Mining Policy (8-19-04)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 This is known as the Claim-Patent System and its provisions are considered outdated by many.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 Mining industry representatives agree that some provisions of the law are outdated, but agreement ends there on how the law should be revised to balance mineral development with other land uses.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. An article published in the Washington Post on August 17th highlighted how Bush administration policy changes have made it easier for coal companies to practice moutnaintop mining. The process involves cutting off the top of a mountain and depositing the debris in adjacent valleys, permanently burying streams and disrupting watersheds. In May 2002, the administration changed the word defining mining debris from "waste" to "fill," legally entitling companies to dump the debris into streams. Under the new "fill rule," "fill" is defined as rock, sand, clay, plastics, construction debris, wood chips, and overburden from mining, with garbage the only material specifically forbidden. The Bush administration claims the revision is an attempt to clarify existing rules and ease regulatory burdens for the coal industry, which they see as a necessary component of national energy security. They maintain that the rule changes are not an effort to weaken environmental accountability, but to acknowledge the reality that these rules are not commonly followed and to bring regulatory stability and predictability. Opponents claim the modifications to environmental regulations make it easier for coal companies to dump in streams and harder for those actions to be challenged. Government studies have shown that waste rock and debris has buried more than 700 miles of headwater streams in central Appalachia, where those who oppose mountaintop mining outnumber supporters two to one. The article emphasized how slight changes to environmental policies have been quite common during this Bush administration, often inflicting huge environmental impacts. Another article, written for the Charleston Gazette on August 16th, summarized an investigation that revealed Abandoned Mine Land (AML) money, intended for the cleanup of abandoned coal mines, has been used to fund low-priority and unrelated projects in Wyoming. The money, which is collected from a coal surface mining tax of 35 cents per ton, is slated to be used to cleanup coal mines abandoned before 1977, with priority given to the most hazardous sites. Established in the 1977 Surface Mining Conservation Reclamation Act (SMCRA), the tax is distributed as a 50-50 split: half of the ALM money goes back to the original state and the other half is distributed by the Office of Surface Mining (OSM). Problems have arisen because Wyoming has significantly fewer abandoned mines predating 1977 yet produces more than half of the coal mined in the U.S annually. This gives more ALM funds to Wyoming than states in the East, where coal production has steadily decreased and a large proportion of abandoned mines remain. Congress included a loophole in the Act to enable states who cleanup their high priority sites to use the money for specific public facilities in coal communities. In 1984, Congress questionably "certified" that Wyoming had cleaned all of its high priority sites; a subsequent Government Accountability Office (GAO) report concluded the state should not be certified because it had not cleaned up all of its abandoned coal mines, only the most severe sites. Instead of cleaning up the lower priority sites, the state has since spent more than $90 million of ALM money on roads, sewer systems, hospitals, schools, and a new geology building for the University of Wyoming. Additionally, Wyoming has legally used ALM funds to reclaim noncoal mines whose industries pay no tax to supplement cleanup efforts. The OSM, however, has poorly monitored how these funds have been spent. The state also claims that it has discovered over 1,700 abandoned mines since they received certification, prompting a request of more ALM money from Congress. (8/19/04) On July 8th, Judge Joseph Goodwin of the U.S. District Court for the Northern District of West Virginia ruled that an Army Corps of Engineers system known as Nationwide Permit 21 (NWP 21) violated Clean Water Act intentions by not scrutinizing mountaintop mining applications more carefully. NWP 21 allows applications to be automatically approved if they meet certain criteria, even though they involve dumping mine waste in adjacent valleys that often contain streams. Judge Goodwin concluded this permit streamlining was harmful to waterways and ordered a halt to all NWP 21 projects not already commenced by the court ruling date. There have been several reports that the mining projects have continued despite the court order, with the offenders claiming the definition of construction commencement has not yet been specifically defined. The Army Corps and environmentalists have sought help from the West Virginia Department of Environmental Protection, but they have declined to help enforce the ruling, claiming they are trying to avoid controversy and allow Judge Goodwin and the involved parties to sort out the problem. (8/11/04) On September 29, 2003 the House Subcommittee on Energy & Mineral Resources held a Reno, NV field hearing on hard rock mining in Nevada. Industry representatives, state and government officials and an economist discussed Nevada's