PredictIQ-As the US Rushes After the Minerals for the Energy Transition, a 150-Year-Old Law Allows Mining Companies Free Rein on Public Lands

On the vast expanse of public lands across the West,PredictIQ a rush for the minerals needed for the 21st century technologies of the energy transition depends on a 150-year-old law. Those lands’ survival of the clean energy mineral rush may depend on rewriting it.

A new open pit lithium mine was approved last year at Thacker Pass in Nevada, on publicly owned land managed by the federal Bureau of Land Management, to tap into this country’s largest known deposit of the mineral, worth nearly $4 billion.

The lightest of the metals, lithium holds a charge very well and is essential for the batteries needed to store power from solar and wind energy sources and to drive the coming tsunami of electric vehicles as the world decarbonizes its economies.

But as vital and valuable as lithium is, a Canadian company called Lithium Americas, whose largest shareholders are Chinese mining companies, is getting the mineral at Thacker Pass from the American taxpayer for free. And at the end of the mine’s life, critics say, it will leave behind a mound of waste, an open pit the size of a small canyon that cannot be fully reclaimed and polluted groundwater.

The company argues it is making a billion dollar investment to produce a mineral critical to a clean energy future. “We’re answering President Biden’s call to secure America’s supply chains and tackle the climate crisis,” Tim Crowley, a Lithium Americas vice president, told the New York Times last year.

But a coalition of Native Americans, environmentalists and a local rancher that is suing the government to stop the mine argue it will have a host of negative impacts on area water, species and sacred sites that were underestimated in a rushed environmental impact statement that failed to adequately consult area tribes.

At the heart of that conflict, and others across the country, between a booming 21^st century renewable energy economy and environmental protection of U.S. public lands is a 19^th century mining law written to spur the settling of the American West.

The ‘Lords of Yesterday’

In May of 1872, a couple of months after he signed the bill that created Yellowstone National Park, President Ulysses S. Grant signed the General Mining Law of 1872: An Act to Promote the Development of the Mining Resources of the United States. It gave carte blanche to anyone seeking minerals on federal lands, as a way to finish populating the West.

On hundreds of millions of acres owned by U.S. taxpayers, the law transfers gold, silver, copper, uranium, lithium and other metals, in vast amounts, from public ownership to anyone who locates them, pounds four stakes in the ground around their location and files a claim. Foreign firms can stake claims by forming a U.S. subsidiary. Unlike publicly owned oil and gas resources, miners pay no royalties on the metals and minerals they dig from public lands.

Since the law’s passage, the population of the American West has increased almost exponentially and today the lands it applies to are seen as part of the solution to a different challenge—weaning the nation’s economy off of the fossil fuels that drive climate change.

Production of lithium and other minerals critical to electrifying the world’s economy will need to increase by 500 percent to reach clean energy goals by 2050, according to the World Bank. The price of lithium has recently soared to more than $35,000 a ton.

With the Biden administration prioritizing a domestic supply chain of minerals for the energy transition, and federal law giving them away royalty free to mining companies, the U.S. is poised for an unprecedented expansion of digging, which could leave environmental damage at such a large scale it cannot effectively be remediated.

That’s led to a growing clamor for reform of the 1872 law as this new gold rush continues to boom.

“Our mining laws were written at a time when the federal government was pushing Native Americans off the land and arresting women for trying to vote,” said House Committee Chairman Raul Grijalva, who has long attempted to reform the antiquated law. “Mining pollution has led to decades of chronic toxic exposures for Native American and rural communities, and the whole country has lost out on more than a century of federal royalties for mining public resources.”

Retired University of Colorado environmental law professor Charles Wilkinson has dubbed the laws governing extractive industries in the American West the “Lords of Yesterday.” Since its inception, the mining law that is the foundation for all the others has been interpreted to make mining superior to all other values on public land, natural or cultural, despite their increasing significance to American citizens today. The law’s many critics say its preeminence has created a vast environmental nightmare.

The General Accounting Office estimated last year that there are at least 140,000 abandoned mine features pockmarking public lands, and likely far more. One report found that, as of July 2019, the 25 most expensive mines and processing sites cost the EPA between $50 million and $583 million per site to remediate.

