[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT HEARING TITLED ``AMERICA'S MINERAL RESOURCES: CREATING
MINING AND MANUFACTURING JOBS AND SECURING AMERICA''; AND LEGISLATIVE
HEARING ON H.R. 1063, H.R. 687, H.R. 697, H.R. 761, H.R. 767, H.R.
957, AND H.R. 981
=======================================================================
OVERSIGHT AND
LEGISLATIVE HEARING
before the
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
of the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
Thursday, March 21, 2013
__________
Serial No. 113-7
__________
Printed for the use of the Committee on Natural Resources
Available via the World Wide Web: http://www.fdsys.gov
or
Committee address: http://naturalresources.house.gov
----------
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COMMITTEE ON NATURAL RESOURCES
DOC HASTINGS, WA, Chairman
EDWARD J. MARKEY, MA, Ranking Democratic Member
Don Young, AK Peter A. DeFazio, OR
Louie Gohmert, TX Eni F. H. Faleomavaega, AS
Rob Bishop, UT Frank Pallone, Jr., NJ
Doug Lamborn, CO Grace F. Napolitano, CA
Robert J. Wittman, VA Rush Holt, NJ
Paul C. Broun, GA Raul M. Grijalva, AZ
John Fleming, LA Madeleine Z. Bordallo, GU
Tom McClintock, CA Jim Costa, CA
Glenn Thompson, PA Gregorio Kilili Camacho Sablan,
Cynthia M. Lummis, WY CNMI
Dan Benishek, MI Niki Tsongas, MA
Jeff Duncan, SC Pedro R. Pierluisi, PR
Scott R. Tipton, CO Colleen W. Hanabusa, HI
Paul A. Gosar, AZ Tony Cardenas, CA
Raul R. Labrador, ID Steven A. Horsford, NV
Steve Southerland, II, FL Jared Huffman, CA
Bill Flores, TX Raul Ruiz, CA
Jon Runyan, NJ Carol Shea-Porter, NH
Mark E. Amodei, NV Alan S. Lowenthal, CA
Markwayne Mullin, OK Joe Garcia, FL
Chris Stewart, UT Matt Cartwright, PA
Steve Daines, MT
Kevin Cramer, ND
Doug LaMalfa, CA
Vacancy
Todd Young, Chief of Staff
Lisa Pittman, Chief Legislative Counsel
Jeffrey Duncan, Democratic Staff Director
David Watkins, Democratic Chief Counsel
------
SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES
DOUG LAMBORN, CO, Chairman
RUSH HOLT, NJ, Ranking Democratic Member
Louie Gohmert, TX Steven A. Horsford, NV
Rob Bishop, UT Matt Cartwright, PA
Robert J. Wittman, VA Jim Costa, CA
Paul C. Broun, GA Niki Tsongas, MA
John Fleming, LA Jared Huffman, CA
Glenn Thompson, PA Alan S. Lowenthal, CA
Cynthia M. Lummis, WY Peter A. DeFazio, OR
Dan Benishek, MI Tony Cardenas, CA
Jeff Duncan, SC Raul M. Grijalva, AZ
Paul A. Gosar, AZ Colleen W. Hanabusa, HI
Bill Flores, TX Joe Garcia, FL
Mark E. Amodei, NV Vacancy
Steve Daines, MT Vacancy
Kevin Cramer, ND Edward J. Markey, MA, ex officio
Doc Hastings, WA, ex officio
----------
CONTENTS
----------
Page
Hearing held on Thursday, March 21, 2013......................... 1
Statement of Members:
Holt, Hon. Rush, a Representative in Congress from the State
of New Jersey.............................................. 5
Prepared statement of.................................... 6
Lamborn, Hon. Doug, a Representative in Congress from the
State of Colorado.......................................... 2
Prepared statement of.................................... 4
Statement of Witnesses:
Batulis, Ruthe, President, Dakota County Regional Chamber of
Commerce, and President, Minnesota Conference of Chamber
Executives................................................. 23
Prepared statement on the Oversight Hearing.............. 24
Connell, Jamie E., Acting Deputy Director, Bureau of Land
Management, U.S. Department of the Interior................ 46
Prepared statement:
on H.R. 687.......................................... 49
on H.R. 697.......................................... 51
on H.R. 761 and H.R. 1063............................ 48
on H.R. 767.......................................... 52
on H.R. 957.......................................... 54
on H.R. 981.......................................... 55
Questions submitted for the record....................... 56
Gosar, Hon. Paul A., a Representative in Congress from the
State of Arizona........................................... 7
Prepared statement on H.R. 687........................... 9
Grijalva, Hon. Raul M., a Representative in Congress from the
State of Arizona, Oral statement on H.R. 687............... 10
Heck, Hon. Joseph J., a Representative in Congress from the
State of Nevada............................................ 14
Prepared statement on H.R. 697........................... 15
Hohn, Mike, General Manager, Soda Ash Business OCI Chemical
Corporation................................................ 83
Prepared statement on H.R. 957........................... 85
Iwanicki, James M., P.E., Engineer Manager, Marquette County
Road Commission............................................ 18
Prepared statement on the Oversight Hearing.............. 20
Johnson, Hon. Henry C. ``Hank,'' Jr., a Representative in
Congress from the State of Georgia, Oral statement on H.R.
981........................................................ 17
Kirkpatrick, Hon. Ann, a Representative in Congress from the
State of Arizona........................................... 12
Prepared statement on H.R. 687........................... 13
Krill, Jennifer, Executive Director, Earthworks.............. 28
Prepared statement on the Oversight Hearing, H.R. 687,
H.R. 697, H.R. 761, and H.R. 957....................... 29
McGroarty, Daniel, President, American Resources Policy
Network.................................................... 80
Prepared statement on H.R. 1063.......................... 81
Melander, Harry, President, Minnesota Building and
Construction Trades Council................................ 25
Prepared statement on the Oversight Hearing.............. 26
Miller, Stephen Q., Chairman, Board of Supervisors, Pinal
County District 3, Casa Grande, Arizona.................... 72
Prepared statement on H.R. 687........................... 74
Question submitted for the record........................ 75
Neatby, Pierre, Vice President, Sales & Marketing, Avalon
Rare Metals................................................ 87
Prepared statement on H.R. 1063, H.R. 761, and H.R. 981.. 88
Peralta, Soyla ``Kiki,'' Council Member, Superior Town
Council, Superior, Arizona................................. 102
Prepared statement on H.R. 687........................... 103
Quinn, Hal, President and CEO, National Mining Association... 76
Prepared statement on H.R. 761........................... 77
Rambler, Terry, Chairman, San Carlos Apache Tribe............ 91
Prepared statement on H.R. 687........................... 92
Questions submitted for the record....................... 101
Wagner, Mary, Associate Chief, U.S. Forest Service, U.S.
Department of Agriculture.................................. 57
Prepared statement on H.R. 687........................... 58
Additional materials submitted for the record:
List of documents retained in the Committee's official files. 112
OVERSIGHT HEARING ON ``AMERICA'S MINERAL RESOURCES: CREATING MINING AND
MANUFACTURING JOBS AND SECURING AMERICA''; AND A LEGISLATIVE HEARING ON
H.R. 1063, ``NATIONAL STRATEGIC AND CRITICAL MINERALS POLICY ACT OF
2013''; H.R. 687, ``SOUTHEAST ARIZONA LAND EXCHANGE AND CONSERVATION
ACT OF 2013''; H.R. 697, ``THREE KIDS MINE REMEDIATION AND RECLAMATION
ACT''; H.R. 761, ``NATIONAL STRATEGIC AND CRITICAL MINERALS PRODUCTION
ACT OF 2013''; H.R. 767, TO AMEND THE ENERGY POLICY ACT OF 2005 TO
MODIFY THE PILOT PROJECT OFFICES OF THE FEDERAL PERMIT STREAMLINING
PILOT PROJECT; H.R. 957, ``AMERICAN SODA ASH COMPETITIVENESS ACT''; AND
H.R. 981, ``RESOURCE ASSESSMENT OF RARE EARTHS ACT OF 2013.''
----------
Thursday, March 21, 2013
U.S. House of Representatives
Subcommittee on Energy and Mineral Resources
Committee on Natural Resources
Washington, D.C.
----------
The Subcommittee met, pursuant to notice, at 10:07 a.m., in
room 1334, Longworth House Office Building, Hon. Doug Lamborn
[Chairman of the Subcommittee] presiding.
Present: Representatives Lamborn, Broun, Lummis, Benishek,
Duncan, Gosar, Daines, Cramer, Holt, Horsford, Huffman,
Lowenthal, DeFazio, Grijalva, Hanabusa, and Garcia.
Also Present: Representatives Heck, Napolitano, Johnson of
Georgia, and Kirkpatrick.
Mr. Lamborn. The Committee will come to order. We are going
to go ahead and get an expedited start here. As the Ranking
Member comes in he will make his opening statement at an
opportune time. But with votes pending, and then with people
wanting to catch planes later in the day, we thought we should
go ahead and get started.
The Chairman notes the presence of a quorum, which, under
Committee Rule 3(e), is 2 Members. The Subcommittee on Energy
and Mineral Resources hearing today is to hear testimony on an
oversight hearing on, America's Mineral Resources: Creating
Mining and Manufacturing Jobs and Securing America, and we are
going to have a legislative hearing on H.R. 1063, I introduced
it, it is National, Strategic, and Critical Minerals Policy Act
of 2013; H.R. 687 by Representatives Gosar and Kirkpatrick on
Southeast Arizona Land Exchange and Conservation Act of 2013;
H.R. 697 by Representative Heck, Three Kids Mine Remediation
and Reclamation Act; H.R. 761, by Representative Amodei,
National Strategic and Critical Minerals Production Act of
2013; H.R. 767 by Representative Cramer to amend the Energy
Policy Act of 2005 to modify the Pilot Project offices of the
Federal Permit Streamlining Pilot Project; H.R. 957 by
Representative Lummis, America Soda Ash Competitiveness Act;
and H.R. 981 by Representative Johnson of Georgia and Markey,
Resource Assessment of Rare Earths Act of 2013.
Under Committee Rule 4(f), opening statements are limited
to the Chairman and Ranking Member. However, I ask unanimous
consent to include any other Members' opening statements in the
hearing record if submitted to the clerk by close of business
today.
[No response.]
Mr. Lamborn. Hearing no objection, so ordered.
I also ask unanimous consent that the following Members be
allowed to participate in today's hearing: the gentlelady from
California, Mrs. Napolitano; the gentlelady from Arizona, Mrs.
Kirkpatrick, the gentleman from Nevada, Mr. Heck, and the
gentleman from Georgia, Mr. Johnson.
[No response.]
Mr. Lamborn. Hearing no objection, so ordered.
STATEMENT OF THE HON. DOUG LAMBORN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Mr. Lamborn. I would like to welcome everybody to the
hearing today, and who are listening via our webcast, to the
Subcommittee on Energy and Mineral Resources oversight, and the
legislative hearing focusing on assessing the Nation's solid
mineral resources, and examining our national strategic and
critical minerals policy.
As I have stated before, our national minerals policy has
been neglected for far too long. And as evidenced by the
bipartisan nature of the legislation we will be considering
today, there is a clear recognition that, as a Nation, we can
no longer afford to have our domestic mineral needs or policy
put on the back burner.
Strategic and critical minerals are essential to our
economy, livelihoods and national security, as well. Renewable
energy, national defense equipment, agriculture, health care,
and everyday items such as televisions, telephones, computers,
light bulbs, and so on, are all dependent on minerals.
Currently, the United States relies on foreign sources for a
majority of our non-fuel mineral materials. And, according to
the USGS, we are 100 percent dependent on foreign sources for
rare earth minerals.
Mining creates tangible value, introducing new money into
the Nation's economic system. Additional tangible value is
added to the raw mined production through manufacturing,
construction, and other uses. Harvesting domestic mineral
resources contributes to local economies, and it also
contributes to the Nation's overall economic security from the
most basic level up.
Mining and the associated businesses and industry have been
one of the few growth areas during our country's prolonged
recession, and has provided employment opportunities for
skilled labor, scientists, engineers, and others. These are not
your everyday, run-of-the-mill jobs, but high-paying, family
wage jobs with generous benefits. A recent CRS analysis shows
the non-supervisory positions in the energy and mineral sectors
pays $1,200 to $1,500 per week, respectively.
I would like to point out that domestic mining isn't just
about jobs in the mines. It is thousands of geologists,
biologists, and environmental engineers. It is about the tens
of thousands of jobs in the industries that support our miners,
from the Caterpillar factories in Illinois to Redwing Boots in
Minnesota, from St. Pierre chains in Worcester, Massachusetts
to AirFlow Catalyst Systems in Rochester, New York.
As an added benefit, the Nation will become more self-
reliant on the raw, mined materials our society depends on, as
well as increasing opportunities for growth in our domestic
manufacturing sector. We will also have improved economic and
national security. The end result is Americans everywhere
benefit from more domestic mining.
Now, we have an interesting and exciting hearing before us
today. We will start with a bipartisan panel of our colleagues
on both sides of the legislation before us. We will have an
oversight panel following that will provide testimony on
America's mineral resources creating mining and manufacturing
jobs and securing America.
Domestic mining faces many challenges in the U.S.,
permitting and access being only a sliver of the numerous
challenges facing mine development. However, it holds great
promise. So we will hear from folks who see a bright future and
opportunity. Just as the United States has experienced
significant growth in oil and natural gas reserves and
resources, mainly from private and State mineral-rich lands,
there is an opportunity for significant growth in domestic,
non-fuel, strategic, and critical minerals production, as well.
Now, this oversight hearing will be followed by an
administration panel that will provide testimony on the
legislation under consideration today.
And finally, we will hear from our legislative panel. We
are getting a lot of things done today. With the exception of
my colleague Kevin Cramer's bill to amend the Energy Policy Act
of 2005 to modify the Pilot Project offices that were referred
to earlier, the other pieces of legislation have passed out of
the House Committee on Natural Resources and, in some cases,
the Floor of the House during the last Congress, unfortunately
only to languish in the Senate.
Here I would like to make a pitch for my legislation, H.R.
1063, the National Strategic and Critical Minerals Policy Act
of 2013, which I strongly believe will provide the agencies
with the information they need to make better decisions for the
country when it comes to the development of our non-fuel solid
mineral resources.
Other important bipartisan pieces of legislation under
consideration today that will not be considered by the Members
panel, so I should give them a little emphasis right here, H.R.
761, the National Strategic and Critical Minerals Production
Act of 2013, which uses the President's Executive order
requiring coordination between agencies when permitting
infrastructure projects in order to expedite construction and
job creation; and H.R. 957, the American Soda Ash
Competitiveness Act, which sets the Federal royalty rate for
soda ash at 2 percent, allowing the domestic soda ash industry
to remain competitive with international producers.
I look forward to hearing from our witnesses today, and I
would like to recognize the Ranking Member, from New Jersey,
Representative Holt.
[The prepared statement of Mr. Lamborn follows:]
Prepared Statement of The Honorable Doug Lamborn, Chairman,
Subcommittee on Energy and Mineral Resources
I would like to welcome everyone in the room here today and
listening via our webcast to the Subcommittee on Energy and Mineral
Resources oversight and legislative hearing focusing on accessing the
Nation's solid mineral resources and examining our national Strategic
and Critical Minerals Policy. As I've stated before--our national
minerals policy has been neglected for far too long. And as evidenced
by the bipartisan nature of the legislation we will be considering
today there is a clear recognition that as a Nation we can no longer
afford to leave our domestic mineral needs or policy on the back
burner.
Strategic and critical minerals are essential to our economy,
livelihood and national security. Renewable energy, national defense
equipment, agriculture, healthcare and everyday items such as
televisions, telephones, computers and light bulbs are all dependent on
minerals. Currently the United States relies on foreign sources for a
majority of our non-fuel mineral materials and, according to the USGS,
is 100 percent dependent on foreign sources for rare earth minerals.
Mining creates tangible value, introducing new money into the
Nation's economic system. Additional tangible value is added to the raw
mined product through manufacturing, construction, and other uses.
Harvesting domestic mineral resources contributes to local economies,
and to the nation's overall economic security from the most basic level
up.
Mining and the associated businesses and industry have been one of
the few growth areas during the country's prolonged recession providing
employment opportunities for skilled labor, scientist, engineers and
others.
These are not your everyday run of the mill jobs but high-paying-
family wage jobs with generous benefits. A recent CRS analysis shows
the non- supervisory positions in the energy and minerals sector pay
$1,535 and $1,220 per week respectively.
I'd like to point out that domestic mining isn't just about jobs in
the mines, its thousands of geologists, biologists, and environmental
engineers, it is about the tens of thousands of jobs in the industries
that support our miners. From the Caterpillar factories in Illinois to
Red Wing Boots in Minnesota, from St. Pierre Chains in Wooster, MA to
Airflow Catalyst Systems in Rochester, NY.
As an added benefit--the Nation will become more self-reliant on
the raw mined materials our society depends on as well as increasing
opportunities for growth in our domestic manufacturing sector, and
improving the Nation's economic and national security. The end result
is Americans everywhere benefit from more domestic mining.
Members Panel
We have an exciting hearing before us today; we will start with a
bipartisan panel of our colleagues, on both sides of the legislation
before us.
Oversight Panel
The Members panel will be followed by our oversight panel that will
provide testimony on ``America's Mineral Resources: Creating Mining and
Manufacturing Jobs and Securing America.'' Domestic mining faces many
challenges in the U.S., permitting and access being only a sliver of
the numerous challenges facing mine development. However, it also holds
great promise as we will hear from folks who see a bright future and
opportunity.
Just as the U.S. has experienced significant growth in Oil and
Natural Gas reserves and resources--mainly from private and state
mineral rich lands--there is an opportunity for significant growth in
domestic non-fuel strategic and critical minerals production as well.
ADMINISTRTION PANEL
The Oversight panel will be followed by the Administration Panel
that will provide testimony on the Legislation under consideration
today.
Legislative Panel
Finally, we will hear from our legislative panel. With the
Exception of my colleague Kevin Cramer's bill to amend the Energy
Policy Act of 2005 to modify the Pilot Project offices of the Federal
Permit Streamlining Pilot Project to include Montana and South Dakota,
the other pieces of legislation have passed out of the House Committee
on Natural Resources and in some cases the floor of the House during
the last Congress only to languish in the Senate.
Here I'd like to make a pitch for my legislation H.R. 1063 the
``National Strategic and Critical Minerals Policy Act of 2013,'' which
I strongly believe will provide the agencies with the information they
need to make better decisions for the country when it comes to the
development of our non-fuel solid mineral resources.
Other important bipartisan pieces of legislation under
consideration today that will not be discussed by the Members panel
are:
H.R. 761 the ``National Strategic and Critical Minerals
Production Act of 2013'' which uses the President's Executive Order
requiring coordination between agencies when permitting infrastructure
projects in order to expedite construction and JOB creation as a
template for permitting reform for advanced mineral exploration and
mine development projects--the foundation of other more familiar
Infrastructure projects such as roads and bridges--leading to JOB
creation and economic and national security; and
H.R. 957 the ``American Soda Ash Competitiveness Act''
sets the Federal royalty rate for soda ash at 2 percent allowing the
domestic soda ash industry to remain competitive with international
producers--namely China--and protects domestic JOBS in the mining,
transportation and shipping sectors.
I look forward to hearing from our witnesses today.
______
STATEMENT OF THE HON. RUSH HOLT, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW JERSEY
Dr. Holt. Thank you, Mr. Chairman. Let me see if I can keep
my remarks to a minute or two. The bells have sounded. We have
Members waiting, and we clearly won't be able to get through
everything.
But I am pleased we are examining rare earth and critical
minerals. I am pleased that H.R. 1063, introduced by Chairman
Lamborn, includes compromised language agreed to in the last
Congress.
I would point out that, despite being entitled, ``National
Strategic and Critical Minerals Production Act of 2013,'' H.R.
761 has nothing to do with developing these minerals. In fact,
it is about gutting environmental safeguards and proper review
of large mining projects.
Another bill today, H.R. 687 that looks at exchanging land
at the Tonto National Forest with regard to copper mining,
raises numerous concerns about the impacts on the environment.
And I will be interested to hear more about that.
H.R. 957 would impose reduced royalty rate for soda ash
produced on Federal lands. We can and should debate the impact
of such a reduction. But the ability of the soda ash industry
to increase production should be part of that conversation.
And, overall, we have to understand that all of this debate
is done in the context of the archaic Mining Law of 1872.
Ranking Member Markey and Representative Grijalva and I will be
introducing legislation that would ensure that large companies
extracting minerals belonging to the taxpayer from public lands
pay for the privilege of doing so, as they do for oil and gas.
More about that later.
But to save time, let me end my remarks and come back to
them in the course of the questioning. Thank you.
[The prepared statement of Dr. Holt follows:]
Prepared Statement of The Honorable Rush Holt, Ranking Member,
Subcommittee on Energy and Mineral Resources
Thank you.
I am pleased that we are examining rare earth and other critical
and strategic minerals that are indispensable in the manufacture of
high-tech goods. Everything from solar panels and iPhones, to missile
guidance systems and MRI machines requires one or several of the
world's 17 minerals collectively known as rare earths. H.R. 981, the
RARE Act, tasks the U.S. Geological Society with conducting a global
assessment of rare earth mineral resources and potential supply
sources. And I am pleased that H.R. 1063, introduced by Chairman
Lamborn, also includes compromise language agreed to in the last
Congress that would accomplish the same goals of improving our
understanding of these important rare earth minerals.
Unfortunately, while these two bills will improve our understanding
of critical and strategic minerals, other pieces of legislation that we
are considering today represent nothing more than huge giveaways to the
mining industry and rollbacks of environmental protections for our
public lands. Many of these measures passed the House in the last
Congress but were too extreme to pass the Senate. Yet, today we are
considering these same extreme bills with few or no changes.
For instance, despite being entitled the ``National Strategic and
Critical Minerals Production Act of 2013,'' H.R. 761 has absolutely
NOTHING to do with developing these minerals. In fact, this bill is all
about gutting the environmental safeguards and the proper review of
large mining projects on public lands for virtually all minerals. The
bill would really waive proper environmental review and public input
for large mining operations on public lands for abundant minerals like
gold, silver or copper.
Another bill we are considering today, H.R. 687, would transfer
approximately 2,400 acres of land in the Tonto National Forest,
including 760 acres that were withdrawn from mining operations by
President Eisenhower in 1955, to a subsidiary of two foreign mining
companies--Rio Tinto and BHP Billiton. This bill raises numerous
concerns about the impacts on the environment, surrounding communities
and Native American sacred sites.
Allowing copper mining in this area could have significant impacts
on the quality and quantity of drinking water for thousands of people
in this already drought prone area. This proposal could decimate the
economic benefits of recreation. It could devastate an area sacred to
Native People. And this legislation would hand over billions of dollars
worth of mineral resources to foreign mining companies without
receiving a fair return. All while waiving proper review under the
National Environmental Policy Act. In addition, support for this mining
proposal has been eroding. The town of Superior, Arizona--the town that
would be most directly impacted--recently adopted a resolution opposing
the deal.
H.R. 957 would re-impose a reduced royalty rate for soda ash
produced from Federal lands. We can and should debate the impact of
such a reduction but the ability of the soda ash industry to increase
production, exports, and employment last year following the expiration
of the reduced royalty rate should be part of that conversation.
And while many of the bills we are considering today provide new
giveaways to large, multinational mining companies, they do nothing to
update the Mining Law of 1872, which allows mining companies to pull
taxpayer-owned hardrock minerals out of our public lands virtually for
free. In fact, under this 140-year old law, mining companies can
extract gold, silver, uranium, copper and other hardrock minerals
without paying taxpayers a dime in royalties for those minerals. This
law isn't just outdated, it's outrageous. That is why I will be
introducing legislation with Ranking Member Markey, and Representative
Grijalva that would ensure that large companies extracting these
minerals on public lands pay taxpayers for the privilege of doing so,
just as oil, gas and coal companies do now. As we are looking at ways
to reduce our deficit, updating this law should be a common sense
reform. But instead, the Majority continues to focus on heaping new
giveaways on this industry.
______
Mr. Lamborn. OK, certainly. And thank you, Representative
Holt. We now have five Members who have come forward for our
first panel. We have about 8 minutes or so before we have to
scurry over there to catch the first vote, because the 15-
minute period is running. Hopefully we can get through the
testimony. If not, we will just reconvene after votes. But we
will be in recess in about 8 minutes or so.
Let's start now with Representative Paul Gosar of Arizona.
STATEMENT OF THE HON. PAUL A. GOSAR, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Dr. Gosar. Thank you, Chairman Lamborn, and thanks for
scheduling today's legislative hearing on the Southeast Arizona
Land Exchange and Conservation Act. When I was first elected to
Congress a little over 2 years ago, one of the first
initiatives the people of Arizona brought to my attention was
this land exchange.
H.R. 687 facilitates a land exchange that will bring into
Federal stewardship 5,500 acres of high-priority conservation
lands that contain endangered species, sensitive ecosystems,
recreational sites, and historical landmarks, in exchange for
2,600 acres of Federal land in Pinal County, Arizona,
containing one of the largest undeveloped copper resources in
the world. It is a critical first step in the development of
the largest producing mine in North America.
The potential economic benefits of this legislation are
staggering. Upon passage of the bill, Resolution Copper
estimates that it will be able to employ nearly 3,000 workers
during a 6-year construction period, and that is just the
start. The mine, assuming the company's mine plan of operation,
complies with all environmental laws. Let me repeat. It is a
requirement explicitly by my bill that they comply with all
environmental bills.
When they go into full production, they will directly
employ another 1,400 people. These are high-paying jobs,
ranging from $40,000 to $120,000 salaries per year in a region
that is struggling, economically. As many people familiar with
mining communities know, an influx of over 1,000 mining jobs
will spur economic development growth in the community. These
mine workers need restaurants to eat at, convenience stores to
shop at, and homes to live in. A recent economic study
estimates an additional 2,300 jobs could be created due to
these demands. That brings the estimated total number of jobs
resulting from this legislation to 3,700.
Overall, independent analysis estimates the total economic
impact of the project will be over $61 billion. That is over $1
billion per year over the life of the mine, which equates to
over $19 billion to Federal, State, county, and local tax
revenues--$19 billion in tax revenues. In these tough fiscal
times, I think we could all agree our local governments, and
certainly the U.S. Treasury, could use those funds.
This legislation has national security implications. The
U.S. currently imports 30 percent of our copper demands, and
the demand is skyrocketing. This critical mineral is used in
virtually all modern-day technology, ranging from renewable
energy and hybrid cars to everyday electronics like cell phones
and iPads. Our country must use domestic resources to meet this
growing demand, and this project could yield enough copper to
meet 25 percent of our current needs.
This legislation is not only a jobs bill, it is a
conservation bill. The lands that the Federal Government
acquires in the exchange are highly coveted recreational and
conservation areas. It protects one of the few remaining
undammed rivers in Arizona, the San Pedro River. The Dripping
Springs property is a superb hiking and climbing location. The
Cave Creek property will protect a riparian corridor, as well
as numerous archeological sites, and nearly 100 acres of
private land adjacent to culturally important Apache Leap is
placed into the Federal stewardship.
A few of the witnesses today are going to testify that
Congress is rushing consideration of the land project exchange,
and that there are many unanswered questions surrounding the
project. That could not be further from the truth. Over the
past 8 years, this exchange and the potential mine have been
subject to intensive review, public consideration, and
modification. Today will be the fifth legislative hearing in
either the House or the Senate held to examine the specifics of
this legislation. This exact language passed the U.S. House
with bipartisan support, and was almost signed into law last
year.
Many of the issues that the detractors of this project will
bring up in today's hearing have been addressed in the
Congressional Record at some point. Congresswoman Kirkpatrick
and I are committed to addressing the few concerns that have
not as we move forward in this legislative process, in
particular the concerns about the land that will be conveyed to
the Town of Superior.
But don't be fooled. This land exchange has strong
bipartisan support across the State of Arizona. I would like to
submit letters of support from the State Government delegation
of the affected region: Governor Jan Brewer, Democrat State
Senator Barb McGuire, Republican State Representatives Frank
Pratt and T.J. Shope, and Brenda Barton. I would like to submit
these for the record.
Mr. Lamborn. With no objection, so ordered.
Dr. Gosar. Also for the record, a resolution unanimously
passed by the bipartisan Pinal County Board of Supervisors and
letters of support from the entire bipartisan Gila County Board
of Supervisors.
Mr. Lamborn. With no objection, so ordered.
Dr. Gosar. These two counties encompass the area's most
affected by the exchange.
And finally, I have letters from the Town of Payson; the
Mayor of Globe, Terry Wheeler; a Superior Councilman, John
Tameron; and a resolution of support from the Town of Kearny.
Mr. Lamborn. Seeing no objection, so ordered.
[The information submitted for the record by Dr. Gosar has
been retained in the Committee's official files:]
Dr. Gosar. Each of these officials was elected to their
position in some part because of their support for this land
exchange. Their constituents--our constituents--want Congress
to approve this land exchange.
Thank you for the opportunity to testify. I urge my
colleagues to support the legislation because I know it will
lead to a better future for my constituents and this country.
Thank you, sir.
[The prepared statement of Dr. Gosar follows:]
Prepared Statement of Paul A. Gosar, a Representative in Congress From
the State of Arizona, on H.R. 687
First, I would like to thank Chairman Lamborn for scheduling
today's legislative hearing on the Southeast Arizona Land Exchange and
Conservation Act. When I was first elected to Congress a little over 2
years ago, one of the first initiatives the people of Arizona brought
to my attention was this land exchange.
H.R. 687 facilitates a land exchange that will bring into Federal
stewardship 5,500 acres of high-priority conservation lands that
contain endangered species, sensitive ecosystems, recreational sites,
and historic landmarks, in exchange for 2,600 acres of Federal land in
Pinal County, Arizona containing one of the largest undeveloped copper
resources in the world. It is the critical first step to the
development of the largest producing mine in North America.
The potential economic benefits of this legislation are staggering.
Upon passage of the bill, Resolution Copper estimates it will be able
to employ nearly 3,000 workers during a 6-year construction period--and
that is just the start. The mine, assuming the company's mine plan of
operation complies with all environmental laws, which let me repeat--is
required explicitly by my bill before the company can begin production,
will directly employ around 1,400 people. These are high-paying jobs,
ranging from $40,000 to $120,000 salaries per year, in a region that is
struggling economically.
As many people familiar with mining communities know, an influx of
over 1,000 mining jobs will spur additional economic growth in a
community. Those mine workers need restaurants to eat at, convenience
stores to shop at, and homes to live. A recent economic study estimates
an additional 2,300 jobs could be created due to these demands. That
brings the estimated total number of jobs resulting from this
legislation to 3,700.
Overall, independent analysis estimates the total economic impact
of the project will be over $61 billion. That is over $1 billion per
year over the life of the mine, which equates to over $19 billion in
Federal, State, county, and local tax revenue. Nineteen billion dollars
in tax revenue--in these tough fiscal times I think we can all agree
our local governments and certainly the U.S. Treasury could use those
funds.
This legislation also has national security implications. The
United States currently imports 30 percent of our copper and demand is
skyrocketing. This critical mineral is used in virtually all modern day
technology ranging from renewable energy and hybrid cars, to your
everyday electronics like cell phones and iPods. Our country must use
domestic resources to meet this growing demand; this project could
yield enough copper to meet 25 percent of our current needs.
This legislation is not only a jobs bill, it's a conservation bill.
The lands the Federal Government acquires in the exchange are highly-
coveted recreational and conservation areas. It protects one of the few
remaining undammed rivers in Arizona, the San Pedro River. The Dripping
Springs property is a superb hiking and climbing location. The Cave
Creek property will protect a riparian corridor as well as numerous
archaeological sites. And nearly 100 acres of private land adjacent to
the culturally important Apache Leap is being placed into Federal
stewardship.
A few of the witnesses today are going to testify that Congress is
rushing consideration of the land exchange and that there are many
unanswered questions surrounding the project. That could not be further
from the truth. Over the past 8 years, this exchange and the potential
mine has been subject to intensive review, public consideration, and
modification. Today will be the sixth legislative hearing, in either
the House or the Senate, held to examine the specifics of this
legislation. This exact language passed the U.S. House with bipartisan
support and was almost signed into law last year.
Many of the issues that the detractors of this project will bring
up in today's hearing have been addressed in the Congressional record
at some point. Congresswoman Kirkpatrick and I are committed to
addressing the few concerns that have not as we move forward in the
legislative process, in particular concerns about the land that will be
conveyed to the Town of Superior.
But don't be fooled--this land exchange has strong bipartisan
support across the State of Arizona.
I would like to submit letters of support from the State government
delegation of the affected region--Democrat State Senator Barb McGuire,
and Republican State Representatives Frank Pratt, T.J. Shope, and
Brenda Barton.
Also for the record--a resolution unanimously passed by the
bipartisan Pinal County Board of Supervisors and letters of support
from the entire bipartisan Gila County Board of Supervisors. These two
counties encompass the areas most affected by the exchange.
Finally, I have letters from the Town of Payson, the Mayor of Globe
Terry Wheeler, Superior Councilman John Tameron, and a resolution of
support from the Town of Kearney.
Each of these officials was elected to their positions in some part
because of their support for this land exchange. Their constituents . .
. OUR constituents, want Congress to approve this land exchange.
Thank you for the opportunity to testify. I urge my colleagues to
support the legislation because I know it will lead to a better future
for my constituents and this country.
______
Mr. Lamborn. OK, thank you.
We will now hear from Representative Grijalva.
STATEMENT OF THE HON. RAUL M. GRIJALVA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Mr. Grijalva. Thank you, Mr. Chairman. I appreciate the
time. And I think, as President Reagan said famously in a
debate once, ``Here we go again.'' And as my friend, Mr. Gosar,
said, this is about the fifth, sixth version of this piece of
legislation.
And before I make any comments on this legislation, I want
to advise the Chairman and the Ranking Member that I made a
request to Chairman Hastings and Ranking Member Markey to delay
this hearing until there is meaningful government-to-government
consultation between the Federal Government and tribal Nations
affected by this legislation. And that is consistent with the
Federal agency and tribal memorandum of understanding that is
in place right now. And I would again urge that consideration.
I am also asking that we ask the State Department to verify
that this particular decision on H.R. 687 does not violate any
resolution that this Congress has passed with regards to
sanctions, economic sanctions in Iran, or any company or entity
that does business with them. It is our understanding that Rio
Tinto, the parent company of subsidiary Resolution Copper,
jointly operates a uranium mine, of all things, in Namibia.
And I would suggest that before you take my word for it or
take the denials as truth, that a formal request from the Chair
and the Ranking Member to the State Department to validate and
verify that. We have all passed resolutions and the urgency of
those resolutions has come for the protection of Israel. I
would suggest that that is one. The last time we had a motion
to recommit on the same subject, we split entirely along party
lines. Democrats supported the motion to recommit, and every
Republican opposed to it. Before we cross that bridge again I
would suggest we get information.
This legislation, quite frankly, Mr. Chairman, is a
deception. Even today we have no one from Rio Tinto or its
subsidiary, Resolution, as a witness available to answer
questions, questions dealing with transparency, the due
diligence, and what is the return for the taxpayer. There is a
tattered history to this legislation and this deal. But the
fundamental and consistent reasons for opposition remain the
same.
Pre or post-NEPA, the company says, ``We are going to obey
everything,'' but once it is in their hands and it is
privatized, the Federal land, no matter what is found in NEPA,
no matter what is found in the environmental impact statement,
there is nothing the Government can do to assure compliance. So
when we say we are OK with NEPA, after the fact, the law is
moot after the fact.
Native Americans, and you are going to hear from them
today, we have the Chairman and the President of the Hopi and
Navajo Nation, as well as the Chairman of the All-Indian Pueblo
Council, representing 20 pueblos in New Mexico and Texas that
are here, not only in support of their colleagues, San Carlos
Apaches, but also in opposition to this bill.
And the opposition continues the same. What is the value of
the resource? $60 billion? $100 billion? What is under that
land? And is the trade that we are talking about, is that a
fair return for the taxpayer? I understand the value is
proprietary to the company, but I think some due diligence on
the part of this Committee to understand value and what we are
giving back to the taxpayer is an important issue.
I mentioned the issue of sanctions. I think all the
legitimate opposition and concerns that we have are always met
with, ``You are anti-jobs, you are anti-mining.'' Well, I think
there is a rush for this legislation because there is an
erosion of local support. There is unanimous opposition among
Native Americans, not only in Arizona but across the country.
And there is a track record for Rio Tinto with regards to labor
violations, environmental violations, and failure to do
reclamation.
So, why the rush? Perhaps there is a feeling there is a
much more accommodating presence at the Senate that would allow
this bill to go as is. Perhaps it is that there is hemorrhaging
local support in the region for the mine, and let's do it now
before that support eradicates entirely.
Mr. Chairman, I hope that we do our due diligence and be
true stewards of our public lands and the responsibility we
own. We are not Wal-Mart greeters for Rio Tinto or its
subsidiary. We are not facilitators or brokers. This cozy deal
before us today in the form of H.R. 687 is the same deal we saw
before, and before, and before. We are doing it again, and the
opposition to the points remain the same. Thank you, Mr.
Chairman.
Mr. Lamborn. OK, thank you for your testimony. I apologize
that we couldn't finish the remainder of the panel. We will go
into recess now to vote. I am going to let the audience know I
am estimating about 45 minutes or so before we come back. But
at that point we will reconvene, hear from the rest of the
panel, and then go into our other panels.
We will be in recess.
[Recess.]
Mr. Lamborn. The Subcommittee will come back to order. We
have a couple Members who are on their way from the voting that
just concluded, but one Member is here and I see another Member
coming in. Excellent. So we will go ahead and, since Mrs.
Kirkpatrick is here and we are still on the subject of H.R.
687, we will hear her testimony and then go to Mr. Heck of
Nevada.
Mrs. Kirkpatrick, the floor is yours.
STATEMENT OF THE HON. ANN KIRKPATRICK, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Mrs. Kirkpatrick. Thank you, Mr. Chairman and Ranking
Member Holt. I am proud to represent Arizona's first district.
It covers 60,000 square miles, 80 rural communities, including
the Town of Superior, whose leaders are here today. And it has
12 Native American Tribes, including the San Carlos Apache
Tribe, whose leaders are here today.
I am here today testifying in support of H.R. 687, the
Southeastern Arizona Land Exchange, of which I am an original
cosponsor. I would like to start by first recognizing there are
pros and cons to this legislation and to the land exchange. My
testimony will touch on both aspects of this project. However,
it is my belief that there is a way to work together and use
the legislative process to develop a piece of legislation that
brings a diversified and stable economy to this region. But not
without first addressing the project's impact on our
environment, water, and lands.
My district includes Arizona's Copper Corridor, which has
more than a century's legacy of copper mining. It includes
communities like Superior, Globe, Miami, Hayden, Winkelman, and
Kearny. Copper is part of Arizona's heritage. It is one of the
four C's represented in our State Seal.
The Copper Corridor has played a major role in our State's
early growth and economic development. Folks here have remained
in these towns for generations, and have expressed strong
support over the years for the Superior mine. They have raised
their families here, worked the mines, run their own
businesses. But small towns in Arizona have been hit hard by
the Great Recession. They have been set back by changing
economic realities. The median household income in my district
is just over $30,000. These are working families; they
struggle. But they love their communities and they want to stay
if there is a way.
Across the globe there is a great need, an economic demand
for the high-grade copper these communities can produce. I know
this, and so does my colleague, Congressman Gosar. That is why
each of us tried in previous Congresses to make this project a
reality. And that is why, in this Congress, we have joined
together to try again in hopes that a bipartisan approach could
make the difference.
My district is also home to the San Carlos Apache Tribe.
The testimony of Chairman Rambler must also be taken into
account as we move through the legislative process. The Tribe's
concerns about the impact this project will have on sacred
sites and land are valid concerns. The Tribe's concerns about
the impact of the project on our environment, water, and public
health are also valid concerns. I am committed to using the
legislative process to represent their concerns. This process
must be transparent. It must reflect our shared interest in the
public good. And that means recognizing that these communities
cannot have long-term economic stability without clean water,
air, and land.
The voices of tribal and environmental groups should be
heard and respected, and that is where the legislative process
comes in. I support requiring government-to-government tribal
consultations prior to the land exchange. We also need to
include environmental protections for the water and land in and
around the Copper Corridor very likely prior to the land
exchange.
If people are going to live, work, and raise their families
in these areas, these factors must be addressed. I will be
working toward including responsible provisions like these in a
final version of this legislation. I believe that if these
provisions are included, it will help ensure that Superior Mine
can finally move forward.
I offer my sincere thanks to all of those who came here
today to testify about this legislation and make your voices
heard.
And I want to especially thank Congressman Gosar and his
staff for working together with us on this important effort.
Thank you very much.
[The prepared statement of Mrs. Kirkpatrick follows:]
Prepared Statement of The Honorable Ann Kirkpatrick, a Representative
in Congress From the State of Arizona, on H.R. 687
I am proud to represent Arizona's first district, which covers
60,000 square miles, 80 rural communities, including the town of
Superior whose leaders are here today, and 12 Native American tribes--
including the San Carlos Apache Tribe, whose leaders are here today.
I stand here today testifying in support of H.R. 687--the
Southeastern Arizona Land Exchange, of which I am an original co-
sponsor.
I would like to start by recognizing there are pros and cons to
this legislation and to the land exchange. My testimony will touch on
both aspects of this project.
However, it is my belief that there is a way to work together, and
use the legislative process to develop a piece of legislation that
brings a diversified and stable economy to the region--but not without
first addressing the project's impact on our environment, water and
lands.
My district includes Arizona's Copper Corridor, which has more than
a century's legacy of copper mining.
It includes communities like Superior. Globe. Miami. Hayden.
Winkelman and Kearny.
Copper is part of Arizona's heritage--it's one of the five C's
represented in our State seal.
The Copper Corridor has played a major role in our State's early
growth and economic development.
Folks here have remained in these towns for generations and have
expressed strong support over the years for the Superior mine.
They've raised their families here. Worked the mines. Run their own
businesses.
But small towns in Arizona have been hit hard by the great
recession.
They've been set back by changing economic realities.
The median income in my district is just over $30,000 a year.
These are working families. They struggle.
But they love their communities and they want to stay--if there's a
way.
Across the globe, there is a great need--an economic demand--for
the high-grade copper these communities can produce.
I know this, and so does my colleague, Congressman Gosar.
That's why each of us tried in previous Congresses to make this
project a reality.
And that's why in this Congress, we have joined together to try
again, in hopes that a bipartisan approach could make the difference.
Now, my district is also home to the San Carlos Apache Tribe. The
testimony of Chairman Rambler must also be taken into account as we
move through the legislative process.
The tribe's concerns about the impact this project will have on
sacred sites and land are valid concerns.
The tribe's concerns about the impact of the project on our
environment, water and public health are also valid concerns.
I am committed to using the legislative process to represent their
concerns.
This process must be transparent. It must reflect our shared
interest in the public good.
And that means recognizing that these communities cannot have long-
term economic stability without clean water, air and land.
The voices of tribal and environmental groups should be heard and
respected.
And that's where the legislative process comes in:
I support requiring government-to-government tribal consultations
prior to the land exchange.
We also need to include environmental protections for the water and
land in and around the Copper Corridor--very likely, prior to the land
exchange.
If people are going to live, work and raise their families in these
areas, these factors must be addressed.
I will be working toward including responsible provisions like
these in a final version of this legislation.
I believe that if these provisions are included, it will help
ensure the Superior mine can finally move forward.
I offer my sincere thanks to all those who came here today to
testify about this legislation and make your voices heard.
And I want to thank Congressman Gosar and his staff for working
together with us on this important effort.
Thank you.
______
Mr. Lamborn. Thank you, Representative. And as each Member
provides their testimony, feel free to be excused. I know there
are other Committees going on and other pressing matters. Thank
you.
Mrs. Kirkpatrick. Mr. Chairman, may I be excused?
Mr. Lamborn. Please, yes.
Mrs. Kirkpatrick. Thank you.
