Will Trump's executive orders increase US mining activities

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Taylor Kuykendall:

Welcome back to Energy Evolution, a Platts podcast by S&P Global Commodity Insights where we dive deep into the stories that are shaping the world of the energy transition. I'm your host, Taylor Kuykendall, and in this episode we're unpacking a significant development in US mineral production policy that could reshape the landscape of domestic resource management.

Seat critical minerals are essential to the energy transition because they serve as the foundational components for this wide range of technologies that drive renewable energy and energy efficiency. Seat minerals such as lithium, cobalt, nickel, and rare earth elements, they're all vital for the production of batteries which power electric vehicles and then store renewable energy resources, but also used in the kind of equipment that we use for solar energy and wind energy. Now, back on March 20th, President Donald Trump signed an executive order. It was aimed at ramping up domestic mineral production through the Defense Production Act.

Now this move's part of a broader strategy that aims to reduce America's reliance on foreign mineral supplies, particularly from China, which has long dominated the mining and refining sectors for critical minerals. Now we have several great guests today to talk about this order. We're going to hear from Francesca Price, a Senior Analyst in the Metals and Mining Research team here at S&P Global Commodity Insights. We'll also hear from executives from two mining companies that are working on US projects. We have Mark Smith, Executive Chairman, President, and CEO of NioCorp Developments. They're building the Elk Creek Critical Minerals project, which is North America's only niobium-scandium-titanium project, and that's going to be located in Nebraska.

We also have Pat Risner, president of South32 Hermosa, the only advanced mining project in the United States that could produce two federally designated critical minerals. It's manganese and zinc. The mine is the first to use this expedited permitting system that we're going to hear more about soon called FAST-41. Finally, we'll hear about some of the environmental concerns about all this mining from Ethan Manuel. He's the director of the Sierra Club's Lands Protection Program, which works on issues related to public lands, forests, wilderness, and wildlife issues. Let's kick off the episode with Francesca Price, finding the insights for a breakdown of why the US is taking this action.

Francesca Price:

When we talk about overseas reliance on critical minerals, we're looking at an average of about 50% from the US. But that varies massively between commodities and it also depends at what stage of the supply chain we're looking at. So if we take zinc, for example, so the US is a net exporter of mined zinc, so the material that's actually coming out the ground, but because it's got no domestic refining capacity, it's exporting all of that material and then it's completely reliant on the imports of the refined product. And this pattern's observed for many commodities really, and it's not just limited to the US either. So obviously having the raw material in the ground and the right conditions to extract it is one thing, but if you don't have the midstream capacity to actually refine it and process it into the usable form, then you're still dependent on the countries which do, which is where China has done so well, really, in building out its integrated supply chains.

If we think of the projects that maybe exist but haven't been brought online already, or you refer to if the materials are in such high demand, why aren't they online? So there's several factors that come into play when we look at increasing supply, and demand is really only one of them, and quite a small factor really. I mean, it is often cited that supply is elastic to demand, and if the demand is there, then the market will provide. And while that's true, when we're looking at overall trends over the decade timescale, there's so many other factors that contribute to getting a project up and running. So obviously there's the geological and the geographical constraints to start with. There's the economic environment that we're operating in. Obviously commodity prices fluctuate. They can be really volatile. We've got environmental concerns as infrastructure, and there's all these other permitting considerations that can take years and years to work through.

And then there's a secondary list of barriers to market that critical minerals specifically experience. So if we take out gold and base metals from the list, for critical mineral markets, they typically suffer with a trade-off between the monetary value and the strategic value of commodity, which means that the development of these projects quite often lose out to the gold and the base metal projects. And it also means that the market dynamics and the supply chains for these materials are generally far more complex, far more opaque, which obviously increases the commercial risk and therefore deters investment. So there's lots of different factors at play as to why these projects aren't getting off the ground quick enough.

