US industry calls for careful reform of Mining Law

A representative of the US mineral mining industry told a congressional panel July 26 that essential reforms of the 1872 Mining Law must ensure a fair return to taxpayers and to mining investors; provide stronger security of title for mining operators; recognize existing laws and regulations that provide comprehensive environmental protection and suitability criteria for mining on federal lands; and fund a reclamation program for abandoned mines with revenue from production payments.

William Champion, president and CEO of Kennecott Utah Copper and vice chairman of the National Mining Association (NMA), told the House Energy and Minerals Resources Subcommittee that the mining industry is committed to “a fair, predictable and efficient national minerals policy” because US mineral resources are vital to the nation’s economic wellbeing. “The cornerstone of NMA’s policy objectives,” said Champion, “is a predictable legal and regulatory framework that will provide the long-term stability we need to protect existing investments and also to attract new investment capital to domestic mining.”

Champion elaborated on several essential elements of mining law reform that NMA was committed to achieving in cooperation with all stakeholders.

Fair Return – Industry favours a net income production payment from new mining claims on federal lands as the best means of ensuring a fair return to the public and adequate funding for restoring abandoned mine lands, said Champion. He warned, however, against adopting certain royalty payment schemes that would be self-defeating – destroying mining investment as well as the revenue and jobs they generate for local communities. Champion cited a World Bank study that cautioned against so-called “gross royalty” approaches, as opposed to profit-based approaches that are more likely to sustain mining investments, jobs and infrastructure.

Security of Title – Ensuring the long-term security of title (or tenure) is vital for mining operations that are inherently capital-intensive and require long-term investments. Without the patenting provision that guarantees the security conferred by ownership, the Mining Law should include language that clarifies the rights of operators to use and occupy federal lands for the full gamut of mining activities, from prospecting through post-mining reclamation. Without such assurances of tenure, said Champion, financing for costly, long-term mining projects will become increasingly more difficult, if not impossible, to obtain, thus driving more mining investment and high-wage jobs off shore.

Environmental Standards – Current law features a comprehensive framework of regulations and related measures that cover virtually every aspect of mining from exploration through reclamation and closure, said Champion. He cited a report in 1999 by the National Academy of Sciences (NAS) that concluded the existing regulatory framework for mineral mining is “generally effective” in protecting the environment. Rather than new laws and regulations, NAS found that “implementation of existing regulations provides the best opportunity for enhancing environmental protection.”

Champion noted the NAS specifically cautioned against applying inflexible, technically prescriptive standards. The NAS report said: “simple ‘one-size-fits-all’ solutions are impractical because mining confronts too great an assortment of site-specific technical, environmental, and social conditions.”

Access to Federal Lands – Existing authority is adequate for determining the suitability of federal lands for mining activity, said Champion. He cited numerous authorities under which Congress has closed lands to mining for wilderness, national parks, wildlife refuges, recreation areas and wild and scenic rivers. The Antiquities Act also authorizes the president to create national monuments to protect landmarks and objects of special interest, and congress had given the Secretary of the Interior authority to withdraw federal lands from mining. “New closures of public land, based on vague and subjective criteria without congressional oversight, would arbitrarily impair mineral and economic development,” said Champion.

Import Dependency –
Champion emphasized the importance of reforming the current law with provisions that balance environmental protection with economic opportunity. The US is already becoming increasingly dependent on off-shore supplies of minerals critical to our economy and defense industries, he said. Although the US has virtually unrivalled reserves of these minerals, current regulatory policies have tended to discourage exploration, increasing our dependency on foreign minerals and denying Americans the potential benefits from mining employment and revenue.