[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
``THE LONG OVERDUE NEED TO REFORM THE MINING LAW OF 1872,'' INCLUDING
THE FOLLOWING BILL, AND OTHER RELATED MEASURES: H.R. 2579, THE
HARDROCK LEASING AND RECLAMATION ACT OF 2019
=======================================================================
LEGISLATIVE HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
OF THE
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
Thursday, May 9, 2019
__________
Serial No. 116-15
__________
Printed for the use of the Committee on Natural Resources
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
or
Committee address: http://naturalresources.house.gov
___________
U.S. GOVERNMENT PUBLISHING OFFICE
36-319 PDF WASHINGTON : 2019
COMMITTEE ON NATURAL RESOURCES
RAUL M. GRIJALVA, AZ, Chair
DEBRA A. HAALAND, NM, Vice Chair
GREGORIO KILILI CAMACHO SABLAN, CNMI, Vice Chair, Insular Affairs
ROB BISHOP, UT, Ranking Republican Member
Grace F. Napolitano, CA Don Young, AK
Jim Costa, CA Louie Gohmert, TX
Gregorio Kilili Camacho Sablan, Doug Lamborn, CO
CNMI Robert J. Wittman, VA
Jared Huffman, CA Tom McClintock, CA
Alan S. Lowenthal, CA Paul A. Gosar, AZ
Ruben Gallego, AZ Paul Cook, CA
TJ Cox, CA Bruce Westerman, AR
Joe Neguse, CO Garret Graves, LA
Mike Levin, CA Jody B. Hice, GA
Debra A. Haaland, NM Aumua Amata Coleman Radewagen, AS
Jefferson Van Drew, NJ Daniel Webster, FL
Joe Cunningham, SC Liz Cheney, WY
Nydia M. Velazquez, NY Mike Johnson, LA
Diana DeGette, CO Jenniffer Gonzalez-Colon, PR
Wm. Lacy Clay, MO John R. Curtis, UT
Debbie Dingell, MI Kevin Hern, OK
Anthony G. Brown, MD Russ Fulcher, ID
A. Donald McEachin, VA
Darren Soto, FL
Ed Case, HI
Steven Horsford, NV
Michael F. Q. San Nicolas, GU
Matt Cartwright, PA
Paul Tonko, NY
Vacancy
David Watkins, Chief of Staff
Sarah Lim, Chief Counsel
Parish Braden, Republican Staff Director
http://naturalresources.house.gov
------
SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES
ALAN S. LOWENTHAL, CA, Chair
PAUL A. GOSAR, AZ, Ranking Republican Member
Mike Levin, CA Doug Lamborn, CO
Joe Cunningham, SC Bruce Westerman, AR
A. Donald McEachin, VA Garret Graves, LA
Diana DeGette, CO Liz Cheney, WY
Anthony G. Brown, MD Kevin Hern, OK
Jared Huffman, CA Rob Bishop, UT, ex officio
Matt Cartwright, PA
Raul M. Grijalva, AZ, ex officio
------
CONTENTS
----------
Page
Hearing held on Thursday, May 9, 2019............................ 1
Statement of Members:
Gosar, Hon. Paul A., a Representative in Congress from the
State of Arizona........................................... 4
Lowenthal, Hon. Alan S., a Representative in Congress from
the State of California.................................... 1
Prepared statement of.................................... 3
Statement of Witnesses:
Comer, Robert D., Partner, Norton Rose Fulbright US LLP,
Denver, Colorado........................................... 19
Prepared statement of.................................... 20
Questions submitted for the record....................... 35
Davis, Colin, Member, Yellowstone Gateway Business Coalition,
Paradise Valley, Montana................................... 12
Prepared statement of.................................... 14
Lachelt, Gwen, County Commissioner, La Plata County, Colorado 16
Prepared statement of.................................... 18
Manuel, Hon. Edward D., Chairman, Tohono O'odham Nation,
Sells, Arizona............................................. 10
Prepared statement of.................................... 11
Additional Materials Submitted for the Record:
List of documents submitted for the record retained in the
Committee's official files................................. 74
Patagonia Area Resource Alliance, WE THE PEOPLE, submission
by Carolyn Shafer.......................................... 70
Submissions for the Record by Representative Gosar
American Exploration & Mining Association, Hardrock
Mining Timeline........................................ 8
Arizona Chamber of Commerce & Industry, Letter to Rep.
Gosar, May 4, 2019..................................... 7
Chinese Resource Strategy: China is securing minerals and
metals for which it is net import reliant.............. 9
Reuters, ``Exclusive: Tesla expects global shortage of
electric vehicle battery minerals-sources,'' by Ernest
Scheyder, May 3, 2019.................................. 6
Slides Used During the Hearing........................... 68
LEGISLATIVE HEARING ON ``THE LONG OVERDUE NEED TO REFORM THE MINING LAW
OF 1872,'' INCLUDING THE FOLLOWING BILL, AND OTHER RELATED MEASURES:
H.R. 2579, THE HARDROCK LEASING AND RECLAMATION ACT OF 2019
----------
Thursday, May 9, 2019
U.S. House of Representatives
Subcommittee on Energy and Mineral Resources
Committee on Natural Resources
Washington, DC
----------
The Subcommittee met, pursuant to notice, at 10:05 a.m., in
room 1334, Longworth House Office Building, Hon. Alan Lowenthal
[Chairman of the Subcommittee] presiding.
Present: Representatives Lowenthal, Cunningham, DeGette,
Grijalva (ex officio); Gosar, Graves, and Hern.
Also present: Representatives Stauber and Amodei.
Dr. Lowenthal. The Subcommittee on Energy and Mineral
Resources will come to order. The Subcommittee is meeting today
to hear testimony on the long overdue need to reform the Mining
Law of 1872, and on H.R. 2579, we are going to hear Chairman
Grijalva's Hardrock Leasing and Reclamation Act of 2019.
Under Committee Rule 4(f), any oral opening statements at
hearings are limited to the Chair and to the Ranking Minority
Member or their designee. I am going to ask unanimous consent
that all other Members' opening statements be made part of the
hearing record if they are submitted to the Subcommittee Clerk
by 5 p.m. today. Hearing no objection, so ordered.
STATEMENT OF THE HON. ALAN S. LOWENTHAL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Dr. Lowenthal. First, I would like to welcome our
witnesses, and thank you for traveling so far today to be
before us.
The Mining Law of 1872 is one of the most obsolete laws
that are still on the books. It comes to us from a time of the
Wild West, when Civil War veterans would head West and try to
make their fortunes with a pick, a shovel, a donkey, and a
dream.
But there are no more picks, shovels, or donkeys in today's
mining. Instead, there are earth-moving trucks weighing over
350 tons and standing nearly three stories tall, and the dreams
are those of CEOs in boardrooms in Vancouver, Sydney, and
Santiago, Chile.
In 1872, land was plentiful and cheap, and President
Ulysses S. Grant's goal was to give it away as fast as possible
and encourage people to settle the West, paying little
attention to the original inhabitants of those areas. The
Mining Law is designed to give land and minerals away for next
to nothing. The operating responsibility was an afterthought,
if it was even considered at all.
The government effectively posted a sign on our public
lands saying, ``Free gold. Free silver. Free copper. Free land.
No royalties or cleanup required.'' Mining companies took
advantage, extracting over $300 billion of precious metals from
public land without paying a single cent in royalties to the
American people and without bothering to clean up their legacy
of half a million abandoned mines.
I would like to introduce a little breaking news. You have
heard it here first. This was done by President Ulysses Grant
to settle the West, as I pointed out. This may be a surprise to
everyone here on the panel and in the office, but the West has
been settled. Yes, there is no doubt that the West has been
settled. So, we now need to begin to look at what we need to do
now.
It is no surprise that mining companies do not want and
oppose any reform. Who would want to give up a 147-year-old
free ride?
Yet, as we all know, many things have changed in the past
century and a half. Hardrock mining in America now has to
comply with the Federal Land Policy and Management Act, the
National Environmental Policy Act, and the Clean Water Act,
among others.
But none of these laws help land managers plan for the
specific environmental challenges that come with hardrock
mining, or address the exalted status that mining has managed
to maintain on our public lands. Half a million abandoned
hardrock mines litter the country, posing safety threats and
polluting thousands of miles of rivers and streams with toxic
runoff. Fifty million gallons of toxic wastewater, the
equivalent of 2,000 tanker trucks, flows out of hardrock mines
every single day.
Congress tackled this issue for coal mines over 40 years
ago. The industry was asked to pay a small fee for each ton of
mined coal, and that money goes to remediating the harmful
legacy of countless abandoned coal mines. There is no similar
program for cleaning up abandoned hardrock mines. That can only
happen if the mining industry steps up and meaningfully deals
with its own long history of pollution, just as the coal
industry has done.
There are many ways to raise that revenue, and one option
would be a long-needed and overdue royalty on hardrock mining.
For nearly a century, the American people have received a
royalty for oil, gas, coal, potash, soda ash, and many other
resources that are extracted from public lands. It should be no
different for gold, silver, copper, or any other mineral.
We can establish an abandoned mine land fund so that our
public lands are safe and accessible for generations to come.
We can reaffirm that there are places mining shouldn't happen,
where the impacts on public health, the environment, or places
sacred to tribes will be too great. And we can finally get rid
of this idea that mining is always the highest and best use of
our public lands.
The mining industry says everything is working just fine.
Yet, in the same breath they complain that the permitting
system is completely broken. I say to them, that is because
there is no permitting system, just modern environmental laws
piled on top of a creaky, rotting 150-year-old foundation.
They will argue that we need more mines to cut our import
dependence or find the minerals needed to realize our clean
energy future. But they need to acknowledge that this can't
happen and will not happen if they insist on creating a future
for mining using a relic of the distant past. The Mining Law of
1872 must go.
[The prepared statement of Dr. Lowenthal follows:]
Prepared Statement of the Hon. Alan S. Lowenthal, Chairman,
Subcommittee on Energy and Mineral Resources
First, I would like to welcome to our witnesses and thank you for
traveling so far to be here today.
The Mining Law of 1872 is one of the most obsolete laws still on
the books. It comes to us from a time of the Wild West, when Civil War
veterans would head West and try to make their fortune with a pick, a
shovel, a donkey, and a dream.
But there are no picks, shovels, or donkeys in today's mining.
Instead there are earth-moving trucks weighing over 350 tons and
standing nearly three stories tall. And the dreams are those of C-E-Os
in boardrooms in Vancouver, Sydney, and Santiago, Chile.
In 1872, land was plentiful and cheap, and President Ulysses S.
Grant's goal was to give it away as fast as possible and encourage
people to settle the West, paying little attention to the original
inhabitants of those areas. The Mining Law is designed to give land and
minerals away for next to nothing. Operating responsibly was an
afterthought if it was even considered at all.
The government effectively posted a sign on our public lands
saying: ``Free gold! Free silver! Free copper! Free land! No royalties
or cleanup required!''
Mining companies took advantage, extracting over $300 billion of
precious metals from public land without paying a cent in royalties to
the American people, and without bothering to clean up their legacy of
half a million abandoned mines.
We are no longer in the mid-19th century. And as a Californian, let
me assure you: the West is settled!
It's no surprise that the mining industry opposes any reform. Who
would want to give up a 147-year-old free ride?
Yes, some things have changed in the past century and a half.
Hardrock mining in America has to comply with the Federal Land Policy
and Management Act, the National Environmental Policy Act, and the
Clean Water Act, among others.
But none of those laws help land managers plan for the specific
environmental challenges that come with hardrock mining, or address the
exalted status that mining has managed to maintain on our public lands.
Half-a-million abandoned hardrock mines litter the country, posing
safety threats and polluting thousands of miles of rivers and streams
with toxic runoff.
Fifty million gallons of toxic wastewater--the equivalent of 2,000
tanker trucks--flows out of hardrock mining sites every day.
Congress tackled this issue for coal mines over 40 years ago.
Industry was asked to pay a small fee for each ton of mined coal, and
that money goes to remediating the harmful legacy of countless
abandoned coal mines.
There is no similar program for cleaning up abandoned hardrock
mines.
That can only happen if the mining industry steps up and
meaningfully deals with its own long history of pollution, just like
the coal industry has done.
There are many ways to raise that revenue, and one option would be
a long-overdue royalty on hardrock mining. For nearly a century, the
American people have received a royalty for oil, gas, coal, potash,
soda ash, and many other resources that are extracted from public
lands. It should be no different for gold, silver, copper, or any other
mineral.
We can establish an abandoned mine land fund so that our public
lands are safe and accessible for generations to come. We can reaffirm
that there are places mining shouldn't happen, where the impacts on
public health, the environment, or places sacred to tribes will be too
great. And we can finally get rid of this idea that mining is always
the highest and best use of our public lands.
The mining industry says everything is working just fine. Yet, in
the same breath they complain that the permitting system is completely
broken. I say to them that this is because there is no permitting
system, just modern environmental laws piled on top of a creaky,
rotting, 150-year-old foundation.
They will argue that we need more mines to cut our import
dependence, or find the minerals needed to realize our clean energy
future. But they need to acknowledge that this can't happen, and that
this won't happen, if they insist on creating a future for mining using
a relic of the distant past. The Mining Law of 1872 must go.
______
Dr. Lowenthal. With that, I look forward to the testimony
from our witnesses. And I will now recognize Ranking Member
Gosar for his opening statement.
STATEMENT OF THE HON. PAUL A. GOSAR, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Dr. Gosar. Thank you, Mr. Chairman, and thanks for yielding
time. And thanks to all the witnesses for being here today.
Today, we are going to consider the Hardrock Leasing and
Reclamation Act of 2019. This misinformation and misguided
legislation seeks to transform the general Mining Law of 1872.
Specifically, this bill would convert the existing mining claim
system to a leasing system, and impose an 8 percent gross
royalty on existing operations and a 12.5 percent gross royalty
on new mining operations on Federal lands.
While my colleagues on the other side claim that they are
simply seeking to update an outdated statute, in fact this
legislation is designed to cripple the domestic mining industry
by making new and existing operations unprofitable. Without a
doubt, this legislation would drive mining investment away from
the United States, furthering our dependence on foreign imports
and threatening the U.S. supply chain for countless industries
and products.
Hardrock mining is critical to our national security,
manufacturing, and infrastructure sectors, and even renewable
technologies. If you will bring up Slide 1 showing the
components of a cell phone.
[Slide.]
In order to make missiles, modern weapon systems, solar
panels, wind turbines, batteries for electric vehicles,
smartphones, tablets, and even smart home devices, you must
first mine and process hardrock minerals. For example, electric
vehicles require large amounts of lithium, cobalt, graphite,
and copper. Presently, the United States is dependent on
foreign imports for each of these minerals. Would you please
show Slide 2.
[Slide.]
According to the U.S. Geological Survey, the United States
is currently 100 percent import-reliant on 18 minerals and more
than 50 percent reliant on another 30 minerals. Please push
Slide 3.
[Slide.]
Look at the corresponding change. As you see here, we have
greatly increased our dependency on foreign minerals,
particularly from China, which has happened over the last two
decades. In the previous slide, if you looked--can I go back to
the previous slide--way down at the very bottom, it shows
``rare earth.'' This is one of our technology marvels that we
need. It is at 2 percent that we were relying on everybody
else.
Now let's go back to the previous slide. It is 100 percent.
China dictates a whole marketplace. That is why you have seen
batteries move over to China. They dictate the whole process in
this aspect. We are import-reliant for 14 of the 15 minerals
required in most renewable energy technologies, and demand will
soon outpace supply. Just last week at a conference here in DC,
Tesla warned that a lack of investment in the mining sector is
creating a shortage of key minerals needed to build electric
vehicles.
My colleagues say that the Mining Law is antiquated and
that companies are free to mine anywhere they would like
without paying their fair share. However, hardrock mining must
comply with the same environmental statutes and regulations as
all other industries. In fact, the general Mining Law has been
amended several times to require additional environmental
protections and establish fees for mining claims.
In addition to state and local laws, hardrock mining
operations must comply with at least three dozen Federal
environmental laws and regulations, including FLPMA, NEPA, the
Endangered Species Act, the Clean Water Act, the Clean Air Act,
the National Historic Preservation Act, just to name a few.
Each of these laws ensures that mining operations protect
public health, safety, as well as the environment.
While my colleagues are quick to claim that this industry
can mine on our federally owned land free of charge, that is
not the case. In Fiscal Year 2017, the industry paid $65
million in mining claim fees and 40 to 50 percent of all
earnings in taxes, fees, and state royalties.
My colleagues' proposal to convert the current claim system
to a leasing system would drive away investment from the
domestic mining industry. Under a leasing system, the Federal
Government can cancel a lease for political reasons, even after
significant up-front investment has been made in exploration
and before any resources have been recovered.
In fact, that is actually trying to happen right now. My
colleagues on the other side are trying to dispute a claim that
has already been settled. Hardrock mining exploration involves
significant financial risk, as it can take decades to locate a
deposit that is economical to mine. According to the USGS, only
1 in 1,000 potential targets for a potential operation actually
become a mine. The average timeline from concept to discovery
is 10 years, and the average permitting timeline is 7 to 10
years.
Under this legislation, a company would need to negotiate
renewal of the lease before permitting has even concluded.
Given that the average up-front investment before mining even
begins is $244 million, the arbitrary lease renewal
requirements would undoubtedly curtail investment in any new
mines.
Because most of the $244 million is spent on environmental
compliance imposing a system that encourages companies to race
toward production under the new threat of a lease cancellation,
that would pose a greater risk to the environment. Further, the
royalty rates suggested in this draft legislation are designed
not to generate fair return to the taxpayers, but to put the
domestic mining industry out of business. Under this
legislation, there would be no mining industry to pay for the
abandoned mine cleanup.
At a time when we are facing shortfalls in critical
minerals like lithium and copper, we should be focusing on
streamlining the permitting process to bolster domestic
production, not enacting legislation that can put the U.S.-
based industry out of business. The foolish policies in this
legislation would only further exacerbate our reliance on China
and other nations for minerals we need for our economic and
national security.
Before I turn back over the microphone, I have several
things that I want to submit for the record. We have ``Mining
the Future'' that would be submitted into the record. We also
have a summary from Tesla to be submitted into the record.
Dr. Lowenthal. So ordered.
Dr. Gosar. I also have a letter from the Arizona Chamber of
Commerce to hand out. This would have an impact of $4.29
billion and 44,000 direct and indirect jobs will be associated
with impact because of this bill. I would like to have that
submitted for the record.
Dr. Lowenthal. It will be submitted for the record. So
ordered.
Dr. Gosar. I would like to have the timeline in regards to
what it takes, a hardrock mining timeline from before
production, to be placed in the record.
Dr. Lowenthal. So ordered.
Dr. Gosar. I also have ``China Resource Strategy: The
Extortive Aspect,'' in which China ``One Belt, One Road'' is
nominating all resources around the world and where they are at
for the record.
Dr. Lowenthal. So ordered.
Dr. Gosar. I thank the Chairman and yield back.
[The information follows:]
Submissions for the Record by Rep. Gosar
Exclusive: Tesla expects global shortage of electric vehicle battery
minerals-sources
By Ernest Scheyder
Reuters
May 3, 2019
WASHINGTON (Reuters)--Tesla Inc expects global shortages of nickel,
copper and other electric-vehicle battery minerals down the road due to
underinvestment in the mining sector, the company's global supply
manager for battery metals told an industry conference on Thursday,
according to two sources.
The company, a major minerals consumer, has rarely talked publicly
about its views on the metals industry. Copper, nickel, lithium and
related minerals are key components used to make electric-vehicle
batteries and other parts.
Sarah Maryssael, Tesla's global supply manager for battery metals, told
a closed-door Washington conference of miners, regulators and lawmakers
that the automaker sees a shortage of key EV minerals coming, according
to the sources.
According to a Tesla spokesman, the comments were industry-specific and
referring to the long-term supply challenges that may occur with
regards to these metals.
The copper industry has suffered from years of underinvestment, and it
is now working feverishly to develop new mines and bring fresh supply
online as the electrification trend envelops the global economy.
Freeport-McMoRan Inc, the world's largest publicly traded copper
producer, is expanding in the United States and Indonesia.
Electric cars use twice as much copper as internal combustion engines.
So-called smart-home systems--such as Alphabet Inc's Nest thermostat
and Amazon.com Inc's Alexa personal assistant--will consume about 1.5
million tonnes of copper by 2030, up from 38,000 tonnes today,
according to data from consultancy BSRIA.
All that will make the red metal--and other minerals--scarcer
commodities, which worries Tesla.
Maryssael added, according to the sources, that Tesla will continue to
focus more on nickel, part of a plan by Chief Executive Elon Musk to
use less cobalt in battery cathodes. Cobalt is primarily mined in the
Democratic Republic of the Congo, and some extraction techniques--
especially those using child labor--have made its use deeply unpopular
across the battery industry, especially with Musk.
Maryssael told the conference, hosted by commodity pricing tracker
Benchmark Minerals Intelligence, that there is ``huge potential'' to
partner with mines in Australia or the United States, according to the
sources.
Australia late last year signed a preliminary deal with the United
States to support joint research and development of minerals deemed
critical to the U.S. economy.
The conference, attended by more than 100 people, featured speakers
from the U.S. Department of State and Department of Energy, as well as
Standard Lithium Ltd, ioneer Ltd and other companies working to develop
U.S. lithium mines.
(This story corrects Tesla executive's title to global supply manager
for battery metals instead of head of minerals procurement, paragraph
1.)
______
Arizona Chamber of Commerce & Industry,
Phoenix, AZ
May 4, 2019
Hon. Paul Gosar, Ranking Member,
House Subcommittee on Energy and Mineral Resources,
1324 Longworth House Office Building,
Washington, DC 20515.
Dear Ranking Member Gosar:
We write to you today to express our concern regarding the Hardrock
Leasing and Reclamation Act of 2019, as drafted. The mining industry in
Arizona has a long and proud history, delivering significant economic
growth since before we became a state. In recognition of this important
contribution, our state flag even features a copper star.
The Arizona Chamber of Commerce and Industry advocates in support
of free-market policies that stimulate economic growth and prosperity
for all Arizonans. We believe that to maintain a strong economy,
Arizona must attract and develop businesses in diverse industry
sectors. The Chamber supports policies that improve Arizona's economic
vitality, retain existing businesses, and spur new business growth and
job creation.
Mining continues to play an important role in the continued
economic growth and development of Arizona's future. The total economic
impact of the hard rock mining industry in Arizona is $4.29 billion and
creates nearly 44,000 direct and indirect jobs. Further, the total
state and local taxes generated by mining companies and their employees
in the state is $482 million, with even more tax revenues going to the
federal government.
As one of the most regulated industries in the United States, hard
rock mining is subject to a myriad of federal and state environmental
regulations governing the initiation, operation, and cleanup of mine
sites. We support this existing and rigorous framework because it
promotes a safer mining industry and helps to protect the people of our
state and its remarkable treasures. However, duplicative and onerous
regulatory burdens do not improve outcomes, but rather result in
chilled economic investment, fleeing industries, and significant job
losses.
While we seek to ensure an appropriate regulatory balance between
protecting Arizonans and supporting new and existing economic growth,
we oppose targeted legislative proposals that would imperil
longstanding and important industries such as mining. Inversely, we
support legislative efforts that promote responsible governance and
wise regulation.
Sincerely,
Glenn Hamer,
President and CEO.
______
Hardrock Mining Timeline
American Exploration & Mining Association
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chinese Resource Strategy
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Dr. Lowenthal. Thank you. I am now going to ask unanimous
consent for Congressman Amodei and Congressman Stauber to sit
on the dais and participate in this morning's hearing. Hearing
no objection, it has been so ordered.
I will now introduce today's witnesses. First we have the
Honorable Edward Manuel, Chairman of the Tohono O'odham Nation;
next we have Mr. Colin Davis, owner of Chico Hot Springs Resort
and a member of the Yellowstone Gateway Business Coalition;
next we have Ms. Gwen Lachelt, County Commissioner of La Plata
County, Colorado; and finally, Mr. Robert Comer, partner at
Norton Rose Fulbright.
Let me remind the witnesses that they must limit their oral
statements to 5 minutes, but their entire statement will appear
in the hearing record.
When you begin, the lights on the witness table in front of
you will turn green. After 4 minutes, the light will turn
yellow, and then your time will expire when the red light comes
on 1 minute later. I will ask you to please complete your
statement at that time. I will also allow the entire panel to
testify before questioning the witnesses.
Let's begin. The Chair now recognizes Chairman Manuel to
testify.
STATEMENT OF THE HON. EDWARD D. MANUEL, CHAIRMAN, TOHONO
O'ODHAM NATION, SELLS, ARIZONA
Mr. Manuel. Good morning, Chairman Lowenthal, Chairman
Grijalva, Ranking Member Gosar, and distinguished members of
the Subcommittee. My name is Edward D. Manuel, and I am
Chairman of the Tohono O'odham Nation, a federally recognized
tribe with more than 34,000 members located in southern and
central Arizona.
As the Subcommittee is likely aware, mining has caused much
turmoil throughout Indian Country. Mining has generated untold
amounts of pollution, destroyed natural resources, and caused
untold amounts of healthcare issues. These problems have been
aided by the 1872 Mining Law. It is time for reform.
