that the Clean Energy Minerals Reform Act of 2022’s mandatory conversion of mining claims into leases would destroy self-initiation and the security of land tenure that were necessary to justify the large private sector expenses associated with mineral exploration and development.
  • She commented that the legislation’s system was based on an existing program for acquired lands that fails to produce minerals and has generated very little money in royalties.

Congressional Question Period:

Full Committee Ranking Member Bruce Westerman (R-AR):

• Ranking Member Westerman remarked that the U.S. currently had a shortage of critical minerals and criticized Congressional Democrats for seeking to reduce domestic uranium and copper mining. He further criticized the Biden administration for pulling the lease on Twin Metals’ project in Minnesota. He then mentioned how a U.S. Government Accountability Office (GAO) report had found that the average permitting timeline for mining projects takes about two years to complete. He commented however that this permitting timeline often took much longer than two years to complete. He asked Ms. Struhsacker to indicate how long it took for the average hard rock mine to become active in the U.S. from exploration to production. He also asked Ms. Struhsacker to explain why this process was so lengthy.
  • Ms. Struhsacker remarked that it could take as much as 20 years between the first discovery of a hard rock mineral to the development of a mine. She noted how hard rock minerals were often very difficult to find, which meant that the exploration process could be very lengthy. She commented that this dynamic rendered leasing systems for hard rock minerals impractical because leases were inherently time-limited in nature. She highlighted how other countries could permit mines in less than three years and commented that these other countries maintained similar environmental standards to the U.S. She also attributed the hard rock mining’s lengthy permitting process in the U.S. to the NEPA process.
• Ranking Member Westerman asked Ms. Struhsacker to discuss how the Clean Energy Minerals Reform Act of 2022 would impact the timeline for permitting domestic hard rock mining projects moving forward.
  • Ms. Struhsacker remarked that the Clean Energy Minerals Reform Act of 2022 would make the hard rock mining permitting process more complicated and would not provide additional environmental protections. She asserted that the U.S. already possessed comprehensive environmental protections.
• Ranking Member Westerman then asked Mr. Chen to indicate where 80 percent of the world’s EV batteries were currently built.
  • Mr. Chen testified that Rivian Automotive sourced its battery cells from Asia and noted how most of the world’s battery cells were produced in Asia. He elaborated that China, South Korea, and Japan were major producers of battery cells.
• Ranking Member Westerman asked Mr. Chen to indicate where Rivian Automotive would obtain their lithium, metals, and rare earths for building EV batteries within the U.S.
  • Mr. Chen stated that the hearing was meant to support the development of additional sources for these materials and minerals. He indicated that Rivian Automotive was currently working with various global suppliers to source these minerals and elements.
• Ranking Member Westerman highlighted how the USGS had stated that the U.S. currently possessed all of the minerals and elements needed to produce EV batteries.
  • Mr. Chen testified that Rivian Automotive was currently speaking with several U.S. companies about ways to domestically source their needed minerals and elements.
• Ranking Member Westerman asked Mr. Chen to estimate how long it would take to construct a lithium refinery and processing facility within the U.S.
  • Mr. Chen noted that while Rivian Automotive did not engage in lithium processing as an automobile company, he stated that the company was interested in lithium processing capabilities.

Rep. Debbie Dingell (D-MI):

