Summary of Hearings on Mining Policy (9-20-06)

  • September 20, 2006: House Resources Committee, Subcommittee on Energy and Mineral Resources "To establish the “Mineral Commodity Information Agency (MCIA)” within the Department of the Interior, and other purposes."
  • June 14, 2006: Senate Committee on Environment and Public Works, "Oversight Hearing to Consider Whether Potential Liability Deters Abandoned Hard Rock Mine Clean-Up"
  • July 28, 2005: House Resources Committee, Subcommittee on Energy and Mineral Resources, Oversight Hearing on "Sustainable Development Opportunities in Mining Communities, Part II"
  • April 28, 2005: House Resources Committee, Subcommittee on Energy and Mineral Resources, Oversight Hearing on "Improving the Competitiveness of America's Mining Industry"

House Resources Committee, Subcommittee on Energy and Mineral Resources
"To establish the “Mineral Commodity Information Agency (MCIA)” within the Department of the Interior, and other purposes."

September 20, 2006

Witnesses
Panel 1
Drew A. Meyer, Vice President, Marketing & Transportation Services, Vulcan Materials Company On behalf of The National Stone, Sand, & Gravel Association
David S. Brown, President, Wyo-Ben, Inc. and Vice Chairman, Bentonite Section Industrial Minerals Association
David L. Kanagy Executive Director Society for Mining, Metallurgy, and Exploration Inc.

Panel 2
Michael Kaas, Mining Engineer, retired from the U.S. Bureau of Mines
Constance Holmes, Senior Economist and Director of International Policy, National Mining Association
Milt Copulos, President, National Defense Council Foundation

Chairman Jim Gibbons (R-NV) opened the hearing by providing some background on mineral resource programs at the federal level. The U.S. Geological Survey (USGS) ran the nation's mineral resource program before 1925, then the U.S. Bureau of Mines (BM) was created and they took over the mineral resource program. In 1995, the BM was eliminated and the mineral resources program was moved back to the USGS. Gibbons indicated that in the 21st century the nation needs mineral commodity knowledge for "power and security".

Gibbons then asked Ranking Member, Raul Grijalva (D-AZ) to give his opening remarks. Congressman Grijalva questioned the timing and need for this bill. The bill was introduced very late in the 109th Congress, there was little discussion with the members of the subcommittee about the bill, there was little time to even read the bill before the hearing on the bill and there is no cost estimate yet from the Congressional Budget Office. Grijalva also complained about the Republicans eliminating the BM in 1995 against the wishes of the Democrats and now wanting to re-create what the Republicans had undone. He was worried about the additional expense of creating a new agency.

Congresswoman Thelma Drake (R-VA), the primary sponsor of the ROCK bill, explained why she was introducing the bill. The new Mineral Information Team (MIT) would collect and disseminate data on every commercially important non-fuel mineral commodity. This information is critical for business, government and most importantly the Department of Defense. The U.S. is the biggest user of mineral commodities, with processed materials of mineral origin accounting for over $487 billion in 2005. She concluded that a separate agency was needed because of the repeated attempts by the Administration to cut the Mineral Resources Program of the USGS. A separate agency would eliminate this yearly battle of program cuts.

The first panel of witnesses represented mineral commodity trade associations and each testified in favor of mineral commodity data collection and the MIT. Drew Meyer from the National Sand, Stone and Gravel Association, was a member of the National Research Council (NRC) committee of Earth resources that prepared a 2003 report on the USGS Mineral Resources Program. His main point was that the mining community relies on the data the USGS provides now and they support the advancement of the group to the status of an independent agency.

David Brown from the International Mining Association, is a small businessman, who also values the mineral commodity data. He indicated that each person in the U.S. uses about 25 pounds of minerals each year and that it would be impossible for businesses, especially small businesses to get the information that a federal mineral resource program provides. The U.S. needs a central, comprehensive, unbiased and unified agency to gather and disseminate this type of information.