The 1872 Mining Law has adversely affected the Tohono
O'odham Nation in many ways. I would like to address three
today.
First, our mineral resource program oversees Freeport-
McMoRan Mine in the northern part of the reservation as well as
a historical mine located on our reservation near Tucson. These
operations were permitted under an old system, where mining
companies could claim minerals underneath our lands without our
consent.
The 1872 Mining Law has no environmental standards, so
these mines were allowed to generate pollution that impacted
our lands and waters. The Freeport-McMoRan Mine has generated
pollution that has infiltrated the underground aquifer. The
pollution is such that the U.S. Environmental Protection Agency
has designated it as an alternative Superfund Site.
The Asarco Mine was able to operate from 1957 to 2001
without a mine plan of operation. It took years of legal
wrangling from the Nation to be able to better assure
environmental protection in and around the Asarco Mine. If the
proposed reforms were in place when the mine started, we could
have alleviated many of these heartaches.
Second, the current system has divided mineral rights
throughout our reservation lands in the United States among a
patchwork of patented, unpatented, public, and allotted lands.
The patented mining claims in particular are a great source of
pain for the Nation. There are dozens of patented mining claims
throughout the Nation.
This makes pockets of land throughout the Nation that we do
not have control of. As a result, we still devote some of our
financial and administrative resources to buying back mineral
rights privatized under the antiquated statute. If the proposed
reforms were in place, it is likely the Nation would not have
lost so much control of its land.
Finally, the 1872 Mining Law threatens our natural
resources near the reservation. Hudbay is seeking to open the
Rosemont Mine in the Santa Rita Mountains outside of Tucson.
The U.S. Forest Service approved the mine without meaningful
tribal consultation. Instead, the Forest Service ignored its
authority to protect cultural resources on public lands where
there was no discovery of a valuable mineral deposit. Again, if
the proposed reforms were in place, we would have had a seat at
the table to allow our concerns to be meaningfully considered.
Reform of the 1872 Mining Law will help prevent the
pollution of our lands and waters by providing an independent,
dedicated funding source for the clean up of abandoned mines.
Revenues from this reclamation fee could be distributed to our
mining or mineral resource program and potentially used to
employ our Nation's members, not just in mining operations but
also in reclamation projects.
It will also permanently end patenting. This privatization
of minerals underneath our reservation provides just another
way to take our lands from us. Most importantly, this reform
respects tribal sovereignty with the consultation process,
where Federal agencies received input from tribes.
But I must make clear that this will be for naught if the
Federal agencies do not proactively take steps to avoid and
minimize the impacts to cultural resources. Finally, this
reform clarifies the authority of both tribal governments and
the Federal Government to balance mining with other competing
land uses.
Thank you again for the opportunity to testify before you.
For the above reasons, I respectfully ask for your support of
this important mining reform legislation. Thank you.
[The prepared statement of Mr. Manuel follows:]
Prepared Statement of the Honorable Edward D. Manuel, Chairman, Tohono
O'odham Nation of Arizona
introduction
Good morning Chairman Grijalva, Chairman Lowenthal, Ranking Member
Gosar, and distinguished members of the Subcommittee. My name is Edward
Manuel and I am the Chairman of the Tohono O'odham Nation, a federally
recognized tribe with more than 34,000 members located in southern and
central Arizona. Our traditional lands span across the United States/
Mexico border from Sonora to Phoenix, west to the Gulf of California
and east to the San Pedro River. As the Subcommittee is likely aware,
mining has caused much turmoil throughout Indian Country. Mining has
generated untold amounts pollution, destroyed sacred sites and caused
untold amounts of sickness. These problems have been aided by the 1872
Mining Law. It is time for reform.
The 1872 Mining Law has adversely affected the Tohono O'odham
Nation in many ways. I would like to address three today. First, our
Mineral Resources Program administers operations at a Freeport McMoran
mine in the northern part of our Reservation, as well as an ASARCO mine
located on our Reservation near Tucson. These operations were permitted
under an old system, where mining companies could claim minerals
underneath our lands without our consent. The 1872 Mining Law has no
environmental standards and so these mines were allowed to generate
pollution that impacts our lands and waters. The Freeport McMoran mine
has generated pollution that has infiltrated the underground aquifer.
The pollution is such that the U.S. Environmental Protection Agency has
designated it an Alternate Superfund Site. The ASARCO mine was able to
operate from 1957-2001 without a Mine Plan of Operation. It took years
of legal wrangling for the Nation to be able to better assure
environmental protections in and around the ASARCO mine. If the
proposed reforms were in place when the mines started, we could have
alleviated much of this heartache.
Second, the current system has divided mineral rights throughout
our reservation lands in the United States among a patchwork of
patented, unpatented, public, and allotted lands. The patented mining
claims in particular are a great source of pain for the Nation. There
are dozens of patented mining claims throughout the Nation. Since
owners of patented mining claims can put the land to ANY use, this
makes pockets of land throughout the Nation that we do not have control
of. As a result, we still devote some of our financial and
administrative resources to buying back mineral rights privatized under
this antiquated statute. If the proposed reforms were in place, it is
likely the Nation would not have lost control to so much of its land.
Finally, the 1872 Mining Law is currently causing issues with
sacred sites near the Reservation. Hudbay is seeking to open the
Rosemont Mine in the Santa Rita Mountains outside of Tucson. The Nation
is currently in litigation with the U.S. Forest Service over the
proposed mine. The litigation is centered around the fact the Forest
Service, with no meaningful tribal consultation, assumed away its
authority to protect cultural resources on public lands where there was
no discovery of a valuable mineral deposit. Again, if the proposed
reform were in place, we would have a seat at the table to allow our
concerns to be meaningfully considered.
Reform of the 1872 Mining Law will help prevent the pollution of
our lands and waters by providing an independent dedicated funding
source for the cleanup of abandoned mines. Revenue from this
reclamation fee could be distributed to our Mineral Resources Program
and potentially used to employ our Nation's people, not just in mining
operations, but also in reclamation projects.
It will also permanently end patenting. This privatization of
minerals underneath our reservation provides just another way to take
our lands from us. Most importantly, this reform respects tribal
sovereignty with a consultation process where Federal agencies receive
input from tribes. But I must make clear that this will be for naught
if the Federal agencies do not take into meaningful consideration this
input received by tribes and proactively take steps to avoid and
minimize impacts to cultural resources. Finally, this reform clarifies
the authority of both tribal governments and the Federal Government to
balance mining with other competing land uses.
Thank you again for the opportunity to testify before you. For the
above reasons, I respectfully ask for your support of this important
mining reform legislation.
______
Dr. Lowenthal. Thank you, Chairman Manuel.
The Chair now recognizes Mr. Davis to testify for 5
minutes.
STATEMENT OF COLIN DAVIS, MEMBER, YELLOWSTONE GATEWAY BUSINESS
COALITION, PARADISE VALLEY, MONTANA
Mr. Davis. I would like to thank the Chairman and the
entire Committee for inviting me to speak today on behalf of
the urgent need to reform the 1872 Mining Law in order to
protect our Nation's resources, our free competition, and above
all, our communities. I have had the privilege of testifying
before this Committee in 2018 while I was fighting for my own
home, my own way of life. Today, I feel I am doing the same for
my country.
I sit here today as a founding member of the Yellowstone
Gateway Business Coalition, also as a business owner and a
proud steward of Montana's Paradise Valley. Not unlike
Yellowstone National Park, the Paradise Valley is one of God's
greatest creations. From the majestic mountains and the flowing
river to the thriving ranches, our outdoor lifestyle is clearly
abundant. That is where my wife, my daughters, and I, we hike,
we hunt, we fish, we recreate. My daughter is here today; she
can testify to all of those.
More importantly, it is the gateway to Yellowstone National
Park, which draws visitors from around the country but also, as
you know, from around the world. And it drives our local
economy.
Paradise Valley is as fruitful for commerce as it is for
recreation. Our family business, Chico Hot Springs Resort, has
thrived for 120 years, primarily thanks to the wonders of the
surrounding landscapes. Our family works extremely hard, and we
take immense pride in preserving the springs and our legacy,
and we love to share them with others. It is hard work and
independence that are a way of life, but it is also a Montana
ethic and a Montana way of life.
The other businesses surrounding Yellowstone are equally
committed to preserving this place. To that end, over 400
businesses and stakeholders banded together in a successful
effort to fight one of the greatest threats our region had ever
faced. We stood together to prevent two industrial-scale gold
mines from ripping apart our valley, our land, our life, and
our businesses. And it was all being done without giving our
community a say in the future of these lands, in the future of
our own backyard.
We formed this coalition based on three principles. It was
formed on pro-business, pro-mining, and pro-property rights. We
support development, including mining, when it is done right
and it is good for our community. When it is not done right, it
should be our right and is our right to oppose it.
The mines would have had a dramatic and negative impact on
our already flourishing regional economy. It is important to
underscore we are not anti-mining, and this is one of our core
principles. We understand the West is rich in extractable
minerals, which can be vital to parts of the economy. Our
membership includes miners. Mining, like all industries, like
my own, can be done well or it can be done poorly.
We also believe in property rights. That being said,
mining, even on public lands, can unjustly damage private
business interests. We, as the public, should have a loud, loud
voice in what happens to our public lands, especially when they
are local.
Our principles are consistent with individual liberty and
free enterprise, which our Nation values so highly. The tenet
of free enterprise should give us a voice in managing, not
wasting, these natural resources. What I am sharing with you is
nothing new, but our community chose to stand and fight
together. It is why our region is now protected from
industrial-scale mining via the Gateway Protection Act, which
passed in a recent public lands package. It was no easy feat.
Our coalition spent over 4 years, money we did not have,
money we could not afford, and countless hours away from our
homes and our families, simply to fight foreign corporations
that stood to profit from legal loopholes in our own law. And
it would have been at our expense. Fortunately, we were
successful. But many communities and businesses across the West
are facing similar fights.
Today's problems with the 1872 Mining Law were not always
problems. In 1872, it made sense to encourage Americans to go
West and incentivize them to dig. But today it really does not.
The world has changed dramatically in 147 years, but this law
simply has not.
The law gives hardrock mining a very unfair advantage in
multiple ways. It creates externalities and stifles
competition. It gives mining companies a free pass to mine
without paying royalties that other extractive industries, such
as coal and oil, have to pay. The law, especially, declares
mining the best use of public lands with zero cost-benefit
analysis. This special treatment frustrates fair competition.
Finally, hardrock mining does pump more pollution than any
other source, according to the EPA. This means the industry
placing the biggest boot on the taxpayer's back also leaves the
biggest footprint on the land.
The way forward, to me, is clear and it is simple. Stop
subsidies. Make companies pay royalties. Ensure companies pay
for cleanup. And above all, let land managers and local
communities choose the true best use of those public lands.
In conclusion, I would like to say that while it was a real
honor to be one of the leaders of the Yellowstone Gateway
Business Coalition and an honor to win this fight, I would have
much rather been at home running my own business and spending
the last 4 years with my family.
I hope Congress can find the same bipartisan path it did
with the lands package in updating this law. Our lives, our
businesses, and our communities should be ours to control and
care for. Thank you very much.
[The prepared statement of Mr. Davis follows:]
Prepared Statement of Testimony of Colin Davis, Member, Yellowstone
Gateway Business Coalition
introductory remarks
Thank you for inviting me back here to speak on the urgent need to
reform the 1872 mining law in order to protect our nation's most
valuable resources, our commitment to free and fair competition, and
our millions of small businesses and communities living adjacent to
public lands. While I came here advocating for my home in 2018, I'm
advocating today on behalf of my country.
how an outdated law nearly destroyed one of god's greatest creations
and hundreds of small businesses
I stand before you as a small business owner, a community leader,
and a proud steward of one of God's greatest creations--Montana's
Paradise Valley. Paradise Valley is indeed paradise--the kind that we
ourselves cannot make, but can certainly enjoy. From majestic mountains
and cottonwood glades, to thriving farms and ranches, the Valley offers
commercial and recreational opportunities beyond number. My family and
I have religiously hunted, hiked, and fished through the seasons of our
dynamic landscape for generations, as my daughter who's here today can
tell you. The Valley is also the doorstep of the Yellowstone National
Park, through which Americans from across the country, and tourists
from across the world, come to marvel at the beauty of our national
treasure.
Paradise Valley is as fruitful for commerce as it is for
recreation, when done right. Our family business, the Chico Hot Springs
Resort, has thrived thanks to the wonders of the land it sits on. We
take pride in presenting the hot springs to others, and we work hard to
preserve the springs and our historic resort in the state we received
them.
Hard work and independence are a way of life that has sustained our
region for generations. Small businesses in and around Yellowstone are
so committed to preserving this way of life that over 400 regional
businesses from across the political spectrum came together to fight
the greatest threat our region has ever faced. The Yellowstone Gateway
Business Coalition formed to prevent two proposed gold mines from
ripping apart our land, our views, and our generations-old businesses,
without giving any of us who actually live here a say in how we wanted
our land used.
The coalition formed with three simple principles, and we still
hold these principles today:
Number 1: We are pro-business. And I can tell you that
pursuing short-term profit over long-term gain is a great
way to go bankrupt. That is why we support development,
including mining, when the development is good for
business, and we oppose it when it's not. The proposed gold
mines, at commercially viable scale, would have hurt the
economic prospects of thousands of Montanans, so our
coalition opposed them.
Number 2: In case this needs repeating, we are not anti-
mining. Our group includes members who are themselves
miners. Mining, like all forms of industry, can be done
well, or done poorly. It can produce a net gain or a net
loss. Mining at the front doorstep to Yellowstone is a
quick way to destroy both resources and the jobs of
thousands of people whose businesses depend on them. Saying
``not here'' does not mean ``not anywhere.''
Number 3: We believe in the sanctity of private property
rights and we reject any policy that infringes on those
rights. Mining that damages private business interests and
property values is unjust, and the community and businesses
who will bear the brunt of the impact from mining should
have a say in whether and how the mining happens. Private
landowners simply cannot be saddled with the risks and
costs of hardrock mining without having any say in the
matter.
These three principles are consistent with the principles of
individual liberty and robust enterprise that undergird our nation and
our economy. You don't have to be an environmentalist to agree that
giving away public resources so that private corporations can profit at
the expense of the public is both foolish and immoral. The net cost of
mining gold in Yellowstone is so staggeringly high that it is hard to
think anyone ever put the proposition through a balance sheet.
sparing future generations this fight
Inclusion in Public Lands Package
I'm not telling you all anything new. We all agree on the three
principles I just shared. Both parties agree that mining on the
doorstep to Yellowstone would be a terrible idea, and that's why our
valuable region was permanently protected from mining under the public
lands package passed this February. But reaching that common-sense
conclusion wasn't a simple matter of me or any other resident of
Paradise Valley explaining to you the huge net loss of mining there. It
wasn't the result of a fair, transparent process in which the people
who actually live in an area are consulted about how they'd like to use
it. Instead, we had to take huge amounts of time, energy, and money
away from our businesses and our families in order to protect them from
outside forces.
Our coalition spent 4 years spreading the word that America was
about to lose one of its greatest treasures for good, all thanks to an
outdated law and unaccountable foreign corporations. The corporation
that wanted to build a gold mine above Chico was not family-owned, not
regional or local, not even American. Yet it stood to benefit hugely
from a loophole in U.S. law, at the expense of our entire nation and
especially my community. And my story is just one of many. Small
business owners across the West are facing the same fight we did, and
most of them do not come out on the other side with their communities
and livelihoods intact.
Images and numbers capture the devastating effects of hardrock
mining on the towns and businesses in its vicinity: the mustard-yellow
Animus River in Colorado, swollen with 3 million gallons of
contamination after the Gold King Mine disaster; the $30,000 per day
cost of treating contamination from the Summitville Mine, estimated to
reach at least $170 million; the 40 percent of all watersheds in the
West that are contaminated from mining alone. Mining is spilling its
deadly effects across our country at an ever-expanding rate and an
ever-expanding cost. Communities should have the right to ``say no'' to
corporations that would cause these impacts in their backyards.
Need for 1872 Reform
The problems with the existing 1872 mining law are not hard to
spot. In 1872, allowing people to mine public lands without paying a
penny in royalties was designed to motivate individuals to move West,
and it worked. But while this may have made sense more than a century
ago, this massive mining subsidy clearly is not working anymore--at
least not for the American people.
There are at least glaring problems with the 1872 mining law that
Congress should fix. logical fallacies of this law are (1) its fiscal
inadequacy, (2) its lack of cost-benefit analysis, and (3) hardrock
mining's disproportionate contribution to environmental expenses.
1. The 1872 law declares hardrock mining the ``highest and best
use'' of public lands without accounting for other possible
uses, or for the uses of adjacent private lands. Again,
this special treatment afforded hardrock mining companies
comes at the expense of local communities, who have no
input into the development of their public lands for this
purpose.
2. The 1872 law gives mining companies a free pass to mine Federal
lands without requiring them to pay the standard royalties
that other extractive industries, like coal, oil, and
natural gas, pay for their profit.
3. Finally, hardrock mining pumps more toxic pollution into our
lands than does any other source, according to the
Environmental Protection Agency. This means that the
industry placing the biggest boot on the back of our
taxpayers is also leaving the biggest footprint of
pollution on the lands it claims. In Montana, the shameful
legacy of irresponsible hardrock mining on public lands is
still being felt--in our waterways and our pocket books.
Fixing the 1872 Mining Law is as easy as identifying its flaws.
Simply apply the same standards to hardrock mining that we do to all
other mining industries. Require hardrock mining companies to pay
royalties and reclamation fees, so that taxpayers get their fair share
of profit from mining on public lands. Require mining companies to pay
for the cleanup of their operations, rather than leaving taxpayers to
foot the bill. And most importantly, give communities the opportunity
to help choose the true best use of their lands, rather than letting
foreign corporations decide for them.
Beyond these immediate fixes, an additional step is needed to help
protect communities from hardrock mining. While other extractive
industries have to meet environmental standards, there is currently no
direct statutory authority for environmental protection under the 1872
law, and existing environmental laws are clearly not ensuring that
mining is done responsibly. Federal land managers must be given clear
regulatory authority over reclamation of mining sites, or else cleanup
will continue to be no one's job and taxpayers' burden.
Taxpayers are subsidizing one of the most lucrative and most
damaging industries in the nation for no reason other than an outdated
law. We cannot let sheer inertia leave our laws in the 1800s, while our
economy and population have 21st century needs.
conclusion
While it has been an honor and a privilege to work with my
colleagues on the coalition, I would much rather be running my
business. That is what I chose to do 16 years ago and hope to continue
doing without being threatened by outdated laws. I hope Congress takes
bipartisan action to update this law and allow the millions of
Americans living near public lands to live in peace, knowing our
businesses and communities are ours to care for and control.
______
Dr. Lowenthal. Thank you, Mr. Davis.
The Chair now recognizes Ms. Lachelt to testify for 5
minutes. Welcome to the Committee.
STATEMENT OF GWEN LACHELT, COUNTY COMMISSIONER, LA PLATA
COUNTY, COLORADO
Ms. Lachelt. Thank you, Chairman, Ranking Member, and
members of the Committee. My name is Gwen Lachelt. I am a
County Commissioner from La Plata County, Colorado.
In 2015, polluted water spilled out of the Gold King Mine,
turning the Animas River--the lifeblood of our corner of
southwest Colorado--a toxic orange. Three million gallons of
acidic waste laden with arsenic, lead, and other harmful
contaminants spilled out of the inactive gold mine, flowing
directly into the Animas River. The people of southwest
Colorado rely on the river for drinking water, to irrigate
fields, to sustain wildlife, and to support a lucrative outdoor
recreation industry.
The 1872 Mining Law reform and the reclamation fund it
would create would help communities like mine clean up the
hundreds of thousands of abandoned hardrock mines that litter
the West. To date, there is still no comprehensive inventory of
abandoned hardrock mines, no system to prioritize cleanup of
the most dangerous of these mines, and almost no funds to pay
for it. According to the EPA, estimated clean-up costs are
around $50 billion.
La Plata County is not alone in feeling the impacts of
abandoned mines. The hardrock mining industry is the country's
largest source of toxic pollution, according to the EPA's Toxic
Release Inventory. And because the 150-year-old Mining Law
continues to govern in the 21st century, both abandoned and
operating mines leave behind environmental, public health, and
economic devastation that taxpayers must pay for and
communities must endure.
Just last week, the Blue River that flows through
Breckenridge, Colorado turned orange because of recent
precipitation that mobilized runoff from an abandoned mine
upstream. One of the biggest concerns following the river's
dramatic change in color last weekend has been about the safety
of drinking water supplies, given that hundreds of thousands of
people in Colorado rely on Dillon Reservoir, which is
downstream from the pollution.
Communities across the country rely on their rivers the way
we rely on the Animas. Our health and prosperity depend on
clean water. Reforming the 1872 Mining Law to bring it into the
modern age can help us clean up old mines and safeguard our
precious water resources from future mine disasters.
The time to change U.S. mining policy is long overdue. The
General Mining Law that governs today's mining industry was
signed into law more than 147 years ago, when miners worked
with picks and shovels--a far cry from the modern mines that
can decimate entire watersheds. We have an opportunity to make
sure that there is never another Gold King Mine spill. By
reforming the 1872 Mining Law, we not only create a robust
reclamation fund to clean up old mines, but we also create
jobs.
An Abandoned Mine reclamation program with a significant,
dedicated funding source can act as an economic driver. Across
the country, the Surface Mining Control and Reclamation Act's
Abandoned Mine program has reclaimed over $5.7 billion worth of
mine pollution and nearly 800,000 acres of damaged land and
water. This work cannot be outsourced. The program delivered a
total impact of $778 million to the U.S. economy in Fiscal Year
2013, and supported 4,761 jobs across the country, 1,317 of
which were in Central Appalachian states.
The Congressional Budget Office estimates that for each $1
million spent on mine cleanup, 14 to 33 new jobs are created.
In Ohio, the Surface Mining Control and Reclamation Act funds
generated 10 jobs per million dollars invested. Between 2008
and 2013, Federal funding to the AML program generated more
than $1.8 million in Ohio State and local tax revenue. Stream
restoration has a positive economic impact as well. In West
Virginia, estimated benefits from restoration of Deckers Creek
total about $1.9 million annually.
Without 1872 Mining Law reform, we simply do not have
enough money to pay for mine cleanup and spill prevention for
the hundreds of thousands of abandoned and inactive mines that
litter our country. The public and the environment have paid
the price for too long. Western communities and water resources
need Congress to act now to protect our important water
resources.
Thank you very much.
[The prepared statement of Ms. Lachelt follows:]
Prepared Statement of Gwen Alexandra Lachelt, County Commissioner, La
Plata County, Colorado
Thank you Chairman Grijalva, Chairman Lowenthal, Ranking Member
Gosar and members of the Committee, for inviting me to testify today.
My name is Gwen Alexandra Lachelt, and I am a county commissioner from
La Plata County, Colorado. In 2015, polluted water spilled out of the
Gold King mine turning the Animas River--the lifeblood of our corner of
southwest Colorado--a toxic orange.
Three million gallons of acidic waste laden with arsenic, lead and
other harmful contaminants spilled out of the inactive gold mine,
flowing directly into the Animas River. The people of southwest
Colorado rely on the river for drinking water, to irrigate fields, to
sustain wildlife and to support a lucrative outdoor recreation
industry.
1872 Mining Law reform, and the reclamation fund it would create,
would help communities like mine clean up the hundreds of thousands of
abandoned hardrock mines that litter the West. To date, there is still
no comprehensive inventory of abandoned hardrock mines, no system to
prioritize cleanup of the most dangerous of these mines, and almost no
funds to pay for it. According to the Environmental Protection Agency
(EPA), estimated clean-up costs total approximately $50 billion.
La Plata County is not alone in feeling the impacts of abandoned
mines. The hardrock mining industry is the country's largest source of
toxic pollution, according to the EPA's Toxic Release Inventory. And
because the 150-year-old Mining Law continues to govern the industry in
the 21st century, both abandoned and operating mines leave behind
environmental, public health and economic devastation that taxpayers
must pay for and communities must endure.
Just last week, the Blue River that flows through Breckenridge,
Colorado, turned orange because recent precipitation mobilized runoff
from an abandoned mine upstream. One of the biggest concerns following
the river's dramatic change in color this weekend has been about the
safety of drinking water supplies, given that hundreds of thousands of
people living on the Front Range rely on Dillon Reservoir, which is
downstream from the pollution.
Communities across the country rely on their rivers the way we rely
on the Animas. Our health and prosperity depend on clean water.
Reforming the 1872 Mining Law to bring it into the modern age can help
us clean up old mine sites and safeguard our precious water resources
from future mine disasters.
The time to change U.S. mining policy is long overdue. The General
Mining Law that governs today's mining industry was signed into law
more than 147 years ago, when miners worked with hammer and chisel--a
far cry from the modern mines that can decimate entire watersheds.
We have an opportunity to make sure that there is never another
Gold King Mine spill. By reforming the 1872 Mining Law, we not only
create a robust reclamation fund to clean up old mines, we also create
jobs.
An Abandoned Mine Land (AML) reclamation program with a
significant, dedicated funding source can act as an economic driver.
