Most Recent Action   Background  Hearing Summaries

Update on Mining Law and Regulatory Reform (10-21-02)

Mining law reform is one of the eternal issues before Congress, with a focus on the reform of the General Mining Law of 1872 law that governs many mining activities on public land. The law allows individuals and corporations the right to stake claims on prospected mineral deposits. If the deposit is found to be economically recoverable the holder of a claim can patent the deposit and thus have title of the minerals and land of the claim. This is known as the Claim-Patent System and its provisions are considered outdated by many. Environmentalists feel that the law needs to be updated because public lands are being destroyed by mining activities without fair payment or reclamation compensation from miners. Mining industry representatives agree that some provisions of the law are outdated, but agreement ends there on how the law should be revised to balance mineral development with other land uses. With comprehensive mining law reform seemingly unreachable, efforts have focused on regulatory reform within federal land management agencies. Issues expected to be addressed in the 107th Congress are the $100 annual holding fee per claim enacted in fiscal year (FY) 1993, revised hard-rock mining regulations put into place at the tail end of the Clinton Administration, and the patent moratoria enacted pending General Mining Law reform.

Most Recent Action
On October 11th, a bipartisan group of Representatives sent a letter to Secretary of the Interior Gale Norton regarding a department task force that is looking at the issue of bonding (i.e. financial guarantee) requirements for mining on federal lands. Late last year, the Bureau of Land Management (BLM) announced changes to the bonding requirements within the so-called 3809 regulation for hardrock mining on federal lands. The October 11th letter, which was signed by 19 members of the House of Representatives, notes their opposition to any efforts to weaken the bonding regulations. It them goes on to state: "If implemented, these changes would make it easier for corporate polluters to shift the burden of multibillion dollar cleanup costs to taxpayers or force local communities to bear unnecessary public health risks from toxic mine wastes." Some mining companies have claimed that the current insurance environment is such that it is difficult to obtain surety bonds. Under the revised regulations, mining companies must provide a financial guarantee that covers the estimated costs of reclamation, which is normally done by having the company obtain surety bonds. According to the Department of the Interior, the task force is simply gathering information at this point but that it is expected to release a report in November to Secretary Norton. (10/18/02)

On September 18th, the Senate accepted an amendment (S. Amdt. 4573) by Sen. Barbara Boxer (D-CA) to the fiscal year 2003 Interior and Related Agencies Appropriations bill (H.R. 5093) regarding the a gold mine proposal in Imperial County, California. For several years, the Glamis Imperial Corporation has been working to get a permit to operate an open-pit gold mine in southern California. It was delayed a couple of years ago when then Secretary of the Interior Bruce Babbitt accepted a legal opinion that would allow the agency to reject the proposed mine because of potential environmental and/or cultural impacts to resources on federal lands -- the solicitor's opinion noted that the mine would be located in an area of important religious, cultural, and historical resources for the Quechan people as well as in a delicate desert environment. Just days after the Senate acceptance of the Boxer amendment, Interior Secretary Gale Norton announced that the Glamis claim is valid, reversing the previous administration's action. H.R. 5093 has not yet been passed by the Senate. If it does, and the Boxer amendment is kept in the final Interior appropriations bill, then the two opposing positions must be reconciled, which is likely to happen in the courts. (10/11/02)

The Mineral Policy Center, Great Basin Mine Watch, and Guardians of Our Rural Environment filed suit on November 16th to block new mining rules adopted by the Bush Administration that are set to go into effect on December 31st, overturning regulations previously proposed by the Clinton Administration.  The environmental groups charge that the new rules governing hard-rock mining on public lands -- known as 3809 regulations governing lands controlled by the Bureau of Land Management (BLM) -- will cost taxpayers money, leave mining companies "essentially unsupervised" under state regulation, and fail "to prevent undue degradation" to public lands.  They called the Bush rules a "sham reform" of the General Mining Law of 1872, which still calls for mining companies to pay the government from $2.50 to $5 dollars an acre for the minerals they extract from public lands. Nevada's mining industry opposed the Clinton rules, saying that they would impose unnecessary and confusing federal environmental protections.  Industry representatives have expressed support for the new rules, which they claim are supported by a National Academy of Sciences study.  A BLM press release praised the new rules for removing "several unduly burdensome provisions of the current mining regulations while retaining most of its provisions." (11/19/01)

