A pro-mining Trump administration will still face economics and environmentalist opposition

President-elect Donald Trump campaigned on a promise of a "drill, baby drill." Having nominated an oil company executive for Energy secretary and the governor of a major oil-producing state for Interior Secretary, it appears he plans to make good. 

It’s likely that his "drill, baby drill" strategy for American energy dominance will also translate to a "mine, baby mine" strategy for mineral supply chains. According to experts, that may not unto itself result in a domestic-mineral supply-chain boom. 

Market dynamics

While a friendlier regulatory environment will make it easier for oil and gas companies to produce more of their product, there’s a point at which the supply begins to exceed demand. 

As energy analyst David Blackmon told Just the News after Trump sailed to victory earlier this month, oil and gas prices can only go so low before companies begin holding back rig counts to remain profitable. 

“If consumers are thinking this election means they're going to have immediate lower prices at the gas pump, that's not going to happen," he said. "Although it's something that could come about just because of market dynamics."

North American natural gas prices at regional hubs are at historic lows this week, OilPrice.com reported, and the U.S. natural gas rig count has been responding to that market pressure. 

David Hammond, a mineral economist with decades of experience as a mining consultant, told Just the News, that a "mine, baby mine" administration will help improve domestic mineral supplies, but there’s a lot more to building a mine than getting the permits. 

“On the petroleum side, that’s all positive. On the mineral side, I think it’s a bit more cloudy,” he said. 

Hammond said that mining investors are looking for a high degree of confidence that a project is going to start producing with a favorable price. With mineral markets, there’s a lot of uncertainty.

The price “may be too low to make some of these projects go economically, even though there's an improvement in, or reduced delays in, getting the permits in place,” he said. 

Back and forth

Trump has only four years to do whatever he’s going to do for the mining industry. While another Republican administration supportive of mining could follow, there’s no guarantee, and even eight years may not be enough. 

Twin Metals Minnesota has for decades been pursuing a copper and nickel mine near the Boundary Waters Canoe Area Wilderness in the state. 

Democratic President Barack Obama passed a moratorium on federal land in the area near the end of his second term in 2016. During his first term, Trump reversed the decision, and returned mineral leases to Twin Metals. President Joe Biden then canceled those leases. And in 2023, he banned mining on 225,000 acres of the Superior National Forest near the Boundary Waters wilderness. 

A similar back and forth happened with the Ambler Access Road in Alaska. The 211-mile gravel road would have connected mining districts in west-central Alaska to a highway that runs through the middle of the state. The miles are rich in copper and cobalt. 

In his first term, Trump approved a permit to build the road, but after Biden took office, Interior Secretary Deb Haaland ordered a new analysis, arguing that the Trump-era studies were inadequate. In July, the Biden-Harris administration blocked the road. 

While Trump could undo the decisions in his second term, investors would have to wonder what the next administration will do – something that’s impossible to predict with any degree of certainty.

Environmentalist opposition

Even if a two-term Republican administration follows Trump’s second and final term, which would secure 12 years of a pro-mining White House, there’s little that can be done to stop environmental groups from blocking mining projects with litigation. 

The Natural Resources Defense Council, which brought in $555 million in 2022, was instrumental in stopping the Pebble Mine in Alaska, something the organization takes great pride in, despite being supportive of an energy transition to electric vehicles, battery storage, wind and solar.

In 2015, Independent journalist John Stossel interviewed Bob Deans, senior adviser of communications for the NRDC, and asked him whether there was any project that NRDC didn’t fight. While Deans told Stossel there were examples of such mines, the NRDC, Stossel said in a recent update that included the interview, never furnished him with the name of a project the group didn’t oppose. 

NRDC isn't the only pro-energy transition environmental organization fighting every mining project. 

The Center for Biological Diversity filed lawsuits against a lithium project in Nevada, claiming it threatened an endangered species of buckwheat. Though the group failed to stop the mine so far, litigation raises costs and creates uncertainty for investors. Hammond, the mineral economist, said that even with extensive permitting reform that expedites the process, not much can be done about environmentalist litigation. 

“You're still going to have opposition from the green industry," he said. "That's not going to go away, even if the rules change, because they can still use litigation to delay these projects. Unless Congress decides that you will not be allowed to file a lawsuit as an intervener in a mining project."

And such a law would likely be ruled unconstitutional, even with the current makeup of the Supreme Court. 

Other regulatory impacts

Trump has said he’ll torch the Biden-Harris administration’s EV mandate, which would impact demand for the minerals. According to E&E News, the United States' EV market accounts for only 8% of global lithium demand, 3% of nickel demand, 7% of cobalt demand and 6% of natural graphite demand. An end to the EV mandate and tax incentives for new EV purchases would still leave a large global demand. 

Hammond said one thing that could change the demand picture is if the Defense Department decides to establish buying programs to create mineral stockpiles. 

“The government will want to ensure that there's enough available supply if we need it in a conflict situation for national security," he said. "I think we're headed toward that, even it doesn't happen over the Trump administration. I think that's going to be a reality that will evolve over the next decade, just because the Chinese have got glommed onto so much of the global supply of these minerals."

A government guarantee to buy the minerals at a price that makes it economical to mine will spur domestic production. However, Hammond said, that still wouldn’t create an enormous demand. 

Absent codified permitting reform, any pro-mining actions Trump takes during his second administration won’t be solid enough for investors to be attracted to long-term mining projects. That effort, too, is stymied by environmentalist opposition. 

Unlike the oil-and-gas industry, which can drill until the demand is entirely satisfied, to do the same, the mining industry will need something more than a pro-mining president in its corner.