Mike Lee Leads Senate Energy Committee Hearing To Consider Pending Legislation

1 hour ago

The Senate Energy Committee held a hearing on Wednesday to consider pending legislation.

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Transcript

00:00:00Today, we'll receive testimony on six bills listed in the notice for today's hearing.

00:00:05All these bills address domestic mining and mineral processing, related reporting and

00:00:12public information.

00:00:14Four of these measures have bipartisan co-sponsors, and a fifth has received some bipartisan support.

00:00:20Having served on this committee since 2011, I'm keenly aware that the United States has

00:00:25fallen behind China and other nations when it comes to mining and mineral processing.

00:00:31Today's hearing represents a first step in developing a legislative record on measures

00:00:36to address this very problem.

00:00:39Of course, not all of us will support each measure on which the committee will hear testimony

00:00:43today.

00:00:44I don't support all the bills listed on the notice for today's hearing.

00:00:48For example, although I agree that America needs to process more non-fuel minerals here

00:00:54at home, and I appreciate that Senator Hickenlooper's bill, S-596, has Republican co-sponsors, I've

00:01:02got strong reservations about the pilot program that this legislation would establish.

00:01:07Also, I included Senator Lujan's bill, S-859, in today's hearing as a courtesy.

00:01:13Senators Heinrich Weiden and Padilla are co-sponsors, along with a number of Democratic colleagues.

00:01:20Today's hearing is reflective of my intent to sharpen the committee's focus on legislation

00:01:24without diminishing our other responsibilities to consider presidential nominations or to

00:01:30conduct oversight within our committee's jurisdiction.

00:01:34We'll begin by moving pending nominations through the committee as soon as we have the

00:01:39requisite paperwork on these additional nominations.

00:01:44I want to thank Ranking Member Heinrich and all the members of the committee for helping

00:01:48identify the six bills that we will receive testimony on this morning.

00:01:55After I conclude my opening statement, we'll hear from Senator Heinrich for his opening

00:01:59statement, and thereafter, I'll introduce our distinguished panel of witnesses.

00:02:04We'll hear the witness testimony and then move to a round of questions from members.

00:02:09Members will have five minutes for their questions, and we'll alternate between senators on one

00:02:15side of the dais and then the other.

00:02:19If you're here today, it's because you understand that America's economic strength and national

00:02:24security hinge ultimately on securing a reliable supply of key materials.

00:02:31Currently, a majority of the world's mineral extraction and refinement are controlled by

00:02:37adversarial countries.

00:02:39We've seen what happens when we rely on these nations for essential resources.

00:02:44Supply chain disruptions, economic vulnerabilities, and ultimately, tragically, national security

00:02:51risks.

00:02:53It's time to fix that.

00:02:55The resources are here, right here in the United States.

00:02:58We just need the right policies in order for us to be able to unleash them.

00:03:04My home state of Utah, for example, has 40 of the 50 minerals deemed essential by the

00:03:10U.S. Geological Survey, yet bureaucratic delays and inconsistent regulations create often

00:03:17insurmountable barriers to domestic production.

00:03:20A 2024 S&P Global Survey found that U.S.-based mineral projects take an average of 29 years

00:03:30to move from discovery to production.

00:03:35That's the second longest timeline in the world.

00:03:38To put that in perspective, if a mine were needed for defense applications during World

00:03:43War I using today's permitting timelines, it wouldn't be operational until after World

00:03:48War II had come to an end.

00:03:51That is unacceptable.

00:03:53It's one of the reasons why I've introduced the Critical Mineral Consistency Act with

00:03:57my colleague from Arizona, Senator Mark Kelly.

00:04:01Right now, the Department of Energy and the Department of the Interior have separate parallel

00:04:07inconsistent lists of what counts as critical and what doesn't.

00:04:12That doesn't make any sense.

00:04:14In 2023, the Energy Department added copper to its list of critical materials, recognizing

00:04:21the metal as integral in energy technologies but also at risk for supply disruptions by

00:04:292035.

00:04:30But the U.S. Geological Survey left copper off its own list, even though it's vital for

00:04:35power grids, wind turbines, and electric vehicles.

00:04:40My bill would require these lists to match.

00:04:44These designations send a powerful message to investors.

00:04:48The U.S. government is backing these supply chains on national security grounds.

00:04:53If we want private investment in domestic production, we need clarity and we need consistency.

00:05:00That's exactly why we need to pass Senators Cortez Masto and Rish's Mining Regulatory

00:05:08Clarity Act to enable mining on federal land.

00:05:12But streamlining regulations is only part of the equation.

00:05:16This doesn't get the whole thing.

00:05:18We need to get to streamlining regulations.

00:05:21We need to go beyond that to truly strengthen our supply chains.

00:05:26We must also reject policies that create additional burdens on domestic production.

00:05:33Imposing additional federal royalties would only add cost and uncertainty, potentially

00:05:38shutting down existing projects and driving investment overseas.

00:05:45These specifically to nations with far worse, far inferior environmental and humanitarian

00:05:51standards than what we have here.

00:05:53It would create redundant fees, as domestic mining projects are already subject to state

00:05:58and local royalties and taxes.

00:06:01Simply put, these proposals would make our mineral supply chains less competitive, and

00:06:07it would make them more vulnerable, impacting everything from economic growth to national

00:06:12security.

00:06:13We cannot afford to drag our feet any longer.

00:06:17China is racing ahead in mineral processing and refining.

00:06:21We need to move faster, smarter, and more strategically.

00:06:26The United States has the resources, the talent, and the technology.

00:06:31We just need the right policies to lead this charge.

00:06:35That starts here, with hearings like this one that we're having today, with legislation

00:06:40like what we'll be discussing at this hearing.

00:06:43I look forward to working with my colleagues to ensure that we have the ability to unlock

00:06:47our full potential and secure America's mineral future.

00:06:53I now recognize Senator Heinrich for his opening statement.

00:06:56Thank you, Chairman.

00:06:58I am glad that we're holding this hearing today on a set of issues that are critically

00:07:02important to people and communities across the country, but particularly in the West.

00:07:08However, before turning to the topic of today's hearing, I think it's impossible to talk

00:07:13about any natural resource issue today without talking about the incredible damage being

00:07:19done to the workforce that manages those lands and resources for the American people.

00:07:25The illegal firings of probationary staff, rumored to be just the beginning of staffing

00:07:30reductions, is already reducing access to public lands, with locked gates and closed

00:07:35visitor centers at parks across the country.

00:07:39What's more, as we're considering legislation intended to increase mineral production on

00:07:44public lands, this administration is cutting staff and land agencies that process those

00:07:50same permits.

00:07:52With a voluntary resignation offer that encouraged some of the most experienced, highest performing

00:07:57staff at these agencies to leave public service, along with the legal firings of staff who

00:08:03were recently promoted because of their high performance, this administration is crippling

00:08:08the very public land agencies that evaluate plans for new mines.

00:08:13Anyone who is hoping for government efficiency out of this administration can see that what

00:08:17we're actually getting is government dysfunction.

00:08:20Now, to today's hearing in particular, modern technologies involve a lot of raw materials,

00:08:27and as our scientists and engineers find new and cheaper ways to generate and store energy,

00:08:32the types and quantities of minerals used in energy technologies will only continue

00:08:37to grow.

00:08:39Responsible domestic mining and processing can be part of the solution, but we can't

00:08:42get there without outdated laws that don't reflect the nation's needs and priorities

00:08:47today.

00:08:48The law that governs metal mining on most public lands in the West was written in 1872,

00:08:56more than 150 years ago.

00:09:00Yellowstone had been a national park for barely two months when the mining law was

00:09:03signed, and New Mexico would still be a territory for another 40 years.

00:09:08We have actually learned quite a bit since 1872, how to manage public land for public

00:09:14benefit, how to conserve habitat for sustainable fish and wildlife populations, how to protect

00:09:19our drinking and irrigation water from heavy metals pollution, and how to ensure a fair

00:09:24return for the commercial development of resources that, after all, belong to the American people.

00:09:31And yet, our hard rock mining law remains stuck in the 19th century, right when we need

00:09:36to build the energy infrastructure of the 21st century.

00:09:41Updating the 1872 mining law could bring public land mining into the 21st century and provide

00:09:46the minerals that we need for the energy technologies of today.

00:09:51But we're here today to talk about more than just mining, because mining alone won't solve

00:09:55our supply chain dependence on adversaries unless we also invest in the entire life cycle

00:10:01of minerals.

00:10:02This includes increasing our domestic mineral processing capacity, continuing the on-shoring

00:10:09of manufacturing through the Chips and Science Act, and investing in recycling technology

00:10:15so that we can reuse the minerals that we already have.

00:10:19The fact that we export copper and rare earth materials, as well as things like batteries,

00:10:25to China in the form of electronic waste is one of the more infuriating realities of our

00:10:31current system.

00:10:32We should be capturing and reusing the minerals present within our borders in devices, vehicles,

00:10:38batteries, and machinery, rather than paying to ship them overseas.

00:10:43I firmly believe we can find ways to secure the minerals we need for new energy technologies

00:10:48while also protecting our water, air, and public lands.

00:10:52I believe it's possible to open new mines while giving local communities a say in whether

00:10:57a particular location on public land is an appropriate place for a new mine, just like

00:11:03we do for oil and gas and other uses.