Mr. Lamborn. Thank you for being here. And now we will hear
from Representative Heck of Nevada on his bill.
STATEMENT OF THE HON. JOSEPH J. HECK, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEVADA
Mr. Heck. Chairman Lamborn, thank you for inviting me back
to testify before the Subcommittee on an innovative solution
for restoring the environment, improving safety, and creating
jobs in my district in Southern Nevada.
As you know, I originally introduced the Three Kids Mine
Remediation and Reclamation Act in the previous Congress. This
legislation was passed successfully through the Natural
Resources Committee and passed the House by a voice vote, but
unfortunately, did not receive consideration in the Senate
before the 112th Congress adjourned. I have since re-introduced
the legislation as H.R. 697.
Mr. Lamborn. Representative, is your microphone on?
Mr. Heck. Yes, it is.
Mr. Lamborn. OK, excellent. Maybe pull it a little closer.
Mr. Heck. And I appreciate the opportunity to come back and
testify before the Subcommittee to talk about a serious
environmental public safety and abandoned mine reclamation
issue in the city of Henderson, Nevada. In the interest of
time, I am going to abbreviate my remarks, but request that my
full statement be entered into the record.
Mr. Lamborn. No objection, so ordered.
Mr. Heck. And I also request that a written statement of
The Honorable Andy Hafen, Mayor, City of Henderson, Nevada, be
entered into the record.
Mr. Lamborn. Without objection, so ordered.
[The information submitted for the record by Mr. Heck has
been retained in the Committee's official files:]
Mr. Heck. The Three Kids Mine is an abandoned manganese
mine and mill site consisting of approximately 1,262 acres of
Federal and private lands which lies within the Henderson City
limits, and is literally across from Lake Mead Parkway, from an
increasing number of homes and businesses. The Three Kids Mine
was owned and operated by various parties, including the United
States, from approximately 1917 through 1961, and used as a
storage area for Federal manganese ore reserves from the late
1950s through 2003.
The project site contains numerous large, unstable, sheer
cliff open pits as deep as 400 feet, and huge volumes of mine
overburden and tailings, mill facility remnants, and waste
disposal areas.
To give a sense of scale, the mine overburden is 10 stories
high in some areas. Abandoned waste ponds are up to 60 feet
deep and filled with over 1 million cubic yards of gelatinous
tailings containing high concentrations of arsenic, lead, and
petroleum compounds. Reclaiming the project site will require
the excavation and management of at least 12 million cubic
yards of material, enough to fill a modern sports stadium 6
times. The presumptive remedy for the project site is to use
the existing mine pits as permanent repositories for the mine
residue in an appropriately engineered manner.
The legislation I have introduced with the support of the
entire Nevada Delegation is the result of over 5 years of work
among the City of Henderson Redevelopment Agency, the
Department of the Interior, the State of Nevada, and private
entities to develop a program to finally clean up the Three
Kids Mine site.
Boiled down to its simplest form, the Secretary of the
Interior will convey the Federal lands at the project site,
approximately 948 acres, at fair market value, taking into
account the cost of investigating and remediating the entire
site, which includes an additional 314 acres of now private
lands that were used historically in mine operations. The
Federal Government will receive a release of liability for
clean-up of both the Federal lands and the private lands.
This is a unique and complex public-private partnership
proposal. It will finally lead to the clean-up of the Three
Kids Mine site at no cost to the Federal Government.
In closing, I want to once again thank Chairman Lamborn and
Ranking Member Holt, as well as the other members of the
Subcommittee for holding a hearing on this serious problem of
abandoned mine lands and innovative solutions for addressing
the problem. And I would be happy to answer any questions the
Subcommittee might have.
[The prepared statement of Mr. Heck follows:]
Prepared Statement of the Honorable Joseph J. Heck, a Representative in
Congress From the State of Nevada, on H.R. 697
Chairman Lamborn and Ranking Member Holt, thank you for inviting me
back testify before the Subcommittee on an innovative solution for
restoring the environment, improving safety, and creating jobs in my
District in southern Nevada. As you know, l originally introduced the
Three Kids Mine Remediation and Reclamation Act in the previous
Congress. This legislation was passed successfully through the Natural
Resources Committee and the House, but unfortunately, did not receive
consideration in the Senate before the 112th Congress adjourned. I have
since reintroduced this legislation as H.R. 697, and I appreciate the
opportunity to come back and testify before the Subcommittee to talk
about a serious environmental, public safety, and abandoned mine
reclamation issue in the City of Henderson, Nevada.
* * *
The Three Kids Mine is an abandoned manganese mine and mill site
consisting of approximately 1,262 acres of Federal and private lands
which lies within the Henderson City limits and is literally across
Lake Mead Parkway from an increasing number of homes and businesses.
The Three Kids Mine was owned and operated by various parties,
including the United States, from approximately 1917 through 1961, and
used as a storage area for Federal manganese ore reserves from the late
1950s through 2003. The project site contains numerous large unstable
sheer-cliff open pits as deep as 400 feet, huge volumes of mine
overburden/tailings, mill facility remnants and waste disposal areas.
To give a sense of scale, mine overburden is ten stories high in some
areas; abandoned waste ``ponds'' are up to 60 feet deep and filled with
over 1 million cubic yards of gelatinous tailings containing high
concentrations of arsenic, lead and petroleum compounds. Reclaiming the
Project Site will require the excavation and management of at least 12
million cubic yards of material (enough to fill a modern sports stadium
six times). The ``Presumptive Remedy'' for the Project Site is to use
the existing mine pits as permanent repositories for the mine residue,
in an appropriately engineered manner.
* * *
The Nevada Division of Environmental Protection has identified the
Three Kids Mine as a high priority for the implementation of a
comprehensive environmental investigation, remediation, and reclamation
program. Numerous unsuccessful proposals to clean up and redevelop the
Project Site have been advanced over the years. All were ultimately
abandoned due to unrealistic estimates of the scale of required
remediation, as well as the complexities posed by the mix of private
and Federal ownership at the Project Site. Something must be done to
address this serious blight on the Henderson community.
* * *
The legislation I have introduced, with the support of the entire
Nevada Delegation, is the result of over 5 years of work among the City
of Henderson Redevelopment Agency, the Department of the Interior, the
State of Nevada, and private entities to develop a program to finally
clean up the Three Kids Mine site. Boiled down to its simplest form,
the Secretary of the Interior will convey the Federal lands at the
project site--approximately 948 acres--at fair market value taking into
account the costs of investigating and remediating the entire site,
which includes an additional 314 acres of now-private lands that were
used historically in mine operations. The Federal Government will
receive a release of liability for cleanup of both the Federal lands
and the private lands. Under the legislation, before the Federal lands
are conveyed, the State must enter into a binding consent agreement
under which the cleanup of the entire Project Site will occur. The
consent agreement must include financial assurances to ensure the
completion of the remediation and reclamation of the Site. The cleanup
will be financed with private capital and Nevada tax increment
financing at no cost to the Federal Government.
In more detail, the legislation would direct the Secretary to
convey the 948 Federal acres of the Three Kids Mine project site to the
Henderson Redevelopment Agency for fair market value, discounted to
reflect the costs of cleanup of the entire Project Site. According to
preliminary estimates, the cleanup costs for the Project Site range
from a low of $300 million to a high of nearly $1 billion. The BLM's
preliminary estimate of the value of the lands to be conveyed as if
they were ``clean'' ranges from $95 million to $190 million. The value
and costs will be determined by the Secretary under the legislation
using established national appraisal methods, environmental assessment
standards, and cost estimating procedures. We fully expect the cleanup
costs to substantially exceed the value of the lands to be conveyed.
Moreover, given the mix of private and Federal lands at the project
site and the substantial cleanup costs involved, there is no viable
solution to remediate and reclaim the Federal lands without the private
lands.
Before any conveyance of Federal land, the legislation requires an
executed Mine Remediation and Reclamation Agreement between a
responsible party and the State of Nevada that would govern the
``CERCLA-protective'' cleanup program for the entire Project Site
(Federal and private lands) and ensure that the program is fully
funded. Finally, in exchange for the conveyance, the Federal
Government's responsibility for the cleanup of this site will be
assumed and paid for by a responsible third party and the Secretary's
land will also be cleaned up at no cost to the Federal Government.
* * *
Fundamental to the economic viability of the entire project is the
availability of ``tax increment financing'' under the Nevada Community
Redevelopment Law. The Nevada Redevelopment Law allows the
Redevelopment Agency to fund the cleanup of blighted conditions such as
an abandoned mine and environmental contamination through use of an
``increment'' of property taxes collected within a designated
redevelopment area over a 30-year ``capture period.'' The ``increment''
is a portion of the assessed value of the property which predictably
increases in value following cleanup and as the subsequent commercial
and residential redevelopment build-out occurs. To advance this
important project, the City of Henderson completed annexation of the
Three Kids site in January 2009, and the Lakemoor Canyon Redevelopment
Area was established in February 2009.
* * *
This is a unique and complex ``public/private partnership''
proposal. It will finally lead to the cleanup of the Three Kids Mine
site at no cost to the Federal Government. Millions of dollars have
been spent on this effort to date on environmental assessment work at
the Project Site and to advance discussions and negotiations among
project stakeholders. I believe that this initiative offers a viable
solution for the cleanup and reclamation of the Three Kids Mine and
could serve as a model for other similar sites across the country. I
would respectfully request that the Subcommittee grant expeditious
consideration of the Three Kids Mine Remediation and Reclamation Act.
In closing, I want to once again thank Chairman Lamborn and Ranking
Member Holt, as well as the other members of the Subcommittee, for
holding a hearing on the serious problem of abandoned mined lands, and
innovative solutions for addressing the problem. I would be happy to
answer any questions the Subcommittee might have.
______
Mr. Lamborn. OK, thank you for your testimony. Feel free to
be excused. I know there are other pressing issues and
Committee hearings. Thank you for being here.
We will now hear from Senator--excuse me, Representative
Johnson--there is an interesting Senate race going on in
Georgia, but I should say Representative Johnson of Georgia.
STATEMENT OF THE HON. HENRY C. ``HANK,'' JOHNSON, JR., A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA
Mr. Johnson of Georgia. Well, I tell you, I am going to
stay right where I am and stay out of that big fight.
[Laughter.]
Mr. Johnson of Georgia. But thanks for the elevation,
anyway.
Mr. Lamborn. We just made some news today here.
Mr. Johnson of Georgia. Thanks, Mr. Chairman. I want to
thank you, Chairman Lamborn. Also, Ranking Member Horsford, for
allowing me to join you today.
Mr. Chairman, it is a testament to the statesmanship of the
Chairman and Ranking Members that you have placed a bill
offered by a Democrat on the table for discussion today. That
bipartisan approach will be necessary if we are going to rise
to the challenges of our time.
I also must thank Ranking Member Markey for his and his
staff's hard work in developing H.R. 981, the Resource
Assessment of Rare Earths Act of 2013, or the RARE Act, which
we jointly introduced this year.
Ranking Member Holt I also want to thank for his support
for this legislation.
This hearing on creating mining and manufacturing jobs here
in America, and the securing of our access to necessary
minerals is critically important. The RARE Act will help ensure
that our Nation is able to assess rare earth elements, which
are necessary components of numerous products, from wind
turbines to solar panels to energy-efficient light bulbs and a
number of Department of Defense applications, as well.
The bill is simple and I would also argue that it is also
non-partisan. It directs the U.S. Geological Survey to lead a
global, multilateral assessment of rare earth element deposits
to develop a comprehensive understanding of their distribution
around the world.
We need this bill because China now accounts for upwards of
90 percent of U.S. rare earth element supply. This Chinese
monopoly is a potentially ruinous economic and geopolitical
vulnerability for the United States. In recent years, China has
shown a willingness to exploit its monopoly by restricting rare
earth elements exports, undermining U.S. national security and
competitiveness in defense and clean energy. A better
understanding of where these critical elements are will enable
us to adjust to supply disruptions from any particular region.
As I said, this is a non-partisan issue, and that is why I
am happy to see Chairman Lamborn's bill, H.R. 1063, which is
under consideration today, and which includes language that
mirrors the rare earth assessments called for in my bill.
Thank you, Mr. Chairman, for holding this hearing today. I
look forward to the comments from the witnesses which I will
take in via webcast. And thank you, members of the Committee.
Mr. Lamborn. OK, thank you, Representative Johnson, for
being here today and providing your testimony.
That concludes our first panel. We will now move to the
second panel of witnesses for oversight. And I invite forward
Mr. James Iwanicki, Engineer Manager for the Marquette County
Road Commission; Ms. Ruthe Batulis, President of the Dakota
County Regional Chamber of Commerce, and President of the
Minnesota Conference of Chamber Executives; Mr. Harry Melander,
President of the Minnesota Building and Construction Trades
Council; and Ms. Jennifer Krill, Executive Director of
Earthworks.
Like all our witnesses, your written testimony will appear
in full in the record. So I ask that you keep your oral
statements to 5 minutes, as outlined in our invitation letter
and our Committee rules.
Our microphones are not automatic, so you have to push a
button to be heard. And the way the timing works is that when
you press the button a green light comes on, and the 5-minute
timer starts counting down. After 4 minutes, the yellow light
comes on, and then the red light at 5 minutes.
So, we will start in with our testimony. Mr. Iwanicki, you
may begin.
STATEMENT OF JAMES M. IWANICKI, P.E., ENGINEER MANAGER,
MARQUETTE COUNTY ROAD COMMISSION
Mr. Iwanicki. Hi. I am James M. Iwanicki, Engineer and
Manager of the Marquette County Road Commission. Thank you, Mr.
Chairman and members of the Committee. Thank you for asking me
here to testify about our experiences with trying to create a
new county road, County Road 595, to improve the quality of
life, the health, safety, and welfare of our citizens. County
Road 595 would have had a positive impact on the mining,
logging, recreation, and tourist industries.
Rio Tinto was willing to fund an $83 million, 21-mile
public road project to access a remote but key area of the
county. The road would have had a major positive economic and
public safety impact for the area and region. The road is
located in a working woods. It would have replaced a system of
two track roads that are currently used to access the area.
As a local government official, it was very frustrating in
dealing with the EPA throughout this project. If I operated the
Marquette County Road Commission the way the EPA handled this
permit, I would not be sitting here today. It is even more
surprising, when you consider the list of support that we had.
County Road 595 was supported by all local units of government
in Marquette County and where County Road 595 would either go,
or where the existing road to the mine goes through. This
includes three cities, Marquette, Ishpeming, and Negaunee;
eight townships; the Marquette County Board; two Michigan State
House of Representative Members, one Democrat, one Republican;
the Michigan State Senator of the area, a Republican; 63 of the
110 Members of the 96th Michigan State House; 28 of the 38
Senators from the 96th Michigan State Senate; the Governor of
the State of Michigan; the Michigan Department of
Transportation; the Michigan Department of Environmental
Quality; the Michigan Department of Natural Resources; the
Michigan State Police; Republican Dan Benishek of the U.S.
House; and both Democratic U.S. Senators, Carl Levin and Debbie
Stabenow.
EPA over-reached their authority on this project in at
least five different ways to kill County Road 595. EPA did not
allow Marquette County Road Commission to use any creation of
wetlands for mitigation, forested wetlands in particular, as
allowed by 40 CFR Part 230.92 and 230.92a2. The preservation
ratios EPA required were beyond that which were reasonable, and
not compliant with 40 CFR Part 230. Michigan Department of
Environmental Quality rules allowed a maximum ratio of 12-to-1
for wetland preservation.
EPA imposed requirements that required mineral rights to be
obtained for wetland preservation areas. Federal rules only
required that site protection should include measures to
protect sites to the extent appropriate and practical in regard
to mineral extraction and other threats.
EPA continually changed the rules in regards to what was
required for mitigation on the project. EPA suggested that
wetland preservation be at 20-to-1 replacement ratio in June
2012 to cover indirect and secondary impacts. But in December
2012 it required additional mitigation to address secondary
impacts and gave Marquette County Road Commission less than 30
days, including Christmas and New Year's holidays, to come up
with such measures. The EPA public hearing in this process was
held over 3 months prior to the December 4, 2012 EPA letter,
and the timing of the letter did not allow sufficient time for
the Marquette County Road Commission and MDEQ to respond to the
requirements of EPA's letter, due to the holidays.
EPA would not allow the Marquette County Road Commission,
Marquette County, or Michigamme Township, all legal
governmental entities in the State of Michigan, to be the land
stewards for the proposed wetland mitigation area, as allowed
in 230.97(a).
Because of the EPA decision, we have gone from having a
common-sense practical solution to solve public safety issues
and improve the economics of the region to the use of the
existing road system which will not be as safe as the proposed
solution, cause more air pollution, and stagnate the economic
development of the area.
In conclusion, it is hard for the people in the area to
understand how a Federal agency that does not live and work in
our community can make such an important decision for us, 350
miles away in Chicago.
Thank you for your time. I would be happy to answer any
questions the Committee may have.
[The prepared statement of Mr. Iwanicki follows:]
Prepared Statement of James M. Iwanicki, P.E., Engineer Manager,
Marquette County Road Commission
Mr. Chairperson and Members of the Committee:
Thank you for asking me here today to testify about our experiences
with trying to create a new county road, CR 595, to improve the quality
of life, the health, the safety, and the welfare of our citizens. CR
595 would have had a positive economic impact on the Mining, Logging,
Recreation, and Tourism Industries.
Background Information
In January of 2012 Marquette County Road Commission (MCRC)
submitted a Section 404 permit application to fill approximately 26
acres of wetland to construct 21 miles of road at a cost of $83
million. CR 595 was going to be funded by Rio Tinto through a public-
private partnership. In addition Rio Tinto spent over $20 million to
permit CR 595.
Rio Tinto was interested in funding the project because they were
constructing a new nickel and copper underground mine called the Eagle
Mine. The company is also refurbishing the old Humboldt Mill to process
the ore. The mine and the mill will create about 300 direct new jobs.
(See Figure 2) The distance between the mine and the mill as the crow
flies is about 19 miles. Using the existing road system to go from the
mine to the mill would be approximately 60 miles one way. CR 595 would
reduce travel time by an hour. The construction of CR 595 would have
lasted 2 years and employed over 100 people during that timeframe.
CR 595 would have been built in a working woods not in pristine
wilderness. The road alignment is based on existing public and private
roads. (See Figures 4 and 6-9.),
CR 595 was the common sense solution to Marquette County's
transportation needs.
If you cannot build CR 595 then you can never build any new road in
Marquette County or the Upper Peninsula of Michigan.
EPA
In April of 2012 EPA objected to MCRC's project purpose.
EPA held a public hearing on CR 595 in August of 2012.
EPA lifted their objection to the project purpose on
December 4, 2012 but had other objections which needed to be satisfied
by January 3, 2013 (within 30 days) or jurisdiction would revert to the
Army Corps of Engineers.
Rio Tinto needed certainty in their transportation route
by January of 2013. Failure to have a permit for CR 595 in January 2013
would cause Rio Tinto to pull their $83 million funding commitment for
CR 595 and they would use the existing road system to truck the ore.
EPA did not like how we proposed to mitigate the impacts
of CR 595. Our proposed mitigation plan involved preserving over 1,576
Acres of land (2.5 square miles) adjacent to McCormick Tract in the
Ottawa National Forrest. The area included approximately 647 acres of
high quality wetland (25 to 1 ratio) including an additional 929 acres
of uplands (60 to 1, total acreage). (See Figure 5)
EPA was very aloof doing the whole permit process. They
would not tell us what would be acceptable. In fact during the last
month of the project they would not even tell us who the decision maker
was going to be. They were unwilling to negotiate resolutions openly by
telling us directly what would satisfy their issues.
EPA wanted additional wildlife protection and they
proposed creating wildlife crossings (tunnels or bridges) large enough
to accommodate moose, bear, and cougar and to place fencing to guide
wildlife to the crossing. But they would not tell us where these
crossings needed to go.
EPA wanted to limit secondary road connections to CR 595
by placing deed restrictions on CR 595 so adjacent land owners could
not connect to the road.
EPA's Overreach of Their Authority
The Marquette County Road Commission (MCRC) believes the EPA
overstepped its authority in the following areas:
1. EPA would not allow MCRC to use any creation (``establishment'')
of wetlands for mitigation, forested wetlands in particular, as allowed
by 40 CFR part 230.92 and 230.93(a)(2).
2. The preservation ratios EPA required (i.e. 20:1) were beyond
what was reasonable and not compliant with 40 CFR part 230. Michigan
Department of Environmental Quality (MDEQ) rules allow a maximum
replacement ratio of 12:1 for wetland preservation.
3. EPA imposed requirements that required mineral rights to be
obtained for the wetland preservation areas. Federal rules only require
that site protection should include measures to protect sites ``to the
extent appropriate and practicable'' (230.97(a)(2)) in regard to
mineral extraction and other threats.
4. EPA continually changed the ``rules'' in regards to what was
required for mitigation on the project. EPA suggested that wetland
preservation be at a 20:1 replacement ratio in June 2012 to cover
indirect and secondary impacts but in December 2012 it required
additional mitigation measures to address secondary impacts and gave
MCRC less than 30 days (including Christmas and New Year holidays) to
come up with such measures. The EPA public hearing in this process was
held over three months prior to the December 4, 2012 EPA letter and the
timing of the letter did not allow sufficient time for MDEQ or MCRC to
respond to the requirements of EPA's letter due in substantial part to
the holidays.
5. EPA would not allow the Marquette County Road Commission,
Marquette County, or Michigamme Township (all legal governmental
entities in the State of Michigan) to be the land steward of the
proposed wetland preservation area, as allowed in 230.97(a).
Political Support for CR595
CR 595 is supported by all local units of government in Marquette
County where CR 595 would either go through or where the existing road
to the mine goes through. This includes 3 cities, (Marquette,
Ishpeming, Negaunee) 8 townships, the Marquette County Board, the two
Michigan State House of Representatives members that represent
Marquette County, the Michigan State Senate senator who represents
Marquette County, 63 of the 110 members of the 96th Michigan State
House, and 28 of 38 senators from the 96th Michigan State Senate, the
Governor of the State of Michigan, Michigan Department of
Transportation, Michigan Department of Environmental Quality, Michigan
Department of Natural Resources, the Michigan State Police, Dan
Benishek (R) U.S. House of Representative, and both U.S. Senators Carl
Levin (D), and Debbie Stabenow (D).
Result of EPA's Overreach
Heavy truck traffic will now be routed through the
populated areas of Marquette County.
Local Units of government are trying to address the
safety issues created by EPA's lack of regards for people and local
units of government.
The following are excerpts from The Mining Journal, the
local newspaper:
Headline: CR 595 project killed
Date: January 4, 2013
Online location: http://www.miningjournal.net/page/content.detail/id/
583130/CR-595-project-killed.html
Author: John Pepin, Staff Writer
Quotes:
Road Commission Engineer-Manager Jim Iwanicki said the
U.S. Environmental Protection Agency's refusal to remove objections to
the project prevented the DEQ from issuing a permit that had the
required Federal backing.
``It's a shame that the EPA has killed a good project,''
Iwanicki said. ``The EPA's action is going to affect a lot of
lives in Marquette County and the road commission believes it
will affect them negatively.''
Iwanicki said the EPA ``stonewalled'' road commission
efforts to comply with the agency's request in several phone
conversations held with the road commission, EPA and DEQ in December.
``The EPA moved the bar every time we got close,'' Iwanicki
said. ``Throughout the whole process, it's been an ever-
changing target.''
The road commission responded on Dec. 27 to the EPA's
requirements for removing its remaining objections, but
Iwanicki said it became clear before Christmas; the Federal
agency would not be satisfied.
Iwanicki said the agency never liked the project from the
start and for months worked to change expectations and requirements. He
said Thursday's official finality to the project was expected and was
``just the bow on the package.''
``They played a good game of bureaucratic nonsense,'' Iwanicki
said of the EPA.
Headline: City wants joint meeting on truck traffic
Date: March 12, 2013
Online location: http://www.miningjournal.net/page/content.detail/id/
585271/City-wants-joint-meeting-on-truck-traffic.html
Author: Kyle Whiney--Journal Staff Writer
Quotes:
In the wake of the Michigan Department of Environmental
Quality's decision to not permit the proposed Marquette County Road
595, local groups have been working to determine the route mining
company Rio Tinto will use to transport ore from its Eagle Mine to the
Humboldt Mill.
The city commission also charged its special legal
counsel with determining how best to communicate with the U.S.
Environmental Protection Agency concerning Rio Tinto traffic on city
streets.
In an August letter to the EPA, the city voiced concerns
related to the prospect of mine trucks traveling through
Marquette.
At that time, according to the letter, the city had no plans
``for expanding local infrastructure to support increased heavy
truck traffic.'' The alternate route would ``create substantial
negative social impacts, as well as drastically undermine
decades of transitional economic development and tens of
millions of dollars of investment supporting Marquette's
current economy.''
Editorial: Finding new truck route worth the effort
Date: March 14, 2013
Online location: http://www.miningjournal.net/page/content.detail/id/
585322/Finding-new-truck-route-worth-the-effort.html
Author: Mining Journal Editorial
Quotes:
Concerns over the increase in truck traffic from the
mine, which is expected to begin production in 2014, became more
significant when a plan to construct a new north-south haul road--
Marquette County Road 595--through the woods from the mine to the mill
was scrapped.
Rio Tinto now plans to use its originally intended route, which
involves trucking the ore from Eagle Mine on County Road AAA to
CR 510, then on CR 510 to CR 550, south on CR 550 to the City
of Marquette, then on Wright Street to U.S. 41 and finally west
on U.S. 41 to the mill. While we maintain our stance that the
CR 595 option was by far the best route, particularly for
public safety reasons, it's a good idea to have the county,
city and township seriously explore an alternative to driving
the trucks through residential areas and on busy roads.
______
Mr. Lamborn. Mr. Iwanicki, thank you for your testimony.
We will now hear from Ms. Batulis.
STATEMENT OF RUTHE BATULIS, PRESIDENT, DAKOTA COUNTY REGIONAL
CHAMBER OF COMMERCE, PRESIDENT, MINNESOTA CONFERENCE OF CHAMBER
EXECUTIVES
Ms. Batulis. Mr. Chair and Members, thank you for having us
here today. I want to bring greetings from Minnesota, where
yesterday it was minus 7 degrees. So we are glad to be here. My
name is Ruthe Batulis. I represent a statewide association of
chamber of commerce executives, and I am President of Dakota
County Regional Chamber of Commerce.
As you know, business and labor do not always agree. But
when it comes to job creation, and specifically the jobs that
come from the mining of strategic metals, we could not agree
more. You will hear from my friend, Harry Melander next to me,
from the Building and Trades Association in a minute. We are
tremendously excited about the Jobs for Minnesotans Coalition,
and what strategic metal mining can do for the entire State of
Minnesota and our country.
You have heard previous testimony about the jobs that are
created, ancillary jobs that are created from the strategic
metal mining and the production of materials and entrepreneurs
that can really drive creation of jobs throughout the State.
These strategic metals such as nickel and copper are used in
the green economy in electric cars, wind turbines, and, of
course smart phones and other high-tech equipment.
Imagine Minnesota's high-tech manufacturing industry, where
contractors and suppliers have the opportunity to creatively
utilize those strategic metals mined right in Minnesota. That
is on the horizon.
In Minnesota, we have some of the best schools in the
country. We know that providing for a good education and a good
investment isn't cheap. Resources for our schools are
constantly an issue of public debate and discussion. Our
schools will gain tremendously from an emerging strategic
metals industry in Minnesota because royalties generated from
the projects directly benefit our schools. In Minnesota, these
royalties from mining go directly into what our lawmakers call
the School Trust Fund. At this time about $5 million a year
goes into the Trust Fund. That is $26 for every student.
Imagine the impact of $2.5 billion going into the school
district.
The addition of strategic metal mining in Minnesota will
add to this existing fund. Businesses and construction unions
alike need skilled workers. And, as such, the education and
workforce development issues are paramount. The prospect of
this kind of investment is thrilling.
Our members are always seeking ways to make their processes
more efficient and effective to serve their customers. In fact,
you are all working together to make the permitting process
more efficient and effective, and it is a great sign for all of
us, this renewed commitment and job creation.
We are blessed in Minnesota that any large-scale projects
and the jobs that follow come with the equivalent of the Good
Housekeeping Seal of Approval. Our environmental laws are among
the most stringent in the world, ensuring that our precious
waters are protected from the outset through our permitting
processes. Our citizens can always rest assured that permitting
projects have undergone responsible and extensive scrutiny by
the Department of Natural Resources, the Minnesota Pollution
Control Agency and other State agencies.
Minnesotans have just recently worked across party lines to
ensure responsible scrutiny is done in an effective manner that
allows permit seekers to have certainty and investors to
continue to seek opportunities in Minnesota and the United
States.
I applaud you for all that you do here in Washington, and
appreciate what you are about to accomplish to foster job
creation in Minnesota and the United States.
Thank you for hearing us here today, and I can answer any
questions that you might have.
[The prepared statement of Ms. Batulis follows:]
Prepared Statement of Ruthe Batulis, President of the Minnesota
Conference of Chamber Executives
Mr. Chairman, Members of the Committee, good morning, my name is
Ruthe Batulis and I am the President of the Dakota County Regional
Chamber of Commerce, also in Minnesota. We are a regional chamber of
commerce in the southeast suburbs of the Twin Cities. We proudly serve
the cities of Eagan, Farmington, Lilydale, Mendota Heights, Mendota,
Rosemount, Sunfish Lake, and West St. Paul. And we're proud to
contribute to the outstanding quality of life our businesses enjoy
every day. I also currently serve as President of the Minnesota
Conference of Chamber Executives--the professional association for
chamber leaders across our State.
We are also tremendously excited about the Jobs for Minnesotans
Coalition, and what strategic metals mining means for the entire State
of Minnesota and the country.
As you know--business and labor don't always agree, but when it
comes to job creation, and specifically the jobs that will come with
the mining of strategic metals in Northern Minnesota, we couldn't agree
more.
Minnesota is fortunate to have an abundance of natural resources.
We are literally ``by nature'' an agricultural state, a timber State
and a mining State.
What people don't necessarily think of when it comes to our natural
resources--and for us what is very exciting--is that thousands of
associated and spinoff jobs are created as a result of our natural
resources industry. When the strategic metals mines start producing
materials, entrepreneurs and workers across Minnesota and throughout
the Twin Cities will have new opportunities in all kinds of industries.
These strategic metals are used in electric car batteries, smart
phones, wind turbines and other high tech equipment. The sky is the
limit.
Imagine Minnesota's medical device manufacturing industry, or
Minnesota's many national defense contractors and suppliers with the
opportunity to creatively utilize strategic metals mined right here in
Minnesota. That is on the horizon.
Furthermore, Minnesota (especially Dakota County) has some of the
best schools in the country. Providing for schools is a good
investment, but it isn't cheap! Resources for our schools are
constantly an issue of public discussion and debate. Our schools will
gain tremendously from an emerging strategic metals industry in
Minnesota, because of the royalties generated from the projects that
directly benefit our schools. In Minnesota, royalties from mining go
directly into what our law makers call our ``school trust fund.'' The
addition of Strategic Metals Mining in Minnesota will add to this
existing fund. Businesses and construction unions alike need skilled
workers for the future, and as such, education and workforce
development issues are paramount. The prospect of this kind of new
investment is thrilling.
My members are always seeking ways to make their processes more
efficient and effective to serve their customers. The fact that you are
all working together to make the permitting process more efficient and
effective is a wonderful sign to us of a renewed commitment to my
members and businesses in general.
We are blessed in Minnesota that any large-scale projects and the
jobs that follow come with the equivalent of ``Good Housekeeping Seal
of Approval.'' Our environmental laws are among the most stringent in
the world, ensuring that our precious waters are protected from the
outset through our thorough permitting process. Our citizens can always
rest assured that permitted projects have undergone responsible and
extensive scrutiny by the Department of Natural Resources, the
Minnesota Pollution Control Agency and other State agencies.
As my friend Harry said during his testimony, Minnesotans just
recently worked across party lines to ensure this responsible scrutiny
is done in an efficient manner so that permit seekers have certainty
and investors will continue to seek opportunities in Minnesota and the
United States.
I applaud you all for working to do the same here in Washington,
and appreciate what you are about to accomplish to help foster job
creation in Minnesota and across the country.
I am happy to answer any questions you may have.
______
Mr. Lamborn. Thank you for your testimony and for being
here.
And we will now hear from Mr. Melander.
STATEMENT OF HARRY MELANDER, PRESIDENT, MINNESOTA BUILDING AND
CONSTRUCTION TRADES COUNCIL
Mr. Melander. Chair, Committee members, my name is Harry
Melander, and I work as the President of the Minnesota Building
and Construction Trades Council, an organization that
represents over 50,000 unionized workers throughout the State
of Minnesota, and also the Co-Chair of Jobs for Minnesota, with
David Olson, the President of the Minnesota Chamber of
Commerce, and working very closely with Ruthe on this issue.
David, Ruthe, and I, along with other business, labor,
local bodies of government, professional associations, and the
heart and backbone of our State, small businesses, and its
employers, form this diverse group of Minnesotans to focus on
jobs, jobs that will be created in the development of strategic
metals in our State.
Minnesota has a long history of iron ore mining for well
over 100 years, and is on the verge of its next generation of
mining metals. These metals, copper, nickel, and others, are
used in the production, as indicated earlier, in smart and
green products that we all use today. These metals will also be
used in products yet to be designed that will save lives and
also create new jobs for Northeastern Minnesota that will last
for generations, revitalizing an industry and its region.
Minnesota has one of the largest untapped sources of these
metals in the world. If allowed to move permitting forward, we
will have the second-largest deposit of nickel, globally. We
think that is important for our Nation's independence and its
security.
Jobs for Minnesota is here today encouraging you and others
to use what we call ``The Minnesota Model.'' As indicated in
our written comments, 2 years ago, with a Republican-led House
and Senate and a Democratic Governor, we were able to create a
law that limited the time applicants have to get permits. In
the report submitted to you today, that good work by different
interests has benefited Minnesota, limiting the time it takes
to issue permits in our State.
What you are doing here today will have a positive effect
on the permitting process on a national level. Members, we can
no longer look to others for materials that are already
limited, globally. We believe what Minnesota has done is only a
start. The work you do today in efficient permitting will make
our country prosperous and allow us to continue to grow
technology with an abundant source of metals used in advancing
technologies around the world.
You have an opportunity to create and expedite always safe
means of permitting on our limited resources. Please do not
lose sight of this opportunity. If we can do it in Minnesota,
others can do that. Thousands of Minnesotans and others in our
country are waiting for jobs.
Thank you. And if there is any questions, I would be more
than happy to answer those.
[The prepared statement of Mr. Melander follows:]
Prepared Statement of Harry Melander, President, Minnesota Building and
Construction Trades Council
Mr. Chairman, Members of the Committee, good morning, my name is
Harry Melander and I am the President of the Minnesota Building and
Construction Trades Council. We are the advocate and voice for
unionized construction workers in Minnesota. Fifty thousand members
strong, we have provided leadership and advocacy for construction
workers in Minnesota for 60 years.
On behalf of my members, I have recently teamed up with David
Olson, the President of the Minnesota Chamber of Commerce, to form the
Jobs for Minnesotans Coalition.
Jobs for Minnesotans is a growing coalition of labor organizations,
businesses and business associations, middle class workers, local
governments, educators and other supporters of job creation in the
State of Minnesota. The initial focus of this diverse coalition is to
champion the development of critical and strategic metals (copper,
nickel, platinum, palladium and gold) mining in Minnesota and provide
information about the direct and ancillary job creation that strategic
metals mining will produce for the state, once permitted to begin
operations.
Why this Coalition?
Minnesota is on the verge of becoming one of the most significant
producers of strategic metals in the world. Right now, the United
States has no domestic source of nickel, a key element in many products
used for our national security. If those seeking permits in Minnesota
are able to proceed, Minnesota will become the 2nd largest producer of
nickel globally. This is critically important.
For my members, a recent University of Minnesota Duluth study shows
that strategic metals projects could mean the potential for 1,300 jobs
in Minnesota. A job surge of this magnitude in Minnesota's Iron Range
would have a significant, lasting impact on our State's, and the
region's economy. By moving forward to safely extract these minerals
from one of the world's largest known, untapped deposits in what is
known as Minnesota's ``Duluth Complex'' means jobs for generations for
hard working Minnesotans.
The Minnesota Department of Natural Resources is charged with
issuing the permits to mine. Just 2 years ago, labor and business, our
Democratic governor and Republican legislature stood together to pass
landmark permit efficiency legislation, much like that which you are
considering here at a Federal level. There was no discussion of who was
going to get a political win. It was about getting Minnesotans back to
work; together--and doing it in an environmentally sensitive way.
In fact, during the last Legislature, streamlining permits in
Minnesota was House File 1. And Governor Dayton, early in that session,
issued similar executive orders while the legislature passed this
landmark legislation which the he then signed into law.
Both branches of government are actively working together again
this legislative session to shorten the permitting time. In fact it was
a key policy point made by Governor Dayton's Chief of Staff at the
Minnesota Chamber of Commerce's legislative banquet earlier this year.
My point here is that an efficient permitting process can be
something that policymakers of all political stripes can and should
stand together to support. I am enclosing for the record the recent
February 2013 report by the Minnesota Pollution Control Agency which
outlines the successes of efficient environmental permitting in
Minnesota today, due to the laws we passed.
What you are working on here is a natural extension of what we did,
working together in Minnesota. On behalf of the 50,000 men and women I
represent through the Building and Construction Trades Council, and the
growing coalition I am leading with my State chamber counterpart, I'd
ask that you too stand together for jobs and pass significant
permitting efficiency legislation here in Washington.
I am happy to answer any questions you may have.
Note: The report entitled, ``Environmental Permitting: MPCA's
Semiannual Permitting Efficiency Report'' Minnesota Pollution Control
Agency, (February 1, 2013) (http://www.pca.state.mn.us/index.php/view-
document.html?gid=18982) has been retained in the Committee's official
files. Minnesota Pollution Control Agency, 520 Lafayette Road North,
Saint Paul, Minnesota 55155-4194. This report is available in
alternative formats upon request, and online at www.pca.state.mn.us.
Document number: Irp-gen-10sy13.
______
JOBS FOR MINNESOTANS
Minnesota--Permitting Efficiency Law
During the 2011-2012 biennium, Democratic Governor Mark Dayton and
the Republican-controlled Legislature worked on a bi-partisan basis to
enact the permitting efficiency law. The bills were in response to
concerns expressed about the overall length and uncertainty associated
with regulatory processes, including both environmental review and
permitting.
Minnesota House File 1/Senate File 42 (2011)
Minnesota House File 2095/Senate File 1567 (2012)
Established a 150-day goal for the Minnesota Pollution
Control Agency (MPCA) and Minnesota Department of Natural Resources
(DNR) to issue permits and requires a report on applications not
meeting that goal.
Allows a project proposer the option to prepare the draft
Environmental Impact Statement (EIS), rather than a regulated
government unit such as a State agency or local government.
Requires that final decisions on permits be made within
30 days--rather than 90 days--of the final approval of an EIS.
Eliminated district court review of environmental review
decisions and sends all appeals directly to the Court of Appeals.
Requires that when the MPCA adopts standards that exceed
federal standards, the MPCA must document that federal standards are
not protective enough.
Allows a permit applicant to begin new construction or an
extension before a national pollutant discharge elimination system
(NPDES) or State disposal system (SDS) permit is issued by the MPCA,
unless Federal law prohibits the action.
Established a permits coordinator required to assist
permit applicants.
Allowed DNR permit holders who have a permit or have
applied for a permit to continue to operate during a suspension of
government services as long as they abide by all rules and regulations
in the permit.
On February 1, 2013 the MPCA released its semiannual report to the
Legislature. In its findings, the MPCA acknowledged that full
implementation would take additional time but that they are pleased
with the overall results. Most notably the MPCA continues issuing more
than 90 percent of priority (construction) permits within the 150-day
goal while ensuring the protection of human health and the environment.
Since the enactment of the Permitting Efficiency Law, the MPCA has
initiated a number of improvement endeavors:
Improving communication around permitting metrics through
the Agency electronic dashboard.
Standardizing permitting processes across media and
programs to minimize business and technology system duplication and
establish a unified agency-approach, where possible, to permit
delivery.
Developing new technology tools to improve data
integration and utilization of data, and system efficiency.
* The MPCA Report can be accessed here: http://www.pca.state.mn.us/
index.php/view-document.html?gid=18982.
______
Mr. Lamborn. Thank you for your testimony.
We will now hear from Ms. Krill.
STATEMENT OF JENNIFER KRILL, EXECUTIVE DIRECTOR, EARTHWORKS
Ms. Krill. Thank you. Mr. Chairman, Ranking Member Holt,
and members of the Subcommittee, for giving me the opportunity
to testify here today. My name is Jennifer Krill, and I am the
Executive Director of Earthworks. We are a nonprofit
organization dedicated to protecting communities and the
environment from the destructive impacts of mineral and energy
development.
Earthworks opposes H.R. 761, the National Strategic and
Critical Minerals Production Act of 2013. The authors and
advocates of this legislation, the mining industry lobby and
its champions, would have you believe that mining companies in
the United States are stifled by the current regulatory system.
The truth is the mining lobby's vision of a mining-hostile
United States is, in our view, pure fantasy. Our stable
democracy, our courts that enforce contracts, and an orderly
and reliable process for public input in permitting decisions
make this country one of the best places for mining investment.
Hard-rock mining companies in the United States also enjoy
a myriad of subsidies and loopholes that create an extremely
friendly regulatory environment.
First, they have the 1872 Mining Law, which was mentioned
earlier today, a law that allows mining companies, foreign and
domestic, to take gold, copper, silver, uranium, and any other
mineral from public lands for free. The Forest Service has
repeatedly said that because of this antiquated law, they
cannot deny mine proposals on our National Forests. While
operating under this 140-year-old law, mining companies are
also given free reign to pollute our water, thanks to two Clean
Water Act loopholes that allow mining waste to be dumped
directly into streams, rivers, lakes, and wetlands. The metals
mining industry is the single largest source of toxic pollution
in this country.
An extremely favorable tax code rounds out the fantastic
regulatory environment for hard-rock mining. The percentage
depletion allowance allows a company to deduct a fixed
percentage from their gross income, which costs taxpayers over
$500 million per year.
In the case of minerals mined on public lands, mining
companies, because of the percentage depletion allowance,
sometimes get paid by the government to mine minerals that the
public gave them for free.
According to the Frasier Institute, a center-right Canadian
think tank which annually surveys mining companies around the
world, three U.S. States, Nevada, Utah, and Wyoming, are ranked
in the top 10 highest jurisdiction for investment, according to
the opinions of mining company managers and executives from
around the world.
Environmental review does not discourage mining investment
in the United States. We know this because the Frasier survey
asked that question of these global companies, and the answer
was no.
This is not an issue of too many lawyers or regulators. It
is an economics issue. Mining occurs where minerals are, and
where the target mineral price makes the process economically
viable. H.R. 761 is a bill written for a problem that does not
exist. This legislation would negatively impact the environment
and our public lands and the communities surrounding them,
while doing little to give mining companies the social license
to operate that they often claim that they desire.
By seriously impairing the public's ability to review and
provide input on the uses of its lands, this legislation simply
adds another special favor to an overly blessed industry. What
we believe is really needed is a concerted mining industry
effort to work with communities to build more responsible
mines, to reform outdated policies, and to play by the rules
with which other industries already profitably comply.
I would like to take my last minute and turn to H.R. 687,
the Southeast Arizona Land Exchange and Conservation Act of
2013. This is a bill that is also opposed by Earthworks. A
foreign-owned mining company is planning a massive mine in
southeast Arizona. Because the area is partially protected and
would be destroyed by the mining process, this company would
like to privatize 2,600 acres of public lands.
As you will hear from the Chairman of the San Carlos Apache
Tribe later today, the Oak Flat Campground, which has been
protected since 1955 under the Eisenhower Administration, is a
sacred area to Tribes and is used often for religious purposes.
In addition to the destruction of this sacred site, this land
exchange would end public access to some of the most
spectacular outdoor recreation and wildlife viewing areas in
Arizona.
