ouse Democrats overwhelmingly pass US Mining Law reform, gross royalty

House Democrats Thursday slammed the domestic hardrock mining industry in a 244-166 vote to approve a tough new mining law and imposes the world’s highest royalty on mining on public lands.

RENO, NV - 

As predicted, the U.S. House Thursday passed a tough new mining law bill, which mandates that the hardrock mining industry pay gross royalties of 4% for existing mines and 8% for future mines on minerals extracted on public lands.

The National Mining Association says it's the world's highest royalty for all mineral mining. 

The bill, which won passage on a 244-166 vote, of which 220 Democrats and 24 Republicans voted in favor, while 163 Republicans and three Democrats voted "nay."

The chief author of the bill, House Natural Resources Committee Chairman Nick Rahall, D-West Virginia, said, Those who support this legislation - the countless locally elected public officials, concerned citizens, sportsmen and women, and taxpayer advocates - bring with them the new century conviction that corporate interests can no longer have an unfettered ability to reap America's mineral wealth with no payment in return.  There must be parameters set, and rules adhered to - for if we do not make corrections to the current regime, the ability of the mining industry to continue to operate on public lands in the future is questionable."  

Rahall's bill, HR 2262, The Hardrock Mining and Reclamation Act of 2007, also contains a litany of environmental legislation, including expanding the ability of Indian tribes to petition the Secretaries of Interior and Agriculture to withdraw federal lands from entry under the Mining Law, enhances the capability to withdraw federal lands in national parks from mining, exploration and geothermal development, and prohibits mines that would generate perpetual water pollution.

In a news release, Rahall declared that the legislation also "gives the Secretary of the Interior the right to say ‘no' to a proposed mine that would have severe, irreparable impacts on natural resources." 

Nevada Congressman Dean Heller, whose congressional district will bear the brunt of the Mining Law reforms, said "As written, the heavy new taxes and burdensome regulations imposed by the bill will severely hurt and shrink the domestic mining industry. Our nation will lose mining jobs in the same way we have lost automobile or steel industry jobs in the Midwest, hurt the seafood industry in some coastal areas, or closed textile operations in the Southeast."

House Republican Whip Roy Blout of Missouri said, "Unfortunately, too many Democrats in Washington hold the view that mining of any kind is bad-whether it's for coal, iron, copper, lead or any other mineral of clear strategic or economic importance."  

"The bill Democrats passed in the House today falls perfectly in line with that viewpoint-having decided the best way to put an end to mining in this country is to tax it until it stops. The problem with that plan, however, is that more than 170,000 Americans rely on hardrock mining to provide for themselves and their families-and millions more rely on the minerals they extract to produce everything from dinner utensils to microchips," Blount added.

"Imposing a new layer of taxes on mining-on top of the taxes that are already paid-would hasten the mass-migration of these jobs overseas, while eroding the strategic benefit we get by mining these minerals here at home, " Blunt said. "But Democrats didn't seem all that moved by that argument today, much more concerned with passing another tax increase at the expense of American workers and consumers." 

Stephen D'Esposito, President of the environmental NGO EARTHWORKS, declared that, "if this effort to succeed, leadership from the mining industry itself and from community and political leaders in western states is needed. Each of these states-from Washington to New Mexico-have been, and continue to be, adversely affected by this antiquated law and its lack of adequate protections for taxpayers and the environment."

National Mining Association (NMA) President and CEO Kraig Naasz declared, the bill "falls far short of the reforms we have worked hard to achieve to provide a fair return to the taxpayer for the use of federal lands and greater regulatory certainty. The enormous costs that would be imposed on the hardrock mining industry by the bill and the failure to provide mining companies with greater security when operating on federal lands will only increase the nation's growing reliance on imported minerals vital to our economy." 

Powerful Senate Majority Leader Harry Reid, the son of a Nevada gold miner, said in a statement that "the House of Representatives, led by Chairman Rahall and [Energy and Mining Subcommittee] Chairman [Jim] Costa, laid down a marker on mining policy."

"I am pleased to be working with Chairman [Jeff] Bingaman and Senator [Pete] Domenici [both of New Mexico] on legislation that will provide a constructive counterpoint to the Rahall-Costa bill.  I look forward to working with my colleagues in both the Senate and House who care about mining, public lands and rural America to provide a new vision for industry and conservation in the West.  While I cannot support many of the provisions in the House bill, I believe that the opportunity still exists for common sense reform.  It is in no one's interest to leave the regulation of this important industry to the whims of each passing Administration, as is the case today," Reid declared. 

During a conference call Thursday, Barrick Gold Executive Vice President and General Counsel Patrick Garver told analysts that the royalty would mainly impact the Cortez gold mine, a little of the Bald Mountain and Turquoise Ridge operations, and a smaller percentage of Round Mountain. Garver said he did not anticipate that the Senate would act on HR2262 this year.

He noted that the House has passed 15 years of bills aimed at Mining Law reform, adding that "none of them have ultimately succeeded." Garver also suggested that prospects for enactment of Mining Law reform during the 2008 Presidential Election Year are "very uncertain." 

"We, at this point in time, are not all that anxious," he declared.

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