00:11:05And I'm confident that we can find a way to finally fund the cleanup of legacy mine pollution

00:11:11that contaminates streams and rivers across the West.

00:11:15I hope that today's hearing will be a step towards all of those goals.

00:11:19Thank you, Senator Heinrich.

00:11:23I'll now be pleased to introduce each of our witnesses.

00:11:27It's my pleasure first to introduce and welcome Brian Summers, the president of the Utah Mining

00:11:33Association.

00:11:34Mr. Summers joined the association as its president back in 2019.

00:11:39He previously led the Utah Science, Technology, and Research Initiative as its managing director.

00:11:45In his career, Mr. Summers served in leadership and senior staff positions in the Utah state

00:11:51government and also in private industry.

00:11:54Our next witness is Mr. Rich Haddock.

00:11:57Mr. Haddock is an attorney who's worked in the mining industry for more than 30 years.

00:12:02He spent the last 25 years of that time at Barrick Gold Corporation in both legal and

00:12:08operational roles and retired as general counsel in 2022.

00:12:13Mr. Haddock is currently a senior advisor to Barrick.

00:12:16He's also a member of the board of directors of Perpetua Resources Corporation.

00:12:20I'm pleased to relate that Mr. Haddock holds a degree in geology from Brigham Young University

00:12:26and a law degree from the University of Utah School of Law.

00:12:30Finally, we'll hear from Mr. Chris Wood, the president and CEO of Trout Unlimited since

00:12:372001.

00:12:39Before joining Trout Unlimited, Mr. Wood served as the senior policy and communications advisor

00:12:46to the chief of the U.S. Forest Service, capping a career in government.

00:12:51He's the author and co-author of numerous papers and articles and three books.

00:12:57Okay, so we'll now hear from each of the witnesses.

00:13:01Mr. Haddock, we'll start with you, then move to Mr. Summers, and then Mr. Wood.

00:13:06Chairman Lee, Ranking Member Heinrich, Senator Cortez Masto, and members of the committee,

00:13:11thank you for inviting me to testify today.

00:13:13I believe it is critical to competitiveness and national security for the United States

00:13:17to develop a secure mineral supply chain.

00:13:21One only needs to look at China's export ban of certain strategic minerals to understand

00:13:25this.

00:13:26I believe we can do much of what is necessary here at home with the domestic mining industry.

00:13:32Over the last 40 years, production of many critical minerals has become concentrated

00:13:37in just a few mines in unfriendly jurisdictions where global demands are met by a race to

00:13:42the bottom of price, of human rights standards, of labor standards, and of environmental standards.

00:13:49Often, critical minerals are produced only as byproducts and are found in very small

00:13:53quantities along with gold, copper, lead, zinc, iron, and other economically viable

00:14:01minerals.

00:14:02The key to domestic production of as many of these minerals as possible is a healthy

00:14:06ecosystem for the U.S. mining industry, policy, expertise, and investment.

00:14:12The first step in creating a healthy mining ecosystem is before you today as S. 544 of

00:14:17the Mining Regulatory Clarity Act.

00:14:19This is a bipartisan bill I testified in support of at the request of chairs from both parties.

00:14:24This bill addresses the confusion, delay, and continuing litigation created by the Ninth

00:14:28Circuit Rosemont decision, which upended decades of mining law interpretation and agency

00:14:34practice.

00:14:35Rosemont, if not addressed, would make it nearly impossible to cite mine support facilities

00:14:39like mills, shafts, crushers, tailings facilities, and roads.

00:14:44In BLM regulatory parlance, these are called ancillary facilities, but I think necessary

00:14:49is really a better adjective because you can't have a mine without one, and I'm grateful

00:14:53that the committee recognizes that.

00:14:56The version of the MRCA before you today responds to criticisms of the original bill, S. 1281,

00:15:01introduced by Senator Cortez Masto in the 118th Congress.

00:15:05Initially, industry and environmental groups worked together to develop a detailed savings

00:15:09clause to diffuse the criticism.

00:15:11When it persisted under Senator Cortez Masto's leadership, committee staff worked with industry

00:15:16representatives and environmental group representatives to produce this version of the bill.

00:15:21It's the same language this committee advanced last fall as part of the Energy Permitting

00:15:26Reform Act of 2024.

00:15:28The MRCA is narrowly tailored.

00:15:30Over the last 50 years, less than one-third of 1% of the land in Nevada has been included

00:15:36in a plan of operations.

00:15:37This is the state with the most mining and 85% federal land.

00:15:42Only a portion of the ground inside a plan of operations is disturbed, and only a part

00:15:46of that disturbed ground contains ancillary facilities.

00:15:50The subsection C mill sites created by the bill can only be located inside a proposed

00:15:56plan of operation, which only happens when you have a real mine.

00:16:00Real mines are few and far between, and honestly, I wish we had a few more, and perhaps our

00:16:04critical mineral concerns might not be as acute as they are today.

00:16:09So with that, I applaud that the Congress recognizes the strategic importance of minerals

00:16:14as represented by the three critical mineral bills before the committee.

00:16:20I thank the sponsors for their work on these bills.

00:16:23The Chairman's Critical Mineral Consistency Act is common sense, one list that is dynamic

00:16:29to guide policy.

00:16:31I applaud the goals of the Critical Minerals Future Act, S-596, because it recognizes there

00:16:36are market forces that inhibit the domestic production of these minerals, and proposes

00:16:42ways to begin to address those forces.

00:16:45I thank Senator Hickenlooper and his staff for their extensive outreach to industry and

00:16:48effort on the bill.

00:16:49I also appreciate that S-789 recognizes the U.S. needs to be as resource-savvy as our

00:16:55global competitors.

00:16:58Importantly, I think these bills underscore the need to focus on and improve our knowledge

00:17:03of potential domestic resources for these minerals, which I believe should be our long-term

00:17:08primary goal.

00:17:10And finally, while not today's topics, I would be remiss if I didn't, number one, thank

00:17:14the committee and Environment and Public Works for recognizing that permitting and associated

00:17:19judicial review needs to be improved for your ongoing work on these issues.

00:17:24And number two, acknowledge, thank, and congratulate Senator Heinrich for his tireless effort on

00:17:28the Good Samaritan bill last year, which was a great step in the right direction, and we

00:17:32were delighted to see signed into law.

00:17:35Thank you, and I look forward to any questions.

00:17:38Thank you, Mr. Haddock.

00:17:39We'll hear from Mr. Summers next.

00:17:43Chairman Lee, Ranking Member Heinrich, and other members of the committee, thank you

00:17:46for the invitation to testify.

00:17:49Mining is a critical industry in Utah, contributing $7.7 billion to the state's GDP, supporting

00:17:54nearly 57,000 direct and indirect jobs, empowering Utah's broader economy by producing the coal,

00:18:00which provides 62 percent of Utah's low-priced electricity.

00:18:04Mining jobs in Utah are family and community-sustaining jobs, with mining salaries averaging 46 percent

00:18:09more than the average Utah wage.

00:18:11The recent actions of China to ban or restrict the export of critical minerals or mineral

00:18:15processing technologies, which they control, should highlight the need to strengthen our

00:18:19domestic mining and mineral processing capabilities and reassure critical mineral supply chains.

00:18:25Of the 10 minerals or mineral groups currently subject to Chinese export bans or restrictions,

00:18:30rare earth elements, antimony, germanium, gallium, graphite, tungsten, tellurium, bismuth,

00:18:34molybdenum, and indium, Utah has the capacity to produce nine.

00:18:39Utah is currently producing rare earth elements, tellurium, and molybdenum.

00:18:42Utah has proven and very rare primary resources of germanium, gallium, and indium, and significant

00:18:47historical production of antimony, tungsten, and bismuth.

00:18:51As the Chairman mentioned, Utah hosts 40 of the 50 critical minerals on the Department

00:18:55of the Interior's current critical mineral list, 40 of the 50 critical minerals in just

00:19:00one state, admittedly one with an unusually rich and diverse mineral endowment, add occurrences

00:19:05of critical minerals in other states, and there is little reason the U.S. should be

00:19:09as dependent as it is on foreign critical mineral supply chains, again, with our geopolitical

00:19:13adversary China as the dominant global producer.

00:19:17Our current situation is the result of a lack of investment in and support of our domestic

00:19:21mining and mineral processing industries, as well as outright market manipulation by

00:19:25China and other foreign mineral producers.

00:19:28The U.S. mining industry is committed to responsibly developing our mineral resources,

00:19:32and it is appropriate that the U.S. has stringent labor, safety, financial, and environmental

00:19:37regulations.

00:19:38However, these regulations must also be rational, stable, economically feasible, and not misaligned

00:19:43with the regulatory environments of other free and developed nations with major mining

00:19:48industries, nations like Canada and Australia.

00:19:51The Chairman also mentioned the report from S&P Global that found that the U.S. has the

00:19:54second longest timeline in the world for developing a new mine, 29 years, the worst

00:19:59record of any country in the world except for Zambia.

00:20:02That report states, quote, the development of a mine in the U.S. is not only long and

00:20:06costly, it is unusually uncertain.

00:20:09While developing a mine in Canada or Australia can also take a long time, those mines do

00:20:12reliably enter production.

00:20:14In the U.S., even if mines receive all required permits, they are subject to higher litigation

00:20:18risk.

