House OKs measure on mineral royalties
A bill passed by the House on Thursday would change that by forcing the hard-rock mining industry to pay royalties on minerals extracted from public lands. Coal mining and the oil and gas industries already do.
The bill, which passed 244-166, also would put new environmental controls on hard-rock mining, set up a cleanup fund for abandoned mines and permanently ban cheap sales of public lands for mining. Environmentalists say there are more than 500,000 abandoned hard-rock mines in the U.S. and estimate the cleanup cost at between $32 billion and $72 billion.
In 2006, Utah hard-rock mining (base and precious metal production) produced value of $3.28 billion, which accounted for about 70 percent of all mineral production, according to the Utah Geological Survey.
Currently, there are six base metal mining operations with six smaller developments in production in the Beehive State. There are also four precious metal mining operations with four smaller developments in production.
"This is a pirate story with the public lands profiteers robbing the American people blind," said Rep. Nick Rahall, D-W.Va. "The robbery of American gold and silver must stop."
Republicans objected that the royalties would amount to a tax on an already struggling industry and would send jobs overseas to countries that use child labor.
The bill still needs approval from the Senate, where it faces stronger opposition. And the White House threatened a veto, saying that putting royalties on existing mining operations would invite lawsuits.
Republican opponents also circulated a letter contending that the bill could threaten national security by limiting the domestic availability of minerals critical to the U.S. military like magnesium, which is used to make airplanes and missiles.
"This legislation hurts, perhaps even kills, the domestic mining industry and with it the towns and communities in western Nevada and rural America," said Rep. Dean Heller, R-Nev., whose state is the fourth-highest gold producer in the world, after South Africa, Australia and China.
"When mining communities are decimated there will be no royalties to collect," Heller said.
The bill would impose a royalty of 4 percent of gross revenue on existing hard-rock mining operations and 8 percent of gross revenue on new operations. The Congressional Budget Office estimates that about $1 billion a year would be subject to the proposed royalty.
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