Federal Government And The Mining Industry essay example
Abandoned mines continue to pollute. C. The need to implement royalty fees and cash bonds to assure future clean up. V. Compromise is needed from both sides The Debate Over a Century Old Law The General Mining Law of 1872, like the Homestead Act of 1862, was put into effect to encourage migration and development of the western region of the United States, under the presidency of Ulysses S. Grant. At the same time, Congress was also offering public lands for the taking, to enterprising stockmen and loggers. The mining law provides every American the right to stake one or more claims-up to one hundred sixty acres-on federal lands. If the claimant can convince the government that he has a "discovery", of a "hardrock" mineral, that would justify a "prudent man" deciding to mine the claim, he can work th land and live on it rent-free without paying a penny in royalties to the federal government (Barol, Zuckerman). By contrast, the oil, gas, and coal mining industries pay up to twelve and one half percent of their gross revenues to mine federally owned lands (Begley, Glick 66). This law also gives the claim holder than right to "patent" the claim.
By buying patent to a hardrock mining claim, the miner or miners are essentially purchasing federally owned public lands away from the U.S. Government, including land in the U.S. National Forests. The price they pay for the land in question depends upon what type of claim they have filed for. A claim where the mineral is imbedded in ore, as in a gold vein, is called a "lode" claim. The fee per acre to patent a lode claim is, and has been for the past 125 years, two dollars and fifty cents an acre. The other type of claim involves minerals that have already been detached from the ore. These claims are called "placer" claims.
These placer claims made up the majority of the claims filed, in the beginnings of the California gold rush, in the mid-eighteen hundreds. The price per acre for these lands today is the same as it was over a hundred years ago, just five dollars an acre. (Satchell 12). Now, one hundred and twenty five years later, a change is on the horizon, much to the dismay of the hardrock mining corporations. The western territory of the United States no longer needs incentives such as the Homestead Act and the General Mining Law to promote expansion.
The economy, weather, and general lifestyle have taken care of this very nicely. Stewart Udall, after resigning as Secretary of the Interior in 1969, stated in a letter that "After eight years in this office, I have come to the conclusion that the most important piece of unfinished business on the nation's resource agenda is the complete replacement of the mining law of 1872 (Hocker 25). This law has remained in effect largely due to powerful lobbying by the mining industry and the general public's lack of awareness (Arrandale 531). The environment is playing an ever-increasing role in this debate. Present Secretary of the Interior, Bruce Babbitt, has referred to the 1872 mining law as "the one federal resource law where the unrestrained, giveaway, environment-be-damned attitudes of the nineteenth century have persisted" (Arrandale 533). This has even led to single person operations (many that are recreational hobbyists) that are run much in the same way they were over one hundred years ago, with pickaxe and shovel, to come under examination because of the actions of the large mining corporations and their abuse of the environment.
Some of these small time operations have gained an unexpected ally in the face of corporate mining's abuses to the environment. Local environmentalists in the Klamath River region of Northern California depend on these remotely located traditionalists. These miners are the watchdogs of the national forests when it comes to reporting offences by mining and logging companies (Barol, Zuckerman 62). Just Last year environmentalists narrowly prevailed in stopping a Canadian firm from opening a huge gold and copper mine only three miles from Yellowstone National Park. Logical, clear-cut decision, right Guess again. The White House Council on Environmental Quality brokered (bribed) a deal with the Canadian developer in which they will receive federally owned land elsewhere, worth over $65 million, in return for giving up the mining rights near Yellowstone (Satchell 12).
Large mining corporations have taken advantage of cheap land and a lack of lease or royalty payments to the federal government. According to the General Accounting Office, at least $1.2 billion in hardrock minerals are extracted from public lands every year with absolutely no royalties returned to the public (Begley 22). In 1989 the General Accounting Office was asked to look into mining law abuses. They randomly investigated twenty cases and found the government had been paid just four thousand five hundred dollars for land that had a mineral worth of between $14 million and $48 million. Opportunists to this day continue to stake claims and resell them at a huge profit to mining corporations, housing developers, and any other interested party with available funds (Hocker 25). In 1920 the Mineral Leasing Act was passed.