decreasing share of the international mining market despite its abundance of mineral resources. Witnesses agreed that a cumbersome permitting process including overlapping state and federal regulations was partially to blame for this phenomenon. Also of concern were January, 2001 revisions to the Bureau of Land Management (BLM) Surface Management Regulations (also called the 3809 Regulations) requiring cash bonds at the outset of a project to cover cleanup costs. Those testifying contended that this obligation would hamper mining investment. The panelists also maintained that current mining operations were the result of past exploration and that new exploration, contingent on a streamlined permitting process, would be necessary for the mining industry to remain in Nevada in the long term. Each of the witnesses spoke to the mining industry's contribution to Nevada's job market and its coffers. (10/9/03) The House Resources Subcommittee on Energy and Mineral Resources met on July 17th to consider the role of strategic and critical minerals in maintaining national economic security. Witnesses representing the mining industry argued that US mineral resources have not been depleted and could be mined in an environmentally responsible and economically profitable manner if regulations and the permitting process were streamlined and enforced. Their testimonies were unchallenged by the Members of Congress present at the hearing and the need for a national mineral policy was stressed throughout. A summary of the hearing is available on this site. (7/23/03) On June 3, 2003, the U.S. Circuit Court of Appeals for Washington DC upheld the Department of the Interior's decision that subsidence should remain exempt from the list of illegal surface effects found in the 1977 Surface Mining Control and Reclamation Act (SMCRA). Subsidence is the gradual sinking of the surface ground over a mine, and has been considered an allowable effect since 1991. The June 3rd decision overturned a March 2003 ruling by the U.S. District Court for the District of Columbia that interpreted SMCRA as including subsidence under its list of illegal mining impacts. The Court of Appeals' opinion states that the law's ambiguity "eclipses the ability of the courts to substitute their preferred interpretation for [the] agency's reasonable interpretation…." Sen. Joseph Lieberman (D-CT) has asked the General Accounting Office (GAO) to review the methods currently used by the Department of the Interior to acquire reclamation funds from mining companies, especially with regard to their usage of corporate guarantees. In a letter to David Walker of the GAO, Lieberman requests a study examining the extent to which corporate guarantees have been used, how often the guarantees have been fulfilled, and whether any financial burdens from environmental cleanup were placed on taxpayers due to unfulfilled guarantees. He requested a second study on "the availability and effectiveness of bonds for hardrock and coal mining." The Bureau of Land Management (BLM) currently requires that hardrock leasees cover 100% of costs through surety bonds or cash, but the mining industry is advocating the allowance of corporate guarantees due to their concern that companies may not be able to acquire the necessary bonds. Lieberman's letter makes reference to the increasingly strict and expensive surety industry as being "due to losses in the…industry resulting from the attacks of September 11, 2001." Also in May, a Draft Programmatic Environmental Impact Statement
(EIS) was
released by federal and state agencies evaluating opportunities for
improvement in the reduction of harmful environmental impact due to
mountaintop mining and valley fill operations in the Appalachia region.
The report details several policy options and is the result of four
years' worth of data collection and thirty scientific and technical
studies. The agencies involved in the report support Alternative 2,
that recommends the creation of a common permitting process and improvements
in communication between agencies. The report has been criticized
by environmentalists for not calling for a general limit on the size
of allowable valley fills. A study included in the EIS reports that
2% of streams in the study area were directly impacted by mountaintop
mining and valley filling processes. No new regulations were proposed
under Alternative 2, which would seek to decrease mining processes'
negative impacts through proposed administrative and procedural improvements.
The author agencies are now requesting public comments on the Draft
EIS and will be accepting comments until August 29, 2003. Additional
background information and information on providing comments are available
at http://www.epa.gov/region3/mtntop/index.htm. The 108th Congress extended its moratorium on issuing mining leases
for at least one more year in April 2003. The patent moratorium is
part of the FY 2003 appropriations bill, and does not halt production
on public lands but does prevent the sale of public lands into private
ownership. Two bills regarding hardrock mining were introduced in January 2003:
the Elimination of Double Subsidies for the Hardrock Mining Industry
Act of 2003 (S.
44) was introduced by Sen. Russell Feingold (D-WI), and the Abandoned
Hardrock Mines Reclamation Act (H.R.
504) was introduced by Rep. Mark Udall (D-CO). In addition to
eliminating double subsidies for hardrock mines, S. 44 would establish
the Abandoned Mine Reclamation Trust fund, to be overseen by the Treasury.