Taylor Kuykendall:

And so this new Executive Order from President Trump issued on March 20th, it's trying to take an attempt at turning that thing around and getting more mining and mineral production here in the United States. Can you tell us just a little bit about, a high-level overview of what that Executive Order does, and maybe to what degree we've seen other administrations or congressional efforts to do the same in the past?

Francesca Price:

Yeah, so as you say, this Executive Order is fundamentally aimed at increasing domestic production of critical minerals. And that's not just the raw material out the ground, but it's also referring to the refined product, and also the component and the end product. So what it's really doing is trying to build out these end-to-end supply chains. And obviously this is all part of the effort to reduce reliance on overseas supply of minerals, but particularly from China. And there there's three main takeaways or actions from the Executive Order that are really important here. So the first one is identifying and fast tracking permitting of priority mining projects. The second one is prioritizing mineral production on federal land specifically. And the third one is mobilizing existing capital and existing financing mechanisms to support these domestic projects. So that's utilizing the Development Finance Corporation and also the Export-Import Bank. And this approach isn't radical.

Most countries are trying to do the same thing here in one way or another. We're trying to secure critical mineral supply chains. So the EU for example, they have literally, just a couple of days ago, released their strategic project list and that shares a lot of the sentiment behind President Trump's priority project list, which is the expedited permitting. But kind of closer to home in the US, we've of course only got to look to a few years ago with the Inflation Reduction Act, and that shares a lot of the same ideology really to that Executive Order to an extent, which was the aim to strengthen US supply chains for critical minerals and then discourage sourcing of the minerals from certain parts of the world. So we've certainly seen similar measures taken in the past, both in the US and elsewhere, but this Executive Order does go one step further by proposing quite drastic changes actually to things such as mining regulation and land use policy. So yeah, it's certainly going one step further than what's been done before.

Taylor Kuykendall:

Yeah. So if it's one step further, do you see this having a big impact on the mining sector in the short and in the long term? I mean, is this going to change how mining companies start to think about how they're going to invest in their projects?

Francesca Price:

Yeah, certainly. I mean, I think in the very immediate term, I think we're likely to see a flurry of activity in terms of project PR with mining companies really pushing to make sure that their projects are seen as most favorable and clinching that priority project status. Over the long term, I think it's really tricky to know at this stage. I mean obviously it's an executive order, it's not legislation, and obviously Trump's term will be up in four years time, at which point it could be revoked entirely. So it does beg the question as to the long-term viability of this and how much can really be achieved in that time. There's some bold statements being made in that executive order.

Taylor Kuykendall:

So now that we've laid out some of that groundwork, let's turn to Mark Smith. He leads NioCorp Developments. NioCorp is developing a greenfield underground mining project in Nebraska focused on four key product streams, niobium, scandium, titanium and magnetic rare earth oxides. Currently, the US relies almost entirely on imports for niobium and scandium, and imports most of its titanium and its magnetic rare earth oxides. The minerals have a whole lot of applications. For example, niobium plays a role in strengthening steel for automotive and infrastructure safety. Scandium has got potential to enhance aluminum for the automotive and aerospace industries. Titanium is used in aircraft alloys and rare earth oxides are a necessity for electric vehicles and defense technologies. I asked Mark his first reaction when he heard about the new executive orders from the Trump administration.

Mark Smith:

I started cheering to begin with because this is a recognition at the highest level of our government that we have a problem and we have to solve this problem. I think that we were very positive with the president's remarks when he said he was going to issue this Executive Order as well. There is a recognition that we need mining, we need mineral processing, and we need parts production. We need the whole supply chain to be located in the United States. We have not had that recognition at this level of office as far as I know for the 66 years that I've been alive. So this was just extremely good news. The issue of permitting is in there. The issue of financing is in there. The issue of having the whole supply chain available in-country is there. I think it's just tremendous that we're recognizing this and willing to do something about it.

Taylor Kuykendall:

Yeah. So tell us a bit more about what's in the order and maybe specifically tell us what do you like most about what this order is able to accomplish.