This bill would sacrifice the interests of Arizonans and
all Americans in order to enrich foreign shareholders. We
strongly urge you to protect these public lands for future use.
Thank you.
[The prepared statement of Ms. Krill follows:]
Prepared Statement of Jennifer Krill, Executive Director,
Earthworks
H.R. 761--``National Strategic and Critical Minerals Production Act of
2013''
Thank you Mr. Chairman for the opportunity to testify before your
Committee in opposition to H.R. 761, the National Strategic and
Critical Minerals Production Act of 2013. My name is Jennifer Krill,
and I am the Executive Director of Earthworks. We are a non-profit
organization dedicated to protecting communities and the environment
from the destructive impacts of mineral and energy development. We work
closely with a broad coalition of local governments, Native Americans,
citizen groups and other conservation organizations to improve the
policies governing hardrock mining and oil and gas development.
The authors and advocates of H.R. 761--the mining industry lobby
and its champions--would have you believe that mining companies in the
United States are stifled by the current regulatory system. They
describe a country where mineral development is stymied by Federal
rules that divert companies to spend their mineral investment dollars
elsewhere. But the mining lobby's vision of a mining-hostile United
States is pure fantasy.
In reality, hardrock mining companies in the United States enjoy
subsidies and loopholes that create an extremely friendly regulatory
environment for them.
It starts with the 1872 Mining Law--a law that allows mining
companies, foreign and domestic, to take gold, copper, silver, uranium
and any critical or strategic minerals from public lands for free,
without paying a royalty to the taxpayer. Years of case law define
hardrock mining as the highest and best use of public lands; Federal
land managers now give hardrock mineral extraction precedence over
hunting, fishing, sacred sites and all other uses of public lands. The
Forest Service has repeatedly said that because of this antiquated law,
they cannot deny mine proposals on our national forests.
In addition to royalty-free mining, the 1872 Mining Law collects no
reclamation fee from the industry. The EPA estimates that the clean up
cost of these hardrock abandoned mine sites is $50 billion--all of
which is currently being paid for by the taxpayer.
While operating under this 140-year-old law, mining companies are
also given free rein to pollute our waters thanks to two Clean Water
Act loopholes that allow mining waste to be dumped directly into
streams, rivers, lakes and wetlands. The metals mining industry is the
single largest source of toxic waste and one of the most
environmentally destructive industries in the country. In fact, the
Environmental Protection Agency estimates hardrock mining pollutes 40
percent of the headwaters of watersheds in the western United States.
An extremely favorable tax code rounds out the regulatory fantasy
for hardrock mining companies in the United States. The Percentage
Depletion Allowance (PDA) permits a company to deduct a fixed
percentage from their gross income according to the mineral extracted,
ranging from 22 percent for uranium to 15 percent for silver and other
hardrock minerals. In some cases this deduction actually exceeds costs.
The result is a situation where mining companies not only pay virtually
nothing for the deposit royalty for the public's minerals, but also get
paid by the government to mine public minerals they were freely given
under the PDA. This subsidy costs taxpayers over $500 million every
year.
This trifecta of an outdated mining law, the ability to dump mine
waste directly into fresh water and enormous tax breaks for the
industry makes hardrock mining unique in this country, and renders H.R.
761 unnecessary and absurd.
The United States of America is one of the world's best places for
mining investment. We have stable Democratic institutions, courts that
enforce contracts, favorable tax and environmental policy, and an
orderly and reliable process for public input in permitting decisions.
Just ask the mining companies. According to the Fraser Institute--a
center-right Canadian think tank who annually survey approximately 700
mining, exploration, development companies around the world--Nevada,
Utah, and Wyoming, rank in the top 10 most attractive jurisdictions for
mineral exploration investment, according to mining company managers
and executives surveyed.
the nevada example
According to the University of Nevada Reno, more than 80 percent of
Nevada's surface area is public land managed by the Federal Government
in trust for all Americans by the Bureau of Land Management and the
U.S. Forest Service. Consequently, Federal law--and NEPA in
particular--applies to the vast majority of Nevada.
As a result, if permitting delays imposed on public lands were so
burdensome, one would expect that Nevada would be unattractive relative
to other potential mineral investment destinations.
The opposite is true.
Consider again the Fraser Institute survey and its most important
criteria included in the composition its ``Policy Potential Index''
(i.e. policy attractiveness):
``The Policy Potential Index is a composite index that measures
the effects on exploration of government policies including
uncertainty concerning the administration, interpretation, and
enforcement of existing regulations; environmental regulations;
regulatory duplication and inconsistencies; taxation;
uncertainty concerning native land claims and protected areas;
infrastructure; socioeconomic agreements; political stability;
labor issues; geological database; and security.''
Note what is absent from that ranking: mineral potential. The
ranking is based on policies, and things that result from policies,
alone.
In the most recent survey (2012-2013 edition), Nevada--in terms of
the aggregate effect of the various policies that apply to mining
within the State--is the 7th most attractive mineral investment
destination in the world. Wyoming, another State known for its
abundance of public lands, ranks 5th. Utah, another public lands State,
follows close behind.
The aforementioned Policy Potential Index includes areas in which
Nevada would score well but is conceivably not directly attributable to
regulation (e.g. infrastructure). Do environmental regulation and
permitting drag down mineral investment in Nevada and the rest of
public lands in the United States?
The answer is ``no''. In fact, the Fraser Survey also includes a
ranking of the relative attractiveness of regions' ``current mineral
potential with no regulations in place and assuming [only] industry
best practices''.
If the claim that existing regulations actually restrict mineral
investment in Nevada and Federal public lands around the nation were
true--then one would expect survey participants to find the absence of
regulations to increase Nevada's mineral investment appeal.
Instead, the opposite is true. According to the Fraser Survey, when
mining industry insiders were asked to assume no government regulations
in a jurisdiction, Nevada's mineral investment attractiveness ranking
in the 2012-13 survey remains unchanged. In past years, it actually
dropped.
Furthermore, the 2012-13 Fraser Survey directly asks survey
respondents whether a jurisdiction's environmental regulations deter
investment, encourage investment, or have no effect. 69 percent of
respondents said environmental rules in Nevada--80 percent of whose
area is subject to Federal oversight--either encourage mineral
investment or do not deter it.
Taken as a whole, the Fraser Survey is a direct refutation for the
need for this bill. In fact, the only evidence found in the survey
suggest that existing oversight--including Federal policies like NEPA--
is a relative competitive advantage, not disadvantage.
definition of strategic minerals
The bill broadly defines critical and strategic minerals as those
that ``support domestic manufacturing, agriculture, housing,
telecommunications, healthcare, and transportation infrastructure.'' In
other words, all minerals including gold, the most valuable mineral
mined in Nevada.
Gold is particularly inappropriate for designation as a critical or
strategic mineral for the simple reason that the majority of it in the
United States--54 percent in 2011 according to the USGS--is used in
jewelry fabrication. 54 percent is actually quite low in terms of
jewelry's historic percentage of U.S. gold demand. As recently as 2008,
it was 84 percent.
Since jewelry fabrication is neither a critical nor strategic use
for gold, then no critical or strategic purpose is served by exempting
its mining from our most basic environmental protections like NEPA
review.
the importance of public participation, public lands, and environmental
protection
When the National Environmental Policy Act (NEPA) was enacted in
1969 by an overwhelming bi-partisan majority and signed by President
Richard Nixon, the goal of the legislation was to create a process by
which the environmental impacts of large industrial projects could be
explored, weighed and eventually mitigated.
NEPA makes sure that in addition to government and industry input,
everyday citizens can take part in the development and oversight of
projects that affect our social, economic, and environmental health.
The NEPA process provides citizens an opportunity to learn about
proposed Federal actions and offers agencies an opportunity to receive
valuable input from the public.
The average time it takes BLM to permit a large mine is 4 years--
not 10, not even 7. When a particular permit takes longer, the reason
either has to do with State processes or, more likely, delays created
by the mining company themselves--sometime for perfectly legitimate
reasons like changes in market conditions.
Under current law, agencies must fully evaluate the environmental
impacts of actions that may significantly affect the environment.
Though, it is important to point out that the law does not require that
the decision-making agency choose the most environmentally-friendly
option, it only requires that they weigh all the options.
Furthermore, the NEPA process is the public's window on how a
mining operator plans to comply with environmental law. Without NEPA,
the public is forced to rely on the mining company, and the permitting
agency, to verify that mining operator's plan of operations can
realistically do so.
While such faith is touching, the facts indicate it is sadly
unfounded.
In a unprecedented 2008 research paper commissioned by Earthworks,
conducted by a member of the National Academies of Science Earth
Science Board, and reviewed by regulators and industry, mining industry
promises of environmental compliance for ``major'' mines undergoing
full NEPA review were compared against what actually happened at the
mines. The most disappointing finding: 100 percent of mines in the
study predicted environmental compliance; 75 percent of them did not.
The only reason we know of industry (and permitting agencies')
failure to adequately govern mining operations: NEPA review. If not for
NEPA, citizens would not know how badly the mining industry performs,
nor be able to use this information to pressure permitting agencies to
improve its behavior.
This legislation would run roughshod over the values of
transparency and public participation that are at the heart of NEPA--
essentially taking public review out of potential uses of our public
lands.
While mining on public lands helps stimulate economic activity,
protection of those lands is also vital to the western economy. Last
year, over 100 economists including 3 Nobel laureates, sent a letter to
President Obama stressing the importance of the protection of our
public lands to our national economy. They said:
``The rivers, lakes, canyons, and mountains found on public lands
serve as a unique and compelling backdrop that has helped to transform
the western economy from a dependence on resource extractive industries
to growth from in-migration, tourism, and modern economy sectors such
as finance, engineering, software development, insurance, and health
care.''
They also note, ``increasingly, entrepreneurs are basing their
business location decisions on the quality of life in an area.
Businesses are recruiting talented employees by promoting access to
beautiful, nearby public lands . . . Together with investment in
education and access to markets, studies have repeatedly shown that
protected public lands are significant contributors to economic
growth.''
Section 103 reprioritizes the entire field of public land and
environmental law regarding mineral operations, making ``development of
the mineral resource'' the ``priority of the lead agency.''
Under current law, the Federal land agencies are subject to a
variety of congressional mandates that attempt to balance mineral
production with the protection of human health, water and air quality,
wildlife, etc. For example, if a mining project may adversely affect a
threatened or endangered species, then as the Supreme Court has held
pursuant to the Endangered Species Act, ``Congress intended endangered
species to be afforded the highest of priorities.'' TVA v. Hill, 437
U.S. 153 (1978). If the ESA is not applicable, then other congressional
policies apply, such as the prevention of ``unnecessary or undue
degradation'' to public land under the Federal Land Policy and
Management Act of 1976, 43 U.S.C. 1732(b). See Mineral Policy Center v.
Norton, 292 F.Supp.2d 30, 33 (D.D.C. 2003) (discussing competing
congressional mandates for mining operations on Interior Department
lands).
H.R. 761 essentially eliminates these long-standing congressional
mandates, and subjects the BLM and Forest Service to a new ``maximize
mineral development'' standard. Although Section 103 states that the
agency must ``mitigate environmental impacts,'' that vague language
does little to protect environmental values in light of the new
overarching development standard. For example, under current
environmental law, ``mitigation'' can mean simply ``minimizing
impacts'' or ``reducing the impact over time.'' 40 CFR 1508.20. Coupled
with the ``maximize development'' priority, as well as the requirement
that the agencies ensure that ``more of the mineral resource can be
brought to the market place,'' an agency's ``mitigation'' authority is
thus severely curtailed.
equal access to justice act
H.R. 761 also allows regulators to exempt mining projects from the
Equal Access to Justice Act (EAJA). In many cases, affected communities
cannot afford to hire a lawyer, much less the litany of scientific and
technical experts needed to mount a serious challenge to a major
multinational mining corporation. The practical effect of this
provision would leave many communities unable to sue for the
contamination of their lands and waters.
conclusion
In sum, environmental reviews and legal challenges do not
substantially affect mining investment, employment, or the reserves of
certain critical minerals. The market has long ago priced in these
costs and the result is that many of our Western States are among the
best places for mineral investment and have substantially lower
unemployment rates than surrounding communities. This is not an issue
of too many lawyers or regulators; it's an economics issue. Mining
occurs where the target mineral price makes the process economically
viable.
NEPA has been in place for more than 40 years. Federal Government
agencies and the mining companies they regulate understand the process
well and value the market certainty NEPA creates and investors crave.
Dismantling this well-established process could undermine the purported
purpose of this bill of encouraging investment and securing more
critical mineral resources.
The consequences of H.R. 761 would negatively impact the
environment of publicly owned lands within mining States, and the
communities surrounding them, while doing little to give mining
companies the social license to operate that they often claim they
desire. By seriously impairing the public's ability to review and
provide input on the uses of its lands, this legislation simply adds
another special favor to an already overly blessed industry.
H.R. 761 is a bill in search of a problem that does not exist. What
is really needed is a concerted mining industry effort to work with
communities to build more responsible mines, to reform the outdated
policies that haunt them, and to play by the rules with which other
industries profitably, comply.
H.R. 687--``Southeast Arizona Land Exchange and Conservation Act of
2013''
On behalf of Earthworks and the thousands of members we represent
in Arizona and nationwide, we also urge you to oppose H.R. 687 the
Southeastern Arizona Land Exchange and Conservation Act of 2013 (the
``land exchange bill'') that would, in part, revoke a mining
prohibition on 760 acres of public lands in the Tonto National Forest
in the area of the Oak Flat Campground 60 miles east of Phoenix.
Resolution Copper Company (RCC), a foreign-owned mining company, is
planning a massive block-cave mine and seeks to acquire Oak Flat
Campground and the surrounding public lands through this land exchange
bill. If they succeed, the campground and an additional 2,300 acres of
the Tonto National Forest will become private property, forever off
limits to many recreationists and other users. Privatization of this
land would end public access to some of the most spectacular outdoor
recreation and wildlife viewing areas in Arizona. And massive surface
subsidence will leave a permanent scar on the landscape, eliminating
the possibility of a diversified economy for the region.
The Eisenhower Administration recognized the Oak Flat Campground as
an important recreational resource in 1955, specifically placing it off
limits to future mining activity. Oak Flat should remain under Federal
jurisdiction for its continued protection. With tens-of-thousands of
visitors each year, Oak Flat contains a world-class natural resource
for birding, bouldering, camping, hiking, hunting, picnicking, rock
climbing and other recreational uses. On the eastern border lies Gaan
Canyon, one of the crown jewels of Arizona's State trust lands with
some of the finest remaining riparian habitat in the State.
Oak Flat Campground and the surrounding area has long been an
important cultural site for Western Apaches. The Tonto National Forest
recognized at least a dozen archeological sites in and around Oak Flat
and traditional Apache continue to use the Campground area for
performing religious and cultural rites. Privatizing Oak Flat and
destroying its surface would forever eliminate Apache traditional
practices in the area, since they would be unable to access the site.
Transfer of part of our national forests to a multinational copper
mining company will almost certainly deplete and contaminate water
resources and nearby watersheds. Surface water, tributary water, and
aquifers are located where the copper ore body resides. Excavating this
ore risks contamination. Many billions of gallons of water are
necessary to carry migrating slurry to and from the ore body over the
decades long life of the mine. Altering the surface and subsurface
geological structure of this area via the impending subsidence will
forever change the natural state of aquifers and drainage of watersheds
through out the region.
Section 4(j) of H.R. 687 provides sham compliance with the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321). This is
because the environmental impact statement (EIS) occurs only after
privatizing the land. By that point, the Government loses the
opportunity to act on reasonable alternatives, and the mine becomes a
forgone conclusion regardless of the potential impacts the EIS finds.
In addition, as soon as this bill becomes law, the land becomes
available for mining activities. Section 4(h) mandates that only laws
pertaining to mining on private land will apply. The Secretary will
also issue a special use permit for exploration of Oak Flat within 30
days of Resolution Copper's request (Section 4(f)). Only after
Resolution Copper has built mine shafts, adits, tunnels, and tailings
deposition areas will the Secretary then receive a mine plan of
operations.
Finally, this land exchange bill would set a chilling precedent
allowing for the revocation of similar land withdrawals such as parks,
recreation areas, and wildlife refuges. Public lands such as Oak Flat
that are set aside for recreation should remain protected for future
generations. This land exchange bill would sacrifice the interests of
Arizonans, and all Americans, to enrich foreign shareholders. It would
destroy sacred sites for short terms gains. Thirty years from now--when
the mining jobs once again leave--the region will be much worse off
because the landscape will be ruined. We strongly urge you to protect
these public lands for the public's future use and preserve the unique
opportunities for Arizonans that the Oak Flat area provides.
H.R. 957--American Soda Ash Competitiveness Act
Earthworks also respectfully opposes H.R. 957, The American Soda
Ash Competitiveness Act. The experience gained from the last time
Congress lowered the royalty on soda ash and related sodium minerals
teaches us that this industry remains competitive regardless of the
royalty rate. The U.S. Department of Interior's Report to Congress on
the Soda Ash Royalty Reduction Act of 2006 makes this clear.
Despite cutting the royalty from a weighted average of 5.6 percent
to 2 percent, the soda ash industry experienced almost no change in the
volume of production, leases, or sales. Overall capital investment
since FY 2006 has fallen. Domestic employment in the soda ash industry
has similarly dropped since FY 2006. While industry revenues increased
significantly, the Department of the Interior attributes this to a
spike in prices coupled with a sharp decline in production costs--due
to historically low prices of the natural gas used to power these
operations.
Instead, this bill amounts to an unnecessary extension of a
taxpayer giveaway first granted in 2006. Without the royalty reduction,
DOI estimates States alone would have received $62.1 million more from
FY 2007-2010. They estimate total lost royalty revenues between FY
2007-2011 at more than $150 million. Additionally, BLM regulation (43
CFR 3513) provides an administrative process through which Federal
sodium lessees may individually seek royalty rate reductions. Creating
an industry wide reduction only encourages a trend toward shifting soda
ash extraction from State and private lands to Federal lands just to
take advantage of the lower royalty. The end result is simply lower
government revenues, without the benefits of more jobs or greater
global competitiveness.
______
Mr. Lamborn. Thank you. And thank you all for being here
and providing testimony. We will now have a round of questions
for the witnesses from the members of the Committee. And I will
start by asking a question of Mr. Iwanicki.
Later today on another panel we are going to hear from BLM
and others that requiring agencies, including the EPA, to
better coordinate on NEPA documents and mine permits is
unnecessary and will somehow hinder their ability to follow
their multiple-use mandate. How would you respond to that?
Mr. Iwanicki. I am not quite sure of that question. I know
for us, with our project with County Road 595, we had all
private funds that were being used to build this county road.
And, therefore, we did not have to go through the Federal
process. And we did follow a lot of those guidelines in doing
our permit process with our Department of Environmental Quality
and with the EPA, but we did not follow all the rules of the
NEPA process through our project.
Mr. Lamborn. OK, thank you. And I am going to ask a
question now of Ms. Batulis and Mr. Melander. What advice do
you have for us in Washington to try and streamline the
permitting and NEPA processes so it doesn't take 7 to 10 years,
or even more, to permit a project?
Mr. Melander. Want to go? Me?
Ms. Batulis. You go.
Mr. Melander. Chair, Committee members, a response to that
question is that I think looking at what the State of
Minnesota, as indicated in my comments, what we call ``The
Minnesota Model'' is something to look at. We have a State that
is beautiful, other than being cold, as Ruthe had indicated,
and we love our State. But we have opportunities here that we
need to take advantage of in a safe way. But using the model
that Minnesota has developed, I think, is a good start.
Mr. Lamborn. Ms. Batulis?
Ms. Batulis. I would agree with Harry. What really happened
in Minnesota was both sides of the aisle worked together to
find a common ground that would work for everyone. And it was
about streamlining the process so that we can create jobs. It
is all about jobs now. And we really saw some extraordinary
work done across the aisle that we are all very proud of. So
that would be our suggestion.
Mr. Lamborn. OK. Thank you. And I would like to note at
this time that both Michigan and Minnesota--Michigan is
represented very well by Representative Benishek, who is here
on the Committee--are home to, in the case of Minnesota, the
3rd largest producer of non-fuel minerals, and Michigan, the
10th largest producer of non-fuel minerals in the country. So,
there are significant deposits of strategic and critical
minerals.
Ms. Krill, I would like to ask you a question real quick
here. Is there any new proposed mine in the United States that
your organization does approve of?
Ms. Krill. Our organization approves of mines--I am sorry,
am I on? Yes.
Mr. Lamborn. I can hear you.
Ms. Krill. Our organization would approve of mining that
has attained the free, prior, and informed consent of
indigenous communities, that does not pollute waterways or
allow the dumping of tailings or mine waste into waterways,
rivers, lakes, streams, and wetlands, that enjoy the community
support of the local community, that do not impact areas of
high biodiversity, and follow international labor
organizational standards for labor organizing.
At this time, there are some mines that follow some of
these principles, and others that we would support. We haven't
found a mine in the United States that follows all of these
principles that we would support. And we encourage industry and
are working actively with industry in dialog to identify a way
that we can move forward.
Mr. Lamborn. Well, it sounds to me that if there is no new
mine in this country that you support, that you could be
accused of opposing for the sake of opposing, that you will
always find some reason to oppose.
Ms. Krill. We don't oppose mines, either. In fact, many
mines we don't take a position on. There are some areas where
we feel like mining is not an appropriate activity. And in
those instances we do take a position of opposition.
Mr. Lamborn. OK. At this point I am going to turn to
Representative Holt for his questions.
Dr. Holt. Thank you. Let me begin with just a comment
following from that last exchange. I would say that the
standards that Ms. Krill, that you laid out are attainable and
desirable. And I would hope that all operations, mining and
otherwise, would work to achieve those.
Ms. Krill, the Interior Department has stated that H.R. 761
is, ``drafted in such,'' and this is a quotation, ``drafted in
such a manner as to cover virtually all hard-rock mining on
Federal lands.'' Do you believe that a bill that is intended to
deal with strategic minerals should also be broad enough to
cover clay, coal, crushed stone, sand, gravel, scrap iron?
Ms. Krill. No, we do not. We oppose H.R. 761 because, in
large part, because of how broad it really is. As I said
earlier, mining companies mine where minerals are. The
economics of mining in the United States favor the ability of
mining companies to mine in the United States.
Dr. Holt. Ms. Batulis, simple question. Could you define
for us a critical and strategic mineral?
Ms. Batulis. Copper, nickel.
Dr. Holt. OK.
Ms. Batulis. And I think the----
Dr. Holt. And would you include crushed stone, granite,
gravel, clay?
Ms. Batulis. Mr. Chair, Committee members, no.
Dr. Holt. No? Yes. Mr. Melander?
Mr. Melander. The same question, sir?
Dr. Holt. Yes, please.
Mr. Melander. As indicated by Ruthe, those precious metals.
And regarding sand and gravel, I would not consider those
precious metals.
Dr. Holt. Yes. I think we might have some redrafting to do,
or some amending here, then.
Do you include gold and silver in that?
Mr. Melander. Gold, correct.
Dr. Holt. OK. Ms. Krill, in a later panel, we will hear
testimony that the United States is putting itself at a
competitive disadvantage with other countries, because of
permitting time. And yet, in your testimony you say that the
United States is one of the best places in the world for mining
investment. Which is it?
Ms. Krill. Well, if Mr. Holt, if you listen----
Dr. Holt. Would you care to elaborate on the statement that
you made in your testimony?
Ms. Krill. Absolutely. If you listen to the opinions of
mining managers from a global perspective, they do indeed favor
the United States as a place for mining investment. The BLM
says that the average time for permitting in the United States
is 4 years. With various other regulatory conditions, the
United States is, indeed, considered a favorable place by
mining investment, worldwide, to mine.
Dr. Holt. Ms. Krill, in light of the conditions under which
the Mining Act of 1872 was passed--we were trying to build a
Nation and expand to fill the western territories--would you
say that this bill is up to date? In particular, do you think
at a time that there is so much talk about reducing the deficit
we should be asking mining companies to pay a royalty rate for
extracting these minerals?
Ms. Krill. I----
Dr. Holt. And should it be comparable to what is done for,
say, oil and gas?
Ms. Krill. I absolutely agree that mining companies should
be paying a royalty rate. Mining companies shouldn't be granted
access to public lands and public minerals for free. And if
there is an interest in reforming how mining is done in this
country, I would suggest we start with reforming the Mining Law
of 1872.
Dr. Holt. Yes. The name itself suggests some dated
characteristic of it.
[Laughter.]
Dr. Holt. Just in the few seconds that remain, Ms. Krill,
do you know whether Western States charge a royalty rate for
extraction of minerals, different from the Mining Act of 1872,
different from the Federal----
Ms. Krill. There are Western States that charge a royalty
rate for mining. federally, on a national level, we do not.
Dr. Holt. Well, I think my time has expired. I thank the
witnesses and I thank the Chair.
Mr. Lamborn. Thank you. And I would point out to the
Ranking Member that the Mining Law of 1872 has been amended
many times over the years. So let's keep up on the amendments.
And, Ms. Krill, I would like to point out to you that when
you say that minerals are extracted for free, you are
neglecting State severance taxes, you are neglecting the taxes
that are paid by mining companies on a corporate income, taxes
paid by their employees on personal income, sales tax, property
tax, and on and on and on.
OK. We are going to go to our next witness--excuse me, next
Committee member. I would like to point out that we are missing
Representative Amodei. Unfortunately, his mother passed away
earlier this week, so our thoughts and prayers are with him.
But we will go instead next to Representative Gosar.
Dr. Gosar. Thank you. I want the record very, very clear.
Ms. Krill, have you ever endorsed or supported--careful wording
here--any mining operation in the United States, your
organization?
Ms. Krill. Have we ever endorsed----
Dr. Gosar. Or supported a mining operation in the United
States.
Ms. Krill. A single operation.
Dr. Gosar. Absolutely.
Ms. Krill. No. We have endorsed and supported principles
for----
Dr. Gosar. I am getting at that point. It seems like, I am
going back with the Chairman's connotation, that no is an
answer. No is not an answer any more in America. It is how do
we accomplish this under the protocols.
Let me ask you the next question. In regards to the United
States, isn't it a lot about our mineral composition, that we
are rich with minerals in the United States that so many
foreign and national mining companies really would like to work
here, because it is a concentration and plethora of minerals
that we actually have here? Is that not true, compared to about
any other continent?
Ms. Krill. Mining companies do mine where the minerals are.
Dr. Gosar. So we are very rich, and that is why. So I mean
we want to make sure we are careful about how we look at those
things.
Chairman, for the record, what I would also like to do is,
put in the record a letter from the Nature Conservancy and this
is an op ed from the Arizona Republic, as well as a climbing
recreational group from Queen Creek for the record that support
this mine.
Mr. Lamborn. Seeing no objection, so ordered.
[The information that Dr. Gosar submitted for the record
has been retained in the Committee's official files:]
Dr. Gosar. Let me ask you one more question, Ms. Krill. You
know, has your organization ever been out to the mine?
Ms. Krill. I am sorry, which mine?
Dr. Gosar. Resolution Copper in Southeast Arizona.
Ms. Krill. Yes.
Dr. Gosar. You have actually toured the mine?
Ms. Krill. I have not personally, no.
Dr. Gosar. No, I don't think anybody has toured the mine,
frankly. I just checked with the company. You have not toured
the mine, as far as I can understand.
Let me ask you another question.
Ms. Krill. I thought you were referring to Oak Flat
Campground.
Dr. Gosar. That is the campgrounds.
Ms. Krill. The site.
Dr. Gosar. I am looking at the mining site.
Ms. Krill. OK.
Dr. Gosar. You know, hands-on are a lot of different
things. There is being able to see, to dialog about the facts.
You know, facts are kind of an interesting thing. It is hard to
argue around facts, because the facts set you free. I know that
there was an invitation, was there not, from the company to
come out and review the mine?
Ms. Krill. I have not received a invitation, but I would be
happy----
Dr. Gosar. I think you need to go back in your records to
do your due diligence to find out that they actually extended
that, and they were turned away. So I would hope that you would
go back into your records.
And I would invite you, like I would invite the Member from
Arizona who has not been in his tenure, out to the mine.
Because I think those are the things that answer questions. You
know, facts set you free. And I think Arizona has been stalwart
in that aspect in regards to doing this, with all the magical
features that we have been able to do and to build Arizona.
And I think that I would leave my questions at that. Thank
you. I yield back, Mr.----
Mr. Lamborn. All right, thank you. We will now go to
Representative Grijalva.
Mr. Grijalva. Thank you very much. Ms. Krill, a couple of
quick questions. In reference to the first part of your
testimony, there was a time prior to President Nixon signing
the NEPA Act where there was no NEPA, that we can talk--it is
not about ``what if,'' there was none.
Consequences of that lack of oversight, transparency,
public participation, what drove that Congress, that President
to enact the NEPA Act? What was the situation in terms of not
just the environment, but communities as well?
Ms. Krill. That is a very good question, Representative
Grijalva. I think that the critical thing that NEPA provides to
communities and to the public is an opportunity to participate
in a clear and transparent and consistent process. The
minerals, for example, in mining, which we are discussing, the
minerals are minerals that belong to the public. And it is very
important, in our democratic society, that the public has this
opportunity to comment on and to participate in a process about
what we do with public minerals.
Mr. Grijalva. And you mentioned the H.R. 687. H.R. 761 is
kind of the same process as H.R. 687, only taken to steroid
quality, in the sense that we would do away with all regulatory
controls, to do it after the fact, when there is nothing to
bind, an action or a remedy. Fair or unfair comparison between
the two bills?
Ms. Krill. I think that is a fair comparison.
Mr. Grijalva. I was going to ask Mr. Melander, on all these
issues, and I think my friend from Arizona has mentioned that
this is about how you say yes, not just no. And I couldn't
agree more. But the point is that everything, and you said it
is about the jobs and it is about creating that kind of a
sustainability in Minnesota, and everybody is at the table at
that effort.
Verification of the job numbers, do you verify them
yourself? Or, let's say, for instance, we are working off in
Resolution Copper, the job analysis by the company, themselves,
and it is a movable target. And so, how do you validate that
you are making a commitment, whether it is regulatory, whether
it is government assistance, based on a sole source,
proprietary source of analysis by the company on job
production, or do you seek an independent source to verify that
that is indeed what is going to be there at the end of the day,
in terms of number of jobs?
Mr. Melander. Chair, Representative--and that, too, is a
good question. And one can get in trouble indicating the amount
of jobs.
The first part of your question, when we make reference to
our specific State in regards to the opportunity in
generational employment, it is done working with our partners
in trying to get a realistic expectation.
What we like to do, and we do this consistently, is we talk
about work hours that will be generated. I mean it is really
hard to describe, I mean, to really be clear. But when we,
whether it is, and this has nothing to do with it, but whether
we are building stadiums or projects, we base it off of work
hours, because it is a better way to describe the opportunities
for individuals, at least within our industry.
Mr. Grijalva. OK. As you generate precious metals, copper,
gold, and I think, I don't know who stated that those are for
use and for the industries as they grow here in that country,
what is a ratio of export versus keeping the product domestic?
What is the emphasis? For instance, the other legislation, the
CEO, that said the Resolution Copper mine will help meet this
need, and the need is that China will build three more cities
larger than Sydney every year until 2030, and that the major
stockholder in Rio Tinto, the parent company, is, indeed,
China.
And so, we take out our domestic taxpayer resource and ship
it overseas, no royalties, no payback, no infrastructure, no
sustainability in that community. Is there a ratio that you
think is appropriate? Anybody can answer it.
Mr. Melander. Chair, Representative, by no means were we
prepared to start to give a statistical or analytical
information in regards to export and import of these precious
metals, strategic metals.
Mr. Grijalva. I appreciate----
Mr. Melander. We were here today to talk about the
opportunities that we believe are----
Mr. Grijalva. You are absolutely right, and it is probably
an unfair question. If Resolution or Rio Tinto were sitting in
your seat, they might have an answer. Thank you.
Dr. Gosar [presiding]. Thank you very much. I would like to
yield to the gentleman from Michigan, Dr. Benishek.
Dr. Benishek. Thank you, Mr. Chairman. I want to thank the
Chairman for holding this important hearing today, and I want
to also thank Mr. Jim Iwanicki from my district in Northern
Michigan for coming to Washington to tell us about the
tremendous obstacles he had in simply building a county road
through a working forest in the Upper Peninsula, and the
difficulties he has had with the EPA.
Mr. Iwanicki, can you tell me some of the most frustrating
part of dealing with the EPA? And I heard in your testimony
about the changing goal post, how to deal with them, and they
seem to change the rules halfway through the process. Can you
elaborate on that a little bit more?
Mr. Iwanicki. Well, the EPA was kind of cold to the idea of
building a county road in this working woods area from the
start. And it took great effort on our part locally and with
your help and the help of our Democratic Senators to at least
get them to listen and evaluate the permit, which we thought
was a huge deal. And any time we seemed to come to a conclusion
and thought we had solved their issue, they would come back and
say, ``Well, that is not really what we meant, we were looking
for something more like this,'' and that was very evident when
you took a look a the wetland mitigation process and the
process that went through the wetland mitigation.
We first proposed doing some creation of forested wetlands,
and the EPA said, ``No, we don't like the creation aspect; we
would like more preservation.'' We then turned around and came
up with a preservation plan for them, and then they started
with the issues of, ``Well, we don't like who the land stewards
are going to be, we don't like the way you have the mineral
rights in protecting that preservation area and the lack of
mineral rights for it.'' So again, it was very frustrating.
Dr. Benishek. Let me ask you a question. How many acres of
wetlands would need to be mitigated by the construction of the
road?
Mr. Iwanicki. It was 25 acres of wetland that needed to be
mitigated, and we proposed giving them 2.5 square miles of
land. The wetland being protected was about 25-to-1, I believe,
in that 2.5 square miles, and that was next to a National
Forest. And again, so it was very frustrating that they
wouldn't----
Dr. Benishek. Now, as I understand it, not only did you
have to give--was it 2.5 square miles for the 25 acres?
Mr. Iwanicki. Correct.
Dr. Benishek. But you also had to have an environmental
steward of that land in perpetuity. Is that correct?
Mr. Iwanicki. That is correct. And again, none of the local
agencies were considered a viable steward for that land.
Dr. Benishek. This is the Michigan Department of
Environmental Quality, is that correct?
Mr. Iwanicki. Well, again, we worked with the Michigan
Department of Environmental Quality and the State DNR. And the
State DNR in December agreed that they would be the stewards of
the land. And when we said that to the EPA, the EPA was not
sure that the State DNR was an acceptable agency to be the
steward of this land, and the State DNR addresses all the
public lands and takes care of all the public lands the State
owns in the State.
Dr. Benishek. They are the stewards of all the public lands
within the State.
Mr. Iwanicki. Right.
Dr. Benishek. The State-owned public lands, is that
correct?
Mr. Iwanicki. Correct.
Dr. Benishek. And they have been doing that for hundreds of
years, is that right?
Let me ask you another question about this road, because
this is dear to me. In other words, now I know that this road
is a 22-mile road which will take the place of a 66-mile road
going through downtown Marquette that the ore trucks will now
have to drive through. Can you explain to me, how is that
better for our local environment, going through the 66 miles?
Mr. Iwanicki. Again, it isn't. And again, the EPA put the
animals and the environment in front of all the concerns of
public safety and safety of our community, in front of all
those. So, again, it was very frustrating. And you can see from
all of our public support that we had on the political end of
things that it was something that the people wanted and
something that we wanted, as a community.
Dr. Benishek. Do you think there has ever been the kind of
requirements of any other county road in the country that you
are aware of to deal with the requirements this road needed?
Mr. Iwanicki. I am unaware of any. And again, if these
requirements are out there for all new road projects, it is a
good thing our grandfathers and great-grandfathers built a lot
of the infrastructure here in the United States.
Dr. Benishek. I think my time has expired. Thank you very
much, sir.
Dr. Gosar. I thank the gentleman. Now I would like to go to
Mr. Lowenthal from California.
Dr. Lowenthal. Pass.
Dr. Gosar. You are going to pass? That would be, then, Ms.
Hanabusa from Hawaii.
Ms. Hanabusa. Thank you very much, Mr. Chair. My questions
are directed to Ms. Krill. Ms. Krill, I am talking here about
H.R. 687. And I just want to know if you are reading the bill
very similarly to the way I am.
My first question is really beginning on page 12, and that
is the environmental compliance section, which if you just read
it sort of quickly, it seems like NEPA applies. However, if you
read it, I think carefully, it doesn't kick in until after the
transfer is made to Resolution Copper. And it is prior to the
commencing of any production in commercial quantities of any
valuable minerals. And then it gives 3 years for the Secretary
to then actually complete a review under Section 102 of NEPA.
Am I reading that correctly?
Ms. Krill. I believe you are reading that correctly.
Ms. Hanabusa. So, as opposed to a situation where before
the Secretary would even consider doing this transfer, which
clearly has a lot of environmental implications, and what I am
concerned about are the cultural aspects of it, as well, the
EIS is not, and there is no requirement for any review. That is
correct.
Ms. Krill. That is my understanding, yes.
Ms. Hanabusa. OK. Now, the other part of this that I am
concerned about in reading is the references, of course, to the
Oak Flat withdrawal area, and Apache Leap. Apache Leap, as I
understand it, is not directly covered by this potential
transfer.
Notwithstanding, the Secretary is told in this bill that
they can give special use permits to Resolution Copper to
actually tunnel under the surface of Apache Leap. It says you
are not supposed to mine under Apache Leap, but you have the
right to tunnel under Apache Leap. But Apache Leap is outside
of the area of the transfer. Is that correct?
Ms. Krill. I believe so, although I would defer to the
gentleman who will be testifying later from the San Carlos
Apache Tribe.
Ms. Hanabusa. I understand that. I just want to know if you
are reading this bill very similarly to how I am.
I am also curious about--and the same thing applies, by the
way, to the Oak Flat area, which is supposed to be withdrawn,
but you can still tunnel under it, or you can give a permit for
tunneling under that.
You do reference in here in your testimony the fact that
there is a way of the extraction. And I think it is some kind
of a--let's see, block cave mine.
Ms. Krill. Yes.
Ms. Hanabusa. Are you familiar with this methodology enough
to explain it to me? What does it mean to be a block cave
mining whatever? Massive block cave mine is what you are saying
they are intending to do. Can you explain to me what you mean
by block cave mine, and how you developed that understanding
that Resolution Copper is going to do this?
Ms. Krill. I will do my best to explain it in layman's
terms. I am not a mining engineer, and I have never performed
block cave mining. What block cave mining is, in my
understanding, is creating a very large, open space, a cave, to
extract the ore body with some supports, and then letting the
supports go, so you have significant surface subsidence into
the area. It is essentially creating an open pit, and turning
the surface area into rubble above it.
Ms. Hanabusa. So it is like extracting whatever minerals or
whatever that they want underneath, and then, after that,
letting nature take its course. In other words, you don't fill
it back up. Is that what you are saying?
Ms. Krill. Yes.
Ms. Hanabusa. And evidence of this used in other areas have
resulted with the ground settling and leaving pits in various
locations?
Ms. Krill. Yes. The technique causes severe impacts on the
surface. It also causes severe impacts to the water table below
the mine. And this is a area where we are very concerned about
water, as well.
Ms. Hanabusa. So though they do not permit this block cave
mining, it appears, under Apache Leap, which has very major
cultural significance, as well as Oak Flat, what they are
permitting, however, is for Resolution Copper to get a permit
to tunnel under that. We have no idea what it means to tunnel
under those specific areas.
Ms. Krill. That is correct. And we are very concerned for
that reason about the impacts on those areas.
Ms. Hanabusa. Thank you. I yield back, Mr. Chair.
Mr. Lamborn [presiding]. OK, thank you. We will now have
questions from Representative Daines.
Mr. Daines. Thank you, Mr. Chairman. I am going to yield my
time to the gentleman from Arizona.
Dr. Gosar. Thank you very, very much. First of all, I would
like to address Ms. Hanabusa, just to make sure we understand
this. In this language, that is why my bill will protect Apache
Leap beyond the current land management situation. It places
nearly 100 acres of Apache Leap currently owned by the mining
company into Federal stewardship. Additionally, as a condition
of the land exchange, Resolution Copper will surrender its
right to commercially extract any minerals under Apache Leap.
Finally, I would like to point out that the company will
have over a billion dollars of infrastructure located between
the underground mine and Apache Leap. And, in other words, the
company would have to destroy a billion--with a B--dollars
before Apache Leap's structural integrity could be jeopardized.
Without a doubt, Apache Leap would be protected, more so than
the current situation, if this legislation is signed into law.
So, I wanted to make sure we are clear on that.
Ms. Krill, what size of parcel of land would be too small
to have a NEPA done? What kind of acreage would we have to do a
NEPA on?
Ms. Krill. I am not sure of the answer to that question,
but I can get back to you.
Dr. Gosar. Let me ask you a question, then. Let me ask you
a question. So you are a homeowner, and what you do is you go
buy a piece of property. Would that homeowner have to have a
pre-NEPA?
Ms. Krill. No.
Dr. Gosar. Why not?
Ms. Krill. Because I know that is too small.
Dr. Gosar. Oh. Interesting. So, I mean, it is part of a
plan.
Let me ask you the next question. In regards to the mining
operation, is anything--let me rephrase that--is anything in
the NEPA process short-cutted with this process?
Ms. Krill. I am sorry, which process?
Dr. Gosar. In the process I outline in this bill. They
cannot go forward, they cannot do anything, without a full NEPA
going through. Is that true?
Ms. Krill. My understanding is that is after the land
transfers.
Dr. Gosar. Well, I am making a correlation here, yes. But
the NEPA, I mean, they can't do anything to the land. They are
just getting a transfer. So they can't do anything on the land
until the NEPA process goes through. Is that true? There are no
shortcuts?
Ms. Krill. [No response.]
Dr. Gosar. Let me answer it for you. There are no
shortcuts. There are absolutely no shortcuts. And our next
witness will validate that, as well.
This comes back to the facts. We have to deal in facts,
because the facts set you free. Not scaring people, not fear-
mongering. We have to deal in the facts.
Let me ask you another question. You know how Arizona was
founded? Do you know the five areas in which Arizona was
founded? Its principle--what made Arizona special? It is called
the five C's: cattle, citrus, climate, cotton, and what would
be the fifth one?
Ms. Krill. I believe that would be copper.
Dr. Gosar. I thank you very, very much. It is called gold-
leaf copper, or leaf copper here. It forms naturally.
You also made another comment in regards to that mining has
been the source of the largest pollution in this country. I
would like to see your facts on that. Because I would like to
show you a case in point of Rio Tinto and stewardship. This is
in Wisconsin, very close to Congressman Obey's congressional
district. This is an open pit mine. I just want to make sure we
get this straight, too. This is an open pit mine, where we
actually open a big, large top--OK? It is much more
conventional in copper. And this is exactly how it was
mitigated, OK?
In block mining, what we do is we have a small opening
where we go down. OK? So you are going deep in the ground. And
that is where robotics come in, where we hear this problem with
robotics. Because we want miners' safe, do we not? I would
really be concerned about mining safety. And so, the robots
actually go down into the ground and mines this ore and brings
it back up. Right? Am I right so far?
Ms. Krill. I am not familiar with that particular mine.
Dr. Gosar. Well, cave mining, you made a comment here, cave
mining and open pit mining, very different. And once again, you
need to make sure you are solidly on the facts, OK? But this
shows mitigation. And it is wonderful. I mean this is an
extraction. I think Congressman Obey would tell you this is
incredible. This is a great company, OK?
And are you familiar with all their investments and good
stewardship in Superior?
Ms. Krill. Am I familiar with Rio Tinto's investments?
Dr. Gosar. Yes.
Ms. Krill. No, but I would like to answer your earlier----
Dr. Gosar. No? Would you also like to know that what they
did is they actually came in and helped mitigate problems from
previous mining claims? Now they have been a very good steward
with us, the City of Superior. They have helped out all over.