Constance Holmes from the National Mining Association, echoed the support of the two other witnesses for an accurate, timely and comprehensive mineral commodity database collected by an independent and unbiased federal agency, such as MIT. The decline in funding for the Mineral Resources Program at USGS has led to a deterioration in the amount of data that can be collected. The increasing global demand for minerals require accurate and timely data because the U.S. will need to compete more and more heavily for the mineral resources we need.

Congresswoman Drake asked the witnesses about the propriety of the data and the concern from companies about protecting their competitive confidentiality. The witnesses indicated that the USGS Mineral Resources Program effectively protects competitive data details and the industry is confident about the collection and dissemination process. Congressman Grijalva asked how Congress can ensure adequate funding for mineral resource commodity data and whether MIT was just another version of the BM. Holmes replied that MIT would not replicate BM because the BM had many other functions besides data collection. She thought an independent agency was necessary to sustain industry confidence in the confidentiality of the data. Meyer indicated that the funding is not adequate and the program needs to modernize their collection procedures to reduce costs.

Chairman Gibbons asked why the USGS Mineral Resources Program receives a low rating from the Office of Management and Budget. Holmes responded that the program is taken for granted and its importance is not recognized by the people who are assessing the program. Gibbons agreed that the data was viewed more like a telephone book that is outdated and no longer relevant, even though the analogy is not realistic.

The second panel of witnesses included former government employees and scientific societies. Michael Kaas, who retired from the BM when it was eliminated in 1995, talked about the importance of unbiased and comprehensive mineral commodity data that could only realistically be collected and disseminated by a centralized and independent federal agency. He suggested that a new agency such as the MIT would be more global and forward-looking. He indicated that an MIT would need to enhance their international mineral commodity data, increase the staff with economic and engineering skills and track technological developments by maintaining contacts with universities.

David Kanagy, the Executive Director of the Society of Mining, Metallurgy and Exploration, emphasized the importance of mineral commodity data for industry and federal, state and local government agencies. He indicated that since 2002, mineral prices have been rising as demand increases and supplies dwindle. Base and precious metals such as gold, copper, zinc, molybdenum and nickel have all increased by more than 100% and in some cases by more than 1000%. The U.S. imported about $103 billion in mineral commodities in 2005 and as global demand increases, it will become harder and more expensive for the U.S. to get the mineral commodities the nation and the economy needs to function. U.S. companies imported 100% of 16 minerals and depend on imports for about 40 of 81 minerals that are currently tracked by the USGS Minerals Resource Program.

Milt Cupolous explained the importance of the mineral commodity data by presenting several examples of where minerals are of critical use:

"For example, we are 100% dependent on imports for our supplies of Yttrium, which is essential to the manufacture of key defense products such as aircraft components, radar and microwave transmitters. We are also totally dependent on imports for our supplies of rare earths which are also essential to the manufacture of radars as well as computer monitors and permanent magnets. Or consider for a moment, our import dependence on some of the key minerals required to manufacture a military jet engine.

One Jet Engine, such as those used in our fighter aircraft contains 2.7 tons of Titanium of which 63% would be imported; 2.6 tons of Nickel of which 54% would be imported; 1,600 pounds of Chromium of which 69% would be imported; 1,000 pounds of Cobalt of which 78% would be imported; 800 pounds of Aluminum; of which 47% would come from imports; 200 pounds of Columbium of which 100% would come from overseas and 3 pounds of Tantalum of which 91% would be imported."

In addition to our dependence on imports for some critical minerals, Cupolous noted the rising prices for more common mineral commodities. Copper prices have risen 500% in 5 years and there is growing demand for copper (for example, a Toyota Prius hybrid car requires twice as much copper as a Toyota non-hybrid sedan). Cupolous decried the "19th century attitude toward a 21st century market" in mineral commodities and strongly supported a federal mineral commodity data program.

Congresswoman Drake asked how policymakers could make the public realize the importance of mineral commodities. Kanagy suggested putting a list of ingredients on products like the list of ingredients required for food and drinks. So every computer, appliance, vehicle, tool and other items would list the minerals used to create the final product. This is essentially what Cupolous had just done quite effectively in his testimony.

