Domestic Minerals Production Could Boost Manufacturing
After decades of outsourcing, the resurgence in domestic manufacturing is now America’s favorite comeback story. Factors that once drove companies overseas — including labor and energy costs — are no longer considered insurmountable obstacles, as companies from Apple to GE to Ford bring production back to our shores. A recent Boston Consulting Group survey of 106 companies with more than $1 billion in sales revealed that 37 percent planned to re-shore or were “actively considering” it. This encouraging development stands to reinvigorate our economy and advance our competitive edge.
Yet one troubling trend could signal a major complication for returning manufacturers: our nation’s increasing reliance on unstable supply chains of imported minerals.
Industries across the country depend on minerals such as aluminum, copper, silver, cobalt, nickel and gold for the production of smartphones, solar panels, energy-efficient vehicles, military body armor, MRI machines and countless other high-tech products critical to the American way of life. Here in the United States, there are more than $6.2 trillion worth of key mineral resources ready to be developed and put to good use by our nation’s innovators and manufacturers.
But despite our wealth of minerals, U.S. manufacturers were forced to import more than $42 billion worth of minerals last year — more than half of their needs. Domestic companies are completely dependent on imports for 18 different minerals and metals crucial to manufacturing supply chains, up from just eight minerals in 1995. Increasingly, our core industries are left with no choice but to rely on unstable, unreliable sources for the mineral raw materials they need — and this unpredictability comes at no small cost.
With such an abundance of mineral resources here in the United States, why are manufacturers being kept from utilizing more domestic minerals and metals? The answer is the duplicative permitting process for new minerals mines. This process, outdated and entangled in a bureaucratic red tape, continuously stalls projects with unnecessary delays, ultimately keeping valuable raw materials locked underground and jobs overseas. As it stands, it can take nearly a decade for companies to receive approval to mine for minerals in the United States — five times longer than it takes in countries, such as Canada and Australia, with similarly strict environmental regulations.
There is no question that the United States’ lagging mineral development is a threat to manufacturing. A recent PwC report revealed that 73 percent of CEOs in the automotive industry have businesses that face minerals and metals scarcity. The same problem applies to 78 percent of high-tech industry CEOs and 50 percent of aviation CEOs. In a highly competitive global economy where demand for minerals continues to grow and the stability of supply is increasingly a concern, this trend is unsustainable and harmful to an economic rebound post-recession.
Fortunately, leaders in Washington are beginning to recognize the importance of minerals to American industries and understand the pressing need to address permitting delays. In September, the U.S. House passed the bi-partisan National Strategic and Critical Minerals Production Act of 2013 (H.R. 761), which would streamline the permitting system for minerals mining, while in no way minimizing or hindering the important environmental protections already in place. By requiring coordination between federal and state agencies, H.R.761 facilitates efficient, timely and thorough permit reviews needed to encourage U.S. minerals mining and fortify supply chains. Now, the Senate must act to bring similar legislation to the floor.
The United States needs policies that support domestic mineral production. This will ensure access to the raw materials needed for innovation, shorten and simplify manufacturers’ supply chains and spur job growth here at home. We must continue to encourage our nation’s leaders to work together to implement the policies that will bring economic opportunity back to our shores and “Made in America” the rule — not the exception.
Hal Quinn is president and CEO of the National Mining Association (NMA), which advocates on behalf of America’s mining and minerals resources.