NMA commissioned the study "Permitting, Economic Value and Mining in the United States", "to demonstrate the economic impact of mining project permitting delays in the United States." The study researched "selected mining projects at various stages of operations and permitting, in a number of states, to assess the delays that are associated with mine permitting."
The Rosemont copper project south of Tucson was one of the case studies analyzed for the study, They concluded that "the Rosemont Copper project in Arizona continues in its attempts to secure permits, five years after the originally
planned start date of 2010. Over this period, the value of the project has fallen from $18 billion to $15 billion despite much higher copper prices."
The key findings are that :
- Unexpected delays in the permitting process alone reduce a typical mining project’s value by more than one-third.
- The higher costs and increased risk that often arise from a prolonged permitting process can cut the expected value of a mine in half before production even begins.
- The combined impact of unexpected, and open-ended, delays and higher costs and risks can lead to mining projects becoming financially unviable.
The study found that permitting in the US takes 7-10 years compared to 2-3 years in Canada and Australia, countries with comparable environmental requirements. I spoke with Katie Sweeney, General Counsel for NMA on our video magazine "Arizona Mining Review' and she said the solution is not to weaken environmental regulations but to require permitting agencies to coordinate their reviews and abide by deadlines. There is also federal legislation being proposed to require agencies to complete their reviews within specific time-frames, comparable to those in other developed countries with stringent environmental standards.