Across the country, the Surface Mining Control and Reclamation Act's
(SMCRA) AML program has reclaimed over $5.7 billion worth of mine
pollution and nearly 800,000 acres of damaged land and water. This work
cannot be outsourced. The program delivered a total impact of $778
million to the U.S. economy in FY 2013, and supported 4,761 jobs across
the country, 1,317 of which were in Central Appalachian states.
The Congressional Budget Office (CBO) estimates that for each $1
million spent on mine cleanup, 14 to 33 new jobs are created. In Ohio,
SMCRA coal reclamation funds generated 10 jobs per million dollars
invested. Between 2008 and 2013, Federal funding to the AML Program
generated more than $1.8 million in Ohio state and local tax revenue.
Stream restoration has a positive economic impact as well. In West
Virginia, estimated benefits from restoration of Deckers Creek total
about $1.9 million annually.
Without 1872 Mining Law reform, we simply don't have enough money
to pay for mine cleanup and spill prevention for the hundreds of
thousands of abandoned and inactive mines that litter our country. The
public and the environment have paid the price for too long. Western
communities and water resources need Congress to act now to protect our
important water resources.
Thank you.
______
Dr. Lowenthal. And we thank you, Ms. Lachelt.
The Chair now recognizes Mr. Comer to testify for 5
minutes. Welcome.
STATEMENT OF ROBERT D. COMER, PARTNER, NORTON ROSE FULBRIGHT US
LLP, DENVER, COLORADO
Mr. Comer. Thank you, Mr. Chairman, Ranking Member, and
Members. I am Bob Comer, a mining and environmental lawyer, and
a former associate and regional solicitor for the Department of
the Interior. My career has been devoted to the conservation
and protection of sensitive resources in the environment and in
advancement of mineral and other land uses. My comments are
supplemented by written testimony.
The General Mining Law, as amended, governs how U.S.
citizens may gain access to hardrock minerals so important to
our economy, renewable energy future, and daily lives. No
modern city, home, factory, computer, telephone, solar panel,
train, plane, automobile, or national defense system can be
built without minerals.
The proposed legislation will harm our Nation by severely
limiting access and tenure to minerals at a time when the
national agenda demands more. Because renewable energy cannot
be achieved without minerals, the proposed legislation is
inconsistent with the country's renewable energy expansion
objectives. Solar panels, EV cars, rechargeable batteries, and
wind turbines require an array of hardrock minerals.
Smartphones require over 40 minerals.
Just last week, the World Bank Group launched its Climate
Smart Mining Initiative that focused on mining's indispensable
role in renewables. It showed an alarming reliance on foreign
minerals, including 14 of the 15 minerals identified as
essential for renewables. The world will demand the same amount
of copper in the next 25 years as has been mined over the last
500 years, yet our dependence on many essential minerals has
greatly increased over the past 20 years despite our
substantial mineral wealth.
The sweeping changes proposed to the Mining Law are
unwarranted, given how little Federal land is used for hardrock
mineral activities. There are about 350,000 active mining
claims, with roughly half being in Nevada, which is less than 1
percent of the lands with our Nation's mineral wealth. And only
313,000 mineral acres have been authorized for service
disturbance. When viewed in perspective, this far-reaching
proposed legislation is grossly out of proportion to mining's
very minor impact on Federal lands.
Self-initiation allows U.S. citizens to locate mining
claims on Federal lands to explore for minerals with the hope
of discovery. The National Academy of Sciences estimates that
1,000 mineral targets must be evaluated to discover just one
deposit. These are daunting odds.
Self-initiation leverages private investment to finance the
costly physical and drilling programs at no risk or expense
whatsoever to U.S. taxpayers. Mines can only be developed where
the minerals exist. The irony of this legislation is that it
would cloak a functioning mining law in a century-old leasing
system.
The proposed leasing program is fraught with problems that
will precipitate the forfeiture of private property rights. It
will cause a premature shutdown of mines. In Nevada alone,
several large mining companies operate numerous mines that
exceed the acreage limitations contained in this legislation.
This will create a substantial impact and burden on many
communities and the country.
One of the stated drivers for the proposed legislation is
to create mechanisms to say no to mining--in other words, to
leave more mineral in the ground. There is no need for another
law to put Federal lands off-limits to mining as nearly 50
percent of the Federal mineral estate already is off-limits to
mining. The new suitability provisions would prohibit mining.
They are unnecessary. They eliminate the balance that the
Federal land management and environmental laws create. And they
elevate virtually all other uses over mining.
Congress has amended the mining law many times over the
years to respond to evolving environmental and land management
requirements. Any hardrock royalty must promote a fair return
to the public while ensuring the viability of hardrock mining
on Federal lands, which the proposed royalty does not achieve.
Modeling a hardrock royalty after coal, oil, or gas
programs does not consider the differences that exist between
these minerals, from exploration through processing. Finally,
the royalty and dirt tax revenues are illusory because the
royalty base will be dramatically reduced due to the many
onerous provisions in the proposed legislation.
Congress should consider policies that encourage
responsible mineral exploration and development to discover the
domestic minerals needed for American security and society.
Amending the Mining Law to provide a fair return to the public,
while preserving certainty, land tenure, and private investment
for finding, developing, and producing domestic minerals, would
be an important step toward energy independence and a clean
energy future and a stronger America.
Thank you for the opportunity to testify, and I look
forward to answering any questions you may have.
[The prepared statement of Mr. Comer follows:]
Prepared Statement of Robert D. Comer, Esq., Co-head of Mining, Norton
Rose Fulbright US LLP
introduction
Mr. Chairman, Ranking Member, and members of the Committee, my name
is Bob Comer. I am honored to testify today at the request of the
Committee. I am co-head of Mining at the Norton Rose Fulbright US LLP
law firm and former Associate and Regional Solicitor for the Department
of the Interior. My career has been devoted to the conservation and
protection of sensitive resources and the environment in the
advancement of mineral resources and other land uses. I have served
leadership roles in educational and professional organizations, having
been the Natural Resources Practitioner in Residence at the DU law
school, Chair of the ABA Mining Law Section, Chair of the CBA Natural
Resource and Energy Law Section, a Trustee of the Rocky Mountain
Mineral Law Foundation, and on the Advisory Boards of the CU Graduate
Energy Management Program and Innovative Energy Initiative. My
recognitions include an environmental achievement award from EPA for a
pioneering Good Samaritan cleanup. I also serve as a reviser to the
American Law of Mining Treatise.
Thank you for the opportunity to appear today to discuss the
numerous policy challenges contained in the discussion draft of the
Hardrock Leasing and Reclamation Act of 2019 (the ``proposed
legislation'') and how they will adversely affect America's national
security, energy future and social fabric by deterring, and in many
instances eliminating, mining on Federal lands.
The General Mining Law, as amended, governs how U.S. citizens may
gain access to hardrock minerals (also known as locatable minerals)
like copper, gold, silver, zinc, lithium, cobalt, rare earths, nickel,
and other minerals on Federal lands in the western states. These and
other locatable minerals are essential building blocks of our economy,
providing the essential foundation for infrastructure, technology,
manufacturing, conventional and renewable energy, and national defense.
No modern city, home, factory, computer, telephone, train, car,
airplane or national defense system has ever been built or can be built
without minerals.
The proposed legislation will harm the Nation because this bill as
designed will reduce the mineral resources available to extraction on
Federal land. The bill severely limits access and tenure to the mineral
resources on the Nation's public lands at a time when the national
agenda demands minerals for national security, global economic
competition, renewable energy development and to revitalize our
infrastructure. If enacted, it would contribute to America's already
alarming reliance on foreign sources of essential minerals--including
the many hardrock minerals that are in cell phones and renewable energy
applications like wind turbines, solar panels, electric vehicles and
rechargeable storage batteries. The proposed legislation terminates
mining claims, prohibits the staking of new claims, and creates an
unworkable leasing system with arbitrary term and acreage limits that
extinguish private property rights and expose the Federal Government to
substantial takings litigation.
Although the bill is touted as a ``modernization'' of the Mining
Law, it is hard to escape the irony that its essential feature is to
cloak the adequately functioning Mining Law in a century-old mineral
leasing law intended for development of very different types of mineral
deposits.
the hardrock leasing and reclamation act of 2019 will increase
america's
reliance on foreign minerals--including minerals necessary for
developing renewable energy
The U.S. Geological Survey's 2019 Mineral Commodity Summary \1\
shows the United States is 100 percent reliant on foreign countries,
including Russia and China, for 18 important minerals such as the rare
earth minerals that are needed to manufacture the magnets in wind
turbines, and at least 50 percent reliant on imports from foreign
countries for 30 other minerals. Our reliance on foreign minerals has
been increasing at an alarming rate. For example, the USGS 1995 Mineral
Commodity Summary \2\ shows that we imported only 2 percent of the rare
earths needed at the time. (See the two USGS mineral reliance charts at
the end of this testimony).
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\1\ U.S. Geological Survey, 2019, Mineral commodity summaries 2019:
U.S. Geological Survey, 200 p., https://doi.org/10.3133/70202434.
\2\ U.S. Geological Survey, 1996, Mineral commodity summaries 1995:
U.S. Geological Survey, https://minerals/pubs/mcs/1996/nir.gif.
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Our increasing reliance on foreign minerals is not because America
lacks domestic mineral resources. To the contrary, the United States is
blessed with a rich mineral endowment, much of which is located on
Federal lands administered by the U.S. Bureau of Land Management (BLM)
and the U.S. Forest Service where hardrock minerals are governed by the
Mining Law. The dramatic decline in the production of domestic minerals
is due in large part to unfavorable policies that have substantially
chilled investment in domestic mineral exploration and development
including measures that put more and more lands off limits to mining,
and BLM's and the Forest Services' time-consuming permitting processes,
which do not compare favorably to other mineral-rich countries like
Canada, Australia, and Mexico that have much more practical mineral
development and investment policies.
Given the country's current focus on renewable energy, it is
especially important to recognize that the proposed legislation would
severely constrain our ability to find and develop domestic sources of
minerals that are needed to build renewable energy infrastructure.
Solar panels require silver, tin, copper, and lead; wind turbines use
rare earths, copper, aluminum, and zinc; electric vehicles are built
with copper, aluminum, iron, molybdenum; and rechargeable storage
batteries use lithium, vanadium, nickel, cobalt, and manganese.
Approximately 40 percent of the gold now produced is used in
electronics and computer chips that are an integral part of renewable
energy technologies. These are all locatable minerals targeted by this
proposed legislation.
Just last week on May 1, the World Bank Group convened a conference
in Washington, DC to discuss its recently published report, ``The
Growing Role of Minerals for a Low Carbon Future,\3\'' and to launch
its ``Climate Smart Mining/Minerals for Climate Action Initiative.''
Citing an article in Nature, the World Bank report states:
---------------------------------------------------------------------------
\3\ Arrobas, Daniele La Porta, et al, 2017, The Growing Role of
Minerals and Metals for a Low Carbon Future, Washington, DC, World Bank
Group.
``A transition to a low carbon society, [is] a change that will
require vast amounts of metals and minerals. Mineral resourcing
and climate change are inextricably linked, not only because
mining requires a large amount of energy, but also because the
world cannot tackle climate change without adequate supply of
raw materials to manufacture clean technologies.'' \4\
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\4\ Nature, Ali et al. 2017, p. 367 as cited on page xvi of the
World Bank report.
The World Bank report identifies 15 minerals that are critical for
renewable energy. A comparison of the World Bank's list to the USGS
2019 Mineral Commodity Summary reveals that the U.S. relies on imports
for 14 of the 15 renewable energy minerals--even though we have
substantial deposits of many of these minerals. For example, the United
States imports 32 percent of the copper we use despite the fact that
there are significant copper deposits in Arizona, Utah, New Mexico,
Nevada, Montana, Michigan, Minnesota, and Missouri. Electric vehicles
use nearly four times the amount of copper as conventional vehicles, so
we should expect the demand for copper to continue to grow to satisfy
renewable energy expansion objectives. Experts estimate that the world
will need the same amount of copper in the next 25 years that it
produced in the last 500 years to meet global demand.\5\ Renewable
energy applications, including increased use of electric vehicles,
accounts for some of this increased demand for copper. Similarly, we
import 62 percent of the silver we use rather than relying on domestic
silver deposits in Alaska, Nevada, and Idaho to meet our needs. Silver
(and copper) are used to manufacture solar panels.
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\5\ http: / / www.riotinto.com/documents/
190409_Arnaud_Soirat_World_Copper_Conference_ presentation_speech.pdf.
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A peer-reviewed study published by the American Institute of
Professional Geologists \6\ found that global supply and price issues
constrain the availability of the strategic minerals needed for
renewable energy. This study states that U.S. policies should support
exploration and development of domestic sources of renewable energy
minerals and notes that policies that limit mining will impede
renewable energy objectives.
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\6\ See Exhibit I, Burnell, J.R., You Say Alternatives are the
Answer . . . Let's Talk: Resource Constraints on Alternative Energy
Development, American Institute of Professional Geologists, in, The
Professional Geologist, March/April 2009 pp. 33-37.
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Obtaining these minerals from other countries is inconsistent with
low carbon and renewable energy objectives because shipping renewable
energy minerals to the United States increases their carbon footprint.
Domestic production of renewable energy minerals would eliminate this
carbon footprint. Another serious concern is that we rely on
adversarial nations like Russia and China or countries with inferior
environmental protection and worker health and safety laws as sources
for some renewable energy minerals. In particular, cobalt sourced from
the Congo is likely being mined with child labor.
a total overhaul of the mining law is unwarranted given mining's very
small footprint on federal land
In discussing whether the dramatic changes to the Mining Law in the
proposed legislation are warranted, it is important to understand how
little Federal land is currently being used for hardrock mineral
activities. The sweeping changes proposed to the Mining Law must be
evaluated in the context of the very limited footprint that mining has
on Federal land. When mining is put into proper perspective, it becomes
clear how the far-reaching changes proposed in the Hardrock Leasing and
Reclamation Act of 2019 are grossly out of proportion to mining's
impact on Federal land. In fact, the miniscule amount of Federal lands
being used for hardrock mining calls into question whether Congress
should devote much effort to discussion about changing the Mining Law.
BLM's 2017 Public Lands Statistics \7\ show that at the end of FY
2017, there were only 358,983 active mining claims distributed in the
western states, with roughly half of these claims located in Nevada.
(The number of claims in Nevada reflects the fact that if Nevada were a
country it would be the fourth largest gold producing country in the
world). BLM's annual public lands statistics show that since 2001, the
number of active mining claims has fluctuated largely in response to
commodity prices from a low of 203,354 claims in 2002 when gold prices
ranged from about $278 to $349 per ounce to a high of 406,140 claims in
2012 when gold prices were as high as $1,789 per ounce.
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\7\ Public Land Statistics 2017, Volume 202, June 2018, U.S.
Department of the Interior Bureau of Land Management, BLM/OC/ST-18/
001=1165, P-108-7.
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Under the Mining Law, a lode mining claim is limited to a maximum
of 20 acres. Thus, the aggregate footprint of the active claims in 2017
covered roughly 7.8 million acres, which is a minute fraction--less
than 1 percent--of the Nation's 800 million-acre Federal mineral
estate. About half of this footprint is located in Nevada; the rest is
scattered throughout the West. According to BLM, in 2017, there were
43,401 mining claims in Arizona covering 863,791 acres. By way of
comparison, Maricopa County, Arizona covers roughly 9,224 square miles
\8\ or 5.9 million acres. The states of Alaska, Colorado, New Mexico,
Oregon, and Washington each had fewer than 10,000 claims in 2017.
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\8\ https://en.wikipedia.org/wiki/Maricopa_County,_Arizona.
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Even more revealing is that as of March 2019, BLM's LR 2000
database shows that the agency has authorized just 313,042 acres of
surface disturbance on 587 mineral exploration and mining projects on
mining claims located on BLM-administered lands throughout the West,
with nearly 60 percent of the authorized surface disturbance located in
Nevada. In Chairman Grijalva's state of Arizona, BLM has authorized a
mere 3,465 acres of surface disturbance on 37 mineral projects.
Hardrock mineral activities affect a very small amount of Federal
land because hardrock mineral deposits are rare, and as such, very
difficult to find. According to the National Academy of Sciences,\9\
1,000 mineral targets must be identified and evaluated to discover a
deposit that can become a mine. Given these daunting discovery odds,
policymakers should be very concerned that current exploration levels
are insufficient to discover the domestic minerals needed for our
future. The limited domestic exploration for minerals is one of the key
reasons why the country is so reliant on foreign sources of minerals.
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\9\ Hardrock Mining on Federal Lands, 1999, National Research
Council, National Academy of Sciences, 247 p.
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The draconian changes proposed in the proposed legislation will
exacerbate this problem by decreasing mineral activities on Federal
land. Rather than measures that eliminate or make exploration and
mining more difficult on Federal land, this country needs policies to
encourage responsible exploration and development of our mineral
resources, consistent with the policy objectives in Section 102(a)(12)
of the Federal Land Policy and Management Act of 1976, (43 U.S.C. 1701
et seq), the National Materials and Minerals Policy Research and
Development Act of 1980 (30 U.S.C. 1601 et seq) and other laws.
previous amendments to the mining law have already met modern policy
objectives
Proponents of the proposed legislation assert that the Mining Law
is antiquated and thus requires radical amendments. But this
characterization of the law is misleading and inaccurate because
Congress has amended and updated the law many times since its
enactment. In the past, congressional actions to amend the Mining Law
have preserved the Mining Law's core principles including the property
rights created by efforts to identify and advance economic mining
claims. The historical amendments to the Mining Law stand in marked
contrast to the proposed bill, which guts these rights and replaces
them with an unworkable and unrealistic leasing system.
The Minerals Leasing Act of 1920
The 1920 Minerals Leasing Act removed coal, petroleum, natural gas,
phosphates, sodium, sulfur, and potassium from the Mining Law and
established leasing programs for these resources while preserving the
claim location system for hardrock minerals. Examining the scope of and
historical implementation of the leasing system in the Minerals Leasing
Act is very informative when compared to the leasing system proposed in
the Hardrock Leasing and Reclamation Act of 2019.
The 1920 Minerals Leasing Act created a prospective leasing system
that did not interfere with the Mining Law rights to oil and gas mining
claims that existed on the date of enactment. Section 37 \10\ of the
1920 Minerals Leasing Act is a savings clause which preserved the
property rights under the Mining Law on existing claims of oil, gas,
and the other Minerals Leasing Act minerals that going forward would
require a lease rather than a mining claim. The Section 37 savings
clause allowed claim owners to continue to explore and develop their
existing oil and gas mining claims, to make discoveries, and to secure
patents to those claims under the provisions of the Mining Law.
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\10\ See United States v. Locke, 471 U.S. 84 (1985) and Hickel v.
Oil Shale Corp., 400 U.S. 48 (1970).
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In marked contrast, this proposed legislation contains no such
savings clause for currently existing mining claims. The mandatory
conversion of mining claims into leases will abruptly terminate the
claim owners' current Mining Law property rights. By extinguishing
claimants' property rights and substituting term- and acreage-limited
discretionary leases, the proposed legislation will expose the Federal
Government to Fifth Amendment takings claims.
The Mining and Minerals Policy Act of 1970
When Congress enacted the Mining and Minerals Policy Act of 1970,
it declared that ``it is the continuing policy of the Federal
Government in the national interest to foster and encourage private
enterprise in (1) the development of economically sound and stable
domestic mining, minerals, metal and mineral reclamation industries,
(2) the orderly and economic development of domestic mineral resources,
reserves, and reclamation of metals and minerals to help assure
satisfaction of industrial, security and environmental needs.'' (30
U.S.C. Sec. 21a). The mineral directives in this Act apply to BLM-
administered public lands and National Forest System lands. These are
compatible objectives that operate to encourage deployment of
privately-funded, domestic mineral production while protecting the
environment.
The Federal Land Policy and Management Act of 1976 (FLPMA)
Congress made other important changes to the Mining Law when it
enacted FLPMA in 1976. Among other things, FLPMA mandated a claim
filing and recordation system to give BLM a mechanism to rid the
Federal lands of stale mining claims and created an environmental
protection mandate prohibiting unnecessary or undue degradation (UUD)
of public lands subject to mineral activities. When mining critics
assert the Mining Law needs to be changed because it does not include
environmental protection requirements they are ignoring how FLPMA
significantly changed the Mining Law by inserting the UUD environmental
performance standard, which specifically applies to mineral exploration
and mining projects.
In 1980, BLM finalized the 43 CFR 3809 surface management
regulations for locatable minerals to implement the FLPMA UUD mandate.
The stated purpose of these regulations is to ``[p]revent unnecessary
or undue degradation of public lands by operations authorized by the
mining laws [and to] establish procedures and standards to ensure that
operators and mining claimants meet this responsibility . . . and
reclaim disturbed areas.'' (43 CFR Sec. 3809.1) The UUD provisions in
the 43 CFR 3809 regulations contain explicit directives that mineral
activities must comply with all applicable state and Federal
regulations to protect the environment and cultural resources, and
satisfy a long list of environmental performance standards.\11\ Prior
to commencing mineral activities on public lands, project proponents
must provide BLM with financial assurance (reclamation bonds) to
guarantee that lands affected by exploration and mining will be
properly reclaimed.
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\11\ 43 CFR 3809 Sec. Sec. .5, .401, .415, and .420.
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National Forest Management Act of 1976
The laws governing National Forest System lands are similarly
protective. In 1976, Congress enacted the National Forest Management
Act, which mandates a land use planning process that ensures mineral
resource development is given proper consideration consistent with the
mandate in the Mining and Minerals Policy Act of 1970 while minimizing
resource conflicts and balancing environmental concerns. The Forest
Service recognizes that minerals are usually hidden, relatively rare,
and governs by land management planning procedures.\12\
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\12\ https://www.fs.fed.us/geology/
1975_mining%20in%20national%20forests.pdf.
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The Forest Service's 36 CFR 228 Subpart A surface management
regulations for locatable minerals include environmental protection
measures that require operators of mineral exploration and mining
projects to minimize adverse impacts on National Forest surface
resources where feasible (36 CFR Sec. 228.8). Like the BLM, Forest
Service's surface management regulations provide comprehensive and
effective environmental protection at mineral projects on National
Forest System lands including requirements for financial assurance
before activities can commence.
The National Materials and Minerals Policy Research and Development Act
of 1980
In September 2016, the Government Accountability Office (``GAO'')
published a report entitled ``Strengthened Federal Approach Needed to
Help Identify and Mitigate Supply Risks for Critical Raw Materials.''
\13\ This reported evaluated ``certain metals, minerals, and other
``critical'' raw materials [that] play an important role in the
production of advanced technologies across a range of industrial
sectors and defense applications.'' The GAO report found several
limitations in the scope of Federal critical mineral programs that are
inconsistent with the directives in the National Materials and Minerals
Policy, Research and Development Act of 1980. (30 U.S.C.
Sec. Sec. 1602-1605), hereinafter referred to as the 1980 Act.
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\13\ GAO-16-699.
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In the 1980 Act, Congress found:
``the United States lacks a coherent national materials policy
and a coordinated program to assure the availability of
materials critical for national economic well-being, national
defense, and industrial production, including interstate
commerce and foreign trade.'' (30 U.S.C. Sec. 1601(7).
In response to this finding, Congress declared:
``. . . it is the continuing policy of the United States to
promote an adequate and stable supply of materials necessary to
maintain national security, economic well-being and industrial
production with appropriate attention to a long-term balance
between resource production, energy use, a healthy environment,
natural resource conservation, and social needs.'' (30 U.S.C.
Sec. 1602)
The proposed legislation is completely inconsistent with the 1980
Act because it will significantly increase the country's reliance on
the minerals needed for all sectors of the American economy, and to
advance our renewable energy agenda. In fact, Section 401(b) of the
proposed legislation specifically amends the 1980 Act to exempt
National Forest System lands from the requirement to improve mineral
data availability and analysis requirements in the 1980 Act, signaling
the intention to drastically reduce and even eliminate mining on
National Forest System lands. According to the U.S. Forest Service,
``the National Forests contain much of the country's remaining stores
of mineral.'' \14\
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\14\ https://www.fs.fed.us/geology/
1975_mining%20in%20national%20forests.pdf.
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Enactment of Claims Maintenance Fee Requirements
In 1992, Congress made another significant change to the Mining Law
using the appropriations process to establish an annual fee, the Claims
Maintenance Fee, in lieu of the annual assessment work requirement in
Section 28 of the Mining Law and to place a moratorium on patenting. As
a result of this change, claimholders currently must pay $155 per claim
to keep their claims in good standing. This fee, which is adjusted
every 5 years to reflect the Consumer Price Index will increase in
2019. By making timely payment of this fee, claimants secure the right
to use and occupy Federal lands, subject to compliance with the 43 CFR
3809 and 36 CFR 228A surface management regulations and all other
applicable state and Federal environmental protection regulations.
The Claims Maintenance Fee, which has been continued in annual
appropriations measures since 1992, gives BLM a powerful land
management tool that accomplishes several important objectives. First,
it provides real-time information about where claims are located, who
owns the claims, and whether the claims remain in good standing. Claims
for which the fee is not paid by the August 31 fee payment deadline are
categorically voided. Second, the substitution of a fee for the on-the-
ground assessment work requirement has virtually eliminated unnecessary
ground-disturbances associated with performing the annual assessment
work that was previously required to maintain a claim in good standing.
