Lengthy permitting processes and limited access to sustainable financing are two of the strongest headwinds facing mining expansion in the US, experts said during the Giga USA 2024 conference held June 11-13 in Washington by Benchmark Mineral Intelligence.

Expanding domestic production of critical minerals such as lithium to curb dependence on foreign nations including China has been a bipartisan priority in recent years, bolstered by incentives included in the Inflation Reduction Act passed in August 2022. But much remains to be done to improve the reliability of timelines and financing for domestic mining projects if the US is to domesticate more of its minerals supply, experts said during the event.

"Timelines really need to be firmed up to become predictable," Ash Lazenby, head of cobalt for North America at diversified miner Glencore PLC, said during the event. Predictability is the number one barrier to domestic raw material projects, Lazenby said.

Speeding up permitting

Federal permitting timelines, a longtime subject of the mining industry's scrutiny, are a major factor affecting project risk and appeal, event speakers said.

"Once it takes longer to permit a project than, you know, not just one presidential term [but] possibly an entire presidency of eight years, then you have additional risks built in because the entire political climate can change," Richard Russell, senior vice president for government and political affairs at the National Mining Association trade group, said during a June 11 panel.

Changes to the federal permitting process are particularly important if the US hopes to quickly curb its critical minerals dependence on China, experts said.

"I think we generally have been leapfrogged in the west, and the only solution right now is to move even faster than [China], and to move even faster than them requires a complete rethink of the permitting process," James Rodriguez de Castro, founder and CEO of fluorspar company Mongolian Minerals Pte. Ltd., said during a separate June 11 panel.

Bipartisan efforts to modify mine permitting regulations within the current US Congress have largely centered around page limits and deadlines under the US National Environmental Policy Act (NEPA). Those reforms, however, overlook judicial changes that would do more to decrease mine permitting time, some speakers said.

"The NEPA process is not broken in this country ... the real issue we have in the US is judicial reform," Jonathan Evans, president and CEO of Lithium Americas Corp., said June 13 during the event. "[Legal appeals] can go on for decades. ... Investors don't want to invest in something that they don't know they're going to get done."

Republican-backed legislation from March 2023, which did not advance beyond the House, would have imposed filing deadlines for some judicial processes related to NEPA decisions. NEPA reform rules issued April 30 by the Biden administration did not include changes to legal review processes under the act.

More changes could be on the horizon, however, as Congress members keep permitting front of mind and call for further alterations.

"I'm working with my Republican colleagues, and hopefully we're going to be able to show you a complete [permitting] bill that does an awful lot of good things, that's going to continue to help, especially with judicial reforms and transmission and permitting and leasing and all of the things that we need on a timely basis," Sen. Joe Manchin (I-W.Va.), said June 12 during a keynote address.

Financing fluctuations

Accessing sustainable financing, particularly in a time of variable commodity prices, is another challenge for the burgeoning US critical minerals sector, experts said.

"We need some other measures such as long-term sustainable capital coming from the industry," Glencore's Lazenby said. "About two, three years ago, you had the conversations over having the lithium prices up through the roof. ... [Commodities] are cyclical, and this is something that then provides the challenges, I think, for industry and others to actually move projects along an unpredicted timeline."

For some miners, government support through loans or grants issued by agencies such as the US Energy Department's Loan Programs Office is one way to gain access to reliable financing.

"I do think the public debt we're providing out of the Loan Programs Office is the debt that is more reliable and dependable for people to use to build [and] bring their projects to fruition," Jigar Shah, director of the Loan Programs Office, said June 12. "All of you are telling us that the private commercial market is not a reliable partner right now on the debt side."

That financing is also likely to remain stable regardless of the outcome of the US elections in November, Shah and Lithium Americas' Evans said. Lithium Americas received a conditional commitment in March for a $2.26 billion loan from the Energy Department to support its Lithium Nevada project, also known as Thacker Pass.

For mining companies able to secure financing, they face a unique period of opportunity for the US sector.

"I think it's the beginning of a golden era [for extraction]," Venkee Sharma, executive chairman of water purification and lithium extraction technology Aquatech International LLC, told S&P Global Commodity Insights during the event. "Just like we have to have energy independence and the US did tremendous things to make that happen and make it a reality, the same thing will happen, in my opinion, on critical mineral security."