• Rep. Dingell remarked that the domestic supply and production of critical minerals were fundamental to the U.S. automotive industry. She stated that EVs constituted the future of the U.S. automotive industry and noted how EVs would require “substantially” more critical minerals than gasoline-powered vehicles. She remarked that EVs would play a key role in enabling the U.S. to achieve its climate change goals. She indicated that while she was supportive of the rapid deployment of EVs, she asserted that EVs must also be built in a responsible manner. She asked Mr. Chen to discuss how Rivian Automotive was working to reduce the overall mineral demand for each of their EVs. She also asked Mr. Chen to indicate whether Rivian Automotive was engaged in any efforts related to battery and mineral recycling.
  • Mr. Chen remarked that Rivian Automotive was “heavily” involved in looking at the entire supply chain of EV batteries and the battery cells that it used within its products. He stated that Rivian Automotive was looking at domestic mineral supplies and recycling options. He testified that Rivian Automotive had designed its batteries to be second-life batteries. He explained that these batteries could be put into stationary storage applications after they were no longer suitable to power EVs. He also noted how an EV battery’s precious metals were not actually consumed during the battery’s recharge and charge cycles.
• Rep. Dingell asked Mr. Chen to discuss the signals that Rivian Automotive is receiving from its shareholders about the sourcing of critical minerals for its vehicles.
  • Mr. Chen remarked that an increasing number of shareholders were recognizing the importance of responsible supply chains. He expressed Rivian Automotive’s interest in working with Congress to develop laws that would promote domestic manufacturing and supply chains.
• Rep. Dingell asked Mr. Chen to indicate whether Rivian Automotive was a member of the Zero Emission Transportation Association (ZETA). She also asked Mr. Chen to discuss the automotive industry’s outlook for supporting more responsible domestic mining.
  • Mr. Chen indicated that Rivian Automotive was a member of ZETA and stated that the automobile industry was supportive of more responsible production and manufacturing. He also mentioned how Rivian Automotive had signed onto the Global Climate Initiative and was working towards achieving zero emissions by 2035. He specifically highlighted Rivian Automotive’s ocean plastics initiative that worked to divert plastics from going into the waste stream.
• Rep. Dingell expressed interest in working to support the domestic production of critical minerals in a manner that was acceptable to all stakeholders, including manufacturers, environmentalists, and workers.

Rep. Russ Fulcher (R-ID):

• Rep. Fulcher discussed how the Stibnite mining project in Idaho represented the largest reserve of antimony outside of Russia or China. He stated that the Stibnite mining project could become operational very quickly if it were to receive the proper permissions. He discussed the importance of antimony and how it had various applications, including next generation utility scale batteries, military uses, munitions, infrared technology, semiconductors, and wind turbines. He asked Ms. Struhsacker to address how the enactment of the Clean Energy Minerals Reform Act of 2022 would impact the Stibnite mining project and other similar projects.
  • Ms. Struhsacker remarked that the Stibnite mining project was an important source of critical minerals. She expressed uncertainty as to whether the Stibnite mining project’s primary proponent, Perpetua Resources, could justify its proposed $1 billion investment for reclamation efforts if the Clean Energy Minerals Reform Act of 2022 were to become law. She commented that the Clean Energy Minerals Reform Act of 2022’s leasing system would eliminate the security of tenure for Perpetua Resources.
• Rep. Fulcher mentioned how the U.S. Department of Defense (DoD) and other organizations had expressed concerns regarding the U.S.’s stockpile of antimony. He also highlighted how the private sector would conduct the cleanup associated with the proposed Stibnite mining project and commented that this project appeared to benefit both the private sector and the U.S. government. He asked Ms. Struhsacker to indicate whether she agreed with his assessment of the proposed Stibnite mining project.
  • Ms. Struhsacker remarked that the Stibnite mining project would constitute a “win-win” for U.S. taxpayers and the private sector. She stated that the reprocessing and re-mining of historic mine sites could provide an important source of critical minerals and that the private sector’s involvement in these sites could support cleanup efforts. She commended Perpetua Resources for its work in this area.
• Rep. Fulcher asked Ms. Struhsacker to indicate whether she was aware of other instances beyond the context of hard rock mining where the private sector had sought to proactively pursue environmental cleanup efforts.
  • Ms. Struhsacker remarked that modern mining would be best suited to address historic problems at old mines that had existed prior to modern environmental regulations. She stated that the liability issues associated with mine clean up often dissuaded third parties from pursuing cleanup efforts. She suggested that the U.S. could enhance abandoned mine site reclamation efforts through enacting Good Samaritan legislation.

