December 13, 2012 in Nation/World

Lawmakers propose fees from ‘hard rock’ mines

Operations on federal land would have to pay royalties
Jason Dearen Associated Press
 

SAN FRANCISCO – While the U.S. government reaps billions of dollars in royalties each year from fossil fuels extracted from federal lands and waters, it does not collect any such royalties from gold, uranium or other metals mined from the same places, congressional auditors reported Wednesday.

The federal government doesn’t even know how much these so-called “hard rock” mines produce from federal public lands in the 12 western states where most of the mining occurs, the Government Accountability Office report found.

And there is no federal law requiring the disclosure of production figures from individual mines.

Two Democratic lawmakers are hoping public concerns over the economy and the looming “fiscal cliff” will reinvigorate a movement on Capitol Hill to reform the General Mining Act of 1872, which exempted mining companies from paying royalties for profiting from U.S. public lands.

They want miners to pay the same 12.5 percent in royalties as oil companies, a move that could bring hundreds of millions of dollars in new annual revenue.

The 1872 law “was designed to perpetuate the ‘go west, young man’ idea to bring people, commerce and industry to the West. But that’s done, it’s the new West now,” said Rep. Raul Grijalva, D-Ariz., who along with Sen. Tom Udall, D-New Mexico, requested the GAO study.

The U.S. Department of the Interior collected $11.3 billion in 2010 and $11.4 billion in 2011 from oil, coal and natural gas royalties and leases, the report found.

The mining industry, which has fought to kill similar reform bills, said it already pays billions in taxes involving mines located on state and private lands.

“In 2008, there were $20 billion in sales in U.S. metals, and we paid about $8.3 billion in various taxes on that,” said Carol Raulston, a spokeswoman for the National Mining Association. She said the industry supports fair compensation for the government but not a royalty comparable to what is paid by the oil industry.

Grijalva and Udall said they plan to make their case in the next session of Congress. Grijalva said he intends to introduce a bill calling for royalties on the mining of metals on public land.

The bill would also require companies to disclose production levels on federal lands.

The GAO estimated the value of hard rock minerals mined on federal lands in 2011 was about $6.4 billion. If the industry paid royalties comparable to oil companies, the federal government would have received $800 million in royalties from those mines.

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