DEEP DIVE: Can the Mining Industry Resolve Its Ethical, Environmental Supply Chain Challenges?

DEEP DIVE: Can the Mining Industry Resolve its Ethical, Environmental Supply Chain Challenges?

As the global competition for rare earth minerals increases, lawmakers and experts have charted various courses for the future stewardship of the safety and health of workers involved in mining and the treatment of the environment where those mines are located.

Minerals like lithium, cobalt, neodymium and used in the technology that powers the everyday operations of businesses and lives of consumers, from batteries to semiconductors to magnets.

A panel of mining industry experts appeared before the U.S. House Subcommittee on Environment, Manufacturing, and Critical Materials 13 June 2024 to grapple with questions about the industry's carbon footprint, as well as ethical issues surrounding workers in some foreign mines and technological innovation that aims to provide solutions on both fronts.

According to the National Mining Association, it takes an average of seven to 10 years to permit a mine in the United States. The global lead time to open a mine is even longer, having grown to 17.9 years from 2020-23, versus 12.7 years for a similar mine 15 years ago.

“Sourcing the vast majority of critical materials from other countries, including countries that lack environmental and worker health and safety laws, is not sustainable if the U.S. wants to continue to lead the innovation economy,” said Martin Stratte, partner at Hunton Andrews Kurth LLP, in his witness testimony.

There is a strong bipartisan emphasis on promoting U.S. mining over foreign competition, but there remain differences along party lines about the extent to which the U.S. Environmental Protection Agency (EPA) should play a role in regulating the industry and which materials should be prioritized.

The Critical Material TRACE Act, or H.R. 8187, aims to address many of the environmental and human rights concerns presented by the mining industry, which is consistent with extended producer responsibility (EPR) standards implemented across many other sectors. It was introduced by Subcommittee Ranking Member Paul Tonko (D-N.Y.) and U.S. Rep. Garrett Graves (R-La.) and was also praised by industry representatives on the witness stand.

It includes the following tracking and reporting standards, measured via digital identifiers:

• Material origins
• Recycling and reuse pathways
• End-of-life management
• Chemical, diagnostic, maintenance, repair, and performance data
• Human rights, labor, and environmental concerns associated with material sourcing

“We must ensure that we continue to have a strong domestic market for clean energy technologies, so that companies are willing to make long-term investments in this sector,” said U.S. Rep. Frank Pallone, (D-N.J.), the ranking member of the House Energy and Commerce Committee. “Creating a circular economy for critical minerals is a win for our environment, our economy, and our national security.”

Industry leaders like Matt Vincent, Executive Director of the Montana Mining Association insist that miners are not opposed to regulation, and support many subsides and programs that incentivize cleanups, like the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, the Regulatory Clarity Act (RCA), and the Investment in Infrastructure and Jobs Act (IIJA).

CEO and President of Cirba Solutions David Klanecky said his company plans to invest $2 billion into the battery recycling sector in the coming years, which is expected to create more than 500 jobs in the U.S. by 2028.

“For the U.S. to win, we need a combination of mining and recycling to ensure battery materials stay in the United States – creating a holistic closed loop critical materials strategy,” Klanecky said. “Cirba Solutions can recover over 95% of these critical materials such as lithium, nickel, cobalt, and manganese. These materials are almost infinite in their recovery and reuse.”

The shift towards recycling these critical materials is expected to significantly reduce dependence on mining and imported resources, promote environmental sustainability, and support the circular economy. In about 15 years, the U.S. should have the capability to source 34% of its lithium supply and 40% of its cobalt supply from recycled content, according to a study published by Oxford University Press.

Michelle Michot Foss, a fellow in Energy, Minerals & Materials at Rice University's Baker Institute for Public Policy, said it is important to distinguish between countries with established regulatory oversight and those without.

“Whether truly green materials can be provided and be affordable while satisfying the gamut of views and expectations regarding environmental justice is, by itself, a massive undertaking,” Foss said. “All of this is compounded by the maturing global mining fleet and the legacy of abandoned mines and facilities.”

House Republicans, Industry Leaders Back Reform Bill

Chemistry Matters, the advocacy arm of the American Chemistry Council (ACC), urged lawmakers in a 10 June 2024 letter to pass a regulatory reform bill that would require more transparency and public input.

The bill, H.R. 8204, Regulatory Early Notice and Engagement Act, was introduced by U.S. Rep. Guy Reschenthaler (R-Pa.), U.S. Rep. Don Davis (D-N.C.), and Tim Burchett (R-Tenn.) on 1 May 2024.

The legislation mandates that rules issued by federal agencies must identify the problem the rule addresses, state whether the rule is required by law or necessary, assess available alternatives, and invite public recommendations.

“As rules are increasingly issued, reversed, and restored with administration changes, businesses are left to navigate a sea of regulatory uncertainty and unable to plan for long-term investments,” the letter's authors wrote. “This regulatory whiplash impedes our ability to strengthen our economy in the U.S. and instead pushes manufacturing to other countries. All of this undermines national priorities, impedes domestic innovation, and threatens U.S. competitiveness.”

The letter was co-signed by 46 trade groups across a variety of industries, including the American Petroleum Institute (API), the National Automobile Dealers Association (NADA), National Association of Home Builders (NAHB), and the U.S. Chamber of Commerce.

GOP Goes on Offense Against ESG

An 11 June 2024 report issued by GOP members of the House Judiciary Committee alleges a group of left-leaning activists referred to in the report as the “climate cartel” have colluded with major U.S. financial institutions to force American companies to decarbonize and to reach net zero emissions.

Environmental, social, and governance (ESG) standards have become increasingly cited as benchmarks for companies to measure their progress toward sustainability goals.

The report alleges that corporations were forced to disclose their carbon emissions and then reduce them. House Republicans criticized these environmental measures for their economic consequences, arguing they would harm American consumers.

House Judiciary Committee Ranking Member Jerrold Nadler (D-N.Y.) pushed back, denying the allegations in the GOP report. Democratic House Judiciary staffers issued a report that alleged Republicans misused the Sherman Antitrust Act to shield fossil fuel producers from regulatory scrutiny.

“The Majority did not find evidence of wrongdoing in the 2.5 million pages of documents they collected over the course of this investigation, but that was never the point,” Nadler wrote. “Their purpose was to use the Committee as a cudgel, and to bully investors into withdrawing from ESG partnerships.”

Wiping the Slate Clean

A new bill that empowers the Federal Trade Commission (FTC) to enforce a series of labeling requirements for household wipes overwhelmingly passed the House 351-56 12 June 2024.

U.S. Rep Lisa McClain introduced H.R.2964, the Wastewater Infrastructure Pollution Prevention and Environmental Safety Act (WIPPES). McClain, a Republican, represents Michigan's 9th Congressional District, which includes a portion of the Detroit metropolitan area.

The legislation, which requires “Do Not Flush” to be included in the packaging and labelling of products like baby wipes, cleaning wipes or other personal care wipes, was supported by the Water Environment Foundation (WEF) and the National Association of Clean Water Agencies (NACWA). These groups cited their concerns over the potential for improperly disposed wipes to clog critical municipal water infrastructure.

The bill has been received in the Senate and referred to the Committee on Commerce, Science, and Transportation.

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Editor's Note: 3E is expanding news coverage to provide customers with insights into topics that enable a safer, more sustainable world by protecting people, safeguarding products, and helping businesses grow. Deep Dive articles, produced by reporters, feature interviews with subject matter experts and influencers as well as exclusive analysis provided by 3E researchers and consultants.