Rep. Katie Porter (D-CA):

• Rep. Porter mentioned how the USFS had repeatedly said that it could not object to proposed mining projects. She asked Mr. Kalen to explain why the USFS could not object to proposed mining projects.
  • Mr. Kalen noted how mining claims were considered property rights, which meant that a USFS objection to a proposed mining project would be considered an incursion of a property right. He stated that there existed uncertainty as to whether the USFS actually possessed the legal authority to object to mining claims and called on Congress to clarify the USFS’s legal authority.
• Rep. Porter asked Mr. Kalen to indicate whether the Mining Law of 1872 had established hard rock mining as the “highest and best use” of a land.
  • Mr. Kalen acknowledged that while the Mining Law of 1872 did not explicitly state that hard rock mining constituted the “highest and best use” of a land, he stated that federal agency officials had long interpreted the law to view hard rock mining as the “highest and best use” of a land.
• Rep. Porter stated that the “highest and best use” standard often led the USFS to choose mining projects that caused more environmental harm over other less environmentally harmful projects. She then mentioned how Rivian Automotive was headquartered within her Congressional District. She asked Mr. Chen to discuss how reforming the Mining Law of 1872 would improve Rivian Automotive’s supply chain and their ability to create U.S. jobs.
  • Mr. Chen remarked that reforming the Mining Law of 1872 would help to increase the domestic supply of critical minerals in a more environmentally responsible manner.
• Rep. Porter asked Mr. Chen to indicate whether Rivian Automotive currently faced supply chain issues related to the importation of minerals.
  • Mr. Chen remarked that Rivian Automotive faced supply chain challenges and mentioned how the company’s CEO had recently told the Wall Street Journal that the company was making progress in terms of addressing these challenges. He stated that increasing access to the U.S.’s domestic mineral supplies would help to more permanently address his company’s current supply chain challenges.

Rep. Jerry Carl (R-AL):

• Rep. Carl asked Ms. Struhsacker to compare environmental protections in the U.S. to the environmental protections in other major critical mineral producing countries (including China).
  • Ms. Struhsacker remarked that the U.S. possessed the world’s cleanest and safest mines. She called it important for the U.S. to responsibly source the minerals it needed for the transition to clean energy sources. She stated that China and Russia maintained few environmental protections and sometimes employed slave labor. She asserted that the U.S. maintained the world’s best environmental and labor laws. She noted how other countries often requested guidance from the U.S. in developing their mining laws to ensure that they would maintain adequate environmental protections.
• Rep. Carl asked Ms. Struhsacker to discuss the impact that would result from the imposition of an 8 percent gross royalty on existing mines. He also asked Ms. Struhsacker to address how such a royalty would impact the ability of domestic industries (such as EV companies) to access critical materials.
  • Ms. Struhsacker remarked that the imposition of a royalty on currently operating mines would have a “devastating” impact and commented that such royalties would likely constitute takings by the federal government. She noted how existing mining operations were largely based on multiyear investments and commented that the sudden imposition of a royalty on these mines would constitute a major disruption for them. She predicted that the imposition of a royalty on mines would make it unprofitable for the mines to continue to operate, which would result in mine shutdowns, lost jobs, and reduced domestic production of critical minerals.
• Rep. Carl ask Mr. Chen to discuss the recommendations that the EV industry had made to the Biden administration for improving the ability of U.S. companies to acquire critical minerals from domestic sources.
  • Mr. Chen stated that the EV industry had called for updates to the Mining Law of 1872 in order to catalyze new investments in responsibly sourced domestic mineral supplies and to shore up existing allies and trading partners. He also mentioned how the EV industry had made recommendations related to workforce development and consumer facing policies.
• Rep. Carl asked Mr. Chen to identify the biggest challenge to building a domestic mineral supply chain.
  • Mr. Chen stated that the availability of minerals and the existence of sufficient processing capabilities were challenges to building a domestic mineral supply chain.
• Rep. Carl asked Mr. Chen to indicate how far out Rivian Automotive made projects for its business.
  • Mr. Chen testified that Rivian Automotive considered one-year outlooks, five-year outlooks, ten-year outlooks, and 30-year outlooks for its business.
• Rep. Carl remarked that Congress ought to make similar longer-term projections in its policymaking.