For the full text of witness testimony, click here.

-LR

Senate Committee on Environment and Public Works
"Oversight Hearing to Consider Whether Potential Liability Deters Abandoned Hard Rock Mine Clean-Up"

June 14, 2006

Witnesses:
Panel 1
The Honorable Wayne Allard, United States Senator, Colorado
The Honorable Ken Salazar, United States Senator, Colorado

Panel 2
The Honorable Stephen L. Johnson, Administrator, United States Environmental Protection Agency (EPA)

Panel 3
Dennis E. Ellis, Executive Director, Colorado Department of Public Health and Environment
Velma M. Smith, National Environmental Trust
John Gioia, Chair, Board of Supervisors, Contra Costa Public Works
Terry Harwood, Former Executive Director, Hazardous Material Policy Council, USDA; Former Chief Environmental Engineer, USFS
Scott A. Lewis, Director, Environmental and Governmental Affairs, AngloGold Ashanti North America Inc.

The Senate Committee on Environment and Public Works held a hearing on June 14, 2006 to consider whether potential liability deters 'volunteers' from cleaning up abandoned hard rock mine sites. Committee Chair James Inhofe (R-OK) began the hearing by explaining that there are over 500,000 abandoned hard rock mines in the U.S. and that many of them "were abandoned long before modern environmental laws were enacted." It is estimated that about 20 percent of these mines pose significant risk to watersheds into which they leach acids, mercury, arsenic, copper and other heavy metals. "We must broadly define a 'Good Samaritan' so that as many innocent parties as possible can participate [in hard rock mine cleanup], while taking necessary precautions to ensure that those who may have had any role in the mining of these sites are held legally and financially accountable," Inhofe said.

In her opening statement, Barbara Boxer (D-CA) disagreed with Inhofe's enthusiasm for the 'Good Samaritan' legislation (S.1848, S.2780). "It is worth noting that the [Environmental Protection Agency (EPA)] Administrator [Stephen Johnson] is testifying today in support of efforts to rollback environmental laws and standards that would provide a direct financial benefit to industry," she said. "Proposals to streamline environmental cleanup by undermining standards is the wrong approach and raises the risk to communities that things will get worse, not better."

Boxer's primary concern is that the proposed bills contain no standards regarding acceptable cleanup levels or measures of environmental improvement. She pointed out that mechanisms to deal with the cleanup of abandoned hard rock mines are already in place. Grants for mine cleanup are available from the EPA's Superfund and Brownfield programs, which place emphasis on maintaining high environmental standards. "Why create new legislation and bureaucracy, when the means to deal with these issues are already in place?" Boxer asked.

Senators Ken Salazar (D-CO) and Wayne Allard (R-CO), the co-sponsors of S.1848, argue that their bill would encourage mine cleanup at a level that could not be funded by the existing Superfund and Brownfield programs. Volunteers would be exempted from the Clean Water Act - and other laws that do not allow for partial cleanups - and would not be held accountable for pollution they did not help create. Salazar explained that S.1848 would allow 'Good Samaritans' to apply for an EPA cleanup permit - which would be granted based on the soundness of the work plan and the potential for environmental improvement. He also mentioned that, contrary to other proposed bills, S.1848 "does not offer blanket liability protection," but instead allows state and local governments to craft the liability protections on a case-by-case basis.

The EPA's Administrator, Stephen Johnson, supports passage of the Good Samaritan bills. Johnson emphasized that because "nothing has been done in decades" in terms of cleanup at thousands of mines, even incremental or partial cleanup would have a positive effect on the environment. Scott A. Lewis, the Director of Environmental and Governmental Affairs at the AngloGold Ashanti mining company agreed that little more mine cleanup will be done if volunteers are not involved. He suggested that mining companies be included as 'Good Samaritans,' and that they be allowed to reprocess abandoned tailing piles or other mine residues - to make a modest profit - while engaged in cleaning up abandoned sites.