On October 25th, the Bureau of Land Management (BLM), which administers 264 million acres of federal lands, announced changes in the hard-rock mining on federal lands regulations, commonly referred to as the 3809 regulations.  Revised regulations were released in the final days of the Clinton Administration, after several congressional delays, and put into effect earlier this year.  President Bush postponed these regulations and others to provide his administration the opportunity to review and possibly further revise federal rules regarding public lands.  In June 2001, BLM announced that it was extending the deadline for mining companies to meet the bonding (i.e. financial guarantee) requirements of the new regulations.  According to an L.A. Times article from October 25th, the new revisions would maintain the Clinton-era bonding regulations and regulations regarding the use of cyanide in mining gold deposits.  Also, the newly revised rules would revoke a provision that would have allowed the Secretary of the Interior to block projects that pose "substantial irreparable harm to significant scientific, cultural, or environmental resources."  More information on the originally revised rules is available below.    (10/25/01)

On April 20th, the House Energy and Mineral Resources Subcommittee held a field hearing in Reno, Nev., to examine the impact of federal mining policies on the domestic minerals industry. Testimony is available on the subcommittee website. The hearing, chaired by Rep. Jim Gibbons (R-NV) focused on the Clinton Administration's revised 3809 regulations and millsite opinion. The Bush Administration is currently re-examining the 3809 regulations through a formal rulemaking process, arguing that lawsuits necessitated the review. Public comment ended May 7th with a final decision by BLM expected in July. (5/12/01)

Background
The General Mining Law, or Hard Rock Mining Act, of 1872 was passed by Congress and signed by President Ulysses S. Grant to protect and encourage mining and settlement in the Western territories. The act is one of the major statutes of federal land management policy. According to law professor Charles Wilkinson, "From its inception, hardrock mining has been the highest and most preferred use of the public lands, and the old law extends to mining companies a 'right to mine.'" In his book, Crossing the Next Meridian, he also states that the hardrock mining system is "still a miner's law -- built on open access, free minerals, unlimited tenure, and rights to land as well as minerals."

In the past 129 years, the law itself has been subjected to minimal change, but its scope has been greatly limited. The most significant change to the 1872 Mining Act was the removal of some federal lands and mineral resources from its jurisdiction.  The creation of the National Park system and National Historic Sites established federal lands that are protected from mining.  Indian reservations, military reservations, wilderness areas, and water and power projects have also removed land from the purview of the Hardrock Mining Act. The Act originally applied to all minerals except coal. In 1920 the Mineral Leasing Act set new policies for the mining of oil and gas, oil shale, phosphate, and sodium on public lands, removing them from control of the Hardrock Mining Act.  Other mineral resources were later added to this list.

According to the Congressional Research Service report Mining on Federal Lands, the 1872 law welcomes individuals and corporations to prospect for minerals in public domain lands. When a deposit is discovered the prospector can stake a claim on that land. Miners can hold as many claims as they wish and are not required to commence mineral production. Each claim requires a $100 annual holding fee -- under legislation enacted in 1992 by the 102nd Congress. If a miner chooses to patent the claim to gain title of the claimed lands and extracted minerals they pay a patent application fee plus $2.50 to $5 per acre after patent approval. A patent is not required to mine a claim.