Rep. Blake Moore (R-UT):

• Rep. Moore asked Ms. Struhsacker to discuss the protections that were in place for ensuring that current mines would not create future environmental problems.
  • Ms. Struhsacker remarked that the U.S. maintained various federal and state environmental laws and regulations that guaranteed that new mines would be developed in a responsible manner. She noted how the EPA had concluded in 2018 that this regulatory framework provided comprehensive environmental protections and financial assurances. She mentioned how state and federal agencies in her state of Nevada possessed $3.4 billion in reclamation bond monies to guarantee that current mines would be responsibly reclaimed.
• Rep. Moore asked Ms. Struhsacker to indicate whether the EPA’s 2018 review was sufficiently forward looking. He also asked Ms. Struhsacker to address whether any of the additional environmental protections being proposed in the Clean Energy Minerals Reform Act of 2022 would be beneficial.
  • Ms. Struhsacker remarked that the Clean Energy Minerals Reform Act of 2022 would not provide any incremental benefits in terms of protecting the environment. She stated that the U.S.’s laws and regulations for mining were already forward looking in nature. She noted how parties that wanted to obtain permits from either the BLM or the USFS needed to demonstrate that their mines would comply with existing federal and state regulatory requirements. She commented that this dynamic meant that parties would need to comply with the most up-to-date laws and regulations in order to obtain mining permits.
• Rep. Moore then asked Ms. Struhsacker to discuss the proposals for paying for mine reclamation efforts that would not necessarily discourage mining investments on federal lands.
  • Ms. Struhsacker remarked that Congress could require that mining claims fees that were in excess of what was required to administer the mining program be earmarked for abandoned mine reclamation efforts. She noted that Congress could do this through the appropriations process. She mentioned how these excess mining claims fees (which amounted to about $30 million annually) currently went to the U.S. General Fund.
• Rep. Moore asked Ms. Struhsacker to indicate whether she was familiar with the Good Samaritan legislative proposals that would permit third parties to get involved with abandoned mine cleanup efforts. He also asked Ms. Struhsacker to indicate whether industry was supportive of these Good Samaritan legislative proposals.
  • Ms. Struhsacker remarked that industry had long supported Good Samaritan laws and commented that these laws would support abandoned mine reclamation efforts.

Note: The Subcommittee took a brief recess at this point due to technical difficulties.

Rep. Tom Tiffany (R-WI):

• Rep. Tiffany asked Mr. Chen to indicate whether energy and mineral independence was important for the U.S.
  • Mr. Chen remarked that energy and mineral independence were vital to the U.S.’s survival and leadership.
• Rep. Tiffany asked Mr. Chen to answer whether it was ethical for the U.S. to be obtaining its mineral resources from countries with lower labor and environmental standards when those mineral resources were already present within the U.S.
  • Mr. Chen commented that such activity from the U.S. was not ethical. He highlighted how Rivian Automotive possessed a “robust” supplier code of conduct for its mineral suppliers. He stated that having domestic mineral suppliers and a domestic mineral supply chain would make it easier for Rivian Automotive to enforce its supplier code of conduct. He remarked that reforming the U.S.’s current mining laws could support the development of domestic mineral suppliers and supply chains. He also commented that such reforms could ensure the protection of the U.S.’s environmental laws and sacred spaces, as well as ensure consultations with local communities and tribes about prospective mining projects.
• Rep. Tiffany asked Mr. Chen to indicate whether Rivian Automotive sourced any of its materials from China.
  • Mr. Chen answered affirmatively.
• Rep. Tiffany asked Mr. Chen to assure the Committee that none of the products that Rivian Automotive sourced from China were produced by slave labor.
  • Mr. Chen remarked that Rivian Automotive maintained a “robust” anti-slave labor policy that it required its suppliers to adhere to. He testified that Rivian Automotive maintained mechanisms for auditing suppliers to ensure their compliance with this policy.
• Rep. Tiffany asked Mr. Chen to indicate whether the NEPA process should be streamlined so that it would no longer take companies over a decade to obtain mining permits.
  • Mr. Chen remarked that the NEPA process could be improved and streamlined without compromising environmental protections.
• Rep. Tiffany then asserted that the Biden administration was providing conflicting messages to rural America. He specifically discussed how President Biden had suggested providing subsidies for fertilizers in order to support agricultural production while the Biden administration was concurrently advancing the Conservation Reserve Program (CRP), which took agricultural land out of production. He also stated that the Biden administration was providing conflicting messages to the mining sector. He raised concerns that the Biden administration policies that discouraged natural resource production were prevailing.
  • Ms. Struhsacker expressed agreement with Rep. Tiffany’s concerns. She asserted that the Clean Energy Minerals Reform Act of 2022 was designed to curtail mining activities on federal lands. She also mentioned how the IWG on Federal Hardrock Mining Laws, Regulations, and Permitting provided an opportunity for stakeholders to provide input on refining the current permitting process for mining projects.

