Mining reform: Will it occur this year?

Supporters and opponents wait to see as the congressional calendar winds down

The archaic and historic mining law whose fate now rests firmly in the hands of New Mexico’s two senators was only recently popularized in the 2007 film There Will Be Blood. In the opening scene, Daniel Plainview (Daniel Day Lewis) lowers himself into the darkness of a small opening in the earth, risking life and limb to recover the smallest scrap of silver from which to build his fortune.

The fact that any person or company can own the precious minerals he or she gathered from the earth royalty-free has been the controversial legacy of the General Mining Act of 1872, and continues to bring mining prospectors and companies to mineral-rich states like New Mexico. This law, which critics say is a boondoggle for large mining corporations and has all but resisted any substantive change for well over a century, is now facing what many believe is radical yet necessary reform. But time is running out.

With the 2008 Senate calendar winding down, opponents and proponents of mining reform are anxiously waiting to see if the stalemate in the Senate Energy and Resources Committee over the bill, headed by Sen. Jeff Bingaman (D-NM) and ranking member Pete Domenici (R-NM), can be overcome.

The reform would establish hardrock mining royalties, add stricter environmental standards and would give local communities the right to deny a mining project in their immediate area.

In the late 1800s and early 1900s, the sweet smell of fame and fortune was blown toward the east by rumors of cheap land, abundant resources and manifest destiny. The romantic notion of turning a speck of gold into a mountain of wealth was facilitated by a number of laws coming out of Congress at the same time wagons were heading west, including the General Mining Act of 1872.

This bill, signed into law by President Ulysses S. Grant, was the ultimate incentive for mining and prospecting of hardrock minerals such as gold, silver and even uranium. By law, any public land that was found to contain usable amounts of minerals was available for purchase by a mining company. It topped out the price of public land used for mining at $5 an acre, the price it remains today, and allowed both foreign and domestic companies to take minerals from public land without paying any royalties.

According to several estimates, $245 billion dollars worth of minerals have been mined on public land since 1872, and hardrock mining remains the only extractive industry to operate royalty free.” The idea was really to level the playing field for anyone who wanted to come out west and strike it rich," said Chris Shuey, director of the Albuquerque-based public policy group, the Southwest Research Information Center. “But now we have seen the affects this mining has had on public land and it is clearly a law from an entirely different era.”

In November, the House passed the Hardrock Mining and Reclamation Act of 2007, also known as HR2262. Some of the many reforms included in the bill were stricter environmental regulations, an abandoned mine fund, and an 8 percent royalty fee for new mines and 4 percent royalty for existing mines.

The bill was lauded by environmental groups in New Mexico and Washington, D.C. who say it will prevent many of the environmental problems rural towns in New Mexico and other mining states suffered after the last uranium boom, and will help ensure there is adequate funding the clean-up efforts of remaining and future uranium mines.

"The reform of this law is incredibly important to states like New Mexico so they can strike a balance between mining and other uses of public land," said Lauren Pagel, a policy director for the Washington D.C.-based advocacy group, Earthworks. "There is no reason one industry should have primacy over all others."

Senators Bingaman and Domenici announced in November 2007 that the committee could not come to an agreement on the wording of the House bill, and preferred to write their own bipartisan draft. Domenici said mining reform was a “top priority” for him, but he felt the House bill would result in the loss of jobs and a continued reliance on foreign mineral supplies. "We've had three full committee hearings on this topic but it is stuck on high center," said Bill Wicker, communications director for the Senate Energy Resources Committee. "We are well aware that the Senate calendar is not working in our favor."

Wicker said the two biggest sticking points facing the reform bill are royalties, including whether or not they should be retroactive, and how environmental regulations would deter future mining claims. "The mining companies don't like the idea of local jurisdictions being able to stop a mining claim for their own personal reasons," Wicker said. “Obviously the west is not the same as it was in the days of President Ulysses S. Grant, so we have to find a way to come up with the fairest version possible.”

The biggest hurdle facing mining reform remains finding a way to make a gold rush era law compatible in the modern world. The west has been more than settled and large corporations, not Daniel Plainviews hoping to strike it rich, make the vast majority of mining claims.

For mining proponents, any reform must take into account the importance of mineral mining as a vital economic resource that should be supported by the government.

“Hardrock mining created an economic framework and a vast amount of capital that we still use today,” said Laura Skaer of the mining advocacy organization, the Northwest Mining Association. “The highest paid jobs in New Mexico are jobs in the mining industry, and they also spur other jobs.”

Skaer said the mining companies realize some reform is needed, and they are willing to agree to a 5 percent royalty and an abandoned uranium mine fund as well. “It is time for some changes,” Skaer said. “But this reform bill is a fairly narrow, surgical approach to mining laws that just wouldn’t work.”

While the first 140 years of mining in the United States were done with scarce environmental regulations, Skaer argues that since the creation of the Environmental Protection Agency in 1970, this is no longer the case. Only an estimated .0001 percent of the earth’s crust contains mineral deposits, and Skaer said giving local communities the right to deny an area of public land for mining would deter investors and unnecessarily curtail future projects. “The minerals only exist where God put them,” Skaer said. “You have to mine them where they are found.”

There are signs the shift in public perception of public land may highlight the wrinkles in the mining law even further. Throughout New Mexico and the West, mining claims have been popping up as the price of uranium has risen. Some of these claims are near Navajo Nation land, although uranium mining on the reservation was banned in 2005. On June 14, Mount Taylor was granted a temporary Traditional Cultural Designation on behalf of five local tribes, which requires the tribes to be privy to all future development on the sacred mountain. Later that month, the U.S. House of Representatives halted uranium mining near the Grand Canyon, an act that was spearheaded by outraged environmental groups throughout the country.

“Now that the mining companies are returning to these areas they are being greeted by an opposition that just wasn’t there before,” Shuey said. “When the companies say they have right to the land under some old law the people are saying ‘wait a minute here.’”

With less than two months remaining on the legislative calendar, state and local efforts to push Domenici and Bingaman to act have begun. In June, Gov. Bill Richardson, Gov. Chris Gregoire of Washington State and Gov. Ted Kulongoski of Oregon wrote to the senators urging them to draft legislation for proper mining reform. This was followed by pledges of support in Lincoln County, New Mexico and Albuquerque.

If the bill does not reach the senate floor soon, other issues could overshadow it when a new configuration of Congress begins in 2009. “Energy and the economy will dominate Congress in 2009,” Skaer said. “Mining law will not be one of the first things out of the gate.”

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