Mark Smith:

I think there's two things. One is the permitting issue. The president understands that when these mining projects, really legitimate projects operated by good companies, get into this thing that we all call permitting hell, that's going to be corrected now. We're going to have multiple eyes on these projects and we're going to make sure that reasonable decisions are made and that projects are moved forward, just not held in limbo forever. So that permitting issue I think comes out as very strong to me. Now, I will also say that as important as that is to the industry, at NioCorp, with our project in southeast Nebraska, we actually have all the permits in hand that we need to start construction on that. So we're in a little different shape. But the second part of the order that captured my attention was the recognition for financing on these projects.

So the president has provided in his Executive Order means and methods to get debt and equity financing through both the DFC and XM, and again, on NioCorp's behalf, I would also say that we're in a very fortunate situation because we started working with XM about two years ago, and we are well along the path of hopefully securing a loan for our project here in the near future. So these are things that we understood and took care of. Other companies have not been as fortunate, and the president has done a great job of opening the door to taking care of these two issues. And as the private investment industry starts to see the government investment into these projects, I think that you're going to see an opening up of the financing capabilities of these projects. It's been very difficult for many years right now. So those are the two things that I think make the biggest difference.

Taylor Kuykendall:

Is there anything missing from the order that you would've liked to have seen, or maybe even take the question in a slightly different route? It is a little uncertain given there's an executive order, say maybe versus some of the finality it might have this as an act of Congress. Can you tell me about maybe what you would like to see maybe improved upon, whether it's through an executive policy or whether that's through something that we see in Congress, that would make it easier to mine here in the United States?

Mark Smith:

It's an outstanding question, and I think my response to that is very simply that I think this is a fantastic start and I recognize, like you just did Taylor, that there's much more to be had here. How strong is the executive order? Will it be challenged? Do we need to go to Congress? All of those issues that are going to have to be dealt with as we move forward with this executive order. The one thing that gives me great hope is that in the many, about 10 years that we've been working on the NioCorp project now, we're seeing support for this whole idea of critical strategic minerals and complete supply chains in the United States.

We're seeing support for that across the aisle. There isn't one party or the other that supports it. It's both parties. And so I think the good news to me is that we've got some momentum started here with the Executive Order from President Trump, and I feel very confident that if we need to get additional congressional support and approval for this, that it will be coming because we're just seeing an across-the-board recognition that this is an issue and something that has to be addressed. So I'm confident that this is a great start. It creates good momentum, and to the extent that we need additional details or additional congressional action, I think it will be there.

Taylor Kuykendall:

Now, Mark told me during our conversation that the Executive Order has already spurred new interest from the investment community. Keep in mind, Mark and I talked just a few days after the Executive Order had come out.

Mark Smith:

Yeah, let me talk about that from a real realistic basis. When the Executive Order came out Friday, my phone has been ringing off the hook for the last three days now, and I'd count four, but I was busy watching the Colorado State Rams play in the NCAA basketball tournament one day, so I didn't answer a lot of calls that day. But with that aside, because we did lose, my phone has been ringing off the hook with investment parties that are saying, "What does this Executive Order mean? What does it do for NioCorp?" And I'm explaining it to them as thoroughly as I can.

We all have a lot of questions, but people recognize that there is going to be government funding available for these projects that need to be here in the United States, good projects, environmentally sound projects, that meet the needs of our critical and strategic minerals that we are literally importing 100% of today. So just based on the three days of the phone ringing off the hook, I think that's a pretty good story all by itself. And I have phone calls the rest of this week on the same subject matter. So it has raised the awareness. Now we're out telling our story about our project constantly. So we have a lot of people that are in the know, but people immediately saw this Executive Order and they want to talk to us more about this project and what it means to the country.