Rep. Yvette Herrell (R-NM):

• Rep. Herrell first highlighted how critical minerals were necessary for developing solar energy projects. She then noted how federal oil, gas, and coal all operated in the U.S. with a 12.5 percent royalty. She asked Ms. Struhsacker to explain why hard rock mining on federal lands should not be subject to a similar royalty.
  • Ms. Struhsacker remarked that hard rock mining was fundamentally different from oil and gas. She discussed how hard rock minerals required extensive processing and stated that this processing ought to be accounted for when developing a hard rock mineral royalty structure. She emphasized that there did not exist a market for crude ore while there did exist a robust market for crude oil. She concluded that the oil and gas royalty system would thus be ill-suited for hard rock minerals.
• Rep. Herrell asked Ms. Struhsacker to estimate the returns that U.S. taxpayers would receive if the U.S. were to impose a high royalty rate on hard rock minerals extracted from federal lands.
  • Ms. Struhsacker remarked that a high royalty rate on hard rock minerals extracted from federal lands would lead many mines to become uneconomic. She stated that royalties could not be collected on mines that were shut down and that such royalties would thus result in reduced jobs, tax revenues, and mineral production. She commented that this situation would result in the U.S. becoming more reliant on foreign sources for hard rock minerals.
• Rep. Herrell then noted how Mr. Chen had testified that Rivian Automotive maintained an auditing process for ensuring that their suppliers did not use child slave labor. She asked Mr. Chen to discuss who was performing these audits. She expressed particular interest in Rivian Automotive’s ability to perform these audits in China.
  • Mr. Chen mentioned how Rivian Automotive provided their first tier and second tier suppliers with the company’s anti-slave labor standards. He indicated that Rivian Automotive’s contracts with these suppliers included the ability for the company to audit the suppliers. He testified that Rivian Automotive often used third-party auditors to conduct these audits. He also noted that Rivian Automotive required its suppliers to provide Rivian Automotive with reports from their auditors.
• Rep. Herrell asked Mr. Chen to indicate whether Rivian Automotive could guarantee U.S. consumers that no child slave labor was being used to produce the minerals needed for the company’s EV batteries.
  • Mr. Chen remarked that Rivian was using the best available tools to ensure that child slave labor was not being used to produce the minerals needed for the company’s EVs.
• Rep. Herrell commented that Rivian Automotive could not guarantee that the was no child slave labor used to produce the minerals needed for the company’s EV batteries. She then asked Mr. Chen to address whether Rivian Automotive was concerned about the availability of critical minerals in light of the increased demand for these minerals from renewable energy companies.
  • Mr. Chen called it critical for Rivian Automotive to identify diversified sources of critical minerals for both the company and its suppliers.

Full Committee Chairman Raúl Grijalva (D-AZ):

