Mining law overhaul has prospects

Mining law overhaul has prospects – Los Angeles Times

The House votes to add environmental protections as well as royalties on minerals taken from public land.
By Richard Simon, Los Angeles Times Staff Writer
November 2, 2007
WASHINGTON — When a law was passed in 1872 to let miners extract minerals virtually for free from federal lands, it was meant to promote settlement of the West.

With that goal long since accomplished, the House voted 244-166 on Thursday to overhaul the 135-year-old law, adding protections for the environment and, for the first time, requiring miners to pay royalties for the gold, silver, copper, uranium and other minerals they extract from public lands.

The White House has threatened to veto the bill but also signaled willingness to negotiate. Driven by worries that mines are damaging the environment and complaints that private companies are shortchanging the government, the decades-old efforts to overhaul the law signed by Ulysses S. Grant have their best prospects in years for success.

“Times have changed,” said Rep. Gabrielle Giffords (D-Ariz.). “Today’s West now depends on the health as well as the conservation of our fragile environment, as much as it relies on mining.”

The proposed rewrite of the mining law underscores the political change in the Capitol since Democrats took control of Congress last year. Just two years ago, environmentalists were on the defensive, fighting a bid in the Republican-led Congress to let mining companies buy federal land with valuable mineral deposits for nominal fees.

Unsuccessful efforts were made to overhaul the law in the 1970s and in 1994.

Chance for compromise?

The bill’s fate will rest heavily on Senate Majority Leader Harry Reid (D-Nev.), a gold miner’s son from the biggest gold-mining state. He opposes a royalty on operators of existing hard-rock mines but has hinted he might allow royalties on new operations as a way to compromise on a priority of environmental groups, an important Democratic constituency.

After the vote, Reid said, “While I cannot support many of the provisions in the House bill, I believe that the opportunity still exists for common-sense reform.”

Efforts to forge a compromise could be aided by the fact that the bill’s leading champion in the House is Rep. Nick J. Rahall II (D-W.Va.), the pro-mining chairman of the House Natural Resources Committee. He has pushed to revamp the law, “the Jurassic Park of all federal laws” as he called it, for two decades. “I think all sides want finality,” he said.

A spokesman for Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, agreed that prospects for a compromise are good. “Consensus for change is building, even in the mining industry,” Bill Wicker said.

John D. Leshy, who was an Interior Department solicitor in the Clinton administration, said Bush could come under pressure to sign a bill that passes with bipartisan support.

“If something came out with consensus support, I would think the industry would be going down to the White House, saying, ‘Sign it, because it could get worse after you leave,’ ” said Leshy, who teaches at UC Hastings College of the Law. “On the other hand, I’ve been at this a long time, and I know much better than to hold my breath.”

Environmentalists were encouraged by the House vote.

“Rapid Western growth, mounting cleanups costs and a rash of new claims make mining reform a priority for the American public,” said Jane Danowitz, director of the Pew Campaign for Responsible Mining, who stood with a bearded man dressed as President Grant, buttonholing lawmakers on their way to vote.

The overhaul also has the support of the Jewelers of America, a trade association for retail jewelers, as well as Tiffany & Co., because of environmental concerns.

Opponents, including the National Mining Assn., argue that the measure would impose “the highest royalty in the world,” discourage domestic mining and make the U.S. more dependent on other countries, such as China, for minerals critical to manufacturing.

“It would be a sick twist of fate if the U.S. had to begin importing uranium from Iran,” said Rep. Steve Pearce (R-N.M.). “There are people who want to make the West simply the vacation ground for the rest of the country. . . . We want jobs.”

Rep. Don Young (R-Alaska) accused the bill’s supporters of pandering to the environmental lobby. “This is an easy ‘green’ vote for a majority of the members in this body to have tacked onto their so-called environmental score cards,” he said, noting that hard-rock mining operations are concentrated in the West.

Twenty-four Republicans joined 220 Democrats in voting for the bill. Three Democrats joined 163 Republicans in voting against it. California House members voted along party lines, with Democrats for it and Republicans against it. Rep. Dennis Cardoza (D-Atwater) and House Speaker Nancy Pelosi (D-San Francisco) did not vote.

New royalties

The administration complained that the bill imposes a royalty on mining claims “where property rights already have been vested, could reduce the continued domestic production of hard-rock minerals” and imposes environmental rules that are “unnecessary.”

The measure would permanently end the sale of mining claims at bargain-basement prices, though such sales have been prohibited since 1994 under a congressional moratorium.

It would establish an 8% gross income royalty on new mining operations and 4% on existing operations. As federal law stands now, companies drilling for oil and gas, and mining for coal on federal lands, must pay royalties, but hard-rock miners do not.

Under the bill, the royalties would be used to clean up abandoned mines that have been blamed for environmental problems.

The measure is moving through Congress as the number of mining claims has skyrocketed, driven by rising prices of minerals such as gold and uranium. More than 21,300 mining claims have been staked within 10 miles of California’s national parks and monuments, federal wilderness areas and roadless areas, according to an Environmental Working Group analysis of U.S. Bureau of Land Management records.

California was the 7th-ranked gold producer among states in 2006, according to the U.S. Geological Survey. Arizona, Nevada and Utah are the top three hard-rock mining states.

The measure “ensures that proposals to mine near national parks and national monuments are carefully scrutinized . . . and requires the secretary of the interior to deny a permit to mine if a national park’s resources cannot be protected,” according to the Democratic staff of the Natural Resources Committee. The bill specifies that a mine’s impact on park resources such as water, scenic assets, acoustic qualities and “other changes that would impair a citizen’s experience” must be considered before issuing a permit.

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