This act allows the government to collect royalties of twelve and one-half percent of gross revenues on coal, oil, and natural gas produced from public lands. Unfortunately, hardrock minerals such as gold, silver, copper, and uranium are not covered by this leasing system (Arrandale 533). This has led to the writing of to reform bills, one by the House, and one by the Senate. In general, these bills hope to impose royalties, do away with the patent system in order to keep mining lands in federal ownership, and review public lands for their suitability to mining and the potential environmental impact that would result from such mining. Could all these reforms lead to the demise of the mining industry Or are the mining "execs" just trying to keep a good thing going In Nevada, the mining industry claims that the implementation of harsh reforms could cause half the miners in that state to lose their jobs. Break-even operations could be seriously affected by royalty payments and the abolishment of patents, but by far the biggest cause for the loss of employment in the mining industry, in the industry itself.
The progress made in the extraction of minerals from ore, a once laborious task, has now become more efficient, thus needing fewer employees. Arizona, in 1980, had twenty three thousand copper miners. That number has dropped to eleven thousand in twelve years, while at the same time the cost to produce a single pound of copper has dropped from $1.10 to 60 cents (Hocker 26). Mining executives deny that they are taking advantage of the system. John A. Knebel, president of the industry's trade group, the American Mining Congress, states "Contrary to popular belief, our industry pays for the right to mind on federal lands" through federal taxes on companies' profits and on the incomes of the mineworkers.
He further states "We also pay production taxes [and other taxes to the state] which are used to help finance highways, hospitals, and schools" (Arrandale 534). Toronto based American Barrick Resources provides over seventeen hundred high wage jobs in the city of Elko Nevada, (where they recently took title to almost two thousand acres of mining land) they have also provided donations for schools and sewer lines in the area. Jack Gerard of the Minerals Resource Alliance points out the seldom-mentioned investments, such as new high-tech equipment, housing, and schools if the mine is in a remote area, made by mining corporations before ever extracting a single ounce of gold or silver, not to mention the millions of tax dollars and thousands of jobs generated (Begley, Glick 67). The royalties alone are greatly feared that the mining industry. John Knebel once again comes to their defense, citing the possible demise of the industry if such stringent bills come to pass. Philip M. Hocker Reports in the Economist that "this is bunkum, despite the recession, hardrock mining is thriving, and gold production in 1991 was ten times what it was in the year 1980 (25).
One of the bills that is in the House, is referred to by Keith Knoblock of the American Mining Congress as "a no mining bill". This House bill calls for an eight- percent royalty on the gross (before taxes, material expenses, and wages) revenue of the mining companies. This bill would abolish the patent system and also put into effect a government revue of public lands suitable for mining (Begley, Glick 67). An industry study by Cooper and Brand, a national accounting firm, has come to the conclusion that the House plan would eliminate over forty thousand mining jobs and slash mineral production by almost six billion dollars yearly (Arrandale 535). Mining executives warn that his plan could cause the industry to close many domestic mining sites and pursue new mineral rights overseas (534). With the entrance of the Clinton administration came promises to be kept, but not without concessions.
With support of environmental groups in his election bid, President Clinton needed to act on some problematic land issues facing the federal government. With this in mind he proceeded to appoint former Arizona governor and chairman of the League of Conservation voters, Bruce Babbitt, as the new Secretary of the Interior (Arrandale 543). President Clinton's first budget, encouraging environmentalists, proposed to raise one billion dollars over five years by instituting a 12.5 percent royalty on hard rock mining. Larry E. Craig, R-Idaho, and other regional state politicians warned that any such deal that led to the loss of mining jobs in the western states would be met with a filibuster.
Eventually, the president backed down; for fear that the budget would cause them to lose political support in the region (Camia 2786). The environment may very well be the biggest loser in this power struggle. Tom Arrandale states in the CQ Researcher that "The Mineral Policy Center estimates that more than five hundred thousand abandoned mines, most in the west, are creating pollution problems in thirty two states. Fifty-six of these mines have been declared Federal Superfund clean-up sites (534). This has caused many environmentalists to criticize the government on its lack of regulations that allows a mining company to pick up and leave a mine when the minerals have played out, knowing that the government will be fair to pick up the tab for the inevitable cleanup. The cost of dealing with the more than fifty sites on the Superfund list is estimated to be as much as forty to fifty billion dollars.