The fee has thus significantly reduced the environmental impact of
mineral exploration activity. Third, the fee raises sufficient revenue
to fund the Department of the Interior's Mining Law program, with
leftover revenue that goes to the Treasury. BLM's Public Land
Statistics show mining claimants paid over $65 million in Claims
Maintenance Fees in FY 2017.
The 1920 Mineral Leasing Act, FLPMA, and the annual Claims
Maintenance Fee are examples of how Congress has continually updated
the Mining Law since its enactment in response to evolving land
management requirements, and clearly demonstrate that the law is not
antiquated. To the contrary, the Law as amended serves the country
well. If the Law is amended in the future, the changes should be
surgical and tailored to respond to specific land management
objectives--and not a wholesale overhaul like that in the proposed
legislation, which is completely unwarranted in light of the very
limited use of Federal lands for hardrock mineral activities and
counter-productive to satisfying the Nation's demand for minerals.
Additionally, if changes are enacted, they should be prospective in
nature--they must not be retrospective--to avoid exposing the Federal
Government to takings claims. Congress recognized this in 1920 when it
enacted the Minerals Leasing Act and removed oil, gas, and other
minerals from the jurisdiction of the Mining Law. If this Congress
elects to create a leasing program for what are currently locatable
minerals, this change must be forward looking and not be imposed on
existing mining claims.
The Myriad Environmental and Sensitive Resource Protection Laws
The proposed legislation also ignores the myriad laws that require
all mines to protect the environment and sensitive resource values.
Mines must comply for example with the laws protecting air, water,
wildlife, endangered species, and wetlands, among other requirements,
many of which exist at the local and state levels as well.
the proposed leasing system interferes with existing property rights
and will lead to takings litigation
An essential and unique element of the Mining Law is the ``self-
initiation'' process, which allows U.S. citizens to enter Federal lands
open to operation of the Mining Law, to locate mining claims on lands
that may have favorable geologic conditions for finding a mineral
deposit. Once the claim is located, the claim owner can use the surface
of a mining claim for mineral exploration and development purposes so
long as they comply with the surface management regulations and other
environmental protection requirements.
Self-initiation is especially critical to the prospecting and
early-stage mineral exploration phases of the mining life cycle when
geologists continually test and refine their mineral target concepts
and exploration techniques. Because exploration is an iterative process
that uses new information to vector toward mineralized zones, the
ability to expand a claim block based on new information is critically
important. The 1 in 1,000 odds of making a discovery are akin to
looking for the proverbial needle in the haystack and drive the need to
preserve self-initiation to facilitate locating additional claims on
lands with potentially favorable geology in response to the on-the-
ground realities of exploring for rare mineral deposits that are very
difficult to find.
Under current law, claim owners deploy private investment and take
the initiative to locate claims based on preliminary concepts about
where minerals may be located and then make substantial investments of
time, knowledge, and money to test these concepts to explore for
minerals on their claims with the hope of discovering a mineral deposit
that can be developed into a mine. This self-initiation process greatly
benefits our Nation because it effectively leverages private
investments that transform undeveloped Federal land into mining
operations that create jobs, pay taxes, and provide the minerals the
country needs--at no risk or expense whatsoever to U.S. taxpayers.
In contrast to the proposed legislation's introductory statement
that it is ``consistent with the principles of self-initiation,'' the
proposal completely destroys self-initiation by eliminating the current
mining claim system and substituting a discretionary leasing system. As
proposed, the Federal Government will decide where geologists can look
for minerals and where miners can develop mines. Eliminating mining
claims and self-initiation is not in the public's best interest because
it will severely compromise the Nation's ability to capitalize on
private-sector investments to discover and develop domestic mineral
deposits. It will significantly chill investment in the Nation's
mineral resources and increase the country's reliance on foreign
minerals.
The licensing and leasing acreage limits in the proposed
legislation will only serve to discourage mining on Federal lands.
Mining companies that operate more than one mine in a given state
currently own thousands of mining claims that cover their active mining
operations. This describes the current situation in Nevada where
several large mining companies operate numerous mines throughout the
state. The 20,480-acre per company per state limit, which is the
equivalent of only 1,024 mining claims, will require forfeiture of the
private property rights on thousands of mining claims located within
the boundaries of currently producing mining properties. This private
property seizure will completely disrupt active mining operations and
precipitate numerous takings claims as the government forces the
premature closure of viable mining operations or the divestiture of
lands that are part of productive mining operations. Then the
government will have to expend taxpayer funds to satisfy Constitutional
taking claims without the benefit of any mineral production.
This property forfeiture is clearly not in the public's interest.
Besides exposing the Federal Government to substantial takings
litigation, this baseless extinguishment of private property rights
will destroy the economic engines that sustain rural mining
communities. Forced mine closures will kill high-paying mining jobs,
deprive states and local communities of the tax revenues and other
substantial economic benefits that the mines generate, and increase the
country's reliance on foreign minerals.
The temporary and spatially constrained prospecting license in the
proposed legislation is completely inappropriate and unworkable for
hardrock minerals. Prospecting licenses have a primary term of only 2
years, with the possibility of a 4-year extension, and cannot cover
more than 2,560 acres, the equivalent of just 128 20-acre mining
claims. To put this artificial acreage limit into perspective, most
promising mineral exploration projects are typically comprised of
several hundred to several thousand claims to give the owner the
ability to conduct mineral exploration over a broad area with mineral
potential.
The totally unrealistic time and areal constraints in the proposed
draft bill will severely curtail if not virtually eliminate mineral
exploration on Federal lands. Because the exact location of hardrock
mineral deposits is generally unknown, these deposits are difficult to
find and discovery typically takes 10 years or longer. Investment in
mineral exploration will become even riskier and less attractive if an
arbitrary and unrealistic term limit of 2 to 6 years is imposed on what
is already a very high-risk endeavor.
If prospecting licensees are skillful and lucky enough to have
discovered a valuable mineral deposit (a term that is undefined in the
discussion draft), they may apply for a 20-year non-competitive mining
lease if the surface management agency consents to issuance of the
lease. By requiring the consent of the BLM or the Forest Service for
issuance of a mining lease and providing no guidelines on when the
agency is authorized to withhold its consent, the discussion draft
creates a carte blanche opportunity for denial of lease applications
with no opportunity for legal review as there is no standard to apply.
This possibility puts at risk a company's entire exploration investment
and creates uncertainty that will completely chill mineral exploration
and development in the United States. Companies will not be able to
justify to their shareholders expenditures of the tens to hundreds of
millions of dollars required to discover a valuable mineral deposit if
there is no guarantee that they will have the right to develop those
minerals.
The 20-year primary term lease is another serious barrier to
mineral investment because it is not unusual for mines to operate for
several decades. Without the assurance that a mine can continue to
operate longer than 20 years, companies will be very reluctant to
invest the hundreds of millions and sometimes billions of dollars
needed to develop a mine. Together, this will lead to the collapse of a
sustainable, viable mining industry, the jobs it provides and the
societal advancements it makes possible.
Although creating a one-size-fits-all leasing process for hardrock
minerals, coal, oil, gas, etc. might sound like a desirable policy
objective, it fails to realize the significant geologic differences
between oil, gas, coal and hardrock mineral deposits that make a
uniform hardrock leasing program untenable. Oil and gas are fluid
minerals that occur in well understood sedimentary basins where
geophysical surveys that do not disturb the surface can identify oil
and gas targets with a high likelihood of success. Once an oil well is
drilled, it can readily be modified into a production well.
In contrast, hardrock mineral deposits are solid minerals that
occur in areas with much more complex geology and typically have unique
geologic, geochemical, and metallurgical characteristics that
distinguish them from other similar mineral deposits. Defining a
hardrock mineral deposit requires extensive exploration and development
drilling. Once drilling has sufficiently defined the deposit to support
a decision to develop a mine, huge investments are required to build
the mine and processing facilities. Therefore, the proposal to create a
leasing system for hardrock minerals modeled after oil and gas leasing
is ill conceived, impractical and unworkable.
the hardrock leasing and reclamation act of 2019 will put more land
off-limits to mineral exploration and development
One of the stated drivers for the proposed legislation is to create
mechanisms to say no to mining. We question the need for yet another
way to put lands off-limits to mining when the Federal Government has
already eliminated mining on half of the Federal mineral estate.\15\
Congress and the Federal land management agencies already have
established effective statutory and regulatory tools to prohibit mining
on large swaths of Federal lands. The suitability determination
proposed in Section 112 is unnecessary in light of the numerous other
mechanisms to segregate Federal lands from mining. Additionally, no one
group should be given the authority as proposed in Section 112 to
declare lands unsuitable for mining.
---------------------------------------------------------------------------
\15\ Public Lands, On-shore Federal and Indian Minerals in Lands of
the U.S.: Responsibilities of the Bureau of Land Management, Dec. 1,
2000.
---------------------------------------------------------------------------
Section 112 also is impractical because it creates a list of so
called ``special characteristics'' that would deem an area unsuitable
for mining. These special characteristics include fairly common and
widespread features such as ``any aquifer or aquifer recharge area,''
areas listed on the National Register of Historic Places, lands within
or adjacent to National Conservation System lands or National Research
Lands, lands with critical habitat, lands where ill-defined other
``resource values'' have been identified by field testing or ``credible
information,'' and lands containing tribal sacred sites. Other laws
recognize the need to balance resource development and other land
uses--the proposed legislation elevates virtually all other uses over
mining.
This suitability determination will create an unlimited opportunity
to put lands off-limits to mining which will further chill investment
in mineral exploration and mining and increase our reliance on foreign
minerals. Section 112 establishes a continual mechanism to expand the
inventory of lands that cannot be explored or developed despite their
mineral potential. The anti-mining NGO, Earthworks' press materials on
the proposed legislation incorrectly assert that mining ``enjoys nearly
unfettered access on nearly all public lands.'' This is simply untrue.
At a minimum, there are already over 350 million acres of land off-
limits to mining. Access for mining purposes on lands that remain open
to the Mining Law is hardly unfettered. It is governed by stringent
surface management regulations to protect the environment.
In the last Congress, minority members of this Committee asserted
that the Hardrock Leasing and Reclamation Act of 2018 was necessary to:
``[e]liminate the exalted status that mining currently enjoys on public
lands [and to] level the playing field with all other uses of public
lands . . .'' This assertion ignores the numerous environmental
protection regulations that govern hardrock mineral exploration and
development and an essential geologic reality that hardrock minerals
can only be mined exactly where they are discovered. The economics of
developing hardrock mineral deposits are therefore very different from
oil and gas, which may be able to withstand no surface occupancy
restrictions and be produced from off-site well fields. Additionally,
specific geologic features such as faults and folds typically play an
important role in localizing and controlling mineralization. In
contrast to oil and gas which occur over broad areas in geologic
basins, hardrock mineral deposits have much more limited areal extents
and knife-edge boundaries between mineralized and unmineralized rocks,
necessitating a very precise location for the mine.
Sound public policies governing mineral exploration and development
must consider these basic geologic principles. Current law does not
confer an ``exalted status'' for locatable minerals. It does, however,
consider the geologic reality that mines can only be developed where
minerals are located and have been discovered. Changes to the Mining
Law that are not responsive to this geologic reality will substantially
chill investment in mineral exploration and mining, impede the
development of the Nation's mineral resources, and increase our
reliance on foreign minerals--including renewable energy minerals.
These are not desirable outcomes.
Additionally, the law should not create post-discovery
opportunities like the Section 112 suitability determination to declare
the discovery site as unsuitable for mining and to eliminate the
possibility of responsibly developing the mineral resource if the
project proponent can demonstrate the mine will be able to comply with
many state and Federal environmental protection requirements. Mining
critics ignore the significant state and Federal environmental
protection regulatory requirements applicable to all mineral
exploration and development projects on Federal lands. During the
rigorous mineral project permitting process, project proponents must
demonstrate that the proposed operation will comply with numerous
stringent state and Federal environmental protection requirements and
environmental standards.
Using this permitting process, BLM, the Forest Service, EPA, and
state regulatory agencies already have the authority to say no to
mining if there are doubts that the project can meet specific
environmental protection regulatory requirements. During the permitting
process, regulators can require project proponents to go back to the
drawing board to redesign a project to address concerns about
environmental impacts. Additionally, the NEPA process requires detailed
alternatives analysis to identify the project configuration that best
eliminates or mitigates potential impacts. Numerous other Federal
environmental statutes also govern mining including but not limited to
the Endangered Species Act, the Clean Air Act, the Clean Water Act, the
National Historic Preservation Act, Archaeological Resources Protection
Act, the Resource Conservation and Recovery Act, and the Comprehensive
Environmental Response Compensation and Liability Act.
The current system achieves the appropriate balance between mine
development and environmental protection. There is no exalted status.
Rather, there is a rigorous demonstration that all aspects of the
environment at a proposed mine will be protected. The suitability
determination and the duplicative environmental provisions would
completely upset this balance, making it much more difficult if not
impossible to develop the mine if the lands are deemed unsuitable for
mining.
Moreover, the Federal Government already has effective tools for
putting lands off-limits to mining if an area is determined to be
unsuitable for mining. Using existing statutory and regulatory tools,
Congress and regulators have already permanently prohibited mining on
half of the Nation's Federal mineral estate. Regulators can also place
20-year moratoria on mining, such as the Department of the Interior has
recently done at the Grand Canyon Arizona Strip by withdrawing these
lands from operation of the Mining Law for 20 years.
The Section 204(c)(1)(H) prohibition against authorizing mines that
require water treatment facilities that must operate for longer than 10
years after mine closure is too limiting. At highly regulated and fully
bonded modern mines, the investments made in water treatment systems to
meet water quality criteria often can be viewed as a long-term asset
that benefits the public long after mining has ceased. Under BLM's and
the Forest Services' financial assurance regulations, mine operators
must provide long-term financial assurance instruments to cover the
operating costs for post-mining water treatment facilities. In some
cases, these financial assurance instruments are designed to provide
funding for in perpetuity operation of water treatment facilities.
Post-mining water treatment facilities can also be passive in nature
and assure the conservation of water resources.
Consequently, water treatment facilities are not necessarily a
liability and pose no real risk to taxpayers. To the contrary, long-
term, post-closure operation of water treatment facilities could
provide a source of valuable clean water available for non-mining uses
including but not limited to habitat enhancement, redevelopment of mine
sites as renewable energy sites or other non-mining industrial uses,
and even municipal water supplies in the arid West.
the royalty and materials disposal fee provisions in the hardrock
leasing and reclamation act of 2019 are unfair and illusory
The proposed legislation establishes a royalty for production of
minerals on Federal lands. The mining industry has long asserted that a
hardrock royalty program must be structured to promote a fair return to
the public while at the same time ensuring the continued viability of
hardrock mining on Federal lands.\16\ As discussed in detail below, the
royalty provisions in the proposed legislation are seriously flawed and
will not achieve the important objective of providing the American
public with royalty revenues from hardrock mining, which can only be
accomplished if mining on Federal lands remains economically feasible.
The numerous provisions in the proposed legislation that make mining
impractical and even impossible will adversely affect mineral
production and lead to a drastic reduction of mining on Federal lands.
Consequently, the royalty and fee revenues anticipated by the
legislation are illusory.
---------------------------------------------------------------------------
\16\ Exhibit II, James Cress' January 24, 2007 testimony before the
House Natural Resources Committee/Energy and Natural Resources
Subcommittee.
---------------------------------------------------------------------------
The proposed royalty would apply retroactively to mining claims
located prior to enactment. The proposed legislation would require that
existing claims be converted to new leases or forfeited. In many cases,
existing claims have been held by companies and individuals for many
years in reliance on their property rights and security of tenure under
the General Mining Laws. Claimholders have advanced their claims at
great expense through exploration, development, feasibility, financing
construction, and in some cases to production. Either the imposition of
a retroactive royalty or the forfeiture of claims entirely deprives
claimholders and other stakeholders in the claims of property rights in
violation of the Fifth Amendment.
The royalty and the material disposal fee in the proposed
legislation will be new and additional costs that will impact project
economics of every mine and likely make some currently operating mines
uneconomic. They are certain to shorten the viable operating life of
many mines, forcing premature closure of what would otherwise be
profitable mining operations, which defeats conservation objectives.
The immediate adverse economic impacts will be loss of high-paying
direct jobs and the many indirect jobs that mines create, and tax
revenues for local, state, and federal governments.
In addition, the royalty and materials disposal fee in the proposed
legislation will surely impact projects on the drawing board by
rendering projects economically infeasible. Many projects will not be
funded and construction of mines and processing facilities will be
deferred or canceled.
Finally, as mines prematurely close and new mines are deferred or
canceled, the domestic supply of the minerals critical to the Nation
will decrease and exacerbate our dependence on foreign sources of
strategic and critical minerals indispensable to advancing the
country's high-priority renewable energy, technology, and
infrastructure agendas.
In light of this threat, the mining industry requests that the
Committee consider preparing an economic impact study of the proposed
bill and pledges its assistance in the preparation of such a study.
Production Royalty
The bill imposes a royalty on the gross value of minerals or
mineral products of not less than 12.5 percent of the gross value of
the products derived from the lease. For producing mines that are
forced to convert to a lease, the proposed legislation imposes a gross
royalty of 8 percent.
As explained in detail in testimony presented to this Committee in
2007 (see Exhibit II) and in 2017 (see Exhibit III), the mining
industry has gone on record for many years as opposing a gross royalty
like the royalty in the proposed legislation because such royalties are
unfair and will significantly diminish mining on Federal lands. As the
industry has previously explained, (see Exhibits II and III), modeling
a hardrock royalty after the coal, oil, and gas royalty programs is
unworkable due to the substantially different geologic characteristics
of oil, gas, and coal compared to hardrock minerals. Additionally,
discovering and developing a hardrock mineral deposit requires a much
larger investment of time and resources compared to oil, gas, or coal,
which are much more abundant and easier to find and develop.
Royalty payments to the United States should be based on the value
of the Federal Government's ownership interest in the minerals.
Instead, the royalty base in the proposed legislation includes the mine
operator's costs associated with the value-added mineral processing
steps that are necessary to produce a salable mineral product.
Including these costs in the royalty base is confiscatory and highly
inappropriate. It also differs significantly from the ways in which
states typically assess royalties and severance taxes as discussed in
Exhibit III.\17\
---------------------------------------------------------------------------
\17\ Exhibit III, James Cress' July 20, 2017 testimony before the
House Natural Resources Committee/Energy and Natural Resources
Subcommittee.
---------------------------------------------------------------------------
The royalty in the proposed bill is a ``gross royalty'' calculated
on the gross value of mineral products derived from leases. This gross
royalty is unfair to the operator, because it includes the value added
by the operator to process, refine, and produce a salable mineral
product from the raw minerals removed during mining. Unlike oil and gas
and coal operations, the raw minerals produced during mining are not
salable; they must undergo costly processing steps to produce a product
that can be sold. As a general proposition, it is important to
understand that although Federal royalties for oil, gas, and coal are
simplistically called gross royalties, they are comparable to a net
royalty because they are based on the value of the unrefined yet
marketable products from an oil and gas well or a coal mine. (See
Exhibit III, at 4-5).
The costs an operator must incur to produce a salable product from
raw minerals should be deducted from the royalty base on which a
Federal royalty is calculated. The Federal Government's contribution
upon which the royalty is based must be limited to the value of the
raw, unrefined minerals and should not be inflated with the operator's
costs once the minerals have been mined. A net income or net proceeds
royalty based on the value of the minerals at the mine (or that allows
deductions for transportation and processing costs to produce a
marketable product) is fair to both the operator and the Federal
Government, which is paid a share of the value of minerals at the mine
consistent with the Federal Government's ownership interests in
minerals on Federal lands.
The Hardrock Leasing and Reclamation Act of 2019 Royalty Increases
Financial Risk
Mine operators must pay production royalties out the margin between
costs and realized price. Costs tend to vary from mine to mine, even
for mines extracting the same commodity. In addition, costs tend to
vary in a single mine over the mine life, as ore grades rise and fall
and as the mineralogical characteristics change. Operators have no
control over price, and little ability to insulate themselves from
price fluctuations. As a gross royalty, the discussion draft takes a
bigger bite out of the margins between cost and price, and therefore
reduces the viability of the project. This greater risk constrains the
availability of the project financing necessary to construct mines, and
could make project financing unavailable altogether.
Retroactive Imposition of the Royalty on Existing Claims
The retroactive imposition of the gross royalty on existing claims
will be highly disruptive to the structure of the industry today. Many
projects in development or in production have relied on construction
finance packages to construct the mine. The retroactive royalty has the
potential to trigger immediate defaults of those credit facilities,
creating serious financial problems for operators and mine financiers.
However, it is important to understand that the 8 percent royalty on
existing mines will affect more than just mine operators and the
financial institutions that have provided mine financing. It will also
affect BLM and the Forest Service because these agencies will be faced
with mining operations that may be forced to close prematurely.
Administration's 2007 Statement of Policy
In November 2007, the Bush administration issued a Statement of
Administration Policy (SAP) stating: ``The Administration believes that
royalty provisions should be prospective, should avoid constitutional
concerns, and should be set at a level that does not threaten the
continued, reliable domestic mineral production on which this Nation
relies.'' This statement is consistent with the mining industry's long-
held position on royalties and amending the Mining Law.
The 2007 SAP expresses concerns that the retroactive royalty being
considered in H.R. 2262, a Mining Law bill being considered by this
Committee during the 110th Congress, would expose the Federal
Government to takings claims. As explained in the SAP, ``The royalty
structure in H.R. 2262 will likely generate Takings Clause challenges
because it fails to take into consideration property rights relating to
properly maintained claims established prior to enactment of the
bill.''
Because the royalty proposed in the proposed legislation is similar
to that proposed 12 years ago in H.R. 2262, the same takings concerns
are applicable. It is important to recognize that the universe of
potential takings claims litigants goes beyond mine owners and
operators and includes the entities that have provided mine financing
and companies and individuals with third-party royalty agreements for
these mines. It could potentially include states that currently derive
royalty or severance tax revenues from hardrock mines.
the hardrock leasing and reclamation act of 2019 will not create a
viable abandoned mine reclamation fund
The proposed legislation creates a Hardrock Mining Reclamation Fund
with the proceeds from royalty payments and the seven cents per ton
displaced material reclamation fee in Section 303. This fund would be
used to clean up Abandoned Mine Lands (AMLs), which are historic mine
sites that were developed prior to modern environmental protection and
reclamation laws and regulations.
The problem with this fund is that it is illusory. The negative
implications of the proposed legislation on mineral production that
will diminish mining on Federal lands will mean there will be
insufficient mining to achieve the funding objectives.
For more than two decades, the mining industry has been seeking
legislation to enable Good Samaritan reclamation of AMLs. Liability
provisions in both the Clean Water Act (CWA) and the Comprehensive
Environmental Response Compensation and Liability Act (CERCLA)
currently obstruct Good Samaritans from cleaning up AML sites. These
liability concerns affect numerous stakeholders--local communities,
conservation groups like Trout Unlimited, and mining companies alike.
Two Good Samaritan meetings in April 2019 in Reno, Nevada and
Denver, Colorado discussed this problem. Participants in these meetings
included state and Federal regulators, conservation groups involved
with limited AML cleanups, environmental and reclamation professionals,
and mining companies. Although there is widespread interest in
addressing the AML problem, CWA and CERCLA liability concerns are
recognized as a serious obstacle. Good Samaritan legislation is clearly
needed to facilitate reclamation of AML sites where there are water
quality issues.
Maintaining a viable hardrock mining industry is an essential
component of addressing the AML issue. Some historic, pre-regulation
mine sites still contain mineral resources that could be developed into
a modern mine by a new mining company that was not involved with the
previous mining activities. Modern mining at an historic site creates
an important opportunity to integrate the cleanup and remediation of
historic, unreclaimed mine features into a modern mine designed to
protect the environment and achieve conservation objectives.
Taken together, the Hardrock Leasing and Reclamation Act of 2019
and CWA and CERCLA liability concerns will create an insurmountable
barrier to AML cleanup. Mining projects on Federal lands will be
drastically diminished under the discussion draft. If the proposed
legislation is enacted, mining operations that may be viable will be
unlikely to undertake AML reclamation due to the CWA and CERCLA
liability associated with old mine sites. The revenue stream for the
Hardrock Mining Reclamation Fund will be insignificant and the AML
problem will remain unresolved.
conclusion
I would like to thank this Subcommittee for the opportunity to
testify on the important topic of hardrock mining on Federal land,
which has such far-reaching implications for all aspects of the
country's economy, national security, energy use, infrastructure,
technology, and manufacturing.
If you choose to amend the Mining Law in a way that provides a fair
return to the public while preserving certainty and land tenure rights,
and encourages private investment in finding, developing and producing
domestic mineral resources, you will take an important step toward
energy independence and a clean energy future and a stronger America.
