In October, reports surfaced that the Biden administration had entered into negotiations with Indonesia on a critical minerals free trade agreement. The news prompted immediate backlash from members of Congress. Such a deal would have allowed Indonesian nickel and cobalt producers to qualify for significant electric vehicle subsidies under the 2022 Inflation Reduction Act (IRA), sending millions of U.S. taxpayer dollars to foreign producers. The move also signaled an about-face from Biden on his “Build American, Buy American” agenda, which had aimed to boost the economy and secure vulnerable supply chains.
As a bipartisan group of Senators pointed out in a letter to the administration, the Indonesian mining industry lacks labor protections, neglects environmental standards, and operates under heavy influence from Chinese investors. Further, pursuing additional mineral agreements without Congressional approval and before adequately developing domestic resources would violate the express intent of the IRA and hurt the American workforce.
The Indonesian deal was eventually walked back quietly. But the Biden administration is considering similar agreements with the European Union and the United Kingdom—and already successfully negotiated a limited free trade agreement with Japan last March.
These efforts to increase America’s critical mineral dependency stand as a perfect example of President Biden’s double standard when it comes to mining policy. Although the White House has repeatedly pledged to support mineral projects at home, in practice, it has done just the opposite. Since 2022, federal agencies have blocked several major critical mineral projects and removed over 1 million acres of public land across the country from potential development. At the same time, little has been done to streamline the burdensome mine-permitting process, which currently takes more than two times longer than in other developed nations.
The first-order consequences of these failures are well known. Neglecting America’s vast domestic resources will result in the loss of good-paying jobs, heightened national security risks, and the enormous waste of federal dollars intended to reshore our supply chains. But it is the second-order effects of the United States’ absent mineral leadership that are ultimately most concerning.
Over the last four decades, mining productivity has been in freefall. Though there is no singular explanation for this, the lack of contribution from the world’s largest economy stands out as a major problem. Indeed, in the late twentieth century, the United States began to largely outsource its mining operations, transforming it from a top producer of minerals like aluminum, copper, and zinc into a net importer. Coincidentally, mining efficiency reached its peak and began to plummet around the same time. Today, despite some recent improvements, the industry remains 25 percent less productive than it was in the mid-2000s.
This should not come as much of a surprise. For nearly a century, the United States has served as the world’s research and development lab. From smartphones to advanced semiconductors to solar panels, other nations have come to rely upon the United States for key technological breakthroughs. Once developed, exporting these innovations helps to make them more accessible and affordable, returning benefits to American consumers. The whole process has become something of an inevitable two-step: the United States invents new technologies, and then global markets commercialize them.
But without that first step, the mining industry has been unable to adapt to the skyrocketing demand for critical minerals. With high-quality mineral reserves becoming increasingly depleted, producers have had to increasingly source from lower-grade deposits that raise both the cost and environmental impacts of extraction. In response, the world has turned to cheap producers relying on inefficient and unsustainable legacy mining processes. Indonesia, for example, was the world’s fastest-growing nickel market in 2022. But it also uses energy-intensive open pit extraction methods that produce high CO2 footprints, significant water pollution, and unsafe working conditions.
On the contrary, our domestic extractive industries have repeatedly demonstrated a capacity to innovate while remaining committed to the highest labor standards and environmental protection practices. One notable example of this is the American shale revolution, which utilized developments in hydraulic fracturing and horizontal drilling to transform the United States into a leading oil and gas producer. Today, these same technologies are being used to develop next-generation clean geothermal energy. Substantial progress can also be seen in nonfuel mineral operations, even if on a limited scale. Utah’s Kennecott Copper Mine, for instance, has established itself as a global leader in energy efficiency, waste management, and emissions reduction over decades of operation. In 2020, it became the first mine in the world to be awarded the Copper Mark, a rigorous independent certification that recognizes responsible production and continuous process improvement.
Public policy should facilitate more of these kinds of breakthroughs, improve mining’s negative historical narrative, stimulate new investment, and generate greater community support. Instead, the Biden administration’s unwillingness to unleash the full power of U.S. domestic industry caters to radical environmental activist groups that demand new mines to “prove it first” before implementing any new technologies. These sentiments fundamentally contradict the spirit of innovation that the world desperately needs, undermine the legitimacy of the U.S. permitting process, and fly in the face of the president’s stated mineral security goals.
The United States will undoubtedly need to build up more secure supply chains outside of its borders in order to meet its critical mineral targets. But that doesn’t mean it has the option to just “opt out” of mineral production, either. Without us, crucial productivity improvements will continue to fall short of global needs. Furthermore, our commitments to share key technologies and contribute to responsible critical mineral sourcing abroad will ring hollow. Many of our allies have already recognized this much for their own domestic programs and are taking action with mineral self-sufficiency targets and roadmaps for regulatory reform. For our own sake and the sake of the global mining industry at large, we need to follow suit and become a mineral leader once again.
Jacob Greenberg (@JacobEGreenberg) is an energy and natural resources reporter. His work has appeared in The National Interest and RealClearEnergy.
Image: Shutterstock.com.