Taylor Kuykendall:

Okay, so let's hear about another project from our Pat Risner. Just a reminder, he's the president of South32 Hermosa, a company that's enjoyed a fast track status for permitting its mining project in Arizona. The Hermosa project is a significant critical minerals initiative featuring one of the largest zinc deposits alongside a high-purity, battery-grade manganese deposit with a total investment of approximately $2.6 billion, Pat said the project is currently 40% through its construction phase, and they're aiming to be in production in the first half of 2027. Let's hear Pat describe how a program known as FAST-41 makes it easier to build a mine in the United States.

Pat Risner:

FAST-41 is a program that was put into place in 2015. Enacted by Congress, FAST is actually an acronym that stands for Fixing America's Surface Transportation. And that's because the program was originally put in place, there was a collection of critical infrastructure projects that were shovel-ready and the government wanted to deploy, and the program was to create a more coordinated, transparent, efficient way to get through the NEPA process, the National Environmental Policy Act process, for federal compliance. Mining was added as a coverage sector under FAST-41 a few years later. But until recently, there'd never been a mining project added to FAST-41. So Hermosa was added as the first mining project in the program in 2023. Largely, I think because of the criticality of the two supply chains for the critical minerals we produce, and our reliance on foreign sources, but also to some extent how we're proposing to develop the project from a sustainability standpoint and what it does for our host community.

But what FAST-41 really does is it has elements to it that address a lot of the common administrative delays that we see with large, complex projects like this. To get into FAST-41, there's a certain investment threshold, and you have to demonstrate importance or criticality in the nation. And so the role of the Federal Permitting Council, which is an independent agency that has oversight of FAST-41 projects, is probably the key. They, as I said, are an independent agency. Their role is to support the lead agency to help with coordination. NEPA is a big coordination process. That's what makes it complex. That's what makes it a bit unwieldy and challenging is, you coordinate between a lead agency, a lot of cooperating agencies, tribes, communities, local government, just lots of stakeholders.

And so the Federal Permitting Council obviously helps with coordination. They help with resourcing to make sure the lead agency's resourced properly, which is also often a challenge. My experience having been through NEPA on other mining projects before, you often get stuck when there's big decisions that need to be made. Those are put in front of the right people and made more efficiently. It's also more transparent. So there's an end-to-end schedule for the entire process published at the start.

Taylor Kuykendall:

You know, I'm wondering because a part of this critical minerals order that we're talking about from Human Health Administration, it was about trying to speed up permitting and solving that long-held permitting issue. I'm wondering, is this FAST-41, is it a great model to look at to say, "Here's how we solve all the problems," or are there some things in that program even that might be able to be improved upon?

Pat Risner:

Yeah, we think it's a good start. We think it's a tool that could be quite effective. We were really pleased to see it called out specifically in the Critical Minerals Executive Order because we think there's a lot about it that helps with process and administrative delays as I mentioned. Maybe the one thing I would clarify though, that is still required, even if you have an overlay or a structure like FAST-41 to help with the process and address those administrative delays, it does still require collective will and support from leadership within the lead agency, from the federal government, obviously from the proponent, there is a collective will and support still required to shepherd through the process. And that combined with some of the aspects of FAST-41, like the permitting council's role and resourcing, that's what really gets it done. So I do want to emphasize you still do have to have that support amongst leadership for all the parties involved to get through it.

I would say the other thing that still requires some focus is while FAST-41 helps with the NEPA process proper, there are a lot of other regulatory processes that have to run concurrently with NEPA to get a decision, like Section 7 Consultations under the Endangered Species Act with Fish and Wildlife Service. Section 106 Consultations for National Historic Preservation Act, compliance with the tribes and state historic preservation officers. Those processes have to run their course and get to a decision before a lead agency can issue a record of decision for a NEPA process. So they have to come along. So I think that's one of the opportunities is making sure that the agencies and the stakeholders that run those processes are also enrolled and that they're coming along because you can get through a NEPA process proper as efficiently as possible, but if those processes aren't keeping pace, then you have the potential for delays. And so we're learning a lot about that as we go through it. We're still on track, but that's probably something that can continue to get some focus and improve upon.