• Chairman Grijalva asked Mr. Stiffarm to address what good faith tribal consultation would look like for mining projects moving forward if Congress did not make any changes to the current federal mining laws.
  • Mr. Stiffarm remarked that good faith tribal consultation should entail tribes being involved in federal mine decision making processes. He discussed how another mine that could have adversely impacted his tribe was almost recently approved. He testified that neither the Montana Department of Environmental Quality nor the BLM had consulted his tribe about the proposed mine and indicated that his tribe had only become aware of the project through press reports. He mentioned that his tribe subsequently filed a lawsuit regarding the project after learning of it. He contended that tribes ought to be consulted regarding mine projects and asserted that this lack of consultation was unjust.
• Chairman Grijalva remarked that there existed a legacy in both Indian country and rural America of collateral damage stemming from mining projects. He stated that this collateral damage was often the result of failing to consult tribes regarding mining projects. He then asked Mr. Kalen to identify the biggest “loopholes” in existing federal mining laws that harmed public lands.
  • Mr. Kalen first remarked that existing mining laws did not return any value to the U.S. for hard rock minerals extracted from federal lands. He also stated that there was a lack of clarity surrounding the operation of mining rights as they pertained to mill sites. He further called for better enforcement, bonding, and mechanisms for financial assurances. He mentioned how the Trump administration had reversed the Obama administration’s policies regarding financial assurances for mine sites. He then remarked that the U.S. lacked sufficient abandoned mine reclamation fund operations and commented that the U.S. needed to address this issue. He lastly called for a better mechanism for selecting what types of mining activities would occur on public lands. He suggested that the U.S. should use a land management planning process in order to ensure that stakeholders (including tribes) could provide input early on in the decision making process. He stated that this approach would likely prevent conflicts and controversies from materializing, which would provide more certainty to the mining industry.
• Chairman Grijalva asked Mr. Kalen to indicate whether updating the Mining Law of 1872 would lead to fewer conflicts between mining companies, local communities, and tribes.
  • Mr. Kalen answered affirmatively. He reiterated that updates to the Mining Law of 1872 could involve a land management planning process that would solicit input from tribes and local communities early on in the decision making process.
• Chairman Grijalva then discussed the importance of ensuring that minerals were produced in a manner that did not violate human rights and that maintained high environmental standards. He asked Ms. Struhsacker to indicate whether a multinational corporation should be permitted to engage in mining activities on federal lands in the U.S. if said corporation had demonstrated a poor record of accounting for human rights in their foreign mining operations.
  • Ms. Struhsacker remarked that investor demands that companies make ESG considerations made it very unlikely that multinational corporations that had poor human rights records when operating abroad could operate within the U.S. She stated that multinational corporations would need to demonstrate to their shareholders, local communities, and tribal communities that they were responsible corporate entities before they could pursue mining projects within the U.S.
• Chairman Grijalva asked Ms. Struhsacker to answer whether Rio Tino ought to be permitted to engage in mining activities on federal lands in the U.S. given their record of human rights and labor rights abuses in foreign countries.
  • Ms. Struhsacker remarked that the U.S. ought to take a site-specific and situation-specific approach when making mining permit decisions. She stated that a company that had histories of human rights and labor rights abuses would likely be prevented from obtaining social licenses to operate within the U.S.
• Chairman Grijalva expressed interest in modifying the Clean Energy Minerals Reform Act of 2022 to prevent companies that had records of engaging in human rights and labor rights abuses abroad from engaging in mining activities on federal lands in the U.S.

Rep. Doug Lamborn (R-CO):

