A new report by S&P Global Market Intelligence, “Mine Development Times: The U.S. in Perspective,” has mentioned essential data about the U.S. mining industry. This report is trending in U.S. mining news. According to this report, mines in the United States take an average of 29 years to develop from discovery to production. It is the second-longest time taken for mining development. The giant timeline is hindering Washington’s initiatives to increase the production of lithium, nickel, and other metals essential for the energy transition, as stated in the report released on July 18th. Which country takes the longest to develop its mines? It is Zambia, and constructing a new mine takes 34 years in this country.
Key Insights from the Report on the United States
Lengthy and Uncertain Mine Development
The report mentions that developing a mine in the U.S. mining industry is lengthy, costly, and highly uncertain. While mining projects in Canada and Australia also take time (respectively, 27 and 20 years on average), they reliably reach production. Even fully permitted mines in the U.S. mining industry face higher litigation risks, leading to more legal challenges. This uncertainty may explain why exploration budgets in Canada and Australia have been 81% and 57% higher than in the U.S. over the past 15 years.
Lower Investment Despite Rich Resources
The U.S. has significant endowments of essential metals for energy transition, such as copper, lithium, nickel, and palladium. However, compared to Canada and Australia, it receives less exploration investment per metric ton of endowment. Despite comparable copper resources, the U.S. attracts significantly lower exploration budgets.
Political and Institutional Factors
Mining’s larger role in Canada’s and Australia’s GDP and employment may drive more robust political support for projects. Additionally, Canada and Australia have dedicated ministerial offices for mining, which may streamline permitting. In contrast, the U.S. shares mining jurisdiction between federal and state governments, potentially complicating the process.
Mineral Development Timelines
Globally, gold mines develop the fastest, averaging 20.8 years. Copper, critical for the energy transition, is one of the slowest, taking 24.1 years. In the U.S. mining industry, gold mines take 24.2 years and copper mines 31.8 years to develop.
Challenges and Opportunities in U.S. Mining Industry
Increased Demand for Critical Minerals
The energy transition will boost demand for materials like copper, lithium, cobalt, and nickel. The U.S.’s Inflation Reduction Act predicts a 20-30% compound growth rate for these “battery minerals” by 2035.
U.S. Reliance on Foreign Sources
The U.S. depends on countries like Chile and Australia for critical minerals, leading to competition with China for resources like refined copper.
Lengthy and Uncertain Permitting Process
U.S. mine development is lengthy and costly, with significant litigation risks, particularly on federal lands. The process involves multiple agencies and can take years to secure necessary permits, contributing to delays and increased costs.
Political and Institutional Challenges
Permitting is more predictable on private or state lands. Canada and Australia have dedicated ministerial offices for mining, whereas the U.S. lacks a similar structure, complicating the development of its vast mineral endowments.
The image below shows a breakdown of multiple challenges in the U.S. mining industry.
Figure 2: Operational Challenges in the U.S. Mining Industry as Mentioned in the Report by S&P Global
Conclusion
S&P Global analyzed a sample of 268 operating and non-operating mines and found that the U.S. has the second-longest development times globally. The U.S.’s non-operating mines average over $100 billion in value, which highlights their significant potential. This U.S. mining news could influence the government to take swift action toward faster mining development in the country.
