News Coverage
The Coloradoan: Hard-Rock Mining Boom Compels Reform
Gross royalties, bonding and public oversight should be implemented
Published October 11, 2007
Colorado has a rich and storied relationship with hard-rock mining.
Gold and silver mining were key to the state's settlement in the 1800s, and uranium boomed in Western Colorado in the 20th century. But that same history led to thousands of abandoned mines, water quality issues and health concerns from a commodity-based industry vulnerable to booms and busts.
Mining technology has changed; the United States has evolved. Yet, today, the act that governs mining on federal lands such as Rocky Mountain National Park sits relatively unaltered.
But a modern-day boom in hard-rock mining claims - particularly for uranium - should provide inspiration for passage of the Hardrock Mining and Reclamation Act of 2007, which was introduced in Congress this spring and is facing committee review.
In the 1800s, the federal government awarded hard-rock mining priority status regarding rights on federally owned lands to encourage settlement in the West. Unlike other mining industries, such as coal, or even oil and gas energy extraction, hard-rock mines on federal lands were not required to pay royalties to the federal government. That hasn't changed since Ulysses S. Grant signed the legislation in 1872.
Fueling modern-day concerns over this gap is that so many of the hard-rock mining companies operating in the United States today are foreign-owned, meaning they are extracting resources from public lands without any compensation to the U.S. Treasury.
A reform effort makes sense because it recognizes both the important economic contribution of mining as well as the responsibility to ensure fiscal and environmental accountability. The legislation:
> Requires the payment of royalties to the federal government based on gross extraction.
> Shifts the burden of cleanup costs from taxpayers to the mining industry. Some royalties will be used for reclamation of thousands of abandoned mines.
> Injects a citizen-review process to reassess, every three years, a mining project's bond and permit.
So far, key sticking points between the mining industry and bill proponents appear to be charging royalties on gross extraction rather than net income and additional environmental oversight.
But charging mining companies based on how much they extract from the ground is the correct route. Mining industry officials say this approach will reduce jobs or even force some mine closures. We disagree. Given the surge in mining activity, now is the time for mining companies to adjust to a gross royalty. And, given that net income can be manipulated through exemptions, relying on gross extraction is fairest to the public.
Broadening public oversight into reclamation plans and bonding for mines located on federal lands is warranted.
Colorado has seen a 239 percent increase in mining claims in the past five years, according to the Environmental Working Group. We urge Sens. Wayne Allard and Ken Salazar and Rep. Marilyn Musgrave to open a new chapter on hard-rock mining by supporting reforms that would protect the environment and compensate U.S. citizens fairly for mining on federal lands.