00:20:19Uncertainty in litigation risk may explain why exploration budgets committed by investors

00:20:23to Canada and Australia over the last 15 years have been 81 percent and 57 percent

00:20:29higher than to the U.S., close quote.

00:20:32If the U.S. is to have any chance of becoming self-sufficient in supplying its own critical

00:20:35mineral needs, Congress and the federal government must commit to real permitting reform, litigation

00:20:41reform, ending federal land and mineral withdrawals, renewing the diminishment of state primacy

00:20:46for the enforcement of federal labor and environmental laws, reversing the decline of mining engineering

00:20:51programs in U.S. universities, providing grants for research into new mineral extraction and

00:20:56processing technologies, and providing incentive to attract more mineral exploration and other

00:21:01mining investment to the U.S.

00:21:03A positive first step is the recent introduction of the Critical Mineral Consistency Act of

00:21:072025 by Chairman Lee and Senator Kelly.

00:21:10This act will end the misalignment between the Department of Interior's critical mineral

00:21:13list and the Department of Energy's critical materials list.

00:21:16If the act is passed, it will have a positive effect on Utah as we are a major copper-producing

00:21:21state.

00:21:22In fact, Utah is home to one of the largest and most productive copper mines in the world,

00:21:25the Rio Tinto-Kennicott-Bingham Canyon Mine.

00:21:28Rio Tinto-Kennicott is not only a world-class copper operation and has one of only two working

00:21:32copper smelters in the U.S., it is also Utah's largest producer of critical minerals, currently

00:21:37producing tellurium, platinum, and palladium, and with the potential to produce rare earth

00:21:42elements, indium, germanium, gallium, and many other critical minerals through secondary

00:21:46recovery.

00:21:47The example of Rio Tinto-Kennicott highlights the fact that many critical minerals are co-mingled

00:21:50with base metals, precious metals, and other mineral commodities, and why we must not only

00:21:55support and invest in new mines, but also expand production and secondary recovery at

00:21:59existing mines and mineral processing facilities.

00:22:02Another Utah success story on this front is the Energy Fuels White Mesa Mill in Blanding,

00:22:06Utah.

00:22:07The White Mesa Mill is the last functioning conventional uranium mill in the U.S. and

00:22:11which is now also processing monazite, a mineral byproduct which contains uranium but also

00:22:15high concentrations of rare earth elements.

00:22:18Taking an existing and already permitted facility and a high dose of rural Utah ingenuity,

00:22:23the White Mesa Mill has created the most advanced rare earth element processing operation outside

00:22:27of China, a great step toward ending that nation's stranglehold on the rare earth supply

00:22:31chain.

00:22:32Again, I appreciate the opportunity to highlight some of Utah's success stories and to discuss

00:22:35how the Federal Government can better support State efforts to lead on the critical minerals

00:22:40front.

00:22:41I look forward to any questions from the committee.

00:22:44Thanks, Mr. Simmers.

00:22:45Mr. Wood, you're next.

00:22:47Chairman Lee, Ranking Member Heinrich, and other committee members, thank you very much

00:22:52for inviting me to testify today.

00:22:55Trout Unlimited has been involved in mining issues for a long time, from protecting special

00:22:59places such as Bristol Bay in Alaska to working with the mining industry and other partners

00:23:05to clean up legacy pollution from abandoned mines.

00:23:09Domestic mineral production helped to build our nation.

00:23:12It won two world wars.

00:23:14It fueled westward expansion and provides the raw materials for modern society.

00:23:22At the same time, historic mining left hundreds of thousands of abandoned mines that dot the

00:23:26landscape, leaching their toxic brew of lead, zinc, cadmium, arsenic, and other pollutants

00:23:32into our rivers and streams.

00:23:35To be certain, there is no constituency for acid mine waste and orange rivers.

00:23:40There is, however, a bipartisan commitment to clean up abandoned mines, to encourage

00:23:45responsible mining, and to propel the needs of a clean energy future while making our

00:23:50rivers and streams cleaner and our communities healthier.

00:23:53Working together, we have an opportunity to craft a path forward that is collaborative,

00:23:58innovative, and responsible.

00:24:01In 1872, the General Mining Law helped to spur settlement of the West.

00:24:06Today, it is an anachronism in need of modernization.

00:24:11The EPA estimates that 40% of western headwater streams are negatively affected by abandoned

00:24:17hard rock mines.

00:24:19These are, by and large, not contemporary mines.

00:24:22They were built many decades or even a century ago.

00:24:25An analysis conducted by Trout Unlimited scientists found that approximately 110,000 miles of

00:24:32streams, enough to encircle the earth four times, are listed as impaired and abandoned

00:24:38mines are a major source of these impairments.

00:24:42Thanks last year to the leadership of Senator Heinrich, Senator Risch, and many other members

00:24:46of this committee, Congress passed the Good Samaritan Remediation of Abandoned Hard Rock

00:24:52Mines Act of 2024.

00:24:55The new law is proof that the mining industry and conservation interests can find common

00:24:59ground and pass common sense mining legislation.

00:25:03Tens of thousands of abandoned mines negatively affect our nation's waters.

00:25:08The reality is that this is a completely solvable problem.

00:25:12Just about every commodity produced from our public lands has an associated royalty or

00:25:17fee that helps to address remediation from legacy development.

00:25:22I appreciate that mining companies must make years and often millions of dollars in investments

00:25:27before they can mine.

00:25:29But there should be a common sense royalty once new mines are up and running to help

00:25:34pay for the cleanup of legacy mines.

00:25:37The coal industry alone has paid more than $12 billion in royalties since 1977 to help

00:25:44clean up abandoned coal mines across Appalachia and parts of the West.

00:25:49If we can do it with coal, we can do it with hard rock minerals, especially given the immense

00:25:53need.

00:25:54Finally, professional land managers should be able to deny a mine if it is proposed in

00:26:00a community drinking water supply, a sacred site, or an exceptional fish and wildlife

00:26:05habitat.

00:26:07But that denial should happen early in the process, before a mining company has invested

00:26:12tens of millions of dollars in exploration or development.

00:26:17Between the industry's desire for certainty, the confusion caused by the Rosemont decision,

00:26:22the obvious need for a royalty, and the equally obvious need for some measure of discretion

00:26:27as to where mining can and should occur, there is an agreement to be had.

00:26:32We have fought and bickered and disagreed over mining on public lands for over 100 years.

00:26:38Certainly there is a common sense compromise within our reach that would provide sufficient

00:26:42dedicated funding for abandoned mine cleanups, allow that certain landscapes are inappropriate

00:26:48for mining, and at the same time address the legal and regulatory certainty needed

00:26:53for investment by the mining industry.

00:26:56You have Trout Unlimited's commitment to continue working in good faith to strike that balance.

00:27:02Thank you for the opportunity to be here today.

00:27:06Thanks so much for your opening testimony.

00:27:08We'll now proceed to questions.

00:27:09We'll go alternating between Republicans and Democrats in five-minute rounds.

00:27:16Mr. Summers, I'd like to start with you.

00:27:18Last month I introduced a bill called the Critical Mineral Consistency Act, and I did

00:27:24this in order to try to align the Department of the Interior's critical mineral list with

00:27:29the Department of Energy's critical materials list.

00:27:34Can you explain for us, Mr. Summers, why both critical minerals and critical materials are

00:27:41essential to the United States, particularly with regard to our economic, energy, and national

00:27:47security?

00:27:48Absolutely.

00:27:49Thank you, Mr. Chair.

00:27:52I applaud you for introducing this particular piece of legislation, because the disparities

00:27:59between the lists that the federal government has maintained, especially between the DOI

00:28:03list and the DOE list, has been perplexing to the mining industry for a number of years

00:28:08now.

00:28:09And in many cases, again, when you're talking about critical minerals specifically, a lot

00:28:12of these critical minerals, as I mentioned in my testimony, are co-located with base

00:28:17metals and precious metals and other things that may not appear on either of these lists.

00:28:21But in particular, in the case of Utah, again, our most productive copper mine is also our

00:28:27most productive critical mineral mine.

00:28:29And so making sure that you have equal consideration from the federal government for both the critical

00:28:35minerals and minerals like copper is really essential.

00:28:40The other issue that comes to the fore here is that regardless of what national defense

00:28:47technology or energy transmission technology you're talking about, I mean, they're going

00:28:51to rely both on things like copper and on some of the more boutique minerals that are

00:28:56on the critical minerals list.

00:28:57And so while you have a large number of rare earths, for example, that will go into an

00:29:02F-35, which we have a lot of in Utah, you also need a lot of copper to make an F-35.

00:29:07You also need vanadium for the alloys that go into those airframes.

00:29:11And so, again, having some consistency from the federal perspective when it comes to any

00:29:16potential fast-track permitting or grants and research and other things is essential

00:29:22in order for us...

00:29:23Why is it a matter for us to try to produce those in the United States rather than importing

00:29:25them?

00:29:26Right.

00:29:27Absolutely.

00:29:28I mean, again, as you've seen from the recent actions of China, I mean, if you have something

00:29:31like antimony, for example, that's banned, that prevents us from manufacturing munitions

00:29:36in the United States because those are critical to go into, again, munitions and national

00:29:40defense systems and other things.

00:29:42And so it does become a national security risk if we're relying on foreign producers

00:29:47and especially adversarial foreign producers for those minerals.

00:29:50Makes sense.

