By Larry W. Reaugh – President & CEO of American Manganese Inc.
As you may know, a very important bill has been circulating through the U.S. House of Representatives over the last month, a bill that could potentially change the landscape of permitting mine sites in the United States. H.R. 4402 (also known as the National Strategic and Critical Minerals Production Act) is designed to create a more efficient permitting process for critical and strategic mineral reserves, and couldn’t come at a more crucial time for the country.
The United States is currently at a crossroads with regards to the supply and demand of metals and minerals. As the demand for the latest consumer electronics continues to grow year over year, along with the demand for increased alternative energy sources like solar farms, wind farms and hydroelectricity, so too does the demand rise for the metals that form the basis of these technologies. However, the supply of these metals is not keeping up with the rising demand, and is in fact declining, which may soon lead to a critical metal shortage in North America, threatening businesses, jobs and the economy.
The reason North America is facing such a shortage is simple. China has become the dominant player when it comes to the global supply of rare earths and critical metals. While China doesn’t necessarily have the most critical or rare earth deposits, they have been able to mine these metals at an inexpensive rate and effectively supply the global demand. That however is changing.
China has taken a second look at their production of critical and rare earth metals and has decided to drastically scale back their export of these metals. Their rationale is twofold; one, they no longer want to simply provide the world with the raw material, but rather, have the final manufactured products created in China, adding more jobs and more opportunity to the Chinese economy.
Secondly, certain mining efforts, particularly rare earth mining and electrolytic manganese metal, have serious environmental impacts, so much so that rare earth mining in “modern, western” countries has very strict and stringent permitting requirements. China has operated their mines mostly without these permitting requirements, and has decided that needs to change.
The reduction of Chinese exports has serious implications to the global mining industry, and policy makers in the US have woken up to the issue. Earlier this month, H.R. 4402 was presented and passed in the House and has now moved onto the Senate. However, because the Senate is Democrat-controlled, and the White House has openly stated they oppose the bill, chances of it passing are slim; but the fact this bill has even made it as far as the Senate is a sign that government is aware of the growing problem and the necessary actions needed to correct the issue.
Manganese faces the same supply issue as many of the other rare and critical metals. China controls over 98% of the world’s supply of Electrolytic Manganese Metal (EMM) which is a critical component to steel and lithium-ion batteries. Currently, there is no production of EMM in North America and there are zero strategic reserves stored in the US.
American Manganese hopes to change that with our Artillery Peak project, but like many other mining companies looking to begin production we face the sluggish US permitting process. H.R. 4402, or a bill similar in nature, would dramatically change the landscape for projects like ours, and allow the build up of critical and rare metal reserves in North America.