1872 Mining Law: time for an update?

Congress considers imposing new royalties on minerals and stricter environmental rules.

Mining in the American West – the search for gold, silver, copper, uranium, and other "hardrock" minerals – is as old as those first dusty codgers looking to stake a lucrative claim and strike it rich. It's older than that if you count the early Spanish conquistadors.

Since then, it's grown to a multibillion-dollar industry, much of it owned by foreign investors. The problem, as critics see it, is that this extraction of natural resources is governed mainly by a law signed 135 years ago by President Ulysses S. Grant.

Now, with a Democratic majority in Congress, the likelihood of bringing that law and the practices it regulates into the 21st century is greater than it's ever been.

A new proposal by Rep. Nick Rahall (D) of West Virginia would impose an 8 percent royalty on hardrock minerals. (Coal, oil, and natural gas already pay such royalties.) It would also stiffen environmental protections by requiring mine operators to submit land reclamation plans before obtaining a permit to mine on federal land.

Much of the royalty revenue, which could amount to $100 million a year, would be used to help clean up the worst of what the Environmental Protection Agency estimates are 500,000 abandoned hardrock mines around the West. Many are highly toxic, including several dozen Superfund sites.

"The Mining Law of 1872 played a role in the development of the West," Representative Rahall, chairman of the Committee on Natural Resources, said in introducing his bill last week. "But it also left a staggering legacy of poisoned streams, abandoned waste dumps, and maimed landscapes."

Newer environmental laws such as the Clean Air Act and the Clean Water Act apply to such mining. But experts say they have serious gaps.

"They do nothing to protect ground water, which can be hugely threatened by these big mines," says John Leshy, former Interior Department solicitor and now a professor at the University of California, Hastings College of Law in San Francisco. "They don't focus on post-mining cleanup and reclaiming the land. They don't provide clearly for financial assurance for cleanup if things go bad and the operation goes bankrupt."

An estimated 40 percent of the headwaters of Western waterways are polluted by mining, including the cyanide, lead, arsenic, mercury, and other substances used or unearthed in the mining process. The cost of cleanup could total $32 billion or more, according to the US Interior Department's inspector general.

Meanwhile, the price of gold has pushed up to nearly $700 an ounce, and the price of uranium has more than tripled over the past three years. As a result, mining claims registered with the Bureau of Land Management rose 47 percent between the end of 2002 and September 2006, reports the Environmental Working Group after an investigation of federal records. Five of the top 10 claimholders are foreign corporations (Canadian and Australian), reports EWG, and "hundreds of the new claims filed in the last four years are within five miles of Grand Canyon National Park."

Industry officials and supporters say they're willing to work with Congress on modernizing federal mining law.

In a statement anticipating Rahall's bill, National Mining Association president and CEO Kraig Naasz said, "NMA is committed to playing a constructive role in development of a fair, predictable, and efficient national minerals policy through amendments to the Mining Law." This could include a "fair return to the government in the form of a net income production payment for minerals produced from new mining claims on federal lands."

But an 8 percent royalty, NMA spokeswoman Carol Raulston told the Associated Press, "could be very punitive to the industry."

Budget watchdogs like Taxpayers for Common Sense have joined environmentalists in urging a new law to regulate hardrock mining.

But while Democrats now control the House and Senate, reforming the 1872 Mining Act is not a slam-dunk. Nevada, home state of Senate majority leader Harry Reid, accounts for 87 percent of US gold production. Outside the gambling centers of Las Vegas and Reno, mining is the state's largest employer, with jobs averaging more than $63,000 in annual wages.

Senator Reid, whose father was a hardrock miner, is in no hurry to do anything that would upset the industry.

Still, says Jane Danowitz, director of the Pew Campaign for Responsible Mining, "We believe that this Congress offers Americans the best opportunity in more than a decade to ensure that modern mining is regulated by modern law. Mining in the 21st century should not be governed by a 19th-century law."

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