September 19, 2017

Following the House Natural Resources Subcommittee on Energy and Mineral Resources hearing on hardrock mines, the Senate is now wading into the contentious area of mining policy reform. Senator Tom Udall (D-NM), along with four Democratic cosponsors, introduced the Hardrock Mining and Reclamation Act of 2017 (S.1833). Senator Udall’s bill would affect mining legislation laid out in the 1872 General Mining Act (30 U.S.C. 24), a law enacted in the Gold Rush-era that has remained largely unchanged since its passage; the new bill includes provisions for collecting royalties and establish a reclamation fund.

The Hardrock Mining and Reclamation Act of 2017 would impose a royalty of two to five percent for new mining operations based on gross income. Although some states charge their own royalties, there is no federal royalty for mineral commodities mined on public lands, unlike oil and gas or coal operations. Opponents of a hardrock mining gross royalty cite the differences in producing commodities from hardrock mines compared to oil and gas or coal; commodities from hardrock mines are not usable until after being processed, and different metals have different markets. The proposed legislation would, however, allow the Secretary of the Interior to grant royalty relief to companies depending on the market and other economic factors.

The bill would also create a Hardrock Minerals Reclamation Fund, similar to the Abandoned Mine Lands (AML) fund for coal extraction sites, to pay for cleaning abandoned hardrock mine lands. AML funding comes from a fee charged to coal companies based on the amount of material they mine. S.1833 would establish a similar fee for hardrock mines that would be determined based on the value of the mining production instead of the material removed.

Sources: E&E news, Library of Congress, U.S. House of Representatives