• Rep. Lamborn first remarked that the Clean Energy Minerals Reform Act of 2022 would result in less mining activity within the U.S. He then asked Ms. Struhsacker to explain the difference between a net tax and a gross tax.
  • Ms. Struhsacker explained that a net tax allowed for a producer to subtract the costs of making a marketable product before a royalty was imposed while a gross tax did not allow for such subtractions. She discussed how oil was very marketable in its crude form while hard rock minerals required significant processing before they could be considered marketable. She stated that a net royalty would enable hard rock miners to make deductions for their processing costs. She expressed support for a net royalty for hard rock minerals that were extracted from federal lands.
• Rep. Lamborn discussed how it was often difficult to predict the future prices of a given hard rock mineral. He stated that a gross tax on hard rock minerals could therefore drive certain hard rock mining operations out of business in the event that a given hard rock mineral’s price fell dramatically.
  • Ms. Struhsacker expressed agreement with Rep. Lamborn’s statement. She stated that a net royalty approach to hard rock minerals extracted from federal lands would ensure that mines were not put out of business when hard rock mineral prices declined. She commented that this approach would preserve jobs and a revenue stream for the federal government. She stated that gross royalties by contrast were very insensitive to hard rock mineral market prices and ignored the fixed costs associated with hard rock mineral processing.
• Rep. Lamborn asked Ms. Struhsacker to discuss how the Clean Energy Minerals Reform Act of 2022’s proposed royalty on gross revenues and dirt tax would impact prospective mining operations. He commented that this royalty and tax would create “onerous” conditions for miners.
  • Ms. Struhsacker remarked that the Clean Energy Minerals Reform Act of 2022’s proposed gross royalty and dirt tax provisions would cause the investment in the U.S. domestic mining industry to decline “even more dramatically.” She asserted that this industry decline would make the U.S. increasingly reliant on foreign mineral sources.
• Rep. Lamborn stated that the Clean Energy Minerals Reform Act of 2022 would cause many U.S. domestic mining operations to close.
  • Ms. Struhsacker expressed agreement with Rep. Lamborn’s statement regarding the Clean Energy Minerals Reform Act of 2022. She contended that now would be an especially poor time to enact the legislation given the current mineral availability “crisis.”
• Rep. Lamborn asked Ms. Struhsacker to address how the inability for the U.S. to produce critical minerals domestically and an increased reliance on China for these minerals would impact the costs of consumer goods (including EVs, cellular phones, and computers).
  • Ms. Struhsacker remarked that the inability for the U.S. to produce critical minerals domestically would drive the costs of consumer goods up. She stated that these additional constraints on the U.S. mineral supply would exacerbate current mineral supply shortages.
• Rep. Lamborn asked Ms. Struhsacker to discuss the disadvantages that the U.S. faced with respect to China in terms of supplying refined critical minerals. He commented that the U.S. was limited in its ability to produce certain critical minerals due to its stringent environmental laws and taxation system. He also asked Ms. Struhsacker to address how these disadvantages impacted the U.S.’s national security.
  • Ms. Struhsacker remarked that Russia and China were poised to weaponize access to critical minerals against the U.S. She commented that Russia’s recent invasion of Ukraine demonstrated the perils associated with countries being overly reliant on foreign suppliers for critical minerals and materials.
• Rep. Lamborn then asked Ms. Struhsacker to address why the mining claims system was superior to a leasing system.
  • Ms. Struhsacker discussed how it was very difficult to determine where exactly hard rock minerals were located and noted how it was much easier to know where oil and gas resources were located. She stated that the claims system provided geologists with enough time to make discoveries regarding the availability of hard rock minerals. She stated that the mining claims system had historically worked very well and noted how the BLM already tracked where claims were located. She stated that mining companies that engaged in self-initiation of claims still needed to record their claims with the BLM in order to make them valid. She added that mining companies needed to pay fees associated with each type of claim.
• Rep. Lamborn then asked Ms. Struhsacker to discuss the changes that the U.S. had made to its mining and environmental laws since the Mining Law of 1872’s enactment.
  • Ms. Struhsacker stated that every single environmental law that applied to other industries also applied to the mining industry. She also indicated that the Mining Law of 1872 had been amended many times. She noted how the Federal Land Policy and Management Act of 1976 had amended the law to include an environmental performance standard. She explained that this standard required that mines comply with all other environmental protection regulations in existence.

Full Committee Chairman Raúl Grijalva (D-AZ):

• Chairman Grijalva remarked that the Mining Law of 1872 was an “instrument of dispossession” for tribal nations and asserted that the U.S. must work to correct the injustices that resulted from the law. He then stated that the urgent need to address climate change necessitated that the U.S. transition to renewable and clean energy sources. He noted how critical minerals were needed to develop such energy sources. He contended that the Clean Energy Minerals Reform Act of 2022 was meant to modernize (rather than stop) domestic mining activities. He stated that public consultation ought to be a key aspect when considering future mining projects in order to ensure that the projects did not have long-term negative effects. He also remarked that royalties for minerals extracted from federal lands could help the U.S. to fund abandoned mine reclamation efforts.
  • Mr. Stiffarm noted how the Mining Law of 1872 predated many of the U.S.’s Native American treaties that had forced tribes onto reservations. He stated that the Mining Law of 1872 had remained intact since its enactment and called on Congress to update the law.