Since 1872, mining interests have made billions of dollars by removing and selling valuable minerals from our public lands without having to pay a cent to the American taxpayer. This is one of the biggest budget loopholes of the modern economy, and it needs to change—especially now—as Congress tries to address the deficit and balance budgets.
Blame this bizarre omission of royalties on the 1872 Mining Law, which encouraged Westward expansion by allowing prospectors to stake claims on public lands and freely remove “hardrock” minerals like gold, silver, copper and uranium. This saloon-era handout—established more than 140 years ago—continues unchanged to this day. Mining companies still receive these precious metals and minerals for free.
Today, some of the world’s biggest companies make a mint by mining our metals, selling them to the highest bidder, keeping all the profits and often sticking taxpayers with a costly cleanup bill. We’re left with a legacy of abandoned and contaminated mines on public lands that leak into streams and aquifers—lands that should be managed for the benefit of the American people.
Even as these giveaways continue, funding for national parks and other public facilities keep getting tighter. Employees’ hours are being reduced; cleanup crews are scarce; and trails are going untended and falling into ruin. Even a small royalty could rejuvenate our public-lands system, help clean up abandoned mines and mine waste, and put people back to work. Why should companies get a free ride while the national budget is slashed and parks close for lack of funds? With prices for gold, silver and other minerals at near-record highs, requiring companies to pay a royalty for public resources is simply good policy.
In 2011, we requested a Government Accountability Office investigation of this issue. The results, published this past November, were striking: The GAO found that we have no estimate at all of the value of the hardrock resources extracted from federal property. Not only are we giving public resources away for free; we don’t even know what’s being taken or the value of what we’re giving away.
According to a 2012 Bureau of Land Management report, in California alone, there are 20,200 mining claims, 215,000 ounces of gold, and 35,000 ounces of silver produced annually on BLM land.
The Department of the Interior, using estimates and partial information, put a ballpark figure of $6.4 billion on the value of hardrock minerals extracted from federal land in 2011. If taxpayers received an 8 percent royalty on $6.4 billion, that would mean more than $500 million a year we could put back into managing our public lands and reducing our national debt.
For decades, Congress has tried to rally sufficient support for hardrock mining law reform. Disputes about what royalty rate to charge, how to calculate company profits, and what benefits would go to local mining communities have managed to stall decades of reform efforts. While full reform has not been successful so far, progress has been made.
In the 1990s, both the House and Senate implemented a moratorium on the patenting of federal land for hardrock mineral development. As recently as 2008, the House passed a measure that would have protected special landscapes and charged a royalty of up to 8 percent. As co-sponsors of this legislation, we were frustrated to see the bill die in the Senate.
Now more than ever, the case for reform is clear, and we appreciate the support we’ve received from President Obama’s administration. As our nation works to address the deficit in the months ahead, we can no longer allow federal giveaways of our natural resources to continue without any compensation to the taxpayers who own those resources. The president proposed hardrock mining reform measures in each of his past two budgets, and we hope to see this repeated in his fiscal year 2014 request due this month.
But the only way mining reform will happen is if the public becomes aware of its importance. Nothing in Congress happens in a vacuum. That’s why we’re highlighting this issue now, before budget negotiations get too intense.
In 1872, Congress made national expansion the country’s top priority, and we spent the next century growing westward. That phase of American history ended a long time ago, but our mining law never caught up to the realities of today. It is long overdue for Congress and the administration to act––to finally demand, and get, a fair price for the public’s hardrock minerals.
The writers are contributors to Writers on the Range, a service of High Country News. Arizona Democratic Rep. Raúl M. Grijalva is the ranking member of the House Subcommittee on Public Lands and Environmental Regulations; Democratic Sen. Tom Udall of New Mexico sits on the Senate Committee on Environment and Public Works.