The Great Debate

Don’t belittle Congress’s attempts to enhance mineral production

As someone deeply familiar with Sen. Lisa Murkowski’s leadership on the “Critical Minerals Policy Act,” John Kemp’s recent Reuters column criticizing the bill struck me as a cynically misguided reaction to her important work. Sen. Murkowski introduced the legislation in order to, as she put it, “keep the United States competitive and begin the process of modernizing our federal mineral policies.” This is a laudable goal and an important process, particularly as our foreign reliance increases for materials needed to build semiconductors, skyscrapers, and everything in between.

In Kemp’s view, however, the bill “deserves to die” because it would authorize new federal funding that he views as a sop to “special interests.” With all due respect, he’s wrong.

Murkowski’s legislation is one of the few examples of real bipartisan cooperation amid the dysfunction of Washington, having attracted nine Republican and nine Democrat co-sponsors.

The Critical Minerals Policy Act takes commonsense steps to facilitate increased mineral production here at home. Importantly, the bill authorizes funding to improve the United States’ permitting process, which industry analysts at Behre Dolbear have ranked as worst in the world at getting applicants a timely “yes” or “no” response. Such delays strand capital and have contributed to an ongoing decline in America’s share of private investment in exploration, which dropped from 10 percent in 2000 to 7 percent in 2013 according to the SNL Metals Economics Group. In response, the bill brings some needed accountability and resources to the federal agencies considering these permit applications.

The bill also recognizes the importance of geologic surveys, which can jump-start mining activity. The supply chains for mineral commodities begin with entrepreneurial geologists who go out and find this stuff. Sometimes they do it on their own; other times they use government data to get going. Murkowski’s bill places a particular emphasis on the latter, and it should. Up north, the Prospectors and Developers Association of Canada has found that every public dollar spent on geologic data generates approximately $5 in privately-funded exploration work. That’s a pretty good rate of return, even for those who balk at treating government spending as an investment.

Is there a way around the sale of ‘blood gold’?

Looking for the perfect holiday gift for that special person in your life? You can pick up an 18-karat gold designer bracelet at a swanky Fifth Avenue jeweler that is sure to do the trick. Yours for $995.

These days, even if gold prices are down a bit from recent highs, it’s hard to find a trinket that doesn’t swallow the paycheck. Now there’s something else you have to consider: it could be dripping in blood.

As 2013 draws to a close, gold is at the end of a 13-year price party that has powered a burst of exploration and gold mine development on every continent except Antarctica. It has also driven some of the world’s most brutal mining practices, as armed militias enslave whole populations, driving them to mine at the point of a gun. In the circles that monitor such activity, a phrase has emerged that should send fear into the hearts of miners and bullion dealers: blood gold.

Making oil and mining dollars transparent

By Raymond C. Offenheiser
The opinions expressed are his own.

For most of us, this July 15th will be the start of just another hot summer weekend. But for many, the day marks the one-year anniversary of Congressional approval of a landmark law that will lift the veil of secrecy on billions of dollars that flow every year from oil and mining companies to governments around the world.

Tucked into the massive Dodd-Frank Wall Street Reform and Consumer Protection Act is a provision requiring oil, gas and mining companies reporting to the US Securities and Exchange Commission (SEC) to disclose the payments they make to host governments.

From rural villagers in Africa to investors on Wall Street, the groundbreaking law casts the transparency net far and wide, arming the public with information it can use to track the amount of money governments receive from oil and mining companies. The provision, backed by a bipartisan group including Senators Lugar and Cardin, among others, requires annual reporting of taxes, royalties and other payments, and covers a broad range of US, European, Chinese, Brazilian and other companies. By law, the final regulation from the SEC — the regulatory agency responsible for implementing the law — should have been issued in April. However, no final rule has been issued.

Third time unlucky for BHP

- The opinions are the author’s own -

No one doubts BHP Billiton is the smartest, most innovative mining company in the world. It has shaken up a once-sleepy sector and transformed pricing and marketing of raw materials from copper to coal and iron ore.
BHP is the mining sector’s Goldman Sachs. It employs the best minds and campaigns to change practices which have been long-established but which the firm considers outdated in a successful quest to unlock immense value for its shareholders.

According to the firm’s website “At BHP Billiton we’re looking for people who want to grow with us around the globe, take chances and stand out from the crowd. We need people who embrace tomorrow, have vision, love stretching their minds and going far beyond what they thought was achievable.”

But like Goldman, BHP’s success has come at a price. The company is unloved. BHP’s success has bred envy among its competitors. Worse, the company’s aggressiveness has made it a host of enemies among competitors, customers and regulators. Now that backlash is hampering the company’s ambitions to grow.