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Message: US Mining Royalty....Yes or No ???

US Mining Royalty....Yes or No ???

posted on Nov 30, 2007 02:41PM
Proposed mining royalty has divided support
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    By Diana Marrero, Gannett News Service
    WASHINGTON — Tourists pay $25 per car to enter Yellowstone National Park. Film crews must spend as much as $750 a day to film on federal land in Nevada. And hunters on a wildlife refuge off the Florida panhandle are charged up to $30 to shoot arrows at white-tailed deer or feral hogs.

    But mining companies pay nothing to the federal government to extract billions of dollars worth of gold, copper and other valuable minerals from public property, thanks to an 1872 mining law that allows it. Lawmakers and activists are trying to change the situation.

    "You have to pay the government if you're using a mountain bike on public land, but you don't have to pay if you're using an earth mover," said Jane Danowitz, director of the Pew Campaign for Responsible Mining, which supports mining reform.

    The House passed a bill earlier this month that would make existing mining companies pay a 4% royalty on hard-rock minerals, much like the royalties already paid by oil, gas and coal companies. New mines would pay 8%.

    Industry officials counter that lawmakers could drive mining off American soil if royalties are set too high.

    "We'd certainly be drawing investments to other countries," said Luke Popovich, a spokesman for the National Mining Association.

    With the price of gold at about $800 an ounce, critics say the mining industry can afford to pay royalties.

    Advocates for mining reform are pushing lawmakers to amend the mining law, written in an era when President Ulysses S. Grant was encouraging Americans to head West. They say the law cheats taxpayers, poisons the land and allows mining claims too close to national parks.

    All sides are now turning their attention to Senate Majority Leader Harry Reid, a Nevada Democrat who has long been a champion of the industry.

    Reid, whose late father was a gold miner, is expected to play an active role in crafting legislation that would govern modern-day mining. While he says he favors some reform, he is critical of imposing a royalty on existing mines.

    The fight over these fees has significant implications for the West, especially for Reid's home state. Nevada is the largest gold producer in the nation and the fifth largest in the world behind South Africa, Australia, China and Peru. About a third of the state's gold mining — worth $3.8 billion last year — is done on public lands.

    Other states with significant hard-rock mineral mining production include Alaska, Arizona, California, Colorado, Montana, New Mexico, South Dakota, Utah and Washington.

    Rep. Nick Rahall, D-W.Va., who sponsored the successful House bill, worries Congress will ultimately enact "sham reform." The industry has beaten back attempts to update the mining law for decades.

    If approved by the Senate and signed into law, the legislation would ensure that much of the royalty money would go to clean up abandoned mines strewn across the West. A 2004 report from the Environmental Protection Agency's inspector general identified 156 hard-rock mining sites that could cost $7 billion to $24 billion to clean up.

    The sites also pose a safety hazard. A 13-year-old Arizona girl died in September after falling into a 125-foot abandoned mineshaft near her home.

    Environmental advocates say the industry should pay to clean up the mess it left in its wake while profiting handsomely off public resources.

    Whatever Congress does, it's clear Reid will have a firm hand in guiding the outcome.

    He has collected $270,000 in campaign contributions from mining interests since 1989, according to the Center for Responsive Politics. Reid's son-in-law, Steven Barringer, is a lobbyist for Newmont, one of the world's largest gold mining companies, and Coeur d'Alene Mines, a silver miner.

    Reid does not allow family members to lobby him or his staff, said spokesman Jon Summers. He said contributions play no role in the senator's deliberations.

    "It's an important industry that employs thousands of Nevadans," Summers said. "These are good-paying jobs that people particularly in rural parts of the state rely on heavily."


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