Both mining industry representatives and environmentalists agree that some provisions of the General Mining Law are outdated. Congress has been working towards comprehensive reform of the law. Currently, there is a moratoria on the issue of new patents, pending the legislative changes. The House Resource Committee Subcommittee on Energy and Mineral Resources General Mining Law brief from the 106th Congress supports many of the provisions of the original law because they promote development of domestic resources, which would otherwise be imported. The Mineral Policy Center say reform is necessary because current mining law "gives away billions of dollars worth of taxpayer-owned minerals every year." One recommendation is for metals mining to switch to a royalty system similar to that used for other natural resources on public lands. While $2.50 to $5 per acre may seem inexpensive, the Energy and Mineral Resources Subcommittee brief contends that "the surface value of most lands presently being patented under the mining law is relatively low, generally in the $100-$150 an acre range -- not the millions or billions of dollars often implied by the opponents of the mining law." Nevertheless, the brief states, "... the federal government should receive fair market value for a mining claim, and everyone agrees that the current price for a patent has long been below this value."

Action in the 106th Congress
During the 106th Congress, several bills were introduced to reform the General Mining Law of 1872, many similar to those introduced in past Congresses. Rep. Nick Rahall (D-WV) introduced H.R. 410, the Mineral Exploration and Development Act of 1999, which would have required mining to be performed in ways that minimize adverse impacts to the environment as well as establishing a reclamation fund for lands affected by past mining activities.  Rep. George Miller (D-CA) also introduced three bills that would create a royalty system for hard rock mining (H.R. 394), impose a reclamation fee based on the net proceeds from mining activity (H.R. 395), and remove some tax subsidies for mining operations on public lands (H.R. 397). Sen. Russell Feingold (D-WI) also introduced a mining law reform measure, S.590 that was similar to Miller's tax reform measure. Several committees and subcommittees held hearings on mining law reform during the 106th Congress, summaries are available on the AGI Mining Law of 1872 Reform Hearing Summary webpage. Even with all of this activity, no legislation to reform the  Mining Law of 1872 passed into law.

A major topic of debate in the 106th Congress were the proposed Bureau of Land Management (BLM) Section 3809 mining regulations that apply to hardrock mining for such minerals as gold, silver, zinc, copper, lead, uranium, and molybdenum on public lands. The final version of these regulations was published on November 21, 2000, to take effect on January 20, 2001. Several lawsuits have been filed to stop the enforcement of the rule, and in early 2001 the BLM along with some members of Congress took steps to revoke the new regulations and return to the 1980 version.

When BLM released the final environmental impact statement (EIS) on the revised 3809 regulations in October 2000 and outlined the agency's preferred plan of action from those recommended in the 1999 NRC report Hardrock Mining on Federal Lands. The final regulations are a slightly amended version of the preferred alternative that would:

More information is available through the AGI Mining Law of 1872 Reform Update for the 106th Congress and in the Congressional Research Service (CRS) issue brief Mining on Federal Lands, released March, 2001.

Department of the Interior Secretary Bruce Babbitt announced on January 17, 2001, just days before the end of the Clinton Administration, that the BLM decided to deny the proposed Glamis gold mine in southeastern California. This represents the first time that the federal government has denied a major mining project on lands covered by the Mining Law of 1872. The activities of the mine would have been located near an area of "great cultural and religious importance to the Quechan Indian Nation." Several laws were invoked in the denial including the California Desert Protection Act, and environmental regulations that indicate that the BLM must prevent "unnecessary or undue degradation of the public land resources." (4/9/01)



The Effect of Mining Claim Fees: Are they worth it?
House Resources Committee Subcommittee on Energy and Mineral Resources
March 29, 2001

The Bottom Line
On March 29, the House Resources Committee Subcommittee on Energy and Mineral Resources held a hearing to discuss the $100 mining claim fee and $25 location fee collected by the Bureau of Land Management (BLM). These fees, put into place in the fiscal year (FY) 1993 Department of the Interior (DOI) appropriations bill, fund the Mining Law Administration Program (MLAP) that manages exploration and development of minerals on public lands. Testimony was heard from the Director of Financial Management and Assurance at the Government Accounting Office (GAO), Linda M. Calbom; Bob Anderson the Deputy Assistant Director of Minerals, Realty, and Resource Protection at the BLM; J.P. Tangen of the Alaska Miners Association; Alan Septoff of the Mineral Policy Center; and the Vice President of of Golden Phoenix Minerals, Steven D. Craig.

