EARTHWORKS

Grijalva pushing for fees on mines

BILL WOULD MAKE FIRMS PAY ROYALTIES, ESTABLISH HARD-ROCK CLEANUP FUND

Arizona Daily Star | Tony Davis

June 23, 2013
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U.S. Rep. Raúl Grijalva of Tucson and two others are bringing back an oft-tried bill to overhaul the country's 142-year-old hard-rock mining law and charge royalties for copper and other non-coal mining operations on public lands.

The bill would also prevent mining on certain kinds of environmentally sensitive public lands and establish an abandoned mine cleanup fund, paid for by a separate fee on mining companies.

The royalty would be set at 12.5 percent on the gross income derived from mining claims on federal land.

Mining companies have long opposed a royalty of that size but have said they'd be willing to support a lesser but as yet undetermined royalty.

If the royalty - the same as paid by oil and gas companies leasing federal lands - were established, the new bill would have it used to pay down the annual federal budget deficit, or to reduce long-term national debt if no annual budget deficit exists.

"This is about improving our financial picture, our environment and our corporate governance practices all at the same time," Grijalva said in a news release Friday announcing the legislation. "This industry has been enjoying outdated loopholes and keeping billions of dollars that other industries have paid back to the public. We need to start reclaiming land, cleaning up our landscapes and reinvesting in jobs, and this bill is the right way to go."

Other sponsors of the Abandoned Mine Cleanup and Taxpayer Fairness Act are U.S. Reps. Ed Markey of Massachusetts and Rush Holt of New Jersey. They and Grijalva, who are all Democrats, hold leadership positions on the House Natural Resources Committee. Grijalva is the top Democrat on the committee's Public Lands Subcommittee.

Mining said to be different

Hard-rock mining companies argue they are different from energy firms and deal with a unique market and development challenges.

That's why they say a 12.5 percent royalty would be too burdensome.

They also say the proposed rate is higher than in any other country in the world and could cripple future investments.

Oil and natural gas removed from federal lands can be sold immediately, but hard-rock minerals need expensive processing once they're out of the ground, Luke Popovich, a National Mining Association spokesman, has said in the past.

"Just because oil and gas have been paying royalties on federal lands, it doesn't mean that therefore hard-rock mining should be paying royalties," Popovich said last year.

It's true that no severance exists now, Harold Roberts, an executive with Energy Fuels Inc., a uranium mining firm, said at a recent hearing of the House Energy and Mineral Resources Subcommittee, the environmental news service Greenwire reported.

"But we pay a lot of state taxes, we pay federal taxes, we employ a lot of people with very high-paying jobs," he said.

Modern law urged

It's time for a modern mining law that recognizes some places need to be protected from mining, gives taxpayers a fair return, and ensures that companies act responsibly, said Lauren Pagel, policy director for Earthworks, a Washington, D.C.-based environmental group.

"This bill stops million-dollar giveaways to mining companies, gives the public a say in where mining should occur on public land and protects our increasingly scarce drinking water. It says enough is enough," Pagel said in Grijalva's news release.

Specifically, besides the royalty provision, the new bill would:

• Protect federal Areas of Critical Environmental Concern, national Wild and Scenic Rivers and federally designated roadless areas, from future mining. Currently, mining is barred in federal wilderness areas. States and tribes could submit proposals to withdraw areas from future mining claims.

• Establish a fund to clean abandoned hard-rock mines, to be paid for by a 7-cent-per-ton fee charged to mining companies on displaced material.

• Direct the Interior secretary to issue federal regulations setting mine reclamation standards. A mining company would be required to restore lands to uses that they could have supported before land disturbance.

• Allow citizens to sue violators, including the U.S. Interior and Agriculture secretaries.

Udall pushed similar bills

Congressional Democrats and environmentalists have pushed unsuccessfully for these and similar measures since the 1970s, when the late Rep. Morris Udall, like Grijalva a Tucson Democrat, had to withdraw a mining reform measure after small miners in the Tucson area led a protest against it.

The issue of mining reform came up during a hearing of the Energy and Mineral Resources Subcommittee earlier this month, Greenwire reported.

Republicans and companies said they could be willing to accept changes but that Democratic legislation could hurt companies and domestic production.

Chairman Doug Lamborn, a Colorado Republican, said, "While many of us support reforming the 1872 law, the question of how and what is subject to great debate and is an area where members aren't nearly as far apart as the special interests would make it appear," Greenwire reported.

Last December, Grijalva and U.S. Sen. Tom Udall of New Mexico released a report saying that the dollar value of hard-rock minerals mined on federal land by companies is unknown because royalties aren't charged on their extraction. The report was written by the Government Accountability Office, Congress' investigative arm.

"This report points out the obvious - we don't value minerals extracted from public lands. All because of the 1872 Mining Law, there is no royalty," said Grijalva at that time, referring to the 140-year-old law passed to encourage mining companies to enter federal land.

Now, in the Senate, Udall says he is also working on a mining reform bill that industry sources hope is closer to a compromise than the House version, Greenwire reported. Senate Majority Leader Harry Reid, a Nevada Democrat, has also expressed support for mining reform as long as it is fair to hard-rock mining companies, a major presence in his state.

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