Published: October 20, 2014 |

Mark Fellows
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Last year, Hecla’s Lucky Friday mine in the Silver Valley produced 1.5 million ounces of silver.

Not one of those ounces came downhill to Ground Force Manufacturing in Post Falls, to Titan Spring in Hayden, or to any other North Idaho manufacturer.

In fact, none of the precious metal stayed in the U.S.

That’s not just a problem for Hecla and Ground Force, sources say. It’s at the heart of a big, big problem for the American economy.

A 49-page report released last month shows a major disconnect between U.S. miners and their brethren in the manufacturing sector. The study, done by Mark Fellows for SNL Metals and Mining, follows minerals mined and refined in the U.S. through their metamorphosis into eventual products. Unfortunately for both industries, there’s a huge gap between them.

“Manufacturer supply chains have become very long, complex and quite exposed to a whole range of risks that they have no control over,” said Fellows, listing geopolitical risk, natural disasters, conflicts, and concerns about ethical sources of materials.

Long, complex — and expensive, says Ground Force CEO Ron Nilson. He, like Fellows and many in the mining and manufacturing sectors, blame unnecessary permitting processes and excessive regulations for putting the brakes on American production that would otherwise lead to more good jobs, a vibrant economy and a rapidly dwindling federal deficit. Attending a national manufacturers’ convention earlier this month in Washington, D.C., Nilson said industry experts estimate excessive regulations cost the American economy some $2 trillion annually.

“When a mining permit takes 10 years that’s a blow to both industries,” said Nilson, who has visited more than 300 open pit mines all over the world. “We need both those resources and those jobs.

“We’re getting raw materials, but the sad truth is we aren’t getting them from our own country. That’s why, in the mining sector, so many of these jobs have gone overseas.”

Fellows, the study’s author, said sensible permitting timelines that wouldn’t jeopardize the environment would satisfy consumers and industry. It’s expensive and unnecessary, he said, for so much of America’s metals and minerals to be exported when there’s so much demand for it right here at home.

“Consumers are asking the manufacturers, ‘Where do the materials come from that go into my car?’” he said. “If you locate mining fairly close to manufacturing in the U.S., you can give consumers a whole lot of comfort that the materials that are being used haven’t been produced by child labor, and it’s not funding a nasty guerrilla war somewhere.

“This is becoming quite a powerful argument. And of course we are putting across the view that although the U.S. remains the largest manufacturing nation globally, it’s slipped in the rankings very significantly.”

It’s slipped much more in mining, where the U.S. has tumbled from the world’s No. 1 miner in 1990 to seventh now — and still falling.

Permitting, Fellows insists, is a key that unlocks many solutions. And it doesn’t mean tossing out environmental standards with the heavy metal residue.

“We’re not talking about making environmental regulation less stringent,” he said. “What we’re talking about is simply ensuring the process is expedited without losing any of its integrity.

“What we’re pointing out is that in other well-developed, civilized countries such as Canada and Australia, this permitting process is carried out to the same kind of environmental standards in timeframes of two to three years, as opposed to seven to 10 years we see in this country.”

Hecla Mining CEO Phil Baker said the extensive permitting process is devastating.

“There isn’t anyplace in the world that can do a better job of producing products safely, with environmental protection, as cost-effectively as here in the U.S.,” Baker said. “We have the most innovation, the best organization, the best work force and the best flexibility for the private sector to get that to happen, which provides a significant competitive advantage when operating in the U.S. But you need to have a regulatory environment that encourages that. And we have just the opposite. We have a regulatory environment that forces us to spend years and millions and millions of dollars to get the permits necessary to do the work, even at existing operations.”

U.S. Sen. Jim Risch said the regulatory burden that includes mine permitting has gone beyond excessive. He noted that in an average year, Congress will adopt roughly 800 pages of new laws. In that same average year, he said, the federal bureaucracy will adopt about 80,000 pages of new rules and regulations. And that’s not the worst of it.

“For Congress to get rid of or amend a regulation, the House has to approve it, the Senate has to approve it and the president has to sign it,” said Risch, ranking member of the Senate Small Business Committee. “Bureaucrats have that power by themselves. They can put it in place . . . and it stays there forever until bureaucrats change it or Congress changes it. That’s outrageous.”

Hanady Kader, a spokesperson for the federal Environmental Protection Agency Region 10 office in Seattle, declined comment on specific questions about permitting and other regulations. However, she recommended questions be directed to other regulatory agencies and gave the following statement in response to the newspaper’s request:

“Mining operations commonly trigger the need for water and air permits and other authorizations or licenses that must be obtained from different levels — including local, state, and federal. EPA supports the approach of facilitating collaboration between applicants and regulatory agencies in addition to concurrent, rather than sequential, reviews for permits, which helps all parties engage early in the permitting process.

“EPA coordinates with federal and state partners, industry and the public to ensure mining proposals are consistent with existing laws and best-available science. However, with the exception of a few states in which EPA issues air and water permits pursuant to the Clean Air Act and Section 402 of the Clean Water Act, EPA is not generally responsible for issuing permits for mining-related activities. EPA provides comments and assistance to the U.S. Army Corps of Engineers, states, and other agencies that do issue such permits. EPA also has the responsibility to review Environmental Impact Statements prepared pursuant to the National Environmental Policy Act for proposed mining activities.”

— By: Mike Patrick, The Coeur d’ Alene Press