Policy Alert: Major Critical Minerals Policy and Regulatory Changes

Action: Executive Order “Immediate Measures to Increase American Mineral Production”

What it does: Citing the threat of “reliance on hostile foreign powers’ mineral production” and a goal to “take immediate action to facilitate domestic mineral production to the maximum possible extent,” the Order jumpstarts permitting and approval of critical mineral production projects. It also requests the National Energy Dominance Council (the Council) to seek “industry feedback on regulatory bottlenecks and other recommended strategies for expanding domestic mineral production.” It adds uranium, copper, potash, gold, and any other “element, compound, or mineral” that the Chair of the Council (Interior Secretary Doug Burgum) determines is critical. It also delegates authorities under the Defense Production Act of 1950 based on the earlier declaration of a National Energy Emergency.

Key Insights

• The Order also requires the Interior Department to identify “all Federal lands known to hold mineral deposits and reserves” and to “prioritize mineral production and mining related purposes as the primary land uses in these areas, consistent with applicable law.” This would encourage greater use of Federal lands for mining rather than conservation or other uses.
• It requests a report to clarify “the treatment of waste rock, tailings, and mine waste disposal” under the Mining Act of 1872, signaling potential legislative changes and strong deregulation.
• The Order waives certain requirements under the Defense Production Act and delegates certain authorities under it to the Secretary of Defense and other officials, including the crucial authority under Section 303 to make purchase commitments for industrial production and make subsidy payments for domestically produced materials.
• The effect of the Presidential waiver removes the requirement in the Act that there be a “domestic industrial base shortfall” before the Act can be invoked, thus potentially expanding the types of commodities purchased and subsidies granted under the Act, which may be seen as a greater reliance on industrial policy. While similar delegations have been made before, this is an expansion of the Act’s reach and the powers of the Defense Department.
• For applicants for loans, loan guarantees, grants, and equity investments in the US, or increasing US access to foreign critical minerals, the Order effectively repeals a requirement in a 2018 SEC regulation (Regulation S-K Part 1300) that requires disclosure and reporting of mineral properties material to a company’s business or financial condition, including disclosure of mineral resources and reserves, supporting documentation, and technical report summaries. This will reduce the compliance burden on public companies but will require disclosure for companies to investors.
• The Order also instructs the Secretary of Defense to use the National Security Capital Forum “to pair private capital with commercially viable domestic mineral production projects to the maximum possible extent” and seeks a “dedicated mineral and mineral production fund” for domestic investments made by the Development Finance Corporation.
• The Order supports some efforts at greener energy by including electric vehicles and wind turbines as examples of derivative products of critical minerals.