However, if you enact the changes proposed in the proposed
legislation, you will create uncertainty, discourage or eliminate
private investment in U.S. minerals, prematurely close producing mines,
export tens of thousands of high paying mining jobs and exacerbate an
unhealthy reliance on foreign sources of minerals for national defense,
manufacturing, infrastructure and clean energy.
I look forward to answering your questions.
ATTACHMENTS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
*****
The following documents were submitted as supplements to Mr. Comer's
testimony. These documents are part of the hearing record and are being
retained in the Committee's official files:
-- Exhibit I: You Say Alternatives are the Answer . . . Let's
Talk: Resource Constraints on Alternative Energy
Development, Burnell, J.R., American Institute of
Professional Geologists, in The Professional Geologist,
March/April 2009, pp. 33-37.
-- Exhibit II: James Cress' January 24, 2007 Testimony before the
Senate Energy and Natural Resources Committee.
-- Exhibit III: James Cress' July 20, 2017 Testimony before the
House Natural Resources Committee/Energy and Mineral
Resources Subcommittee.
______
Questions Submitted for the Record by Rep. Gosar to Robert D. Comer,
Esq.
Question 1. This bill would apply a 12.5 percent royalty on new
mines, and an 8 percent royalty on existing mines. Why shouldn't
hardrock mining have the same? What about this particular industry
makes a large gross royalty such a bad fit?
Answer. To determine the burden of a Federal mineral royalty, both
the royalty rate and the royalty base must be considered. Federal
royalties on natural resource commodities produced from Federal lands
should satisfy the following overarching objectives:
Royalty Rates:
Royalty rates must be responsive to the mineral commodities in
question. As demonstrated by the Mineral Leasing Act of 1920
(MLA) 30 U.S.C. 181 et seq., a uniform royalty rate is not
practical. Under the MLA, royalty rates for oil, gas, coal,
phosphate, sodium, potassium, and sulfur range from 12.5
percent to 2 percent. Oil and gas are valued, with some
exceptions, at the well head. Coal is valued at the mine mouth
typically after only nominal processing. For example, there is
a well-developed market for a barrel of crude oil, for MMBtu
(1,000 cubic feet of 1,000 Btu) of natural gas, and for raw
crude coal at the mine. For purposes of assessing the Federal
royalty the other leasable minerals are valued when they first
become marketable products. The processing necessary to create
a marketable product varies greatly by mineral commodity,
nature of the orebody and other factors, and generally is much
more complex for hardrock minerals than for coal, oil, and gas.
Royalty Base:
The royalty base is the amount against which the royalty rate
is applied. For example, a royalty base might be the proceeds
of sale of a marketable product, less certain allowable costs.
The royalty base must allow reasonable deductions for the costs
to produce a marketable product. The Federal royalty
regulations for the minerals governed by the MLA allow certain
deductions that vary depending on the mineral. The royalty base
for hardrock mineral commodities should similarly allow
deductions to back out the post-mining costs necessary to
produce the first marketable products of the various hardrock
mineral products.
Promote Mineral Production and Provide a Fair Return to Taxpayers:
Because the main purpose of assessing Federal royalties is to
provide a fair return to taxpayers from production of minerals
from Federal lands, the royalty must be workable and responsive
to the business dynamics and economic conditions that apply to
each mineral commodity. An unfair or confiscatory royalty will
be at cross purposes with this objective because it will reduce
mineral production.
Unfortunately, the royalty proposed in H.R. 2579 does not satisfy
any of these objectives. First it simplistically force-fits the 12.5
percent Federal royalty rate applicable to oil, gas and surface-mined
coal onto hardrock minerals, which fails to consider the substantial
economic and business differences between discovering and producing
marketable coal, crude oil, and gas versus the much greater complexity
in finding, mining, and processing hardrock minerals into marketable
products.
Second, the proposed structure for the hardrock mineral royalty
does not allow any deductions for the numerous and costly processing
steps required to transform hardrock mineral ores (rocks that contain
minute quantities of valuable metals) into marketable metal products.
Unlike raw hardrock mineral ores for which there is no market,
unrefined crude oil and gas are marketable commodities that are
typically sold directly in either arm's length or non-arm's length
transactions. Oil and gas royalties, which are assessed on crude oil
and gas as they come out of the ground at the well head, allow crude
oil and gas producers to deduct the transportation costs to deliver the
crude oil and gas to buyers of these products. Other types of
deductions are allowed for the other MLA minerals.
Finally, the H.R. 2579 royalty, along with the unworkable and
onerous leasing and environmental provisions in the bill, will
significantly chill investment in hardrock minerals and cause a
dramatic decline in hardrock mineral production from Federal lands.
Instead of rewarding taxpayers with increased revenue from hardrock
mining, H.R. 2579 will reduce existing hardrock mining revenues such as
claims maintenance fees, and will produce only paltry hardrock royalty
revenues.
The 12.5 percent royalty rate on oil, gas, and coal produced from
surface mines works for these commodities because they are much easier
to find compared to hardrock minerals (see the response to Question No.
5) and do not require complex and costly post-extraction processing to
produce marketable products. The lower Federal royalty of 8 percent on
coal produced from underground mines \1\ reflects the higher extraction
costs associated with underground coal mines compared to surface mines
and clearly illustrates that a uniform Federal royalty rate is
unworkable--even for leasable minerals. The uniform 12.5 percent
royalty in H.R. 2579 for all hardrock minerals is similarly
impractical.
---------------------------------------------------------------------------
\1\ Like coal, many hardrock minerals may be mined from underground
or surface mines depending on the geologic characteristics of the
specific deposit.
---------------------------------------------------------------------------
In evaluating the inappropriateness of a uniform 12.5 percent
hardrock mineral royalty, it is instructive to consider the different
royalty rates that apply to the MLA minerals as shown in Table 1. The
MLA imposes a different royalty rate and royalty valuation (the point
in the production cycle at which the royalty is assessed) for the
various MLA minerals.
---------------------------------------------------------------------------
\2\ https://www.law.cornell.edu/cfr/text/43/3504.21.
TABLE 1 2
Comparative Federal Royalty Rates for Minerals Governed by the MLA
------------------------------------------------------------------------
Commodity Royalty Rates and Valuation Basis
------------------------------------------------------------------------
Crude Oil 12.5% at the well head
------------------------------------------------------------------------
Natural Gas 12.5% at the well head
------------------------------------------------------------------------
Coal 12.5% of the gross value for surface mined
coal and 8% for coal produced from
underground mines
------------------------------------------------------------------------
Phosphate 5% of gross value of the output of phosphates
or phosphate rock and associated or related
minerals
------------------------------------------------------------------------
Sodium 2% of the quantity or gross value of the
output of sodium compounds and related
products at the point of shipment to market
------------------------------------------------------------------------
Potassium 2% of the quantity or gross value of the
output of potassium compounds and related
products at the point of shipment to market
------------------------------------------------------------------------
Sulfur 5% of the quantity or gross value of the
output of sulfur at the point of shipment to
market
------------------------------------------------------------------------
The different royalty rates and valuation bases for the MLA
commodities clearly demonstrates that a one-size-fits all royalty for
leasable minerals is just as infeasible as it would be for hardrock
minerals because leasable minerals have different geologic
characteristics, processing requirements, and business parameters that
must be considered in establishing a fair and workable Federal
royalty--with the ultimate goal of producing royalty revenues for the
Federal Government. Imposing the 12.5 percent royalty rate that works
for oil, gas, and surface coal on the other leasable minerals
(underground coal, phosphate, sodium, potassium, or sulfur) would make
production of these minerals uneconomic and would produce zero royalty
revenues for taxpayers.
The substantially lower royalty rates for sodium, potassium, and
sulfur compared to the 12.5 percent oil and gas royalty reflect the
different business parameters applicable to these leasable solid
minerals versus those affecting production of oil and gas, which are
classified and regulated as fluid minerals. Generally speaking,
leasable solid minerals require more post-extraction processing to
produce a marketable product. For example, in the case of sodium and
potassium, the royalty is assessed on the value of the first marketable
product produced from processing raw sodium and potassium ores or
sodium and potassium brines.\3\ Oil and gas are marketable commodities
at the point of extraction (i.e., at the well head), without further
processing.\4\
---------------------------------------------------------------------------
\3\ Statement of Deborah Gibbs Tschudy, Deputy Associate Director,
Minerals Revenue Management, Minerals Management Service, U.S.
Department of the Interior, before the Senate Committee on Energy and
Natural Resources, January 24, 2008.
\4\ There is a worldwide market for crude oil and natural gas in
their unrefined state. On May 24, 2019 the Wall Street Journal (page
B7) listed the price for crude oil at $57.91 per barrel; the price for
natural gas was $2.578 per one million Btu (MMBtu).
---------------------------------------------------------------------------
In contrast, there is no market for unrefined ores of sodium,
potassium, or sulfur. These ores require post-extraction processing to
make a marketable product. Therefore, the Federal royalty is assessed
at the point of shipment--not at the point of extraction (the mine
mouth). The royalty for these minerals is calculated on the value of
these minerals after certain processing costs have been deducted. The
royalty rates for these minerals reflect the economics of producing
these minerals and is assessed at a rate that sodium, potassium, and
sulfur mining operations can withstand and still operate at a profit.
There is no commodity market for raw (crude) hardrock mineral ores
as they are produced from the mine (i.e., at the mine mouth).
Transforming raw gold ore from the gold-bearing rocks produced at a
mine into salable dore or producing marketable base metal concentrates
from base metal ores extracted from deposits of copper, zinc, lead,
nickel, etc. requires costly mineral processing techniques performed at
or near the mine site.\5\ Because hardrock minerals have significant
processing costs associated with these processing steps to produce a
marketable product, a hardrock minerals royalty must allow deductions
for these processing costs.
---------------------------------------------------------------------------
\5\ Most hardrock minerals must also undergo further processing at
off-site smelters and refineries to produce finished product metals.
But unlike the costs to refine oil and gas into consumer products like
diesel and gasoline, which can be passed on to the consumer, the costs
to refine metals into consumer products is not reflected in metals
commodity prices.
---------------------------------------------------------------------------
Every hardrock mineral deposit has unique mineralogy that requires
deposit-specific metallurgical treatments to optimize mineral
recoveries. Examples of hardrock minerals processing steps include
crushing, grinding, milling, thickening, flotation, leaching, roasting,
autoclaving, and gravity separation. Mining companies perform detailed
metallurgical studies to determine the most efficient and economic
processing techniques to maximize mineral recovery rates and typically
invest hundreds of millions to billions of dollars to construct mining
and mineral processing facilities. Given the substantial capital
required to build hardrock mining facilities, a Federal hardrock
royalty must be structured to allow deductions for the processing costs
applicable to each mining operation.
Just as a uniform royalty rate under the MLA on leasable minerals
is unfeasible, a single royalty rate for hardrock minerals would be
similarly impractical. Compared to the solid leasable minerals,
hardrock minerals are much more diverse in nature. (See the response to
Question No. 3). Therefore, in the event Congress enacts a royalty on
hardrock minerals, it needs to reflect the broad diversity of hardrock
minerals and the costs associated with the various and numerous
processing steps required to produce marketable products from the wide
array of hardrock minerals. The different royalty rates for phosphate,
sodium, potassium, and sulfur under the MLA reflect the variable
business realities influencing mining and producing these minerals,
which are substantially different than for coal, oil, and gas.
Similarly, a hardrock Federal royalty must be structured to reflect the
different economics of producing the diverse group of hardrock minerals
that are governed by the Mining Law. A Federal hardrock royalty must
accommodate the different business models applicable to each hardrock
mineral commodity.
Question 2. Is the royalty system described in Chairman Grijalva's
bill a useful way to achieve greater returns for the public?
Answer. The royalty system in Chairman Grijalva's bill is not a
useful way to provide taxpayers with revenue from hardrock mining
operations on Federal land. As explained in the response to Question
No. 1, a hardrock mining royalty must account for the costs to produce
a marketable mineral product like dore or concentrates, which is
consistent with the way in which royalties are assessed on leasable
minerals. The 12.5 percent gross royalty proposed in H.R. 2579 on
``production or concentrates or products derived from hardrock
minerals'' is not comparable to the 12.5 percent net royalty assessed
on marketable crude oil and gas at the well head, and is itself written
in an ambiguous manner.
Hardrock mining royalties should allow deductions for the costs to
process raw ore into a marketable product, which would be consistent
with the way that the MLA assesses royalties on both fluid and solid
leasable minerals that allow deductions to develop marketable products.
Additionally, the high, uniform royalty rates of 12.5 and 8 percent in
H.R. 2579 are not appropriate for hardrock minerals--just like the 12.5
percent royalty rate on oil, gas, and surface coal is not applicable to
the other leasable minerals governed by the MLA.
The proposed H.R. 2579 royalty treats hardrock minerals differently
than any of the leasable minerals for which certain deductions are
allowed prior to calculating the royalty. There is no public policy
rationale for assessing a hardrock mineral royalty in a radically
different manner compared to the way in which royalties are assessed on
leasable minerals. Hardrock minerals should not be subjected to a
unique, unfair, and confiscatory royalty that disallows any deductions
to make a salable mineral product.
As written, the H.R. 2579 royalty gives the Federal Government a
financial interest in the costly investments that hardrock mining
companies must make in order to produce a salable product. Not only is
this inconsistent with the way in which the Federal Government treats
leasable minerals, it is inappropriate.
A Federal hardrock royalty should be based solely on the
government's ownership interest in the Federal hardrock minerals. It
must not be expanded to include the mining companies' enormous
investments in finding, mining, and processing minerals into marketable
mineral products. Company costs for these value-added steps must be
deducted from the royalty calculation. The Federal Government does not
contribute anything to find, mine, and process hardrock minerals; these
costs are borne solely by private-sector mining companies and should be
excluded from the royalty valuation.
In assessing an appropriate Federal royalty rate for hardrock
minerals, the total government take (state royalties, taxes, and fees)
that are already imposed upon these minerals must be considered. As
shown in Exhibit I, the American Exploration & Mining Association
(AEMA) recently compiled statistics showing that the average hardrock
mine operates with a very slim 3 percent profit margin (i.e., the
difference between a mine's total costs and its total revenues).
Obviously, mines operating with only a 3 percent margin cannot afford
to pay a 12.5 percent royalty.
Roughly 40 percent of the revenue from hardrock mines goes toward
paying state royalties and Federal and state fees and taxes; \6\ 24
percent is spent on operating costs; labor costs consume the remaining
33 percent. The H.R. 2579 12.5 percent royalty takes a bigger bite out
of the economic pie than most mining operations can sustain. Moreover,
the economic pie cannot be easily reapportioned because existing state
and Federal royalties, fees, and taxes are fixed costs; they cannot be
readily reduced to accommodate payment of a new Federal royalty that
exceeds the mine's profit margin.
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\6\ Hardrock mining operations pay numerous state, local, and
Federal taxes including but not limited to property taxes, sales and
use taxes, payroll taxes, and corporate income taxes.
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The 2000 study entitled ``Global Mining Taxation Comparative Study
(Second Edition) \7\ by Professor James Otto and others evaluated
direct and indirect taxes and royalties on hardrock mining operations
in 24 countries. This analysis showed that the projected government
``take'' in 2000 on a hypothetical medium-sized profitable Nevada gold
mine was 49.3 percent. A similar projection for a hypothetical Arizona
copper mine was 49.9 percent. In 2008, the testimony that Dr. Otto
presented to the Senate Energy and Natural Resources Committee showed
that many mineral-producing countries have a total government take in
the range of 40 to 50 percent. Dr. Otto's work reveals that even a
small Federal royalty would make the U.S. less competitive for mining
investment because the total government take is already at the high end
of the range and would exceed the 40 to 50 percent government take that
is typical in mineral producing countries.
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\7\ Otto, Bataresh, and Cordes, Institute for Global Resources &
Policy Management/Global Mining Taxation, March 2000.
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Imposition of the 12.5 percent royalty in H.R. 2579 would cause
many mines to close because they would no longer be economic to
operate. Obviously, mines that are forced to close due to the 12.5
percent royalty would generate zero Federal royalties. But the adverse
economic impacts of the unrealistic and confiscatory royalty in H.R.
2579 would not be limited to the lack of Federal royalty payments. The
premature closure of these mines would have a harmful economic ripple
effect due to the substantial loss of high-paying mining jobs, state
royalty payments, and the other local, state, and Federal taxes and
fees associated with operating mines. Premature mine closures would
also destroy the many indirect jobs that mining projects create. In
rural mining communities, operating mines create essential economic
engines that would grind to a halt as the H.R. 2579 royalty renders
mining operations uneconomic to operate, forcing them to close.
Thus, the proposed royalty would create a significantly negative
overall economic footprint that would harm mining communities and
reduce local, state, and Federal revenues. As discussed in Question No.
4, the leasing provisions in H.R. 2579 would force claim forfeitures
and divestments, expose the Federal Government to takings litigation
associated with these forfeitures and divestitures, and eliminate
claims maintenance fees and service charges which currently amounted to
roughly $65 million in FY 2017,\8\ further exacerbating the economic
harm resulting from the H.R. 2579 royalty.
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\8\ 2017 BLM Public Land Statistics, Table 3-25.
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Question 3. Hardrock mineral commodities all have different price
points and level of rarity. What would a single blanket Federal royalty
do if applied to all these minerals in the same way?
Answer. A single, blanket Federal royalty for hardrock mineral
commodities would be completely unworkable given the wide range of
locatable minerals that are governed by the Mining Law and the
different types of mining and processing techniques needed to produce
marketable hardrock mineral commodities based on the widely varying
orebody characteristics. Imposition of a uniform royalty--like the
confiscatory 12.5 percent royalty in H.R. 2579--would make mining many
hardrock minerals uneconomic. Most hardrock mineral deposits could not
withstand a 12.5 percent royalty that does not allow any deductions for
the costs to produce a marketable product. Because the H.R. 2579
royalty fails to take into account the differences between the various
hardrock minerals in terms of mineralogy, processing techniques and
costs, and the different points at which hardrock minerals become
marketable products, it would lead to premature mine closures, would
chill investment in exploration and mineral development, and lead to a
substantial increase in the Nation's reliance on foreign countries for
the minerals we need for our economy, infrastructure, technology,
manufacturing, conventional and renewable energy, and national defense.
The increased reliance on foreign minerals that would result from
H.R. 2579 would be completely inconsistent with President Trump's
Executive Order 13817, A Federal Strategy to Ensure Secure and Reliable
Supplies of Critical Minerals. This Executive Order directs the
Secretary of Commerce, in coordination with heads of selected executive
branch agencies and offices, to submit a report to the President to
outline ways to reduce the country's reliance on foreign minerals. The
U.S. Department of Commerce just published this report.\9\
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\9\ https://www.commerce.gov/news/reports/2019/06/federal-strategy-
ensure-secure-and-reliable-supplies-critical-minerals, A Federal
Strategy to Ensure Secure and Reliable Supplies of Critical Minerals,
June 4, 2019.
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The royalty, the onerous land tenure restrictions, and the
unsuitability provisions in H.R. 2579 would completely thwart Call for
Action No. 5 ``Improve Access to Domestic Critical Mineral Resources on
Federal Lands and Reduce Federal Permitting Timeframes'' in the
Department of Commerce's report. H.R. 2579 would interfere with this
objective because the bill is designed to decrease access to hardrock
minerals, many of which are critical minerals, by putting more lands
off-limits to mining and creating additional permitting hurdles.
Additionally, H.R. 2579 would render Call for Action No. 4, ``Improve
Understanding of Domestic Critical Mineral Resources'' pointless. The
research recommended to identify new domestic critical minerals
resources would become a purely academic exercise on Federal lands
given the barriers to exploration and development in H.R. 2579.
Compared to the solid, non-fuel leasable minerals (phosphate,
sodium, potassium, and sulfur) hardrock minerals are much more numerous
and diverse. The U.S. Bureau of Land Management (BLM) describes
hardrock minerals as ``includ[ing] most metallic mineral deposits and
certain nonmetallic and industrial minerals'' \10\ and lists the
following as examples of locatable minerals: copper, nickel, lead,
zinc, cadmium, cobalt, gold, silver, garnet, uncommon-variety limestone
or clay, platinum, palladium, quartz crystals, semiprecious gemstones,
uranium, or other minerals.\11\ Similarly, the U.S. Forest Service's
long list of locatable minerals consists of: ``base and precious metal
ores, ferrous metal ores, and certain classes of industrial minerals
that include but are not limited to gold, silver, platinum, copper,
lead, zinc, magnesium, nickel, tungsten, bentonite, barite, fluorspar,
uranium, and uncommon varieties of sand, gravel, and dimension stone.''
\12\
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\10\ https://www.blm.gov/programs/energy-and-minerals/mining-and-
minerals/locatable-minerals.
\11\ Public Land Statistics 2017, Volume 202, June 2018, U.S.
Department of the Interior Bureau of Land Management, BLM/OC/ST-18/
001=1165, P-108-7.
\12\ https://www.federalregister.gov/documents/2018/09/13/2018-
19961/locatable-minerals.
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There is far greater diversity and complexity in all aspects of
discovering, mining, and processing hardrock minerals compared to
leasable minerals. Leasable minerals generally occur in sedimentary
basins whereas hardrock minerals occur in a wide range of geologic
terrains, which is one of the reasons that hardrock minerals are more
difficult to find than leasable minerals. Additionally, hardrock
mineral deposits have unique and site-specific geological,
mineralogical, and metallurgical characteristics that require deposit-
specific mine plans and processing facilities.
If Congress decides to establish a Federal hardrock mining royalty,
the royalty must be structured to accommodate the complexities and
diversity of mining and processing the broad list of hardrock minerals
governed by the Mining Law. In order to avoid making hardrock mining on
Federal lands economically infeasible, which would cause a significant
reduction in the production of hardrock minerals, a Federal hardrock
royalty must account for the fact that the many different locatable
minerals have unique characteristics that are reflected in the mining
and processing techniques used for each specific hardrock mineral.
A Federal hardrock royalty must be responsive to the highly diverse
business dynamics and economics applicable to each of the hardrock
minerals. For example, mining operations for locatable uncommon
varieties of sand, gravel and dimension stone are significantly
different than underground mining operations for precious or base
metals. The mining and processing techniques applicable to locatable
uncommon varieties of sand, gravel and dimension stone differ
substantially from what is required to mine and process ores of gold,
silver, copper, and most other locatable minerals. A Federal hardrock
royalty must not make production of the wide group of locatable
minerals uneconomic by failing to account for the complexity,
diversity, and variability of hardrock minerals.
Please see the response to Question No. 5 for a discussion of the
relative rarity of hardrock minerals compared to leasable minerals--
especially oil and gas.
Question 4. One of the major changes this bill would make is
transitioning the General Mining Law from a claim system into a leasing
system. It would allow an initial 20-year lease term, plus the option
to renew for 10 years after that. Other minerals like coal seem to
function with a leasing system. Why should hardrock be treated
differently?
Answer. The elimination of the mining claim system and the forced
conversion of mining claims into leases are especially problematic
aspects of H.R. 2579. The H.R. 2579 leasing proposal attempts to impose
a scheme appropriate for coal, oil, and gas onto hardrock minerals. The
above-described geological and operational differences between coal,
oil, and gas compared to hardrock minerals are the reason that a
leasing system will not work for hardrock minerals.
The H.R. 2579 leasing provisions would destroy self-initiation, a
unique aspect of the Mining Law that benefits the Nation by using
private-sector investments to discover and develop domestic mineral
deposits. Under the current Mining Law, U.S. citizens can enter Federal
lands open to operation of the Mining Law and locate mining claims in
areas they think have favorable geology for finding a mineral deposit.
This self-driven process, known as self-initiation, greatly benefits
our Nation because it effectively leverages private investments that
transform undeveloped Federal land into mining operations that create
jobs, pay taxes, and provide the minerals the country needs--at no risk
or expense whatsoever to U.S. taxpayers.
The National Academy of Sciences estimates that 1,000 hardrock
mineral targets must be identified and evaluated to discover a deposit
that can become a mine.\13\ This 0.001 odds makes finding mineral
deposits a very difficult and high-risk endeavor that is expensive and
time consuming.
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\13\ Hardrock Mining on Federal Lands, 1999, National Research
Council, National Academy of Sciences, 247 p.
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Searching for the one-in-one-thousand needle in a haystack mineral
deposit is an iterative process that makes self-initiation is
critically important because it gives geologists the ability to expand
their search for minerals and locate new claims--or to narrow their
search and drop those claims on lands that no longer appear to have
mineral potential. Each step in this process evaluates the available
data to hone in on the mineral target. The exploration process requires
having the on-the-ground flexibility to follow the geologic data to
explore adjacent or new areas, to locate new claims on prospective
ground, and to drop claims on lands that have been evaluated and
determined to lack sufficient mineralization to meet that company's
criteria to warrant further investment.\14\ Self-initiation makes
exploration possible because it supports the iterative process of
looking for minerals to find mineral deposits that are very difficult
to find.
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\14\ It is not uncommon for claims that have been explored and
dropped by one company to be re-located by a different company that
will conduct additional exploration work with the hopes of discovering
a valuable mineral deposit.
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This iterative process becomes impossible under a leasing system
because the Federal Government determines where companies can and
cannot look for minerals. Leasing substitutes the Federal Government's
geologic acumen about where minerals are located for the private
sector's knowledge and expertise. Rather than capitalizing upon the
private sector's substantial understanding about where minerals may be
located, the Federal Government becomes the initial prospector, without
the benefit of any or much geologic data, and determines where
companies may be allowed to look for minerals.