00:29:51Mr. Haddock, in your testimony you noted that Nevada, where Barrick operates, is a state

00:29:59with a lot of federal land.

00:30:01And Utah faces, of course, a similar challenge with 67% of our land being owned by the federal

00:30:07government.

00:30:08When it comes to mineral development, what additional hurdles do companies face when

00:30:13trying to develop these things when they're operating on federal land as compared to either

00:30:18state land or private land?

00:30:23The additional hurdle is permitting.

00:30:25It's the timeline for permitting.

00:30:28Permitting timelines on state or federal land would be much quicker.

00:30:32And then, of course, the litigation risk on the tail end where almost every project is

00:30:37litigated.

00:30:38It makes it very difficult to spend a lot of money.

00:30:42Like some projects, you would spend half a billion dollars before you'd get to the point

00:30:46of permitting it.

00:30:48That's a lot of money to sit there for a long time.

00:30:51But when you're going in to operate on either state land or private land, there's still

00:30:54permitting required.

00:30:56There's still a potential litigation risk.

00:30:58Tell me how that risk and the corresponding delays compare between the two.

00:31:05There is kind of a broader range of litigation risk because of, number one, NEPA.

00:31:13The agencies, the federal agencies that administer the public lands, do an absolutely great job

00:31:21of bringing together mountains of data, analyzing all the range of issues that they have to

00:31:29consider under the various laws.

00:31:32But what tends to happen in those cases is that the courts tend to flyspeck the EISs

00:31:38and nitpick until they find one issue that they don't think has been adequately addressed.

00:31:43And then you're back to supplemental EIS.

00:31:46Okay, so does that suggest that the additional time consumed in the federal process doesn't

00:31:53necessarily produce a cleaner, safer outcome?

00:31:59It's more flyspecking and time consuming, but not necessarily with a corresponding benefit

00:32:06to environmental quality.

00:32:08And if this is the case, how does this impact, how does that situation, compounded by recent

00:32:14court decisions, how does that impact investment and project development?

00:32:18Well, it makes it harder to invest, but you're absolutely right.

00:32:23NEPA was enacted before many of the detailed federal environmental laws that have performance

00:32:28standards.

00:32:29And what commonly happens is, whether you're working on state land or private land or federal

00:32:36land, you have to comply with all those laws.

00:32:38What typically happens through an EIS process is additional mitigation measures are imposed,

00:32:43additional performance standards are imposed, and then they're litigated over.

00:32:47So that's kind of the additional burden from that.

00:32:54My time's expired.

00:32:55Senator Heinrich.

00:32:56Thank you, Chairman.

00:32:58Mr. Wood, according to the GEO, there are at least 140,000 abandoned hard rock mine

00:33:04features just on federal land.

00:33:07And GEO actually points out itself that that information, where those sites are, is so

00:33:13lacking that the true number may actually be closer to half a million features on public

00:33:18land alone.

00:33:20That leads into the dynamic that you described of something like 40 percent of headwater

00:33:25streams being impaired, places that should run clear and be home to trout running orange

00:33:34and acidic, which certainly impacts both irrigation, municipal water supplies.

00:33:41Talk us through what the primary impediments are to being able to clean up those sites,

00:33:46and how much of it is purely a resource constraint.

00:33:50Well, thanks to your good work, sir, on the Good Samaritan remediation of Abandoned Hard

00:33:56Rock Mines Act, one of the primary problems, liability issues, are at least they're being

00:34:02addressed in a pilot program over the next seven years.

00:34:07But the single largest, the most fundamental challenge that we face on cleaning up abandoned

00:34:12mines is that there's no dedicated funding source for it.

00:34:16So TU has managed to do about 50 abandoned mine cleanups around the country.

00:34:21And the way we're able to do that in spite of the liability is we get federal agencies

00:34:24to agree to hold the liability for us.

00:34:26And it's only on public land that we can do that.

00:34:30But we have to cobble, we have to beg, borrow, and steal to get that money.

00:34:33It's membership dollars, it's the mining industry, frankly, has been generous in supporting

00:34:38a lot of abandoned mine cleanups, foundations, private citizens.

00:34:43There's no, unlike with coal, unlike with oil, unlike with gas, there's no dedicated

00:34:48funding source that we can rely on.

00:34:50Mr. Barrick, is it reasonable to expect mining companies to make some contribution towards

00:34:56that effort?

00:34:58Senator, the way, let me answer that one this way.

00:35:06We have said over the years that we would support a reasonable net royalty.

00:35:12Now there are, as you've heard me say before, there are issues about that, including that

00:35:17we should look at total government take.

00:35:19And when you look at total government take with the form of taxes and royalties to state

00:35:25and local governments, the amount that you pay to operate in Nevada is really commensurate

00:35:31with what we would pay to operate in Australia or Canada.

00:35:36That said, we support a reasonable net royalty.

00:35:38Net royalty is preferable because in the hard rock mineral context, the ore bodies are extremely

00:35:45complex and different, and net represents, net actually recognizes the difference between

00:35:52ore bodies.

00:35:53You don't have to go about determining what kind of royalty rate for which ore body.

00:35:59The other thing I would note is the way, we have to remember the state and local taxes

00:36:04because the way the mining law was set up to begin with was it really left taxation

00:36:10and royalties to state governments.

00:36:13It's interesting because when they pulled oil and gas out of the mining law in 1920,

00:36:19they made the royalty a federal royalty, but then the federal government collects it

00:36:23and then distributes it back to the states.

00:36:26And so with that, I would say that we support it.

00:36:31We would support actually a reasonable net royalty that is earmarked at first for abandoned

00:36:36mine land reclamation.

00:36:38Great.

00:36:39Now, that's very helpful.

00:36:40So it sounds like the main issues here are creating some sort of regulatory certainty

00:36:47and permitting certainty so that capital doesn't have to be ridiculously patient.

00:36:55There's the issue of actually being able to have some sort of revenue source that is reasonable

00:37:01to be able to clean up the existing mine lands problem.

00:37:05And then the issue that Mr. Wood brought up of some level of discretion within the public

00:37:10land management agency so that you don't get into the sort of intractable arguments that

00:37:16oftentimes lead to litigation.

00:37:20Do you foresee, Mr. Haddock, a potential sort of global solution here where you could have

00:37:28a lot more certainty at the front end and then come up with a reasonable number that

00:37:33does take into account those variations and then be able to have a more predictable way

00:37:39to clean up all of the legacy issues?

00:37:43I think all of those things can happen without wholesale revision of the mining law.

00:37:48Those are discrete issues that I think can be addressed discreetly.

00:37:53My view on kind of certainty up front is that's what the BLM's land resource planning process

00:37:59is about.

00:38:01And I think that's where the certainty needs to come.

00:38:04That's where the resources that need to be protected need to be identified.

00:38:10Because once you start exploring, you need to be able to continue.

00:38:13So you basically need a map of like where this is going to be embraced and it's permissive

00:38:22and where are the places where maybe there's enough of a conflict that it's not appropriate.

00:38:28And that process exists and is in place today in the BLM districts.

00:38:34Senator Jaynes.

00:38:35Chairman, thank you.

00:38:38Talk about the Bull Mountains coal mine.

00:38:40This is a mine near Roundup, Montana.

00:38:43Plays a crucial role in Montana's energy economy.

00:38:46The mine employs 250 people.

00:38:49These are high paying jobs with good benefits.

00:38:51Generates over $90 million a year in state, local, and federal taxes and revenues.

00:38:59It is the lifeblood of Muscle Shell County.

00:39:02Unfortunately, these jobs are now at risk and the life of the mine and the community

00:39:07it serves are in limbo.

00:39:10It's because of the checkerboard federal ownership in Montana, as well as this long wall mining

00:39:16process, this mine is running out of permitted coal and might be forced to close.

00:39:22This is why I introduced Senate Bill 362.

00:39:25It's a targeted short-term fix that allows the mining of very specific federal minerals

00:39:32to ensure that we have enough time to find a longer term solution for the mine.

00:39:38This bill simply allows the mine to continue mining the same materials it has for decades

00:39:44under the same permit it's had for years.

00:39:48Last Congress, this committee passed this identical bill with a bipartisan vote.

00:39:54I want to thank my colleagues in this committee for working with me to make that happen and

00:39:58I hope we can again pass this short-term fix so these workers in Montana can continue

00:40:04to provide for their families.

00:40:06Mining jobs saw a major hit in Montana over the last couple of years.

00:40:12The Bull Mountains mine recently had to lay off dozens of hardworking Montanans because

00:40:16they've run out of permitted coal.

00:40:19And recently, the Stillwater mine, the United States' only platinum and palladium mine,

00:40:27which is used in catalytic converters to keep our air clean, it recently laid off 700 Montanans.

00:40:36We can't afford the loss of any more jobs for these Montana miners.

00:40:41That's why we must pass this bill and get it on the President's desk.

00:40:45Mr. Summers, as the President of the Utah Mining Association, you understand how vital

00:40:51the mining industry is to building jobs, local communities, national security, tax revenues.

00:40:58In Montana, coal-fired plants provide the largest share of Montana's electricity generation,

00:41:06accounting for 45 percent of Montana's in-state generation.

00:41:12The coal industry not only supplies Americans with low-cost, reliable, and secure source

00:41:17of energy – it's called baseload power – but it also generates millions of dollars

00:41:23of federal, state, and local revenue per year, and creating hundreds of very good-paying

00:41:29jobs in Montana.

