Diverse group urges reform of 1872 mining law

Hard-rock mining has been getting a free ride for 136 years, a group of ranchers, environmentalists and others said at a press conference Tuesday.

The group, which included former U.S. Rep. Pat Williams, D-Mont., and Julia Doney, president of the Fort Belknap Tribal Council, urged Montana's congressional delegation to back a pending bill overhauling federal mining law.

A representative of the mining industry said in an interview later that American companies favor some kind of mining law revision, but they envision a plan that calls for lower royalty rates than the ones in the bill.

"I don't want them to go out of business," Williams said of mining companies. But as it stands, federal law allows hard-rock mining alone to pay no royalties to the government. State, federal and local governments often end up paying to clean up mining scars after the companies have gone out of business.

Hard-rock mining in the United States is governed, in part, by a bill signed in 1872 by President Ulysses S. Grant. The law exempts hard-rock mining from paying a royalty to the government on the value of the metal extracted. Mining companies are also able to get land to locate their mines for $5 an acre or less. Additionally, said Jeff Barber, water and mining director of the Montana Environmental Information Center in Helena, federal land managers must allow mining to go forward, even if they think it might be inappropriate or might damage other uses of the land.

The U.S. House of Representatives passed a bill changing the law in November. That bill is expected to go before the Senate Energy and Natural Resources Committee for a hearing later this month.

Sen. Jon Tester, D-Mont., is a member of the committee.

The bill, sponsored by Rep. Nick Rahall, D-W.Va., would make existing hard-rock mines pay a 4 percent royalty and make any new mines pay an 8 percent royalty on metals extracted.

The money would go into a trust fund to clean up abandoned mines.

Aaron Murphy, a Tester spokesman, said the senator supports the idea of changing the mining law and looks forward to the hearing.

"The mining law hasn't changed since 17 years before Montana was even a state," Murphy said. "Jon believes it needs to be updated to be fair."

Luke Popovich, a spokesman for the National Mining Association, said his organization supports changing the 1872 mining law. However, he said the 8 percent royalty in the current bill would be the highest metal royalty assessed anywhere in the world and would put American mining at a disadvantage.


U.S. expensive
The United States is already a very expensive place to mine, he said. The U.S. has higher steel costs, energy costs and wages. Mining companies must also comply with a host of federal and state environmental laws, making getting a permit to open a mine time-consuming and expensive.

"That equals a shrinking mining industry," he said. "It would certainly discourage investment."

Popovich said many mining companies would prefer an across-the-board 4 percent royalty.

"That would ensure the public a fair rate of return and still attract investment in mining," he said.

Doney, whose reservation surrounds three sides of the defunct Zortman-Landusky gold mines, said mining companies must be held responsible for cleaning up their messes. The Zortman-Landusky mines are now being reclaimed with public money, which includes millions to treat tainted water indefinitely.

That money could be spent on schools or health care, she said.

Williams said he favors some kind of royalty fee that would be indexed to the global minerals market. When times are good, he said, mining companies could pay more in royalties.

When the market sinks, the royalty rate would also deflate, although Williams said he wouldn't want the rate to sink below 4 percent.

Williams' ideas are not part of the current bill.