The government-as-prospector leasing system may work for leasable
minerals like coal, oil, and gas, which are much more abundant than
hardrock minerals and generally less difficult to find (i.e., have much
higher and more predictable rates of discovery compared to hardrock
minerals as discussed in more detail in Question No. 5). However, it is
wholly inappropriate for hardrock minerals given their relative rarity.
Prior to discovery, the specific location of hardrock mineral deposits
is generally unknown, making them difficult to find and develop.
Consequently, hardrock mineral exploration is a very risky business.
The Federal Government is ill-suited for this high-risk endeavor and
should not get into the hardrock exploration and development business,
as required under the H.R. 2579 Federal leasing scheme.
In contrast, there are well-defined and well-understood vast
geologic basins where coal, oil and gas are already known to occur such
as the Powder River Coal basin in northeastern Wyoming and southeastern
Montana or the vast Permian oil and gas basin in western Texas and
southeastern New Mexico. A Federal leasing system for tracts of land in
previously identified coal, oil, or gas provinces is feasible because
the Federal Government already knows the location of the targeted
resources. Moreover, because the odds of discovering additional oil and
gas reserves in an established oil and gas or coal province are much
higher than the one-in-one-thousand odds of discovering a hardrock
mineral deposit, companies have an incentive to bid on and acquire
Federal leases. (See the response to Question No. 5).
The H.R. 2579 lease term and acreage limits will create significant
barriers to hardrock mineral exploration and development on Federal
lands. The 2-year primary term for a prospecting license (i.e., an
exploration lease) is completely unrealistic and inappropriate for
hardrock minerals. Even with the allowable 4-year extension, the
prospecting license term limit is much too short.
Discovering and developing a hardrock mineral deposit typically
takes 10 years or longer, making hardrock mineral exploration a very
risky and costly business. Depending on the deposit type and complexity
of the geologic setting, exploration costs on the order of hundreds of
millions of dollars are typical. (See Exhibit I). Hardrock mineral
exploration will become even riskier and less attractive if an
arbitrary and unrealistic term limit of 2 to 6 years is imposed on what
is already a very high-risk endeavor. The H.R. 2579 exploration term
limit will most certainly chill private-sector investment in exploring
for minerals on Federal lands.
The amount of land that can be explored under an H.R. 2759
prospecting license is limited to an arbitrary 2,560 acres, which is
the equivalent of just 128 20-acre mining claims. This limitation is
inconsistent with the iterative mineral exploration process described
above in which large target areas that may be comprised of several
hundred to several thousand claims covering a broad area with mineral
potential are initially examined, with each step of the exploration
process vectoring toward a more defined and promising mineral target.
The time and spatial constraints associated with the H.R. 2759
prospecting licenses will significantly reduce the likelihood of future
mineral discoveries and chill investment in mineral exploration. This
arbitrary acreage limit could precipitate adverse environmental
consequences because it would eliminate the ability for companies to
focus their efforts in areas in which they are already operating where
there is existing infrastructure that could be used to expand an
existing operation or develop a nearby, satellite deposit. Rather than
capitalizing on existing facilities in a ``brownfields'' setting, this
acreage limit would have the perverse effect of creating new
disturbances in ``greenfield'' areas where the company does not have
any leases or operations.
The H.R. 2579 leasing provisions compound the risks and add more
disincentives to hardrock minerals exploration and development, which
is already a high-risk business. Although successful prospecting
licensees may apply for a 20-year non-competitive mining lease, the
Federal land management agencies (e.g., BLM or the Forest Service) have
the discretionary authority to deny issuance of the lease. H.R. 2579
gives these agencies broad discretionary authority to deny lease
applications, which puts a company's entire exploration investment
under its prospecting license at risk. Because H.R. 2579 does not
provide specific guidelines dictating when the agencies are authorized
to deny a lease application, the bill creates a carte blanche
opportunity for BLM and the Forest Service to withhold their consent to
lease lands on which minerals have been discovered for mine
development.
The very real possibility that the Federal Government may not grant
leases for the minerals discovered under a prospecting license creates
intolerable uncertainty that will completely chill mineral exploration
and development in the United States. Companies will not be able to
justify to their shareholders expenditures of the tens to hundreds of
millions of dollars required to discover a valuable mineral deposit if
there is no guarantee that they will have the right to develop the
minerals they discover.
The 20-year primary term lease in H.R. 2759 is another serious
barrier to mineral investment because it is not unusual for mines to
operate for several decades. Without the assurance that a mine can
continue to operate longer than 20 years, companies will be very
reluctant to invest the hundreds of millions and sometimes billions of
dollars needed to develop a mine. Similarly, financial institutions
will be unwilling to finance mine construction.
Finally, it is important to understand that the arbitrary and
unrealistic 20,480-acre per company per state leasing limit in H.R.
2759 will expose the Federal Government to takings litigation. This
acreage limit, which is the equivalent of only 1,024 mining claims,
fails to recognize that it is not unusual for mining companies to
operate several mines in a state and own more than 1,024 mining claims.
This is the case in Nevada and other mining states where several large
mining companies operate multiple mines comprised of thousands of
mining claims.
The H.R. 2579 leasing acreage restrictions will result in
forfeitures of the private property rights on thousands of mining
claims located within the boundaries of currently producing mining
properties. There are no public policy benefits or justifications for
this private property seizure, which will completely disrupt active
mining operations. The acreage restrictions will precipitate numerous
takings claims as the government forces the premature closure of viable
mining operations or the divestiture of lands that are part of
productive mining operations.
There is a compelling public interest in maintaining the mining
claim system and self-initiation process, which capitalizes upon
private-sector knowledge and investment to find and develop the
minerals essential to American life. Under the current law, individuals
and mining companies do the educated guesswork on where to spend
private-sector resources to look for minerals and in exploring for
minerals. The Federal Government is ill-suited to identifying
prospective mineral targets.
Ironically, the stated purpose of H.R. 2579 is ``[t]o modify the
requirements applicable to locatable minerals on public domain
lands,\15\ consistent with the principles of self-initiation of mining
claims . . .'' Nothing could be further from the truth because H.R.
2579 completely destroys self-initiation by abolishing future mining
claims and forcing the conversion of existing mining claims into
leases.
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\15\ It should be noted that H.R. 2579 targets public lands in the
western United States that are open to operation of the General Mining
Law (30 U.S.C. 21a et seq)--not public domain lands which are not
subject to the General Mining Law.
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Finally, the paucity of operating mines and mineral exploration
programs on acquired Federal lands provides compelling evidence of the
chilling effect that a Federal leasing system has on hardrock minerals
exploration and development. Despite the fact that Federal acquired
lands in Missouri, Minnesota, and elsewhere have significant--even
world class \16\--mineral endowments, mineral exploration and
production from these lands is very limited. The current minerals
leasing program for acquired lands is failing to achieve the basic
purpose of a Federal royalty program, which is to generate revenue from
mineral production on Federal lands.
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\16\ The Duluth Complex on the Superior National Forest in
Minnesota contains very large copper, nickel, and platinum group
mineral deposits that are truly world class.
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The H.R. 2579 Federal leasing program would similarly fail to
produce meaningful royalty payments from mining on Federal lands open
to location under the Mining Law in the western United States. There
would be no public policy benefits or justification for replicating the
failing leasing system for acquired lands on western Federal lands.
Question 5. How difficult are these resources to find, exactly? How
much yield is there mining for hardrock minerals than for coal, for
example?
Answer. As discussed in the response to Question No. 4, the
National Academy of Sciences has found that it is necessary to examine
1,000 hardrock mineral targets in order to discover a mineral deposit
that can ultimately be developed into a profitable mining operation.
These one-in-one-thousand (1:1,000) odds of discovering a viable
hardrock mineral project stand in stark contrast to the relative ease
with which hydrocarbons are discovered. The oil and gas industry uses a
rule of thumb that 1 in 10 wildcat oil and gas exploratory wells will
successfully discover hydrocarbons.\17\ This high rate of discovery of
oil and gas resources reflects the predictable geology in the
sedimentary basins that contain most of the world's hydrocarbon
reserves. The geologic conditions that are very favorable locations for
discovering and producing hydrocarbons in sedimentary basins like the
Permian and Williston basins are relatively well understood because
these basins have already been extensively drilled and have
comparatively simple geology in contrast to hardrock minerals.
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\17\ Not every wildcat well that discovers hydrocarbons will be
economic to develop.
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BLM's statistics show there is a high discovery rate for oil and
gas resources on Federal leases. According to BLM, Federal oil and gas
leases covered roughly 26 million acres at the end of FY 2018. Nearly
half of these leased areas--12.8 million acres--produce oil and gas in
economic quantities.\18\
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\18\ https://www.blm.gov/programs/energy-and-minerals/oil-and-gas/
about.
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Comparing the footprint of hardrock mineral activities for
exploration, development, and mining on Federal lands with Federal
lands where oil and gas is being produced vividly demonstrates that
hardrock mineral deposits are much rarer than oil and gas deposits.
BLM's statistics show that at the end of FY 2017, mining claims covered
only about 8 million acres \19\--less than one-third the footprint of
the Federal lands leased for oil and gas. Using the footprints of
Federal oil and gas leases and mining claims as proxies for the
distribution and frequency of occurrence of oil and gas compared to
hardrock minerals, it is evident that oil and gas resources are much
more abundant and widespread than hardrock mineral resources.
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\19\ Public Land Statistics 2017, Volume 202, June 2018, U.S.
Department of the Interior Bureau of Land Management, BLM/OC/ST-18/
001=1165, P-108-7.
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Active mineral exploration and mining projects are taking place on
just a small fraction of mining claims. BLM's data show that the agency
has authorized surface-disturbing mineral exploration, development, and
mining activities on a mere 313,042 acres, which represents less than 4
percent of the area covered by mining claims.\20\ This small mineral
activity footprint reflects the rarity of hardrock mineral deposits--
hence the one-in-one thousand odds of making a discovery. Oil and gas,
on the other hand, are much easier to discover, as the production
statistics from Federal leases show, with producing wells on roughly
half of the acres currently subject to Federal leases.
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\20\ March 2019 LR 2000 database showing acres of authorized
surface disturbance for mineral exploration, development, and mining on
BLM-administered lands.
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It's also important to understand the different economics and time
frames associated with oil and gas exploration and development compared
to hardrock exploration and mining. Once an exploratory well is drilled
into an oil and gas field, the wildcat well can be readily retrofitted
into a production well from which marketable crude oil or natural gas
can be produced. Subsequent wells drilled into the same oil and gas
deposit have a high probability (greater than 1 in 10 chance) of being
productive. Similarly, discovery of a coal deposit is relatively easy
given the abundance of coal. Coal seams typically have continuity and
predictability.
In contrast to oil and gas wildcat wells that can be transformed
into producing wells, hardrock mineral exploration drill holes cannot
be turned into a mine. A drill hole that discovers hardrock minerals is
just the start of a time-consuming and expensive process to drill many
other holes to confirm the presence of a mineral deposit of sufficient
size and grade to warrant development of the mine. Even though
geophysical surveys, geological mapping, sampling, and drilling provide
important information that may help identify that one-in-one thousand
project that can become a mine, they do not guarantee discovery of a
viable mineral deposit. Companies spend tens to hundreds of millions
exploring for minerals with no guarantee that their efforts will
discover a deposit that can be developed into a mine. If the
exploration data and engineering studies are favorable enough to
warrant the decision to build a mine, an enormous investment on the
order of hundreds of millions to billions of dollars will be required
to design and construct the mine and associated mineral processing
facilities.
As discussed in the response to Question No. 1, numerous processing
steps are required to produce a marketable product like metal
concentrates or dore from the hardrock mineral ores that are extracted
from the mine. In contrast, leasable minerals like coal, oil and gas
require comparatively less processing to produce a marketable product.
Additionally, hardrock mineral ores contain only small concentrations
of valuable metals. The processing steps are required to separate the
metals from the ore (the rocks that contain the metal). As shown in
Exhibit I, 300 tons of coal coming out of the ground at a mine has an
immediate value at the mine mouth because nearly all of the produced
coal is marketable, requiring relatively little processing. In
contrast, 300 tons of gold ore coming out of the mine is comprised of
rock that contains a very small amount of gold. This gold ore must be
processed in order to separate the gold from the rock. Thus the
``yield'' from raw, unprocessed hardrock mineral ores is much smaller
than the yield from coal at the mine mouth or crude oil and gas at the
well head.
The gold ores produced at surface gold mining operations typically
contain less than one-tenth of an ounce of gold for every ton of rock
mined (a grade of <0.1 ounces of gold per ton). Many surface gold mines
produce gold from exceptionally low-grade gold ores that contain
hundredths of ounces of gold (i.e., gold grades of less than 0.09
ounces of gold per ton). Other hardrock minerals comprise similarly
small fractions of the rocks in which they are found.
Question 6. What contributes to the total average costs of starting
up a mine before production can start? Where do those expenses mostly
come from?
Answer. It is not practical to provide a total average cost of
starting up a hardrock mineral mine due to the diversity of hardrock
minerals. Because each hardrock mineral deposit has unique geological
and metallurgical characteristics, mine plans and processing plants
must be custom-tailored to fit that deposit. Additionally, site-
specific environmental conditions such as the proximity to surface
water and groundwater aquifers or the presence of important wildlife
habitat or cultural resources will influence the mine design. The goal
is to engineer mining and mineral processing operations to optimize
economic returns and minimize capital and operating costs and
environmental and social impacts.
Therefore, there is no such thing as an average mine, which is the
reason why the royalty base (the valuation upon which a Federal
hardrock mineral royalty is calculated) must consider the costs driven
by this diversity and complexity. No two mines will have identical
startup or operating costs.
Despite the wide range of factors that contribute to startup and
operating costs, it is possible to offer some generalizations. Startup
costs for locatable industrial minerals and the uncommon varieties of
sand, gravel and dimension stone that are considered locatable minerals
will be considerably less than the startup costs for hardrock metals
mines. Generally speaking, industrial minerals and uncommon varieties
will be located at or near the ground surface and can be mined using
simple surface mining techniques. Typically, these minerals do not
require complex processing to make a marketable product. Examples of
processing necessary for these minerals include washing, sorting,
sizing, screening, and packaging. Some industrial minerals may also
require crushing.
On the other end of the spectrum, deeply buried metallic mineral
deposits \21\ must be mined using underground mining techniques and
require expensive processing to separate the metals from the ore
(metals-bearing rocks). Development of an underground mine takes an
enormous investment of capital. Similarly, processing facilities are
very costly to develop--especially if they involve numerous processing
steps such as crushing, grinding, flotation, leaching, roasting, and
autoclaving. The design of a mineral processing facility will depend on
the mineralogical and metallurgical characteristics of the deposit,
which will be unique to that deposit. Generally speaking, underground
hardrock mineral deposits that require complex mineral processing will
have the most expensive startup costs.
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\21\ Underground mines may be developed several hundred to several
thousand feet below the ground surface, with some deposits being as
much as 1 mile underground.
---------------------------------------------------------------------------
The startup costs to develop a surface mine will typically be less
than the costs associated with developing an underground mine. The
mineral processing costs at surface mines will depend on the mineralogy
and metallurgy of the deposit being mined. Deposits of oxidized or
partially oxidized precious metals or copper may be processed using
heap leaching techniques, which are generally less expensive to build
and operate than a milling facility. However, many surface mining
operations produce ores that require many or all of the above-described
processing steps to produce a marketable product. For example, some of
the large surface gold mines in Nevada have complex milling facilities
that have roasters and autoclaves in addition to crushing, grinding,
leaching, and flotation components.
Startup costs in the range of hundreds of millions of dollars are
fairly typical for mid-sized surface metallic mineral mines that do not
require complex mineral processing facilities. However, much higher
startup costs--on the order of several billions of dollars--are
required for large surface or underground mining operations that need
complex mineral processing facilities.
The substantial investment of capital required to start a hardrock
metal mine is one of the key reasons that the H.R. 2579 leasing scheme
is unworkable. In order to secure financing to build a multi-million or
billion dollar mine, mining companies and their lenders must have
security of tenure to assure that the mine and mineral processing
facilities can continue to operate during the projected mine life in
order to amortize the investment required to build the mine. The
limited leasing time frame in H.R. 2579 (a 20-year primary term with
the possibility--but not the guarantee--that the mine can continue to
operate longer than 20 years) will make financing large mines with mine
lives that exceed 20 years very difficult if not impossible.
Lenders will be very reluctant to provide the necessary capital to
build mines if there is uncertainty about whether the mine can continue
to operate past the primary lease term. It is not uncommon for large
base metal and some precious metal deposits to be developed into mines
that operate for decades. Thus the 20-year leasing term limit in H.R.
2579 will likely thwart the future development of these deposits, which
otherwise would be some of the Nation's most important mineral
resources. Most mines continue to operate so long as it is economic to
stay in operation.
Question 7. What state and Federal regulations must hardrock
operations follow today?
Answer. The panoply of Federal environmental statutes that protect
the Nation's environment apply to mining in the same way they apply to
all other industries. There are no mining exceptions or exemptions.
Federal statutes applicable to mining include but are not limited to
the National Environmental Policy Act, the Endangered Species Act, the
Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the
Toxic Substances Control Act, the National Historic Preservation Act,
Archaeological Resources Protection Act, the Migratory Bird Treaty Act,
the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, and the
Emergency Planning and Community Right to Know Act. In addition to
these universally applicable environmental laws, the Federal Land
Policy and Management Act (FLPMA) governs mineral activities on BLM-
administered public lands. The Forest Service's Organic Administration
Act applies to mining on National Forest System lands.
FLPMA mandates that all activities on public lands--including
mineral activities conducted pursuant to the U.S. Mining Law--must
prevent unnecessary or undue degradation (UUD). BLM's 43 CFR Subpart
3809 surface management regulations for hardrock minerals implement the
FLPMA mandate to prevent UUD. The 43 Subpart 3809 regulations include
detailed environmental performance standards to protect air quality,
surface water, groundwater, wildlife habitat, cultural resources,
visual resources, and other resource values.
Under the authority of the Organic Administration Act, the Forest
Service has developed the 36 CFR Part 228 Subpart A surface management
regulations for hardrock mining. 36 CFR Sec. 228.8 establishes the
environmental protection standard which requires mining activities to
minimize adverse impacts on National Forest System lands including air
and water quality, scenic values, and wildlife and fisheries habitat.
BLM's and the Forest Service's surface management regulations require
reclamation and financial assurance before surface-disturbing
activities can begin. In Nevada, the country's largest gold mining
state, BLM and the Forest Service co-manage over $2.8 billion in
reclamation bonds for hardrock mineral projects.
All of the western states with lands open to location under the
U.S. Mining Law have enacted laws and implementing regulations
specifically applicable to hardrock mining. Generally speaking, these
laws and regulations establish environmental protection, reclamation,
and financial assurance requirements that apply to hardrock mineral
activities on both Federal and private lands. Table 2 is a partial list
of the state laws governing hardrock mineral exploration and mining
projects.
TABLE 2
Partial List of State Laws Governing Hardrock Minerals
------------------------------------------------------------------------
State Mining Statutes
------------------------------------------------------------------------
Alaska Alaska Mining Statute, AS Title 27
------------------------------------------------------------------------
Arizona Arizona Mined Land Reclamation Act, Ariz. Rev.
Stat. Ann. Sec. Sec. 27-901 through 1026
------------------------------------------------------------------------
Aquifer Protection Permit (APP), Ariz. Rev.
Stat. Ann. Sec. Sec. 49-241 through 252
------------------------------------------------------------------------
California California Surface Mining and Reclamation Act
Public Resources Code, Sections 2710-2796
------------------------------------------------------------------------
Porter Cologne Water Quality Control Act,
California Water Code Section 7
------------------------------------------------------------------------
Colorado Colorado Mined Land Reclamation Act, Title 34
Mineral Resources, Article 32
------------------------------------------------------------------------
Idaho Idaho Surface Mining Act, Idaho Code Title 47,
Chapter 15
------------------------------------------------------------------------
Montana Montana Metal Mine Reclamation Act (``MMMRA''),
Montana Code Annotated (``MCA'') Sec. Sec. 82-
4-301 through 390
------------------------------------------------------------------------
Nevada Nevada Revised Statues 445A.300-445A.370, Water
Pollution Control
------------------------------------------------------------------------
Nevada Revised Statutes 519A.010-519A.280,
Reclamation of Land Subject to Mining
Operations or Exploration Projects
------------------------------------------------------------------------
New Mexico New Mexico Mining Act of 1993, (69-36-1 to 60-36-
20 NMSA 1978)
------------------------------------------------------------------------
New Mexico Water Quality Act (NMWQA), Chapter 74
------------------------------------------------------------------------
Oregon Oregon Mined Land Reclamation Act, OAR Chapter
632, Division 037
------------------------------------------------------------------------
Utah Utah Code Title 40, Mines and Mining--Chapter 8,
Utah Mined Land Reclamation Act (``UMLRA'')
------------------------------------------------------------------------
Utah Code Title 19, the Environmental Quality
title, Chapters 01-06, and 08
------------------------------------------------------------------------
Utah Code Title 73, Chapter 5a
------------------------------------------------------------------------
Washington Washington Metals Mining and Milling Act
(``WMMMA''), Revised Code of Washington
(``RCW'') Chapter 78.56 Sec. Sec. .010-902
------------------------------------------------------------------------
Wyoming Wyoming Environmental Quality Act (``WEQA''),
Wyo. Stat. Sec. 35-11-401, Article 4, Land
Quality
------------------------------------------------------------------------
As a result of these laws and regulations, modern mining operations
are designed, operated, and closed to protect the environment--in
marked contrast to historic mines developed long before enactment of
today's environmental protection mandates. Mining companies devote
considerable resources to ensuring compliance with all applicable
local, state, and Federal environmental protection requirements.
State and Federal environmental permits include extensive site
monitoring and reporting requirements to document that a mine is
operating properly and complying with all regulatory requirements.
These environmental monitoring systems and reporting requirements act
as real-time, early warning systems that provide regulators and
operators with indicators of a possible problem. If project monitoring
data indicate there may be an environmental issue, state and Federal
regulations compel the operator to investigate the potential problem
and remediate the problem if one is discovered. The monitoring systems
at today's highly regulated mining operations provide meaningful
information about the performance of the site's environmental controls.
If the monitoring data suggest there may be a problem that needs to be
evaluated, state and Federal regulators have all of the necessary
regulatory and enforcement tools to require the operator to respond to
the problem with investigatory and remediation measures.
Question 8. How would you characterize the environmental
protections in the United States, compared to other major producers of
critical minerals in the world, such as China? How about Africa?
Answer. As discussed in the response to Question No. 7, the United
States has comprehensive and effective Federal and state environmental
protection regulations governing all industries as well as regulations
specific to mining. The United States also has extensive worker safety
laws and regulations. Mining companies follow the mantra of ``Safety
First.'' Mining companies place a great deal of importance on ensuring
safe working conditions at their sites and on complying with all
environmental protection requirements. Unfortunately, China, African
countries, and other foreign countries do not have similarly stringent
environmental and health and safety regulations.
For example, the Washington Post reports significant pollution at
Chinese graphite mines.\22\ Graphite is used to manufacture the lithium
batteries that power cell phones and countless other electronic devices
including electric vehicles. As noted in the Washington Post the
Chinese graphite mines operate under ``lax environmental controls and
produce old fashioned pollution.'' According to the Washington Post,
the world's demand for lithium-ion batteries to power smart phones,
laptops, and electric vehicles comes at ``a steep cost.'' Villagers
living near the Chinese graphite mines face dirty air, damaged crops,
and polluted drinking water due to operation of these mines. The
Washington Post states that Chinese officials do not enforce
environmental regulations and ``are inclined to look the other way to
benefit a major employer.''
---------------------------------------------------------------------------
\22\ https://www.washingtonpost.com/graphics/business/batteries/
graphite-mining-pollution-in-china/.
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Similarly, Radio Free Asia reports that ``Chinese-operated mines in
Lhundrub County have caused ``severe'' damage to local forests,
grasslands, and drinking water. Waste from the mines, in operation
since 2005, ``has been dumped in the local river, and mining activities
have polluted the air.'' \23\
---------------------------------------------------------------------------
\23\ https://www.rfa.org/english/news/tibet/mines-
05062013154914.html.
---------------------------------------------------------------------------
The worldwide demand for the cobalt used in lithium-ion batteries
is partially met from mines in the Congo, which employ child labor and
operate with little or no environmental or worker health and safety
controls. The Washington Post reports that cobalt mining in the Congo
is performed by workers, including children ``who labor in harsh and
dangerous conditions . . . with little oversight and few safety
measures. Deaths and injuries are common.'' These mining operations
``expose local communities to levels of toxic metals that appear to be
linked to ailments that include breathing problems and birth defects.''
\24\
---------------------------------------------------------------------------
\24\ https://www.washingtonpost.com/graphics/business/batteries/
congo-cobalt-mining-for-lithium-ion-battery/.