And so, I think, and this is getting back to what the
Ranking Member and I were talking about back there, that is why
I asked you the question, ``Have you ever supported a mine
claim,'' because it is not good enough just to say we take no
action, it is that you have to start rewarding good behavior
and proper behavior that you illicitly want to see done.
Ms. Krill. The source for the statistic about the toxic
releases of the mining industry is the Toxic Release Inventory,
which is released annually. The mining industry tops the list
of industries, as far as toxic releases in the United States.
Dr. Gosar. I would challenge that, in regards to the waste
that comes out of urban areas. And so I think what we ought to
do is go back to the facts and look carefully at what that is
in mitigation. So I would like to see that answer.
So, without further ado, I am out of time.
Mr. Lamborn. OK, thank you. Representative Lowenthal.
Dr. Lowenthal. Thank you, Mr. Chair. I would like to yield
my time to Mr. Grijalva.
Mr. Grijalva. Thank you. Mr. Chairman. One of the things
that Rio Tinto touts, Ms. Krill, part of the panel was about
employment, so I won't go back and ask any questions there,
they tout the fact that they are an automated mine. They are
the mine of the future. And you get mixed messages.
You get the message where we did our job and we are going
to have 1,500 people, and they are going to get paid from
$40,000 to $100,000, and it will be the greatest boon that ever
happened to Arizona. But in other statements that the
executives and CEOs of Rio Tinto make talking about Resolution
Copper, that it is the mine of the future, and that they will
be able to reduce employment because of automation, and there
will be a central place where there will be a minimum amount of
maintenance work required there. So it kind of runs counter to
the proposal that this is all about jobs.
I preface that because I think there is an important point.
I understand that we have to deal in facts, and I wouldn't like
anything better than for us to be able to factually deal with
this question of Resolution Copper. But since all we have is
the legislation to go by as fact, while I am a trusting person,
I also like to verify. And part of the verification process has
to be some independent look at what this mine is going to be.
Let me ask you one question. Ms. Krill, the Forest Service
in its testimony said that, ``An environmental review document
after the exchange would'' and this is talking about Resolution
``would preclude the U.S. Forest Service from developing a
reasonable range of alternatives to the proposal and providing
the public and local and tribal governments with opportunities
to comment on the proposal.'' As a result, wouldn't the bill,
as drafted, prevent the Forest Service from properly
identifying or considering any mitigation measures that may be
necessary, including the tunnels under Apache Leap and Oak
Flat?
Ms. Krill. Yes, it would. Once the land is in private
hands, then the Forest Service would not have the ability to
develop alternatives, as they would if it continued to be on
public lands.
Mr. Grijalva. Thank you. And as my State that I love very
much evolves, I try to add an additional C to the five C's,
conscientious compassion. I hope we get compassion as one of
the C's down the road.
Anyway, I yield back, Mr. Chair.
Mr. Lamborn. OK, thank you. That concludes our questions
for this panel. I know that those of you from Michigan and
Minnesota didn't know as much about Arizona issues, but I
appreciate the testimony that you gave today, all four of you,
so thank you for your testimony.
Mr. Melander. Thank you.
Mr. Iwanicki. Thank you.
Ms. Batulis. Thank you.
Ms. Krill. Thank you.
Mr. Lamborn. We will now go to our third panel, and I would
like to invite forward Ms. Jamie Connell, BLM Acting Deputy
Director in the U.S. Department of the Interior, accompanied by
Larry Meinert, Mineral Resources Program Coordinator for the
U.S. Geological Survey; and Ms. Mary Wagner, Associate Chief of
the U.S. Forest Service within the Department of Agriculture.
Like all of our witnesses, your written testimony will
appear in full in the hearing record, so I ask that you keep
your oral statements to 5 minutes, as outlined in our
invitation letter.
You have to press the button on the microphone to be heard
in this room. The timing lights, as I said earlier, start at 5
minutes, runs down to turn yellow at one minute, and then runs
out and turns red at 5 minutes.
Thank you all for being here. And Deputy Director Connell,
you may begin.
STATEMENT OF JAMIE E. CONNELL, ACTING DEPUTY DIRECTOR, BUREAU
OF LAND MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR
Ms. Connell. Mr. Chairman, Members of the Subcommittee----
Mr. Lamborn. Pull it a little closer, please. Thank you.
Ms. Connell. Is that better?
Mr. Lamborn. Yes.
Ms. Connell. Mr. Chairman, members of the Subcommittee,
thank you for the opportunity to present testimony today on a
number of bills on behalf of the Bureau of Land Management. My
permanent job is as the BLM's Montana-Dakota State Director,
but I am currently acting in the position of Deputy Director
for the BLM here in Washington.
I am accompanied today by Larry Meinert with the USGS. He
is a Mineral Resource Program Coordinator. He is available to
answer questions on H.R. 981, the Resource Assessment of Rare
Earths Act, and USGS-related questions on H.R. 1063, the
National Strategic and Critical Minerals Policy Act.
I have submitted testimony for the record on each of the
bills being presented. I will briefly summarize the
Administration's position on each of these, and ask that my
entire statements be made a part of the official record.
The Administration has several concerns with the complex
land exchange proposed in H.R. 687, the Southeastern Arizona
Land Exchange and Conservation Act. Two of the Administration's
principal concerns with the legislation pertain to the timing
of NEPA analysis and tribal consultation. In general, the
Department of the Interior defers to the Forest Service on H.R.
687, as it relates primarily to Forest Service-managed lands
and associated valuation issues.
H.R. 697, the Three Kids Mine Remediation and Reclamation
Act, provides legislative solutions to the issues surrounding
the abandoned Three Kids Mine in Henderson, Nevada, and clears
the way for the area's development. The BLM supports innovative
proposals to address the clean-up of the Three Kids Mine, and
we support this proposal to transfer 948 acres of public land
to the Henderson Redevelopment Agency at fair market value,
subject to valid existing rights.
The Department shares the Committee's interest in
developing rare earth elements and other critical mineral
resources on our Nation's public lands, consistent with
environmental protection and public involvement in agency
decisionmaking. H.R. 761 expedites critical mineral exploration
and mine permitting on public lands managed by the Departments
of the Interior and Agriculture. The bill would limit public
involvement in review of mining proposals and the formulation
of alternatives, which are vital components of the BLM's
multiple-use management of the Nation's public lands. As such,
the Department opposes H.R. 761.
H.R. 767 expands the scope of the Federal permit
streamlining project to include all of the field offices within
the jurisdiction of BLM's Montana-Dakota State office. The BLM
supports the goal of the bill to better conform the pilot
office authority to current permitting demands. This
flexibility would be especially useful for the BLM's North
Dakota field office in Dickinson, North Dakota, where
permitting demand has increased substantially in recent years.
In addition, the BLM would like to work with the sponsor
and the Committee in clarifying amendments as well as language
that would provide additional flexibilities nationwide. There
are many BLM field offices that are not part of the Pilot
Project, but are receiving hundreds of drilling applications
per year.
H.R. 957, the American Soda Ash Competitiveness Act, would
reinstate for 5 years the royalty rate reduction provided under
the Soda Ash Royalty Rate Reduction Act of 2006, which expired
in October of 2011. Because the bill would waive the fair
market value requirements of the Federal Land Policy and
Management Act, and the terms of any applicable leases, and for
the reasons outlined in the Department's 2011 report to
Congress, the BLM cannot support H.R. 957.
H.R. 1063 requires the Secretary of the Interior, through
the BLM and the USGS, to assess the capability of the United
States to meet the demands for minerals essential to
manufacturing and competitiveness and economic and national
security. The Department supports the goals of H.R. 1063. We
would like to work with the Committee and other affected
departments to further these goals, while taking into account
time and resource considerations.
Finally, H.R. 981 directs the Secretary of the Interior,
acting through the Director of the USGS, to conduct a global
assessment of rare earth elements. The Department supports the
goals of this bill, although we note that the activities called
for in H.R. 981 are within the scope of the existing Department
of the Interior authorities.
Mr. Chairman, thank you for the opportunity to testify
today, and I would be happy to take any questions.
[The prepared statement of Ms. Connell follows:]
Prepared Statement of Jamie E. Connell, Acting Deputy Director, Bureau
of Land Management, U.S. Department of the Interior
h.r. 761--national strategic and critical minerals production act and
h.r. 1063--national strategic and critical minerals policy act
Introduction
Thank you for the opportunity to testify for the Department of the
Interior on two bills pertaining to the development of strategic and
critical mineral resources on our Nation's public lands: H.R. 761, the
National Strategic and Critical Minerals Production Act, and H.R. 1063,
National Strategic and Critical Minerals Policy Act. These bills seek
to expedite the development of strategic, critical and rare earth
minerals on public lands managed by the Departments of the Interior and
of Agriculture. This statement addresses the provisions relevant to the
Department of the Interior.
The Department shares the Committee's interest in identifying
opportunities for increasing efficiencies in the development of rare
earth elements and other critical mineral resources on our Nation's
public lands consistent with environmental protection and public
involvement in agency decision-making. We also encourage finding ways
to make permitting less complex, costly, and time-consuming. The Bureau
of Land Management (BLM) would like to work with the Committee to
further these shared goals.
The Department has concerns with these two bills. Public
involvement in review of mining proposals and the formulation of
alternatives--critical components of BLM's multiple-use management of
public lands--would be constrained under H.R. 761, and therefore, the
Department opposes H.R. 761. While the Department supports the goals of
H.R. 1063, we have concerns and would like to work with the Committee
to address them. The Department looks forward to continuing a dialogue
with the Congress on these important matters.
Background
The BLM administers over 245 million surface acres of public land
located in the 12 Western States, including Alaska, as well as 700
million acres of sub-surface mineral estate throughout the Nation. The
public lands not only produce commodities, but also offer hunting,
angling, and other recreational opportunities that help provide
economic stability and growth for local and regional communities. Under
its multiple-use mandate, BLM is working with local communities,
tribes, State regulators, industry, and other Federal agencies to
promote environmentally responsible development of mineral resources on
Federal and Indian lands with a fair return to the American people.
The BLM manages mineral development under a number of different
authorities, including the Federal Land Policy and Management Act, the
Mineral Leasing Act of 1920, the Materials Act of 1947, and the Mining
Law of 1872. Each of these authorities, along with BLM regulations and
guidance, provides a legal framework for the development of minerals.
Global manufacturing demand for critical mineral commodities,
including rare earth elements (REE), is on the rise, with increasing
applications in consumer products such as renewable energy technology,
computers, automobiles, aircraft, and other advanced technology
products. While no REE are being mined on public lands at this time,
some portions of the Federal mineral estate hold potential for REE
development and deposits are being evaluated in three areas: the Bear
Lodge Project in northeast Wyoming; the Bokan Mountain/Dotson Zone in
southeastern Alaska; and potential expansion onto public lands of
Molycorp's Mountain Pass exploration operations in California.
H.R. 761--National Strategic and Critical Minerals Production Act
The stated purpose of H.R. 761, the National Strategic and Critical
Minerals Production Act of 2013, is to increase the flow of critical
and strategic minerals to the U.S. manufacturing sector by expediting
the critical mineral exploration and mine permitting process on public
lands managed by the Departments of the Interior and Agriculture.
However, H.R. 761 is drafted in such a manner as to cover virtually all
hard rock mining on Federal lands. H.R. 761 includes numerous
provisions that circumvent sound Federal decision-making and existing
law calling for the multiple uses of public lands, including public
involvement, the application of the National Environmental Policy Act
(NEPA), the management of permit applications, the review of Federal
Register notices for such projects, and the handling by the courts of
civil actions arising from disputes over mine proposals. The bill's
provisions also could apply retroactively to an application for a
mineral exploration or mine permit that is pending at the time of the
bill's enactment, upon the request of the applicant to the lead agency.
The legislation defines critical and strategic mineral mines as
``infrastructure projects'' so that they will fall under the March 22,
2012, Executive order ``Improving Performance of Federal Permitting and
Review of Infrastructure Projects.''
While the Department strongly supports the development of rare
earth elements and other critical minerals, it strongly opposes H.R.
761. This legislation would remove many of the environmental safeguards
for almost all types of hardrock mines on public lands, bypass
evaluation of potential impacts under NEPA, and limit public
involvement in agency decision-making.
Additionally, H.R. 761 lacks clarity on a number of issues,
including how the rights of surface owners in split estate situations
might be affected in an expedited review process. It is also unclear
how Section 103, which requires maximizing recoverable resources while
mitigating environmental impacts, would affect the Department's
authority under the Federal Land Policy and Management Act to prevent
``undue and unnecessary degradation of the public lands.'' H.R. 761
also does not discuss the consequences of missing the 30-month deadline
on permitting decisions and how State permitting authorities relate to
this timeline. The provision allowing for retroactive application of
the bill to permit applications could have the effect of requiring the
BLM or another agency to abandon in-progress environmental reviews of
proposed actions.
Some of the bill's provisions also duplicate actions the BLM has
already implemented, including the formulation of memoranda of
understanding among agencies and proponents, the concurrent gathering
and review of data, and the appointment of project leads who are
assigned to a project through completion.
Finally, the Department of the Interior defers to the Department of
Justice regarding the provisions of H.R. 761 (Title II) pertaining to
judicial review procedures.
H.R. 1063--National Strategic and Critical Minerals Policy Act
H.R. 1063 requires the Secretary of the Interior--through the BLM
and the U.S. Geological Survey--to assess the capability of the United
States to meet the demands for minerals essential to manufacturing
competitiveness and economic and national security. It requires the
Secretary, in consultation with the Secretary of Agriculture, to
produce a report to Congress within 180 days of enactment that includes
an inventory of the non-fossil-fuel mineral potential of lands under
the jurisdiction of the BLM and the U.S. Forest Service. The report
must identify anticipated mineral requirements for the U.S.
manufacturing sector, current sources of these minerals, implications
of shortages, timelines for mineral development projects on public
lands, and the cost of litigation. In addition, the report must include
an assessment of the Federal workforce and its ability to meet the
challenges of the critical minerals issue. The report must also include
an inventory of rare earth element potential on Federal lands,
impediments and restrictions to exploration or development, and
recommendations to reduce such impediments. Finally, the bill directs
the USGS to conduct national and global assessments of critical mineral
resources.
H.R. 1063 requires far-reaching analysis of vast amounts of data
spanning the jurisdictions of the Departments of the Interior,
Agriculture, Defense, Commerce, and Justice, as well as the Office of
Personnel Management. While we share the goals of H.R. 1063, it would
entail much more than producing a report, likely requiring the
development and implementation of data tracking systems and an ongoing
commitment of staff resources to gather, input, analyze, and update the
data. The administrative time and cost of this work would exceed the
180 days and $1 million authorized by the legislation. Regarding the
national and global assessments of critical minerals, we note that
these activities are already authorized by existing USGS authorities.
These studies would require substantial resources and, absent
authorized appropriations, would significantly impact other program
mission activities.
We would like to work with the Committee and the other affected
Departments to further the goals of the bill taking into account time
and resource considerations. We would also like to work with the
Committee to provide clarification on some provisions of the bills,
such as the minerals under consideration and the designation of
impediments and restrictions.
Thank you for the opportunity to testify on H.R. 761 and H.R. 1063.
I will be glad to respond to questions.
h.r. 687--southeast arizona land exchange and conservation act
Thank you for the opportunity to present testimony on H.R. 687, the
Southeast Arizona Land Exchange and Conservation Act. The legislation
provides for the exchange of a 2,422-acre parcel of U.S. Forest
Service-managed land to a private company in exchange for a number of
parcels within the State of Arizona for management by the U.S. Forest
Service (FS) and the Bureau of Land Management (BLM). Three of the
private parcels are identified for transfer to the Secretary of the
Interior.
In general, the Department of the Interior (DOI) defers to the FS
on the issues directly related to FS-managed lands and associated
valuation issues. We believe that the intent of the legislation is to
facilitate an exchange of land with Resolution Copper Mining, LLC.
Resolution Copper has indicated its intention to develop a copper mine
near Superior, Arizona, and wishes to acquire the 2,422-acre FS parcel
overlying the copper deposit as well as the Federal subsurface rights.
Conveyance of Parcels to the Bureau of Land Management
H.R. 687 provides for the conveyance of three parcels to the
Secretary of the Interior to be managed by the BLM. The parcels
identified are located in Gila, Pinal, and Santa Cruz Counties and
include:
3,050 acres along the lower San Pedro River near Mammoth,
Arizona;
160 acres within the Dripping Springs area near Kearny,
Arizona; and
the 940-acre Appleton Ranch parcel adjacent to the Las
Cienegas National Conservation Area near Sonoita, Arizona.
We would note that the maps for these three parcels are
inaccurately described in the legislation and we would like to work
with the sponsor and the Committee to correct those descriptions.
The lower San Pedro parcel is east of the town of Mammoth, Arizona,
and straddles the San Pedro River. The acquisition of these lands would
enhance key migratory bird habitat along the San Pedro River. H.R. 687
provides for the lower San Pedro parcel to be managed as part of the
BLM's existing San Pedro Riparian National Conservation Area (NCA)
designated by Public Law 100-696. The lower San Pedro parcel lies along
the same riparian corridor as the NCA, but it is at least 60 miles
downstream (north) of the existing NCA and has substantially different
resource issues and needs. If this parcel is conveyed to the Secretary
of the Interior and incorporated into the NCA, the Department
recommends that the existing 80 acres of adjacent BLM-managed public
land likewise be included within the NCA to facilitate the efficient
and effective management of this important riparian corridor.
The legislation also proposes to transfer 160 acres in the Dripping
Springs area near Kearny, Arizona, to the Secretary of the Interior.
This private parcel is an inholding within a larger block of public
lands and has important resource values, including sensitive Desert
Tortoise habitat.
Finally, the bill provides for the transfer of the 940-acre
Appleton Ranch parcel to the Secretary of the Interior. This parcel is
located on the southern end of the BLM's Las Cienegas NCA. These lands
lie within the ``Sonoita Valley Acquisition Planning District''
established by Public Law 106-538, which designated the Las Cienegas
NCA. That law directs the Department to acquire lands from willing
sellers within the planning district for inclusion in the NCA to
further protect the important resource values for which the Las
Cienegas NCA was designated. These lands are part of a significant
wildlife corridor. The acquisition of these lands advances important
conservation goals associated with this unique and special natural
resource.
General Concerns
The Administration has several concerns with the Southeast Arizona
Land Exchange and Conservation Act and cannot support H.R. 687 as
written. Two of the Administration's principal concerns with the
legislation pertain to the timing of NEPA analysis and tribal
consultation.
H.R. 687 requires the Forest Service to prepare an environmental
review document under the National Environmental Policy Act (NEPA)
after the land exchange is completed rather than in advance of the
exchange. It is this Administration's policy that NEPA be fully
complied with to address all Federal agency actions and decisions,
including those necessary to implement congressional direction.
In addition, increasing and improving tribal consultation with
Indian tribes by all Federal agencies is a key accomplishment of this
Administration, and concerns have been raised by Indian tribes
nationwide that the legislation is contrary to laws and policies and
Executive orders that direct Federal land management agencies to engage
in meaningful government-to-government consultation with interested
Indian tribes, and to protect and preserve sites sacred to Native
Americans. This consultation framework includes, including the recent
Memorandum of Understanding among the Departments of Defense, Interior,
Agriculture, Energy and the Advisory Council of Historic Preservation
Regarding Interagency Coordination and Collaboration for the Protection
of Indian Sacred Sites, which was signed on December 4, 2012.
Many of the lands to be exchanged in this legislation hold
significant cultural value to Indian tribes. In particular, the Apache
Leap area, the Oak Flat Campground, and Devil's Canyon are culturally
significant to the San Carlos Apache Tribe and the Fort McDowell
Yavapai Nation. For the San Carlos Apaches, and the Yavapai, this area
is a place of ancient settlements and burial sites. Tribal members
still go to these areas to pray, conduct ceremonies, and gather
medicines and ceremonial items.
The Administration is concerned that any consultations under H.R.
687 would not be meaningful under Executive Order 13175, ``Consultation
and Coordination with Indian Tribal Governments,'' because the
legislation limits the Secretary of Agriculture's discretion regarding
the land exchange. Engaging in government-to-government consultation
prior to the Secretary of Agriculture's public interest determination
would better allow for meaningful consultation and coordination with
interested tribes.
Section 4(i) of H.R. 687 expresses the intent of Congress that the
exchange be completed within 1 year. Based on our experience with
exchanges, we believe the amount of time provided in H.R. 687 is
insufficient to review and finalize the necessary environmental
documents, mineral report, and appraisals, as well as to conduct the
final verification and prepare title documents. We are also concerned
that 1 year may not be sufficient to complete analysis of any historic
and sacred sites in the exchange area as required by the Native
American Graves Protection Act and the National Historic Preservation
Act.
Preparation of a mineral report is a crucial first step toward an
appraisal of the Federal parcel because the report provides important
information about the Federal mineral deposit. The bill does not
address access to confidential exploration and development data and
company analyses on the mineral deposits underlying the Federal land in
order to ensure a timely and accurate appraisal. Such information is
essential for the mineral report, particularly in the context of this
exchange, because of the size of the proposed mining operation and the
proposed mining technique.
Section 6 of H.R. 687 provides for an annual value adjustment
payment to the United States if the cumulative production of locatable
minerals exceeds the projected production used in the appraisal
required by section 4. This provision recognizes that an accurate
projection of future production as part of the appraisal process will
be difficult to develop, and provides a mechanism for additional
payments to the United States if the actual production exceeds the
projected production. The Department generally defers to the FS on the
specific provisions of section 6 of the bill. However, we note that
this section creates a new fund in the U.S. Treasury for the deposit of
these value adjustment payments. The Department believes that these
funds should be dedicated to Federal land acquisition in the same
manner as the initial land equalization payments provided for in
section 4(e)(2)(C) of the bill. Because these funds are to compensate
for a possible initial inadvertent under-appraisal of land values, it
is appropriate that the value when captured be used in the same manner
as if it had been included in the initial appraisal.
Finally, there are a number of issues of a more technical nature,
including appropriate map references, which we would welcome the
opportunity to discuss as this legislation moves forward.
Conclusion
Thank you for the opportunity to testify. The exchange proposed in
H.R. 687 is complex. The Departments of Agriculture and of the Interior
seek to assure that the Federal Government's interest is appropriately
protected in any final legislation and tribal interests are considered.
h.r. 697--three kids mine remediation and reclamation act
Introduction
Thank you for the opportunity to testify on H.R. 697, the Three
Kids Mine Remediation and Reclamation Act. During the past 5 years, the
Bureau of Land Management (BLM) has worked with Nevada governmental
entities in search of administrative remedies to the problems posed by
the abandoned Three Kids Mine, in Henderson, Nevada. The BLM supports
H.R. 697, which provides legislative solutions to the issues
surrounding the Three Kids Mine area and clears the way for its
eventual development.
Background
The Three Kids Mine is an abandoned manganese mine and mill site
located along the south side of Lake Mead Drive, across the highway
from Lake Las Vegas, in Henderson, Nevada. The mine and mill operated
from 1917 through 1961 on 314 acres of private land, in part providing
steel-strengthening manganese to the defense industry and contributing
to the United States' efforts in World War I and II. Federal manganese
reserves were stored in the area from the late 1950s through 2003.
H.R. 697 would direct that 948 acres of the public lands adjacent
to the private site be conveyed to the Henderson Redevelopment Agency,
bringing the total size of the project area to 1,262 acres. Of the 948
acres of public lands, 146 acres are contaminated and will require mine
reclamation and environmental remediation. The most severe
contamination appears to be on the 314 private acres where the mine and
mill were located. No viable former operator or responsible party has
been identified to remediate and reclaim the abandoned mine and mill
site. Today, the site's deep open pits, large volumes of mine
overburden and tailings, mill facility ruins, and solid waste disposal
areas pose significant risks to public health, safety and the
environment. The Nevada Division of Environmental Protection (NDEP)
identified the Three Kids Mine site as a high priority for the
implementation of a comprehensive environmental investigation,
remediation, and reclamation program.
Representatives of the BLM, the Bureau of Reclamation, and the
Department of the Interior Solicitor's Office have worked with the City
of Henderson and representatives of developer Lakemoor Canyon, LLC, to
find solutions to the complex challenges this site presents.
Discussions have focused on overlapping Federal agency jurisdictions,
land management designations and other resource issues, Resource
Management Plan amendments, future liability, and an important utility
corridor that traverses the site.
H.R. 697
H.R. 697 would designate the combined 314 acres of private land and
948 acres of public land as the 1,262-acre ``Three Kids Mine Project
Site'' and provide for the conveyance of the public lands to the
Henderson Redevelopment Agency. The legislation also provides that fair
market value for the Federal lands to be conveyed should be determined
through standard appraisal practices, and that, subsequent to that
determination, the Secretary should determine the ``reasonable
approximate estimation of the costs to assess, remediate, and reclaim
the Three Kids Mine Project Site.'' That cost would then be deducted
from the fair market value of the public land to be conveyed. The
Henderson Redevelopment Agency would pay the adjusted fair market value
of the conveyed land, if any, and the Federal Government would be
released from ``any and all liabilities or claims of any kind arising
from the presence, release, or threat of release of any hazardous
substance, pollutant, contaminant, petroleum product (or derivative of
a petroleum product of any kind), solid waste, mine materials or mining
related features'' at the site in existence on or before the date of
the conveyance.
While the BLM has not established a range for the cost of cleanup,
a proponent of the transaction, Lakemoor Canyon, LLC, estimates the
cost of remediating the public and private lands at between $300
million and $1.3 billion. While it is possible that the cost of
remediating and reclaiming the entire project area might exceed the
fair market value of the Federal land to be conveyed, the cost of the
transaction will only be known after the Secretary completes the
appraisal and remediation cost estimate process as outlined in the
legislation.
The BLM supports innovative proposals to address the cleanup of the
Three Kids Mine, and we support this proposal to transfer the entire
948 acres of public land to the Henderson Redevelopment Agency at fair
market value, subject to valid existing rights. However, the BLM
recognizes that the transfer would include a small portion of the River
Mountains ACEC, and we would like to discuss with the committee
opportunities to mitigate that loss.
Conclusion
Thank you for inviting the Administration to testify on H.R. 697.
The Three Kids Mine problem needs to be resolved, and we look forward
to working toward a solution that protects the environment and serves
the public interest. I would be happy to answer your questions.
h.r. 767--oil and gas pilot project offices
Introduction
Thank you for the opportunity to testify on H.R. 767, which would
amend the Energy Policy Act of 2005 to modify the Federal Permit
Streamlining Pilot Project. The bill would expand the Federal Permit
Streamlining Pilot Project to include all of the field offices within
the jurisdiction of the BLM's Montana/Dakotas State Office. The BLM
supports the goal of H.R. 767 to better conform the pilot office
authority to current permitting demands. However, the BLM would like to
work with the sponsor and the Committee on clarifying amendments as
well as language that would provide additional flexibilities nationwide
to utilize the pilot office authority to respond as permitting demands
shift over time.
Background
Section 365 of the Energy Policy Act of 2005 established the
Federal Permit Streamlining Pilot Project with the intent to improve
the efficiency of processing oil and gas use authorizations and
environmental stewardship on Federal lands. It designated seven pilot
project offices: Miles City, Montana; Buffalo and Rawlins, Wyoming;
Vernal, Utah; Grand Junction/Glenwood Springs, Colorado; and Farmington
and Carlsbad, New Mexico.
Section 365 also established the Permit Processing Improvement
Fund, an account of approximately $18 million annually, to support the
pilot project for 10 years. Specifically, it directed 50 percent of the
income derived from Federal onshore oil and gas lease rental payments
outside of Alaska to the Fund. For FY 2006 through FY 2015, the section
made the Fund available to the Secretary of the Interior for
expenditure without further appropriation to enhance coordination and
processing of oil and gas use authorizations on Federal land under the
jurisdiction of the designated pilot project offices.
In addition to the BLM, Section 365 authorized the Secretary to
transfer monies from the Permit Processing Improvement Fund as
necessary to the Fish and Wildlife Service, the Bureau of Indian
Affairs, the Forest Service, the Environmental Protection Agency, the
Army Corps of Engineers, and the States of Wyoming, Montana, Colorado,
Utah, and New Mexico. It also prohibited the BLM from establishing cost
recovery fees for processing applications for oil and gas permits to
drill. The President's 2013 budget proposed to repeal this fee
prohibition. In lieu of the budget proposal, we note that the Congress
has implemented permit fees through appropriations language for the
last several years.
The agencies involved in the pilot project have made significant
progress in a number of areas. Additional resources, such as personnel
devoted to processing oil and gas use authorizations, have enabled the
various bureaus and agencies to increase the pace of permitting and
completing environmental reviews, particularly given the complex
resource issues we face. The time taken for interagency consultations
has been reduced due to improved communication and through programmatic
streamlining efforts, which have been used in multiple projects and
permits.
Also, the BLM has increased inspection and enforcement capability
as a result of the hiring of additional skilled specialists in the
pilot project offices. The increase in inspections has led to better
compliance by the industry and a reduction in major violations due to
the increased number of inspectors in the field. Increasing the number
of inspectors has allowed the BLM to identify issues early; intervene
in nascent violation situations; and improve interim reclamation work
on lands disturbed by oil and gas operations. The pilot project offices
are also better staffed to help new industry permitting specialists
understand the BLM's requirements for obtaining an oil and gas use
authorization.
H.R. 767
H.R. 767 would substitute the BLM's Montana/Dakotas State Office
for the current pilot project office in Miles City, Montana, with the
goal of broadening the geographic scope of the pilot project authority.
This broadened geographic scope would allow BLM to better allocate some
resources based on current permitting demands and new exploration and
development of oil and gas fields and plays. For example, this
flexibility would be especially useful for processing permits received
in the North Dakota Field Office in Dickinson, North Dakota, which
received 701 applications for permits to drill (APDs) in FY 2012,
compared to 147 APDs received in FY 2009.
In addition, the BLM would like to work with the sponsor and the
Committee on language that would allow greater flexibilities nationwide
to adjust permitting resources based on demand. There are many BLM
field offices that are not part of the pilot project, but are receiving
hundreds of APDs per year. Of the 10 field offices that received the
most APDs during FY 2012, only 5 are currently designated as pilot
project offices. For example, in FY 2012, the Pinedale Field Office in
Pinedale, Wyoming, received 325 APDs; the Bakersfield Field Office in
Bakersfield, California, received 286 APDs; and the Oklahoma Field
Office in Tulsa, Oklahoma, received 157 APDs. Although these offices
have received high volumes of APDs, none are currently designated as
pilot project offices, and none would be designated as such under the
bill. At the same time, some of the currently designated pilot project
offices have received relatively few APDs in recent years; for example,
the Grand Junction Field Office received only 47 APDs in FY 2012.
Conclusion
Thank you for the opportunity to provide testimony on H.R. 767. I
would be happy to answer any questions you may have.
h.r. 957--american soda ash competitiveness act
Introduction
Thank you for the opportunity to testify on H.R. 957, the American
Soda Ash Competitiveness Act. This bill would reinstate for five years
the royalty rate reduction provided for under the Soda Ash Royalty Rate
Reduction Act of 2006, which expired in October 2011. The BLM cannot
support H.R. 957.
Background
Soda ash is one of several products derived from sodium minerals
mined on public lands and is used in many common products, including
glass, pulp, detergents, and baking soda. The mineral trona is a
naturally occurring mixture of sodium carbonate, sodium bicarbonate,
and water. Soda ash may be either natural or synthetic. It can be
extracted from mined natural trona deposits, or it can be manufactured
synthetically. Synthetic soda ash production began in this country in
the 1880s and increased as the demand for soda ash increased. In the
early 1950s, the modern natural soda ash industry began in the Green
River Basin of Wyoming, home of the world's largest known natural
deposit of trona, where soda ash, or ``sodium carbonate,'' is refined
from trona mined at depths of between 800 and 1,600 feet below the
surface.
In 2012, the U.S. soda ash industry consisted of five companies
that mine and mill soda ash, four of which operate five plants in
Wyoming. One company in California produces soda ash from sodium-
carbonate rich brines. At the end of FY 2012, there were 86 Federal
sodium leases covering 111,185 acres in Wyoming, California, Colorado,
Arizona, and New Mexico. Sixty-three of these Federal sodium leases
were located in Wyoming. The soda ash industry is a substantial
contributor to the gross domestic product of the United States, with
the total value of domestic soda ash produced in 2012 being about $1.6
billion and the industry supplying over 2,200 direct jobs. Soda ash is
also a key ingredient in many diversified products, including flat
glass used by the automobile and construction industries.
Soda Ash Royalty Rate Reduction Act
In 2006, Congress passed the Soda Ash Royalty Rate Reduction Act
(2006 Act), which reduced the Federal royalty rate for soda ash to 2
percent. Before the 2006 Act went into effect, the BLM was charging
royalty rates of 6 and 8 percent. The BLM established these rates based
on a 1996 study to examine the fair market value in the sodium industry
in Wyoming. The study reviewed many comparable State and private leases
and found that fair market value in Wyoming appeared to be somewhat
higher than the 5 percent being charged by the BLM previously. As a
result of the study, the BLM determined that the royalty rate for all
then-existing leases would be increased from 5 to 6 percent at the
lease renewal date. The BLM, based on the study, also determined that
the royalty rate on all new leases would be 8 percent. In the Green
River Basin at that time, the royalty rate on most private land was 8
percent and 5 percent on State lands.
Report to Congress
As mandated by the 2006 Act, the BLM reported to Congress in the
fall of 2011 on the impact of the reduction over the previous 5 years,
in the ``U.S. Department of the Interior Report to Congress: The Soda
Ash Royalty Reduction Act of 2006.'' The report found that the 2006 Act
resulted in a substantial loss of royalty revenues to the Federal
Government and the States which exceeded congressional estimates at the
time of enactment. It also stated that the royalty rate reduction did
not appear to have contributed in a significant way to the creation of
new jobs within the industry, to increased exports, or to a notable
increase in capital expenditures to enhance production. Furthermore,
the report found that the royalty rate reduction appeared to have
influenced a shift of production away from State leases and private
lands and onto Federal leases, and that, with regard to global
competitiveness, U.S. production remained stable.
H.R. 957
H.R. 957 would reinstate for 5 years the 2 percent royalty rate for
soda ash which expired in October 2011. Specifically, the bill would
apply an across-the-board reduction in the royalty rate on soda ash
leases from an average of 5.6 percent to 2 percent. In FY 2012, the
soda ash industry paid over $47 million in royalty for production from
Federal lands. If the royalty rate had been reduced to 2 percent during
FY 2012, the royalty revenue for that year would have been
approximately $17 million, a reduction of about $30 million.
Furthermore, the bill could be subject to the Statutory Pay-As-You-Go
Act of 2010.
H.R. 957 would waive the requirements of section 102(a)(9) of the
Federal Land Policy Management Act of 1976 (FLPMA) and the terms of any
applicable leases. Section 102(a)(9) of FLPMA states that it is the
policy of the United States to receive fair market value for the use of
public lands and their resources unless otherwise provided by statute.
For these reasons and for the reasons outlined in the Department's 2011
report, the BLM cannot support H.R. 957.
Conclusion
Thank you for the opportunity to provide testimony on H.R. 957. I
would be happy to answer any questions you may have.
h.r. 981--resource assessment of rare earths act of 2013
Thank you for the opportunity to present the Department of the
Interior's views on H.R. 981, directing the Secretary of the Interior,
acting through the Director of the U.S. Geological Survey (USGS), to
conduct a global assessment of rare earth element resources. The
Department supports the goals of this bill, although we note that the
activities called for in H.R. 981 are within the scope of existing
Department of the Interior authorities.
The USGS is responsible for conducting research and collecting data
on a wide variety of fuel and nonfuel mineral resources, including rare
earth elements (REE). For nonfuel minerals, research is conducted to
understand the geologic processes of concentrated known mineral
resources at specific localities in the Earth's crust and to estimate
(or assess) quantities, qualities, and areas of undiscovered mineral
resources, or potential future supply. USGS scientists also conduct
research on the interactions of mineral resources with the environment,
both natural and as a result of resource extraction, to better predict
the degree of impact that resource development may have on human and
ecosystem health. USGS mineral commodity specialists collect, analyze,
and disseminate data and information that document current production
and consumption for about 100 mineral commodities, both domestically
and internationally for 180 countries. This full spectrum of mineral
resource science allows for a comprehensive understanding of the
complete life cycle of mineral resources and materials--resource
formation, discovery, production, consumption, use, recycling, and
reuse--and allows for an understanding of environmental issues of
concern throughout the life cycle.
Global demand for critical mineral commodities is on the rise with
increasing applications in consumer products, computers, automobiles,
aircraft, and other advanced technology products. Much of this demand
growth is driven by new technologies that increase energy efficiency
and decrease reliance on fossil fuels. In 2010, the USGS completed an
inventory of known domestic rare-earth reserves and resources (Long and
others, 2010). The report documents 28 deposits and includes
information on the location, exploration status, past production, and
estimated resources. The report also includes an overview of known
global rare-earth resources and discusses the reliability of
alternative foreign sources of rare earths. Known U.S. deposits of REE
comprise about 13 percent of the global reserve of REE and are located
on a mix of public (BLM and USFS) and private lands in 14 States. The
primary U.S. source for REE is the Mountain Pass mine in California,
operated by Molycorp Minerals, a Colorado-based company. Advanced
exploration projects for new REE deposits are underway at Bokan
Mountain, AK and Bear Lodge, WY. In 2011, USGS released two additional
REE reports, ``China's Rare-Earth Industry'' (Tse, 2011) and ``Rare
Earth Elements--End Use and Recyclability'' (Goonan, 2011).
The logical next steps are to (1) update a global inventory of rare
earth resources published by the USGS in 2002 (Orris and Grauch, 2002),
(2) review principal REE deposits outside of China and evaluate their
geologic, economic, and development potential, and (3) conduct a
comprehensive assessment of undiscovered REE resources. H.R. 981, the
RARE Act of 2013, outlines a reasonable approach to properly assess the
global endowment of REE resources, to identify potential future
supplies of REE resources, and to better understand future potential
sources of REE needed for United States industry.
The USGS maintains a workforce of geoscientists (geologists,
geochemist, geophysicists, and resource specialists) with expertise in
critical minerals and materials, including REE. The USGS continuously
collects, analyzes, and disseminates data and information on domestic
and global REE reserves and resources, production, consumption, and
use. This information is published annually in the USGS Mineral
Commodity Summaries (USGS, 2013) and includes a description of current
events, trends, and issues related to REE supply and demand.
The USGS stands ready to fulfill its role as the sole Federal
provider of unbiased mineral resource research on known REE resources,
assessment of undiscovered REE resources, and information on domestic
and global production and consumption of REE resources for use in
global REE supply chain analysis. We note, however, that the activities
called for in H.R. 981 are already authorized by existing authorities.
Any study conducted to fulfill the objectives of the bill will require
substantial resources that, without additional support, would
significantly impact other program mission activities.
Thank you for the opportunity to present the views of the
Department on H.R. 981.
References Cited
Goonan, T.G., 2011, Rare earth elements--End use and recyclability:
U.S. Geological Survey Scientific Investigations Report 2011-5094, 15
p., available only at
http://pubs.usgs.gov/sir/2011/5094/.
Long, K.R., Van Gosen, B.S., Foley, N.K., and Cordier, Daniel,
2010, The principal rare earth elements deposits of the United States--
A summary of domestic deposits and a global perspective: U.S.
Geological Survey Scientific Investigations Report 2010-5220, 96 p.
Available at http://pubs.usgs.gov/sir/2010/5220/.
Orris, G.J., and Rauch, R.I., 2002, Rare earth element mines,
deposits, and occurrences: U.S. Geological Survey Open-File Report
2002-0189, 174 p. Available at http://pubs.usgs.gov/of/2002/of02-189/.
Tse, Pui-Kwan. (2011) China's Rare-Earth Industry. U.S. Geological
Survey Open-File Report 2011-2042.
USGS, 2013, Mineral Commodity Summaries 2013, p. 128-129
______
Questions Submitted for the Record to Jamie E. Connell
Questions Submitted for the Record by The Honorable Grace F. Napolitano
Question. Can you clarify how many acre-feet of water will be
utilized in the mining process to cool the drill? It is my
understanding it would be about 40,000 acre-feet. of water. My concern
is the current drought condition of the City of Superior and
surrounding area.
Answer. The Department of the Interior does not have this
information.
Question. Are there current environmental studies in process or
have any been completed on the examination of the land prior to the
exchange into private ownership?
Answer. The Department of the Interior defers to the Forest Service
on issues directly related to the transfer of Forest Service-managed
lands and associated valuation issues.
Question. Wouldn't the normal process of requesting an
environmental study be the first step? H.R. 687 waives compliance with
NEPA prior to the exchange, meaning that the Forest Service or the
public will never have access to information documenting the potential
environmental impacts of a large copper mining operation in the area.
Answer. It is the Administration's policy that NEPA be fully
complied with to address all Federal actions and decisions prior to the
exchange.
______
Question Submitted for the Record by The Honorable Kevin Cramer, a
Representative in Congress for the State of North Dakota
Question. Ms. Connell, on page 2, 2nd paragraph of your March 21,
2013, pre-filed testimony, you stated:
``The agencies involved in the pilot project have made
significant progress in a number of areas. Additional
resources, such as personnel devoted to processing oil and gas
use authorizations, have enabled the various bureaus and
agencies to increase the pace of permitting and completing
environmental reviews, particularly given the complex resource
issues we face. The time taken for interagency consultations
has been reduced due to improved communication and through
programmatic streamlining efforts, which have been used in
multiple projects and permits.''
Do you have specific results to show that this Pilot Project has
improved the Federal permit process? (i.e. A backlog of X amount of
Applications for Permit to Drill (APDs) has been reduced to X amount,
reduced average time to process an APD from X to X, X amount of
inspections before compared to X amount of inspections now.)
Answer. The pilot office authority has allowed the BLM and other
pilot office agencies to better coordinate permitting and related
environmental reviews, which along with additional funding has allowed
us to increase the pace of permitting. The pilot project offices
approved approximately 54 percent of all APDs received from FY 2006 to
FY 2012. From FY 2006 to FY 2012, the amount of time it took for all
BLM field offices to process and approve complete APDs fell from 127 to
77 days. The number of complete APDs pending more than 90 days (the
``backlog'') at all BLM offices declined from 1,486 to 551 from FY 2006
to FY 2012. (Note: only after an applicant has submitted all the
required components of an APD package is the BLM able to complete its
review and make a decision on an APD.) The number of inspections
completed by all BLM offices rose 73 percent from FY 2006 to FY 2012,
from 19,974 to 34,571.
______
Mr. Lamborn. OK, thank you for being here and for your
testimony.
We will now hear from Ms. Wagner.
STATEMENT OF MARY WAGNER, ASSOCIATE CHIEF, U.S. FOREST SERVICE,
U.S. DEPARTMENT OF AGRICULTURE
Ms. Wagner. Good morning, Mr. Chairman and members of the
Committee. Thanks for the opportunity to provide the Department
of Agriculture's views on H.R. 687, the Southeast Arizona Land
Exchange and Conservation Act of 2013.
We have had the opportunity to share our perspective on
previous versions of this bill, and we have not changed our
position since our last testimony. I know you have had an
opportunity to review the detailed written testimony. I am
going to focus on a few key points in my oral remarks.
We support environmentally sound mineral development. We
also recognize the benefit of copper mine development to
economic and employment conditions in the State of Arizona and
the Nation. We acknowledge the environmental benefits and
qualities of the non-Federal land parcels considered in this
exchange, and we appreciate the efforts to resolve land use
issues for the Town of Superior. Last, we appreciate the
recognition and protection of important values of Apache Leap.
While the Department understands and appreciates the
potential economic benefits and value of the lands to be
acquired by the American public, the Department cannot support
the bill as written, but is looking forward to working with
sponsors and the Committee to resolve concerns. The two
principal concerns with the bill are that it would require the
Agency to prepare an environmental review document under NEPA
after the land exchange is completed, and the land exchange and
subsequent mining activities have the potential to impact a
landscape considered sacred to a number of federally recognized
Tribes, without environmental review or consultation with the
Tribes.
