Mining Policy (10-10-06)

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Mining law reform is one of the eternal issues before Congress, with a focus on the reform of the General Mining Law of 1872 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 This is known as the Claim-Patent System and its provisions are considered outdated by many.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 Mining industry representatives agree that some provisions of the law are outdated, but agreement ends there on how the law should be revised to balance mineral development with other land uses.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.

Recent Action

On September 14, 2006, Representative Thelma D. Drake (R-VA) introduced legislation, cosponsored by seventeen members, to create an independent mineral commodity resource administration within the Department of the Interior. The Resource Origin and Commodity Knowledge (ROCK) Act (H.R. 6080) would establish the Mineral Commodity Information Administration (MCIA) headed by an administrator, appointed by the President, who would report directly to the Secretary of the Interior.

"There are numerous interested parties, both in the public and private sectors, which rely on accurate information to gauge the commodities market and react appropriately," said Rep. Drake. "This legislation represents good-government reform which will provide those parties with the reliable resource they need."

The ROCK Act would transfer at least 200 full time equivalent positions from the U.S. Geological Survey and at least 100 full time equivalent positions from the rest of the Department to the MCIA which would provide mineral commodity data that is currently produced by the U.S. Geological Survey. In addition, the new administrator would be required to prepare an analysis of "the foreign and domestic mineral commodities that will be required by the United States to sustain the energy supply, demand, and prices projected by the [Energy Information Administration's] Annual Energy Outlook analysis."

The bill was referred to the House Committee on Resources and the Subcommittee on Energy and Natural Resources held a hearing on the bill on September 20. David Kanagy, the Executive Director of the Society of Mining, Metallurgy and Exploration, testified at the hearing about the need for unbiased, timely and accurate mineral commodity data. There is no comparable legislation currently being considered by the Senate. (10/10/06)

Previous Action

A controversial provision sponsored by House Resources Committee Chair Richard Pombo (R-CA) and Representative Jim Gibbons (R-NV), which would repeal a ban on sales of public lands with mining claims, was included in the House Budget Reconciliation bill that was narrowly passed 217-215 on November 18, 2005. Since 1994 there has been a moratorium on selling public lands for mining and mining companies have had to lease lands from the government, making their operations subject to environmental reviews. The new provision would allow companies to buy public land for as little as $1000 per acre, a large increase over prices in the 1872 mining law, but still relatively cheap considering fair market values. In addition, up to 650 claims in national parks, including California's Death Valley and Joshua Tree National Parks, could possibly be sold to mining companies. Several Democrats have also claimed that the provision would allow companies to buy land cheaply and then resell it as real estate. Proponents of the measure dismiss these fears as unfounded and say selling land for mining would provide a big boost to rural western economies. There is no similar provision in the Senate bill, making it likely that the mining provision will be excluded from the final conference report. Additionally, many moderate Republicans in the House, including several who voted for the budget reconciliation bill, say they will oppose the conference report if it includes the mining language. Some western governors have also said they oppose the measure. Some of this opposition has focused on the effect of the legislation on hunting and fishing, and Gibbons and Pombo have offered to reword the language so as to ensure that it would not hinder hunting and fishing access on public lands. (12/12/05)

On June 9, 2005, Senator Robert Byrd (D-WV) successfully moved an amendment in the FY 2006 Interior and Environment spending bill that again extends the Abandoned Mine Land (AML) tax, until June, 2006. In early May, Byrd and Senator Arlen Specter (R-PA) used the emergency supplemental bill to extend the tax through this September. Byrd's new amendment, which was passed without debate during the full committee mark-up, now gives the House Resources and Senate Energy and Natural Resources committees an additional nine months to agree on a plan to reauthorize the fund. Two competing reauthorization bills -- H.R. 1600, introduced April 13, 2005 by Rep. Barbara Cubin (R-WY) and H.R. 2721, introduced on May 26, 2005 by John Peterson (R-PA) -- differ on how to disburse the AML funds. H.R. 1600 would disburse the funds based primarily on the amount of coal that a state produces, while H.R. 2721 would disburse the funds based primarily on the number of abandoned coal mines in the state. In addition, H.R. 1600 would reduce the reclamation fees paid by mining companies and repeal two uses for the funds: (1) protection , construction, or enhancement of public facilities affected by coal mining practices; and (2) development of publicly owned land adversely affected by coal mining practices, including land acquired for recreation and historic purposes, conservation, reclamation, and open space. (6/13/05)