---------------------------------------------------------------------------
According to the Washington Post, lithium mining operations in
Chile and Argentina used vast quantities of water to process lithium
from deposits located in the high-elevation Atacama region--a high-
altitude desert. Some of these operations provide paltry benefits to
the indigenous Atacamas communities where they are located.\25\
---------------------------------------------------------------------------
\25\ https://www.washingtonpost.com/graphics/business/batteries/
tossed-aside-in-the-lithium-rush/.
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In contrast to these unfortunate problems in countries with
inadequate regulations or poor enforcement of their regulations, mining
companies operating in the United States devote enormous resources to
complying with the stringent environmental protection laws and
regulations discussed in the response to Question No. 7. Besides
protecting the environment at their mine sites, mining companies
operating in the United States are also committed to maintaining and
enhancing their social licenses to operate. Many companies have
corporate social responsibility programs that require meaningful
interaction with the communities in which they mine to ensure that
their mines are responsive to the culture and social fabric of the
community as well as provide economic benefits.
Question 9. What kind of NEPA process do mining projects have to go
through before mining can begin?
Answer. The NEPA process for proposed mineral exploration and
mining projects on BLM-administered public lands and on Forest Service-
administered National Forest System lands is identical to the NEPA
process for any other project that is determined to be a major Federal
action that requires a NEPA analysis. Both BLM and the Forest Service
must prepare thorough NEPA documents to analyze and disclose the
potential environmental impacts associated with proposed mineral
activities. Generally speaking, the agencies prepare an Environmental
Assessment (EA) in response to a proposed mineral exploration project
and an Environmental Impact Statement (EIS) for a proposed mining
operation.
BLM and Forest Service NEPA documents must comply with the Council
on Environmental Quality (CEQ) regulations implementing NEPA at 40 CFR
Sec. Sec. 1500-1508. BLM prepares NEPA documents in accordance with its
NEPA Handbook (H-1790-1). The Forest Service NEPA documents follow the
NEPA procedures outlined in its NEPA rules at 36 CFR Sec. 220.\26\
---------------------------------------------------------------------------
\26\ The Forest Service published an Advanced Notice of Proposed
Rulemaking on January 3, 2018 seeking public comments on how the
efficiency of the 36 CFR 220 NEPA rules could be improved.
---------------------------------------------------------------------------
The NEPA documents for proposed mineral exploration and mining
projects have the same structure and content as NEPA documents prepared
by Federal agencies for all types of proposed projects and include the
following chapters: Purpose and Need; the Proposed Action and
Alternatives to the Proposed Action; Affected Environment, which is a
detailed discussion of the environmental setting of the Project Area
and surrounding lands; Environmental Consequences, which presents a
thorough analysis of the direct, indirect, and cumulative impacts that
could result from the project; Consultation, which lists the tribes,
agencies, organization, and individuals contacted during the NEPA
process; Preparers, which shows the agency and third-party personnel
who prepared the document; and References Cited.
Like NEPA documents prepared for non-mining projects, BLM and
Forest Service NEPA documents for mineral exploration and mining
projects are used as decision tools to assist the agencies in
evaluating a proposed mineral project and alternatives to the project
proponent's project proposal (the Proposed Action) that would minimize
or even eliminate environmental impacts. During the NEPA process, BLM
and the Forest Service identify and analyze project alternatives like
different locations for certain mine facilities that may mitigate
environmental impacts. Based on this alternatives analysis process, BLM
and the Forest Service select an Agency Preferred Alternative and
identify an Environmentally Preferred Alternative, both of which may
differ from the Project Proponent's Proposed Action.
The CEQ regulations require mitigation measures to avoid or
minimize adverse environmental impacts. (See, for example 40 CFR
1502.14 and 1502.16). This mitigation requirement applies to all types
of proposed projects including mineral exploration and mining projects.
BLM and the Forest Service use the NEPA alternatives and environmental
consequences analyses to evaluate ways to avoid and minimize
environmental impacts. This aspect of the NEPA process is integrated
into the agencies' assessment of whether a proposed mineral project
complies with the environmental performance standards in each agencies'
surface management regulations for hardrock minerals (e.g., BLM's 43
CFR Subpart 3809 and the Forest Services' 36 CFR Part 228 Subpart A
regulations).
The NEPA process for proposed mineral exploration and mining
projects includes public involvement that must comply with the public
scoping requirements in 40 CFR Sec. 1506.6 to seek public comments on a
proposed action. The EIS process includes a minimum of three
opportunities for the public to provide comments on a proposed project
during initial project scoping, on the Draft EIS, and on the Final EIS.
The NEPA process is also applicable to hardrock minerals on
acquired lands. Federal agencies must prepare NEPA documents in
conjunction with issuing Federal leases for mineral exploration and
development. Even initial exploration on acquired lands requires a
lease and an associated NEPA analysis, which is typically a time-
consuming process. It can take years of permitting and lease
negotiation before initial exploration for minerals on acquired lands
can begin. This is another reason why a leasing system is problematic
and an extremely inefficient way to manage the Nation's mineral
resources. The self-initiation process under the mining claim system on
lands subject to the Mining Law allows initial exploration activities
like geologic mapping and other activities that do not involve
disturbing the land to take place without a time-consuming permitting
process.
EXHIBIT I
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Dr. Lowenthal. Thank you, Mr. Comer.
I would like to thank the panel for your testimony. And I
want to remind the members of the Committee that Committee Rule
3(d) imposes a 5-minute limit on questions. I am now going to
recognize Members for any questions they may wish to ask the
witnesses.
I recognize first Representative Cunningham for 5 minutes.
Mr. Cunningham. Thank you, Mr. Chairman, and thank you to
our witnesses for being here today. Thank you for traveling to
testify. And it might be surprising that anyone from South
Carolina would care much about a bill that deals largely with
gold and copper mining on Federal lands. You would think that
is just an issue for Nevada. Right?
Except that it is not. I had my staff look into it, and we
found at least three hardrock mining Superfund sites in the
state of South Carolina. And it is possible that there are
responsible parties that are paying for the cleanup of all
three of these. But it is also possible that they are not and
the taxpayers of South Carolina will be forced to foot that
bill. Either way, the point is that abandoned hardrock mines
are not simply a Western issue. They are an American issue.
A little over 40 years ago, Congress came together on a
bipartisan basis to create a program, the Abandoned Mine Land
program, to deal with abandoned coal mines. And Congress
rightly acknowledged that the industry had a responsibility, a
duty, to help address environmental and safety hazards that it
had spent well over a century creating.
We can do the same thing for hardrock mines as well. Every
state has them, from coast to coast. But unlike coal mines,
states get virtually no money from the Federal Government to
help clean them up. Citizens of every state deserve to not be
exposed to the toxic remains of old mines. These sites need to
be cleaned up faster and with less of a burden on the
taxpayers.
And this is not a Republican issue or a Democratic issue.
This is about fairness, it is about health, it is about
safety--issues that are priorities for both sides of the aisle.
So, I want to thank Chairman Grijalva for introducing this
bill. I want to thank Chairman Lowenthal for holding this
hearing. And I want to thank the witnesses again for taking the
time to be here and explain their views on this very important
and critical issue.
And with that, I would yield back the balance of my time.
Dr. Lowenthal. Thank you, Representative Cunningham.
I would now like to recognize Representative Hern for 5
minutes of questioning.
Mr. Hern. Thank you, Mr. Chairman, Ranking Member Gosar,
and our witnesses for being here today to testify.
Hardrock mining provides essential materials that are used
in several industries across the country, including much of our
high tech equipment. However, the majority of our supply of
critical minerals comes from abroad, mostly from China. Because
of this, any restriction on our ability to mine these materials
would hamper our industries and their growth, and make us
reliant on foreign materials.
Mr. Comer, as someone who is considered a leading authority
in natural resource permitting and compliance issues, and on
your testimony today, I would like to just ask you--it is going
to be a pretty short answer, I would think. But I would like to
get to my colleague here from the mining world.
Would you agree that this bill will have a huge negative
effect on the mining industry in the United States, and gravely
impacting our ability to develop renewable energy sources, and
in fact, driving the Green New Deal cost even higher than the
ridiculous estimates of $93 trillion that are already being
accepted across the industry?
Mr. Comer. Would you like an answer as simple as
``Absolutely''?
Mr. Hern. Absolutely. You can expound a little bit.
Mr. Comer. Well, the impacts and the implications will be
several-fold. It will greatly impede existing mines, their
continuation, their operation, and their development. And it
will impair the ability to acquire new mineral resources. And
the United States has substantial mineral wealth. One of the
things that we have not heard about today is some of the
differences in mining today versus 100 years ago.
I look at the mural in the room, and that is a technology
for a bygone era.
Mr. Hern. Mr. Comer, I am going to ask you to hold the rest
of that thought. I have a feeling you are going to be asked a
few more questions, and I want to yield the balance of my time
to my colleague from a mining part of the country.
Mr. Stauber. Thank you, Congressman Hern, for giving me
some of your time.
Chairman Lowenthal and Ranking Member Gosar, mining defines
Minnesota's past, present, and its future. So, I appreciate
this opportunity to appear on this panel because I fear these
proposed hardrock mining reforms would disincentivize any
mining and irreversibly damage Minnesota's economy.
The first bill I introduced, the Superior National Forest
Land Exchange Act, it codifies the land transfer that occurred
last July between the Forest Service and PolyMet Mining. This
bill passed the House last Congress under my predecessor former
Representative Rick Nolan's leadership with broad bipartisan
support, including, Mr. Chairman, your support along with four
other Democrats sitting on this Subcommittee.
Mr. Comer, thank you for appearing today to discuss the
crucial issue involving Minnesota. The Iron Range in my
district produces the iron ore used to build America and help
us win World War II. The economy on the Range is volatile. It
ebbs and flows with the price of steel, and is constantly
threatened by cheap iron ore from international competitors
lacking any environmental or labor standards.
Mr. Comer, how would instituting the proposed royalty and
shift to a leasing system affect iron ore mining and steel
production?
Mr. Comer. It would have a major devastating effect on the
ability to acquire new sources of iron ore in the Rocky
Mountain West. And to this date, there still are no mines that
have been developed under a leasing system in the Upper
Midwest. These are different types of properties, the existing
industry and the new industry, where it is developed with more
Federal mineral. But we have not developed yet. We are still
trying to after years and years of permitting and compliance
activities.
Mr. Stauber. Thank you. Along with iron ore, there are two
proposed copper nickel projects in northeastern Minnesota. The
PolyMet Project surpassed all environmental standards, taking
an incredible 14 years. Other countries mining copper and
nickel have very little to no environmental standards.
Mr. Comer, how can places like northeastern Minnesota
compete internationally under this proposed legislation?
Mr. Comer. It would be very difficult, both in Minnesota
and throughout the West. Land tenure, mineral tenure will be
lost. It will be devastating, and I am not a ``sky is falling''
type person.
Mr. Stauber. Neither am I. Thank you for answering those
questions, Mr. Comer, and for your testimony.
My next question will be to Commissioner Lachelt.
Commissioner, I appreciate your service as a County
Commissioner. I too came from the County Commissioner realm, so
I appreciate what you are doing and understand what you are
going through. Thank you for testifying today.
You listed clean, renewable energy as a priority. And
continued energy diversification requires elements like copper,
nickel, and iron ore. I want to ask you this: Would you rather
power your county with elements harvested in places like
northern Minnesota, who have strict environmental and great
union labor standards? Or do you prefer to receive these
elements from places that lack union labor and environmental
standards like Brazil, China, and Russia?
Ms. Lachelt. Sir, thank you for the question. And I think
it is really important to honor the past. Our mining history in
my part of the world, we honor how our region came to be, and
the economy that it helped build. But we need to look to the
future. And we work with a lot of solar companies in our
region----
Mr. Stauber. Commissioner, I have to yield my time back to
Representative Hern.
Dr. Lowenthal. Yes. You will get your opportunity again.
you will be next, Mr. Stauber.
Mr. Stauber. Thank you, Mr. Chairman. Appreciate it, and
yield back.
Dr. Lowenthal. But no filibusters.
[Laughter.]
Dr. Lowenthal. Next I would like to recognize Congresswoman
DeGette for 5 minutes.
Ms. DeGette. Thank you so much, Mr. Chairman. Thank you for
holding this hearing. I want to welcome my homies, Commissioner
Lachelt and also Mr. Comer, from Colorado. And I want to
apologize for toggling in and out. In the other Subcommittee on
this Full Committee, we are having a hearing down the hall on
wildfires, another huge issue for our state. I really want to
thank you for coming.
I want to start with you, Commissioner Lachelt, about the
issue of cleaning up abandoned mines because, as you know,
Colorado has one of the largest inventories of abandoned
hardrock mines. And we were surely reminded of that when we had
the Gold King Mine blow out in 2015. We all saw those pictures.
It turned the rivers bright yellow and released about 3 million
gallons of toxic wastewater.
And in the meantime, according to an AP report from
February, abandoned mining sites like Gold King are leaking 50
million gallons every single day into streams and rivers like
groundwater supplies. And that is just from the sites that the
AP looked at, so that is a floor and not a ceiling.
I want to ask you, Ms. Lachelt, as a County Commissioner of
southwestern Colorado, I know you have done a lot of wonderful
work advocating the cleanup of these hardrock mines. Can you
tell me what we know about the scale of the problem? What is
the estimated cost for this cleanup?
Ms. Lachelt. Thank you, Representative DeGette. It is
estimated that there are over 500,000 abandoned mines across
the country, and the EPA estimates that clean-up costs could
come in somewhere around $50 billion.
Ms. DeGette. Fifty billion dollars?
Ms. Lachelt. Yes.
Ms. DeGette. And where is that money going to come from to
clean up those mines?
Ms. Lachelt. From the taxpayers.
Ms. DeGette. Right. And do you think that if we don't have
a dedicated hardrock abandoned mine land fund, we could ever
come close to cleaning up the scale of contamination?
Ms. Lachelt. We need a dedicated source of funding in order
to do this cleanup.
Ms. DeGette. Yes. We can't do it without it, I don't think.
Ms. Lachelt. Exactly.
Ms. DeGette. Let me turn to you, Mr. Davis, because one of
the features of the Mining Law of 1872 is that a company can
freely mine on Federal lands, extract the minerals it wants,
and then it doesn't have to clean up after itself or pay a
royalty to American taxpayers.
In your testimony, you identified the lack of royalties as
one of the biggest problems with the Mining Law of 1872. Do you
think it is fair, as a small businessman, that hardrock mining
companies don't pay any royalties for mining Federal lands?
Mr. Davis. I don't think it is fair at all. I think it sets
up a great inequality. I think there are so many other
industries, such as oil and gas that do, but so does logging,
so does agriculture. In my craft, there are so many standards I
have to meet and so many regulations I have to meet. And they
are all a cost to me. And when those costs change, I adapt my
business to manage those costs, and traditionally, most
industries pass those costs along to consumers.
Ms. DeGette. Right. So, oil, gas, coal, solar, wind,
livestock, logging, and outdoor recreation all pay to use the
public lands, but mining does not.
Mr. Davis. That is correct.
Ms. DeGette. Does that seem fair to you?
Mr. Davis. No. It does not seem fair.
Ms. DeGette. Yes. And how does that impact taxpayers like
you?
Mr. Davis. We end up carrying the burden, and especially in
a situation such as the one we faced in Montana, where the two
corporations, one Australian and one Canadian, were coming over
the border to start industrial-scale gold mines. And the impact
of that, it was going to devastate our local economy.
So, who picks up that cost? Who picks up the cost of my
business, our entire valley? Our region has a billion-dollar
industry employing 13,000 people. I listened to the gentleman
to my left talk about the national agenda, and I am curious
where the national agenda forgets about local communities and
our ability to talk about what happens in our neighborhood. And
we talk about necessary imports. I am talking about gold mining
specifically in my region.
Ms. DeGette. Right.
Mr. Davis. And the impact of that. It would be devastating.
it would decimate my industry.
Ms. DeGette. So, it decimates your industry, plus we don't
have the ability to clean up most of these abandoned mines.
Mr. Chairman, this is why we need to update this law, and I
appreciate you having this hearing. And I yield back.
Dr. Lowenthal. Thank you.
Now we return once more to Representative Stauber.
Mr. Stauber. Thank you, Chair Lowenthal. I appreciate it. I
want to continue my conversation, but I want to restate the
question. And Commissioner Lachelt, it will just be a yes or no
answer because I have other questions.
I am going to ask this: Would you rather power your county
with elements harvested in places like northeastern Minnesota,
with great EPA environmental standards and union labor? Or
would you prefer to receive them from places with an utter lack
of labor standards and environmental standards such as Brazil,
China, or Russia? And that is just an either/or.
Ms. Lachelt. Thank you, Representative. I prefer that any
minerals are responsibly sourced. So, I would say yes to your
question, and let you know that I work with solar----
Mr. Stauber. Yes to harvest them in Minnesota, or other
countries?
Ms. Lachelt. Where there are apparently--and you
represented that you have strong standards. I would say I would
much prefer that than from----
Mr. Stauber. Much prefer Minnesota?
Ms. Lachelt. I would.
Mr. Stauber. Thank you.
Ms. Lachelt. However, many of the companies operating on
our public lands are foreign----
Mr. Stauber. I will go to my next question. I appreciate
you supporting my great state of Minnesota.
[Laughter.]
Mr. Stauber. Mr. Comer, how long does the permitting
process take for hardrock operations? And how does that compare
to mining in other countries with comparable environmental
standards?
Mr. Comer. Thank you for the question. If you were to look
at other countries such as Australia and Canada, they have very
strong environmental laws, and they take 2 to 3 years to permit
mines and properties and projects just as complicated as those
that we permit here.
One of the problems with the law as proposed is that it
adds new layers of NEPA analysis and the leasing decisions as
the Federal Government chooses which land should be available
and should not be available for further exploration after
having removed 50 percent of those lands from availability.
In the United States, a typical mine project, hardrock
mining project, takes right around 10 years plus or minus.
Mr. Stauber. Next question. How would you characterize the
environmental protections in the United States compared to
other major producers of critical minerals in the world such as
China?
Mr. Comer. The United States has top of class environmental
protections. To say that there are no controls over how mines
are developed or operated is just a simple fallacy. Part of the
reason it takes 10 years is because of the 40-plus
environmental and land management laws that have to be complied
with. No mine is going to open today that will discharge air or
water emissions that violate the law. Our protections are very
strong.
Mr. Stauber. As they should.
Mr. Comer. As they should be.
Mr. Stauber. Yes. Thank you for those questions.
Chairman Lowenthal and Ranking Member Gosar, I want you to
know, and other members of this panel, I want you to know how
important mining is to the state of Minnesota and this Nation,
the critical elements that we mine, copper and nickel.
We need mining to transition into alternate sources of
energy--windmills, thousands of pounds of copper. It can be
mined in northern Minnesota, following strict standards. Good
paying jobs. And it will be a great part of our economy.
We have permitted the very first copper-nickel mine in the
state of Minnesota that has met or exceeded every environmental
standard. And we are going to bring great paying jobs to this
state. It is called the Duluth Complex. It is the biggest
precious metals find in the world. And we can mine it safely,
following standards, bringing great-paying jobs to our
community.
And we talk about reclamation. I would invite anybody to
come up to northern Minnesota's Iron Range. I will show you
reclamation, how it should be done. We have deer. We are
harvesting hay. We have bees. We have ducks. We have birds. It
is beautiful.
Mr. Chair, I yield----
Dr. Gosar. Would the gentleman yield for a second
Mr. Stauber. The gentleman will yield.
Dr. Gosar. Will the gentleman answer me a question? The
cleanest water in Minnesota is located where?
Mr. Stauber. In the Iron Range.
Dr. Gosar. In reclaimed mines, is it not?
Mr. Stauber. That is correct.
Dr. Gosar. I thank the gentleman.
Mr. Stauber. Mr. Chair, that is all I have. I yield back.
Thank you.
Dr. Lowenthal. Thank you.
I now recognize Chairman Grijalva, Chairman of the Natural
Resources Committee, and also the sponsor of H.R. 2579, the
Hard Rock Leasing and Reclamation Act of 2019.
Mr. Grijalva. Let me first thank you, Chairman Lowenthal
and Ranking Member, for having the hearing. It is a very
important hearing. And the issue of reforming the 1872 Mining
Law will, no doubt, as this legislation proceeds, be a source
of debate, to say the least. But it is a necessary debate that
we need to have. And I appreciate, Chairman Lowenthal, you
scheduling this meeting, and to the witnesses, thank you for
being here.
For a decade now in southern Arizona, the Rosemont Mine has
been a point of opposition by the vast majority of the
community. And yet, 10 years later, as Chairman Manuel said,
the permits continue to be issued, have been issued for it, and
the litigation continues in all the various courts around
there. And it seems that litigation is the last stop.
And regardless of the impacts on the environment, water
quality, sacred sites, or the opposition of the Pascua Yaqui
Tribe, the Hopi Tribe, the Tohono O'odham Tribe, the mine has
been permitted. And that is because the land managers repeat
that under the Mining Law of 1872, they are not allowed to turn
down a mine regardless of impact. And their ability to say no
is non-existent.
And I think that much of the controversy around the issue
of mining, and where it should be and where it should not be,
rests with that clause and that particular power that has been
given to the mining industry. And we are not talking about the
little guy with his donkey going up the hill; somebody
grubstaked him for him to go look for a precious metal, gold or
silver. We are talking about a multi-national industry,
particularly companies from Canada and Australia that were
mentioned as being on the cutting edge of environmental
protections.
I want to ask you in one aspect of this whole discussion,
Chairman Manuel, the O'odham Nation has long dealt with the
impacts, as you mentioned in your statement of mining on your
lands.
Could you tell us the impacts to your land and water,
elaborate a little more regarding the Freeport and Asarco
Mines, Mr. Chairman?
Mr. Manuel. Thank you for the question, Chairman Grijalva.
When the mine was put in place on the Nation back in the 1950s
by Hecla Mining Company at that time, which was from Canada,
and then they started mining. And it is up on a mound, and
there are communities below those mounds.
They started mining underground, the oxide and sulfide. And
they started putting in acid underground. That acid got into
the underground water and started traveling and got to the
communities there. Right now, EPA is involved as far as the
cleanup, and it is a Superfund site. We have walls around the
area, and the contamination is still moving away from the mine.
So, that is our major concern.
Mr. Grijalva. Thank you, and I think the point that the
Chairman made should not be ignored, that the lack of
consultation on the part of the Federal Government with regard
to a Federal asset, with a trust responsibility to consult in a
meaningful and real way with tribes before the fact, not after
the fact. And I think the Chairman pointed that out.
Mr. Davis, your situation is very similar to the one that
we are dealing with in Arizona. You fought the proposed mines
at the doorstep of the Yellowstone?
Mr. Davis. That is correct.
Mr. Grijalva. And people are fighting to keep the Grand
Canyon free from uranium mining, close to the Grand Canyon, an
iconic treasure. And you mentioned also, and it was part of the
overall lands package, that it was approved into law to create
a buffer around that your organization fought so hard for, and
that my colleagues on the other side of the aisle supported, to
create a buffer next to Yellowstone from mining, effectively
banning mining from that area in order to conserve and protect
that.
I find that interesting because I am sure there will be
oppositions to any kinds of equal protections in other parts of
the country, which is another legislative tool that we have
here in Congress to stop that. And I congratulate your group in
doing that and getting that done, and convincing your elected
officials to respond to that.
These mines in Yellowstone, you said they are devastating
to business. Could you elaborate on that? What would have
happened? Employment? Revenue? Local tax base? Et cetera?
Mr. Davis. Just my valley alone sees $70 million a year in
tourist business based on fishing. But the region itself sees
almost a billion dollars, and again, it drives 13,000 different
jobs. So, I have to underscore, this is not about being anti-
mining, and I certainly appreciate the gentleman from
Minnesota.
Montana is laden with extractable minerals. It is what we
are going to mine, how we are going to mine, and where we are
going to mine it. And our big contention is that communities
should have a very loud say in whether that is the place it is
going to happen, instead of having a golden ticket to come into
your community, especially as a foreign corporation, and set up
shop without any penalties or without any respect to the
community and its way of life and what does drive that economy.
Their right certainly should not supersede a right that has
been entrenched for a hundred years. My business is 120 years
old. I have my life on the line. I have my family's life on the
line. So, the impact, especially with today's technology and
today's machinery, to come in 3 miles from the highway, the
corridor to Yellowstone, and start open pit mining, it would
devastate our economy. You would be trading one for another.
Dr. Lowenthal. Thank you, Chairman Grijalva.
I now recognize Representative Amodei for 5 minutes.
Mr. Amodei. Thank you, Mr. Chairman, and thank the
Committee for its courtesies in allowing me to participate in a
hearing for an industry that is fairly important in my
district.
First of all, I would like to ask anybody on the panel if
you have any familiarity with the state of hardrock mining in
Nevada. And if so, please raise your hand and tell me what that
is.
Mr. Comer?
Mr. Comer. Thank you. I have visited mines in Nevada and am
familiar with gold mining in Nevada. In addition, I reviewed,
in some efforts in mine transactions between companies, many
mines in Nevada.
Mr. Amodei. OK. I appreciate that. Anybody else?
[No response.]
