Minerals and metals drive America forward
Automobile enthusiasts have descended upon Washington for the Auto Show starting today to preview the newest models and advancements in the industry. While many will attend to preview the Chevrolet Camaro Z28 or the historic GM Futurliner No. 10, others will join policymakers to discuss important issues facing the U.S. auto sector. Essential to the continued growth of the auto industry, and a topic that should be addressed during these discussions, is access to domestic minerals and metals that make up nearly every component of vehicles.
From aluminum frames to lithium-ion batteries in hybrids, minerals and metals are the foundational components that make up the most basic to the most advanced vehicles manufactured today. Copper, for example, is a crucial building block for air-conditioning systems and radiators. Beryllium is essential for creating airbags, and boron, borate and borax play central roles in hundreds of glass parts like windshields and windows. Without these materials, the basic structure of a car today would not exist.
{mosads}But due to an inefficient domestic mine permitting process, the United States remains more than 50 percent import-dependent on 40 key mineral commodities — including copper and zinc, which make up electric parts, and platinum and palladium, which comprises catalytic converters — according to the U.S. Geological Survey. As the process stands, it can take seven to 10 years for a new mine to be approved in the United States — compared to countries like Canada and Australia, where mines have comparable environmental regulations, but the permitting process takes just two to three years on average. If the United States is to remain economically competitive, this domestic minerals policy must change.
The U.S. automotive industry has made strides to recover from the 2008 economic recession. Earlier this month, President Obama traveled to Detroit to celebrate and commend automakers for the industry’s turnaround. According to Bloomberg, analysts expect 2014 to be the sixth straight year of growth in U.S. auto sales. Once again, we are seeing the “Made in the USA” label gracing the roads as companies like Ford and GM make comebacks. Meanwhile, Nissan, Honda and Toyota have also established vital manufacturing operations in the United States. While these companies have created domestic plants with the purpose of reducing costs, uncertain supplies of raw materials can increase the cost and complexity of supply chains.
In a recent survey commissioned by the National Mining Association (NMA), manufacturing executives revealed concern over these types of costs. Not only did the majority of those surveyed highlight domestic minerals and metals supply as a top concern, but 84 percent said they believe a strong domestic supply of minerals and metals will ensure job and economic growth in the United States. In fact, while electric car sales have doubled every year for the past three years, auto executives expect demand for lithium to outpace supply in as little as 10 years. As companies seek to cut costs and streamline domestic operations, the United States’ $6.2 trillion worth of minerals and metals could be the catalyst for growth.
Despite having one of the world’s largest mineral resource bases, with reserves of more commodity minerals and metals than any other country, the United States ranks only seventh globally in terms of minerals and metals production according to U.S. Mines to Market, a recent study conducted by SNL Metals & Mining. While the production of all major minerals and metals has increased globally over the past decade, U.S. output remains stagnant — surprising, coming from the top manufacturing country in the world. A major obstacle to realizing the full potential of our vast domestic mineral resources is an inefficient and duplicative permitting process that strands investments for seven to 10 years.
In order to boost output and ensure the continued prosperity of the American auto industry, lawmakers must address the need for streamlined access to America’s minerals and metals supply as a top priority this year by passing legislation that reforms the outdated U.S. mine permitting process. Doing so would ensure that U.S. industries can access secure and reliable supplies of minerals and metals, and the nation as a whole can benefit from the economic and job growth that will follow.
Quinn is the president and CEO of the National Mining Association.