Hard to Crystalize Support to Amend US Mining Law
WHEN a Canadian mining company last year paid the United States government less than $10,000 for title to a chunk of Nevada estimated to be worth as much as $10 billion, Interior Secretary Bruce Babbitt called it ''the biggest gold heist since the days of Butch Cassidy.''Skip to next paragraph
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Changing laws bound up in tradition - even ones that give foreigners a huge price break - has never been easy. This is proving especially true for mining laws in the West.
Both industry supporters and critics agree that the 123-year-old statue governing hardrock mining ought to be revamped. But the two sides remain so far apart on the key economic and environmental issues that it is doubtful reform will occur this year.
At stake are millions of acres of federal land and billions of dollars in potential revenue from gold, silver, copper, and other valuable minerals. Also at stake are such environmental treasures as Yellowstone National Park, which is less than three miles from a proposed mine site.
The key issues are ownership of the land and Uncle Sam's fair share of mineral revenues. Under the 1872 General Mining Law, those who stake a claim may obtain title to the land (called a ''patent'') for no more than $5 an acre, then pay no royalties to the federal government for extracted resources.
Western Republicans (and some Democrats) favor proposals that would charge a royalty of 3 percent on net income from mine operations. These bills retain the patenting system, charging miners ''fair market value'' for the federal land. But this covers only the surface value - which is not much in some desert areas - not the minerals below.
Critics call this ''sham reform'' and ''the accountants full-employment act.'' They favor a bill put forth by Sen. Dale Bumpers (D) of Arkansas, a long-time critic of the 1872 law.
The Bumpers bill would end the patenting system and impose an 8 percent royalty on gross revenues. Supporters say this is closer to the 12.5 percent now paid for coal, oil, and gas leases on federal land. Mine operators say that kind of royalty would put many of the estimated 120,000 hardrock miners out of work.
''A gross royalty would result in significant job losses and the closing of some marginally profitable operations,'' Douglas Yearley, president of Phelps Dodge Corporation, a major copper producer based in Phoenix, warned a Senate committee recently.
But Thomas Power, an economist at the University of Montana, asserts that such reform will create more jobs than it costs - mainly through land-reclamation programs by mining firms.
The environmental impact of hardrock mining - particularly the toxic legacy of some abandoned mines - separates mining law partisans as well.
More state control?
Industry supporters say existing laws are adequate, and they favor state control of land-reclamation efforts. Favored by environmentalists, the Bumpers bill gives companies specific orders on mine-site cleanup and wildlife habitat protection.
The proposed New World Mine, located in the Beartooth Mountains of south-central Montana, has become the focus of environmental concern. It would include a 72-acre impoundment for mine tailings that are acidic when exposed to oxygen.
Company officials say the nine-story high impoundment would be properly protected. But Yellowstone National Park superintendent Mike Finley and others worry that this could pollute the Yellowstone River, since it is in an area prone to earthquakes.
North of there, Larry Tuttle, director of the Center for Environmental Equity, is trudging toward Denver on a 1,872-mile hike from Salem, Ore., to publicize the need to reform the 1872 law.
''I'm not doom and gloom about it,'' says Mr. Tuttle by phone from Reedpoint, Mont. ''We're just going to have to work harder than we thought.''
One issue separating House and Senate is a one-year moratorium on new patents due to expire in October. The House has voted to extend the moratorium for another year; senators have rejected the extension. This may become an obstacle to passing a broader mine-reform bill.
''We're hopeful we can get something through,'' says Robert Webster, spokesman for the National Mining Association. ''But it wouldn't surprise me to see it kicked into next year.''