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WV House committee advances bills seeking economic boost from extracting valuable substances from treated mine drainage

Article written by Mike Tony for the Charleston Gazette-Mail
January 27, 2022

The state House Energy and Manufacturing Committee has approved a pair of bills designed to encourage economic development from extraction of rare earth elements and critical minerals essential to technology products and national security.

House Bill 4003 would establish that any party that treats any mine drainage may derive “commercial benefit” from any elements or other byproducts of the treated drainage.

House Bill 4025 would provide a five-year exemption from severance tax starting July 1 for extracting rare earth elements and critical minerals.

The idea is to encourage treatment of acid mine drainage, addressing one of West Virginia’s environmental problems while clearing up what party can enjoy the profits of what is increasingly looking like a lucrative endeavor due to acid mine drainage’s high concentration of rare earth elements and critical materials.

Rare earth elements are a group of 17 metallic elements whose magnetic, electrochemical and other properties make them key components of cellphones, televisions, computer hard drives and other electronic devices as well as defense applications, including lasers and radar and sonar systems.

Rare earths are relatively abundant in the Earth’s crust, but minable concentrations are less common than for most other mineral commodities, according to the U.S. Geological Survey.

Former President Donald Trump issued an executive order in 2017 defining critical minerals as essential to U.S. economic and national security.

The United States had 1.5 million metric tons of rare earth elements in reserve as of Jan. 2021 — 3% of China’s total reserves, according to U.S. Geological Survey data.

West Virginia Water Research Institute Director Paul Ziemkiewicz argued before state lawmakers that rare earth recovery efforts could be a long-term economic solution for the state last year, when the

Joint Economic Development Commission and Joint Standing Energy Committee focused on rare earth elements legislation during interim legislative session meetings.

The institute has been assessing the feasibility of scaling up acid mine drainage treatment technology to support a nationwide supply chain of valuable rare earth elements and critical minerals.

HB 4003 would follow through on Ziemkiewicz’s suggestion to state lawmakers that they clarify who owns the resources resulting from treated acid mine drainage.

A state-issued National Pollutant Discharge Elimination System permit for discharging wastewater is required to treat water for mine drainage, DEP General Counsel Jason Wandling explained to the committee Thursday.

Permit holders are responsible for ensuring that water meets water quality standards before it is discharged back into receiving streams, Wandling noted.

Ziemkiewicz told state legislators that U.S. efforts to get ahead in the rare earths market has created an opportunity for West Virginia to supply rare earth elements and critical materials for the rest of the nation.

“The problem of polluted mine drainage is a big deal across the state. It’s a big deal in my district,” Delegate Evan Hansen, D-Monongalia, said.

Hansen noted that watershed protection nonprofits like Friends of the Cheat and Friends of Deckers Creek have worked for decades to clean up degraded streams that devastate fish and wildlife and hinder local economies.

“Any time we can do something that transforms a waste product into an asset so it can be reinvested back into additional treatment, I think that’s a win for everybody,” Hansen said.

The severance tax exemption provided for in HB 4025 would apply to all extraction of rare earth elements from any mining process, not just mine drainage.

“I have a concern about that,” Hansen said after the meeting. “I would like to see this tax exemption be tailored to mine drainage.”

The state code in which HB 4025 would carve out a rare earth element severance tax exemption imposes a 4%tax on the gross value of natural resource production.

A state Department of Revenue fiscal note for HB 4025 predicts that a proposed exemption applying only to rare earth minerals would not negatively impact state General Revenue Fund collections.

HB 4025 defines rare earth elements as only yttrium, lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium and scandium.

HB 4025 defines critical minerals as only aluminum, antimony, arsenic, barite, beryllium, bismuth, cesium, chromium, cobalt, fluorspar, gallium, germanium, graphite, hafnium, indium, iridium, lithium, magnesium, manganese, nickel, niobium, palladium, platinum, rhodium, rubidium, ruthenium, tantalum, tin, titanium, tungsten, vanadium, zinc and zirconium.

The Energy and Manufacturing Committee referred HB 4003 to the House Judiciary Committee and HB 4025 to the House Finance Committee.

Visit the original article from Charleston Gazette-Mail.