The Biden administration's push to revamp a 150-year-old mining law sparked concern throughout the nation's mining industry, with some fearing changes to the Mining Law of 1872 could potentially delay much-needed domestic investment in new critical mineral mining projects or stall developing mines from coming online.

The U.S. Department of the Interior launched an interagency working group on Feb. 22 to oversee potential revisions to the country's Mining Law of 1872, according to a fact sheet released by the White House. The working group, which will consist of specialists in mine permitting and environmental law, plans to offer recommendations to Congress by November and to "initiate updates to mining regulations" by the end of 2022, the White House said. In the coming months, the group will convene roundtables to collect public feedback.

The National Mining Association, or NMA, a group representing the U.S. mining sector, slammed the Biden administration's plans, saying the announcements left "significant reason for concern."

"We would hope that the administration's examination of minerals supply chain issues would focus on how to restore U.S. mining's competitiveness on the global stage, decrease our import reliance, and ensure that existing federal and state regulations are not duplicated," Conor Bernstein, vice president of communications at the NMA, told S&P Global Market Intelligence in an emailed statement. "Instead, however, Interior's language suggests it is using the supply chain review as a thinly veiled attempt to advance misguided Mining Law reforms that have failed in Congress time and time again."

Bernstein said the U.S. mining industry has been open to a "reasonable" royalty, but he cautioned the administration from "duplicating the robust environmental and financial assurance regulations that already exist on both the federal and state levels."

In conjunction with announcing its review of the nation's landmark mining law, the Department of the Interior said it would consider 11 "fundamental principles" during the process, including prioritizing recycling and reuse of critical minerals and giving government agencies the authority to protect sensitive ecosystems or tribal resources by "withdraw[ing] lands from mineral entry, where necessary." It also called on Congress to install new mining royalties and to create a reclamation program for hardrock mine sites, among other recommendations.

"If we're going to meet the needs of the clean energy economy while respecting our obligations to Tribal Nations, Western communities, taxpayers, the environment, and future generations, we need an all-of-government approach and the input of all Americans to make sure mining in this country is sustainable, responsible, and efficient," Secretary of the Interior Deb Haaland said in a statement.

Environmental nonprofit Earthworks, which focuses on mineral and energy development, lauded the federal agency's plan to update the mining law while still pressuring the Biden administration to uphold its commitments to communities historically affected by intensive mining.

"The cornerstone of President Biden's minerals policy must be reform of our nation's outdated mining regulations and investment in just and equitable solutions to create a circular minerals economy," Earthworks Policy Director Lauren Pagel said in a statement. "Our mining laws and rules must be updated to require the free, prior, and informed consent of impacted and marginalized communities to avoid furthering the historic and ongoing injustices from unfettered extraction."

The announcement by the White House to review the mining law came alongside several other actions geared toward building up the country's supply of minerals needed for a low-carbon energy transition. For example, the U.S. Department of Defense awarded $35 million to rare earth producer MP Materials Corp. to build out its separation and processing capacity at its rare earth facility in California.

On Feb. 11, the Department of Energy announced its intention to dedicate $2.91 billion to increase the manufacturing of advanced batteries as part of the bipartisan infrastructure package. And on Feb. 14, the DOE published a request for information to design and construct a new full-scale rare earth element and critical mineral refinery, saying it would allot $140 million to the program.

Reliance on imports

The latest push to overhaul U.S. mining laws comes nearly one year after President Joe Biden signed an executive order prompting federal agencies to review critical mineral supply chains for potential risks and vulnerabilities. On June 8, 2021, the Biden administration published reports on how the country could shore up the supply chain, including a recommendation to expand the country's domestic mining base.

The U.S. considers battery materials such as lithium, cobalt and graphite, along with 47 other minerals, critical to the country's economy and national security. On Feb. 22, the federal government finalized an expanded list of the country's official critical minerals, bringing the total list to 50 minerals, up from 35 minerals.

Still, the country remains heavily reliant on other countries for these materials. The U.S. imported 789,382 tonnes of its critical minerals in 2021, up 28.5% from 2020, according to the latest data analyzed by S&P Global Market Intelligence.

And despite the Biden administration's call to build out the country's supply of domestically mined battery materials, bringing new mines online in the U.S. has been arduous, industry analysts said. Several mining companies have faced hefty regulatory and permitting requirements as well as local opposition on environmental grounds.

Challenges ahead

On Jan. 26, the Department of the Interior canceled a pair of hardrock mining leases held by U.K.-headquartered mining company Antofagasta PLC's Twin Metals Minnesota LLC, effectively blocking the development of the $1.7 billion Twin Metals copper-nickel project, near the Boundary Waters Canoe Area Wilderness in northeastern Minnesota. The agency said the leases were "improperly renewed."

"We believe we have a strong legal case to defend our position," Ivan Arriagada Herrera, CEO of Antofagasta, said during a Feb. 22 earnings call.

Canadian lithium developer Lithium Americas Corp.'s Lithium Nevada, or Thacker Pass, project faced legal challenges from environmental groups, though the company received court approval to dig in July 2021 and said the permit process is on track. Australian lithium company ioneer Ltd.'s Rhyolite Ridge mine, also in Nevada, has been weighed down by extended environmental reviews and regulatory disputes but is moving forward, according to the company.

"My sense is that it's much easier politically to talk about building [electric vehicles] than it is to talk about mining," said Ian Lange, associate professor of economics and business at the Colorado School of Mines. Lange also served as a senior economist on the Council of Economic Advisers for the Trump and Biden administrations.

"There [has] been lots of success, as expected, on the downstream side where there's more agreement ... to get these EVs built in the U.S.," Lange said. "Thinking further upstream, where [companies] are going to find their minerals, there's a lot more consternation and disagreement within the Democratic party around having operating mines around."