House panel OKs mining royalties

WASHINGTON – A House committee agreed Thursday to impose the first-ever federal royalties on gold, silver and other hard-rock mining on public lands.

During debate on legislation rewriting the antiquated General Mining Law of 1872, lawmakers agreed to an amendment to impose royalties of 4 percent of gross revenue on existing hard-rock mining operations.

New mining operations would pay royalties of 8 percent of gross revenue under the bill, which is expected to pass the House Committee on Natural Resources on Tuesday.

The bill also would add new environmental controls, create a fund for abandoned mine cleanup and create provisions allowing local governments to petition to withdraw federal lands from mining.

“What we’re talking about here is a very small amount of money,” said Rep. Maurice Hinchey, D-N.Y., who proposed the 4 percent fee. “It just insures that some of this cleanup will occur.”

Democrats have been trying unsuccessfully for years to rewrite the mining law, and now that they’re back in control of Congress they hope to get it done.

A full House vote could come before Thanksgiving, but House Democrats would then have to contend with Senate Majority Leader Harry Reid, D-Nev., whose home state has the biggest gold-mining industry in the nation.

Reid, a gold miner’s son who has defeated past mining law rewrites, opposes royalties on existing operations, spokesman Jon Summers said after the House committee action. Summers said Reid is working with other senators on legislation “that provides greater certainty for those families and communities that depend on mining and that provides improved environmental safeguards.”

Unlike with coal, oil or gas, the hard-rock mining industry doesn’t pay federal royalties on minerals it extracts.

The rewrite legislation introduced by committee Chairman Nick Rahall, D-W.Va., in May would have imposed 8 percent gross royalties on existing and new operations. The full House approved that level of payment in 1994 but couldn’t reach agreement with the Senate, so the law remained unchanged.

Rahall exempted existing operations in a substitute bill he brought before the committee Thursday.

Laura Skaer, executive director of the Northwest Mining Association in Spokane, has made 10 trips to Washington, D.C., this year to testify and lobby on behalf of the industry.

Industry officials aren’t opposed to paying a royalty if “we can do it in a way that ensures a prosperous, domestic mining industry,” Skaer said.

Instead of a royalty based on gross revenues, the industry wants royalty payments to be based on net proceeds, Skaer said.