Taylor Kuykendall:

And now, fast forwarding to the signing of the Executive Order and zooming in on that, tell me a little bit, I mean the mining sector maybe sometimes has struggled to get a lot of political support, but that seems to be changing recently. I'm wondering, when this big announcement came out, what was your first reaction?

Pat Risner:

Well, the first reaction is, it's really great to see a renewed focus on domestic mining and establishment of domestic mining. I think many of the average citizens in our country don't understand the national security risks associated with our reliance on foreign sources for many of these critical minerals and materials that we need every day and are becoming increasingly important. So I think recognition of that importance, recognition that we need to have a domestic mining industry upstream, not just processing and midstream and downstream, but we need to mine the materials here.

We think if we want to maintain American standards for worker protection and environmental protections, then it is important we can do it the right way here. We can onshore these supply chains, eliminate or reduce that national security risk for our country, and really benefit communities along the line. So I think the focus on that, the focus on timelines and permitting FAST-41 was good to see. I think there were a few other specific provisions in there that I think recognize a few of the hurdles and challenges that the mining industries had over the years. So really pleased to see the focus.

Taylor Kuykendall:

And do you think this is going to be enough to be that push that the industry needs to go out there and make new investments in the mining sector? Of course, I say that as someone who is out there making new investments in the mining sector already, but I just wonder if you think maybe your peers will also do the same or maybe, are there any further actions you wish this Executive Order would've taken?

Pat Risner:

I do think there's going to need to be a focus on how we do value the benefits of domestic mining. Certainly there are other parts of the world where there are challenges around competition and things like that. Other parts of our sector have struggled with financing. We're financing our project off operating cash flows, our $2.6 billion investment, so it's off the balance sheet. Others have to go out and raise capital to develop these projects. The EO addressed that as well. So I think that's good for further development, but we do need to look at how we onshore the parts of the supply chain that are customer-based. We do need to look at refining for many of these critical minerals. So I do think it will help, and I think it will go a long ways towards promoting more domestic mining. There's probably still more work to do around getting the midstream and downstream onshore in the country as well.

Taylor Kuykendall:

Now of course, with all this mining development, there's concerns about the potential environmental impacts. Ethan Manuel, director of the Sierra Club's Land Protection Program acknowledged the need for some of the minerals that are targeted by this order, but says he's also worried about the potential environmental and health impacts if we rush into this mining development too fast.

Ethan Manuel:

We're obviously very concerned about any kind of uptick in mining, especially the way the Trump administration has talked about doing it. Mining has been a priority on our federal land since 1872, and believe it or not, we are still governed by that mining law of 1872. Ulysses S. Grant was president at that time. And so we have a very pro-mining legal framework already when it comes to public lands. And we've seen some negative impacts of this priority placed on mining on federal lands, especially in the West, especially around water quality. That's where you've seen the most damage from mining operations where material that leaches or spills out of the mining site when it rains, not so much from malfeasance but just from regular operations, but then pollute groundwater. And that's become a more and more intense issue as climate change has accelerated the water crisis in the West.

And so our first and foremost worry is damaging precious water resources in the West, and especially when you're looking at proposed mining around the Grand Canyon or places like that that would threaten the Colorado River and that very important water system. But then also you just see damage to public lands when a mine operates there. These mines have gotten very huge. They're usually open-pit mines that do quite a bit of damage to that ecosystem. And so as you can imagine, when you're drilling up [inaudible 00:24:29], and digging a big hole in the ground, you're damaging the surface. You're taking down trees and damaging ecosystems that are important habitats for species and opportunities for people to recreate. So you're going to see the surface damage from mining, and then you could see some water quality damage too. So those have historically been the two main reasons we want to make sure we do mining right when we do some of this stuff on public lands.

