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WV House passes bill clarifying who profits from extracting rare earth elements from mine drainage

Article written by Mike Tony for the Charleston Gazette-Mail
February 7, 2022

In a nearly unanimous vote, the House of Delegates has passed a bill designed to clarify who can profit from the extraction of rare earth elements and critical minerals essential to technology products and national security.

The House on Monday approved House Bill 4003, which would establish that any party that treats any mine drainage may derive “commercial benefit” from any elements or other byproducts of the treated material.

The idea behind HB 4003 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.

HB 4003 applies to all mine drainage, not just acid mine drainage.

The bill sailed through the House in a 94-1 vote, with only Minority Chair Shawn Fluharty, D-Ohio, voting against the measure.

Assistant Majority Whip Riley Keaton, R-Roane, spoke in favor of HB 4003 on the House floor prior to its passage, predicting it would help reindustrialize West Virginia.

“The kinds of industries that rely on a steady stream of rare earth and critical minerals to function are exactly the kinds of industries that we can count on to create the kind of jobs that people can support a family on,” Keaton said.

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 earth elements 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 January 2021 — 3% of China’s total reserves, according to U.S. Geological Survey data.

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

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.

Ziemkiewicz has also said rare earth element recovery could supply financial support for state mine cleanup funding.

HB 4003 specifies that all funds received by the state Department of Environmental Protection from commercial benefit from mine drainage treatment would go into the agency’s Special Reclamation Water Trust Fund or a set aside fund for acid mine drainage.

A report released in June by the state Legislative Auditor’s Office Post Audit Division warned state mine cleanup funds are nearing insolvency.

West Virginia lawmakers and environmental regulators risk letting the state’s mining reclamation program slip into insolvency through gaping holes in statutory and permitting oversight, the report found.

The Department of Environmental Protection has failed to comply with state and federal law in its reclamation program oversight, the report said, resulting in missed opportunities to financially shore up a program that will need hundreds of millions of dollars to reclaim permit sites under federal regulations.

West Virginia Land & Mineral Owners Association President Phil Montague has expressed concern about the bill potentially rewarding third parties who treat mine drainage rather than landowners on whose properties the mine drainage is located.

DEP general counsel Jason Wandling has noted before state lawmakers that a state-issued National Pollutant Discharge Elimination System permit for discharging wastewater is required to treat water for mine drainage. Permit holders are responsible for ensuring that water meets water quality standards before it is discharged back into receiving streams.

Wandling has denied the bills constitute an unlawful government taking, arguing that entities that invest time and resources into what is typically an expensive treatment process should reap the financial benefit.

HB 4003 now goes before the Senate.

The Water Research Institute was awarded $5 million in 2019 by the federal Department of Energy to scale up recovery of rare earth elements from acid mine drainage sludge. Work includes construction of a facility at a new acid mine drainage treatment plant near Mount Storm. The DEP’s Office of Special Reclamation is the plant designer and builder, Rockwell Automation is providing sensor and control technology and TenCate Corporation is engineering materials for rare earth element extraction.

The project is about 75% complete, DEP spokesman Terry Fletcher said, adding that remaining construction work is scheduled to be finished by the end of April. Installation of rare earth extraction equipment is expected to begin in May and the projected startup is slated for late summer or early fall 2022.

The acid mine drainage treatment plant was previously scheduled to begin operations by November, but the pandemic delayed delivery of needed materials and pushed the tentative completion date back, Fletcher said.

The facility could treat 1,000 gallons of acid mine drainage daily. Nonvaluable solids removed during the clarification process would be pumped into storage plants, while valuable rare earth elements would be separated for further processing. The treated acid mine drainage then would be directed to the receiving stream.

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