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Mining lobby doubles spending as Congress focuses on 1872 law

Mining companies may extract hardrock minerals without paying royalties

Sen. Catherine Cortez Masto, D-Nev., opposed the House bill.
Sen. Catherine Cortez Masto, D-Nev., opposed the House bill. (Caroline Brehman/CQ Roll Call file photo)

A lobbying arm of the American mining industry roughly doubled its spending last year as Congress took up legislation to overhaul the law that allows a category of mining companies, unlike oil and gas firms, to operate on federal land without paying royalties.

The National Mining Association spent $2.1 million lobbying federal agencies and Congress in 2021, records show, a sharp uptick from 2020 and 2019, when the NMA spent $1.1 million and $1.2 million respectively.

“We don’t comment on our lobbying activities,” said Conor Bernstein, an NMA spokesman.

The increase came as House lawmakers included a series of changes to mining laws in its reconciliation legislation and Republicans and Democrats on the Senate Energy and Natural Resources Committee, which has jurisdiction over public lands and mining issues, warmed to the prospect of changing the primary law that undergirds hardrock mining in America.

Established after the Civil War to promote mineral exploration in and development of western states, the General Mining Law of 1872 allows people and companies to search for minerals on federal land and claim them for development.

Under the law, mining companies may extract what are known as hardrock minerals — platinum, gold, silver, copper, molybdenum and others – without paying royalties to the U.S. government, unlike oil and gas companies that operate on federal land or in federal waters.

The House bill would establish a royalty on active and future mines of 4 percent and 8 percent of their income, respectively, exempting companies with less than $100,000 in annual revenue.

It would also appropriate $2.5 billion, through fiscal 2031, for the Bureau of Land Management to clean up abandoned mine sites, and appropriate a separate $3 million to revise the rules governing hardrock mining to limit environmental damage.

“Other extractive industries such as oil, gas, and coal pay royalties for the resources they extract from public lands and waters,” Autumn Hanna, vice president of the nonpartisan Taxpayers for Common Sense, told the Senate committee at an October hearing on mining law updates. “The hardrock mining industry should not be any different.”

A company can purchase a mining claim for “no more than $5 an acre,” Hanna said, adding that the law allows companies, including those headquartered overseas, to lease land at rates that haven’t kept pace with modern market values. “This has led to a massive giveaway of hundreds of billions of dollars in minerals,” Hanna told senators.

‘Reasonable’ royalties

The NMA opposes the royalties in the House bill, Katie Sweeney, the lobby’s general counsel, told the committee.

“If a gross value royalty is imposed, mining companies are required to pay that royalty even when the mine is operating at a loss since the royalty is assessed without consideration of the difficulty or the cost of processing the materials,” Sweeney said.

The NMA would be open to “reasonable” royalties that allowed for companies to make financial deductions, Sweeney said.

At the same hearing, Rich Haddock, general counsel of Barrick Gold Corp., told Sen. Angus King, I-Maine, the company supports a federal mining royalty for hardrock minerals modeled after a Nevada state tax based on a company’s net income.

“Whenever the issue of federal royalty has arisen in Congress, going clear back to 1994, Barrick has supported a reasonable prospective net royalty,” Haddock said. “Today, in line with National Mining Association’s position, we continue to do the same.”

Barrick Gold of North America, a U.S. subsidiary of a Toronto-headquartered global mining firm, is an NMA member.

Up for reelection, Sen. Catherine Cortez Masto, D-Nev., opposed the House bill. She took credit Oct. 5 — the day of the Senate hearing, which she requested Sen. Joe Manchin III, D-W.Va., hold — for stripping the House-passed mining overhaul from any Senate reconciliation legislation.

“The legislation would have an unfair, outsized impact on the state of Nevada, where most of the land is owned by the federal government, and it imposes taxes on federal land,” Cortez Masto said. “But more importantly, moving this type of reform through a short-term budget process would create uncertainty for the industry.”

Representatives for Cortez Masto did not respond to a request for comment.

Campaign donations

A corporate political action committee, or PAC, for Barrick gave Cortez Masto $8,000 on March 30, 2021.

NMA represents companies that mine for coal and other companies that mine for hardrock minerals. It operates two PACs: COALPAC and MINEPAC.

Of the $53,750 MINEPAC has given in the 2022 campaign cycle, $8,500 has gone to the Cortez Masto campaign, making her its top recipient. Political action committees for Manchin, the committee chairman, have gotten $5,000 from the PAC this cycle.

Manchin and other committee members have said they find the hardrock mining system outdated. Coal companies help fund coal mining cleanup through a federal tax, but there is no set funding source for hardrock cleanup, Manchin said in the fall.

“Unlike the coal country where every coal company pays into an Abandoned Mine Land Reclamation Fund, there is no revenue stream to address the enormous legacy of environmental degradation from hard rock mining in the western United States,” Manchin said. Rep. Raúl M. Grijalva, D-Ariz., chairman of the House Natural Resources Committee, said in an interview last week that a hardrock mining overhaul is possible this Congress.

“I don’t think there’s been a retreat, but I think the industry’s done a lot to fog it,” he said. “I don’t think the momentum for reform and change has dissipated, I just think at this point it’s fogged it up with Ukraine, gas prices, precious minerals.”

While no one knows exactly how many abandoned mines exist in America, the Government Accountability Office, the nonpartisan investigative arm of Congress, estimated in a 2020 report there were at least 140,000 abandoned mine sites on federal lands that four agencies manage: the U.S. Forest Service, the National Park Service, the BLM and the EPA.

But the GAO estimated that tally likely excluded more than 390,000 abandoned hardrock mine sites on federal land.

The cost of cleaning up these sites falls to the taxpayers, and it will cost billions of dollars, experts say.

Federal agencies spent about $287 million every year “to address physical safety and environmental hazards” at abandoned mines, GAO said.

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