The Abandoned Mine Land (AML) tax will be extended through September 30, 2005, after an amendment to extend the program survived an arduous Senate mark-up of this year's $82 billion emergency supplemental spending bill. The President signed the supplemental into law on May 11, 2005. Senators Robert Byrd (D-WV) and Arlen Specter (R-PA) inserted the provision before the mark-up, which began on April 12th. Disputes between lawmakers from western and eastern coal-producing states, who disagree over how to distribute revenues from the tax, have prevented members of congress from successfully advancing a reauthorization bill for the tax, which expired in September 2004. The AML program collects from the mining industry 35 cents per ton of surface-mined coal and 15 cents per ton of underground-mined coal, which goes toward the cleanup of mines abandoned before 1977. The Office of Surface Mining estimates that $7 billion worth of coal mine reclamation projects remain to be funded. Senator Byrd, who was a key player in extending the tax through June 2005 in last year's omnibus spending bill, expressed hopes that lawmakers in the Senate will be able to put aside their regional differences and pass an authorization bill soon. "AML is not a cat with nine lives. At some point, we will not be able to continue to extend this program in this stopgap manner," Byrd stated, according to a report in E&E Daily. (5/20/05)


The Bush administration announced a plan on February 10, 2005 to encourage state and federal agencies to work together to streamline the permitting process for new coal mines. The plan consists of a joint memorandum of understanding between four federal agencies that would enable coal companies to submit one permit application for a new mining operation, rather than the many different documents at different times that a company must now submit.

Currently, a mining operation must go through two different permitting processes, one under the Clean Water Act and another under the Surface Mining Control and Reclamation Act. The EPA has oversight over the Army Corps of Engineers' enforcement of fill rules and clean water requirements. And the Office of Surface Mining and state regulatory agencies ensure an operation complies with the mining law. Mining companies have complained that the dual process can be lengthy and confusing, with some of the same information required by both permits, but at different times and in different ways.

The new plan encourages state and federal agencies to collaborate and develop a coordinated regulatory process. But federal officials said this would not trump any of the current regulations or agency oversight. The policy would allow companies to submit one permit application that would provide information for all the permits. The application would then go through one public review process, rather than the many different comment periods and hearings.

"It would be as if you could file your state and federal taxes with one form rather than doing it twice," Mike Gauldin, spokesman for the Office of Surface Mining told Greenwire. "You would save additional efforts on the second process but still have to meet the same requirements."

Environmentalists told Greenwire the coordinated plan could hand the approval process to the Office of Surface Mining, sidelining the EPA and Fish and Wildlife Service, which have traditionally been more stringent on environmental oversight. Federal officials countered by saying that the coordinated process could speed up the approval for a new mine and enhance the overall communication and clarity of permitting. (2/14/05)

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 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."

In 1976, the Federal Land Policy and Management Act (FLPMA) amended the Mining Law of 1872 to give the Secretary of the Interior authority to disapprove of mining operations that would unduly harm or degrade public land. In the 108th Congress, a ruling by the United States District Court for the District of Columbia to uphold FLPMA made the Interior Department unable to issue permits to hard rock mines if they degrade or damage public lands, even if the mines are deemed to be essential. However, because the court found that the plaintiffs failed to prove their claims that current regulations are insufficient to prevent significant degradation of public lands, the ruling made it possible for the Interior Department or the National Mining Assocation to appeal the decision to the Circuit Court.

In another, unrelated legal battle during the 108th congress, the US District Court of the District of Columbia ruled on April 2, 2003 to exempt mining companies from reporting trace levels of heavy metals present naturally in waste rock. Only trace levels of bioaccumulating metals such as mercury and lead need to be reported to the EPA's Toxics Release Inventory (TRI). All other metals need only be reported in the inventory if they make up more than 1% of the waste rock.

The politics on surface mining during the second session of the 108th Congress focused primarily on mountain top mining regulations and abandoned mine lands legislation. The 1977 Surface Mining Conservation Reclamation Act (SMCRA) collects a coal surface mining tax of 35 cents per ton for cleanup of coal mines abandoned before 1977 with priority given to the most hazardous sites. 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). Controversy has arisen because the mineral productive western states such as Wyoming and Colorado pay the bulk of the tax eventhough they have very few clean up sites abandoned before 1977. Eastern coal mining states such as West Virginia and Kentucky, which have the bulk of hazardous abandoned mine lands, argue that the 50-50 split gives the western states too much money, which they then use on low priority or even distantly related projects. The western states claim that since they pay the bulk of the tax, they should reap the bulk of the benefits. The SMCRA was reauthorized until June 30, 2005 in the Consolodated Appropriations bill for FY05 so that lawmakers could have more time to settle the controversy.

Resources

Mining Policy in the 108th Congress


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, Federal Wildlife and Related Laws Handbook.

Contributed by David R. Millar 2004 AGI/AAPG Fall Semester Intern, Katie Ackerly 2005 AGI/AAPG Spring Semester Intern, Peter Douglas, 2005 AGI/AAPG Government Affairs Intern, Emily Lehr Wallace, AGI Government Affairs Program, and Rachel Bleshman, 2006 AGI/AAPG Fall Intern.

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

Last revised on October 10, 2005.