The Department believes that adhering to the Federal Land
Policy Management Act and other laws that guide administrative
land exchanges ensures a sound process for determining the
public interest and disclosing environmental impacts. It
requires that before making a discretionary decision, the
Federal agency considers the environmental impacts of a
proposed major Federal action, and alternatives of such an
action.
It is this Administration's policy that NEPA be fully
complied with to address all Federal actions and decisions,
including those necessary to implement congressional direction.
NEPA conducted in advance of the exchange would create an
opportunity for meaningful tribal consultation, as envisioned
by numerous laws that acknowledge that consultation with tribal
governments is legally mandated and integral to the Federal
Government's trust responsibility to Tribes. Consultation
becomes the vehicle where tribal concerns and interests are
identified, addressed, and potentially mitigated.
We have a number of technical concerns with the bill,
including the timeframe to complete the land exchange,
appraisal provisions, value adjustment provisions, and the
purpose of funds from value adjustment payments. And we would
like to work with the Committee to resolve those issues.
This concludes my statement. I am happy to answer any
questions you might have.
[The prepared statement of Ms. Wagner follows:]
Prepared Statement of Mary Wagner, Associate Chief, U.S. Forest
Service, U.S. Department of Agriculture, on H.R. 687
Mr. Chairman and members of the Committee, thank you for the
opportunity to appear before you today to provide the Department of
Agriculture's views on H.R. 687, the ``Southeast Arizona Land Exchange
and Conservation Act of 2013''. I am Mary Wagner, Associate Chief of
the U.S. Forest Service. H.R. 687 would direct the Secretary of
Agriculture to convey Federal land for use as an underground copper
mine in exchange for environmentally sensitive non-Federal land in
Arizona. We defer to the Department of the Interior on provisions
relating to lands to be managed by the Bureau of Land Management (BLM).
H.R. 687 would direct the Secretary of Agriculture to convey to
Resolution Copper Mining, LLC (Resolution Copper), a 2,422 acre parcel
of land on the Tonto National Forest. The Federal land to be conveyed,
known as Oak Flat, contains a potentially sizeable copper ore body and
adjoins an existing copper mine on private land owned by Resolution
Copper. In exchange, Resolution Copper would convey five parcels of
land to the Forest Service and three parcels of land to BLM. The total
non-Federal acreage that would be conveyed by Resolution Copper is
5,344 acres, all of which are in Arizona.
The Bill calls for an equal value exchange in section 4(e). If the
value of the Federal land (including the ore body) to be conveyed
exceeds the value of the parcels to be acquired, the Bill would allow
for a cash equalization payment by Resolution Copper in excess of 25
percent. Under current law, cash equalization payments may not exceed
25 percent (section 206(b) of Federal Land Policy and Management Act of
1976 (43 U.S.C. 1716(b)). A cash equalization payment resulting from
the exchange would be deposited in the Sisk Act account to be used,
upon appropriation by Congress, for acquisition of land for addition to
the National Forest System within the State of Arizona.
Section 6(b) of the Bill would require Resolution Copper to make
value adjustment payments if, as the mine is developed, production of
the mine exceeds expectations documented in the appraisal. Those funds
would be deposited in a special account in the Treasury to be used,
upon appropriation by Congress, for maintenance, repair, and
rehabilitation projects on BLM and National Forest System lands. The
Department's position is that any value adjustment payments should be
used for land acquisition.
The Bill also would provide for the sale of: a 30 acre parcel of
land currently being used as a cemetery; a reversionary interest and
reserved mineral rights in a 265 acre parcel; and 250 acres near the
Superior Airport at market value to the Town of Superior. Sale proceeds
would be deposited in the Sisk Act account to be used, upon
appropriation by Congress, for acquisition of land to the National
Forest System in Arizona.
H.R. 687 would require Resolution Copper to pay all costs
associated with the exchange, including any environmental review
document. The Bill provides that it is the intent of Congress that the
exchange be completed not later than 1 year after the date of
enactment.
At the request of Resolution Copper, the Bill would require the
Secretary, within 30 days of such request, to issue a special use
permit to Resolution Cooper to carry out mineral exploration activities
under the Oak Flat Withdrawal Area, from existing drill pads located
outside the area, if such activities would not disturb the surface of
the Area. At the request of Resolution Copper, within 90 days, the Bill
would require the Secretary to issue a special use permit to Resolution
Copper to carry out mineral exploration activities under the Oak Flat
Withdrawal Area (but not within the Oak Flat Campground), if the
activities are conducted from a single exploratory drill pad which is
located to reasonably minimize visual and noise impacts to the
Campground.
H.R. 687 would require the Secretary of Agriculture to complete an
environmental review document after the exchange, and after the above-
noted activities were permitted to take place, but before Resolution
Copper's commencement of commercial mineral production on the land it
would acquire in the exchange. Specifically, once the land exchange is
consummated, and these lands are in the private ownership of Resolution
Copper, Resolution Copper is authorized to submit a mine plan of
operation to the Secretary. Thereafter, the Secretary must complete an
environmental review document within 3 years that is limited to section
102(2) of the National Environmental Policy Act of 1969 (NEPA). The
environmental document would be used as the basis for any Federal
action or authorization related to the proposed mine and mine plan of
operations of Resolution Copper, including the construction of
associated power, water, transportation, processing, tailings, waste
dump, and other ancillary facilities. After the exchange, Resolution
Copper may need to use the adjoining National Forest System land for
ancillary activities related to the mining development, such as rights-
of-way for electric lines, pipelines, or roads.
The Bill would add five parcels of land totaling almost 1,200 acres
to the National Forest System. Most of these parcels include riparian
areas which are somewhat rare in Arizona. One of the parcels that would
be acquired adjoins the Apache Leap area on the Tonto National Forest.
Additionally, as a condition of the land exchange, Resolution Copper
would surrender its rights to commercially extract minerals under
Apache Leap.
While the Department understands and appreciates the potential
economic benefits and the value of the lands to be acquired by the
American public, the Department cannot support the Bill as written but
is looking forward to working with the Sponsor and the Committee. The
principal concern is that the Bill would require the agency to prepare
an environmental review document under NEPA after the land exchange is
completed. Also of concern is the fact the Bill would immediately
authorize mining exploration activities under an area that is
considered sacred to a number of federally recognized Indian tribes
(the Western Apache, including the San Carlos Tribe and of the Fort
McDowell Yavapai Nation, and certain other tribes in Arizona and New
Mexico) without a review or study or consultation with Tribes.
NEPA is a forward looking statute setting out procedural
obligations to be carried out before a Federal action is taken. It
requires that, before taking a discretionary decision, the Federal
agency consider the environmental impacts of a proposed major Federal
action and alternatives of such action. It is this Administration's
policy that NEPA be fully complied with to address all Federal agency
actions and decisions, including those necessary to implement
congressional direction.
The purpose of the requirement in the bill that the agency prepare
a limited NEPA review after the exchange, when the land is in private
ownership, is unclear because the bill provides the agency limited
discretion to exercise. An environmental review document after the
exchange would preclude the U.S. Forest Service from developing a
reasonable range of alternatives to the proposal and providing the
public and local and tribal governments with opportunities to comment
on the proposal. In addition, the U.S. Forest Service does not have an
understanding of the impacts the proposed mine will have on local or
regional water supplies, water quality, or possible dewatering of the
area. No studies or assessments of the water supplies have been
conducted. That is information which could and should be obtained by
the Forest Service with NEPA analysis before the exchange. A NEPA
analysis after the exchange would not allow the Forest Service to
recommend alternatives since the exchanged parcel would already be in
private ownership.
The Bill should be amended to require the preparation of an
environmental analysis before the land exchange is completed. The
purpose of preparing an environmental analysis before consummating the
land exchange would be to analyze the effects of the transfer of the
Federal land to Resolution Copper, any activities that are reasonably
foreseeable to occur on the transferred land (including mineral
development), and the acquisition of the non-Federal land resulting
from the exchange. The agency would use the environmental analysis to
make a decision on whether and how to proceed with the exchange and
what mitigation conditions would be required to mitigate the identified
impacts.
The legislation states that it is Congressional intent that the
exchange be completed within 1 year. Based on our experience with
complex land exchanges, this is clearly an insufficient amount of time
to complete the exchange. Given the requirement of mineral reports,
appraisals, title documents, environmental analysis and government to
government consultation with local Indian Tribes, a 2 to 3-year
timeframe is much more realistic.
The agency also understands that a number of federally recognized
Indian tribes and regional and national tribal organizations are
concerned that the H.R. 687 circumvents various laws, policies, and
Executive order that directs the Federal land managing agencies to
engage in formal consultation with the interested Indian tribes. Indian
tribes have also raised important concerns that the Bill is contrary to
various policies and Executive Orders that Federal land managing
agencies protect and preserve sites that are sacred to Native
Americans. The Forest Service understands that the land is considered
sacred by the tribe and holds significant traditional and historic
value. Because of these expressed concerns and because this specific
site has been the focus of historic Government protection it is
important that this Bill provide for the process of formal tribal
consultation to ensure both tribal participation in cultural impact
analysis and protection of this site.
We hold in public trust a great diversity landscapes and sites held
sacred by Indian tribes. Last year, the Department and the Forest
Service issued the ``Indian Sacred Sites Policy Review and
Recommendations''. The Report acknowledges that consultation ``with
Tribal governments is legally mandated and integral to the agency's
trust responsibility to tribes. Among the laws that specifically
require consultation are the Archeological Resources Protection Act
(ARPA), Native American Graves Protection and Repatriation Act
(NAGPRA), and the National Historic Preservation Act (NHPA).'' On
December 5, 2012, the Departments of Defense, Interior, Agriculture,
and Energy, and the Advisory Council on Historic Preservation entered
into a Memorandum of Understanding (MOU) Regarding Interagency
Coordination and Collaboration for the Protection of Indian Sacred
Sites to improve the protection of and tribal access to Indian sacred
sites through enhanced and improved interdepartmental coordination and
collaboration. The MOU is based on the requirements of Executive Order
13007, Indian Sacred Sites, and provisions of the National Historic
Preservation Act.
The Bill would require the Secretary to prepare a management plan
for Apache Leap. Further, the Federal lands to be exchanged (Oak Flat)
hold significant cultural values to Indian Tribes. Although the Bill
would require government-to-government consultation, any consultation
would not be considered meaningful under Executive Order 13175,
``Consultation and Coordination with Indian Tribal Governments'',
because the bill as introduced, limits the Secretary's discretion
regarding the land exchange. The focus of the consultations would
likely be the management of those areas over which the agency would
have discretion, namely, the Federal land adjacent to the mine and
Apache Leap.
For example, the Secretary would not have discretion over the
conveyance or on-site management of the Oak Flat site, which under the
legislation would be conveyed to Resolution Copper. The San Carlos
Apache Tribe considers the Oak Flat area to be a sacred site. They have
expressed concerns that block cave mining would cause subsidence that
would impact the fundamental religious nature of the site. They have
also expressed concerns regarding potential impacts on water quality.
They have detailed in correspondence to Secretary Vilsack, the
importance of traditional acorn gathering and religious ceremonies
which still occur on this site. The Department has a responsibility to
consider the Tribes' concerns and these can only be adequately
addressed if a pre-exchange environmental analysis is the first step.
There is no doubt that the lands that would be acquired and managed
by the U.S. Forest Service under H.R. 687 have important resource
values that should be protected. It is also clear that the economic
benefits from the production of copper could be significant in creating
family wage jobs in tough economic times. However, it is important to
more fully understand the scope of the project before proceeding and
address potentially significant environmental concerns and sites of
high importance to local Tribes. In addition to the concerns expressed
in testimony, the Department would like to work with the Committee on a
number of significant technical concerns.
This concludes my statement and I would be happy to answer any
questions you may have.
______
Mr. Lamborn. OK, thank you for your testimony and all three
of you for being here. We will now have questions from the
Committee. And I will start, and I will ask the first one to
Ms. Connell.
Can you tell me how many acres are currently being
explored, developed, or mined on BLM lands under a notice of
intent or plan of operation?
Ms. Connell. We have plans of operations on more than
260,000 acres of public lands in the United States.
Mr. Lamborn. OK. Thank you. That is exactly what I have. In
fact, I have, when you combine those two categories together,
approximately 260,000 acres. So our numbers correlate exactly.
Now, out of the 247 million acres of land that BLM manages,
260,000 is about \1/10\ of 1 percent, when you do the math. So,
\1/10\ of 1 percent of the lands you actually manage are
authorized for disturbance and it is not all disturbed today,
it is just theoretically could go up to that amount for mineral
exploration, development, or mining. I don't see a problem,
when the mission of BLM is to allow for multiple uses of public
lands, recreation, hunting, fishing, hiking, et cetera, et
cetera, why \1/10\ of 1 percent for mining is overdoing it in
any way, and is a cause for huge concern. Could you respond to
that?
Ms. Connell. Certainly the Department of the Interior, the
Bureau of Land Management has a multiple-use mission that
includes mining. And we very much support mining development on
public lands in the United States, subject to the public
involvement requirements, the environmental protection
requirements. It is definitely a part of our mission, and we
look forward to working with the Committee on any issues
related to that.
Mr. Lamborn. So, what objection is there, for instance, in
working more with other agencies, State and Federal agencies,
as some of these bills call for?
Ms. Connell. We work very----
Mr. Lamborn. And is your microphone on?
Ms. Connell. It is. You want me to--I will try and speak
up.
Mr. Lamborn. Sure, thank you.
Ms. Connell. We do not have a concern with working closely
with other agencies. In fact, I have been a field manager in
the BLM for more than 20 years before I became a State
director. And some of our most successful efforts have occurred
in working at the local level with local managers from other
agencies. And I have seen that at the regional level, as well.
And so, the concerns that we have are not with the
requirements for our organizations to work closely together.
Mr. Lamborn. OK, thank you. I have a question now for Ms.
Wagner. And Mr. Meinert, if you want to chime in at any point,
feel free to do so.
Do you believe that understanding the mineral resource
needs of the Nation and knowing where they are located should
have an equal priority to things that are already in the budget
for BLM for things like figuring out what surface changes might
occur if climate gets warmer or colder?
Ms. Wagner. I will defer to the Department of the Interior
for that.
Mr. Lamborn. Excuse me?
Ms. Wagner. I would like to defer to the--excuse me. I
would like to defer to the Department of the Interior for that
question.
Mr. Lamborn. Oh, I am sorry. I should have redirected that.
Thank you for the clarification. Yes.
Ms. Connell. The question is regarding whether or not we
should place priority on identifying where our particular
minerals are. And certainly the Department of the Interior is
interested very much in understanding the resources that we
hold in trust for the American public. And I think that any way
that we can gain better information to make better decisions is
a good thing.
I would ask if my colleague from the USGS has comments on
the ability to collect that information and the cost that might
be associated.
Mr. Meinert. The gist of your question is really a policy
question about relative priorities, which, for the United
States Geological Survey, I can't really get into, because we
are a science agency.
But for the part of the question concerning the knowledge
about mineral resources, that is a central part of our mission.
It goes all the way back to the founding Organic Act that says
that it is part of our job description to understand about the
mineral resources of the United States. And we have a very high
level of scientific expertise to bring to bear on those
subjects, and that is something that we do on a continuing
basis.
Mr. Lamborn. Well, thank you. I like that answer, because
this does get back to the original mission. And unfortunately,
my figures show that zero dollars are being spent now in
locating rare earth and critical mineral and strategic mineral
resources, and what the obstacles are to using those, that is
getting zero dollars. And yet there is $25 million going to
climate change centers.
So, even though you say there is the mission to know where
our resources are located, as two of these bills call for, you
are allocating zero dollars to do that. Yet there is $25
million going for climate change centers. So I think that that
first category, knowing where our resources are, is just as
important. So I think----
Mr. Meinert. I couldn't agree more.
Mr. Lamborn [continuing]. We shouldn't have--excuse me?
Mr. Meinert. About the importance of mineral resources. And
we have many ongoing programs looking exactly at that question.
So I don't think it would be true to say that there are zero
resources being allocated to this. We, in fact, have many
ongoing programs looking at mineral resources.
Mr. Lamborn. Well, I am glad to hear that. But I am
perplexed by the opposition to the legislation.
OK. I am at this point going to recognize Representative
Holt for questions.
Dr. Holt. Thank you, Mr. Chairman. I thank the witnesses.
It is good to see you here. I appreciate your good work.
Ms. Connell, you indicated that public involvement in the
review of mining proposals would be constrained under H.R. 761.
You also testified that ``public lands not only produce
commodities, but also offer hunting, angling, and other
recreational opportunities.''
I am trying to understand. Do you think that H.R. 761 would
adversely affect other uses of public lands, such as hunting,
fishing, recreational shooting, and so forth?
Ms. Connell. Based on our review of the language of this
bill, our concerns lie more with the language in the bill. Our
concerns lie with our ability to conduct a timely version of
the environmental review and public involvement. And so, we
certainly support the development of rare earth elements and
any critical minerals that exist on the public lands in the
United States----
Dr. Holt. Yes, we are talking--I am sorry, we are talking
about H.R. 761.
Ms. Connell. H.R. 761, which is the Critical Minerals
Production Act.
Dr. Holt. Yes.
Ms. Connell. Right.
Dr. Holt. OK, OK, I am sorry.
Ms. Connell. So that is what I was answering.
Dr. Holt. I beg your pardon. OK.
Ms. Connell. OK.
Dr. Holt. Please go ahead, then. Thank you.
Ms. Connell. But that is a concern that we have with this
bill, is the way that the language isn't clear to us that it
provides as much of an opportunity for public involvement as we
would have liked to have seen.
Dr. Holt. OK. Now, further on H.R. 761, do you agree that
this bill has little to do with critical and strategic
minerals, and would cover lots of other things? Perhaps even
coal mining?
Ms. Connell. The language, when we reviewed it, it was
unclear as to the definition of what ``strategic'' or
``critical minerals'' might be, and it could actually
incorporate a large number of the mineral activities.
Dr. Holt. OK.
Ms. Connell. And it was uncertain to us as to whether that
was the intent of the bill or not.
Dr. Holt. And probably would include gold and silver, as
written?
Ms. Connell. All of the basic----
Dr. Holt. OK.
Ms. Connell [continuing]. Basic minerals that were mined
under the 1872 Mining Law, as amended.
Dr. Holt. Let me turn to H.R. 957, Ms. Connell. The 2011
report by the Department said that royalty reduction for soda
ash mining meant a loss of some hundreds of millions of dollars
of revenue to the Government, which is five times the amount
anticipated by Congress. The industry, those who use the soda
ash, disputes these findings and the conclusion of the report.
So, I wanted to ask if you have met with the industry on
this, if the Bureau or the Department has met with the
industry, and if you can help me understand what the
disagreement is, and how that would be resolved.
Ms. Connell. Well, certainly----
Dr. Holt. Do you still stand by the report, for example?
Ms. Connell. The report that you are speaking of is the
2011 Report to Congress----
Dr. Holt. Yes.
Ms. Connell [continuing]. That BLM was required to submit.
Correct?
Dr. Holt. Yes.
Ms. Connell. And that is accurate, that the numbers that
were concluded in that report by the Department of the Interior
and its partners were basically the data, when we compared that
data with the information that came out from the industry's
report, the data was very, very similar. It was the conclusions
or the interpretations of that data where we found differences.
And, I apologize, I am not familiar with any meetings that
have occurred between the BLM and industry, but we could
certainly get that information to you on the record, if you
would like us to do that.
Dr. Holt. I would appreciate it if you would provide that
to us.
And, well, in the three-quarters of a minute remaining, let
me ask what might be a quick question, Ms. Wagner, on H.R. 687.
What can you say in general terms about the impact on water for
local communities in the area from these activities that would
take place there?
Ms. Wagner. For the mining operation, the question is still
a bit outstanding. The company has not submitted a mine plan of
operations, and with this proposed bill would not be required
to do so until 3 years after the land exchange was codified.
The lands would be in private ownership at that point in time,
and be governed by the State of Arizona's provisions for
private land----
Dr. Holt. So we would not know in advance of voting on this
bill, and maybe we should, do you think?
Ms. Wagner. The absence of a provision for NEPA to explore
the issues surrounding the land exchange, some of which might
be impacts to the highest and best use of that land, in this
case, perhaps mineral development, would not be known prior to
the land exchange.
Dr. Holt. Thank you.
Mr. Lamborn. OK, thank you. Representative Gosar?
Dr. Gosar. Thank you. Thank you, Ms. Wagner, and thank you
for being so quick with your comments. That is a long day. I
have a quick question for you, not just on the Administration,
but a question came up in testimony last year that I want you
to clarify.
When the United States Forest Service does an appraisal,
they use what they call the DOJ Yellow Book, or the DOJ's
guidelines for appraisals, is that not correct?
Ms. Wagner. We use the uniform appraisals standard
guidebook.
Dr. Gosar. So more specifically, the appraisal must comply
with Section 254.9 of Title 36, Code of Federal Regulations and
Nationally Recognized Appraisal Standards, which include the
uniform appraisal standards for the Federal land acquisitions
and the uniform standards of professional appraisal practice.
Right?
Ms. Wagner. Correct.
Dr. Gosar. OK. Now, the Department of Justice guidelines
for appraisals has been very carefully drafted, revised, and
updated over many decades. It requires the appraiser to look at
the actual facts that apply to a particular property, including
associated mineral values.
Last year, some in the minority tried to make the case that
my legislation requires some unusual appraisal process. I would
like to point out that Section 4 of H.R. 687 specifically
requires the same appraisal standards that the agencies are
required to use to determine fair market value. There is
nothing unusual about it; it is a standard procedure.
When Resolution files its Mine Plan of Operation, then it
will go through the NEPA process, and the public will have
ample opportunity to provide comments, as guaranteed under the
law. Is that not true?
Ms. Wagner. The Mine Plan of Operations, as I understand
the bill, Mr. Gosar, would be looking at the ancillary
activities to the plan of operations outside of the private
land. So, if the mine needed utility corridors, power
corridors, roads, tailing, waste dump, ancillary facilities,
that would be what the question on the Federal lands would be
about.
Dr. Gosar. I think that what you have is a full NEPA
disclosure. There would be no shortcuts for the NEPA process in
regards to the way this language is written.
Ms. Wagner. On the private land, would they not be governed
by the laws of Arizona for private land mineral development?
Dr. Gosar. I mean, in fact, in some cases, Arizona is more
stringent than the U.S. Code. Is it not?
Ms. Wagner. So, to your point, what would govern the
private land, should the land exchange go forward, would be the
laws governing private lands in the State of Arizona.
Dr. Gosar. And the full NEPA process is not subjugated or
shortchanged.
Ms. Wagner. If that is what is required in the State of
Arizona.
Dr. Gosar. That is exactly what is required here. So I
wanted to make sure, because we had a witness prior that could
not answer that question appropriately.
Ms. Connell, in your testimony you mention my bill doesn't
touch on the disclosure of mineral reports. In Section 4(d)1 on
page 6, language was inserted to ensure that the appraisal must
comply with the requirements of Section 254.9 of Title 36, Code
of Federal Regulations. Section 254.9 of Title 36, Code of
Federal Regulations states, ``Appraisals prepared for exchange
purposes must contain the following minimum information: 11,
copies of relevant written reports, studies, or summaries,
conclusions prepared by others in association with the
appraisal assignment, which were relied upon by the appraisal
to estimate value, which may include, but is not limited to,
current title reports, mineral reports, or timber crews, as
prepared for qualified specialists.''
Can you clarify why you don't believe we don't touch on
mineral reports? Because our intention is full disclosure, and
I believe the code we cite in the bill requires our full
disclosure.
Ms. Wagner. I am not an expert appraiser, obviously, but my
understanding of the concern was that some of the information
that might be needed to develop an appraisal would be not
accessible to the Federal Government unless it were made
available by a private entity.
Dr. Gosar. And what part would that be?
Ms. Wagner. The mineral quantities from the samples----
Dr. Gosar. Now let me ask you a question. Isn't that part
of the State jurisdiction and oversight? You don't trust the
State?
Ms. Wagner. I can't answer that question for you.
Dr. Gosar. I mean we have kind of a funny thing about facts
here, is that the State is very, very articulate about this.
And once again, some of the State laws are much more onerous
than the Federal laws.
What about Section 6 that specifies the Resolution Copper
must report annually to the Federal Government and the State of
Arizona if the total mine production ever exceeds appraisal
production, estimates Resolution Copper must make an annual
royalty-like adjustment payment to the United States on all
excess productions? Would that also require mineral reports?
Correct?
Ms. Wagner. That is correct.
Dr. Gosar. Yes. That is what I thought. So I have further
questions, but we will start that under somebody else. Thank
you.
Mr. Lamborn. OK, thank you. We will now hear questions from
Representative Grijalva.
Is your microphone on?
Mr. Grijalva. Sorry. The public interest requires a
complete and full informed appraisal, equalization of values be
performed prior to a congressional passage of this bill, not
after. Do you see that as a public interest requirement or a
requirement in the appraisal process as you see it, that the
appraisal process be done prior to, rather than after the
passage of the bill?
Ms. Wagner. Is that question to me, Mr. Grijalva?
Mr. Grijalva. Yes.
Ms. Wagner. The public interest determination that is
usually done when a land exchange is considered is actually
pre-NEPA. It actually looks at the qualities of the non-Federal
parcels, the issues of the Federal parcels. It is not
predicated on a appraisal of the lands, a complete appraisal of
the lands. An estimate of values is done to determine a public
interest.
Mr. Grijalva. And that is for both witnesses. Throughout
his Administration, President Obama has been committed to
enhancing the partnership with Native Nations and the Federal
Government, very vocal about his support for a real
consultation process, and a government-to-government
relationship that has formality and process.
If this bill were to become law, will the Federal
Government be able to meet its commitment, whether it is a
memorandum of understanding your agency might have, or the
initiative of the President, would you be able to meet that
commitment to a meaningful consultation with Native Nations
affected by this legislation?
Ms. Wagner. The Department of Agriculture doesn't believe
that meaningful consultation can occur without the NEPA process
preceding the land exchange decision.
Mr. Grijalva. Resolution Copper's mining operation is going
to require 20,000 acre-feet per year. That is their number.
Apparently, the company says that it has been banking water,
and has indicated it will use excess CAP water to support its
mine operations.
Just so that I am clear, has Resolution Copper provided any
analysis about any potential impact or any mitigation plan in
place to protect the resource? The resource being ground water
in the area, the resource being acid mine drainage into the
ground water. And an analysis, is this 20,000 feet per year
enough to support the mining activities for the life of the
mine? Have any of those been provided to you, the agency, or
any that you know of?
Ms. Wagner. The NEPA that has been conducted with the
Forest Service and Resolution Copper has been on pre-
feasibility exploration by the company on parcels adjacent----
Mr. Grijalva. NEPA question. And correct me. I just want to
be clear, we keep going over this. NEPA is triggered if a
Federal action is likely to have significant impact on human
development. While numerical values of proposed action are
relevant, the number of acres or megawatts, or whatever, there
is no numerical cap or limit on NEPA application. The point is
to determine environmental impacts and things like the number
of acres involved cannot always answer the question.
This bill, I think, plainly waives NEPA with regard to the
land exchange. The decision to trade Federal land, forest land,
particularly land that was set aside during the Eisenhower
Administration, and withdraw it from mining--to a mining
company, a foreign-owned mining company, is likely to impact
the human environment. NEPA would be required prior to the
exchange, if this bill did not specifically waive that
application. Right or wrong?
Ms. Wagner. That is correct.
Mr. Grijalva. And just, I think, for the record, because we
were talking about \1/10\ of 1 percent, Mr. Chairman, I am
happy to announce that the Federal judge in Arizona threw out
the case, the withdrawal of the 1 million acres around the
Grand Canyon. And we can rest assured for a little while that
beautiful icon will continue to be a beautiful icon. I yield
back.
Mr. Lamborn. We will now hear from Representative Cramer.
Mr. Cramer. Thank you, Mr. Chairman and Ranking Member, and
thank you to the witnesses. My, of course, interest is on my
bill, H.R. 767, and all my questions will be for answering by
Ms. Connell.
And, first of all, let me say, publicly thank you for your
service and for being here. Having been an energy and
environmental regulator for nearly 10 years in North Dakota, I
always found the relationship between the State and your agency
to be very professional and productive, and I appreciate that,
which is why I think this makes so much sense, what we are
talking about today.
You know, H.R. 676 simply just adds the word ``Dakota,''
basically, to the Montana-Dakota State office, since that is
our State office, and it wasn't originally part of the original
bill in 2005, the Act in 2005. But this Pilot Project probably,
in 2005, wasn't even envisioned to be as active as it is today.
And so we want to include North Dakota as part of the
streamlining Pilot Project.
Could you in the first few seconds or minute, describe what
that Pilot Project is, exactly? What specifically helps
streamline the permitting process? And is there any
environmental compromising as a result of it?
Ms. Connell. The Energy Policy Act of 2005 identified 7
offices managed by the Bureau of Land Management that would
receive funding which is acquired from rentals for public land
leases across the Nation. And, as a result of that additional
source of income, we were able to establish some teams that
would be set aside in each of those various offices to focus on
developing the oil and gas resources in that area. At the time,
the price of natural gas was very high, and so many of those
offices are areas where we have natural gas activity.
North Dakota has boomed, the Bakken play there is a world-
class, amazing oil resource for this country. And the Dickenson
field office for the BLM has very much been trying to keep up
with the activity. Should the Dickenson office be made a part
of this pilot effort, we would be able to take advantage of
utilizing extra resources from across the county in our ability
to bring the oil reserves from the Bakken from the Federal
lands and from Indian Trust estate to the surface and make it
part of the oil resources available to the American public.
Mr. Cramer. Exactly how does that happen? In other words,
how is the streamlining--how does that happen? What do you do
to streamline, if you----
Ms. Connell. Well, we streamline in some ways by bringing
everyone close together: representatives who work for the
Bureau of Indian Affairs, for the BLM, for the Fish and
Wildlife Service. We are located very close together, and we
have streamlined some of the processes at the local level,
depending on what the issues are. We have actually been able to
streamline some of the work that is done out in the field.
The number of environmental inspections has more than
doubled, as well as the drilling and production inspections.
And we also in the pilot office have been able to process more
drilling permits with an equal amount of environmental
oversight that we were before the implementation of the law.
Mr. Cramer. Thank you. Now I want to get to your testimony
where you have some suggestions for us. And I have been sort of
thinking about it all morning. Realizing that this pilot
project is due to expire at the end of 2015, so we are about
7.5 years into it, as I understand, and your suggestion is that
perhaps we could, by giving BLM more flexibility, utilize the
resources in places other than those original 7-plus North
Dakota offices.
Do you have any concern that would dilute the intent of the
pilot, or would we be better off, and I am really asking, I
really don't know, or would we be better off sticking sort of
to this mission, seeing how it goes, realizing you now have a
world-class play right in the middle, surrounded by public and
State activity, that we could do a real experiment, if you
will, and gather real information, and then perhaps look at
doing something larger down the road? And I am just honestly
asking.
Ms. Connell. I think that broadening the effort across the
Nation would help in a few other places that are having similar
struggles to the Bakken area. I think you would still continue
to see the focus of the pilot efforts in the highest density of
drilling areas, North Dakota would and Eastern Montana would
likely remain in the eye of that development activity for the
foreseeable future.
Mr. Cramer. All right. Thanks for the clarity. And again,
thanks for the great job you do in protecting our resources.
And I just look forward to continuing that same level of
protection, while also providing opportunity for economic
growth.
Thank you, Mr. Chairman.
Mr. Lamborn. You are welcome. We will now hear questions
from Representative DeFazio.
Mr. DeFazio. Thank you, Mr. Chairman. Mr. Chairman, I do
have questions about H.R. 687 that I hope to get to. But I do,
given the opportunity of having Deputy Chief Wagner here, there
is something of immediate concern, which is I disagree strongly
with the Office of Management and Budget that the safe and
secure county rural schools funds are subject to sequestration,
particularly since these were funds for Fiscal Year 2012, when
sequestration did not exist.
We seem somehow to have lost that battle. We have been
sequestered on the BLM funds. And now we are being told you are
going to sequester the funds from the Forest Service. So my
question is, since the money has been dispersed to the States
and spent or programmed for education and public works roads
purposes, where are you going to get that money? How are we
going to do it? The only thing I can see that you might be able
to do is to cut out Title 2 funds. And Title 2, of course,
actually benefits the Forest Service, in terms of projects on
Forest Lands, and employs people.
So, is that where we are headed? We are about to do this
sequestration to the detriment of activities on the Forest
Service lands and loss of jobs? Is that where we are headed?
Ms. Wagner. We had the secure rural schools funding
distributed as quickly as we could because it works for
schools, for roads----
Mr. DeFazio. Right, right.
Ms. Wagner [continuing]. For emergency protection and
services. And last, Title 2 funds are investments in
conservation projects.
It is unfortunate, but we find ourselves in a situation of
having to have notified the States of the impacts of sequester,
and that we are going to have to ask for a return of 5.5
percent of those funds back to Treasury. We have done that, and
the only option as we see right now, because, as you said,
those funds have been programmed to important investments at
the county level, would be to consider using the Title 2 as
offsets to return the 5.5 percent to treasury.
Mr. DeFazio. But what happens, not everybody gets a Title
2.
Ms. Wagner. Exactly.
Mr. DeFazio. So you are going to take sort of doubly out of
the States where they get Title 2 money, will be penalized
more?
Ms. Wagner. It is unfortunate we have to ask for that money
back, but that is where we find ourselves.
Mr. DeFazio. This is extraordinary, and I just find this
very, very hard to believe.
Back to a more general question about H.R. 687, for many
years I have been involved in the fight over mining reform, and
I did the royalty amendment back in 1994, when we passed a bill
on mining reform. This seems to me a very unusual process by
which we would, the taxpayers would, realize value from this
unbelievably valuable asset. And I don't understand why we
wouldn't just want to assess a straight-up royalty, which would
be predictable both to the producer, and it would be
predictable to or more predictable, to the government and
benefit the taxpayers.
Have you reviewed this proposal on how we would get future
revenues from the production of this asset, either--yes, OK.
Ms. Wagner. Yes, Mr. DeFazio. The company would be, should
the estimate of mineral value or quantity differ from what was
assumed in the appraisal process, if the company actually
produced more than what was estimated, there is a provision in
this bill for an income capitalization approach to the
taxpayers receiving some----
Mr. DeFazio. Is this something routinely used, income
capitalization for this sort of an asset?
Ms. Wagner. I am not aware of other----
Mr. DeFazio. So this would be a first impression. They get
to deduct----
Ms. Wagner. I am not aware of other----
Mr. DeFazio [continuing]. All of their estimated
construction, operating, maintenance costs on an annual basis,
from their production, and then that would come up with this
theoretical appraised or annual value.
Ms. Wagner. The appraisal actually would be done by
somebody who has expertise in appraising properties that have
mineral value. And they would use a cost sale comparison
methodology. They might use the income capitalization approach.
It is a multi-faceted approach to get----
Mr. DeFazio. Right. But why would we create a new and novel
process for such an incredibly valuable asset? Why wouldn't we
just say we want a royalty?
Ms. Wagner. My understanding is that it is the vehicle to
protect the interests of the public if the appraisal estimate
of material removed from the mine didn't match up with the
actual production of the mine.
Mr. DeFazio. Yes, but if we are doing a royalty on growth,
that is very predictable, and there is no way to harm the
public there.
Ms. Wagner. We would be happy to work with the Committee on
language that would work to achieve the public interest that I
think that provision was intended to achieve.
Mr. DeFazio. I am not following that at all. Thank you, Mr.
Chairman.
Mr. Lamborn. OK, thank you. Representative Lummis.
Mrs. Lummis. Thank you, Mr. Chairman. I am going to
concentrate my time on the soda ash bill. I appreciate Ms.
Connell's remarks about how the data was very similar between
the BLM and the industry, and the fact that it is how you
interpret it that makes the difference.
And there is a reason that the interpretations that were
drawn by the employer and employee groups that support this
bill convinced both the gentleman from New Jersey and the
gentleman from Oregon here present to support this bill in the
last Congress. And the reason is that both the employer and
employee organizations, industry and labor unions, are
supporting this bill because they recognize what China is
doing.
Soda ash is a natural product. And it is produced in the
United States and shipped overseas, a large part of it. It is
used to make glass and soda, baking soda, and laundry
detergent, and things like that. It is a hard rock. China
produces synthetic soda ash in great quantities, and subsidizes
it to the tune of $30 million annually. So, if we increase the
royalty, which we have now allowed to occur on naturally
occurring soda ash in the United States, we are charging $25
million more annually for soda ash, while the Chinese are
subsidizing theirs to the tune of $30 million. And that just
creates a lopsided competitive disadvantage for U.S. soda ash
that costs jobs and costs production, costs our competitive
edge around the globe. So, that is why this bill enjoys the
support of both labor unions and industry.
Congress set a 2 percent royalty rate back in 2006. And
during those following 5 years of the 2-percent royalty rate,
U.S. soda ash manufacturers increased employment, increased
production and exports, and increased the royalties paid to the
Federal and State coffers, as compared to the previous 5 years.
Now, that royalty rate of 2 percent was allowed to expire. It
has gone up to 6 percent. And that is why labor unions and
industry have joined forces on this bill to allow for more
royalty dollars to be paid to the U.S. Government and the
taxpayers of this country, by allowing our product to remain
competitive globally against this Chinese synthetic product
that is subsidized.
So, Mr. Chairman, I want to point that out and maybe
conclude with this question for Ms. Connell. Isn't it true that
during the years 2006 to 2011 the United States suffered a
recession and unemployment levels were at double digits? But at
the same time, when we had a lower royalty rate on soda ash,
its employment base increased, the production increased,
exports increased, and we actually collected more than the
previous 5 years under a 6 percent royalty?
Ms. Connell. During the year that you are asking about
would have been during the 5 years while the royalty rate was
lower. Correct?
Mrs. Lummis. While the royalty rate was at 2 percent we
enjoyed an increase in production and an increase in employment
in the soda ash industry because our product was more
competitive overseas, as compared to the Chinese synthetic
product.
Ms. Connell. Certainly the soda ash industry in the United
States has remained very competitive, worldwide. And from the
information that I have been provided, it has remained
competitive through 2012, despite the fact that we have had
economic difficulties, as well as the increase in the royalty
rate.
Mrs. Lummis. Well, it is not easy, once employment and
contracts have been established globally under a 2-percent
royalty rate, to immediately change those contracts. And isn't
that the case? I mean some contracts to provide soda ash would
run beyond the expiration of the 2-percent royalty rate, simply
because the contract term runs beyond the expiration of the 2-
percent royalty rate. Isn't that possible?
Ms. Connell. That could definitely be true.
Mrs. Lummis. Thank you, Mr. Chairman. My time is up and I
yield back.
Mr. Lamborn. Thank you. I want to thank the panel for being
here today. Let me ask a couple of clarifications.
Mr. Meinert, you referred earlier to the fact that USGS was
working on some projects to both search for and list critical
and strategic minerals today. Could you supply me with that
list?
Mr. Meinert. To clarify, I stated that we have many
projects researching mineral resources, including strategic
minerals. And we would be happy, for the record, to provide you
with further information about those projects.
Mr. Lamborn. Please do so. Thank you for that offer. And to
clarify something you said, Ms. Wagner, during your testimony,
is it your position that NEPA should be complied with before
land exchanges and conveyances take place?
Ms. Wagner. That is the position of the Administration,
yes.
Mr. Lamborn. OK. I thought you would be interested to know
that we passed a bill yesterday in this Committee, Full
Committee, and it also passed the last Congress by unanimous
consent. It is a bill by Representative Grijalva, H.R. 507, to
convey land into a trust involving a golf course without NEPA
being complied with.
Ms. Wagner. It is certainly true that Congress has the
authority to waive provisions of NEPA.
Mr. Lamborn. OK. Thank you for that clarification, and
thank you for being here. Members of the Committee may have
questions for you to follow up, and we would ask that you
respond to those questions, if they are submitted to you in
writing. Thank you.
We will now go to our fourth and final panel. And I would
like to invite forward the witnesses for this panel: Mr.
Stephen Miller, Chairman of the Board of Supervisors of Pinal
County District 3; Mr. Hal Quinn, President and CEO of the
National Mining Association; Mr. Dan McGroarty, Principal and
Director of American Resources Policy Network; Mr. Mike Hohn,
General Manager of the Soda Ash Business of OCI Chemical
Corporation; Mr. Terry Rambler, Chairman of San Carlos Apache
Tribe; Mr. Pierre Neatby, Vice President of Sales and Marketing
for Avalon Rare Metals; and Ms. Soyla Peralta, Council Member
of the Superior Town Council.
Like all of our witnesses, your written testimony will
appear in full in the hearing record, so I would ask that you
keep your oral statements to 5 minutes. You have to turn on the
microphone to be heard. The countdown begins at 5 minutes with
a green light, turns to yellow after 4 minutes, and then turns
red after 5 minutes.
Thank you all for being here. We look forward to your
testimony, and we will start with Mr. Miller. Thank you for
being here.
STATEMENT OF STEPHEN Q. MILLER, CHAIRMAN OF THE BOARD OF
SUPERVISORS, PINAL COUNTY DISTRICT 3
Mr. Miller. Mr. Chairman and members of the Subcommittee,
my name is Steve Miller, I serve as Chairman of the Pinal
County Board of Supervisors. I appreciate the opportunity to
testify before you----
Mr. Lamborn. Are you speaking into the microphone?
Mr. Miller. I believe I am. Is that better?
Mr. Lamborn. OK. Make it a little closer. Yes, thank you.
Mr. Miller. OK. I appreciate the opportunity to testify
before you today and would like to personally thank Congressman
Paul Gosar and Congresswoman Ann Kirkpatrick for working
together in a bipartisan manner to advance legislation which is
important to the people of Arizona.
I must acknowledge my colleagues in the Pinal County Board
of Supervisors, and especially Supervisor Pete Rios, who hoped
to testify here today, but was not able to make it. I know that
my complete testimony will appear in the record, so let me be
brief and summarize my remarks. Then I will be pleased to
answer any questions.
First, support for this bill is bipartisan and very strong.
Support for this bill from a bipartisan Board of Supervisors is
unanimous, and the vast majority of residents of Pinal County
and all Arizona supports this land exchange and this mine.
Nowhere is the support stronger than the citizens of
Superior. Fourth generation resident Mila Besich Lira spoke at
the Board of Supervisors meeting and said, ``Resolution Copper
has been very generous and transparent with the people of
Superior and the entire mining triangle.'' She credited
Resolution for the exponential rise in the elementary school
math scores and the success of the local schools in the
competition with the schools throughout the Southwest.
Second, the bill and the proposed mine will be a net
positive environment. The mine's operation being proposed by
the Resolution Copper looks very different than the standard
open pit mine. Based upon the county's long-standing working
relationship with Resolution Copper, we believe this project is
going to be one of the most environmentally-sensitive mines in
the Nation, even the world. They have taken it upon themselves
to reclaim an old mine in Superior decades before they were
required to do so at the cost of $50 million.
One parcel in Pinal County that the Federal Government will
receive is the 7B Ranch, 3,050 acres of ranch land, covers 7
miles of both sides of the San Pedro River. Resolution Copper
has already put it under the management of Nature Conservancy.
And in addition, stepped up to the plate, and at their own
expense, have addressed the huge problem of illegal dumping on
an otherwise pristine piece of property. Actions speak louder
than words.
Third, this mine is just the kind of economic stimulus our
county, our State and our Nation needs. The citizens of Pinal
County need more high-quality paying jobs. Our unemployment
rate is about 8 percent. The unemployment rate on the Indian
Reservation is more than triple that number. The Resolution
Copper project will put over 1,400 people in excellent jobs,
direct jobs, as a result of passage of this legislation. It
will create thousands more indirect jobs, combine these jobs,
have the potential of creating more than $60 billion of
economic benefit over the life of the mine.
This project also benefits the public sector beyond the
lands the U.S. Government will receive. The mine will yield
more than $16 billion in new revenues to the Federal
Government. Last I checked, you could use a few billion here.
Back in Arizona, in the State, county, and local
governments, they will receive another $2 billion in revenue.