Every year the mining industry generates two billion tons of solid waste, twice as much as that turned out by all the cities and industries combined in this country. Heavy metals, acid and other toxins from abandoned mines pollute one hundred eighty thousand acres of reservoirs and lakes and twelve thousand miles of streams and rivers (Boyle 52). One of the worst examples is the Clark Fork River Basin in Western Montana. This now abandoned mining and smelting operation has left large ponds loaded with arsenic, copper, lead, zinc, cadmium, and silver. Rivers that passed through the Clark fork area. show signs of this contamination at ten times the normal level, two hundred and forty miles downstream. Cyanide is one of the major problems facing federal cleanup crews, as it is used in the leaching process of most modern gold operations.
A forty-six acre pond with a cyanide / water mixture in Southern Colorado's Summittvile Consolidated Mining Company's gold mine was leaking at over one hundred gallons a minute. Killing aquatic life at least seventeen miles downstream before a one hundred thousand dollar fine was levied and treatment of the water began (Hocker 26). Eventually the company went bankrupt and the federal government took over the forty thousand-dollar a day clean up (Begley, Glick 67). Posting cash bonds (an up-front security deposit to cover the potential clean up of the mining site) along with royalties to ensure environmental clean up of mining sites is necessary to help slow environmental damage, even at the expense of some marginally profitable operations having to go out of business. While most of the larger mining corporations will be able to absorb the added expenditure of the bonds and royalties, it is break-even operations that may be put out of business.
A single person business or recreational prospector could hardly afford to post a six thousand-dollar to twenty-five thousand-dollar cash bond to keep alive a weekend hobby (Barol, Zuckerman). Both the federal government and the mining industry will need to compromise if they are ever to come to an agreement on this issue. Yet, the federal government needs to keep the upper hand on this issue, because if they don't, the mining industry will continue in its irresponsible ways, and what is left of our environment today will be substantially less for the generations of tomorrow. As for the mining industry, they need to wake up and smell the toxins, get a look at the big picture instead of just their profit margins, and take responsibility for their actions while running their industry with a new set of ethics. 3 bc 9 Arrandale, Tom. "Public Land Policy".
CQ Researcher 17 June. 1994: 529-549 Barol, Bill., and Zuckerman, Seth. "The Miners vs. the Feds". Newsweek 28 March.
1988: 62 Begley, Sharon. "Is This What U.S. Grant Had in Mind" US News and World Report 18 Sept. 1995: 22 Begley, Sharon., and Glick, Daniel. "The Last Great Giveaway". Newsweek 30 May.
1994: 66-67 Boyle, Robert H. "This Land is Mine Land". Outdoor Life Aug. 1994: 529-549 Camia, Catalina. "Senators, Conceding Defeat, Drop Mining Law Rewrite". Congressional Quarterly Weekly Report 1 Oct. 1994: 2785-2786 Hocker, Philip M. "A Pickaxe Too Far". Economist 25 April. 1992: 25-26 Satchell, Michael.
"To the Rescue at Yellowstone". US News and World Report 26 Aug. 1997: 12 English 201 The Debate Over a Century Old Law Thesis: The showdown in the west between the U.S. Government and the hardrock mining industry, over a one hundred and twenty five year old law, is apt to leave all parties involved, including the environment, feeling the adverse effects of their indecisiveness. I. The U.S. Government needs to reform this outdated law. A. The west has changed in the past one hundred years. B. Environmental issues are now different. C. Fair reimbursement for lands and minerals must be established. II. If the claimant can convince the government that he has a "discovery", of a "hardrock" mineral, that would justify a "prudent man" deciding to mine the claim, he can work the land and live on it rent-free without paying a penny in royalties to the federal government (Barol, Zuckerman). Yet, the federal government needs to keep the upper hand on this issue, because if they don't, the mining in 34 a.