Terry Harwood, the former Executive Director of the Agriculture Department's Hazardous Materials Policy Council, voiced concern about volunteers undertaking complex cleanups. "The potential for good-intentioned, technically qualified Good Samaritans to make a discernible impact on this huge problem is highly questionable," she said. Harwood suggested that the Superfund program be fully funded, so that the EPA has the ability to properly do its job. Committee ranking member Jim Jeffords (I-VT) agreed with Harwood, and suggested that the EPA should also "issue long-overdue rules to require mining companies to set aside money now for existing and future cleanups."

For the full text of witness testimony, click here.

-JCR

House Resources Committee, Subcommittee on Energy and Mineral Resources
Oversight Hearing on "Sustainable Development Opportunities in Mining Communities, Part II"

July 28, 2005

Witnesses:
Mr. Jim Jeffress, Retired Wildlife Biologist / Private Consultant, Lovelock, NV
Mr. James R. Arnold, P. E., Vice-President, Technical Services and Projects, Coeur d'Alene Mines Corporation
Mr. Tom Harrington, Assistant Manager, Jefferson Local Development Corporation
Mr. L. Courtland Lee, Geologist, Glenn Dale, MD
Ms. Ann S. Carpenter, Mineral Development Consultant, Women's Mining Coalition

Representative Jim Gibbons (R-NV), Chairman of the House Subcommittee on Energy and Mineral Resources, held the second in a series of hearings that evaluate the current state and potential of the U.S. domestic mining industry. Called "Sustainable Development Opportunities in Mining Communities," the hearing focused on modifying mine land reclamation laws to allow continued use of infrastructure after mine closure. Under current law, all roads, buildings, and other facilities at a mining site must be completely reclaimed when the mine closes. The witnesses said in their testimony that other businesses are often interested in using this infrastructure for further business opportunities.

In his opening statement, Chairman Gibbons offered strong support for additional flexibility in federal mining laws. "Allowing infrastructure to remain in place to be utilized by the community for other types of economic activity can help mitigate the effects of mine closure in host communities," Gibbons stated. Specific policy proposals were not offered by Chairman Gibbons at the hearing, leaving considerable uncertainty over the details of future legislation.

Witnesses representing the mining industry emphasized that mine site redevelopment flexibility would not be a substitute for the reclamation process. Under questioning from Chairman Gibbons, Mr. James Arnold of the Coeur d'Alene Mines Corporation said that mining companies were committed to reclamation and that redevelopment "would not mean ultimately changing any reclamation that will be done."

Ann Carpenter of the Women's Mining Coalition testified that allowing the "privatization" of federally owned lands would encourage sustainable development in mining communities. Carpenter suggested that Congress facilitate this transfer through changes to existing mining law by modifying provisions regarding patenting, land exchanges, and direct sales. Carpenter stated under questioning that she would expect mining companies to be able to transfer reclamation responsibility to the purchasers of infrastructure while retaining responsibility for areas not purchased.

Witnesses suggested that continued development of mine sites would be a partial solution to the boom-bust cycles that have long plagued mining communities. Arnold emphasized the importance of careful planning, stating in his testimony that there must be "a commitment to ensure an environmentally stable and clean site once a mining operation is closed" and that "sustainable development in mining has to take into account local communities and their long-term economic and social welfare." Specific development opportunities that would utilize existing mine site facilities could include renewable energy generation, waste management, recreation, business parks, and education facilities.

With only Chairman Gibbons present during questioning, the perspectives of other committee members on mining community sustainability will not enter the record until consideration of actual legislation.

For the complete written testimonies of the hearing witnesses, including accounts of several specific development opportunities, go to the House Resources Committee website.

