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HOUSE SUBCOMMITTTEE FIELD HEARING

US Mining Law compromise urged by Senate Majority Leader

Senate majority leader, Harry Reid, will perhaps be the key to any change in the US Mining Law and he has made it apparent at a subcommittee field hearing in his home state that a workable compromise will need to be reached before any changes would be made.

Author: Dorothy Kosich
Posted: Wednesday , 22 Aug 2007

ELKO, NV -

U.S. Senate Majority Leader Harry Reid, D-Nevada, Tuesday urged environmentalists, miners, and members of the House to achieve a workable compromise in Mining Law reform to bring an end to the uncertainty of a domestic hardrock mining industry now mainly regulated by the Executive Branch.

Reid's clout as one of the nation's most powerful Democrats was not lost on the House Subcommittee on Energy and Natural Resources Chairman Jim Costa, D-California. Costa told Mineweb that normally August is an important time for members of the U.S. to spend time in their individual districts.

In a reference to critics who claim the Mining Law has not undergone meaningful change since it was enacted during the administration of President Ulysses S. Grant, Reid asserted that while the mining industry has evolved and changed, "Congress has not responded. We have instead allowed each passing Administration to develop the rules and regulations they see fit to guide the industry" with harmful consequences.

As an example Reid referred to one of domestic mining's best known foes, former U.S. Interior Solicitor General John Leshy, now a professor at the University Of California Hastings School Of Law in San Francisco. "John Leshy tried to destroy mining," Reid declared. "He wanted it gone."

"If we fail to find a steady compromise on these and other key issues, we leave the fate of the industry in the hands of each proceeding administration," Reid warned. "So, rather than crossing our fingers every fours years and hoping that the newly elected president understands the West and understand the importance of mining, let us work together to guarantee a bright future" for mining.

Reid also noted that domestic mining was too important to the international trade balance to consistently face uncertainty.

In a room packed with miners, explorationists, environmental NGO representatives, elected and appointed federal, state and local officials, Reid declared that "we agree that reform is needed and now is the time." The senator also noted that a significant change in the environmental community "has made them more pragmatic. And I believe the increased involvement of sportsmen's group in debates like this will help to find the way forward."

"It is my hope...that these changes on both sides of the reform effort will make it possible to build a study compromise for a much improved mining law," he declared.

Despite some miners' hopes that Reid would kill a Mining Law reform bill in the Senate, Reid declared that a "bipartisan group of senators" are willing to work with the House to achieve such reform.

Subcommittee Chairman Costa spent two days touring Nevada mines and meeting with both small and major miners to become well-versed about the industry. Costa also encouraged the numerous explorationists, geologists and small businessmen and businesswomen who packed the field hearing to express their views for the record. A handful of those who found themselves testifying Tuesday afternoon had no prepared remarks and were clad in t-shirts and jeans to testify an official committee of the U.S. Congress.

Costa's courtesy and civility with the small miners and explorationists-combined with his willingness to learn--deflected the rancor that was historically accompanied other Mining Law field hearings in the past.

In a brief interview with Mineweb after the hearing, Costa said his role as chairman was to gather information, carry the views of the miners back to Washington, and work with House Natural Resources Chairman Nick Rahall, D-West Virginia, to ensure that the Mining Law reform bill undergoes the necessary revisions to become "good, common sense legislation" that would win H.R. 2262 bipartisan support in both the House and Senate, as well as the mining industry and other groups.

TESTIMONY

AuEx Ventures President and CEO Ronald Parratt--a former Homestake and Santa Fe Minerals exploration manager, now a well-respected independent gold mining explorationist-said that in its current form, H.R. 2262 would force him to concentrate on non-U.S. gold properties. "I'm sure that H.R. 2262 will lead to a dramatic decline in mineral exploration on public lands because it adds land tenure and permitting risks to what is already a very risk endeavor," he testified.

Noting that the bill would eliminate the current Mining Law right to use and occupy public lands for mineral and exploration development, Parratt said that H.R. 2262 "empowers federal land managers with discretionary veto power to reject permit applications for exploration and mining on lands where mineral developed is allowed consistent with multiple use principles."

"H.R. 2262 puts mineral dollars at risk every step along the way of the mining life cycle, from exploration to mining," he declared. "This added uncertainty will dramatically reduce-if not eliminate mineral exploration and development on public lands."

Parratt also asserted that the bill "creates a one-size fits-all permitting process for exploration and mining that is inappropriate for initial exploration projects," adding that it "creates a burdensome permitting process for initial exploration projects by eliminating notice-level operations."

"In its place, Title II establishes a uniform permitting process for all mineral activities-from drilling a couple of holes to building a mine, without any consideration of the obvious and substantial differences in the on-the-ground impacts between the two," he explained.

However, Dan Randolph, Executive Director of Great Basin MineWatch, testified that "we believe that the Hardrock Mining and Reclamation Act of 2007 would bring necessary reforms that will help protest the people and lands of Nevada, while helping this important industry thrive."

Randolph expressed concerns about the health impacts of mercury emissions from Nevada gold mines, the impacts that mining puts on lakes, water quality and quantity, waste rock drainage, and heap leach seepage.

Former state wildlife director Willie Molini, representing the Theodore Roosevelt Conservation Partnership, testified that while he enjoyed a good working relationship with the mining industry, sportsmen's groups still want to see Mining Law reform. Molini asked Congress to consider a mining royalty earmarked for fish and wildlife conservation and abandoned mine reclamation.

"We believe that federal land managers need clear legal and regulatory authority to assure adequate reclamation of mine sites," he added.

Former Nevada State Bureau of Land Management Director Bob Abbey told the subcommittee that "much remains to be done to address abandoned mine sites." Now a land use and permitting consultant, Abbey recommended the subcommittee "evaluate the feasibility of using the Forest Service and BLM's land use planning processes as the mechanism for identifying the appropriateness of making available specific tracts of public lands for mining."

"The amount of land needed for mill sites and or other administrative support functions should be determined through (a) site specific analysis and not be subject go an arbitrary or self-imposed requirement as now proposed in the draft language," he added. "The life of mining plan and reclamation requirements should also be addressed as part of the initial analysis."

"Whether you amend the General Mining Law or not, I believe there needs to be greater Congressional attention given to staffing the agencies with sufficient numbers of personnel as well as with the expertise needed to ensure appropriate reviews of mining proposals and the monitoring that is often required for approved operations," Abbey concluded.

The issue of mining taxation was mentioned by several of those testifying included Russ Fields, the outgoing President of the Nevada Mining Association. Fields declared that the proposed net smelter return royalty "is unfair and will lead to mine closures." Instead, Fields suggested a net income production payment based on production from new mining claims on public lands "would provide the public with a fair return, but would also appropriately take into account the need to foster a strong domestic minerals industry."

Jon Hutchings, Natural Resources Manager for Eureka County where some of the nation's largest gold mines are located, said local government fears the taxation changes contained in H.R. 2262 would shift revenues away from local governments directly impacted by mining. For instance, He noted that revenues have been diverted away from Wyoming local governments to cover the costs of "closing less productive and environmentally challenged operations in the East."

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