Senate Mining Reform

Last week marked significant progress towards reforming one of the most challenging bits of legislation currently governing our public lands  - the Mining Law of 1872. Senator Jeff Bingaman (D-NM), Chairman of the Senate Energy and Natural Resources Committee, introduced S. 796, the Hardrock Mining and Reclamation Act of 2009 , to regulate the mining of hardrock minerals like gold, copper and uranium on public lands.

“We are pleased that Chairman Bingaman has taken this critical step to begin to bring the nation’s frontier-era mining law into the 21st century. His proposal includes key elements needed to reform one of the most outdated laws governing public lands,” read a Pew Environment Group statement.

“Efforts to comprehensively reform the Mining Law have been ongoing literally for decades, but results have thus far been elusive. There is renewed interest on the part of many in the industry and in the environmental community in trying to update this law,” Bingaman said . “The mining industry plays an important role in our part of the country: It fuels local economies. And it contributes to our national security. At the same time, the industry has been criticized on both fiscal and environmental grounds. The Hardrock Mining and Reclamation Act of 2009 will make responsible changes to this outmoded law.”

The key provisions of the Hardrock Mining and Reclamation Act of 2009 are:

Eliminates Patenting – The bill eliminates patenting of Federal lands, but grandfathers patent applications filed and meeting all requirements by September 30, 1994.

Fees – The bill makes modest increases in the annual claim maintenance fee (from $125 to $150) and claim location fee (from $30 to $50). The legislation requires the mine operator to pay a fee in exchange for the use of Federal land that is included within the mine permit area. The bill provides that fees collected are to be used for the administration of hardrock mining on federal lands. Any excess funds are deposited into the Hardrock Minerals Reclamation Fund.

Royalties – The bill provides that the production of all locatable minerals is subject to a royalty to be determined by the Interior Secretary by regulation of not less than 2 percent and not more than 5 percent of the value of production, not including reasonable transportation, beneficiation and processing costs. The royalty may vary based on the particular mineral concerned. No royalty will be collected from lands under permit that are producing in commercial quantities on the date of enactment. Royalty revenues will be deposited into the Hardrock Minerals Reclamation Fund. The bill includes a provision for royalty reductions for all or part of a mining operation where the person conducting the mineral activities shows by clear and convincing evidence that without the reduction, production would not occur.

Permits and Financial Assurances – The bill states that permits are required for all mineral activities on Federal land except for “casual use” that ordinarily results in no, or negligible, disturbance. Mining permits are for a term of 30 years and so long thereafter as production occurs in commercial quantities. The operator must provide evidence of approved financial assurances sufficient to ensure completion of reclamation if performed by the Secretary concerned.

Water Reclamation – Financial assurances attributable to the cost of water treatment will not be released until the discharge has ceased for at least 5 years or the operator has met all applicable water quality standards for at least 5 years. The operator may be required to establish a trust fund or other long-term funding mechanism to provide financial assurances for long-term treatment of water or other long-term post-mining maintenance or monitoring requirements.

Operation and Reclamation – The Secretary of Agriculture must take any action necessary to prevent unnecessary or undue degradation in administering mineral activities on National Forest System land. The bill directs the Secretaries of the Interior and Agriculture to jointly issue regulations.

Land Open to Location – Requires within three years a review of certain lands to determine whether they will be available for future mining claim location. The governor of a state, chairman of an Indian tribe, or appropriate local official may petition the Interior Secretary to undertake a review of an area.

Hardrock Minerals Reclamation Program – Establishes a program for the reclamation of abandoned hardrock mines in 14 western states. Creates a Hardrock Minerals Reclamation Fund comprised of hardrock royalties, fees, and donations. Each operator of a hardrock mining operation on Federal, state, tribal or private land must pay a reclamation fee established by the Secretary of not less than 0.3 percent, and not more than 1.0 percent, of the value of the production of the hardrock minerals for deposit into the Fund. The bill provides grant programs for all states for hardrock reclamation projects and for public entities and nonprofit organizations for collaborative restoration projects to improve fish and wildlife habitat affected by past hardrock mining.