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Mining Law Reform

In 1998, Pegasus Gold, a Canadian mining conglomerate, opened the Beal Mountain mine just above German Gulch. After extracting over $400 million in gold

Never Sweat Mine - Butte, Montana

Never Sweat Mine - Butte, Montana

over the next nine years, the company filed for bankruptcy. They left behind hundreds of acres of unreclaimed, stripped hillsides and a 70-acre leach pond that sits on a geologic fault line. The pond continues to leak cyanide and selenium into German Gulch and is subject to complete failure due to the fault. The company posted a reclamation bond of $6.3 million before packing up. Estimates for cleanup of the site run as high as $40 million. The May-June issue of Montana Outdoors has an article “Precious Metals Precious Trout” that outlines the problems and cost of abandoned mines in Montana.

There are 6,000 abandoned mines in Montana. Nationwide, the EPA estimates that hardrock mining has polluted 3,400 miles of our streams and more than 400,000 acres of land. They estimate the cleanup costs at $50 billion. Congress allots $30 million per year to clean up around 50 abandoned mine sites. The Bugle covered abandoned mine problems in the Blackfoot River drainage in an article last month. $105 million of federal stimulus funds have been dedicated to mine cleanup.

On July 14, the Senate Energy and Natural Resources committee held a full committee hearing on S. 796, the Hardrock Mining and Reclamation Act of 2009. The bill was introduced by Senator Jeff Bingaman (D-NM), chairman of  the committee. S. 796 is the latest attempt to modernize the 137-year old General Mining Act, signed into law in 1872 by Ulysses S. Grant. Every year, an estimated $1 billion in hardrock minerals are mined from our public lands. No royalty fees are collected for those minerals. The 1872 law allows claim holders to buy or “patent” mining lands for no more than $5 per acre. Many of those patented claims have later become ski resorts, dude ranches or private holdings. New proposals such as the Rock Creek Mine, a proposed copper and silver mine that would tunnel under the Cabinet Mountains wilderness area have recently added emphasis to the need to reform out outdated mining laws.

Galena Creek Mine, Montana

Galena Creek Mine, Montana

The new law would establish reasonable royalty payments for hardrock mining. Under S.796, royalty rates would be set at between 2% and 5% of  the production value, minus transportation and processing costs. Rates would vary by mineral and relief would be allowed under special circumstances. Coal, oil and gas companies pay royalties of 12.5% on production on public lands. Under S.796, mine operators would be treated like any other user of public lands and charged a yearly rental fee. The new law would end the giving away of public lands through the patent process.  The new law allows for state, local and tribal officials to petition review of mining proposals. The law strengthens reclamation and restoration requirements and requires all federal agencies to adhere to a standard of “no undue or unnecessary degradation.” Bonds for water quality restoration may not be released until water standards are met and maintained for a five-year period. Royalty monies will establish an abandoned mine cleanup fund. 60% of the funding received goes back to the states for restoration. Sportsmen United For Sensible Mining has lots of good information and news about the bill.

Noted angler and hunter, Ted Williams says of the current law, “The 1872 Mining Law is a phenomenon that has no parallel in the history of this nation — a relic, as fascinating as it is destructive“. S.796 is a fair and equitable solution and has a fair amount of popular support. However, the mining industry has reacted as expected with knee-jerk predictions of the end of hardrock mining in the U.S. and the demise of every mining company on the planet if the bill passes. Majority leader, Senator Harry Reid is the son of a hardrock miner and represents the state of Nevada which is home to around 85% of all the hardrock mining activity in the country. Reid is up for reelection next year and has told senators that he doesn’t want to see mining reform on the slate this year. So, please call or write your senators today and let them know that the time has come to finally reform this 137-year old antique law.

Senator Jon Tester:
email contact website
Phone: (202) 224-2644
Fax: (202) 224-8594
Contact one of his Montana offices

Senator Max Baucus:
email contact website
Phone: (202) 224-2651
Fax: (202) 224-9412
Contact one of his Montana offices


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