00:41:32Mr. Summers, can you speak to the importance of supporting our coal jobs and ensuring that

00:41:37coal mines, like the Bull Mountains mine in Montana, continues to provide revenue for

00:41:43our states as well as our counties?

00:41:46Absolutely.

00:41:48Thank you, Senator.

00:41:49Utah is very similar to Montana with regard to its coal industry.

00:41:54We also deal with checkerboard ownership.

00:41:56We deal with underground mines and the planning that has to go into that.

00:42:02Like Montana, the vast majority of our electricity is provided by coal-fired generation.

00:42:08I mentioned in my testimony that mining jobs on average in Utah pay about 46 percent more

00:42:13than the Utah average wage, but when you go into our coal-producing counties, that number

00:42:17can actually go over 100 percent.

00:42:19So in many of our coal-producing counties, especially in central Utah, mining companies,

00:42:24coal mining companies, are by far the largest private employer and provide very essential

00:42:28revenue, and not just for the direct mining jobs, but for all of the service jobs that

00:42:32go into those particular industries.

00:42:36And Utah in particular, like Montana, has made a very concerted effort to ensure that

00:42:41our coal mines stay healthy and also that our coal-fired generation plants are preserved

00:42:46and are able to provide that essential baseload power so that we can continue to have the

00:42:50type of economic growth that we've become used to in Utah over the last number of years.

00:42:54It's fascinating when you have conversations with technology leaders today, you're chatting

00:42:59with whether it's Google or AWS, Microsoft and others, before we start talking about

00:43:06the technology, perhaps AI, the first conversation right now is the shortage of baseload power.

00:43:12It is the constraint for innovation here for our country long-term, and grateful that we

00:43:17have baseload power, these coal-fired plants.

00:43:19Chairman Lee, I want to close by saying thanks for holding this hearing.

00:43:23I can't stress enough the importance of passing this bill, Senate Bill 362, it's been passed

00:43:30before this committee, ensuring that the Roundup and the mussel shell community isn't left

00:43:35behind because of federal inaction.

00:43:37The federal government has been slow rolling this.

00:43:39This is a short-term fix to allow the process to finally become completed for a long-term

00:43:45solution.

00:43:46This will allow enough time for the Trump administration to finalize a new permit, for

00:43:50Congress to pass legislation like my Crow Revenue Act to bring long-term economic certainty

00:43:56for the workers, Mussel Shell County, as well as the Crow Reservation and the Crow Nation.

00:44:02Chairman, thank you.

00:44:04Thank you, Senator Daines.

00:44:05We'll turn next to Senator King.

00:44:07Thank you, Mr. Chairman.

00:44:08This discussion reminds me of a little-known biblical provision where God came to Moses

00:44:14and said, I have good news and bad news.

00:44:16Moses said, what's the good news?

00:44:17God said, I'm going to allow you to part the waters of the Red Sea.

00:44:20My people will escape.

00:44:21The waters will then come back and engulf Pharaoh's army.

00:44:26Moses said, God, that's wonderful.

00:44:27What's the bad news?

00:44:29You prepare the environmental impact statement.

00:44:34Sorry, I couldn't resist.

00:44:40Mr. Haddock, why does the permitting take so long?

00:44:42I used to work on permitting of energy projects.

00:44:44We thought four or five years was a long time.

00:44:47Why does it take 29 years?

00:44:49What are the bottlenecks?

00:44:52The permitting itself doesn't take 29 years, but the average EIS is about four years for

00:44:59mining project now.

00:45:01There is a massive amount of baseline data and work that has to go in back in an iterative

00:45:08process with the agency.

00:45:12There are just detailed studies, and then at the tail end, there are massive numbers

00:45:21of comments that then have to be responded to that require additional work.

00:45:26It is just a very long process that is, at this point, managed by very dedicated, very

00:45:33capable federal employees that are stretched very thin.

00:45:37We hope that those federal employees will still be here after the next several months,

00:45:41but that's another subject.

00:45:47How do we look on cooperation with our international neighbors?

00:45:50For example, Canada, Australia, allies.

00:45:56Do we need to have more cooperative relationships in that situation, Mr. Summers?

00:46:02Talk about mining as an international factor.

00:46:08I think that we do have to distinguish between countries that are allies and countries that

00:46:13have similar environmental and labor standards like Canada and Australia, as you mentioned.

00:46:18A good example of cooperation that we see in Utah is the production of tellurium.

00:46:23Tellurium is mined at the Bingham Canyon Mine, Rio Tinto Canyon, Rio Tinto Kennecott Mine,

00:46:28and then it's actually sent to Montreal for processing, and then it's sent back to Utah

00:46:31and to Arizona for manufacturing.

00:46:33I don't want to calculate the tariff on that going forward.

00:46:37Sure.

00:46:38I do think that, again, finding ways to utilize allied supply chains and also utilize existing

00:46:45facilities is very important, because in many cases, you're going to be able to get to actual

00:46:49production much quicker if you're utilizing existing facilities than if you're trying

00:46:53to build them from greenfield operations.

00:46:56Absolutely.

00:46:58One word that hasn't been mentioned much this morning is processing.

00:47:02My understanding, for example, that a great deal of lithium comes from Australia, but

00:47:05something like 85% of the processing is done in China.

00:47:09Should we also be talking about processing when we're talking about mining?

00:47:12Aren't they interrelated in a way, because ultimately, we need the product, the result

00:47:18of the processing?

00:47:20Absolutely.

00:47:21If you're producing extracted minerals here in the U.S., but you're having to send them

00:47:24to China or another unfriendly nation for processing, then you haven't really solved

00:47:29the problem at all.

00:47:30Processing needs to be part of this conversation at every level.

00:47:33That should be part of what we're discussing here in terms of bottlenecks in that process.

00:47:41I think you touched on this, but my notes were, who pays for abandoned mine cleanup?

00:47:47It sounds like it sort of catches catch can, Mr. Wood.

00:47:50There's no steady source of available funds.

00:47:55That's right.

00:47:56I would be remiss not to mention again that the mining industry has been very supportive

00:48:00of helping to clean up abandoned mines, so long as they don't have to hold the liability.

00:48:05That's the big problem, is we don't have a dedicated funding source to get ahead of these

00:48:09abandoned mines that dot the landscape.

00:48:13One sort of parenthetical question.

00:48:14Mr. Summers, you mentioned a mine that was producing a lot of important minerals, and

00:48:19there were other minerals there which could be produced at that mine.

00:48:24If you're going after lithium and you discover tellurium, do you have to go through another

00:48:29permitting process, or can that mine expand its production of additional materials without

00:48:35additional delay?

00:48:38To be honest, that depends on the operation and depends on the regulatory environment

00:48:41within the state where that operation is taking place.

00:48:45But in most cases, it is easier to go to produce new minerals from an existing permitted facility

00:48:50because in many cases, it's a matter of finding ways through secondary recovery processes

00:48:56to pull other minerals out of a waste stream in many cases.

00:49:01So again, it depends on the type of operation, but generally, you're better off and can get

00:49:07to actual production quicker if you're using existing permitted facilities.

00:49:12I'm out of time.

00:49:13Mr. Haddock, I want to continue our discussion of net versus gross royalties.

00:49:18If you would give us some written material on why mining should be treated different

00:49:23than oil and gas or coal in terms of the way the royalty is calculated.

00:49:28So we're out of time here, but look forward to having maybe a page or two on that subject.

00:49:35I can point you to materials we submitted to the committee before, and I'll do that.

00:49:40Senator Cortes-Mastin.

00:49:42Thank you to the panelists.

00:49:43Rich and Chris, great to see you again.

00:49:49Mr. Summers, thank you for joining us as well.

00:49:52And I'm going to do this on behalf of my mining companies in Nevada, but I know they would

00:49:57invite any senator on this panel to come and see hard rock mining in the state of Nevada.

00:50:02I think it is important to see it and understand what is going on to recognize the challenges

00:50:08that they're facing and why they are talking about net royalties, so I appreciate that.

00:50:11Thank you also for the hard work that I know you have done on the Mining Clarity Act and

00:50:17the work that we have done together to really focus on some of the challenges that we heard

00:50:21at the last committee.

00:50:22Now, this is based on those challenges.

00:50:25We amended it.

00:50:26It passed out a committee in a bipartisan way last Congress, but I want to put to bed

00:50:30some of the stuff that we're still hearing out there with respect to this act.

00:50:34So Mr. Haddock, if you would, when we came together to address some of the concerns that

00:50:40we heard last time, because there were concerns about that the Mining Clarity Act would allow

00:50:45mining in national parks, monuments, and other withdrawn areas.

00:50:49Can you address that?

00:50:52Can you talk a little bit about whether that's true or not?

00:50:58The savings clause in the act makes clear, and we worked extensively with Trout Unlimited

00:51:05and others on that, that it does not affect any of the laws that govern mining in the

00:51:10parks or doesn't change anything that's been withdrawn.

00:51:14If it's been withdrawn, it's gone, and I think it's crystal clear in the act.

00:51:20Mr. Wood, you would agree?

00:51:21I would.

00:51:23Mr. Haddock, can you also confirm that the savings clause and the restructuring of the

00:51:29language, which includes adding the provision to deposit the mill site annual maintenance

00:51:33fees into an abandoned mine reclamation cleanup fund exists?

