1872 mining law triggers modern-day lobbying duel

Like an Old West duel in the public square, conservation groups and mining companies are facing off over an effort to update a mining law passed the same year Ulysses S. Grant won his second term as president.

{mosads}At stake is a bill written by Rep. Nick Rahall (D-W.Va.), chairman of the House Natural Resources Committee, that would for the first time impose federal royalties on mining operations that extract copper, gold, silver and other hard-rock minerals from federal lands.

For the last 135 years, hard-rock mine companies have avoided paying federal royalties even as coal miners and oil and gas developers were charged to operate on federal lands.

Mine companies say they are willing to compromise on a number of areas, but they remain opposed to key components of Rahall’s bill, scheduled for a floor vote Wednesday.

The measure would charge an 8 percent royalty on new mines and a 4 percent fee on those already operating. The revenues would go to a fund to reclaim as many as 500,000 abandoned mines in the country.

For a loose coalition of conservation, hunting and fishing, and government-spending watchdog groups, Rahall’s bill represents a victory in a long-stalled campaign to reform the mining law, which Congress passed in 1872 to encourage development of the then-largely empty West.

The bill signals “an important milestone,” said Jane Danowitz, the director of the Pew Campaign for Responsible Mining.
“Out of fairness and need, the American taxpayer deserves some sort of payment on current and future operations,” Danowitz said.

Critics say mining has grown from a pick-and-ax operation to a sector run by massive multinational corporations that generates $1 billion a year in revenue on U.S. public lands alone.

Given that the vote falls on Halloween, Pew plans to send a supporter to Capitol Hill dressed as Grant to underscore how dated the law is.

Mine companies, which face a number of bills they consider harmful to their interests, have boosted lobbying and advertising budgets and are donating more money to Democratic candidates than in recent years, when they heavily favored Republicans.
But Luke Popovich, a spokesman for the National Mining Association (NMA), said miners are still open to compromise. They would accept, for example, new federal royalties with receipts helping to pay for mine reclamation.

But the association and individual mine companies insist that a new fee be limited to 5 percent of gross receipts, not the 8 percent in the Rahall bill, and that it be imposed only on new operations.

Existing mines “are not based on economic plans that assumed they’d suddenly be taxed by 4 percent,” Popovich said.

The 8 percent fee, meanwhile, “goes far beyond providing for a fair economic return to the taxpayers and will damage the growth prospects of the U.S. hard rock mining industry and the tens of thousands of jobs it supports,” NMA said in a statement.

The industry also contends that new environmental requirements in the bill are redundant with existing federal and state laws.

Rahall’s measure would also require federal regulators to weigh mining interests against other uses for the land, a provision strongly favored by environmental and conservation groups.

Federal lands “should be available for multiple uses,” said Lauren Pagel, a lobbyist for the group Earthworks.

Pagel’s group was founded in 1988 specifically to lobby for changes to the 1872 law. It secured a successful House floor vote in 1993, but the mining law itself has proven tough to change.

Danowitz said change is slow because the issue used to be confined to the few mining companies and their small cadre of allies on Capitol Hill, and few others cared. But as more people moved west and concerns have grown about mine pollution, the issue has gained a much higher profile.

“People felt the issue didn’t impact them,” she said.

Supporters are optimistic the House vote will go their way, but they are less certain about where things stand in the Senate.
Senate Majority Leader Harry Reid (D-Nev.), whose home state’s economy depends heavily on mining, has opposed similar measures. But Reid has expressed greater willingness this year to compromise.

The Senate Energy and Natural Resources Committee held a Sept. 27 hearing on the act, in which several panel members called for an overhaul.

“The mining industry plays an important role in our country,” Chairman Jeff Bingaman (D-N.M.) said at the hearing. “At the same time, the mining industry has been the subject of criticism on both fiscal and environmental grounds. From my perspective, the root of these problems is the Mining Law of 1872.”