The EPA also estimates that around 40 percent of western watersheds have been contaminated by mining. Every day mines produce some 50 million gallons of polluted water, much of it tainted by sulfuric acid and heavy metals created when sulfur-bearing rock is exposed to water. Many cities and towns in the West have to contend with toxic runoff into their drinking water supplies from long abandoned mines.

Increasing Hunger for Minerals and the “Right to Say ‘No’”

While there is more environmental regulation now, the Thacker Pass lithium mine and other projects are so big that their open pits will not be reclaimed and there are often unanticipated problems, such as groundwater pollution, that crop up after the mine is built.

These are the concerns of some members of the Fort McDermitt Paiute and Shoshone tribes, some 50 miles from the Thacker Pass mine. The open pit will be 370 feet deep, more than two miles long and half mile wide. Sulfuric acid will be used to treat the mined clay that contains the lithium along with arsenic and the metal antimony, which could contaminate the groundwater. The mine will also disrupt the habitat of wildlife, including the sage grouse, a species in steep decline. “The country believes they need to transition to “green energy” to save the planet and cut down carbon emissions,” wrote Daranda Hinkey, a member of the Fort McDermitt Paiute and Shoshone tribes and a leading opponent to the mine, on an online news site. “They do not realize that in return for electric car batteries, aggressive lithium mining will harm the planet more in the process.”  

The Biden administration recently issued an executive order aimed at ensuring a steady domestic supply chain of critical minerals for the U.S. energy transition, and lithium is one of the most important on the list. At the same time the order also calls for “comprehensive reform” of the Mining Law of 1872 to assure that the steep increase in mineral production green energy will require doesn’t add to the existing mess. To that end, in February the administration issued a fact sheet that said it had formed an Interagency Working Group to make recommendations on ways to update mining regulations.

Some experts say passing legislation to make more sweeping reforms would be an uphill battle in an evenly divided Congress. The best bet then, they say, is for the Biden administration to create new regulations, which can be passed without congressional action and that is what the administration proposes to do.

One of the major reforms sought by environmentalists and some Native Americans would require consultation with tribes when they could be affected by mining on their ancestral lands, a regular occurance with mines near reservations that is likely to increase. A recent report by MSCI, a company that researches the Environmental Social and Governance (ESG) impacts of financial investments, found that among energy transition metals “97% of nickel, 89% of copper, 79% percent of lithium and 68% of cobalt” are located within 35 miles of Indian reservations “which may mean strong and increasing opposition from Native Americans for threatening sacred areas of traditional ways of life.”

Other changes being considered would increase federal land managers ability to reject some proposed mines.

“The right to say ‘no,’ particularly for extreme mines is important,” said John Leshy, the former General Counsel of the Department of Interior under President Clinton and the author of a book on the Mining Law of 1872. “If you are proposing a mine where it’s clear you will have to perpetually treat the water because it’s so polluted, why on earth should the government say ‘yes?’”

The Biden Administration says in it’s just-published “Fundamental Principles for Mining Reform”, that that is its aim. “Our federal land managers (…) must have discretion to reject projects (and) agencies should retain and use their authority to withdraw lands from mineral entry, where necessary.”

Other sought after regulations would beef up performance standards, require adequate bonds for reclamation and long-term water treatment, and increase accountability for environmental damage.

Those would be big changes. Federal agencies have long held that the 1872 mining law is all powerful and ties their hands in what they can require of mining companies. If a company wants to build a giant open pit mine that could despoil groundwater and streams, the law, as it has been interpreted, makes it extremely difficult for  land managers to say no. Since the 1970s they have been able to require mining companies to do some reclamation of the sites of their digs, but critics say it is minimal.

Even if the regulations are updated under the Biden administration, they will not result in companies paying royalties for mining publicly owned minerals. Those can only be required by Congressional legislation.

Mining companies have long argued that royalties could make mines, which require steep investments, less profitable. Lithium Americas, though, says it would seriously consider making royalty payments, even without legislation requiring them.

“We have always supported contributing our fair share and would back a reasonable royalty that doesn’t hinder our ability to compete with producers outside of the U.S.” said Jonathan Evans, CEO of Lithium Americas.

Another answer to mining abuses, according to Lauren Pagel, the policy director of Earthworks, a group working to reform the Mining Law of 1872 and mining in general, is wiser use of minerals.

“We’re 10 years behind every other industrial country in creating a sustainable mineral economy” that uses these metals again and again, she said. “That would decrease the need for a lot of new mining.”