00:51:38And that was part of this discussion as we tried to address some of the concerns.

00:51:42We recognize there's not a dedicated funding source, but this was an attempt to try to

00:51:46start that process.

00:51:47Is that right?

00:51:48It was.

00:51:49It was a really convenient way to do it because this is a new kind of mining claim, and it

00:51:55was great to just tie it to mine reclamation, abandoned mine reclamation.

00:51:59Yeah, and if you would address the new kind of mining claim, because this new language

00:52:04limits where these new mill site claims can be located, and there's an accusation that

00:52:09somehow this is also a land giveaway, or that new claims would blanket all of our public

00:52:13lands.

00:52:15Would you address that?

00:52:16Yes.

00:52:17New claims won't blanket all of our public lands.

00:52:20As I've said, it's only a very, very small percentage of Nevada's lands that's even inside

00:52:26a plan of operations compared to the 22% that's already been withdrawn and the 9% that's proposed

00:52:32to be withdrawn.

00:52:33We're talking about a tiny percentage of 1% of the state that is in plans of operations,

00:52:39and only part of that is the ancillary facilities.

00:52:44In order to locate one of these new subsection C mill sites, you have to have a plan of operations.

00:52:50You have to have a real mine.

00:52:51You just can't go out and put them anywhere on federal land.

00:52:54You have to have been working there.

00:52:56You have to have been drilling.

00:52:58You've prepared a plan of operations.

00:53:00You're going into an EIS.

00:53:02You've spent tens of millions of dollars at a minimum for that plan of operation.

00:53:07Then Mr. Haddock, finally, this bill does not overturn or reverse the Rosemont decision.

00:53:14The bill leaves Rosemont in place.

00:53:17It just creates a new path that miners can choose to take.

00:53:20Can you discuss under what circumstances a mining company may choose to take this new

00:53:25path?

00:53:27From my perspective, it's an easy choice because it's clear, and I don't have to fight in permitting

00:53:34over whether or not a given load claim is valid in the sense that it has a economically

00:53:42mineable mineral deposit on it before I put my crusher on top of that.

00:53:46I don't have to argue about whether or not that claim is still valid when I mine through

00:53:51it in the underground and I still have a crusher sitting on top of it.

00:53:55It eliminates those issues.

00:53:56A mining company can choose.

00:53:57If they want to go under the Rosemont decision as the way it exists, they can move through

00:54:00that path, or they can move through this path, setting forth an operational plan with a mill

00:54:04site and contributing to abandoned mine cleanup.

00:54:07Is that right?

00:54:08They can.

00:54:09Okay.

00:54:10There's still a choice.

00:54:11There's still a choice.

00:54:12Okay.

00:54:13I appreciate that.

00:54:14Finally, let me just say thank you to all of you.

00:54:17You've heard the hurdles.

00:54:18There's no doubt the permitting process is the hurdle.

00:54:20We absolutely need to, in the West, make sure that our federal agencies that are crucial

00:54:27to us continuing this mining, and in Nevada, it is the BLM and DOI, that they're adequately

00:54:34funded and staffed.

00:54:35We also have to make sure, and I'm going to put a fine point on this, that those people

00:54:40in those positions can't use their positions to delay permitting by putting it off just

00:54:47because they don't like the permitting or the mining that is going on.

00:54:52That is not their choice to do.

00:54:54We have to address both ends of it when we're looking at moving forward to address the permitting

00:54:59process of this as well.

00:55:01I thank you again to the Chairman and Ranking Member for this hearing.

00:55:06Let's see.

00:55:12Senator Gallegos is next.

00:55:18Thank you, Chairman Lee and Ranking Member Heinrich, and thank you to our witnesses for

00:55:21your attendance today.

00:55:22I've been outspoken about the need to shore up our critical mineral supply chains for

00:55:26years, especially for our national security and just our energy future, and Arizona certainly

00:55:31can be a leader in this space.

00:55:32Over 70 percent of the nation's copper comes from Arizona, along with gold, silver, zinc,

00:55:37and many others.

00:55:38As we produce these minerals and metals in advanced technology, contribute to our economy,

00:55:42and build infrastructure, we can do so in a way that protects our natural resources,

00:55:47too.

00:55:48I'm glad to see multiple bipartisan bills that are critical, those critical minerals

00:55:53in this hearing, and look forward to continuing work on these issues.

00:55:56My first question is for Mr. Wood.

00:55:58You mentioned in your testimony that historic mining has threatened drinking water supply

00:56:02and quality.

00:56:03In states like mine, water is a very scarce resource that must be conserved and cleaned.

00:56:08What other actions can the federal government take to protect and remediate our water in

00:56:13the context of mining and critical mineral supply chains?

00:56:17Thank you, sir, for your question.

00:56:19An important step was taken last year with the passage of the Good Samaritan legislation,

00:56:24which will allow for 12 pilot projects over the next seven years, and then we have every

00:56:29intent of coming back and trying to authorize that legislation to remove the liability hurdles

00:56:34that organizations like mine or mining companies would face by trying to clean up those abandoned

00:56:39mines.

00:56:40But the second, again, I mentioned this earlier, but the second point is paramount today.

00:56:45It's funding.

00:56:46There's just no funding for it.

00:56:48There's no dedicated funding source.

00:56:50So even if you didn't have concerns about liability, you still have to go out and cobble

00:56:56together hundreds of thousands, occasionally millions of dollars, to do these cleanup projects.

00:57:03My next question is for Mr. Haddock.

00:57:05Please expand on how the Critical Minerals Consistency Act would decrease uncertainty

00:57:11about research and tax credits, especially those passed by Congress in the last few years.

00:57:17Senator, I'm sorry.

00:57:20That last part about the consistency would affect research?

00:57:24Would decrease uncertainty about research and tax credits, especially those passed by

00:57:29Congress in the last few years?

00:57:31Well, I think the act simply decreases the uncertainty in mine permitting, and I don't

00:57:39think it really affects the research and that end of things.

00:57:43Okay.

00:57:44Mr. Wood, back to my question earlier.

00:57:50You said that some of these cleanups can be hundreds of thousands to millions of dollars.

00:57:55Is there any national estimate of how much of a cleanup on an annual basis budget do

00:58:00we need to actually be effectively cleaning up some of these sites?

00:58:04On an annual basis?

00:58:05It would be nice if we had a billion dollars a year, but I'm just pulling that out there.

00:58:09It would be nice if a lot of us had a billion dollars.

00:58:14A lot of these projects, to be clear, they're minor construction sites, and my engineers

00:58:18get mad at me whenever I say this, but in many cases, you're dealing with tailings,

00:58:22and you dig a ditch, you line it with an impermeable barrier, you bulldoze the tailings in there,

00:58:27put another impermeable barrier, maybe you dig a French drain around it, and then you

00:58:32walk away.

00:58:34So a lot of these aren't super fun sites that we're talking about.

00:58:37These are often low-tech construction projects.

00:58:43They get more expensive.

00:58:44The reason I used the millions word was if you have to do something like build a wastewater

00:58:48treatment plant, that obviously will be more expensive than just doing a small construction

00:58:53project.

00:58:54Okay.

00:58:55All right.

00:58:57I yield back.

00:58:58That's fine.

00:58:59So with respect to Senator Gallego's question, the EPA estimates that the total liability

00:59:03for these sites is about $54 billion.

00:59:06So if we had a billion dollars a year, it would still take 54 years to get these sites

00:59:11cleaned up.

00:59:12Senator Hickenlooper.

00:59:13Thank you, Mr. Chair, and thanks for having both you and the ranking member having this

00:59:20hearing, and Mr. Haddock, good to see you, and Mr. Summers, and Mr. Wood, nice to see

00:59:25you again.

00:59:26Obviously, I got a master's in geology back in 1979, spent a fair amount of time looking

00:59:34at the difference between geology and resources, and what the difference is between what could

00:59:42a load that could be a mine, a load that couldn't be a mine.

00:59:47I think if you go back and look on a broader scale, we're facing challenges now that's

00:59:52going to require a much higher level of precision when we make those decisions, and Mr. Haddock,

00:59:58obviously, you've been clear, you and Summers both, in terms of we have that capability

01:00:02now to a large extent.

01:00:06Our office has introduced three bills on critical minerals.

01:00:10You're part of a number of other bills, and they're mostly, they're smaller bills, but

01:00:13they are demanding, we're trying to drive innovation, strengthen coordination, make

01:00:19sure we have appropriate alliances, but I thought this does seem like a moment of alignment

01:00:26where we could actually address, have a more comprehensive bill that looked at that alignment

01:00:32of self-interest in terms of, really, I think many people, and my first question will be

01:00:37towards you, Mr. Wood, whether you agree with this, that many people in the environmental

01:00:41community recognize that we're going to need a lot more critical minerals if we're going

01:00:44to deal with the challenges of climate change, more electric vehicles, wind, solar, and all

01:00:52these things demand not just rare earth minerals, but nickel and copper, I mean, things like

01:00:57this, and so, Mr. Wood, just to start that, do you think it's possible that we, can you

01:01:02imagine some sort of a consensus from the environmental side of things that we could

01:01:08help establish what would be the criteria, the framework by which mining could take place

01:01:13and processing could take place, and by so setting standards, we would then export them

01:01:18once we worked our way through that, but I'm not saying this happens easily.

01:01:22Is that something you could imagine?

