Congress Unlikely To Make Mine Reform Effort

The chances of mining reform passing the upcoming Congress remain slim unless the Clinton Administration changes its mind about dealing with the mining industry, legislative officials predicted Friday.

Though only a Presidential veto killed last year’s effort to change the rules mining companies work under, the new Congress will have a hard time mustering support for reform that the industry can stomach, said Nils Johnson, legislative aide to Idaho Republican Sen. Larry Craig.

He and other panelists addressed about 100 mining executives at the final day of the Northwest Mining Association Convention in Spokane.

Many in the industry want a limited reform package to take heat off gold mining companies for the way they patent federal land for mining. The 1872 Mining Law allows land to be mined for little money, though the cost of permitting a mine and removing the gold from the ground can eliminate profits altogether.

The proposals contained in the 1996 budget would have established a royalty from minerals and forced mining companies to pay fair market value for the land. It died when the rules did not become part of the final budget signed in April.

Sen. Craig, who helped author most of the provisions that ended up on the president’s desk, will submit new legislation similar to what was discussed last year, Johnson said.

However, getting legislation from the House will be more difficult. And even if a bill survives the conference committee and both chambers of Congress, it faces certain opposition from Clinton, as far as Johnson could tell.

“They have spoken very clearly on it,” he said. The administration would want to establish national standards for reclaiming mines and a cadre of new environmental laws that don’t wash with mining companies.

The royalty issue is a complex one. The industry favors paying a 5 percent royalty on the metals taken from public land after the costs of removing and refining the metals are taken into consideration, called a net royalty.

Many in Congress, especially Democrats, favor an 8 percent gross royalty on mined minerals, a tax that would effectively eliminate the margin for many mines, industry officials such as Tom Altmeyer of the National Mining Association argued.

The association will issue a study next year that suggest that mining and its related industries account for $750 billion of the economy, nearly 15 percent of the gross domestic product, Altmeyer said.

, DataTimes