While companies across the United States are extracting metals like gold, silver and copper, they do not pay royalties like other extractive industries.
This is in part because the laws governing hardrock mining date back to 1872. U.S. Senator Martin Heinrich, a New Mexico Democrat, wants to reform hardrock mining among other measures to help address the impact that mining can have on communities, including pollution of waterways.
“Every year millions of dollars worth of hardrock metals are given away for free,” Heinrich said in a phone interview with NM Political Report following a Senate committee hearing on hardrock mining reform. “And we still have this enormous abandoned mine problem and the toxic metals that are leaching into our water supply.”
He said there is a desperate need to have a revenue stream tied to the industry through a royalty process that can pay for that cleanup. Hardrock mining—the extraction of non-fuel metals and minerals—is anticipated to increase in the future amid an anticipated growth in renewable energy.
The U.S. House of Representatives has included an 8 percent royalty rate for new mines and 4 percent royalty for existing hardrock mining royalties in the reconciliation bill. The package also includes a seven cents per ton fee on materials removed, which was referred to as a “dirt tax” during a Senate Energy and Natural Resources Committee hearing this week.
Heinrich said he does not think the royalty rate will be as aggressive as what was included in the reconciliation package by House members. And while some people, including Nevada Democratic Sen. Catherine Cortez Masto, questioned whether the reconciliation package is the best way to address royalties, Heinrich said if it is not included in the package it may never happen.
The hardrock mining laws date back to 1872 and have not been reformed since. At the time the laws were passed, the United States used mining to entice people to move west, Heinrich said. These laws make it easy for people to stake a mine claim and local communities have little say in the matter, even if the mines have the potential to contaminate waterways.
Committee Chairman Joe Manchin, a West Virginia Democrat, also spoke about that history at the start of the hearing. He said that the mining law made sense in the aftermath of the California gold rush as Congress wanted to encourage development in the western United States.
“Today one of the most obvious problems is that mining gold fails to require a royalty for hardrock mining on federal lands and continues to mandate the existing claim, and patent system resources owned by every single American,” he said during the committee hearing. “The fact that over $5 billion in minerals can be mined each year, taken off the federal land and sold without a single penny in royalties is just crazy, and makes no sense at all. Also, rather than permanently repealing a temporary fix each year to prohibit lands from being patented and being taken into private ownership for as little as $2.50 an acre. Further, modern mining works at an enormous scale using modern technology that would have been inconceivable back in 1872. Unfortunately this scale has contributed to some enormous abandoned mining problems, and the public is often stuck with the bill.”
In New Mexico, people along the Pecos River Valley are all too aware of the impacts that mining can have on the water they rely on for both irrigation and household use, Heinrich said. In 1991, a mine spill killed fish and it cost $28 million of taxpayer funds to remediate this.
Now, Heinrich said, a foreign corporation has purchased mining claims in the area. Heinrich told NM Political Report that the process for acquiring a mining claim is “pretty trivial.”
“This community and its economy are reliant on farming and fishing,” he said during the committee meeting. “Neither, frankly, can exist without the small streams that feed into the Pecos River, and both are at risk if a new mine opens in this particular location.”
He said the U.S. Forest Service does not have the ability to say that mining in the area is not in the public’s best interest.
Unlike oil, gas, coal or gravel, Heinrich said “there’s simply no step in the process where the public’s interest in the location of a particular mine is considered.”
Heinrich told NM Political Report that the most important thing that the Senate has done this year in terms of mining policy was including $3 billion for the cleanup of abandoned mines in the bipartisan infrastructure bill.
“It’s the first time that we’ve ever had language to create structure for cleaning up these abandoned mines and, if we can get that bill to the president’s desk, it will be a monumental step forward to be able to prevent things like the Gold King Mine spill back in 2015, like what happened in the Pecos in 1991,” Heinrich said.