Taylor Kuykendall:

Yeah. So I mean, it sounds like you said do mining right, you didn't say necessarily no mining. Tell me a little bit about what it would look like to reform that 18th-century mining law. What are some of the things that need to be, I guess, in place before the US does start trying to dig up more of these resources?

Ethan Manuel:

Yeah, that's a good question. And I do want to state this Sierra Club is not opposed to new mining on federal lands, we do understand we need some of these critical minerals because we are very invested in their clean energy economy and making that transition away from fossil fuels. And we know that means batteries and we need some precious minerals that come from mining. So for us, the most important thing when it comes to an individual mine... So we take most of these issues by case basis. We don't have a one-size-fits-all policy when it comes to mining on federal lands. But the most important thing is for us now is that no mining should be done on any land considered sacred to Indigenous people. And again, that holds true when you look at the Grand Canyon and some proposed uranium mining there that have the Supai, and other Indigenous groups and Arizona have historically opposed that because of the threat to water quality from uranium mining.

And they've had that in the past. They don't want to see that in the future. So for us, the most important thing is to make sure that Indigenous sites are protected from any further mining. Same thing in Arizona around Resolution Copper, a mine that would damage national forest lands that are important to a lot of local Apache groups in Arizona. So job one for us is to avoid sacred sites for Indigenous peoples. But number two, we need mining companies to have more responsibility for cleaning up and mitigating sites that they operate in. And there's almost no mitigation for that. So we want to see a lot more done to rehabilitate abandoned mines and abandoned mine lands and have companies themselves pay for that.

Right now, historically, because we haven't had much of a regulatory framework to do that, the states and the feds almost always pick up the cost for cleaning up an abandoned mine. We want companies to do that. That's the second-biggest one. And the third one is making sure that there is a lot more community involvement before a mine is permitted. Again, the 1872 Mining Act doesn't really have a lot of public consultation engaged in that. Other laws can be applied to that, but we need to amend the 1872 Mining Act to engage with the public and again, especially local Indigenous groups.

Taylor Kuykendall:

Yeah. And do you think that can be done? I mean, a lot of the talk about this is the long permitting lag, right? I mean, is it fair to say, is there a path forward where the mining laws can be reformed to meet the kind of requirements you just mentioned that the Sierra Club would like to see, but also get these permits out faster than what we're seeing on them right now?

Ethan Manuel:

Yeah, short term, probably not. This is just a sticky issue politically. There's no consensus, I think, on either side as to moving something forward. And a couple of years ago, the late Representative Raul Grijalva and Senator Martin Heinrich introduced a whole suite of reforms to modernize the 1872 Mining Act. And it ran into a lot of opposition from more conservative members of Congress and even some Democrats who didn't want to be seen as standing in the way of mining. And again, these weren't measures to block mining, just to increase oversight over their operations and again, do a lot more of that abandoned mine cleanup issues like that. So it just shows you how intractable this issue is, and that this law has fundamentally not changed in more than 100 years. It's incredible how it hasn't changed, it hasn't been amended substantially again in more than 100 years.

Taylor Kuykendall:

All right, listeners, thank you so much for listening to the latest episode of Energy Evolution. I want to give a special shout out to our incredible podcast team members. I am once again, Taylor Kuykendall, but some of the other people that work for this podcast include my cohost, Eklavya Gupta, Camilla Naschert, Christopher Coats, Dan Testa, Karen Willenbrecht, and our wonderful agency partner, the 199. To stay up to date with our upcoming episodes, be sure to subscribe to Energy Evolution on your favorite platform. If you have any ideas for future themes or guests, we'd love to hear from you. All you have to do is shoot us an email at EnergyEvolution@spglobal.com. And if you liked what you heard today, do consider sharing the podcast with others or leaving a review on your preferred podcast platform. We can't wait to bring you more fascinating discussions in the future. Until next time, take care and stay tuned for more from Energy Evolution.