01:01:23I can absolutely imagine that.

01:01:25I don't think we're that far apart.

01:01:26I mean, coming up with a reason, I'm not an expert in royalties, but coming up with a

01:01:30reasonable royalty, I think is achievable, it sounds like, building some discretion,

01:01:36whether it's the land use plan or upon enactment of a bill to make clear that some areas are

01:01:43suitable for development, some aren't, that sounds achievable, and so I would be remiss

01:01:51if I didn't say that rare earth minerals and minerals generally are absolutely vital for

01:01:57the future of this country, and so I'd rather we mine them here and give the industry the

01:02:03certainty it needs while providing the protections that conservation demands.

01:02:08Great, and I agree.

01:02:09I think this is almost a unique time where we have what is too often rare in government

01:02:14is the alignment of self-interest, and that's when, whether you're working in non-profits

01:02:18or in businesses or in government, the alignment of self-interest is the secret to progress.

01:02:25Mr. Haddock, we introduced the Critical Materials Future Act to really expand domestic processing

01:02:34of critical minerals and directly reduce our reliance on China.

01:02:38It's been already said several times that China does so much of the processing

01:02:42for so many of these minerals.

01:02:44Can you elaborate a little bit on the need for investments both in domestic

01:02:48mining but also domestic processing?

01:02:50Well, it's obviously important to have processing onshore if you can have it.

01:02:56The materials that we would mine and concentrate for processing are still bulk materials,

01:03:05and they are expensive to ship.

01:03:07So, if you have all things being equal, if you have domestic processing,

01:03:12that promotes a domestic industry.

01:03:14The other thing I would add is, just to kind of put it in context, over the last two decades,

01:03:22China has invested $57 billion in critical mineral supply chain, onshore and offshore.

01:03:32They have recognized the need for that, and they have been very aggressive.

01:03:37And so, that's why so much mineral processing is in China.

01:03:42I agree.

01:03:44Mr. Summers, just real quickly, expanding domestic mining and processing is going to

01:03:49require a skilled workforce.

01:03:51We have only 600 students in the United States right now that are enrolled in mining-related

01:03:56programs.

01:03:56Many of them are at Colorado School of Mines, I'm proud to say.

01:03:59China has 1.4 million students in mining.

01:04:03How are we going to address this?

01:04:06Yeah, thank you, Senator.

01:04:07I think that that is a huge problem.

01:04:09I think that the Mining Schools Act that was considered in the last Congress is a good

01:04:14first step in that, that provides some opportunities for our currently certified mining schools

01:04:20to go out and recruit more students and have more resources available to them.

01:04:24But, you know, solving that workforce problem is critical if we're going to be able to reshore

01:04:29our workforce.

01:04:30And I think that that is a huge problem.

01:04:32And I think that that is a huge problem, and not just for the technical degrees, the mining

01:04:36is critical if we're going to be able to reshore these supply chains.

01:04:40Right.

01:04:40Thank you all.

01:04:41And I yield back only because I have to.

01:04:44I could spend the afternoon talking to you.

01:04:46Yield back.

01:04:48Thanks, Senator Hickenlooper.

01:04:49We'll now start the second round.

01:04:51Mr. Haddock, I'd like to start with you.

01:04:53A few minutes ago, you mentioned you'd be okay with a new net royalty.

01:04:59But that's not, of course, what's being proposed in S859.

01:05:03How do you think a gross royalty as proposed in S859 would affect the industry and would

01:05:13affect essential mining investment and development?

01:05:18Well, it would be devastating, as the testimonies we submitted on the predecessor to this bill

01:05:25showed that that kind of royalty would take 67 percent of the value of the operation.

01:05:30It would take it up from about 30, where we spend today for total government take,

01:05:35to two-thirds of the operation.

01:05:37And that just would make the United States impossible to do business in.

01:05:40So you add that on top of the other burdens, and it would make it an impossibility.

01:05:43Now, Mr. Summers, if there were a net royalty, there might be some businesses, some companies,

01:05:52I suspect, that could absorb that and deal with it.

01:05:54But what would that do to the state of competition in the industry, particularly as it relates

01:06:00to smaller companies, those that are less established?

01:06:04How would they fare in that environment when they had a net royalty added on top of the

01:06:12addition, the pre-existing burdens that we've been discussing today?

01:06:17Yeah, I think it would be very damaging, and especially, again, when the resources obviously

01:06:22don't move, but the capital can move.

01:06:23And so companies are going to invest where they're going to get the best return.

01:06:27And I think especially in the mining industry, we rely very much on small exploration companies

01:06:32and on junior mining companies to develop many of these mineral deposits.

01:06:36And then in many cases, they will be sold off to larger companies.

01:06:40I think that having anything that hampers investment, especially in those smaller companies

01:06:44in that front end of the mining, those front-end mining operations would be very damaging in

01:06:49the long term.

01:06:51So we have to look at this, I suppose, as one of many market signals.

01:06:57If we were to do that, I guess even though some larger companies could absorb it, a lot

01:07:03of the newer exploration, or at least a significant amount of the new development, the new exploration

01:07:10is undertaken by startups, by smaller companies, who have to respond to all kinds of market

01:07:16signals, market signals that have to take into account whether there's federal land

01:07:20involved, whether to what extent there is federal permitting involved, whether to what

01:07:26extent there is a federal litigation risk associated with that permitting.

01:07:32You add more things on top of that, including a royalty, a new royalty, whether that's gross

01:07:41or even net.

01:07:44Doesn't that, in many circumstances, chill investment in the United States and effectively

01:07:52drive it elsewhere?

01:07:54Absolutely.

01:07:54And I think it also goes in opposition to what many of the states are trying to do to

01:07:58bring investment to their states.

01:07:59So in Utah, for example, over the past few years, we've passed two different tax credits

01:08:04that incentivize mineral exploration and also high-cost infrastructure associated with mining

01:08:09operations and other extractive operations.

01:08:11And so if you have the states moving in a direction where they're trying to incentivize

01:08:15production and exploration in order to attract that investment, but on the federal side,

01:08:19you're moving in the other direction, then you're really canceling those efforts out.

01:08:23Right.

01:08:24Mr. Simmers, how would you compare interacting with federal authorities on permitting and

01:08:28other matters to state regulators?

01:08:31For example, the Utah Division of Oil, Gas, and Mining, sometimes referred to as DOGM.

01:08:37What are those two experiences like?

01:08:41I think in many cases, as I mentioned in my testimony, it's very important that we protect

01:08:46primacy for states so that we can manage as many of these federal laws and regulations

01:08:51as possible.

01:08:52But in general, I mean, the state agencies tend to be more responsive because, frankly,

01:08:57we can call their bosses.

01:08:59I mean, we can call the head of the Department of Natural Resources, where DOGM is.

01:09:02We can call the governor, legislators, and get responses there, whereas trying to fix

01:09:07problems on a federal level becomes much more difficult.

01:09:11And not to say that we don't have opportunities to influence those agencies through working

01:09:16with our federal delegation and other things, but as a general principle, I think the government

01:09:23closest to the people functions the best, and we find that in regulatory agencies as

01:09:27well.

01:09:28Do you find a—is there any kind of inferior environmental outcome or greater risk of environmental

01:09:34harm as a result of a decision where jurisdiction is vested in a state agency, for example,

01:09:42the Utah Division of Oil, Gas, and Mining, as compared to federal authorities?

01:09:45We've not witnessed that in Utah.

01:09:47So the biggest significant difference, if I'm understanding you correctly, is the amount

01:09:51of time, the amount of delay, and the uncertainty.

01:09:54Shorter, greater certainty with the states without a diminished environmental outcome.

01:10:00Correct.

01:10:01Senator Heinrich?

01:10:03Actually, Senator Murkowski hasn't had a chance to even have her first round, so I

01:10:08would defer to her.

01:10:09My peripheral vision was off.

01:10:10I know, I'm so far down the dais here, but that's okay.

01:10:14I show up, and that's so much of what matters.

01:10:18My wife would call that male refrigerator blindness, and it claims many victims.

01:10:24I'm going to have to remember that one.

01:10:25I want to thank you for having this hearing as one that's been focused on the issue of

01:10:32critical minerals and the vulnerability that we have in this country when it comes to being

01:10:36able to access our own and the increasing reliance on countries like China.

01:10:42This is a key issue, and I'm glad that the committee's taking it up so early.

01:10:46Mr. Summers, I wanted to start with you.

01:10:49There was an interesting article in the Wall Street Journal just a bit ago entitled, Why

01:10:54the U.S. Keeps Losing to China in the Battle over Critical Minerals.

01:10:58You may have seen it.

01:10:59But it tells the story of Sera.

01:11:02This is an Australian company that I have cited this story a fair amount in the Biden

01:11:11administration because what we saw was hundreds of millions of U.S.

01:11:17taxpayer dollars that went to support that, even though they were planning on sourcing

01:11:23the graphite from a very unstable part of Mozambique.

01:11:31It's one of those sources of frustration.

01:11:34You watch this whole project.

01:11:36Sera goes into force majeure last year, and so everything that the U.S.

01:11:42taxpayer has put out there is at risk, at jeopardy, and you've got continued unrest in Mozambique.

01:11:52To me, this was a situation where you had just no common sense when it came to the federal

01:12:00investment decisions.

01:12:01And then I will submit to you that we've got some opportunities in our own country to be

01:12:09smart about our investments, lower risk investments here at home.

