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Between a Hardrock and a Hard Place: Key Deal Points For the Foreign Investor in U.S. Mining Projects

I. Daniel Colton, Andrew L. Spielman, Raya B. Treiser, 61st Annual Institute Proceedings (2015)

Mining contributes over $344 billion to U.S. gross domestic product, and foreign investors hold important interests in many significant mining operations in the United States. The United States remains a significant opportunity for new mining projects. While other countries with mineral development possibilities may have less complex regulatory climates, U.S. laws generally provide for mining property rights as secure as anywhere. Securing those rights requires an understanding of U.S. federal and state law, an experienced regulatory and legal team, and patience. This chapter identifies key “deal points” for the foreign investor in hardrock mining projects in the United States, based on the authors’ experience counseling an international mining joint venture in the development of one of the largest copper, nickel, and platinum deposits in the world.
A successful mining joint venture in the United States must be based on a realistic understanding of the unique regulatory framework for hardrock mining, as well as the time and cost required to move the project from an early exploration stage, through design and permitting, to construction and operation.
Of equal importance, the corporate structure must reflect the parties’ different business needs and imperatives and their respective abilities and willingness to bear the pre-operation risk and costs. Foreign investors m