- JPV

House Resources Subcommittee on Energy and Mineral Resources,
Oversight Hearing on "Improving the Competitiveness of America's Mining Industry"

April 28, 2005

Witnesses:
Ann Carpenter, Women's Mining Coalition
Kathy Pelto, P & H Mining Equipment
Janet Gellici, American Coal Council
Laura Skaer, Northwest Mining Association
Ted Fitzgerald, Trout Unlimited

Rep. Jim Gibbons (R-NV), Chairman of the House Resources Subcommittee on Energy and Mineral Resources, convened this oversight hearing to draw attention to the state of the U.S. mining industry. Calling for the development of a national mineral policy, Gibbons addressed access, regulatory, and public acceptance issues that have contributed to a decline in mineral investment within the U.S. According to Gibbons, the U.S. is about 80% dependent on imports for about half of the 62 non-fuel minerals used by Americans. China is beginning to surpass the U.S. in mineral consumption, which has driven up the price of metals and increased competition for mineral resources.

Testifying before the subcommittee were four women representing the mining industry and a representative from Trout Unlimited, who provided a conservationist perspective. After what was a respectful and informative discussion on the challenges of the U.S. mining industry, Gibbons thanked the panelists for contributing "one of the most enlightened testimonies that we've had in this committee."

While Gibbons and many of the witnesses highlighted ways to improve U.S. mining competitiveness through increased permitting efficiency and revisions to environmental laws, the subcommittee's ranking member Raul Grijalva (D-AZ) offered an alternative perspective that emphasized the potential costs, through public land claims and environmental damage, of increasing access to public lands for mining. He cautioned those in favor of policy reform not to dissolve current mining laws but to work within the laws to make them better.

Among concerns posed by the panelists, Ann Carpenter from the Women's Mining Coalition identified the proposed budget cuts to the USGS mineral resources program among the most pressing issues to address. "In the face of increased global competition for mineral resources, the nation needs the data and research that is completed by the USGS to properly track foreign reliance, exploration and development trends, and mineral potential throughout the world...[and] in the U.S.," Carpenter testified.

Witnesses reported other troubling trends, such as a steady decline in the number of mining and engineering degrees conferred, paucity of instructors willing to train mining technicians, and an aging workforce. Witnesses recommended infrastructure improvements and legislated incentives to encourage trade school enrollment and to retain science, engineering and technology students at U.S. universities. In addition to federal support for mining and engineering research programs, strong public outreach campaigns would be needed to reverse the growing unpopularity and political incorrectness of exploration geology.

Above all, witnesses called for comprehensive reforms to the National Environmental Protection Act (NEPA) and the Endangered Species Act that would attract industry back to U.S. land. Among more specific recommendations, Laura Skaer of the Northwest Mining Association cited the policies laid out in the1999 National Research Council report, Hardrock Mining On Federal Lands, as a good framework for new legislation. The report assessed the adequacy of the regulatory framework for hard-rock mining and found that in general, existing regulations are well coordinated, but that some changes are necessary.

According to Ted Fitzgerald of Trout Unlimited, policy reforms should focus just as much on cleaning up abandoned mines as providing greater access. Because the need for restoration of old mines outstrips the resources available for cleaning them up, Fitzgerald called Abandoned Mine Lands "the most pervasive and least addressed threat." However, he did not directly express opposition to increasing U.S. mining activity, as long as strong environmental policies were maintained and enforced. He and industry representatives agreed that industry would welcome environmental controls in new mining law, from a public health and economic standpoint.

Grijalva challenged witnesses on the notion that the circuitous permitting process was the only factor driving jobs overseas, asking why the cheap cost of labor in other countries relative to the U.S. was not considered to be at least equally significant. Ann Carpenter insisted that mining companies considered the length of the permitting process to be the critical factor in securing a return on their investment, not the cost of labor. This response brought enthusiastic nods from the other industry representatives.

-KCA

Sources: Hearing testimony, E&E Daily.

Contributed by Katie Ackerly, Government Affairs Staff; John P. Vermylen, 2005 AGI/AIPG Summer Intern; and Jessica Rowland, 2006 AGI/AIPG Summer Intern.

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

Last updated on June 20, 2006.