01:12:13My colleagues have heard about the potential for graphite one, the largest natural graphite

01:12:19deposit in North America.

01:12:21We pushed.

01:12:22We pleaded.

01:12:23We did everything that we could to raise the profile on this.

01:12:28We did get support from the Defense Production Act.

01:12:30That was helpful.

01:12:31But when it came to the Department of Energy, it was really pretty tough to get any attention

01:12:37here.

01:12:38So I'm looking at this, and at least with the previous administration, seeing this unwillingness

01:12:43for the federal government to invest in projects here at home.

01:12:48And so my question to you is whether or not you think it would be wise, advisable, to

01:12:55have some kind of a requirement for any federal investments in mineral processing to be tied

01:13:02to the extent practical to domestically sourced minerals.

01:13:08Because we know we're not doing the processing.

01:13:11We want to bring processing here.

01:13:13But also, it doesn't make sense if we're getting the raw materials from other countries.

01:13:18Speak to this, if you would, please.

01:13:20Absolutely.

01:13:21I think that that would be a very wise requirement.

01:13:23And again, in my testimony, I mentioned that just in Utah, we have 40 of the 50 critical

01:13:27minerals on the DOI list.

01:13:29When you add the graphite that you mentioned in your home state and mineral occurrences

01:13:34in other U.S. states, there's really very little reason that we need to go outside of

01:13:38the U.S. to source these minerals.

01:13:41And again, if we have both the extraction and the processing happening here domestically,

01:13:46then that really does shore up our supply chain and ensure that we don't have those

01:13:49economic and national security risks.

01:13:52I would also say that in many cases, not only are there natural deposits, but in the case

01:13:56of graphite, for example, there's opportunities.

01:13:59You know, there are projects right now currently in Pennsylvania and West Virginia that are

01:14:02getting graphite from coal, you know, with off-gassing of hydrogen, which can be used

01:14:07for electricity generation.

01:14:08So there's many opportunities for us to be innovative as well and not rely on unstable

01:14:13countries in order to extract the raw resources.

01:14:17Thank you for that.

01:14:18Let me ask a question of you, Mr. Haddock.

01:14:21In your written testimony, you briefly mentioned the Bureau of Mines.

01:14:25This was abolished back in the 90s.

01:14:30He didn't specifically call for its resurrection.

01:14:32But given the importance of what we're talking about here today, it's something that I've

01:14:37certainly thought about.

01:14:39We've got a Department of Energy.

01:14:43Maybe we want a Bureau of Mines to look at our mineral security and our competitiveness.

01:14:49So what do you think about the idea?

01:14:51What would a modern Bureau of Mines look like?

01:14:55What functions would they be responsible for?

01:14:59Thank you, Senator.

01:14:59That's a great question.

01:15:01In my mind, as I was looking at these critical minerals bills, and everybody was talking

01:15:06about all the coordination between all these various agencies, and this agency could do

01:15:09this and that, it just felt like there is a need for centralization here.

01:15:15And also, one of the things that I've talked about before and I've advocated is there needs

01:15:20to be a knowledge base of, as private explorers are out working, we need to find a way to

01:15:26be able to share the information that's critical to knowing where these byproduct minerals

01:15:31are in small concentrations.

01:15:34So I don't know exactly what it would look like, but I certainly know in a business world,

01:15:41you would create a focus on that with a small group of people with the right expertise and

01:15:48focus on those very narrow questions.

01:15:51Good.

01:15:51Thank you for that.

01:15:52That might be something that the committee would want to explore, Mr. Chairman.

01:15:57You know, we're trying to eliminate a lot of bureaucracy nowadays, but when you're focusing

01:16:05in an area as significant as this for our entire economy, it seems to me that we might

01:16:11want to give a little more definition.

01:16:14And so certainly something that I'd love to work with you all on.

01:16:17And I appreciate all of you being here today.

01:16:21Senator Heinrich, thank you for the courtesy of the refrigerator look over here.

01:16:27Thanks so much.

01:16:28Senator Heinrich.

01:16:30I'm going to defer to Senator Hickenlooper.

01:16:32I know he has a second round.

01:16:34Great.

01:16:35Let me get back to my question there.

01:16:36I got distracted for just that moment.

01:16:40It's always the case.

01:16:43You guys have been talking a lot about supply chain, and I think that that's at the essence

01:16:48of all these things.

01:16:53Again, I want to go back to Mr. Summers, the National Critical Minerals Council Act to

01:17:01ensure that we are coordinating minerals policy at the highest level of government.

01:17:09Can you kind of elaborate on why it's essential to elevate critical minerals to the highest

01:17:18levels of the White House, obviously, but also to the agency, and how a national council

01:17:25or a minerals advisor could enhance that?

01:17:29Absolutely.

01:17:30And I'd like to echo what Mr. Haddock said.

01:17:33I think that more centralization in the federal government would be very beneficial in whatever

01:17:37form that takes.

01:17:38A Bureau of Mines or a National Critical Minerals Council or Minerals Czar, I'm not sure exactly

01:17:44what that should look like in specific.

01:17:46But I think that ensuring that the federal government is working together, and you have

01:17:51the Department of Energy and Department of Interior and the Department of Defense and

01:17:54the trade representative and others, I mean, all the different parts of government that

01:17:58need to be involved in these discussions so that we are, again, maximizing our opportunities

01:18:04to be self-sufficient with our critical mineral supply chain and also dealing with trade issues

01:18:10and other issues that can affect investment here in the U.S. is absolutely essential.

01:18:18Right.

01:18:18I appreciate that more than you can imagine.

01:18:21I think collaboration and coordination is going to be in high demand.

01:18:27Mr. Wood, this is just, again, as someone who also loves trout, and like many of your

01:18:34members, I enjoy taking the trout out of the water, but also putting them back.

01:18:38Yes.

01:18:39That's good.

01:18:40Yeah.

01:18:41I think we have some of the largest trout, I think, in the country.

01:18:43People don't recognize that yet.

01:18:45Yes, you do.

01:18:47What actions can Congress take to reduce the impacts of some of these new mining projects?

01:18:52What have we not talked about yet where we could get better value in particular?

01:18:59You know, I think we've talked about several topics already that would reduce impact.

01:19:05I will say that modern mining is a lot different than historic mining practices.

01:19:11These are well-regulated industries.

01:19:13Most of them are well-capitalized.

01:19:16I do think the two biggest problems with the mining law, I don't think, are that unfixable.

01:19:22One is, as I mentioned earlier, creating a dedicated funding source or royalty.

01:19:27And the second issue would be making clear that there is discretion for

01:19:35denying a mine permit early in the process.

01:19:37Right. I agree.

01:19:39Perfect.

01:19:41Appreciate that.

01:19:42Obviously, that's a discussion that could go on for some hours.

01:19:45I'll finish up, Mr. Haddock.

01:19:49We've talked about a better path forward for mining in this country by simpler permitting

01:19:55processes, you know, faster responses, but making sure that we have the highest

01:20:01environmental standards.

01:20:03And I guess I could say, actually, to all witnesses, we've talked about, or you've

01:20:07already covered a number of the permitting bottlenecks that mining companies face on

01:20:12projects.

01:20:14But as we resume on this committee bipartisan discussions at solutions, what would you

01:20:21think, each can suggest one, what should be our highest priority?

01:20:25I'll start past the Mineral Regulatory Clarity Act.

01:20:32Okay.

01:20:32That's fair.

01:20:34Mr. Summers.

01:20:36Again, I think that there's been a lot of discussion about permitting reform, and

01:20:39that's absolutely critical, and also litigation reform.

01:20:42There you go.

01:20:44And I would say, again, funding to clean up abandoned mines and allowing some more

01:20:48discretion in the process for areas where you shouldn't mine.

01:20:52Right.

01:20:52Absolutely.

01:20:53The ranking member described the $56 billion backlog, $54 billion backlog, and yet the

01:21:00billion dollars a year that you mentioned really is almost just taking care of what's

01:21:04happening, you know, day to day with existing mining as small as it is.

01:21:08But anyway, somehow that's got to come together as well as we get ultimate solutions.

01:21:13Anyway, thank you all.

01:21:15I appreciate your work and look forward to working with you going forward.

01:21:17I yield back.

01:21:19Senator Henry.

01:21:19Okay.

01:21:26Really appreciate all three of our witnesses for coming here today.

01:21:30You've offered some very valuable testimony that we've all benefited from.

01:21:36As you can tell, these are issues on which there is a lot of bipartisan consensus.

01:21:43Not always on the discrete policy proposals at hand, but in many areas there is.

01:21:48At a minimum, there is a lot of bipartisan consensus over the importance of these issues,

01:21:56and that leads often to legislative consensus or very nearly such.

01:22:05We've got just some brief housekeeping before we wrap up.

01:22:10I ask unanimous consent to enter into the record some letters of support for S-714,

01:22:17the Critical Mineral Consistency Act, and S-544 from the following organizations,

01:22:22the National Mining Association, the American Exploration and Mining Association,

01:22:26Citizens for Responsible Energy Solutions also submitted one.

01:22:30And without objection, so ordered.

01:22:34The record for this hearing will remain open for two weeks.

01:22:38We thank the witnesses and we stand adjourned.

Mike Lee Leads Senate Energy Committee Hearing To Consider Pending Legislation

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