U.S. mining law reform a top Obama Administration priority
While news media attention is focused on the Senate confirmation hearing of a new justice a few doors away, the Senate Energy& Natural Resources Committee is busy adjudicating the fate of the U.S. hardrock mining industry.
Posted: Wednesday , 15 Jul 2009
RENO, NV -
As environmental special interests congratulated themselves for U.S. Interior Secretary Ken Salazar's declaration Tuesday that mining law reform is a top priority for the Obama Administration, lost among the rhetoric and news coverage was Salazar's equally important declaration.
"In my view, our own security depends on maintaining a viable domestic mining industry," Salazar told the Senate Energy and Natural Resources Committee Tuesday. "Minerals are also needed to support development of renewable energy," he added.
Nevertheless, Salazar remained firm in his belief the U.S. mining industry must come to grips with meaningful reform of the 1872 Mining Law, patent reform, and addressing the environmental consequences of modern mining practices "in meaningful and substantive ways."
"In addition, the American taxpayer should receive a fair return for the extraction of these valuable resources and should expect the federal government to develop a reliable process providing for the cleanup and restoration of lands where the responsible party is unable or unavailable to do so, including a Good Samaritan provision," he advised.
Salazar speaks from first-hand experience as much of his Colorado regulatory career was devoted to overseeing and/or participation in the cleanup of the Summitville Mine Superfund site in his state.
Energy & Natural Resources Ranking Member Sen. Lisa Murkowski, R-Alaska, also declared, "The current mining law is woefully out of date. We need to overhaul the law to ensure that it strikes the right balance between protecting the environment, obtaining a fair return for taxpayers, creating jobs and maintaining a secure supply of American minerals."
Nevertheless, Murkowski does not support Committee Chairman Jeff Bingaman's (D-New Mexico) S.796, Hardrock Mining and Reclamation Act of 2009. She expressed concern that that bill's language could hamper economic development by drastically increasing fees and royalties, placing huge swaths of public land off-limits to mineral production, and instituting a long list of new regulations.
"If we get mining reform wrong, we risk trading our reliance on foreign oil for a reliance on foreign minerals," she said.
However, domestic mining's longtime loyal opposition, former Interior Solicitor John Leshy told the committee, ‘The costs of mining gold in the U.S. are well under one-half of the current price of gold."
"The domestic gold industry is, and for quite a long time has been, very profitable," he asserted," an enviable position today in comparison to the economic carnage being visited across much of the American economy. It can readily absorb the modest royalties and other payment called for in the two bills before this committee."
Bingaman has also introduced S.140, the Abandoned Mine Reclamation Act of 2009, which was also considered in Tuesday's hearing of the Senate Energy and Natural Resources Committee.
Leshy said that "practically everywhere else on the planet that hardrock mining companies operate-on state or private lands in the U.S., and just about everywhere abroad-they provide compensation to the governments and others who own the minerals."
"It is long past time for Congress to close this glaring loophole," Leshy declared.
Cathy Carlson, policy advisor for Earthworks, urged the committee to include the following principles in its update of the mining law including:
•1. Eliminate patenting of federal lands
•2. Establish a royalty for mineral production and a fee for use of federal lands for mineral activities
•3. Enable land managers to say "no" to a mining project on federal lands when conflicts exist with other resource uses
•4. Adopt comprehensive reclamation requirements, with particular emphasis on protection of water resources
•5. Ensure that a financial assurance is in place and adequate to cover the cost of mine reclamation
•6. Create an abandoned mine program with adequate funding to address a backlog of public safety and pollution from old mines
In her testimony, Carlson claimed that S.796 "falls short in its consideration in the water related impacts of mining. ...Congress should go further and deny mining operations that will become permanent sources of pollution on federal lands in the West."
Former Silver Institute President Phil Baker, president and CEO of Hecla Mining, warned the committee that while the National Mining Association supports amending the mining law, it must be crafted with great foresight in order to "not only negative impact the domestic mining industry, but also the economy and national security of the United States for many decades."
"I say this because the proposed change will put an end to growth of a viable domestic mining industry, an industry that creates high paying jobs with good benefits and provides resources critical to national security," Baker stressed. "Mining will also play a pivotal role in America's transition to renewable energy as we produce needed resources."
"Today only 8 percent of all worldwide exploration dollars are spent in the U.S., which means fewer mines are developed," Baker noted. "This paltry level of investment will continue to increase our reliance on foreign minerals, which will continue to negatively impact the domestic economy and national security."
"As we become even more dependent on foreign countries for mineral resources, fewer jobs will be created in the U.S., less tax revenue will be generated and the infrastructure and security of our country will be threatened, including the military, renewable energy infrastructure, and even our everyday lives."
"Minerals are the building blocks for every aspect of American commerce, including defense equipment, transportation systems, construction, telecommunications, electronics, medical research, renewable energy infrastructure and mew energy technologies. The U.S. produces only half of the minerals that this nation uses in manufacturing," Baker explained.
Despite the fact Hecla is the largest U.S. pure silver producer; Baker noted the irony that, nonetheless, the U.S. imports 60% of its silver from foreign sources. "Silver has critically important uses, and the United States has significant resources that are not being mined."
"Amendment to the Mining Law should focus on ways that reduce dependence on imported silver and many other mineral commodities," Baker urged the committee. "Silver is a metal that helps protect our armed forces and national security. Why do we rely on politically unstable countries to provide that-or any other-strategic metal?"
The U.S. Geological Survey has documented that America now depends on imports for 100% of 18 minerals commodities. Meanwhile, the U.S. is more than 50% reliant on another 43 important commodities.
"Increasing import dependence causes a multitude of negative consequences, including aggravation of the U.S. balance of payments, unpredictable price fluctuations, loss of high paying jobs and vulnerability to possible supply disruptions due to political or military instability," Baker noted. "For example the metals and minerals used in hybrid cars, wind turbines and solar panels have high net import reliance, while the U.S. has unmined domestic mine reserves."
"Will we be buying all of our wind turbines, solar panels, hybrid cars, electronics and other durable goods from China?" he asked.
Nevertheless, Baker stressed that the National Mining Association supports a net profit royalty for fair return to the public for minerals produced from new mining claims on federal lands.
He asked the Congress to preserve the mining law rights of self initiation and entry to enter and occupy public lands open to prospecting and exploration, as well as provide for secure rights to use and occupy federal lands for mineral purposes.
NMA also supports establishing an abandoned mine land clean-up fund. Baker highlighted several disagreements with S. 796 over exploration permitting, changing uranium from "locatable" to "leasable" status, duplication of existing environmental standards, and other issues.