Mr. Amodei. OK. And it not that I expected you to or that
is a wrong answer or anything like that. But I want to use my
time to kind of, in keeping with the theme of the hearing, talk
about reforming the Mining Law of 1872 because anything with a
date of 1872 suggests that perhaps it is time to take a look at
that and update things. That is not a wild thought, and I
support that.
But the challenge before us in doing that is doing that
with an open mind, and doing that with your head on a swivel,
and doing that with a mind to all things relevant, whether that
is tax, whether that is permitting, whether it is all those
things. And let me just state so it is clear, it is time. We
should take a look at that, and we should do some reforms.
But as we do that, we need to take a look at how things are
going. And I am not going to tell you how things are in your
jurisdictions or things like that. But I do know some things
about what is going on in my jurisdiction. And in my
jurisdiction, when we talk about what are we going to do, for
instance, for taxing those Federal lands which most of the
mining takes place on, it is like, fair enough. Let's talk
about that.
Let's talk about how mining in Nevada pays over $15,000 an
employee in state, local, and Federal taxes. The next closest
industry is about $1,100. That does not mean those industries
are bad industries. It just means that we should not start, at
least in that neck of the woods, on Federal land with the
premise that it is not paying its way.
Let's talk about a living wage in Nevada, because guess
what? If you pay high wages, you also pay Federal income taxes.
So, when we talk about wages in the hardrock mining industry in
my state, those people can afford their food. They can afford
their health care. They can afford their medical care. They can
afford all those things because they are paid very well.
And let's talk about their impact on public safety, because
it is funny--those companies, before they turn you loose on
their sites or underground, tend to do things like drug and
alcohol test you. So, they are not commonly appearing in your
courts and having to be dealt with in those contexts. It does
not mean we should not look at them. It does not mean we should
not update the law. But we should do it with an eye toward all
facts that are relevant.
Let's take a look at another thing. The state of Nevada
said, hey, we want you to pay net proceeds of minerals. So,
after you do all the things you do, which is pay people, which
is what we like; and after you do things like provide good
health care and good retirement and all those sorts of things,
we also say, we want you to pay net proceeds.
You know a funny thing about net proceeds is, when we have
an eye toward increasing those taxes, that is an automatic
deduction from what their state net proceeds are. We should be
mindful of what that does because I will tell you, as having
served in Nevada Legislature, they will go, whoa. If you are
going to affect our income stream, we are going to go back and
revisit that.
I'm not saying they should not. I am just saying we ought
to know that before you enact something, which basically may
say those 500 people working at that mine, extracting whatever
the mineral is, may not have a job any more. May not. I'm not
saying, ``Oh, my God, the sky is falling.'' I am just saying,
we should do that, all these things, with those things in mind.
And let's talk finally about permitting. If a mine is
seeking a permit in an area that does not pass NEPA muster,
then they should be denied. The process is set up for that. But
let's not start with the premise on permitting where it is
like, oh, if you apply, you should have one. There are denials
and they should, quite frankly, be appropriate in some
circumstances.
But when we talk about refining what we do with minerals
and minerals extraction on Federal lands and elsewhere in this
country, let's do so with a 360-degree look at all the issues,
and do it in a way that says, if there is a part of it, then
the final part is this.
Nevada is a success story in reclamation. It doesn't mean
mission accomplished. You never say that. It is a success story
in reclamation. So, when we talk about what are we going to do
with reclamation and we are going to use some of these funds
for that, let's also have our head on a swivel because, quite
frankly, if it isn't broke in some areas, we don't need to
spend Federal money on it.
Thank you, Mr. Chairman, for your indulgence, and I yield
back.
Dr. Lowenthal. Thank you, Mr. Amodei, and welcome to the
Committee.
I am now going to recognize myself for 5 minutes. And I
want to go first to Chairman Manuel.
Chairman Manuel, we have existing laws in this country that
are designed to protect Native American cultural sites. Why
aren't those laws enough to protect the sites from the impacts
of mining? Why aren't the existing laws that we have sufficient
to protect cultural sites from the impacts of mining?
Mr. Manuel. Thank you, Chairman, for the question. The
existing laws that are in place right now are good. But the
problem that we encounter as we do consultation with the
branches of the government, they don't fulfill their authority
and their responsibility in protecting those in our behalf.
That is why we are glad to see the laws being changed now
to give us that consultation that is going to be put in place
as far as protecting, fully protecting, these resources because
right now, how we see it is the government does not really
enforce that authority that they have on those entities.
Dr. Lowenthal. Thank you.
Mr. Comer, we have heard a lot about that if we move toward
this leasing system, that it would be the end of mining in the
United States. But other countries, such as Australia and
Canada, have a thriving mining industry. In most of their
territories, these countries utilize a mixed hybrid or a claims
leasing system.
Mining companies stake a claim until a discovery of a
valuable mineral deposit occurs. At that time, these claims
must be converted to a lease. Why shouldn't the United States
maintain two different mineral development systems, both the
locatable, which we are talking about, and also leasable? We
already know that Minnesota is a locatable system. I'm sorry,
Minnesota is a leasable system already.
Mr. Comer. That is correct. But there are no leasable mines
in operation in Minnesota right now. Leasing has many issues in
hardrock mining. One of the issues is it is difficult to find
mineralization that will yield a mine. The ability to have
claims allows you to establish those locations over time and
then develop them and even chase the mineralization.
The exploration that was initially done in Minnesota was
done in the 1950s and the early 1960s. Under a leasing system,
you would not have your leases any more. They would have
devolved to somebody else.
Dr. Lowenthal. But I would like to follow that question. In
both Australia and Canada, which have been cited as examples,
and they are countries that have thriving mining, they have a
hybrid system, one in which you originally receive a claim;
once you strike the hardrock, you discover that mineral, that
they must be converted to a lease.
So, why is a lease not a problem there, and yet it would be
a problem here in the United States?
Mr. Comer. Mr. Chairman, you have to look at how the system
operates. Certainly that is not what is described in this bill.
This bill contains acreage limitations that would cause the
forfeiture of leases. When we look at royalty----
Dr. Lowenthal. Let me just follow up. You would be
agreeable to a hybrid system such as what we find in Australia
and Canada?
Mr. Comer. Mr. Chairman, it is not what I am agreeable to.
There is an industry out there that is very engaged in these
issues. I think you will find the mining industry is eminently
reasonable in how it views how it should operate, and those are
discussions that may be appropriate to take up. But this bill
does not contain a workable leasing system.
Dr. Lowenthal. So, the problem is, and I will just end now,
on what are the specifics of this bill, not that you oppose a
leasing system?
Mr. Comer. Again, no one really cares what I think.
Dr. Lowenthal. Can we strike his entire record, then?
[Laughter.]
Dr. Lowenthal. With that, I now recognize my friend, the
Representative from Louisiana, Mr. Graves.
Mr. Graves. Thank you, Mr. Chairman. Mr. Comer, I actually
appreciated your testimony.
I have a question, actually, for the Chairman, if that is
OK--Mr. Chairman, the sponsor of the bill? Any chance?
Dr. Lowenthal. Yes.
Mr. Graves. I just want to make sure I understand the
purpose of the legislation. You just feel that this is a public
asset, the minerals that are being mined, and so you feel that
the public should be able to have some type of value assigned
to that and be able to benefit from that like we do for oil and
gas and things like that. Is that accurate?
Mr. Grijalva. Essentially, yes.
Mr. Graves. Thank you. And that is the only question I had.
I just wanted to make sure I understand that.
Do any of you--and, in fact, anybody in this room--I am
curious about the royalty rates. The royalty rates are
established at $10 an acre on top of the 12.5 percent--well, I
guess the royalty rate is 12.5 percent. I think I saw there was
a different royalty rate when they are at 8 percent as well.
I am just curious, does anybody know where those numbers
came from? Eight percent of the value of production, and then--
yes, not less than 8 percent, but then it has a 12.5 percent
threshold as well. But, does anybody know where those numbers
came from, 8 and then 12.5 percent?
Ms. Lachelt. Representative, my understanding for the 12.5
percent royalty rate is that is the same royalty rate for oil
and gas on public lands.
Mr. Graves. OK. OK.
Ms. Lachelt. It is consistent.
Mr. Graves. So, we have it based on oil and gas. There is
some basis, arguably, but then as we heard Mr. Comer say that
there are significant differences between oil and gas, where
you go in and extract from a large reservoir--whereas in this
case, I think it is a different scenario. But at least there is
a basis.
So, do all of you agree that if you have a public asset, a
public natural resource, and it is being mined or being
utilized, that the public that owns it should get some type of
compensation or benefit? Or does anybody disagree with that? Do
any of you disagree with that?
Ms. Lachelt. I do not disagree. I believe that it levels
the playing field for the hardrock mining industry with all
other industries on public lands--oil, gas, coal.
Mr. Graves. OK. And in this case, under the legislation, 75
percent of the royalties or the revenues, they go into
reclamation. They go into helping to clean up abandoned mines.
That is correct. Right?
[No response.]
Mr. Graves. I just find it curious that in this case we are
going to clean up abandoned mines, wherever in other scenarios
there are strong efforts to make sure user pays or polluter
pays; whereas in this case this isn't necessarily--this is
disconnecting that. It is making other folks pay, potentially,
for any type of environmental harm that may be caused.
What are your feelings on the revenue sharing, where the
states get 25 percent, the remaining revenues, 25 percent. So,
none of this money is actually going to the Treasury. As I
read, I think 100 percent--is that right--100 percent is going
out? Because 75 percent goes to reclamation and 25 percent goes
to states? What is that?
Mr. Comer. Federal tax.
Mr. Graves. Federal tax is what? Well, you still get
Federal taxes. But of the royalties, though. so do you believe
that 25 percent should go to the states?
Mr. Davis. I believe if the states are left with the
impacts of reclamation----
Mr. Graves. No. But let's go back and remember that 75
percent of the funds are going to actually do reclamation work.
Right?
Mr. Davis. Right. But the overall impact is going to affect
the state. I personally believe that, yes.
Mr. Graves. Anybody disagree with that, that states should
get some type of compensation?
[No response.]
Mr. Graves. OK. The reason I bring this up, in Louisiana
when we dig, when we mine, we hit water, so there is not a
whole lot going on in Louisiana. The reason I bring this up is
this. Under the Mineral Leasing Act right now, states get 50
percent of the money from energy production on Federal lands in
their states. They get 50 percent of the money, and there are
no strings attached. They can do whatever they want with it. An
additional 40 percent of those funds goes into the reclamation
fund for water projects in the western states. So, 90 percent
of the money effectively goes back.
In the case of where I represent, South Louisiana, we have
produced maybe $200 billion in royalties and bonus bids and
rental payments to the Federal Government, and we get virtually
nothing. I think we got 0.6 percent--0.6 percent. So, the
Mineral Leasing Act gives up to 90 percent; under this bill
they get 25 percent while the environmental impacts are being
addressed. We have lost 2,000 square miles of our coast and we
get nothing. Zero. Zip.
And I just find it interesting how this Committee
continues--just last week, or 2 weeks ago, whenever it was, we
did a bill providing royalty-sharing for offshore wind. I am
not sure what the environmental impacts of that are, but the
territories are getting, under this bill, revenue-sharing from
offshore wind production.
If we care about the environment, I just do not understand
why we have such disparity in our policies? Let me say, Mr.
Chairman, I actually will support legislation--I don't know
about the bill in its current form, but I will support
legislation that provides some type of value back to the
taxpayer.
I believe there should be something there. I don't know
that these royalty rates are set appropriately; maybe we
auction it and see what the market determines. But I actually
think the public should get something back, which is not just
the disparity--and I am wrapping, Mr. Chairman; thank you for
your discretion--not just the disparity on the lack of revenue-
sharing for Louisiana and states that produce offshore energy,
but also I am going to bring in red snapper. I am bringing red
snapper into this conversation. All my friends up here, they
love it when I talk about this.
But here we have again--and you are going to cut me off
now----
[Laughter.]
Mr. Graves. Here we have again a scenario where--red
snapper is a natural resource. It is a public asset. It is a
public asset, and we just give it away for free. Why is it that
now some things are worth money and we need to have a market
and make sure taxpayers are getting something back, and in
other cases we just give it away for free. I don't understand
this Committee ever, ever.
We have no consistency in policy, and it is all about just
choosing winners and losers. And in this case, and the case of
red snapper, the public loses. The public gets completely
screwed. So, thank you. I am done.
[Laughter.]
Dr. Lowenthal. I am not sure I saw the exact relationship
between the red snapper and this, but I always appreciate----
Mr. Graves. You cannot distinguish minerals and red
snapper. They look identical.
Dr. Lowenthal. I always appreciate my Representative from
Louisiana educating us. It is a pleasure.
[Laughter.]
Dr. Lowenthal. I would like to thank the witnesses--oh, oh,
yes. It is with great honor, and the operative word is honor,
that I represent the Ranking Member for 5 minutes, Ranking
Member Gosar.
Dr. Gosar. Well, first of all, just to correct the record
with my colleague from Louisiana, it is not a 50-50 split. As
you will remember a couple years back, it is 48. Yes. The
Federal Government stole 2 percent from the states.
Just to correct a couple records here. Mr. Davis, do you
take deductions on your taxes?
Mr. Davis. Of course.
Dr. Gosar. That is what I thought. Let me ask all the
members on the panel: Do you have a cell phone?
Mr. Davis. Of course.
Ms. Lachelt. Yes.
Mr. Comer. Yes.
Dr. Gosar. How about you?
Mr. Manuel. Yes.
Dr. Gosar. You have one.
Mr. Comer, when we look at litigation situations, Canada is
a little bit different than the United States, is it not?
Mr. Comer. Yes.
Dr. Gosar. So, what is that? I think it is English system,
so what ends up happening? Loser pays?
Mr. Comer. Yes, sir.
Dr. Gosar. Oh, so it's a very, very different application
here. And that is why we get the streamlined effects in Canada,
because we do not get the frivolous lawsuits. OK?
Another thing I need to set straight. Chairman Manuel,
thank you for coming. You talked about government-to-government
consultation. Is it not true that the government reached out to
you and you refused to talk to them? Yes or no?
Mr. Manuel. No.
Dr. Gosar. Let the record reflect that they turned down
government-to-government consultations numerous times with the
Forest Service and with the company.
So, when we start talking about production, Mr. Comer, when
we do these rare earths in particular--I am going to be very
pointed about these--they are a little harder to deal with, are
they not?
Mr. Comer. Yes, sir.
Dr. Gosar. Hardrock has some very different applications,
does it not?
Mr. Comer. Yes, sir.
Dr. Gosar. What do we have to do with these that makes it,
particularly hardrock, a little bit different than everything
else?
Mr. Comer. Well, first of all they are called rare earths
partly because of how they are described, but they are very
rare. They are located in very small quantities. They require
extensive processing. And they are even more difficult to find.
Yet, their applications are essential to our current economic
future.
Dr. Gosar. You saw the charts that I put up there. If we
continue down this pathway, you see the bloom where we are more
reliant on other forms of these minerals all the way around the
world. How does that look to our intellectual property that is
so much based upon these rare earths?
Mr. Comer. It is a challenge. We don't control any of the
rare earths that are a critical part of our technology and
energy resources that we are advancing that are advanced, that
are not conventional in nature.
Dr. Gosar. In fact, they have a monopoly, do they not?
Mr. Comer. An absolute monopoly, sir.
Dr. Gosar. I mean, they actually run the worldwide market,
so what ends up happening is, they keep raising the price,
raising the price. And then it gets advantageous for companies
to come in. And once they start investing money, what they do
is they flood the market, do they not?
Mr. Comer. That is certainly a possibility, sir.
Dr. Gosar. Well, they do. They do. Do you think the demand
for these elements are going to go down, particularly with the
less aspect for renewable energy in wind and solar?
Mr. Comer. I don't see any scenario in the short term where
mineral demands will diminish.
Dr. Gosar. You made a comment that we would spend as much
on copper in the next 5 years as we did in the last 500.
Mr. Comer. Twenty-five years.
Dr. Gosar. Twenty-five years. I am sorry. Is that true?
Mr. Comer. That is my understanding, yes, sir.
Dr. Gosar. Do new cars, electric cars, have less or more
copper?
Mr. Comer. A current electric vehicle uses four times the
amount of copper as a conventional car, which uses
substantially more than a car from 20 years ago. Just think of
all the motors that exist in cars that have copper windings
compared to the cars we grew up in.
Dr. Gosar. I am going to go back to mitigation because it
was brought up. Once again, I just want to bring this up. There
are abandoned mines, but the problem with that mine was alluded
to by the EPA. Their decisions--my wife is from Durango, by the
way, so I do know a lot of people there. The problem for that
spill was a catastrophe of errors, and particularly with EPA. I
did not ask a question. That is fact.
So, when you look at these, Mr. Comer, as far as these rare
earths, are they better done in this country or in China?
Mr. Comer. There are many reasons we are better off having
minerals produced in the United States. It creates jobs. It
creates tax revenues. We do it too high, high environmental
standards. There are a lot of benefits. In fact, you then
control the market.
Dr. Gosar. And one last question. When we talk about
abandoned mines, part of the big problem with abandoned mines
is the litigation that prohibits us. We have been dealing with
this on this Committee over and over again. For one, in
Arizona, we have Resolution Copper that mitigated a past mine
site and have invested almost a billion dollars in that
reclamation application.
And there are plenty of groups that want to do that. But
what ends up happening is the environmental groups will refuse
to sign off on the litigation. That is part of the problem. And
that goes back to my whole application that in Canada they have
a loser pays, so the frivolous lawsuits are few and far
between.
The last point I want to make is the reason why there are
multinational companies is we have put all the American
companies out of business. That is the problem. In order to
mine in the United States, you have to have holdings around the
world to subsidize what you have to put through here because
the time it takes from discovery to mining is sometimes 20
years.
With that, Mr. Chairman, I yield back.
Dr. Lowenthal. Thank you. And I want to thank the witnesses
for their testimony and the questions. I think we had a full
discussion of the issues before us.
Before I kind of summarize and end it, I would like to ask
the witnesses if there is anything that you would like to
provide, some concluding statement? No more than a minute. Or
some question that you wish you had been asked. Either some
concluding statement or some question that you wish we had
asked that you want to ask yourself and answer it here.
No obligation. If you want to answer it, you can. Is there
anything you would like to tell us now that we have not asked
you? Mr. Davis?
Mr. Davis. It is really not a question. It is just a
thought. This mining law, which has not been touched for 147
years, needs to be overhauled. There is no question about that.
I guess my question to you is: In my business, we sit once a
year and we envision what the future looks like. If Congress,
if a bipartisan Congress, were to sit down and rewrite this
law, envision this law, rewrite this law today for the future,
what would it look like?
And I cannot imagine for a second that it would look
anything like what is on the books now and what seemingly is
ignored or passed away. We have heard how it needs to be worked
on. It needs to be thought about. It does, and that is what
today is about. Today is to begin that process.
But if we were writing this law today fresh, if Congress
was rewriting it, what would it look like? And I think that is
my question to Congress, to a bipartisan Congress.
Dr. Lowenthal. Thank you. Anyone else wish to make any
final statement? Concluding statement? Or ask a question that
we have not? Mr. Davis asked us a question. Yes?
Mr. Comer. Members, thank you for this opportunity.
Companies put hundreds of millions and billions of dollars into
opening mines. If they don't have security of mineral tenure,
it is not a true investment if you are subject to losing that.
With respect to how we look at royalties, if you look at
the profits pie in mining, there is not 12 percent of a gross
royalty. There is generally not 8 percent. There is less than 3
percent. So, the royalty issue is important because hardrock
mineralization is difficult to find. It is expensive to
process.
If you look at a typical copper mine, you dig hard rock.
you crush it. You screen it. You grind it. You mill it. Then
you only have 30 percent copper. And you may have had
transportation skips. Then you send it to a smelter to get to
80 percent, and then to a refinery. It is very expensive.
These are small deposits. They are not regional deposits.
The exploration is challenging. So, when you look at a royalty,
it is important to look at: What royalty number are you using?
How are you applying it? And does it make sense for the
mineral? So, it is not a one-size-fits-all, and mining is not
one-size-fits-all.
Thank you very much.
Dr. Lowenthal. Thank you, Mr. Comer.
Chairman Manuel?
Mr. Manuel. I just want to state that I do understand the
purpose and the intent of copper mining that is being done on
our Nation's lands and the benefits out of the mining. But I
just wanted to say that we would rather have consultation so we
can mitigate the negative impact it is going to have on us.
I did meet twice with the U.S. Forest Service Director
there in Tucson, and I met twice with the Corps of Engineers
that is overseeing the project on the 404 permitting. So, we
had those meetings. Thank you.
Dr. Lowenthal. Thank you.
Ms. Lachelt?
Ms. Lachelt. Thank you, Chairman. I would like to start by
just reiterating. This law is almost 150 years old, and we
desperately need a source of funding to be able to clean up the
500,000 abandoned mines. This bill would provide for that. It
would ensure that no community would have to go through what my
community went through with the Gold King Mine spill.
And even though the EPA was working, trying to fix the
mine, it was a net inevitable that that mine was going to blow
out. And we could experience another mine blowout at any point,
so we very much need a source of funding for that.
I would also like to respond by stating that the industry
on Federal lands enjoys exemptions from many of our laws that
protect water quality--the Clean Water Act, the Resource
Conservation and Recovery Act. And in terms of NEPA, it doesn't
apply in terms of they cannot select a no-option alternative.
This reform would also give communities input into the kind of
development that may or may not be appropriate in their
backyards.
And I believe that every community needs a say, and not
just to have a mine forced upon them in their watershed. And
also, folks really want to make sure that they are sourcing
their minerals from mines that practice best practices. And it
is about responsible mining. We don't want to source our
minerals from companies that can destroy an entire watershed
for a community. Thank you.
Dr. Lowenthal. Thank you. And I would like to offer one
concluding thought, after listening to both the panelists and
also to the Members behind the dais.
It is clear, and from the arguments from both sides on this
issue and what was stated, I think quite eloquently, by the
Representative from Louisiana, our hardrock mining system needs
to be fixed, I think. The mining industry knows this. They are
scared of changing the existing system. But they also have made
it clear that the existing system that we have today is not
ideal.
Meanwhile, even though I do agree that it would be good to
reduce our dependence on imports or the importance of finding
new deposits of minerals here in the United States that we need
for our new clean energy future, I cannot support doing that
under the Mining Law of 1872.
I think what I am saying is that there is a win/win to be
found here. We need the mining industry to come to the table to
find that win/win. And, unfortunately, we haven't seen much
appetite on their side to want to come to the table to do that.
But I believe there is a way to reform the Mining Law, protect
special places, as has been identified, by respecting tribes;
that we can clean up abandoned mines and solve some of the
problems that the mining industry faces. But I think we are
going to need to all work together to do that.
In conclusion, I want to say that the Members may have some
additional questions that they may want to ask you, members of
the panel. And we will ask you to respond in writing to those
requests. Under Committee Rule 3(o), members of the Committee
may submit questions to the witnesses within 3 business days
following this hearing. And the hearing record will be open for
10 business days for you to respond to those questions.
If there is no further business, and not hearing any, this
Committee stands adjourned.
[Whereupon, at 11:43 a.m., the Subcommittee was adjourned.]
[ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]
Submission for the Record by Rep. Gosar
Slides Used During the Hearing
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] ------
Submission for the Record by Carolyn Shafer, Patagonia
WE THE PEOPLE
OF 2019 ARE BEING GREATLY HARMED
BY THE ANTIQUATED 1872 MINING LAW
We the People
of 2019 have no voice to speak for the ecosystem that
is in harm's way if a mining company ``owns'' 450 acres
of patented, private land on which it can mount an
underground mine with the intention to blast large
tunnels under 23,000 acres of unpatented claims on
Forest Service public lands through a highly fractured
hydrogeology in a global biodiversity hotspot
identified as one of the top five places in the world
MOST IN NEED OF RESEARCH and PROTECTION.
--Notes 1, 2, & 3
We the People
of 2019 and the next seven generations are being robbed
of an abundant future which we define as a healthy
planet and nutritious foods for all.
We the People
of 2019 recognize that as the anthropocene unfolds, it
is vital to protect and foster the resilience of the
ecosystem and to allow for the possibility that the
highest value is that the materials should be left in
the ground.
We the People
of 2019 continue to be financially impoverished by the
environmental damages of legacy mining as we, the
taxpayers, bear the economic and social cost of
restoration.
We the People
of 2019 suffer the health damages of legacy mining and
21st century industrialized mining.
We the People
of 2019 are puzzled that the government is giving away
extracted materials for free to the mining companies.
We the People
of 2019 living in the Patagonia Mountains and Sonoita
Creek watershed in Southern Arizona implore our elected
federal officials to support ===bill #=== to stop the
infringement of the rights of WE THE PEOPLE of 2019.
NOTE 1
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
NOTE 2
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
NOTE 3
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Patagonia Area Resource Alliance
www.PatagoniaAlliance.org
[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S
OFFICIAL FILES]
-- Larch Company, Andy Kerr, Statement on H.R. 2579
Submission for the Record by Rep. Gosar
-- Foreign Policy Analytics Special Report, ``Mining the
Future--How China is set to dominate the next
Industrial Revolution,'' May 2019.
[all]