Every day that passes without this legislation, we lose out on
all these economic benefits. As an elected official, my
responsibility is to improve the quality of life for the
constituents. I came here today to urge you to join me and the
citizens of Pinal County to support the land exchange. I ask
that you pass H.R. 687 immediately. The residents of Pinal
County and the State of Arizona are looking to you for action.
Mr. Chairman, thank you for the honor of appearing here
today, and I look forward to answering any questions.
[The prepared statement of Mr. Miller follows:]
Prepared Statement of Chairman Stephen Q. Miller, Pinal County
Board of Supervisors, District 3, on H.R. 687
Mr. Chairman and Members of the Subcommittee:
My name is Steve Miller. I serve as the Chairman of the Pinal
County Board of Supervisors. I appreciate the opportunity to testify
before you today, and would like to personally thank Congressman Paul
Gosar for inviting me to testify. I would also like to thank
Congresswoman Ann Kirkpatrick for her leadership on the issue before us
today.
I was born in Arizona and have lived in Pinal County for almost 42
years. During that time, I've been through a lot of ups and downs in
our community. As a husband, father, and grandfather, economic and
community issues drove me to get involved in public and community
service. Sure, I had my livelihood as a builder and truss manufacturer
to consider, but I have always known people are what matter and few
issues today are as important to the people of this County as this
legislation and the jobs that will be created by the development of the
Resolution Copper Mine.
I am fortunate to serve with some great leaders and I must
acknowledge my colleagues on the Pinal County Board of Supervisors,
especially Supervisor Pete Rios. Pete also hoped to testify here today,
but could not be here. He has been an ardent supporter of the
Resolution Copper Mining project from the days when he served in the
Arizona State Senate to now.
The Pinal County Board of Supervisors, made up of Republicans and
Democrats, just unanimously passed a resolution supporting H.R. 687.
The vast majority of residents of Pinal County support this land
exchange and this mine. Nowhere is support stronger than with the
citizens of Superior, Arizona where polling shows support of the mine
exceeds 80 percent. Strong words of support were spoken at our Board
meeting by Superiorites like fourth generation resident Mila Besich
Lira who stated that Resolution Copper has been very generous and
transparent with people in Superior and the entire mining triangle. She
credited Resolution's support of local schools for the exponential rise
in elementary school math scores and the success local Superior schools
have had in competitions with schools throughout the Southwest.
Let me tell you a little about Pinal County. We are right in the
middle of the State between Arizona's two largest counties--Maricopa to
the north and Pima to the south. Like many of the counties in Arizona,
we have a large geographic footprint--just a little larger than
Connecticut. Our population has exploded from 60,000 in 1965 to more
than 375,000. We need high quality, good paying jobs for our citizens
today and into the future. Passage of this bill will help create those
jobs.
Pinal County is not only large, but also diverse. The western part
of the County, which I represent, is mostly low desert where irrigated
farming has dominated over the years. The eastern part of the County is
mountainous with elevations as high as 6,000 feet. It is home to what
we've called the ``copper triangle''--an area known for its long
history as a copper mining region.
While I may be new to the Board of Supervisors, I'm not new to
Pinal County and I'm very familiar with this legislation and the
proposed mine. Mr. Chairman and Members, you need to understand the
mining operation being proposed by Resolution Copper looks very
different than the standard open pit mine. Based upon the County's
long-standing working relationship with Resolution Copper, we believe
this project is going to be one of the most environmentally-sensitive
mines in the Nation . . . even the world. On behalf of our citizens,
the Board will hold Resolution to the highest standard of environmental
stewardship; and based on their actions so far, it is clear to me they
intend to hold themselves to the same standard.
Let me explain what I see as evidence of Resolution Copper's
commitment to the environment. First, the legislation being considered
today is the result of extensive consultation between Resolution
Copper, Federal agencies, and various non-governmental organizations
like The Nature Conservancy and the Audubon Society to find the best
lands to exchange for the Oak Flat Campground. The Federal Government
is the overwhelming beneficiary of this lands package. For example, one
parcel in Pinal County the Federal Government would receive through
passage of this bill is known as the 7B Ranch--3,050 acres of ranch
land that covers 7 miles on both sides of the San Pedro River.
Resolution Copper has already put it under the management of the Nature
Conservancy, and has additionally stepped up to the plate and, at its
own expense, addressed the huge problem of illegal dumping on this
otherwise pristine piece of property. Actions speak louder than words.
Resolution Copper set a high standard for others to follow.
Resolution Copper's actions also speak loudly in Superior, Arizona.
It took over the nearly century-old Magma Mine site in Superior, which
required an extensive environmental cleanup. Resolution Copper was not
obligated to complete cleanup for decades, but decided to begin the $50
million reclamation. Today, that cleanup is over 70 percent complete.
These actions will ensure a safer, cleaner and healthier environment
for the residents of Superior. Resolution Copper knows what it takes to
be a good corporate citizen and a good community partner. They are
helping improve Superior schools, send high school graduates to
college, make it possible for younger kids to play little league on a
field with grass, provide funding for community programs such as
Superior's signature event, Apache Leap Mining Festival, and provide
much needed support for the fire and police departments. They
understand that Superior is their home and the home to many of their
current and future employees.
Let me say something more about economic growth. The citizens of
Pinal County need more high-quality, good paying jobs. Our unemployment
rate is about 8 percent. The unemployment rate on our Indian
reservations is more than triple that number. The Resolution Copper
project will put over 1,400 people into excellent jobs--direct jobs as
a result of the passage of this legislation. It will create thousands
more indirect jobs. Combined, these jobs have the potential to create
more than $60 billion in economic benefit over the life of the mine.
This project also benefits the public sector beyond the lands the
U.S. Government will receive. The mine will yield more than $16 billion
in new revenue to the Federal Government. Last I checked, you could use
a few billion dollars. Back in Arizona, the State, county and local
governments stand to receive another $2 billion in revenues. It has
been said by many others, far better than I can say it, but this bill
is a true stimulus bill that doesn't cost taxpayers one dime. By the
way, dimes are currently made with 91 percent copper.
As an elected official, my responsibility is to improve the quality
of life for my constituents. I came here today to urge you to join me,
and the citizens of Pinal County, in support of this land exchange. I
ask you to pass H.R. 687 immediately. The residents of Pinal County and
the State of Arizona are looking to you for action.
Mr. Chairman, thank you for the honor of appearing before your
subcommittee. I look forward to answering any questions the
Subcommittee may have.
______
Question Submitted for the Record to Stephen Q. Miller
Question Submitted for the Record by The Honorable. Grace F. Napolitano
Question. Is it the normal process for the county to give the
mining business to companies outside the United States, in this case to
the UK and Australia? Why not seek U.S. owned companies to build U.S.
investments in our companies?
Answer. Pinal County is a firm believer in the free-enterprise
system, a system that today thrives within a global economy. As such,
the county does not dictate company ownership or where a mining company
may choose to stake claims and invest its capital to develop a mine.
The practice of isolationism in this country in the past was not found
to be practical or profitable for the nation.
Pinal County did not choose the mining company and direct them to
make an investment here. Resolution Copper, a subsidiary of Rio Tinto,
explored this site and has determined that the ore body in Superior,
Arizona is one of the 10 largest ore bodies in the world. The company
has made multimillion dollar investments in exploring high-tech ways to
extract the ore that sends the fewest number of miners underground. The
company will be able to mine this ore through the extensive use of
robotics and skilled workers.
The jobs created at the mine will be American jobs, pulling a
global commodity from American soil to make the sorts of products that
power this Nation--from motors to cell phones, to the piping that runs
through our homes.
Pinal County seeks to provide opportunity for any company that
wants to make investments in our county which will generate wealth and
provide economic growth and opportunity for our citizens. Pinal County
enjoys the presence of a number of foreign companies which have created
a tremendous number of jobs.
Some of those companies are:
Hexcel Composites Abbott Nutrition Phoenix Mart
ACO Polymers ASARCO Groupo Bright International
It strikes me that this project presents the single biggest
opportunity for Congress to show America that it is serious about
creating jobs, spurring a healthy economy, producing a commodity that
is in global demand and reducing our dependence on foreign sources of
raw materials.
______
Dr. Gosar [presiding]. Thank you, Mr. Miller.
Now I would like to have Mr. Quinn for 5 minutes.
STATEMENT OF HAL QUINN, PRESIDENT AND CEO, NATIONAL MINING
ASSOCIATION
Mr. Quinn. Thank you, Mr. Chairman, members of the
Committee. I appreciate the invitation to testify today on H.R.
761. And I also want to thank you all for your continued
efforts in trying to find and advance enabling public policies
that will positively affect our mineral supply chain here in
the United States.
Let me begin maybe with a little global context to frame
out not only H.R. 761, but also a number of the other pieces of
legislation on minerals that you are considering today. Today
about three-quarters of all the economic growth globally comes
from emerging economies. And some estimate at this rate, by
2050, 80 percent of the entire global GDP will be allocated to
what is today the emerging nations and economies.
Now, these trends are often compared to the Industrial
Revolution, but their pace and scope today are simply
unprecedented. Consider that in the space of 25 years the GDP
of China grew by a factor of 10, took the better part of 70
years for Britain's GDP to grow by a factor of 4 after 1830.
And while the Industrial Revolution was a story of about
perhaps 100 million people, the story unfolding before us today
that we are witnessing really involves billions of people and
for the foreseeable future.
And I say the foreseeable future, because the developing
nations have per capita consumption rates of energy and
commodities that are still just a fraction of the developed
world.
So resource competition will be fierce over the next 20
years. Demand for minerals will soar, and stable and reliable
supplies will become increasingly difficult to sustain. Here in
the United States, our share of global exploration investments
is less than half the levels attracted 20 years ago. At the
same time, our dependence upon foreign sources of key minerals
has doubled. Today domestic minerals supply less than half the
needs of all U.S. manufacturing.
Now, these trends are not due to the lack of mineral
resources. In fact, in the United States we are blessed with a
world-class mineral resource base. Unfortunately, we are cursed
with a third-world permitting system, one that is cumbersome,
duplicative, and unpredictable. Now, finding minerals in
developing mines requires substantial investments, hundreds of
millions and even billions of dollars. As a consequence,
regulatory certainty is a highly valued commodity. Lengthy
delays and permit reviews compromise the commercial viability
of projects by increasing costs, reducing the net present value
of those projects, and impairing financing arrangements.
So, the efficiency and predictability of the permitting
process matters in decisions where to invest. The choice can be
very stark. Invest in countries that provide a predictable
pathway for receiving permits within 2 to 3 years, or here in
the United States, where it may take three to five times
longer.
Now, let me be clear. Valid concerns about environmental
protection should be fully considered and addressed. At the
same time, they should not serve as an excuse to trap mining
projects in a limbo of duplicative, unpredictable, and endless
review without a decision point. We should not confuse the
length of the process with the rigor of the review. Countries
like Canada and Australia, which share our same core principles
of responsible resource development, have demonstrated that
permit views and decisions can be both thorough and timely.
They understand that we are in a global competition for mining
investment, and that an effective and efficient permitting
process provides a competitive advantage.
H.R. 761 provides a big step for the United States to catch
up in this race for investments in minerals. The bill reflects
best practices for coordination among State and Federal
agencies, clarifies responsibilities, minimizes duplication,
sets goals and timeframes, and, frankly, brings just more
accountability to the process.
H.R. 761 provides the opportunity to establish a permitting
system that prepares us for the challenges of the new global
reality, one that will allow our manufacturing, technology, and
other industries to compete with the world's fastest-growing
economies.
Thank you very much for the opportunity to testify today.
[The prepared statement of Mr. Quinn follows:]
Prepared Statement of Hal Quinn, President and CEO, National Mining
Association, on H.R. 761
Good morning. I am Hal Quinn, President and Chief Executive Officer
of the National Mining Association (NMA). NMA is the national trade
association representing the producers of most of the Nation's coal,
metals, industrial and agricultural minerals; manufacturers of mining
and mineral processing machinery, equipment and supplies; and
engineering and consulting firms, financial institutions and other
firms serving U.S. mining.
Today I am testifying in support of H.R. 761, the National
Strategic and Critical Minerals Production Act of 2013. I want to thank
Representative Amodei for reintroducing this very important
legislation. It enjoys bi-partisan support and addresses a key issue
for the country's future economic growth and manufacturing revival: the
painfully slow permitting process for the mines that supply metals and
minerals essential for our basic industries, our national defense and
the consumer products we use. I also want to thank the subcommittee,
especially Congressman Lamborn, for the leadership and persistence in
raising the visibility of a growing problem--the availability and
security of mineral supplies critical to innovation, manufacturing,
national security and our economic growth.
U.S. Mining's Contribution to Society
Mining's contributions to our economy and society are significant.
The value added by major industries that consume the $77 billion of
minerals produced in the United States was an estimated $2.4 trillion
in 2012, or 15 percent of our GDP. Mining's direct and indirect
economic contribution includes nearly 2 million jobs with wage and
benefits well above the State average for the industrial sector. In
addition, domestic mining generated $50 billion in tax payments to
Federal, State and local governments.
In addition to these economic contributions, U.S. metals mining's
commitment to employee safety and health has led to continuing
improvements in our performance and includes the introduction of our
CORESafety initiative last year, which relies on a systems approach to
eliminate fatalities and reduce the injury rate at U.S. mines by 50
percent within 5 years. We also developed last year a systems approach
to environmental management at hardrock mines with a special emphasis
on practices to assist smaller operations with improvements in
environmental outcomes.
U.S. Mining's Potential
Mining's potential is even greater than its current performance.
The United States has an immense and enviable mineral endowment waiting
to be tapped. For example, Resolution Copper's world class copper
deposit represents one of the largest undeveloped copper resources in
the world and is anticipated to have a 50 year mine life that will
support over 3,700 jobs annually.
Overall, when viewed through the lens of resource potential, the
United States is underperforming, a fact that will have increasing
consequences as global demand for minerals becomes more competitive due
to the demands of developing economies, where millions are being
propelled into a rising global middle class. Last week, the United
Nations Development Program released a report that examines the
profound shift in global dynamics driven by the fast-rising new powers
of the developing world.
The report, The Rise of the South: Human Progress in a Diverse
World, includes in its classification of ``the South'' nations in the
Southern Hemisphere as well as China and India. The report emphasizes
the shift is occurring not just in large middle-income developing
nations such as Brazil, Argentina, India and China, but also in more
than 40 other up-and-coming countries that in recent decades have made
astonishing gains in what's called human development. As one of the
report's authors noted, ``The Industrial Revolution was a story of
perhaps a hundred million people, but this is a story about billions of
people.''
Clearly demand for minerals will continue to grow, fueled by these
fast growing economies. Growing demand presents opportunities and
challenges for both U.S. mining and the Nation. These trends point to
enormous growth and job-creation opportunities if U.S. mining is
allowed to perform to its potential. If we do not and become
increasingly marginalized, the consequences are severe for our Nation's
global competitiveness, forcing us to become more reliant upon extended
and unstable supply chains for what we can produce here.
Permitting Poses a Major Obstacle
So while the United States has one of the world's greatest mineral
repositories, our ability to get these minerals into the supply chain
to help meet more of America's needs is threatened. A major obstacle to
the U.S.' reaching its potential is the length of time consumed in
obtaining permits to mine in the United States. Authorities ranging
from the National Academy of Sciences to the Departments of Energy and
Defense to international mining consulting firms have identified
permitting delays as among the most significant risks and impediments
to mining projects in the United States.\1\
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\1\ See National Resources Council, Hardrock Mining on Federal
Lands, National Academy Press (1999); U.S. Department of Energy,
Critical Materials Strategy (Dec. 2010); U.S. Geological Survey USGS,
the Principal Rare Earth Elements Deposits of the United States--A
Summary of Domestic Deposits and a Global Perspective, (2010); Behre
Dolbear, Where Not to Invest (2012).
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The United States has one of the longest permitting processes in
the world for mining projects. In fact, the length, complexity and
uncertainty of the permitting process are the primary reasons investors
give for not investing is U.S. minerals mining. In the United States,
necessary government authorizations now take approximately 7 to 10
years to secure, placing the United States at a competitive
disadvantage and forcing our economy to become increasingly reliant on
foreign producers for minerals we can produce domestically. Our
dependence on foreign minerals has doubled in the past 20 years.
Despite the Nation's rich mineral endowment, our flawed permitting
system significantly impedes the ability to attract investment to our
shores. In 1993, the United States attracted 20 percent of worldwide
exploration investment dollars. Today, our share has eroded to just 8
percent. The percentage of global exploration spending the United
States attracts is critically important since exploration spending is a
leading indicator of where future development capital will be deployed.
The Permitting Scheme Harms U.S. Manufacturing
More than the future of domestic mining is at risk from our
cumbersome and inefficient permitting scheme. Today, less than half of
the mineral needs of U.S. manufacturing are met from domestically mined
minerals, a trend that has been building for nearly 30 years and will
only worsen unless we reform the permitting process responsible for it.
Our broken permitting process also slows creation of high-wage jobs
supported by mineral mining.
As the recent Rand Corporation study, Critical Materials: Present
Danger to U.S. Manufacturing, warns:
While the United States has extensive mineral resources and is
a leading materials producer, a high percentage of many
materials critical to U.S. manufacturing are imported,
sometimes from a country that has the dominant share of a
material's global production and export. In this situation,
U.S. manufacturers are vulnerable to export restrictions that
limit their access to these materials and that can result in
two-tier pricing, under which domestic manufacturers in the
producing country have access to materials at lower prices than
those charged for exports, thereby hindering the international
competitiveness of U.S. manufacturers and creating pressure to
move manufacturing away from the United States and into the
producing country. (p. ix)
The Rand Study also notes a potential ripple effect on U.S.
innovation:
The U.S. science and technology base that support manufactured
products was built on and depends upon the presence of U.S.
manufacturers producing these products from raw and semi-
finished materials. Prolonged disruption in the supply of raw
and semi-finished materials required by these manufacturers
could put the science and technology base in jeopardy, which
would further reduce U.S. innovation capability and
competiveness in the development of new, higher-performance
products. (p.1)
To ease mineral supply constraints on U.S. manufacturers, the study
indicates the most effective action that can be taken would be to
encourage diversified production, i.e., the operation of mines in
several different countries. This diversification should include the
United States and would be accomplished by encouraging domestic
production of the resources needed for the manufacturing supply chain
through modernization of our permitting structure.
The Solution is a Modern Permitting Process
Similar to the bill passed overwhelmingly by the U.S. House of
Representatives in the 112th Congress, H.R. 761 carefully addresses the
deficiencies of our outdated and underperforming permitting system.
Without changing environmental and other protections afforded by
current laws and regulations, it provides for efficient, timely and
thorough permit reviews and incorporates best practices for
coordination between State and Federal agencies.
As an example, Canada is a global mining leader that continues to
take advantage of its efficient permitting system, large pool of junior
explorers and exploration-focused tax incentives to attract 16 percent
of all global exploration dollars in 2012. Canada maintains an
expedient, approximately 2-year, permitting timeline by implementing a
flexible system that seeks to minimize duplication, uncertainty and
delays. Canada recognizes mining is a key economic driver. A recent
Conference Board of Canada report, The Future of Mining in Canada's
North, anticipates the country's overall metal and non-metallic mineral
production will grow by 91 percent from 2011 to 2020. Canada recognizes
long-term global demand for commodities is increasing and is
positioning itself to take advantage of this opportunity and provide
minerals for both domestic and global use.
Further, many of the approaches contained in H.R. 761 are
comparable to those recently praised by the Government Accountability
Office as significantly improving the permitting process for wind and
solar renewable energy projects on Federal lands. The GAO report,
Renewable Energy: Agencies Have Taken Steps Aimed at Improving the
Permitting Process for Development on Federal Lands, found that wind
and solar permitting times at the Bureau of Land Management were
reduced from 4 years for applications filed in 2006 to 1.5 years for
applications filed in 2009. Ironically, the same agency that permits
these alternative energy projects cannot streamline the permitting
process for mining projects that supply minerals essential for building
renewable energy infrastructure and technology.
Conclusion
Using our country's minerals responsibly and efficiently must be a
bi-partisan priority for strengthening our manufacturing base and the
jobs it provides. NMA urges Congress to pass H.R. 761 to provide a more
predictable regulatory environment, one that will attract additional
investments and allow U.S. mining to build on our positive contribution
to the U.S. economy and host communities. The legislation will bring
the United States in line with our competitors for minerals exploration
and development investments--countries such as Australia and Canada
that have already modernized their permitting regime. The permitting
efficiencies set forth in H.R. 761 will allow the United States to
unlock its full potential. Thank you for the opportunity to testify
today.
______
Dr. Gosar. Thank you, Mr. Quinn. Mr. McGroarty--hopefully I
said that right.
Mr. McGroarty. You did, thank you. Am I being heard? All
right.
STATEMENT OF DAN MCGROARTY, PRINCIPAL AND DIRECTOR, AMERICAN
RESOURCES POLICY NETWORK
Mr. McGroarty. Thanks to the Committee for the opportunity
to testify today. I am Dan McGroarty, President of American
Resources Policy Network, a nonprofit think tank and experts
organization dedicated to informing the public and the ongoing
policy debate on the importance of developing U.S. minerals and
metals resources, and reducing America's dangerous dependency
on foreign sources of supply. I am also an officer and director
of U.S. Rare Earths, developing rare earths properties in three
States, with the aim of adding to domestic supply of these
metals that are so critical to our high-tech and green-tech
sectors, as well as our advanced military weapons systems.
The subject before the Subcommittee this morning is key to
so many of the pressing policy issues before the Congress
today, whether it is restoring America's manufacturing prowess
or supporting our high-tech sector and our green-tech
transition. And, of course, as the last portion of the title
today suggests, securing America.
As a significant first step toward aligning our public
policy with the goals of strengthening our resource sector, I
want to focus on one of the bills before this Committee and
this Congress, H.R. 1063, the National Strategic and Critical
Minerals Policy Act of 2013, introduced by Chairman Lamborn. As
the bill notes--and I quote--``The United States has vast
mineral resources, but is becoming increasingly dependent on
foreign sources.'' The bill buttresses this statement. With
data on the degree to which the United States is 100 percent
foreign-dependent on certain metals and minerals, 18 at
present, triple the number 25 years ago.
Last year, when my organization did a risk screen for
metals used in defense applications, we derived a risk pyramid
with 46 metals on it, China being the single largest provider.
But when we looked at known resources in the United States, we
found that the U.S. is home to 40 of the 46 metals and minerals
on our risk pyramid. In other words, if we are foreign-
dependent for a wide range of hard rock resources, it is a
dependency that is largely self-inflicted.
The Lamborn bill takes three steps that would help the
United States formulate a targeted policy to reduce and, in the
case of many metals, eventually eliminate our foreign
dependence.
First, via Section 4, the bill strengthens our assessment
capability. We can't begin to reduce our resource dependence if
we lack current and comprehensive data on the depth of that
dependence. Because in a world of resource nationalism, foreign
dependence for critical metals can be used as leverage,
commercial, but also strategic, that can induce economic shock
to the American system.
The second key section in the Lamborn legislation is
eliminating needless duplication in the mine permitting
process, a process that today, in the leading independent
study, earns the United States the worst in the world ranking,
tied for last with Papua New Guinea, with an average mine
permitting process in the United States taking 7 to 10 years.
And this metric is getting worse, not better.
Just 4 years ago in 2009, the same study found the U.S.
process took an average of 5 to 7 years. Little wonder why. One
day the DOD releases a study showing 23 metals and minerals in
potential shortfall, and the DOE declares a dozen minerals
critical to green-tech and clean energy transition, but at the
very same time the U.S. EPA moves to stop a proposed American
copper mine, a metal whose short supply DOD tells us has
already caused a significant weapons system delay, before the
permitting process has even begun.
With so many mixed signals coming from the Federal
Government, let's ask ourselves if you were an American
manufacturer, dependent on metals and minerals engineered into
your products, could you risk waiting for a reliable source of
American supply? Or would you build your new facility where the
metals are? In China perhaps, exporting jobs and intellectual
property, sacrificing GDP, and feeding a negative balance of
trade as we buy back products that could have been, that should
have been, made here in America? We need to recognize that Made
in America often begins with Mined in America. And the Lamborn
bill puts us back on that track.
The final feature in H.R. 1063 that I would like to focus
on today is the call for a national mineral assessment updated
at 2-year intervals. Critical metals are technology-dependent.
As technology evolves over time, so too will our tool kit of
critical metals. In Roman times sodium chloride, salt, was a
critical mineral essential to preserving food for armies on the
march. In our Moore's Law world, as technology cycles are
measured in months, not years, we must constantly update our
understanding of what metals and minerals deserve to be called
critical.
The Lamborn bill is a solid test of our seriousness on this
issue. If enacted, it would provide the fact base for a data-
driven assessment of the obstacles that stand between us and a
greater degree of resource independence. Thank you.
[The prepared statement of Mr. McGroarty follows:]
Prepared Statement of Daniel McGroarty, President, American Resources
Policy Network, on H.R. 1063
Chairman Lamborn, my thanks to you and your colleagues on the House
Subcommittee on Energy and Mineral Resources for the opportunity to
testify today. I am Daniel McGroarty, President of the American
Resource Policy Network, a non-profit think tank and experts
organization dedicated to informing the public--and the ongoing policy
debate--on the importance of developing U.S. mineral and metals
resources--and reducing America's dangerous dependency on foreign
sources of supply.
I am also an officer and director of U.S. Rare Earths, a publicly-
held company currently developing Rare Earths properties in three
States, with the aim of adding to the domestic supply of metals
critical to our high-tech and green-tech sectors, as well as the U.S.
military's advanced defense systems. The subject before this sub-
committee this morning--America's Mineral Resources: Creating Mining &
Manufacturing Jobs and Securing America--is critical to so many of the
pressing policy issues before the Congress today, whether it's the
restoration of American manufacturing prowess, or restoring our economy
to sustainable growth, or supporting our high-tech sector and our
green-tech transition--and of course, as the last portion of our title
today suggests: ``Securing America.''
As a significant first step toward aligning our public policy with
the goal of strengthening our resource sector, I want to focus on one
of the bills before this Committee and this Congress: H.R. 1063, the
``National Strategic and Critical Minerals Policy Act of 2013,''
introduced by Chairman Lamborn.
As the bill notes--and I quote--``the United States has vast
mineral resources but is becoming increasingly dependent on foreign
sources.'' The bill buttresses this statement with data on the degree
to which the United States is 100 percent foreign-dependent on certain
metals and minerals--18 at present--up from 6--25 years ago. Last year,
when my organization, American Resources, did a risk screen for metals
and minerals used in defense applications, we derived a ``risk
pyramid,'' with 46 metals on it--with China being the single largest
supplier. But as we looked further at known resources located in the
United States, we found that the United States is home to resources for
40 of the 46 metals and minerals on our risk pyramid.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
.epsIn other words, if we are foreign-dependent for a wide range of
hard rock resources, it is a dependency that is largely self-inflicted.
As I see it, the Lamborn bill takes three steps that would help the
United States formulate a targeted policy to reduce--and in the case of
many metals, eventually eliminate--our foreign dependence.
First--via Section 4--the bill strengthens our assessment
capability. We can't begin to systematically address our resource
dependence if we lack current, comprehensive data on the depth of that
dependence. And that assessment, in turn, requires solid data on the
extent to which potential resources might be found on Federal lands--
including lands withdrawn from mineral exploration and development--as
well as the uses to which various metals are put across our economy and
in our defense sector--and finally, a review of our current foreign
suppliers, with an assessment of the likelihood of shortfalls or supply
disruptions. Because in a world of resource nationalism, foreign
dependence for critical metals can be used as leverage--commercial, but
also military--that can induce economic shock to the American system.
And yet even before the U.S. Government begins collecting data, the
agencies involved must begin by sorting through a half-dozen
conflicting definitions of critical and strategic metals--one so tight
that it produced a single strategic metal to the exclusion of all
others--and some so vague that the entire Periodic Table might be
eligible for inclusion.
The second key section in the Lamborn legislation concerns
eliminating needless duplication in the mine permitting process--a
process that today, in the leading independent study, earns the United
States worst-in-the-world ranking, tied for last with Papua New Guinea,
with the average mine permitting process in the United States taking 7-
10 years. And this metric is getting worse, not better: Just 4 years
ago, in 2009, the same study found the U.S. process took an average of
5 to 7 years.
And little wonder why. One day, the DOD releases a study showing 23
metals and minerals in potential shortfall, while the DOE declares a
dozen minerals critical to the green-tech and clean-energy transition.
But at the very same time the U.S. EPA moves to stop a proposed
American copper mine--a metal whose short supply, DOD tells us, has
already caused ``a significant weapon system production delay''--before
the permitting process has even begun.
So with so many mixed signals coming from the Federal Government,
let's ask ourselves: If you were an American manufacturer, dependent on
metals and minerals engineered into your products, could you risk
waiting for a reliable source of American supply? Or would you build
your new facility where the metals are--in China, perhaps--exporting
jobs and Intellectual Property, sacrificing GDP and feeding a negative
balance of trade as we buy back products that could have been, should
have been, made here in America?
Mr. Chairman, we need to recognize that Made in America often
begins with Mined in America. The Lamborn bill puts us back on that
track.
The third feature in H.R. 1063 that I want to mention today is the
requirement for a National Mineral Assessment, updated at 2-year
intervals. Critical metals are technology-dependent; and as technology
evolves over time, so too will our tool-kit of critical metals. In
Roman times, sodium chloride--salt--was a critical mineral, essential
to preserving food for armies on the move. In Adam Smith's time, he
classed gunpowder and sailcloth as critical materials, and the father
of free-market theory warned Britain against being dependent on foreign
sources of supply. In our Moore's Law world, as technology cycles are
measured in months, not years, we will need to constantly update our
understanding of what metals and minerals deserve to be called
critical.
The Lamborn bill is a solid test of our seriousness on this issue.
If enacted, it would provide the fact-base for a data-driven assessment
of our domestic resource potential, our vulnerability to foreign
supply, and the obstacles that stand between us and a greater degree of
resource independence.
I commend the Chairman for his leadership on the critical issue of
critical metals, and for the Committee's focus today on the various
bills that are the focus of this hearing. America has the good fortune
to be a resource-rich nation. Sound policy can help ensure that our
resources will be used to support our economic strength and our
national security--and reduce the dangers of resource dependence in our
uncertain world.
Thank you.
______
Mr. Lamborn [presiding]. Well, thank you for your
excellent, excellent testimony.
[Laughter.]
Mr. Lamborn. I would like to now hear from Mr. Hohn,
please.
STATEMENT OF MIKE HOHN, GENERAL MANAGER, SODA ASH BUSINESS OCI
CHEMICAL CORPORATION
Mr. Hohn. Chairman Lamborn and members of the Committee, my
name is Mike Hohn, and I am the General Manager of Soda Ash
Business for OCI Chemical Corporation. I am here today on
behalf of the U.S. Soda Ash industry, and I thank you for the
opportunity to testify on this vital legislation for our
industry.
The U.S. soda ash industry contributes some $1 billion net
positive to the U.S. balance of trade annually, and is the
single largest inorganic chemical export from the United
States. Soda ash is produced by one of two methods: the natural
method used in the United States; and through synthetic
processes elsewhere in the world, and primarily in China.
The cleaner, natural method only accounts for 25 percent of
the global soda ash production. The American Soda Ash
Competitiveness Act will lead to the growth of jobs at U.S.
soda ash facilities, the growth of jobs in the transportation
sector that supports the U.S. industry, and the growth of jobs
at the ports that support growing exports, including the ports
in Portland, Oregon; Long Beach, California; and Port Arthur,
Texas.
During the recent economic downturn, when a similar royalty
reduction was in place, the U.S. soda ash facilities
experienced the addition of about 100 jobs in the United
States. Now, while that may not seems significant, it certainly
beats the 1,000-plus jobs that the industry lost in the period
from 1996 to 2006, when the royalty rate was 6 percent, which
is the current Federal royalty rate.
It should be noted that these are high-paying jobs in a
very rural community, with an average wage roughly six times
higher than the U.S. minimum wage. We have already witnessed
significant market downturn over the last year that is similar
to what the industry was facing in the late 1990s, and we do
not want to risk a full-blown return to those conditions.
OCI is one of 4 companies that produce about 90 percent of
the world's natural soda ash in Sweetwater County, Wyoming. The
remainder is produced in Trona, California. U.S. soda ash
producers, on average, emit about three times less greenhouse
gas emissions and three times less energy consumed than the
synthetic soda ash plants in the rest of the world. Export
growth is essential to job growth in the U.S. soda ash
industry. One of every two jobs in the U.S. soda ash is
directly attributable to exports.
Therefore, policies which help to grow exports will mean a
growth in U.S. jobs. We believe the Soda Ash Competitiveness
Act will accelerate this job growth. Exports increased by some
11.7 percent in the period during which the 2 percent royalty
was in effect, 2006 to 2011. U.S. soda ash exports also rose by
more than 1 million tons in the same period. Thus, the 2
percent rate resulted in the sort of jobs and export growth
consistent with the President's national export initiative.
Now, during that period, the U.S. soda ash industry
increased investment in the local community and U.S. soda ash
facilities through increased capital investments, which led to
increased economic activity in the communities in which we
operate.
In our current environment, we believe that U.S. soda ash
jobs are at risk to Chinese expansion, export, and pricing
practices. Chinese soda ash production is now the largest in
the world, and they are currently engaged in a price war for
valuable export business in Asia, Africa, and South America. In
the decade of the 1990s, China went from importing over 1
million tons of soda ash per year to becoming a 1 million-ton
net exporter. By 2000, China had become the world's largest
producer of soda ash, though not the most efficient.
Maintaining our competitiveness is important, as we compete
with state-owned Chinese producers.
Mr. Chairman, we hear a lot of discussion about how
Congress can help U.S. manufacturing to restore jobs and
economic growth, i.e. to recapture our economic swagger. As an
industry, we were encouraged by the President's State of the
Union Address when he referenced climate change and the need to
do something. He also indicated he wants to increase job growth
through exports. The U.S. soda ash industry provides a unique
opportunity to accomplish both of these goals. Our industry has
proven that it will increase jobs by increasing exports.
And by increasing the U.S. industry's market share, we will
also be reducing greenhouse gases. Because the U.S. soda ash
industry uses a natural method of producing soda ash, the U.S.
industry uses roughly, again, three times less energy and emits
three times less greenhouse gases than our Chinese competitors
relying the synthetic method for production.
Make no mistake. Throughout history, soda ash is required
to produce glass, for autos, homes, and bottles, containers, as
well as detergents and chemicals that are demanded by an
emerging middle class. The demand for soda ash will be met in
some way. This Committee has the opportunity to reduce global
greenhouse gases and increase jobs by investing in the U.S.
soda ash industry.
We would suggest the bill before you has already proved
successful in doing so for one important sector of our economy.
We believe the 2 percent rate should be reinstated.
Thank you for your consideration of our views. I would be
pleased to take any questions from the Committee.
[The prepared statement of Mr. Hohn follows:]
Prepared Statement of Mike Hohn, General Manager, Soda Ash Business OCI
Chemical Corporation, on H.R. 957
Chairman Lamborn and Ranking Member Holt, I would like to thank you
for the opportunity to testify on H.R. 957, the ``American Soda Ash
Competitiveness Act.'' I am the General Manager, Soda Ash Business for
OCI Chemical Corporation, and I am here today on behalf of the U.S.
Soda Ash industry. I am pleased to report that the soda ash mined and
processed on Federal lands contributes nearly $1 billion annually to
our balance of trade, $20 million in Federal royalties, and some 3,000
direct jobs.
Up until October of 2011 when the BLM raised our royalty from 2
percent to 6 percent, our industry was experiencing job growth, and
there were plans for expansion, despite the economy still suffering
from the worst recession in decades. Enactment of H.R. 957 is important
to insuring that we remain a strong American employer and exporter in
the years ahead. It means the industry will continue to pay our fair
share for the privilege of mining on Federal lands, while creating the
conditions for positive economic growth that are in all of our best
interests.
From the recent experience of the 2006 Soda Ash Royalty Reduction
Act, we know that a 2 percent, as opposed to 6 percent Federal royalty
rate, can have positive impacts:
First, it will lead to robust export growth consistent
with the President's National Export Initiative (NEI).
Second, it will lead to expanded domestic manufacturing
capacity and jobs growth; and
Third, it will result in an increase, rather than a
decrease, in Federal royalty revenues by spurring development of the
resource.
Mr. Chairman, the 2006 act was enacted by Congress out of a
recognition that global economic conditions, specifically the emergence
of stiff Chinese competition, was eroding America's natural soda ash
advantage. We need to continue the positive trajectory that Act created
for this important domestic manufacturing sector by enacting H.R. 957.
Indeed, our continued competitiveness in world markets is far from
certain, in fact over the last year since the royalty increase has been
in effect, the industry has seen a steady decline in our total exports.
This reality was well recognized by Congress in 2006, when it enacted
the Soda Ash Royalty Relief Act, which reestablished a 2 percent
royalty on every ton of soda ash produced. In October 2011, the BLM saw
fit to raise the rate to 6 percent. We believe this rate increase is
not only counterproductive to increasing Federal revenues from soda ash
production, but threatens our industry's exports and jobs growth.
Let me briefly revisit the global conditions that caused Congress
to set the rate at 2 percent in 2006. In the 15 years between 1982 and
1997, our domestic soda ash industry enjoyed a steady and significant
growth in exports. But after 1997, our export growth slowed
dramatically. By 2003, our U.S. exports were only 4 percent above their
1997 levels. This rapid decline in export growth resulted from a sudden
and dramatic change in global competition. In the brief span of the
decade of the 1990s, China went from importing over 1 million tons of
soda ash per year to becoming a 2 million ton net exporter. By 2000,
China had become the world's largest producer of soda ash, though
hardly the most efficient. A growing number of state owned Chinese
producers making soda ash from a more energy intensive and more
greenhouse gas generating synthetic process flooded international
markets with lower priced material aided by an export VAT rebate
incentive. Not only were these exports responsible for a greater carbon
footprint, they were also hurting our cleaner, more efficient American
natural soda ash producers in growing markets, particularly those in
Asia and South America.
Faced with this state owned competition, we identified innovative
ways to reduce spiraling structural costs, and the increasing prices we
paid for energy and transportation. However, as our export growth
slowed in the early part of the last decade we also had to reduce
employment. To remain globally competitive, we regrettably shed almost
1,000 jobs as an industry. Mr. Chairman, this was not a preferred
option. It was in this context that we decided to ask the Congress to
consider that the royalty we pay on each ton of soda ash be assessed at
2 percent as called for originally in the underlying Minerals Leasing
Act.
Mr. Chairman, in 2006, just as today, our low cost natural soda ash
production process when allowed to compete fairly on a level playing
field can beat any other producer in the world. In sum, then as now, if
conditions are equal, we know we can compete with any other global
producer. We can mine the vast underground trona ore reserves in
Wyoming or in lakebeds in California, and bring this raw material to be
processed into soda ash. We can then ship it by rail to Long Beach,
California, Portland Oregon, or Port Arthur, Texas, and deliver it to
any Asian or South American port and effectively compete for our fair
share of global business against the Chinese.
Mr. Chairman, as a result of the action Congress took in 2006, our
industry came out of its downward spiral and experienced sustained
growth driven by our ability to again grow exports. Despite a global
recession and a continuing slow recovery, the American Natural Soda Ash
industry did not lose jobs during the recent recession, and in fact
added almost 100 new jobs in 2010. To put this in perspective, one out
of every two jobs in our U.S. soda ash industry is now the direct
result of exports. U.S. soda ash exports had risen by more than 1
million tons since enactment of the soda ash royalty legislation. As
Mr. Robert Abbey, former Director Bureau of Land Management, stated in
his Senate testimony on August 3, 2011, exports increased by some 11.7
percent in the 5-year period during which the 2006 Act was in place. It
thus puzzled us as to why the BLM saw fit to immediately reinstate the
6 percent rate when the 2006 Act expired in October.
Very simply, the 2006 Act allowed us to grow exports in large part
because we could reinvest in our business at higher rates. During the 5
years this Act was in effect, we reinvested in our businesses at rates
well above those before its passage. In 2005, the year before the
royalty was enacted; the U.S. soda ash industry spent some $88 million
in capital improvements. In 2006, the year after passage, and with the
predictability of a stable 2 percent royalty, the U.S. soda ash
industry nearly doubled its rate of investment in our future, spending
over $158 million dollars to expand capacity and make needed
improvements.
However, Mr. Chairman since the BLM reinstated the 6 percent
royalty, the industry is headed towards a bleaker future similar to the
circumstances in place in the early 2000s. Across the industry, jobs
are going unfilled, planned expansions are being put on hold, and our
exports have fallen off significantly. While the BLM had indicated that
they would entertain individual lease-by-lease application for waivers
of their 6 percent royalty, nothing in their 100-page guidance document
addresses export growth. When we attempted as an industry last year to
submit a streamlined application for relief that was based upon
maximization of production on Federal lands, we were denied. We would
be pleased to make our application available to the Committee for its
review.
Thus, Mr. Chairman, we again turn to Congress to restore the 2
percent royalty rate by enacting H.R. 957. In sum, soda ash production
represents hardcore U.S. manufacturing at its best. We hear every day
how American manufacturing jobs are disappearing and we have a
shrinking middle class. The production of soda ash from U.S. natural
resources in Wyoming and California is done by skilled workers with an
average salary of about $85,000 per year in very small, rural
communities. Growing U.S. soda ash exports will increase the number of
those jobs. Moreover, it will help grow revenues at Treasury. When the
Congressional Budget Office (CBO) produced cost estimates for
legislation implementing the 2006 royalty reduction, it concluded that
the Government would lose $15 million in direct spending and $15
million in payments to States in which the royalties were generated. In
actuality, over the 5-year period, royalties tallied over $85 million
because of the increased production the royalty reduction helped to
generate.
Mr. Chairman, we hear a lot of discussion about how Congress can
help U.S. manufacturing to restore jobs and economic growth; i.e., to
recapture our economic swagger. As an industry, we were encouraged by
the President's State of the Union address when he referenced climate
change and the need to do something. He also indicated he wants to
increase job growth through exports. The U.S. Soda Ash industry
provides a unique opportunity to accomplish both of these goals. Our
industry has proven that it will increase jobs by increasing exports,
and by increasing the U.S. industry's market share we will also be
reducing greenhouse gases. Because the U.S. soda ash industry uses a
natural method of producing soda ash, the U.S. industry uses roughly
three times less energy and emits three times less greenhouse gases
than our Chinese competitors relying on the synthetic method for
production. Make no mistake, throughout history; soda ash has been
produced to supply the glass (glass for autos, homes and bottles) as
well as detergents and chemicals that are required by emerging markets
to grow. The demand for soda ash will be met in some way. This
Committee has the opportunity to reduce global greenhouse gases and
increase jobs by supporting the U.S. Soda Ash industry. We would
suggest the bill before you has already proved successful in doing so
for one important sector of our economy. We believe the 2 percent rate
should be reinstated. Thank you for your consideration of our views. I
would be pleased to take any questions from the Committee.
______
Dr. Gosar [presiding]. Thank you very, very much.
Now, Mr. Neatby.
STATEMENT OF PIERRE NEATBY, VICE PRESIDENT, SALES AND
MARKETING, AVALON RARE METALS
Mr. Neatby. Thank you very much, Mr. Chairman. My name is
Pierre Neatby, and I am Vice President of Sales and Marketing
for Avalon Rare Metals, Inc. I will briefly describe Avalon and
then provide some comments in support of bill H.R. 981.
Avalon Rare Metals is a Canadian-headquartered mineral
development company publicly traded in New York and Toronto.
Our flagship project is the Nechalacho Rare Earth Deposit at
Thor Lake, Northwest Territories, Canada, that contains 25
percent heavy rare earths, which are the truly rare rare
earths, and our project plan is to mine and do initial
processing in the Northwest Territories and further refine the
rare earths in Geismar, Louisiana, in the United States.
H.R. 981 proposes to fund a study of current and future
rare earth deposits and an analysis of the rare earth supply
chain. I believe the focus of the bill should be on the
analysis of the supply chain. There are hundreds of deposits
that have been identified around the world. But the biggest
issue facing our industry is the processing of rare earths and
the production of downstream products that can be used as
inputs into final products.