Hearing Summary
In her testimony, Linda Calbom discussed the findings and recommendations of a GAO report that investigated improper charges that were made to the MLAP account. BLM employees had charged hours to the MLAP account for work other than MLAP projects and some worker bonuses were paid to employees that had earned the bonus from work outside of MLAP. The report recommended that the BLM find ways to prevent improper charges from being made in the future and to inform employees of the source of MLAP funding in addition to addressing the improper charges made in the past. Bob Anderson responded to the GAO findings by defending some of the charges made to MLAP, giving some examples of BLM action to mitigate the damage done by improper charges, and highlighting some activities within BLM to educate its employees about the sources of project funding. Although Subcommittee Chair Barbara Cubin (R-WY) wanted to focus the hearing on whether or not the $100 mining claim fee had impeded mineral exploration and development on public lands, she pointed out that collection of fees that are then used improperly is especially unfair to the miners who pay those fees. She also alluded to the fact that MLAP may not need the additional funds from the mining claim fees to continue operations.

The second panel of witnesses focused on the effects that the mining claim fee has on mining operations and claim activity. J.P Tangen and Steve Craig both testified that from the time of the fee's inception, claim activity, especially by small mineral producers had decreased. They said that miners are discontinuing use of public lands because overlapping regulations and fees make most operations unprofitable. Mining operations are expensive and labor intensive, the additional burden of mining claim fees, environmental impact statements, and reclamation costs are often enough to impede mineral exploration and development on public lands. In addition to the mining claim fee, both Craig and Tangen were opposed to the limit on claim holdings, which they also considered an impediment to small miners and individuals. The remaining mineral deposits on public land are often lower grade and larger in extent than the more obvious deposits mined in the past.  In contrast, Alan Septoff testified that the claim maintenance fee is akin to the royalties paid by fossil resource industries extracting minerals from public lands. He said that the fee is the only way that taxpayers benefit from the extraction of minerals from BLM land. The fee also helps the BLM protect the nation's natural resources. According to the Mineral Policy Center, the recent drop off in mining claims is a reflection of low mineral prices, not a response to the mining claim fee. Information gathered in this oversight hearing will help the committee decide whether or not to extend the mining claim fee as it exists, repeal it, or refine it in light of the fact that it is set to expire on September 30. More information is available from the Subcommittee website.

On March 23, the Bureau of Land Management (BLM) announced that numerous lawsuits that have been filed over the revised Section 3089 mining rule have spurred the agency to review the legal and policy aspects of the rule. The agency is contemplating a reversal of the rule that was finalized in the last months of the Clinton Administration and went into effect on January 20. Public comment on the 3809 regulations will be accepted through May 7 with a final decision expected from the BLM in July. Comment about the rule can be directed to Ms. Nina Hatfield, Director (630), Bureau of Land Management, Administrative Record, Room 401 LS, 1849 C Street, NW, Washington, DC 20240. The possible outcomes of the review could be keeping the rule in place, total reversal of the regulations, modifications to the rule, or removal of some of the rule's provisions. On April 20, the House Resources Committee Subcommittee on Energy and Mineral Resources held a field hearing in Reno, NV to discuss the BLM review.


Sources: Congressional Research Service, House Committee on Resources, E&E News, Greenwire, Greensheets, and Washington Post

Please send any comments or requests for information to the AGI Government Affairs Program.

Submitted by AGI/AAPG Geoscience Policy Intern Spring 2001 Mary H. Patterson, Fall 2001 AGI/AAPG Geoscience Policy Intern Catherine Macris, and Margaret A. Baker, AGI Government Affairs.

Posted May 12, 2001; Last Updated on October 21, 2002.


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