MINING NEWS: Is U.S. Senate end of road for H.R. 2262?

Hardrock Mining and Reclamation Act of 2007 passes U.S. House; other body looks at throwing it out and starting with clean slate

Shane Lasley

Mining News

Representatives Nick Rahall, D-W.V., and Jim Costa, D-Calif., introduced H.R. 2262, the Hardrock Mining and Reclamation Act of 2007, in the U.S. House of Representatives as a replacement for the 1872 Mining Law. Since the bill passed the House with a vote of 244-166 Nov. 1 it has received criticism from Democrats and Republicans alike.

Just before the legislation came up for a vote in the House, the Bush administration issued a statement that the president strongly opposed H.R. 2262 because the bill imposes a royalty on claims where property rights already have been vested, could reduce the continued domestic production of hardrock minerals and restates and expands some environmental standards and permitting requirements that are unnecessary and redundant.

The measure also establishes new public participation standards rather than using existing and well-established processes to engage the public, the White House said. If H.R. 2262 were presented to the president in its current form, his senior advisors would recommend he veto the bill, the statement added.

Democratic presidential hopeful Sen. Barack Obama, D-Ill., added his voice to those criticizing the bill. Obama said he is particularly opposed to provisions in H.R. 2262 that call for a 4 percent royalty tax on new mines and an 8 percent royalty tax on existing operations.

“Given the difficulties that the industry is already having in maintaining its operations, I think it is important for us not to move with royalty payments that are so significantly higher than they were previously,” the Illinois senator said.

Obama said he will work with Senate Majority Leader Harry Reid, D-Nev., and others to develop reasonable compromise legislation that requires fair compensation for the use of federal land, enhances environmental protection and cleans up abandoned mines that pollute fish and wildlife habitat.

Senators want to start with clean slate

Sen. Lisa Murkowski, R-Alaska, said that even though she believes the current mining law is in need of reform, she does not support H.R. 2262 in its current form. Murkowski told delegates to the Alaska Miners Association’s annual convention in Anchorage in early-November that she agrees with Domenici’s statement that “the Senate should start with a clean slate and draft legislation that will make reasonable changes to the mining law.”

Both Murkowski and Domenici are members of the U.S. Senate Energy and Natural Resources Committee, which is expected to take up mining law legislation in January after the holidays. Many ranking senators on both sides of the aisle have said that the House bill will not attract the support needed to pass the Senate and they believe a new bill will emerge from Resources.

National minerals policy

“We have allowed ourselves to become dependant on foreign sources of minerals that are critical to our national security and our national economy,” Murkowski told the miners.

Time for change

During field hearings in Elko, Nev., on H.R. 2262, Reid vowed to not leave the fate of the industry in the hands of future administrations. “Now is the right time to develop a responsible minerals policy,” he said Several Democrats also have indicated that they will follow Reid’s lead on mining law reform.

Laura Skaer, executive director of the Northwest Miners Association, told Alaskans attending the miners’ convention that the industry believes that now is the time to reform the mining law, “but not at all costs.”

Republicans, Democrats, environmentalists or industry leaders; all seem to agree that the time is right to replace the 135-year-old mining law.

Mining industry seeks reasonable reform

• Would require a 4 percent gross royalty tax on existing mining operations, and an 8 percent levy on new operations;

• Has a mine veto provision that allows the Secretary of the Interior to deny an operations permit to a project that complies with all other laws and regulations if the secretary determines that the operation will cause undue degradation to public lands and resources;

• Includes massive withdrawals from mineral entry;

• Allows states, political subdivisions, and Indian tribes to petition to have lands withdrawn from mineral entry;

• Provides no life of mine permits. Permits would be for 20 years with only one renewal of 20 years. The total life of a mine could only be 40 years;

• Establishes new and duplicative environmental standards that are vague, ambiguous and inconsistent with current federal and state environmental laws;

• Codifies the Leshy Ancillary Use Opinion by requiring a valid mining claim, valid mill site or valid tunnel site in order to have any rights under the mining law;

• Fails to provide security of title and tenure needed to attract investment capital;

• Requires buffer zones near national parks and National Conservation System Units, and;

• Calls for unnecessary and harsh enforcement mechanisms.

Skaer said the mining industry supports commonsense and reasonable mining law reform. Reasonable changes would include requiring a net-proceeds royalty of 5 percent, instead of the 8 percent proposed in H.R. 2262; providing security of tenure on federal lands; and guaranteeing the right to occupy lands from entry to closure.

Mining companies also envision a new mining law recognizing existing state and federal laws that govern the mining industry.

—Shane Lasley