A study by SNL Metals and Minerals, ‘Permitting, Economic Value and Mining in the United States’, has shown how delays in the US mine permitting process can diminish the value of a mineral project. The study used three US mines in Alaska, Arizona and Minnesota as case studies for the research. The research found a duplicative permitting process that may delay mining projects by a decade or more is impeding the US’ ability to meet a rising demand for minerals.
The study quantifies how delays in permits hinders and deters investments in mineral development projects. The study indicates that the average mine could lose a third of its value as a result of permit delays and that delays can lead to increased cost and investment risks, which subsequently devalue the mine by half.
One case study revealed that Arizona’s Rosemont mine dropped US$3 billion due to 8 yr of delays. Alaska’s Kessington mine experienced 20 yr of mining delays and the capital cost of building mine increased to 49%.
"For years, we have witnessed US mines struggle to move forward due to an inefficient permitting system plagued by duplication, uncertainty and delays,"National Mining Association NMA President and CEO, Hal Quinn, said. "This study now confirms the connection between the delays and their effect on companies' decisions to invest in domestic mining projects. Hopefully it will strengthen the resolve of Congress to fix a broken permit system that threatens to break down a minerals supply chain that is critical for US manufacturing."
"The results of our study show that the current US permitting process is taking a significant economic toll on the mining industry," said Mark Fellows, the author of the study and Director of Metals Consulting at SNL Metals and Mining. "If things continue as they are, our projections show it increasingly less likely for new mines to advance into production."
The report comes as both the Senate and House of Representatives are currently working on ways to modify the mine permitting system. Sen. Lisa Murkowski, R-Alaska, and Rep. Mark Amodei, R-Nev., have sponsored legislation to modernise the current US mining permitting process and ensure access to vast domestic mineral resources.
Edited from Press Release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/mining/29062015/new-study-finds-delays-in-the-us-mine-permitting-process-devalues-mineral-projects-2482/