Why are rare earths important? They are important for jobs
and economic growth. They play a vital role in a multitude of
applications, many in the clean energy sector. These includes
motors for electric and hybrid vehicles, generators for wind
turbines, solar panel systems, and phosphors for energy-
efficient lighting. We believe the next few years will be
critical for the development of the clean energy sector.
I have highlighted clean energy applications of rare earth,
but other very significant end-use applications include smart
phones, oil refining catalysts, MRI machines, and various
military uses that are also growing.
Rare earth demand is expected to grow at a rate of 7 to 12
percent per year to the year 2020. This demand needs a secure
supply chain outside China, if the demand is going to grow
outside China, and specifically to determine if the new jobs
stemming from this growth are going to be here in the United
States and other western countries, or in China.
So, China produces over 95 percent of the world's rare
earth elements, and China has recently been implementing a
range of policies to control its domestic rare earth industry:
consolidation of ownership, restriction of foreign ownership,
export taxes, export quotas, environmental regulations,
limiting illegal mining, and price controls. The outcome of
these policies has been the ability to restrict exports and
increase prices outside China. China limited exports in 2010,
and this caused prices to increase dramatically in 2011. China
is in a better position today to restrict exports and
manipulate prices outside China than it was in 2010.
The supply chain includes mining, processing, separation,
metal and alloy production, and manufacturing of products sold
to end users. We would like to add recycling and the human
resource aspect to the supply chain. Recycling makes the supply
chain more efficient and less costly to the end user. This is
important for competitiveness. Human resources are the people
that bring know-how to the supply chain: geologists, engineers,
technicians, operators, and researchers.
Growth can't take place if there is no expertise in the
processing and use of rare earths. This is where universities,
colleges, and government can take a key role in our industry,
possibly in conjunction with an industry association, such as
the new Rare Earth Technology Alliance, right here in
Washington. China has hundreds and hundreds of scientists
dedicated to rare earths, and have rare earth courses in
universities. If North America is going to develop its rare
earth infrastructure, it needs educated people specializing in
rare earths.
In conclusion, many growth industries depend on rare
earths, and China will continue to be the dominant supplier,
not only in mining, but also in processing and manufacturing of
final products. China wants the downstream for manufacturing,
because that is where the jobs are. We need action now to stem
the flow of jobs going to China. Thank you very much.
[The prepared statement of Mr. Neatby follows:]
Prepared Statement of Pierre Neatby, Vice President for Sales and
Marketing, Avalon Rare Metals Inc., on H.R. 1063, H.R. 761, and H.R.
981
Avalon Rare Metals Inc. is Canadian headquartered mineral
development company, publicly traded in Toronto and New York, with a
primary focus on the rare metals and minerals in North America.
Americans comprise a high proportion of our current shareholders.
Our flagship project, the 100-percent-owned Nechalacho Rare Earth
Element Deposit, Thor Lake, Northwest Territories, Canada is one of the
largest undeveloped rare earth elements resources in the world. Its
exceptional enrichment in the more valuable Heavy Rare Earth Elements
(HREEs) is key to enabling advances in clean energy technologies,
national defense and other growing high-tech applications. Nechalacho
is one of the few potential sources of these critical elements outside
of China, currently the source of over 95 percent of the world supply.
Avalon is well funded to complete its Feasibility Study (expected
in Q2 2013) and has no debt. Our project includes a mine and processing
facility in the Northwest Territories of Canada and plans for a
refinery in Geismar, Louisiana. This project will cost over $1.2
billion to build. It is one of very few projects outside China to be at
the final Feasibility stage, the last stage before full project
financing is secured and construction begins.
Avalon also explores for and owns other rare metals and minerals
project in Canada and the United States, of which two are at advanced
stages of development: Separation Rapids (lithium) in Ontario, and East
Kemptville, Nova Scotia, a tin-indium-gallium-germanium project where
large inferred resources have been identified requiring further
drilling to bring the project to the pre-feasibility stage.
Avalon is proud to be a charter member of the Rare Earths
Technology Alliance (RETA), a Washington, DC-based international
industry association (non-lobbyist) whose membership includes producers
and users of rare earths and also includes academic institutions
engaged in rare earths research and development. RETA's primary goal is
to promote the development of the rare earth industry through
education, market development and dealing with common issues facing the
industry. It is in that spirit of education and insight into this
emerging industry, in recognition of the U.S.-Canada trade
relationship, and in support of clean technologies and their
contribution to future growth economies that we appear before the
committee today to support the RARE Act of 2013.
Rare Earths--Jobs and Economic Growth
According to the Industrial Minerals Corporation of Australia
(IMCOA), an Australian-based authority on the rare earth market, rare
earth demand is expected to grow at a rate of 7-12 percent per year to
2020. Rare earths are used in a multitude of applications, many in the
clean energy sector. These include electric and hybrid vehicles, wind
turbines, solar panels, and energy-efficient lighting. The next few
years will be crucial to the clean energy sector as it develops. Rare
earth magnets and phosphors are key building blocks for companies
developing these technologies and they need access to a competitive and
secure rare earth supply chain to prosper.
Other end use applications include smart phones, oil refining
catalysts, MRI machines, other medical diagnostics and treatments, and
various military applications. Demand outside China is expected to grow
from 35,000 tonnes in 2012 to 55,000 tonnes in 2016. This increase in
demand assumes that export quotas from China will remain around 30,000
tonnes and that no new export restrictions on rare earths are imposed
so that rare earth consuming industries outside China will be allowed
to grow.
China's Dominance--Threat to Jobs in the U.S. and North America.
Today, China produces over 95 percent of the world's rare earth
elements, even as new sources are being developed in other countries,
including the United States, Canada, and Australia. However, China has
been implementing a range of policies to control its domestic rare
earth industry: reducing the number of companies involved in the
extraction and processing of rare earths, imposing limits on foreign
ownership in the rare earth sector, imposing export taxes, export
quotas, curbing illegal mining, implementing and enforcing strict
environmental regulations, and attempting to set prices. The outcome of
these policies is reduced availability of rare earths outside China,
higher prices and potentially greater price volatility outside China
and the threat of further export restrictions, which ultimately create
the potential for severe supply shortages. While we currently see
relatively low rare earth prices, our interest is that when they spike
again, the United States and North America should not be impacted as
much as we have been. Industry experts believe export restrictions,
specifically on the scarce heavy rare earths, are likely in the coming
years. Western companies are essentially being forced to set up
manufacturing inside China, which puts at risk their intellectual
property and eliminates jobs in countries like the United States. This
is troublesome not only for Avalon, but other companies along the
supply chain and should remain a major security concern for western
governments.
The Importance of the Secure Supply Chain
Avalon is pleased to see the introduction of the RARE Act of 2013
with its focus on conducting global census of the identity and
availability of rare earths elements and an analysis of the supply
chain. We believe that the results of this proposed undertaking will
better inform industry participants and end-users on how all parties
can work collaboratively to offset actions by a single monopolistic
supplier (i.e., China) that can disrupt pricing, availability, and
security of supply. Given the wide variety of applications of rare
earths in many critical sectors such as clean energy, defense and
national security, we believe this type of assessment and analysis is
more important than ever before.
I believe that the U.S. Geological Service (USGS) and U.S.-based
experts like Technology Metal Research (TMR), have endeavored to
identify the hundreds of potential rare earth deposits outside China.
(For example TMR currently tracks the development of over 440 projects
in 37 countries and closely follows some 46 projects it defines as
`advanced' in 14 countries). These projects will generally only produce
mixed concentrates or possibly separated rare earth oxides, with very
few projects pursuing the further value-added processing of such into
phosphors, metals, alloys, magnets or motors which are essentially the
products that consumers need. China's strategy has been to fulfill the
needs of the full downstream processing supply chain and end products,
generating more profits and, more importantly, creating more high
skilled labor and greater job opportunities in China.
One suggested addition to H.R. 981 is to include recycling and
human resources to the discussion about fulfilling the rare earth
supply chain. Recycling is the key to an efficient use of resources in
the rare earth supply chain to achieve low cost manufacturing. A
diverse range of people (e.g. geologists; metallurgical, chemical,
process engineers and technicians; business people, operators,
researchers) are required to establish, maintain and improve a supply
chain outside China.
It is not enough to establish mines and processing plants outside
China. End consumers want reliable, long term, price competitive supply
chains. Currently, some companies are specifying inferior solutions for
certain applications due to fears of high prices or fear of lack of
availability of neodymium and dysprosium (e.g. substituting ferrite and
other magnets where rare earth magnets increase performance). This
strategy is highly detrimental to longer term business and domestic
economic development. Using less efficient inputs (such as ferrite
magnets rather than rare earth magnets) in certain applications could
lead to loss of competitiveness and replacement by most probably
foreign-based suppliers, that can build more efficient products using
superior raw materials.
The supply chain analysis that H.R. 981 would provide will help
government and industry determine where the most sensitive and cost
effective investment should take place and highlight the importance of
investment at all levels of the supply chain to be able to effectively
offer a secure alternative to China.
Corporate Social Responsibility
Social responsibility and environmental stewardship are corporate
cornerstones for Avalon. Avalon believes that environmental, economic
and social responsibility are integral to the upstream and downstream
activities used to create these critical materials; from exploration
and development to production. In 2010, Avalon was recognized by the
Prospectors and Developers Association of Canada with its award for
Environmental & Social Responsibility. Avalon is also one of only a
very few junior resource companies in the world to have published a
comprehensive Sustainability Report, prepared to the Global Reporting
Initiative standard, in which Avalon fully discloses its policies and
practices on social and environmental responsibility, including its
performance against specific targets.
Permitting
The permitting and environmental assessment process is different
across the world, and is dependent upon the national and local
jurisdictions in which the deposit and or operating facilities are to
be established. Avalon's Nechalacho deposit is located in the Northwest
Territories and is regulated under the Mackenzie Valley Resource
Management Act. Avalon is nearing completion of the Environmental
Assessment for the project, a critical step in the permitting process,
and has already established strong community relationships with local
Aboriginal groups where Avalon is considered an industry leader in best
practice. In Geismar, Louisiana Avalon has an option on a property
where permitting for a separation plant was initiated in December 2012
and is expected to be completed by the end of 2013.
______
Dr. Gosar. Thank you very much.
Our next witness is Chairman Terry Rambler.
STATEMENT OF TERRY RAMBLER, CHAIRMAN, SAN CARLOS APACHE TRIBE
Mr. Rambler. Can you hear me? OK. Good morning, Chairman
Lamborn, Ranking Member Holt, and members of the Subcommittee.
My name is Terry Rambler, I am the Chairman of the San Carlos
Apache Tribe, and President of the Inter-Tribal Council of
Arizona. On behalf of my Tribe and ITCA, thank you for this
opportunity to testify.
Joining me today are San Carlos Apache Councilman Windsor
Nosy, Sr., tribal leaders, local elected officials from
communities directly impacted by this bill, and representatives
from different organizations throughout the country. I would
like for all of them to stand. Thank you. This group is diverse
and growing. And it also includes Tribes and tribal
organizations nationwide. We bring our united front in strong
opposition to H.R. 687.
We strongly oppose this bill and the land transfer it
mandates for three reasons: one, it will destroy our sacred
areas; two, it will deplete and contaminate the region's
already overdrawn water supply; and three, it is a bad deal for
the American taxpayer. H.R. 687 would transfer 2,422 acres of
our sacred land, known as Oak Flat in the Tonto National
Forest, to Resolution Copper to develop a massive copper mine.
Oak Flat is one of our holy places, where spiritual deities
reside. Just as a church is a place of worship to Christians
and the Vatican is a holy place to Catholics, Oak Flat is the
equivalent for Apaches, Yavapais, and others. My people have
always gone to Oak Flat to pray, to gather ceremonial items, to
seek peace, and to conduct ceremonial dances of our ancestors,
such as the sunrise dance that celebrates a young woman coming
of age. You can see some of those.
I have a map here that shows the Oak Flat in relation to
our Reservation. As you can see, the forest borders our
Reservation, and Oak Flat is just 15 miles away. These lands
are our aboriginal homelands. I have a second map here that
shows Oak Flat and the forest outlined in red. The black
outline shows land withdrawn from mining by President
Eisenhower's public land order, which protected this area.
Federal laws and policies require meaningful consultation with
Tribes before Federal action. However, once Oak Flat is held in
private ownership, as this bill directs, these Federal
protections will disappear and the sacred area will be
destroyed without our input.
Resolution Copper plans to use the block cave method to
extract the copper ore body underneath Oak Flat because it is
far cheaper than other methods. However, the process is also
more destructive to the land. The diagram here depicts the
block cave mining process. The company would dig a tunnel 7,000
feet down and then dig a horizontal tunnel to extract 1 cubic
mile of ore. It will take 1,400 Cowboy Stadiums to hold 1 cubic
mile of ore. The next diagram shows what happens next. The
surface will eventually collapse, and the area will become an
open pit about 2 miles in diameter. Like a crater, the pit will
be visible from outer space.
Our second major concern is the loss of water in the
region, and our water rights. One of the primary purposes for
establishing the Tonto National Forest in 1905 was to protect
the watersheds and the quality of the water. H.R. 687
undermines these purposes because this project will require at
least 20,000 acre-feet of water annually to keep the mine from
flooding. To put that in perspective, that amounts to the
annual life water supply for 180,000 Arizona citizens.
According to a recent study, this massive groundwater pumping
would be unsustainable, harmful to the region's water supply,
and threatens surface water resources and riparian habitats.
Here is a picture of a perennial spring at Oak Flat. Mining
here will contaminate and dry up this spring and other water
resources at Oak Flat. Here is another picture of the Oak Flat
area, an ancient oak tree that has nourished us for centuries
with its acorns. It takes a century to produce the first acorn
from these trees. These trees will be destroyed when the land
collapses.
My final point is that at a time when all Americans are
being asked to tighten our belts, this bill will result in a
giveaway of American wealth to a foreign-owned mining company.
The appraisal requirements included in H.R. 687 do not insure
that the public will receive fair value. As a result, the
American taxpayer stands to receive only a small fraction of
what the Federal minerals are worth.
In closing, the Federal Government should continue to be
stewards of this land to sustain the well-being of my people.
Our people dance and pray at Oak Flat, just as our ancestors
did. I ask for your help to ensure that our children and theirs
will be able to do the same, well into the future.
Again, thank you for this opportunity. [Speaks in Apache.]
What I said to you was, ``May God watch over you and give you
guidance.'' Thank you.
[The prepared statement of Mr. Rambler follows:]
Prepared Statement of Terry Rambler, Chairman, San Carlos Apache Tribe,
on H.R. 687
My name is Terry Rambler. I am the Chairman of the San Carlos
Apache Tribe (``Tribe''), representing 15,000 tribal members. The San
Carlos Apache Reservation (``Reservation'') is located within part of
our aboriginal territory, and spans 1.8 million acres in southeastern
Arizona. I am also President of the Inter Tribal Council of Arizona
(``ITCA''), a non-profit organization representing 20 federally
recognized Indian tribes. Thank you for the opportunity to testify
about our views on H.R. 687, the Southeast Arizona Land Exchange and
Conservation Act of 2013. On behalf of the San Carlos Apache Tribe and
ITCA, we strongly oppose H.R. 687 and respectfully urge Members of the
Subcommittee to oppose this bill for the reasons set forth below.
Summary of Objections to H.R. 687
H.R. 687 would direct the Secretary of Agriculture to convey 2,422
acres of U.S. Forest Service lands in an area called Oak Flat and the
copper ore body underneath it into the private ownership of Resolution
Copper Mining, LLC (``Resolution Copper'' or ``Resolution'')--a
subsidiary of foreign mining giants Rio Tinto (United Kingdom) and BHP
Billiton, Ltd. (Australia) for block cave mining. The bill would
require this transfer of the Oak Flat area to Resolution Copper within
1 year of enactment.
In the decade since this project has been in development,
Resolution Copper has consistently refused to provide details regarding
the environmental and economic impacts of the project to the local
community and region. H.R. 687 would give the Oak Flat area to
Resolution Copper for a bare fraction of its actual value. Once the
land is privatized under H.R. 687, Federal laws and policies that
currently protect the area and tribal rights would no longer apply.
As details about the impacts of H.R. 687 have emerged, public
opposition has grown and is diverse. Joining us today are local
officials representing the Town of Superior and the Queen Valley
Homeowner's Association. In addition, the City of Globe recently tabled
its support for this project. These communities located near the Oak
Flat area have either expressed opposition to H.R. 687 or serious
concerns about it. Further, many tribes and tribal organizations
nationwide oppose the bill because it would transfer Federal land
encompassing a known tribal sacred area to a mining company whose
mining activities will ultimately destroy the area and circumvent
government-to-government consultation requirements with Indian tribes.
Tribal organizations opposing this bill include the National Congress
of American Indians, the Inter Tribal Council of Nevada, the United
South and Eastern Tribes, Midwest Alliance of Sovereign Tribes, the
Great Plains Tribal Chairman's Association, the Affiliated Tribes of
Northwest Indians, the Eight Northern Pueblos Council, the All Indian
Pueblo Council, and many other tribes and tribal organizations. Other
groups that oppose this bill include the Association of Retired Miners,
the Arizona Mining Reform Coalition, the Sierra Club, the Audubon
Society, and others.
Our opposition to H.R. 687 is based upon the following points: (1)
the bill would desecrate and destroy an area of religious and sacred
significance to the Apache and Yavapai people, which conflicts with
Federal laws and policies governing meaningful consultation with Indian
tribes and protection and preservation of sacred sites; (2) the bill
mandates, in direct violation of NEPA, the transfer of the Oak Flat
area to Resolution Copper without first informing the public about the
adverse impacts on the quality and quantity of the region's precious
water supply, the environment, and the potential health and safety
risks to the public; and (3) the bill constitutes a multi-billion
dollar giveaway to a foreign-owned mining company that is partnering
with the country of Iran on a uranium mine in Namibia. Simply put, the
American public cannot afford this deal.
H.R. 687 Would Result in Desecration and Destruction of a Native
American Religious and Sacred Site
The 2,422 acres of lands to be conveyed pursuant to H.R. 687 are
located in the Tonto National Forest and include the 740 acres of the
Oak Flat Withdrawal where the Oak Flat Campground is located and the
surrounding area (collectively referred to as the ``Oak Flat area'').
The San Carlos Apache Reservation is bordered on the west by the Tonto
National Forest. The Oak Flat area is 15 miles from our Reservation.
The Forest and the Oak Flat area are part of our and other Western
Apaches' aboriginal lands and it has always played an essential role in
the Apache religion, traditions, and culture. In the late 1800s, the
U.S. Army forcibly removed Apaches from our lands, including the Oak
Flat area, to the San Carlos Apache Reservation. We were made prisoners
of war there until the early 1900s. Our people lived, prayed, and died
in the Oak Flat area. At least eight Apache Clans and two Western
Apache Bands document their history in the area. Since time immemorial,
Apache religious ceremonies and traditional practices have been held at
Oak Flat. Article 11 of the Apache Treaty of 1852, requires the United
States to ``so legislate and act to secure the permanent prosperity and
happiness'' of the Apache people. Clearly, H.R. 687 fails to live up to
this promise. The Oak Flat area, as well as other nearby locations, are
eligible for inclusion in, and protection under, the National Historic
Preservation Act of 1966, as well as many other laws, Executive orders
and policies.
Today, the Oak Flat area continues to play a vital role in Apache
ceremonies, religion, tradition, and culture. In Apache, the Oak Flat
area is Chich'il Bildagoteel (a ``Flat with Acorn Trees''). The Oak
Flat area is a place filled with power--a place where Apaches today go
for prayer, to conduct ceremonial dances such as the sunrise dance that
celebrates a young woman's coming of age, to gather medicines and
ceremonial items, and to seek and obtain peace and personal cleansing.
The Oak Flat area and everything in it belongs to powerful Diyin, or
Medicine Men, and is the home of a particular kind of Gaan, which are
mighty Mountain Spirits and Holy Beings on whom we Apaches depend for
our well-being.
Apache Elders tell us that mining on the Oak Flat area will
adversely impact the integrity of the area as a holy and religious
place. Mining the Oak Flat area will desecrate the Gaan's home and
would diminish the power of the place. Without the power of Gaan, the
Apache people cannot conduct our ceremonies. We become vulnerable to a
variety of illnesses and our spiritual existence is threatened. There
are no human actions or steps that could make this place whole again or
restore it once lost.
The unique nature of the Oak Flat area has long been recognized and
not just by the Apache. The Oak Flat Withdrawal was set aside from
appropriation under the mining laws by President Eisenhower and
reaffirmed by President Nixon.\1\ U.S. Department of Agriculture (USDA)
Secretary Tom Vilsack has acknowledged the Oak Flat area as a ``special
place'' that should be protected from harm ``for future generations.''
Protecting the Oak Flat area as a sacred site is consistent with the
articles of the United Nations Declaration on the Rights of Indigenous
Peoples, which was adopted by the U.N. General Assembly in September of
2007, and for which President Obama announced U.S. support in December
of 2012.\2\ The Obama Administration tied its support of the
Declaration to the current Federal policies of government-to-government
consultations with Indian tribes and maintaining cultures and
traditions of Native Peoples.\3\
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\1\ Public Land Orders 1229 (1955) and 5132 (1971).
\2\ See http://www.ohchr.org/english/issues/indigenous/
declaration.htm.
\3\ Available at http://www.state.gov/s/tribalconsultation/
declaration/index.htm.
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The mining project proposed by Resolution Copper will destroy the
Oak Flat area. The block cave mining technique will permanently ruin
the surface of the area. As explained below, the water required for the
project will forever alter the medicinal plants and trees in the area
upon which our people rely for healing and prayer. The ore body that
Resolution seeks lies 4,500 to 7,000 feet beneath the Oak Flat area.
Resolution admits that the ore body is ``technologically difficult'' to
mine, that it may take up to a decade to develop this technology, and
that temperatures as high as 175 degrees Fahrenheit will be
encountered.\4\ It also acknowledges that the land above the ore body,
the Oak Flat Campground, will subside and cave in.\5\ The mine will
destroy the nature of the land, its ecology, and its sacred powers
forever. For my constituents, this reason alone is enough to oppose
H.R. 687.
---------------------------------------------------------------------------
\4\ See S. Hrg. 110-572, p. 44 (July 9, 2008) (Hearing before the
Subcommittee on Public Lands and Forests of the Committee on Energy and
Natural Resources, United States Senate, S. 3157 110th Cong.).
\5\ See Resolution Copper website available at http://
www.resolutioncopper.com/sdr/2011/environment.
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H.R. 687 Circumvents Federal Laws and Policies Designed To Protect
Native American Religious and Sacred Sites
Indian tribes, including the San Carlos Apache Tribe, ceded and had
taken from us hundreds of millions of acres of tribal homelands to help
build this great Nation. The United States has acknowledged that,
despite the transfer in title of these lands to the United States, it
retained an obligation to accommodate access to and ceremonial use of
religious and sacred sites by Native Americans. This solemn obligation
is codified in a number of Federal laws, regulations, and policies.\6\
A core aspect of each of these Federal enactments is the requirement
that the United States must conduct meaningful government-to-government
consultation with affected Indian tribes prior to making a decision
that will impact a Native sacred area.
---------------------------------------------------------------------------
\6\ See Executive Order 13007: Indian Sacred Sites (May 24, 1996);
the Native American Graves Protection and Repatriation Act, 25 U.S.C.
3001 et seq.; the American Indian Religious Freedom Act, 42 U.S.C.
1996; the National Historic Preservation Act, 16 U.S.C. 470 et seq.;
the Religious Freedom Restoration Act, 42 U.S.C. 2000bb et seq.; and
Executive Order 13175: Consultation with Indian Tribal Governments
(Nov. 6, 2000).
---------------------------------------------------------------------------
Executive Order 13175 on tribal consultation requires Federal
agencies to conduct consultations with tribes when proposed legislation
has substantial direct effects on one or more Indian tribes.\7\ USDA
Secretary Vilsack acknowledged ``it is important that [the Southeast
Arizona Land Exchange] engage in a process of formal tribal
consultation to ensure both tribal participation and the protection of
this site.'' \8\ President Obama stated in his 2009 Memorandum
affirming and requiring agency implementation of E.O. 13175, that
``[h]istory has shown that failure to include the voices of tribal
officials in formulating policy affecting their tribal communities has
all too often led to undesirable and, at times, devastating and tragic
results.'' \9\
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\7\ 59 Fed. Reg. 22951 (April 29, 1994).
\8\ See Letter from USDA Secretary Vilsack to Chairman of the
Senate Energy and Natural Resources Committee, Subcommittee on Public
Lands and Forests (July 13, 2009).
\9\ 74 Fed. Reg. 57881 (Nov. 5, 2009).
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To strengthen Federal polices pertaining to Indian tribes, the
Obama Administration recently acted to improve protections of Native
religions and sacred areas. In December of 2012, the USDA released a
report titled, ``USDA and Forest Service: Sacred Sites Policy Review
and Recommendations,'' which provides a framework for how and why the
United States, and specifically USDA and the Forest Service, is legally
obligated to protect and preserve sacred areas located on Federal
lands. The Report acknowledges, ``Like almost all public and private
lands in the United States, all or part of every national forest is
carved out of the ancestral lands of American Indian and Alaska Native
people.'' It affirms and lists the Administration's Federal legal
obligations to protect and provide access to Indian sacred sites and to
consult with tribes on any Federal actions that will impact sacred
sites.
On December 5, 2012, five Federal agencies, including USDA, the
Departments of the Interior, Defense, Energy, and the Advisory Council
on Historic Preservation entered into a MOU to develop guidance for the
management and treatment of Native sacred areas, to develop a public
outreach plan to acknowledge the importance of maintaining the
integrity of Native sacred areas and to protect and preserve such
sites, and to establish practices to foster the collaborative
stewardship of sacred sites, among other goals. On March 5, 2013, these
Federal agencies adopted an action plan to implement the MOU, which
entails working to ``improve the protection of and tribal access to
Indian sacred sites, in accordance with Executive Order 13007 [on
Indian Sacred Sites] and the MOU, through enhanced and improved
interdepartmental coordination and collaboration and through
consultation with Indian tribes.''
H.R. 687 will make an end run around these legal and policy
obligations by transferring the Oak Flat area to Resolution Copper in
private ownership. Once the lands are in private hands, the obligations
to protect the Tribe's religious and sacred areas and accommodate
tribal access will have no force of law. Section 4(c) of the bill
requires tribal consultation, but earlier provisions of the bill
mandate that the land be transferred regardless of the outcome of that
consultation, rendering the act of consultation a mere formality with
no meaningful effect.
H.R. 687 Authorizes the Project To Move Forward Without Informing the
Public of the Adverse Impacts to the Region's Water,
Environment, and Health and Human Safety
Bill Circumvents NEPA and Public Interest Requirements
H.R. 687 undermines the National Environmental Policy Act (NEPA),
which requires an analysis of potential impacts, including providing
public notice and an opportunity to comment, before Federal actions are
taken. The bill fails to require an environmental review, including
consideration of mitigation measures, of the mining project before the
land exchange is completed. The bill mandates that USDA convey the
lands to Resolution Copper within 1 year of enactment.\10\ Once the
lands are transferred to Resolution Copper, NEPA review will not have
any real impact because the land would already be in private ownership.
Because the bill is a mandatory transfer, the Secretary of Agriculture
has no discretionary authority to determine under the Federal Land
Policy Management Act (FLPMA) or other laws whether the exchange is a
bad deal for the American taxpayer, the local residents, and the local
economy, which would be the case if an administrative transfer were
required.
---------------------------------------------------------------------------
\10\ Section 4(i) of the bill states, ``the land exchange directed
by this Act shall be consummated not later than 1 year after the date
of enactment of this Act.'' (Emphasis added).
---------------------------------------------------------------------------
In May 2007, the Forest Service published its ``Technical Guide to
Managing Groundwater Resources.'' The Technical Guide examined the
Forest Service's compliance with FLPMA and NEPA.\11\ The Guide
references the Service's experience with the Carlota Mine also located
in the Tonto National Forest. It was determined through the evaluative
procedures of FLPMA and NEPA that Carlota Mine's groundwater pumping
would impact the Tonto Forest's surface waters and the Service's
appropriated water rights. The Carlota Mine was required to mitigate
the impacts of its groundwater demands for the mining operation before
the mine was permitted. The Carlota project illustrates the importance
of NEPA review before this land exchange is completed. The surface
waters and aquifers that were affected by the Carlota Mine are the same
surface waters and aquifers that will be impacted by Resolution
Copper's mine. Under H.R. 687, Resolution Copper will be able to evade
this type of analysis and can ignore mitigation conditions.
---------------------------------------------------------------------------
\11\ See Technical Guide to Managing Groundwater Resources, U.S.
Forest Service, FS-88, pp. 20-22 (May 2007).
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Resolution Copper has no intention of sharing any relevant
information with the public prior to taking the lands in private
ownership. Resolution's Jon Cherry told the Senate Environment and
Natural Resources Committee in February of 2012 that Resolution Copper
``will be in a position to file our Mine Plan of Operations (MPO) which
will begin the NEPA EIS process over the entire project area including
the area of the subject exchange'' by the ``second quarter of 2012.''
\12\ To our knowledge, Resolution Copper has not fulfilled this
promise.
---------------------------------------------------------------------------
\12\ See S. Hrg. 112-486, pp. 28, 29 (Feb. 9, 2012) (Hearing Before
the Committee on Energy and Natural Resources, United States Senate,
112th Congress).
---------------------------------------------------------------------------
Section 4(j)(1) of H.R. 687 requires only that Resolution Copper
submit a MPO to the Secretary prior to commencing production in
commercial quantities. There are no requirements to guarantee that the
MPO will contain a complete description of mining activities and
measures Resolution Copper will take to protect environmental and
cultural resources, which are normally required by law. Under
Resolution Copper's proposed timeline, the MPO could take close to a
decade. Regarding actual environmental review, Section 4(j)(2) of the
bill requires only that the Secretary, within 3 years of receiving
Resolution Copper's MPO, prepare an environmental review that must be
conducted under the framework of subparagraph 4322(2) of NEPA. Again,
this review will be conducted long after the lands are exchanged and in
private ownership.
Section 4(h) of the bill makes clear that Federal laws will not
limit Resolution Copper's activities on the land after the mandated
exchange. It provides that the lands conveyed ``shall be available to
Resolution Copper for mining and related activities subject to and in
accordance with applicable Federal, State, and local laws pertaining to
mining and related activities on land in private ownership.'' As a
result, the Secretary will have no discretion to exercise meaningful
authority over the MPO or mining activities on private land after the
exchange absent a Federal nexus. There is no requirement in the bill
for the Secretary to examine the direct, indirect and cumulative
impacts of exploratory activities, pre-feasibility, feasibility
operations, or mine facility construction that will be conducted after
the exchange.
Further, upon enactment of H.R. 687, Resolution Copper will almost
immediately begin activities that will harm our sacred area and the
region's water supply, again without any public disclosures of
information. Section 4(f) mandates that the Secretary ``shall'' provide
Resolution with a special use permit within 30 days of enactment to
engage in mineral exploration activities at Oak Flat Withdrawal and,
within 90 days, the Secretary is required to allow mineral exploration.
The integrity of Oak Flat could be substantially harmed by exploratory
activities before the limited environmental review requirements in Sec.
4(j)(2) are triggered. The limited environmental review of the MPO will
have little or no benefit. The Secretary lacks any authority to propose
alternatives to interim activities that might be necessary to protect
water resources, landscape, plants, ecosystems or the integrity of Oak
Flat as a traditional cultural property and sacred site. The immediate
exploration of Oak Flat contemplated by Section 4(j) constitutes an
``irretrievable commitment of resources'' in contravention of NEPA.
Joel Holtrop, Deputy Chief of the National Forest Service, stated
that a MPO containing subsurface information is ``essential in order to
assess environmental impacts, including hydrological conditions,
subsidence, and other related issues.'' \13\ Similar concerns were
expressed by the Forest Service Associate Chief Mary Wagner who noted
that the Service could not support the bill given that it ``limited the
discretion'' of the Service to develop a reasonable range of
alternatives and lacked the opportunity for public comment on the
proposal.\14\ Likewise, USDA Secretary Vilsack stated:
---------------------------------------------------------------------------
\13\ See S. HRG. 111-65 (June 17, 2009) p. 41, Hearing before the
Subcommittee on Public Lands and Forests of the Committee on Energy and
Natural Resources, United States Senate (S. 409 111th Cong.).
\14\ See S. HRG. 112-486 (June 14, 2011) p. 16, Hearing before the
Committee on Energy and Natural Resources, United States Senate (H.R.
1904 and S. 409 112th Cong.).
The purpose of a requirement that the agency prepare the EIS
after the exchange, when the land is in private ownership, is
unclear because the bill provides the agency with no discretion
to exercise after completing the EIS. If the objective of the
environmental analysis is to ascertain the impacts of the
potential commercial mineral production on the parcel to be
exchanged, then the analysis should be prepared before an
exchange, not afterwards, and only if the agency retains the
discretion to apply what it learns in the EIS to its decision
about the exchange. It seems completion of the exchange prior
to the EIS would negate the utility of the EIS. \15\
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\15\ See Letter from USDA Secretary Vilsack to Chairman of the
Senate Energy and Natural Resources Committee, Subcommittee on Public
Lands and Forests (July 13, 2009) (emphasis added).
Further, H.R. 687 does not allow for a supplemental EIS document if
additional review is needed to examine the direct, indirect and
cumulative impacts of mining activities by Resolution. Sec. 4(j)(2)
makes clear that the Secretary may only use the single environmental
review document prepared within 3 years of the submission of a MPO as
the basis for all ``decisions under applicable Federal laws, rules and
regulations regarding any Federal actions or authorizations related to
the proposed mine or plan of operations.'' (Emphasis added).
Again, the bill conflicts with the purposes of NEPA and the bill
fails to vest any real discretion in the Secretary to address the many
concerns presented by the mining operation proposed for Oak Flat. It
simply does not make sense for this bill to limit the Secretary's
discretion, undermine the NEPA process, and ignore the environmental
and tribal concerns related to the mining project.
Moreover, the potential for negative economic impacts to the local
economy through a loss of recreation and tourism could be substantial.
In 2009, detailed direct travel impact estimated for Pinal County
totaled $421 million dollars, with over $16 million spent by those
visiting the nearby campground areas.\16\ Many of these dollars were
spent in and around the area of this proposed mine.
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\16\ See Arizona Travel Impacts 1998-2009p, July 2010 Report,
Arizona Office of Tourism, Phoenix, Arizona.
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If enacted, H.R. 687 will result in disastrous consequences, which
Resolution seeks to downplay and conceal given that the bill requires
no cost-benefit analysis of the potential environmental impacts.
Resolution would be able to mine copper without environmental
permitting, cultural protections or financial assurances necessary for
responsible stewardship. As a limited liability corporation, the
Company could simply walk away from potentially billions of dollars of
environmental and infrastructure damages to this sacred area.
Southeast Arizona's Water Supply Cannot Sustain This
Project
Resolution Copper has not been transparent with the public or its
neighbors in the Oak Flat area. In 2009, Resolution explained that it
was purchasing water and reclaiming contaminated waters in order ``to
build the needed water supplies for mining activities that are a full
decade or more away.'' Resolution claimed to be ``managing water by
taking into account the needs of both current and future users of this
precious resource.'' \17\ Resolution claimed that it had purchased and
``banked'' over 120,000 acre feet of Central Arizona Project (``CAP'')
water from 2006 through 2008 with Irrigation Districts near Phoenix,
enough to operate the mine for 6 years at a projected use of 20,000
acre feet per year.\18\ Resolution further reported in 2008 that it
``installed several hydrology wells to assist in developing models that
will determine if mining may affect the regional aquifers, and . . .
what mitigation options are viable.'' \19\
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\17\ Previously on Resolution Copper webpage, now missing file:
http://www.resolutioncopper.com/res/environment/ddnav.css
\18\ Id.
\19\ See Resolution Copper webpage.
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H.R. 687 does not require Resolution Copper to perform or disclose
its studies of the impacts on the regional water supply and hydrology.
Repeated requests for an independent agency, such as the U.S.
Geological Survey (``USGS''), to conduct studies have been ignored or
opposed. Resolution Copper's failure to disclose critical information
about the impacts on the region's water has united a diverse group that
opposes H.R. 687.
Our neighbors to the West in Queen Valley have already felt
Resolution's insatiable thirst for water. Since 2008, Resolution has
been pumping groundwater to dewater parts of the decommissioned Magma
Mine. Water levels in the Magma shaft have declined nearly 2,000 feet
and water levels in the surrounding aquifer will inevitably decline as
well. The Queen Valley Homeowners Association reported that since
Resolution began pumping 900,000 gallons of water a day, the
community's water supply fell to a historic low requiring water
rationing for the community golf course. The Association passed a
resolution opposing the mine.
According to USGS records, since 2008, the average streamflow in
Queen Creek (downstream from the mine site) has been less than half the
average streamflow for 2001-2007 before Resolution began dewatering at
Magma Mine. Resolution's dewatering efforts removes far less water than
the mine sought, though H.R. 687 will require (approximately 920 acre
feet per year compared to the mine's eventual need for 20,000 acre feet
per year). The simple act of dewatering will have negative effects on
regional water supplies. If Resolution depends on even more groundwater
for its mining operations, the negative impacts will grow.
In 2009, Senator Bingaman questioned the Forest Service about the
impacts of the mine on the local water supplies and quality. Deputy
Chief Holtrop responded:
At this time the U.S. Forest Service does not have an
understanding of the impacts of the proposed mine will have on
local or regional water supplies, water quality, or possible
dewatering of the area. No studies or assessments of the water
supplies have been conducted. That is information which could
be obtained by the Forest Service with NEPA analysis before the
exchange. A NEPA analysis after the exchange would not allow
the Forest Service to recommend alternatives since the
exchanged parcel would already be in private ownership. Data
and analyses in the possession of Resolution Copper Mining
would be of assistance to the Forest Service in evaluating the
impacts of the proposed mine on local and regional water
supplies and quality.\20\
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\20\ See S. Hrg. 111-65, p. 42 (June 17, 2009) (Hearing before the
Subcommittee on Public Lands and Forests of the Committee on Energy and
Natural Resources, United States Senate, S. 409 111th Cong.) (emphasis
original).
In order to better inform the public of the potential impacts, L.
Everett & Associates (LEA), an internationally recognized environmental
consulting firm made up of hydrogeologists, engineers, and geologists,
conducted a review recently of potential environmental impacts to the
region that would be caused by H.R. 687. The following excerpts from
---------------------------------------------------------------------------
the review clearly rebuff Resolution Copper's water claims:
``[I]t is highly speculative that CAP water will be a reliable
source for Resolution over the decades-long lifetime of the
mine. In fact, Resolution correctly admitted that `excess CAP
water will not always be available for purchase and other
sources will be needed.' It seems apparent that Resolution will
need to rely on local groundwater resources to provide a
significant percentage of Resolution's water supply if it is to
be a viable project.
``It is virtually impossible for Resolution to meet even a
fraction of its water needs from local groundwater in a
sustainable manner: the amount of water needed is just too vast
for the natural processes that recharge the aquifer in this
arid region of Arizona to replenish the needed withdrawals.
``Because groundwater and surface water systems are intimately
interrelated, pumping too much groundwater will have a negative
impact on nearby surface water resources because lowering the
water table can starve the local streams of recharge from the
aquifer. This is a serious issue that is very difficult if not
impossible to mitigate. For example, the nearby Carlota Mine
uses much less water than the proposed Resolution Mine
(approximately 1,000 acre feet per year). In a 25-day pump test
at the Carlota Mine, stream flow in Haunted Canyon (2,300 feet
from the nearest well) declined from 45 gallons per minute to 5
gallons per minute, thus threatening the sensitive riparian
habitat.'' \21\
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\21\ Letter from LEA Principal Geologist, James T. Wells, PhD, PG,
to San Carlos Apache Tribe, Chairman Terry Rambler (March 18, 2013)
(Attached to this testimony) (hereinafter ``LEA Analysis'').
Following its assessment of the dewatering process that will be
required to operate Resolution's mine, LEA added, ``Given the depth of
the ore body and the need to dewater the mine workings that are deep
below the water table, Resolution will have to aggressively pump
groundwater from the aquifer. The effect of this pumping will be felt
far beyond the boundaries of the mine.''
Throughout the mining process, water will migrate to the vacant ore
body and mining tunnels. For example, Resolution estimates that inflows
to the existing workings at Magma Mine are 300 million gallons per
year. If mining production on this new project is authorized, the mine
dewatering will deplete many billions of gallons of water from surface
waters and groundwater throughout the region, resulting in the loss of
important seeps, springs, and streams and depleting the perennial pools
in Gaan (Devil's) Canyon and streamflows in Queen Creek and other
surface waters.
The alteration of subsurface and surface geological structures
because of block caving and the admitted collapse of the land surface
will alter the natural state of the aquifers and surface drainage of
the watersheds forever. Resolution has refused to publish the potential
impacts on the water supplies of the region despite the fact that this
legislation has been introduced in the Congress over the past 8 years.
Instead, Resolution has simply claimed that it is urgent for Congress
to pass this land exchange.
Additional Damage to the Southeast Arizona Environment
While water is a paramount concern for the opponents of H.R. 687,
it is not the only concern. Resolution Copper has failed to provide
data pertaining to its mining and post-mining subsidence analysis,
water quality contamination analysis (including acid mine drainage and
subsequent pollution), air quality compliance, tailings and overburden
storage and placement.
On March 15, 2013, the local Town of Superior adopted a resolution
opposing H.R. 687. The nearby City of Globe has tabled a proposed
resolution to support the bill until its questions about the bill have
been satisfactorily answered about the impacts of this mine. This bill
touts jobs for the local economy. But local community leaders
rightfully ask: ``What good are jobs if our communities are
environmental disaster areas lacking water to support our citizens?''
It is common knowledge that acid mine drainage leaking into
groundwater and surface water is a widespread consequence of copper
mining. Acid-generating mines pollute surface water and groundwater
requiring expensive reclamation and long-term water treatment. The
water Resolution is pumping from the Magma Mine shaft is contaminated
with heavy metals. That water is being treated at Resolution's water
treatment facility. In order for that treated water to be reclaimed and
re-used, it has to be diluted with clean CAP before being transported
for use on crops to the Irrigation Districts.
Instead, Resolution and its foreign corporate parents avoid the
true costs of environmental compliance through this land exchange. Once
these public lands are conveyed, under the permissive mining and
reclamation laws of the State of Arizona, Resolution will probably not
be required to post a cash bond to underwrite either the cost of
remediation during its mining operations or for clean-up upon mine
closure. Typically, only self-bonding or corporate guarantees are all
that is required. This is woefully insufficient to protect the public
from bearing the potentially astronomic costs of clean-up resulting
from a limited liability company's massive mining operations. As stated
earlier, Resolution can simply walk away from damage to the Oak Flat
area. As a result, American taxpayers would be left without any revenue
and will be on the hook for the future cost of any environmental
remediation.
There are too many environmental questions that Resolution Copper
has failed to answer. This land exchange allows Resolution to avoid
responding to these questions that Federal law otherwise requires every
other company in America to answer. The Subcommittee should ask why
Resolution deserves special treatment?
H.R. 687 is a Massive Giveaway of Taxpayer Resources to Foreign,
Special Interests
At a time when all Americans are being asked to tighten our belts,
H.R. 687 will result in a giveaway of American wealth to a foreign-
owned mining company. The appraisal requirements of H.R. 687 are unique
to this land transfer and do not adequately ensure that the public will
receive fair value. Since the bill does not afford the Federal agencies
the opportunity to perform a substantive economic evaluation of the
lands along with the copper and other minerals to be exchanged to
Resolution, it is impossible for the Congressional Budget Office and/or
Office of Management and Budget to effectively evaluate H.R. 687. The
public interest requires that a complete and fully informed appraisal
and equalization of values be performed prior to Congressional passage
of H.R. 687, not after. Resolution Copper has variously estimated the
mineral wealth in the lands ranging from $100 to $200 billion.
