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The energy transition that requires vast amounts of minerals like copper and lithium to move the economy from dependence on fossil fuels to renewable sources of electricity has created a shift in the tension between environmentalists and the mining industry.

Conservation groups find themselves opposing mining projects that aim to extract metals like copper and lithium needed to make electric vehicles, wind farms and solar panels. They worry that, even though the end goal will help decrease carbon emissions, a rush to develop the mines may skirt environmental protections put in place over the years.

One of the latest battlegrounds is the Mining Regulatory and Clarity Act. Introduced by Democrat and Republican legislators from mining-heavy states Nevada, Idaho and Alaska, the measure aims to explicitly allow mining companies with claims on federal land to dump rock waste on public land next door, even if those adjacent claims aren’t proven to contain valuable minerals.

This has been the practice under the General Mining Act of 1872, which governs hard rock mining of minerals including gold and copper under land owned by the United States and leased by miners. 

Over the century and a half of the law’s existence, mining has evolved from pickaxes to large industrial operations that remove much more ore and waste rock than the hand-held shovels of yore. Mining companies often deposit that waste on adjacent unprofitable claims rather than on top of land that contains valuable minerals.

Conservation groups have been contesting that. In 2019 a district judge sided with environmentalists and tribes fighting the Rosemont open-pit copper mine in Arizona owned by Canadian miner Hudbay Minerals Inc. HBM. In 2022 a federal appeals court upheld the decision that the company’s only valid claims were on land it could prove contained valuable minerals, thus preventing the mine from putting waste on other claims in the area.

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Ramifications of the Rosemont decision have been rippling through the mining industry. Based on the precedent, a judge blocked a Nevada molybdenum mine owned by Colorado-based miner New Moly LLC and South Korean steelmaker Posco Holdings Inc. PKX. Another judge said the Bureau of Land Management erred in its decision to approve the Lithium Americas Corp. LAC Thacker Pass project in Nevada but stopped short of vacating the decision.

“If judges use the original outline of the law, there are a lot of mines in the U.S. that could be challenged in this way,” Simon Jowitt, mining industry consultant and associate professor of economic geology at the University of Nevada Reno, told Benzinga.

The most vulnerable mining projects are those on public lands that use mining claims for ancillary activities, Collen Clark, a founding partner of law firm Schmidt & Clark LLP, told Benzinga. 

The mining industry supports the changes under the clarity act, saying that it will prevent the United States falling behind in its attempt to develop domestic sources of minerals key to the energy transition and national security. Otherwise, the nation will be reliant on foreign suppliers that may not have the strongest environmental or labor laws, they say. Industry officials add that mines are already strictly regulated by environmental protection laws that needn’t be duplicated in federal mining reform. 

Opponents say the clarity act is a giveaway to the mining industry at the expense of the public and will undermine conservation efforts and damage ancestral land of native tribes.  

“It’s long past time to update the antiquated 1872 hard rock mining law, but the Mining Regulatory Clarity Act is not the solution,” Earthjustice Senior Legislative Representative Blaine Miller-McFeeley said in a statement. “Instead of updating existing law to protect communities, safeguard water resources and protect Indigenous sacred sites, it gives mining companies unprecedented power to hold our public lands hostage for extractive purposes — even without a valid mineral claim.”

In the markup session this month, the House Natural Resources Committee added language saying that nothing in the clarity bill gives mining companies the right to operate where they’re already prevented, such as in national parks. The changes also say the bill doesn’t limit the government’s ability to regulate mining, including under the Endangered Species Act.

Whether the bill passes or not remains to be seen, but it has bipartisan support in the House and Senate, as well as support from the national and Nevada mining associations and the U.S. Chamber of Commerce.

The bill’s chances of passing depend largely on whether it can be attached to a larger legislative package that has a higher priority in Congress, Clark said.

“It’s a very simple clarification aimed at avoiding unnecessary litigation,” Laura Granier, partner with law firm Holland & Hart LLP, told Benzinga. “This should be not a party line issue.”

Now Read: Mining Milestone: Peru Gives Nod To Expansion Of Key Copper, Zinc Mine

Photo: Shutterstock

© 2024 Benzinga does not provide investment advice. All rights reserved.

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