The fund would be appropriated 25% of the revenue received by the
government through the subsidy decrease for the purpose of "reclamation
and restoration of lands and water sources adversely affected by…
mining," with the exception of coal and fluid mining. H.R. 504
would also set up a trust fund for the same purpose, named the Abandoned
Minerals Mine Reclamation Fund. The funds for this fund would be a
percentage-based reclamation fee paid by mining companies to the Secretary
of the Interior. The bill also grants the Administrator of the EPA
the authority to delegate reclamation and restoration permit issuance
and review to the States. Interior Assistant Secretary for Land and Minerals Management Rebecca Watson explained that the reversal will "encourage a reliable supply of the critical strategic minerals that we need to support our way of life, the economy and our national security," Greenwire reported. National Mining Association President Jack Gerard agreed, according to the Los Angeles Times, praising the policy as "good for jobs, mining communities and the American economy." Environmental groups, such as the watchdog organization Mineral Policy Center (MPC), dispute this assessment. As reported in Greenwire, MPC President Stephen D'Esposito maintained that allowing multiple millsites per claim "puts clean water and community health at increased risk, with an open invitation to dump massive quantities of toxic mining waste on unlimited amounts of our public lands." The rule, published in the Federal Register without a public comment period, may face legal challenges, according to MPC Director of Legislative and Regulatory Affairs Lexi Shultz. Several western legislators pushed for the measure, including Senate Minority Whip Harry Reid (D-NV), Sen. John Ensign (R-NV) and Rep. Shelley Berkley (D-NV). Reps. James Gibbons (R-NV) and Barbara Cubin (R-WY) also support the decision. (10/15/03) The United States District Court for the District of Columbia issued a decision on November 18, 2003 that largely upheld the way that the Department of the Interior has implemented the Federal Land Policy and Management Act of 1976 (FLPMA), which amended the Mining Law of 1872. But the decision came with one exception. The court found that in 2001, William Myers, then the department's top lawyer, "misconstrued the clear mandate of FLPMA. FLPMA, by its plain terms, vests the Secretary of the Interior with the authority -- and indeed the obligation -- to disapprove of an otherwise permisible mining operation because the operation, though necessary for mining, would unduly harm and degrade the public land." For the time being, this ruling means that the Interior Department may not issue permits to hard rock mines if they degrade or damage public lands, even if the mines are deemed to be essential. The court noted; however, that the plaintiffs -- the Mineral Policy Center, Great Basin Mine Watch and Guardians of the Rural Environment -- failed to prove claims that current regulations fail to prevent significant degradation of public lands. In light of this, Greenwire reported that the Interior Department or the National Mining Assocation may appeal the decision to the Circuit Court. (11/20/2003) The U.S. Environmental Protection Agency issued a draft notice in the Federal Register on December 10th stating its intentions to focus on industry compliance with environmental laws. Specifically, they expect to pay special attention to enforcement of hazardous waste and environmental justice complaints over the next three years. According to Greenwire, the enforcement priorities, developed at EPA headquarters with input from regional offices, include a dozen new initiatives, ranging from curbing petroleum and gas leads from underground storage tanks to targeting businesses with the poorest overall environmental compliance records. Among other things, regulators in the field have told EPA headquarters that the mining and minerals industry is a particular problem because a number of facilities are operating in violation of the Resource Conservation and Recovery Act. "Evidence gathered in recent inspections indicates that mineral processing facilities are failing to obtain the necessary permits and adequately manage their wastes," according to the EPA notice. Mishandling of these wastes has "caused fish kills and the arsenic and cadmium that these wastes often contain have been found in elevated levels in residential drinking water wells," the notice says. Some groups have interpreted the notice and EPA's move to ramp up enforcement on mineral wastes as a crackdown on hardrock mining. Others believe it stems from the new leadership at the EPA and the desire to mitigate any criticism that may be aimed at the Agency in an election year. Click here to access the Federal Register notice. (12/22/03) The Bush Administration and Pennsylvania state government are introducing
legislation to reauthorize the Abandoned Mine Reclamation Plan. The
1977 Surface Mining Conservation Reclamation Act (SMCRA) is due to
expire in September 2004. If it is not reauthorized prior to the expiration,
lawmakers have predicted that it will be difficult to get it reinstituted.
