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U.S. regulations on mining for minerals need updating

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As Tesla’s decision on the location of its lithium-ion “gigafactory” looms large, New Mexico’s legislators are working to ensure the state remains a top contender in the bid to host the ground-breaking facility.

Last week, state legislators affirmed that the $500 million cost to secure the electric vehicle (EV) battery factory would be well worth the return on investment, giving the state a leg up on the competition. But New Mexico has other competitive advantages over other states competing to host Tesla’s newest operation – its tremendous mineral and metal resources.

Tesla’s $5 billion factory will aim to produce enough batteries to meet the needs of the 500,000 EVs that the company plans to produce in 2020 – the equivalent of today’s global battery production.

The lithium-ion batteries produced on-site will require a diverse palette of minerals including lithium, graphite, cobalt, nickel and copper, not to mention the additional minerals needed to manufacture EVs.

Utilizing raw materials sourced from New Mexico would help the company save on transportation and other associated supply costs, as well as mitigate the risk of supply disruptions if sourcing materials from overseas.

Unfortunately, while New Mexico stands at the ready to host Tesla’s new facility and provide the company with many of the minerals and metals it will need, a confusing and inefficient regulatory regime not only threatens the state’s ability to produce these key mineral resources, but also forces U.S. manufacturers to rely on foreign countries for many of the raw materials found right here at home.

Due to a duplicative permitting process for new mineral mines, our nation’s resources remain locked underground and out of the hands of manufacturers hoping to bring production back to the United States.

Today, it can take nearly a decade for companies to receive approval to mine for minerals in the United States – five times longer than in countries with comparably stringent environmental safeguards such as Canada and Australia.

This regulatory regime discourages investment and new mining projects, sending valuable capital and jobs overseas. As a result, the United States is unable to supply domestic companies with even half of their mineral needs. Instead, we remain 100 percent import reliant for 19 different minerals, and more than 50 percent dependent on foreign sources for another 22 key resources.

Until recently, the U.S. has merely watched as other nations aggressively pursue mineral production and acquisition strategies to the detriment of our industries and economic prowess.

Fortunately, policymakers are beginning to take action to facilitate the development of strong, stable supplies of domestic minerals that would provide much-needed predictability for manufacturers across the country like Tesla and greater economic opportunity in resource-rich states like New Mexico.

For example, last year the House of Representatives passed the bi-partisan “National Strategic and Critical Minerals Production Act,” which would ensure efficient yet thorough permit reviews.

While encouraging domestic production, this bill would not minimize the environmental review that is an important part of the permitting process. Rather, this bill encourages more coordination and less duplication among federal and state agencies involved in permitting.

Passage of this legislation would help quell the growing global frenzy automakers face in seeking to secure their mineral supply chains, as well as provide a healthy boost to domestic manufacturers also reliant on a variety of raw materials.

Building off this momentum, 38 diverse companies, associations and chambers of commerce jointly urged congressional leadership in June to address U.S. dependence on foreign mineral and metal resources and pressed the need to bring the critical minerals legislation to the Senate floor.

The importance of this legislation cannot be understated: It would enable our nation to re-attract the investment in mining that has gone elsewhere for decades, creating high-wage jobs and providing reliable supplies of minerals for domestic companies like Tesla committed to bringing manufacturing back to the United States.

New Mexico’s policymakers should push for this bipartisan bill to be taken up by the Senate to ensure the state has every advantage when attracting new business and is better able to help the nation address our import reliance woes.

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