Resolution's self evaluation of the ore body underlying Oak Flat is
orders of magnitude greater in value than that of the non-Federal
parcels offered in exchange to the public.
A significant amount of information is required for a meaningful
and accurate appraisal. Under the Uniform Appraisal Standards for
Federal Land Acquisition (UASFLA) requirements, a detailed mining plan
is necessary to properly assess the value of the exchanged land. UASFLA
requires that production level estimates should be supported by
documentation regarding production levels achieved in similar
operations. However, it is unknown at this time what Resolution
Copper's production estimates are since mining plan data has not been
forthcoming.
UASFLA royalty income approach also requires several economic
predictions including a cash-flow projection of incomes and expenses
over the life-span of the project and a determination of the Net
Present Value (NPV), including the NPV of the profit stream, based on a
discount factor.
Deputy Chief Holtrop and BLM Deputy Director Luke Johnson informed
the Subcommittee on National Parks, Forests and Public Lands on an
earlier version of this bill that the completion of the exchange within
1 year (as required by H.R. 687 Section 4(i)) was insufficient time to
complete the required appraisals.\22\ Specifically, Mr. Johnson stated:
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\22\ See S.110-52 (Nov. 1, 2007), pp. 4, 5, 8 (Legislative Hearing
before the Subcommittee on National Parks, Forests and Public Lands of
the Committee on Natural Resources U.S. House Of Representatives, 112th
Congress).
Based on our experience with exchanges, we do not believe that
this is sufficient time for the completion and review of a
mineral report, completion and review of the appraisals, and
final verification and preparation of title documents.
Preparation of a mineral report is a crucial first step toward
an appraisal of the Federal parcel because the report provides
the foundation for an appraisal where the land is underlain by
a mineral deposit. Accordingly, adequate information for the
---------------------------------------------------------------------------
mineral report is essential.
Given the evaluation standards prescribed by the UASFLA, coupled
with the lack of factual data from Resolution, the American taxpayer
will once again be short-changed.
Resolution Copper's Corporate Parents Partner With Iran and China
Resolution is not deserving of the special treatment given it under
H.R. 687. The Company is a subsidiary of Rio Tinto (55 percent majority
owner) (UK headquarter/Australian offices) and BHP Billiton (45 percent
shareholder) (Australia headquarter/UK offices). Rio Tinto is a partner
with Iran in the Rossing uranium mine in Namibia.
Rio Tinto currently owns a majority stake in the Rossing mine;
while, the Iran Foreign Investment Company (IFIC) owns a 15 percent
stake in the same mine. The IFIC is wholly owned by the Iranian
government. United Against Nuclear Iran (UANI) raised concerns about
Rio Tinto partnership and called on Rio Tinto and Rossing to sever ties
with the Iranian government. In a letter to the Chairman of Rio Tinto,
UANI President, Ambassador Mark D. Wallace, wrote:
Thank you for the letter of November 8, 2010 from the Rio Tinto
Group. While your letter attempts to address some of the
concerns . . . the largest issue--the current Iranian
government's 15 percent stake--remains outstanding and is of
serious concern to UANI and many within the international
community . . .. You dismiss the concerns raised by UANI
because the government of Iran initially acquired its share in
the Rossing mine in 1975 . . .. This fact is not relevant in
2011 when the government that has been profiting from the mine
for over three decades is one that is pursuing an illegal
nuclear weapons program, [and] sponsoring terrorism in the
region . . ..''
Letter from Former U.S. Ambassador and UANI CEO Mark Wallace to Rio
Tinto Group Chairman Jan du Plessis (Jan. 13, 2011).
In addition, there are no guarantees that the copper mined pursuant
to H.R. 687 will even be processed or used in the U.S. Chinalco, owned
by the Chinese government, holds a 9 percent stake in the Rio Tinto
Group. Nothing in the bill requires Resolution Copper, Rio Tinto's
subsidiary, to process or sell the copper to U.S. companies or even use
U.S. resources to mine the copper.
Based upon the history of parent company Rio Tinto's business
relations with Iran and China and in light of the U.S. and
international sanctions against Iran, it is not in America's interests
to trade valuable Federal land to this foreign-owned mining company.
Speculative Economic Benefits
Without substantiation, Resolution has touted local job creation as
the primary justification for this land exchange. Resolution's jobs
claims have varied widely over the years that this project has been
proposed. Because Resolution is not required to publicly disclose a MPO
before the land transfer, Resolution's jobs claims are speculative at
best. Resolution takes pride in the fact that they are building the
mine of the future. Resolution's Vice President stated, ``Our
grandfathers wouldn't recognize the mines of today.'' The proposed
mine, under H.R. 687, will be highly automated and the likely actual
jobs produced will come in far below the speculative figures promised.
In addition, Resolution has opposed all efforts to amend the bill to
require that: (1) the project headquarters to be located in Southeast
Arizona; (2) local Arizonans be considered first for any job
opportunities that may result from the project; and (3) the ore is
processed and used in the United States--and not in China or another
foreign nation. Further, Resolution has admitted that it will take at
least 10 years to develop technology to access the ore body given that
it is 1-mile beneath the surface of the earth where it is a temperature
of 175 degrees.
Conclusion
In 1871, the U.S. established our Reservation. Since then, the
United States diminished our Reservation several times due to the
discovery of silver, copper, coal, water and other minerals and natural
resources. Our burial sites, living areas, and farmlands on our
Reservation were flooded for a Federal dam for the benefit of others.
Based upon this history and for the reasons stated above, the Tribe
strongly opposes H.R. 687 or any other conveyance of our tribal
ancestral lands in the Oak Flat area to Resolution Copper for mining
that would permanently destroy this sacred site. Once done, this action
cannot be undone.
[Note.--The material attached to Mr. Rambler's Prepared Statement and
the letter referred to in footnote 21 have been retained in the
Committee's official files.]
______
Questions Submitted for the Record to Terry Rambler
Questions Submitted for the Record by The Honorable Grace F. Napolitano
Question. Where are tribal sacred sites located?
Answer. Apache culture, heritage and religion do not focus upon a
specific site or place as sacred, in the traditional convention of
Anglo-European site location. Instead, an area or region is deemed by
the Apache People to have cultural, sacred and religious significance.
The Apache lands which are impacted by the land exchange with
Resolution Copper Mining cover a wide area and include lands known in
Apache as Chi'chil bigagoteel. Chi'chil bigagoteel encompasses the Oak
Flat campground. Nearby is Dibecho Nadil (Bighorn Sheep Are Put There),
the geological feature known as Apache Leap. Chi'chil bigagoteel is
bounded by Gan Bikoh (Crowndancers Canyon), also known as Devil's
Canyon. To the north it is bounded by Ga'an Daszin (Mountain Spirits
Standing), also called Queen Creek Canyon.
This area is documented as the ancestral home of the Pinal and
Aravaipa Apache Bands of the Western Apache, San Carlos Apache Group.
It was also known to have significance to the Western Apache, Tonto
Apache Group.
Apache spiritual beings, Ga'an, live and exist within the sacred
sites of Oak Flat, Ga'an Canyon (Devil's Canyon) and Apache Leap. The
Ga'an are spirit entities made for the Apache People by Yusn, Life
Giver, and are responsible for teaching the Apache People the proper
way of living. Chi'chil bigagoteel is recognized as home of the Ga'an.
Oak Flat has, for generations, played a crucial role in the
exercise of the religious, traditional and cultural practices of the
Western Apache. These practices continue to this day. Oak Flat and the
surrounding area have long been used--and are used today--for religious
ceremonies, sweat lodge ceremonies, and Sunrise Dances (puberty
ceremonies). Chi'chil bigagoteel provides plants and other natural
resources for spiritual, ceremonial and medicinal uses. It has been
said by San Carlos Apache Tribal Cultural Officer, Vernelda Grant, that
the uniqueness of the ecosystem of this area adds to significance and
sacredness of the area to the Apache People.
Losing access to these ecosystems, both by their closure [to Apache
People] or their destruction profoundly weakens the strength to both
Apache and Indigenous peoples' prayer and ceremony, and severely limits
the abilities of Apaches and Indigenous peoples to effectively practice
their religion, ultimately resulting in physical and spiritual harm to
Apaches and Indigenous peoples and neighboring communities.
Question. Are sacred sites in jeopardy?
Answer. There is no question that Apache sacred areas are in
jeopardy as a consequence of the Southeast Arizona Land Exchange and
Conservation Act of 2013.
The ore body which Resolution Copper Mining (RCM) seeks to exploit
lies directly under Oak Flat, Chi'chil bigagoteel. As pointed out in my
testimony on March 21, 2013, the surface lands of Oak Flat will
collapse as a result of the mining method, block caving, RCM will
employ to extract the ore body. RCM's own website admits to such
subsidence. The exhibits which were presented with my testimony
exemplify how the block cave mining method works and the land
subsidence which inescapably follows. Virtually the entirety of
Chi'chil bigagoteel will be destroyed by RCM's mining operation.
RCM's mining operation will also require enormous quantities of
water estimated at 20,000 acre feet per annum, or 600,000 acre feet
over the life span of the mine. Groundwater pumping will inevitably be
a large source for that water. Seeps, springs and streams well beyond
the physical boundaries of Oak Flat will be affected by this pumping.
Furthermore, in order to operate the mine at depths of 4,500 to 7,000
feet below the surface of the earth, RCM will be required to pump
groundwater to keep its mine from flooding further depleting water
resources throughout the area. RCM's groundwater pumping activities
will destroy the medicines and plants that we gather, which will
effectively suffocate the practice of our religion.
Certainly, the land subsidence and groundwater pumping will destroy
Apache sacred areas. Without belaboring the point, other aspects of the
mining operation, such as toxic water pollution associated with copper
mining and tailings waste sites, will further contribute to the
destruction of areas sacred to the Apache and other Indigenous people.
Question. Does H.R. 687 provide adequate protections to avoid the
land from collapsing?
Answer. H.R. 687 provides no protections to avoid the land from
collapsing. Indeed, the protections which are usually afforded the
public under various Federal laws, such as National Environmental
Policy Act (NEPA), to assess potential harms and suggest possible
alternatives are circumvented by H.R. 687. Once the land is in the
private ownership of Resolution Copper and its parent corporations Rio
Tinto and BHP Billiton, NEPA and other protections will be lost. H.R.
687 virtually eliminates the Secretary of Agriculture's discretionary
authority to determine under the Federal Land Policy Management Act
(FLPMA) or other laws the best interests of the public and the American
taxpayer. Please see my written testimony at pages four to seven.
______
Dr. Gosar. Thank you, Chairman Rambler.
Our next guest is Ms. Soyla Peralta, otherwise known as
Kiki.
STATEMENT OF SOYLA ``KIKI'' PERALTA, COUNCIL MEMBER, SUPERIOR
TOWN COUNCIL
Ms. Peralta. Good morning, members of the Subcommittee. My
name is Kiki Peralta, and I am councilwoman for the Town of
Superior. The project mandated by H.R. 687 will have the most
direct and greatest impact on our town. This project will be in
our back yard. And we can't let that happen, because this is
our town. We were born and raised in Superior. I was married in
Superior, and I raised my children in Superior.
Unfortunately, we are here because we want our voices
heard. Our county and Arizona Delegation is not listening.
I support the mining industry. The Town of Superior
supports the mining industry and recognizes the role that
copper mining has played in Superior's history and economy. My
father, brother, husband were all miners. As a matter of fact,
I was the first female hired by Magna-Copper Company in 1975 as
a laborer.
I have to let you know up front that in the past this
Council has supported this project. However, for the following
reasons, the Town of Superior now opposes the Southeast Arizona
Land Exchange. Information has been difficult to come by. But
with the little information that we have, we have learned the
true impacts of this project. This has forced me and our Town
Council to rethink our position.
Our opposition to this project is based on three major
points: number one, the lack of a NEPA study to show what
impacts we will be facing; number two, the impact of our water
and/or hydrology studies; and three, the impacts of block cave
mining on our environment, and the lack of jobs that it will
produce.
First, on the NEPA and Mining Plan of Operation. We
strongly oppose this land exchange moving forward without first
performing the NEPA studies and informing our town about the
negative impacts of this project. Section 4(h) of the bill
provides that if this bill is passed, the lands will be treated
as if they are in private ownership. As a result, no tribal
consultation or no NEPA studies will be required.
A Mining Plan of Operation will also help inform our
community. Where will the tailings and waste products be
dumped? What impacts will they have on our town and surrounding
communities? My question is, once again, why must this project
move forward before informing our community what we can expect?
This is like playing Russian Roulette with our community.
Next, the water. It is often said that whiskey is for
drinking and water is for fighting. Water in Southeast Arizona
is more precious than gold, and it is surely worth more than
copper. Where will this water come from? And what effects will
such large water consumption have on the regional water
balance? Again, where are the hydrology studies? Again, I ask,
how can this project move forward before a question as vital to
our lives as water is answered?
Finally, we have serious concerns with the block cave
method of mining. Block cave mining historically has not been
used in Superior. We know mining, and this method is proven to
be destructive and harmful to the environment. My other concern
with block cave mining is the jobs. Resolution promises jobs
for our community. But in reality, with the use of block cave
mining, most of it will be mechanized and employ only a small
workforce.
I wish that Resolution Copper would answer these questions
today, and I wish that the Arizona Delegation and Congress
would demand these answers. But the bottom line is that today I
am here to represent my community and to protect the long-term
interest of my town.
It was great to hear Pinal County Chairman Miller speak
today. Unfortunately, this is the first time I have seen him.
Neither him nor Congressman Gosar or Kirkpatrick have met with
us on this issue. Yet again, our town will suffer the most
direct impacts of this project. Our water, our environment, our
air will all be harmed. Yet no one has come to me with our
Council. Unfortunately, our county and congressional delegation
are not listening. I wish that my Congresswoman, Ann
Kirkpatrick, could have stayed to listen.
With that said, I am here to fight for my community and I
am glad that you are here to listen. I urge you to oppose this
bill. The Town of Superior can't afford this deal. I again want
to thank you for this opportunity.
[The prepared statement of Ms. Peralta follows:]
Prepared Statement of Soyla ``Kiki'' Peralta, Council Member, Superior
Town Council, on H.R. 687
The Town Council of the Town of Superior, Arizona realizes that
Superior, Arizona, was born as a mining community and has lived through
the mining booms and busts of the Silver King Mine, the Queen Mine, the
Belmont Mine, the Magma Mine and the Broken Hill Proprietary Mine over
the history of our 100 plus years. Because we recognize that mining is
a large part of our history and will potentially be a larger part of
our future, we are not opposed to mining. In fact, we strongly support
responsible mining policies, and practices in and around our community.
However, we believe that H.R. 687 is unacceptable as it presents
serious negative impacts to us and our surrounding community as it
seeks to circumvent the important National Environmental Policy Act
(NEPA) review and analysis process. This is public land, and the public
must be heard openly and fairly under the NEPA process. A decision
regarding these public lands should be made with the utmost knowledge
and care. Once these lands are lost to the public, they can never be
regained.
We appreciate and thank you for the opportunity to express our
views and voice our concerns about H.R. 687, the Southeast Arizona Land
Exchange and Conservation Act of 2013 that will profoundly affect our
Town and Region.
Oak Flat Land Exchange and Loss of Important Public Campground and
Recreational Areas
Resolution Copper Mining, LLC, owned by Rio Tinto based in the
United Kingdom, and BHP-Billiton based in Australia, is planning a
massive block-cave mine and seeks to acquire Oak Flat Campground and
the surrounding public lands for its use through this land exchange
bill. If they succeed, the campground and an additional 2,406 acres of
the Tonto National Forest will become private property and forever off
limits to recreationists and other users. Privatizing this land would
end public access to some of the most spectacular outdoor recreation
and wildlife viewing areas in Arizona. It would deprive the Town of
Superior, currently land-locked at only 4 square miles, from economic
diversification in and around our community. It would also deprive the
San Carlos Apache Tribe of their religious and cultural attachments to
the area.
Located just 5 miles east of Superior, Oak Flat and Devil's Canyon
are recognized as some of the most unique, scenic, popular and
unspoiled areas in the State of Arizona; and they are an important part
of our history and our economic diversification. It has long been
prized for its recreational variety. This area is exquisite and easily
accessible to millions of visitors from the Phoenix and Tucson
metropolitan areas, as well as the outlying areas of Gold Canyon, Queen
Valley, Florence, Kearny, Winkelman, Hayden, Globe, Miami, Top of the
World and Superior. It is significant to our citizens, our neighbors,
and the Apache people, for their cultural values and religious
heritage.
The Oak Flat Campground, Apache Leap, and the surrounding area are
important to the Apaches who gather acorns and pine nuts that are used
both traditionally and ceremonially. Apache Leap is an historical land
known as the Apache's Masada. It is there that many Apaches leaped to
their deaths rather than be captured by the U.S. Army approximately 125
years ago. One of our local historians, Christine Marin, Ph.D.,
Archivist and Historian for Arizona State University and who is a
former resident of Globe, Arizona, and still has family in Superior,
Arizona, published an article in the Copper Country News dated June 11,
2008. In her article entitled, ``Apache Leap Legend: Now We Have `The
Rest of the Story','' Dr. Marin indicated that the story of the Apache
warriors is verified by two historical publications. We believe that
these lands have significant import to the Apaches and that their
wishes should be carefully considered and respected. It is because of
this that our Resolution No. 451 (attached) includes this reference.
You, our Federal legislators, are being asked to give up these
publicly owned lands that have been in trust for the American and
Native peoples since 1955, when President Eisenhower signed BLM Public
Land Order 1229. This Order specifically put Oak Flat off-limits to all
future mining activity. In 1971, President Nixon issued BLM Public Land
Order 5132 to modify PLO 1229 and allow ``all forms of appropriation
under the public land laws applicable to national forest lands--except
under the U.S. mining laws.'' These two executive orders from two
different Republican administrations both mandated that these lands
were to be preserved in perpetuity with special emphasis on prohibiting
mining activities on Oak Flat. There is no compelling reason for these
Orders to be overturned.
We are particularly concerned that this legislated land exchange of
the Oak Flat Campground and surrounding area would bypass critical
environmental impact studies. We fear that natural and cultural
resources will not be protected. We know, without a doubt, that
subsidence will occur and that it will adversely affect our community.
We don't have any information regarding RCC's proposed disposition of
the massive amounts of tailings that will be produced and where they
will reside. We are terrified that downstream pollution will affect the
Town of Superior and everyone who depends upon the nearby aquifers for
drinking water. Our local water supplier recently imposed an additional
``arsenic surcharge.'' While The Magma Mine was operational, local
residents were told that there was no pollution or effects on the water
supply. Now, 20 plus years later, we find that there was--and continues
to be--a price to pay for giving a foreign-owned mining company carte
blanche because we trusted the mine explicitly. We are also worried
that a mine would dry up not only the Town of Superior's water supply,
but a portion of the water supply for the Phoenix metropolitan area. We
also have good reason to believe that mining at Oak Flat will destroy
the riparian habitat not only at Oak Flat, but the nearby Devil's
Canyon which is one of Arizona's great undiscovered riparian treasures.
It is for these reasons and many more that we oppose the enactment of
the Southeast Arizona Land Exchange and Conservation Act prior to
proper NEPA reviews.
Water, the Environment, and Destruction of Land Surface
The Town believes it is critical that Hydrology Surveys,
Environmental Impact Studies, Subsidence Analyses and Transportation
and Circulation Plans be conducted PRIOR to discussion of any land
exchange and/or different use.
Resolution Copper Company's Environmental Impact Assessment
Manager, Bruce Marsh, has indicated that the new mine would utilize
40,000 acre feet of water per year. He further indicated that they
would be buying excess water from the tribes and other sources,
however, they are merely banking those water rights and the sources are
not secured. This is a concern because: (1) Arizona is still in the
grip of a decades long drought with dwindling Central Arizona Project
supplies, and we do not have any assurances that water will still be
available when Resolution Copper Company begins mining in the next 10
years; (2) Superior is located in the Maricopa AMA rather than the
Pinal AMA, and Phoenix metropolitan area water supplies depend upon the
Queen Creek aquifers; (3) The close proximity of the Queen Creek
aquifer to such a massive mining operation will negatively disrupt the
underground water flow and negatively impact hundreds of thousands of
residents; and (4) Neither the State of Arizona nor the local residents
should have to bear the burden of restoring clean and sustainable water
utilized by mining.
RCC has already begun to dewater shafts to prepare for additional
exploration of the ore deposit. We fear that in removing the more than
2 billion gallons of water that have accumulated in the mine since it
was last shut down in 1996 will upset the water balance of the Oak
Flat, Apache Leap, and Devil's Canyon riparian areas. In 1946, Queen
Creek was called a perennial flowing stream. Our Town elders tell us
that when the Magma Mine was in full production during the 60s and 70s,
riparian areas at Oak Flat and in the Town of Superior dried up. An
independent analysis of the impact of a potential mine at Oak Flat to
the water balance of the entire region should be conducted before this
bill should even be considered by Congress.
The Town is alarmed about the issue of subsidence from Resolution
Copper Company's proposed block-cave mining method and its effect on
Oak Flat Campground, Apache Leap escarpment, US Highway 60, and the
Town of Superior. Resolution Copper Company has admitted to only
``minimal subsidence.'' However, they admittedly chose this method of
mining as it is the least expensive and quickest method to approach
this massive ore body. However, experts have demonstrated that there
will be irreparable destruction of unknown extent to the surface
utilizing the block-cave method of mining. This is absolutely
unacceptable. Does block cave mining eventually lead to open pit?
Resolution Copper Company has not yet determined the manner in
which the tailings will be accumulated. Since there will be a
considerable volume of tailings that will be created by this method of
mining, The Town is concerned about the contamination associated with
this activity. We are also concerned regarding reclamation of these
tailings upon mine closure.
H.R. 687 mentions the National Environmental Policy Act (NEPA) but
the bill does not provide for even the most basic study and analysis of
these issues and concerns prior to obtaining the land exchange.
Furthermore, if the land exchange is granted, the ``NEPA'' language in
the bill is so vague that the company could easily avoid doing any
``NEPA'' analysis. Even if a ``NEPA'' study were to be conducted after
the land exchange went into effect, the results would be meaningless as
the outcome of the study would already be mandated by law.
The Town believes that Resolution Copper Company should not be
exempt from the required national permitting studies and analyses that
have been required of the other mines in the area by virtue of a land
exchange. No other mining corporation in this area has been allowed to
bypass the Federal permitting and NEPA process.
If the start-up timeframe proposed by Resolution Copper Company is
correct, then there is plenty of time to conduct the full public review
process. Additionally, if Resolution Copper Company is as
``transparent'' as they profess, they should welcome this endeavor to
put all the ``cards on the table'' and hear everyone's input.
We also believe that details of the project and potential impacts
(Mining Plan of Operation) should be made available to our residents
and to the general public up front. We continually hear that Resolution
Copper Company will make this plan available later--after the land
exchange. We feel that if the land exchange is of utmost importance,
Resolution Copper Company should accelerate production of their plan
NOW--before the land exchange.
Threat to the Town of Superior's Economic Diversification and
Sustainability
Many citizens of the Town have lived through the boom and bust
cycle of mining. After closure of the Magma/BHP mine in the 1990s, many
people fled the community in search of jobs, medical treatment
facilities and amenities that were not available in Superior. Voters
taxed the political body to create a more diversified and sustainable
economic base for its residents. The Town received grants to develop an
Industrial Park, a low-income housing subdivision, a new swimming pool,
second fire station, airport, rest stop and numerous parks and trails.
These projects were initiated to create jobs for our local residents,
to increase State-shared revenue and local taxes and to encourage eco-
tourism.
The Town believes that in order to sustain growth and development,
we cannot rely on any one industry to support us. Mining has an allure
and historical ties in our community. However, just as in the past,
mining has a short life. We cannot base our future on one single
industry or employer. Additionally, the process of mining in the 21st
century is very technologically advanced and requires specialized
training. Resolution Copper Company has not indicated that they will
hire untrained, local labor. In fact, today's activity on the project
reflects an influx of mining technicians from outside the community. We
routinely see vehicles with license plates from Utah, Colorado and
Mexico. We are seeing more and more articles regarding the development
of robotic workers for future mining activities. These robotic systems
are being tested today in South American and Australian mining
operations. It would be no surprise if many of the technical jobs that
are available will be held by highly trained individuals sitting at a
computer in another state--or even another country--controlling our
robotic work-force remotely. The loss of this natural resource and
already protected public lands compromises the potential for our
community to foster and promote a more diversified economy based upon
tourism and outdoor activity. At a minimum, the Boyce Thompson State
Park to the west and the Oak Flat Campground to the east create a
natural flow of traffic to and through the Town. Tourists, Boy Scout
troops and other individuals and groups routinely pass through to camp
overnight at the Oak Flat Campground. They stop for gas, sundries and
refreshments at local establishments in far greater numbers than local
workers. Superior is a natural ``pit stop'' for eco-tourism and this is
the type of activity that sustains our economy.
While Resolution Copper Company has promised great hope for another
``boom,'' they do not willingly embrace annexation into our town
limits, they have purposely depreciated their land values in
anticipation of the land exchange and they have strong-armed our local
government into accepting less than adequate compensation for future
use of the Town's services and support.
Summary
Resolution Copper Company has divided this community by demanding
that the Town Council speak for the residents of Superior in unwavering
and unqualified support of a land exchange that is not necessary in
order for Resolution Copper Company to mine. Behind the scenes, their
representatives have attempted to force the firing of individuals
opposing the Land Exchange. Those individuals who question Resolution
Copper Company in any fashion are deemed to be ``anti-mine.''
Businesses deemed ``anti-mine'' are not supported by Resolution Copper
Company, their employees or agents--in fact RCC employees are urged to
boycott! These strong-arm tactics should not be allowed to pervade a
community already distraught from previous ``boom and bust'' mining
cycles.
H.R. 687 does not represent a land exchange that is in the broader
public interest. It is clear to the Town that Presidents Eisenhower and
Nixon believed that they were protecting Oak Flat from big business
interests in acquiring public lands for development, mining and
transportation. Oak Flat has been important enough to protect from
mining and other elements for over 50 years, and it should not be so
easily conveyed to a foreign-owned mining interest. This land exchange
would set a terrible precedent.
The Town urges this Committee to ensure that the concerns of all
public interests are addressed prior to consideration of any Federal
land exchange. We believe you should protect these public lands for the
public's future use and preserve the unique opportunities for
Arizonans--and especially Superiorites--that the Oak Flat area
provides.
For these and many other reasons, we oppose H.R. 687, the Southeast
Arizona Land Exchange and Conservation Act of 2013 and feel that it
should be rejected, until such time as our concerns are at least
addressed through proper NEPA studies.
Thank you for your time and consideration.
______
Dr. Gosar. Thank you very, very much. There are two things
now--if we can have the screens cleared, please? Thank you.
The Chairman would like, by unanimous consent, to have two
things, the ``Pentagon Warns of Mineral Shortfalls,'' and a
Congressional Research memorandum to be included in the record.
So ordered?
[No response.]
Dr. Gosar. No objections, so ordered.
[The information submitted for the record by Dr. Gosar has
been retained in the Committee's official files:]
Dr. Gosar. I would like to acknowledge myself for the first
aspects of questioning.
Ms. Peralta, thank you for coming here today. I noticed in
your testimony that you made the following statement, ``This is
public land, and the public must be heard openly and fairly
under the NEPA process.'' You are aware that when Resolution
files its Mining Plan of Operations, that it will go through
the environmental review process, and that the public will have
opportunity to provide comments, as guaranteed in the law. Are
you familiar with that?
Ms. Peralta. Yes, I am.
Dr. Gosar. Thank you. Sections 4(i) and 4(j) address
explicitly and implicitly compliance with the Federal
environmental laws and regulations pertaining to conveyances of
Federal land and approval of Mining Plan of Operations. My bill
is clear that the mine can only move forward following
preparation of a full environmental impact study that is in
accordance with NEPA and all other applicable Federal laws and
regulations. That includes national historic preservation acts,
endangered species acts, Executive orders pertaining to
wetlands and floodlands, and hazardous material surveys.
Additional environmental compliance requirements will also
have to be addressed at the State and local levels in order for
this mine to be developed. As you know, and should know, many
of Arizona's environmental compliance laws are even stronger
than those of the Federal laws. This legislation promotes
economic development in an environmentally responsible way.
Now, I agree that the public should be heard, and that is
why we invited you here today. Why do you feel it is so
important for the public to be heard in the NEPA process, while
you and your colleagues silenced the voices of almost 200
citizens last week at your Council meeting when you adopted
your resolution to oppose this bill? You stated that you had
made up your mind, no executive session was necessary, no
public input would be taken, and that if anyone acted up, they
would be escorted out by the police. Is that fair, Ms. Peralta?
Ms. Peralta. Once again----
Dr. Gosar. Is it fair, ma'am?
Ms. Peralta. Yes, it is. According to the open meeting law,
I had those rights. I was the Chair of the meeting.
Dr. Gosar. Thank you very much. For the record, even my
chief of staff went to the meeting at my request, tried to meet
with members of the Council prior to the meeting, and was not
given the opportunity to address the Council. In fact, everyone
in the town that attended your 4-minute meeting--4 minutes, 4-
minute meeting--was threatened with police removal if they
spoke. It doesn't really sound like you or your town manager
want to engage at all.
I have been humbled by the outpouring of support of your
community that was given to Congressman Kirkpatrick and myself
in our efforts to take action. I have been submitted, in
regards to the record, over 400 letters and petition signatures
opposing the town's actions and supporting our bill collected
over the span of just 3 days. The Town of Superior has little
over 2,500 residents. This is pretty incredible.
Ms. Peralta, is it true that petitions have been taken out
to recall you from your seat on the Council?
Ms. Peralta. Yes, it is.
Dr. Gosar. Yes, it is. They were actually filed this
morning.
Ms. Peralta. But--yes, they were.
Dr. Gosar. Yes, thank you.
Ms. Peralta. And I think they have been taken out before--
--
Dr. Gosar. The Town of Superior held local elections just a
week ago, after the current Council broke its Mutual Benefits
Agreement off with Resolution Copper. The two top vote-getters
in the pick-three election were the only two candidates in the
race to express vocal opposition to the current Council's
actions. Two of the current Council members who were part of
this action were the bottom two vote-getters.
I would like to submit for the record the results of the
March 12th election and the statements of the opposition to the
current Council's actions.
I would also like to submit the local media accounts of the
report: the Superior Sun: ``Business Owners, Townspeople React
to Superior's Council Decision;'' ``Thank You, Town Council,
for Losing Superior's Jobs with Resolution Copper,'' right here
on the front page. ``The Copper New Superior Council Meeting
Stirs Anger.''
Ms. Peralta, it appears the only person dividing your
Council is you and the three Council members that have
spearheaded this effort. I encourage you to read these letters,
these petitions, and hear from your citizens and what they are
telling you. I am hard-pressed to believe that you would be
here today with your position if you had listened to your
community.
Ms. Peralta, what is the current financial situation and
status of the town?
Ms. Peralta. We are broke.
Dr. Gosar. Yes. My understanding is the community is in
dire financial conditions. Four months ago you could not even
meet payroll or pay for garbage collection. Is it true that
Resolution advanced monies due in 2013 under your Mutual
Benefits Agreement to cover these bills?
Ms. Peralta. Yes, it is.
Dr. Gosar. Hardly sounds like a bad partner. Supervisor
Miller, why do you think the Town Council has taken such a
radical reversal in position?
Mr. Miller. Congressman Gosar, I don't know what the total
motivation was. I thought it was interesting that, at my board
of supervisors meeting, we had 12 residents from Superior in
support of the resolution that we passed, and 2 against it, one
of which was the new town manager, who stood up and advised us
that they were broke, that they couldn't even put two police
cars back into duty. I thought that was awfully telling as to
their status.
Dr. Gosar. Supervisor Miller, just one last question. In my
tenure in representing District 1, have you seen my presence in
and around Superior in regards to being accessible and
answering questions? Because the witness prior said that I was
not accessible and never had been consulted about this mine.
Mr. Miller. Congressman Gosar, you have been one of the
most accessible legislators I have ever seen. And if there was
an issue and we called you, you made yourself available at any
time.
Dr. Gosar. For the record, without objection, I would like
to highlight those things that I highlighted. And one last
exception is a letter in regards to Chairman Rambler dated
April 15, 2011 in regards to my office in regards to the issues
with tribal consultation and tribal issue in regards to this
mine that was prepared by my staff and experts in Native
American law that I would like submitted for the record.
[No response.]
Dr. Gosar. No objection, so done.
[The information submitted for the record by Dr. Gosar has
been retained in the Committee's official files:]
Dr. Gosar. I would like to now turn it over to the Ranking
Member, Raul Grijalva.
Mr. Grijalva. Thank you very much, Mr. Chairman. Ms.
Peralta, welcome and thank you for taking the time. Can you
tell us about the City Council? There is a number of your
colleagues that can't vote on this issue. Is that correct?
Ms. Peralta. That is correct. We----
Mr. Grijalva. How many?
Ms. Peralta. We have our Mayor and our Vice Mayor, John
Tameron, who are in conflict.
Mr. Grijalva. Conflict because of what?
Ms. Peralta. Our Vice Mayor's son is employed by
Resolution.
Mr. Grijalva. It is because of employment?
Ms. Peralta. And then our Mayor's daughter is married to
him, so that puts him in conflict, also. And our Councilman
John Tameron has a contract with Resolution for cleaning
services he provides.
Mr. Grijalva. It is my understanding that one of the
councilmen, I don't know how recently, left the Council after
some adjudication?
Ms. Peralta. Yes, which is why we had to--which is why the
mutual benefits agreement is null and void. Councilman Hank
Gutierrez was indicted for conflict of interest.
Mr. Grijalva. And he works where?
Ms. Peralta. He has a contract with Resolution.
Mr. Grijalva. Thank you, Ms. Peralta. I also wanted to ask
you. There was a, you know, we get into the discussion, and I
appreciate the Supervisor's point that Resolution has not only
raised the reading scores in the area but is prepared to spend
$16 billion of revenue. At some point we will follow up with
the Supervisor and get some information and some facts. It is
nice to put a little facts, figures around, but you know, at
some point you have to substantiate them. And we will be
following up with questions.
Chairman Rambler, and thank you very much for being here,
as well. Oak Flats' significance; you hear that we are going to
leave the surface alone, so what is the problem? Proponents of
the legislation say, ``We are going to leave the surface alone,
so what is the problem?'' And would you please tell them what
the problem is going to be down the road, not only in terms of
a sacred site, but in terms of the excavation that could
potentially occur underneath?
Mr. Rambler. Yes, thank you. I know in reading some parts
of the bill itself, the proposed bill, it talks about surface,
but it doesn't talk about subsurface. So, on the surface, for
example, Oak Flat and Apache Leap itself, even though in this
particular case the bill itself may say Apache Leap will not be
disturbed and a fence may be put around it to not disturb it
further, but there is nothing there that prevents it from being
disturbed underneath.
So, when we look at it, we look at it in total, the
sacredness of the whole area in total. And so, when underground
it is going to be disturbed, when there is going to be a big
hole left under there, and we don't know what the potential
impact is to the water resources, but we know from history that
when there is a big hole and it rains and it snows and water
comes running down, where is that water going to go, it is
going to go to that big hole, and so we don't know what the
impacts are, and that is how we believe that what is going to
happen under ground is going to affect whatever is going to be
on the surface.
Mr. Grijalva. Thank you. And there has been discussion
saying that this bill does not weaken the NEPA process, and so
people are convinced that the State of Arizona permitting
process for mines and private lands is the same as NEPA. Even
if we side-step NEPA on this one, that is absolutely not true.
The State is far weaker. The public comment period is short.
There is no quick turnaround in the submission of critical
documents. There is no pre-scoping, and the process does not
require bonding to guarantee a clean-up and reclamation after
the fact. And that is just the environmental side of it. On the
consultation, that is a whole other story that doesn't exist.
And so, there is no substitute for, one, skipping over NEPA
and doing it after the fact where there is no enforceability,
and saying, well, the State can take care of it. The State
can't take care of it. The State won't take care of it. This
NEPA process guarantees not only the people of Superior and the
surrounding community, but the viability and the intended or
unintended consequences of this mine everybody is going to know
up front.
And I, for the life of me, you know, many of the critics of
this process could have, would have been shut up a long time
ago, 5 years ago. But for some reason there is a drive to get
it done without NEPA, do it after the fact. If there would have
been agreement, ``Let's do NEPA now,'' we would be waiting and
resolving and debating what the remediation would have had to
be. The consultation government-to-government, we would have
dealt with those consequences, and maybe they wouldn't have
been good.
One suspects, and it is only a suspicion, that a full-blown
NEPA process with public comment is going to disclose and make
transparent some consequences that not only the Tribes and the
Council lady from Superior are going to be opposed to, they are
going to have some consequences that the whole region will be
very, very concerned, particularly around water and sacred
sites. Thank you very much, Mr. Chairman.
Dr. Gosar. Thank you. I would like to acknowledge the
gentlewoman from Wyoming, Ms. Lummis.
Mrs. Lummis. Thank you, Mr. Chairman. And I would like to
slip back in to the much more mundane topic of soda ash in
Trona.
[Laughter.]
Mrs. Lummis. Mr. Hohn, give everybody just a little break,
could you explain a little bit about China and its trade
practices that are distorting the markets for soda ash,
globally?
Mr. Hohn. Absolutely. You know, the facts are China's
capacity to produce synthetic soda ash is growing. Another fact
is that China's exports of soda ash are growing. Another known
fact is that China has incentives such as the VAT that enables
China to sell soda ash below their cash costs. These are all
facts that we are dealing with within the global soda ash
markets.
Mrs. Lummis. I have another quick question, and it relates
to the checkerboard. I think a lot of people don't understand
that the Union Pacific Railroad, when it was given its right-
of-way across the Untied States, was given every other section,
and that this area where the Trona resource lies is within that
checkerboard.
So, the surface, and, therefore, the subsurface mineral
interests under it--lie 640 acres of private land, and next to
that, 640 acres of public land, and that the mining technology
is such that when you are mining a long wall, those things are
enormously expensive to move. Almost indescribably expensive to
move, a long wall, once you set it up and start along its
mining course of action.
Is it possible to just lift those up, or lift your mining
up and go where the royalty is the lowest?
Mr. Hohn. It is very, very, very difficult. It requires
years of advanced mine planning as we look at how we mine the
checkerboard, as you just described. I can assure you with
confidence that, prior to my current role as General Manager of
the Soda Ash Business for OCI Chemical Corporation I was the
Site Manger out in our facility out in Green River, Wyoming.
And while we employ a bit of a different mining technique, it
is a continuous miner operation with room and pillar
advancement--it is impossible to pick up and just change a mine
plan very, very rapidly. And while I don't have the long wall
mining experience, I can assure you also that from my
education, that also requires many years of advanced mine
planning.
Mrs. Lummis. Thank you. And, Mr. Chairman, I will save the
rest of my time and yield back to you to use for whatever
purpose you wish to use it for.
Dr. Gosar. I thank the gentlelady. Before her time runs out
I would like to address some issues laid out in the
Administration's testimony regarding tribal consultation and
the protection of historical significant sites.
As someone who has lived among Native Americans my entire
life, first in Wyoming, then in Creighton University in Omaha,
Nebraska, and finally in Northern Arizona, tribal consultation
and Congress's trust responsibility to Tribes is very important
to me. In fact, I have been very outspoken in favor of the
policies that benefit Tribes in my short time in Congress. That
is why, in crafting this legislation, I have taken specific
measures to protect those interests.
However, regarding Oak Flat Campground, I wanted to correct
some of the misinformation that has been thrown around here.
When the Oak Flat Picnic and Campground was withdrawn in 1955
by a Public Order, PLO1229, in the text it read, ``Reserving
lands within National Forests for use of the Forest Service as
campgrounds, recreation areas, and for other public purposes.''
The withdrawal was done to protect the Federal Government's
interest in the capital improvement of the campground. It made
no mention of tribal sacred sites. In fact, members of
communities that surround the area have given firsthand
accounts that the San Carlos did not utilize the area for
ceremonies until this project was announced about a decade ago.
I will submit a variety of accounts longtime residents of the
area have provided for the record.
I would also like to point out on September 20, 1971 the
Oak Flat Picnic and Campground withdrawal area was modified by
Public Land Order 5132 by Assistant Secretary of the Interior
Harrison Loche. Since then, the 760 acres, known as Oak Flat
Picnic and Campground Area, has been eligible for disposal by
land exchange and other disposal authorities of the Forest
Service.
Once again, I would like to keep the discussion about
facts, because the facts set you free.
The Ranking Member has two articles that he would like to
be included?
Mr. Grijalva. Thank you, Mr. Chairman. And an inventory and
a list of all the Native Nations and tribal governments that
are in opposition of the legislation. Also we will be
submitting for Chairman Lamborn a kind of an explanation
between fee simple and trust land that is for the purpose and
use by Native Tribes under law.
And, Mr. Rambler, thank you. I like the NEPA process, I
like consultation, government-to-government, because I don't
try to tell you what to do and what you need.
Dr. Gosar. Without objection, so ordered.
[The information submitted for the record by Mr. Grijalva
has been retained in the Committee's official files:]
Dr. Gosar. As of this, with no further objections--oh, no,
I am sorry. Mr. Cramer?
Mr. Cramer. I have nothing, Mr. Chairman, but would yield
my time to the Chair, if he needs it.
Dr. Gosar. Well, thank you very, very much. Without further
ado, I know a number of you have to catch your planes. So thank
you very, very much for the testimony, and as of now--thank
you--we stand adjourned.
[Whereupon, at 2:05 p.m., the Subcommittee was adjourned.]
[Additional Materials Submitted for the Record]
The documents listed below have been retained in the
Committee's official files.
Submitted for the record by Representative Paul A. Gosar on
H.R. 687:
Letters of support from the State government
delegation of the affected region: Governor Jan Brewer, State
Senator Barb McQuire, State Representatives Frank Pratt, T.J.
Shope, and Brenda Barton
A resolution unanimously passed by the bipartisan
Pinal County Board of Supervisors and letters of support from
the entire bipartisan Gila County Board of Supervisors. These
two counties encompass the areas most affected by the exchange.
Additional material submitted for the record by Representative
Paul A. Gosar:
Article: Hope for Resolution Copper mine is
bipartisanship, By Editorial board, The Republic/azcentral.com,
2/19/13
E&E Article--Pentagon Warns of Mineral
Shortfalls, 3/20/13
Letter of support from Senate President Biggs
Letter from the Queen Creek Coalition (rock
climbing group)
Superior Town Council election results with quotes
from two candidates and links to news articles where they were
quoted
News Articles: Superior Sun and the Cooper Country
News
CRS Report on Earnings of Mining and Tourism
Industries
Letter from Representative Paul A. Gosar to
Chairman Rambler dated April 15, 2011
Petition and letters of support for H.R. 687, 400
signatures
Letter of support from The Nature Conservancy
Letter of support from the Sonoran Institute
Additional material submitted for the record on H.R. 687:
Access Fund Executive Director Brady Robinson
Affiliated Tribes of NW Indians
Colorado River Indian Tribes
Fort McDowell Yavapai Nation
Inter Tribal Council of AZ Tribes
National Center for Policy Analysis Finding
Sources of Rare Earths beyond China
Ramona Band of Cahuilla Indians
Letters from the Mayor of the Town of Payson, the
Mayor of Globe, Terry Wheeler, Superior Councilman John
Tameron, and a resolution of support from the Town of Kearney
Submitted for the record by Representative Raul M. Grijalva:
Written Testimony of Roger Featherstone, Director,
Arizona Mining Reform Coalition, Testimony on H.R. 687
Submitted for the record in response to James M. Iwanicki's
testimony:
Keweenaw Bay Indian Community
Upper Peninsula Environmental Coalition
Submitted for the record by Representative Joseph J. Heck on
H.R. 697:
Historic Defense Plant Corporation areas
Three Kids Mine and Mill Site Layout
Three Kids Mine Project Site Map Final
Statement of the Honorable Andy Hafen, Mayor,
City of Henderson, Nevada, on H.R. 697