SMCRA gives the government the ability to collect fees from coal companies
to use in environmental restoration of mining sites abandoned before
1977. The new proposal would continue the collection of funds for
another 15 years, but would decrease the fees. The US Geological Survey has released a report assessing the health of the Nation's mining industry and found that output from most nonfuel mining and mineral processing industries decreased last year. Although about 25,000 total jobs were cut, some of the lay-offs were due to better technology and generally higher productivity rates. According to Greenwire, analysts predict that the downward trend of U.S. minerals will likely continue. However, this trend is in contrast to a worldwide increase in demand for mineral and metals. Carol Raulston with the National Mining Association told Greenwire that part of the reason companies are mining internationally is because it can take years to obtain a mining permit in the Unites States, while it only takes about 18 months to obtain a mining permit in other countries though not all international mineral exploration is due to permitting problems. Bauxite, the mineral that aluminum comes from is not found in enough quantity in the United States to meet demand. Despite a general decline in mining, gold prices are currently at their highest level in 14 years. Lexi Shultz of the Mineral Policy Center told Land Letter that the increased prices will lead to increased mining several years down the line. The number of U.S. mining claims has tripled in the past year. Shultz also told Land Letter that the potential boost in gold mining is a concern for the environment, since according to the Toxic Releases Inventory, the mining industry is the nation's top toxic polluter. (2/12/04) An alternate bill to reauthorize the Abandoned Mine Reclamation Program was introduced by Reps. Barbara Cubin (R-Wyo) and Nick Rahall (D-W.Va.) on February 12th. Their bill, H.R. 3796, agrees with the proposal the Bush Administration offered the first week in February in that the Office of Surface Mining would have the authority to collect fees from coal companies for another 15 years. But the two plans differ on how the reclamation funds are distributed. In the Cubin/Rahall plan fifty percent of fees collected would return to the state or tribe they were collected from. In addition, the bill would also eliminate several categories of lower priority reclamation sites, which would give more money to old mines in some of the Appalachian states like Kentucky and West Virginia. (2/13/04) Two differing plans have been proposed for how to deal with federal mineland reclamation have been proposed on Capitol Hill. The current law on cleaning up abandoned mines, the Surface Mining Conservation Reclamation Act (SMCRA), expires in September. SMCRA gave the Office of Surface Mining the authority to collect fees from coal companies to create a special fund to pay for the restoration or mining sites that were deserted before 1977. One plan comes from the Bush Administration and would decrease the fees collected by 15 percent until 2010, 20 percent until 2015 and then 25 percent for the remaining time. The Bush Administration plan would run for 15 years. Senator Craig Thomas (R-Wyo.) would reduce the fees by 10 cents per ton on surface-mined coal, 3 cents per ton for underground mined coal and by 2 cents per ton for lignite. Thomas's plan would span 10 years, although some critics say that at least 15 years is needed and are also afraid that his plan would not generate enough money. The plans also differ on how to distribute the funds back to the
states. The current arrangement is that funds are given out mostly
on the basis of production. One problem is that there are some states
in which mining activity has declined, but there is a backlog of abandoned
sites that need to be cleaned up. The Bush Administration plan would
take into account the historic mining rates of the state, not just
the current production. The Thomas bill would distribute funds based
on priority for need of clean up of abandoned mines, but would also
ensure that states and tribes get back at least 50 percent of what
they pay into the fund. (3/15/04) At a House Energy and Minerals Resources Subcommittee hearing on March 3rd, mining industry representatives and analysts said that a protracted permitting process for the oil, gas and mineral industries in the United States is causing companies to move operations overseas. Permits that used to take 18 months to acquire can now take over 10 years. It still takes an average of 18 months for an international permit. According to Greenwire, Donald Cooper of Behre Dolbear & Co, a mining consulting firm, said "Companies that want to see return [on their investments] go abroad, rather than waiting around in the U.S.A." Some of the Republican members of the Subcommittee were frustrated by the testimony they were hearing and called for better access to national resources. Representative John Peterson (R-PA) was quoted by Greenwire as saying, "This Congress has locked up our resources." However, Resources Committee ranking member Nick Rahall (D-WV) said the decline in jobs in domestic natural resources extractive industries is most closely tied to technological advancements and the volatile nature of markets, not federal land management or environmental protection regulations. Subcommittee Chairwoman Barbara Cubin (R-WY) vowed to look into the issue and said a good first step would be to ensure adequate funding for the Bureau of Land Management, which was cut in the FY 2005 budget. (3/15/04) Representative Jim Gibbons (R-NV) is asking the House of Representatives to add $2.3 million to the Bureau of Land Management (BLM) budget for FY 2005. He hopes that the extra funding will help to speed up the backlogged permitting and claims processes. BLM has 120,000 permits pending in Nevada where mining is the second largest industry. The lag time for mining permits in the U.S. is a sore point with industry representatives who claim that permits that used to take 18 months to acquire can now take many years. Most international mining permits still only take 18 months to obtain. Susan Czopek of the group Great Basin Mine Watch told Greenwire that the group welcomes the extra funding for BLM, not just to speed up the permitting process, but to also protect its millions of acres of land for everyone not just mining companies. (4/12/04)
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 131 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 that, "... 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." 
Sources: The Chicago Tribune, Congressional Research Service, E & E News, Greenwire, Hearing Testimony, Land Letter, The Los Angeles Times, The New York Times, The Washington Post, Mineral Policy Center, National Mining Association and Department of the Interior Contributed by Emily R. Scott, 2003 AGI/AIPG Summer Intern; Ashley M. Smith, 2003 AGI/AAPG Fall Semster Intern; Emily M. Lehr, AGI Government Affairs Program Staff; Gayle Levy, 2004 AGI/AAPG Spring Semester Intern; and Ashlee Dere, 2004 AGI/AIPG Summer Intern. Background section includes material from AGI's Update on Mining for the 107th Congress. Please send any comments or requests for information to AGI Government Affairs Program. Last revised on August 19, 2004 |
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