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Analysis

Dirt Cheap: America's Lands in Speculators' Hands: Analysis

November 8, 2005

A little-known provision in the current House budget reconciliation could precipitate one of the largest land giveaways in American history. The provision, spearheaded by Congressman Richard Pombo of California, would put millions of acres of mining claims in the American West up for sale, including land inside or adjacent to National Parks, wilderness areas and other natural treasures. Real estate speculators, oil and gas companies, foreign mining corporations or anyone who is willing to pay as little as $1,000 per acre could buy the land and generally develop it in any way they wanted.

The impact of the Pombo proposal would be staggering. It would:

  • Put 5.7 million acres of public lands with existing mining claims up for sale immediately upon passage, including more than 2 million acres of claims inside or with 5 miles of national parks, wilderness areas, wildlife refuges, national forests and prized public assets.
  • Open up as many as 350 million acres of public lands for sale to the highest bidder.
  • Eliminate the current requirement that mining claim holders demonstrate valuable mineral deposits under the land.

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Since 1994, Congress has imposed a moratorium on the sale of land with mining claims in an effort to end years of multibillion-dollar taxpayer rip-offs. Pombo's legislation, approved by the House Resources Committee and expected to reach the House floor next week, reverses that policy, but it doesn't stop there. The bill would also remove the requirement that mining claim holders substantiate the presence of valuable mineral deposits under the claim. Under the Pombo bill, anyone can stake a mining claim to any piece of public land open to mining and then simply buy it. Foreign mining corporations, real estate developers, or oil and gas companies rolling in record profits could simply stake claims and take title to millions of acres of land that for more than 100 years have been owned by the citizens of the United States.

State Analyses

Based on an Environmental Working Group (EWG) analysis of current claims and patents, Nevada has the most public land at risk, with more than 2.5 million acres of mining claims that could be purchased and developed in any way the new owner saw fit. Arizona is next with 641,883 acres, followed by California (635,225 acres), and Utah (367,244 acres)(EWG 2004).



Passage of the Pombo Amendment Would Put As Many As 350 Million Acres of Public Land Up For Sale

State Mining Acres Currently Claimed Public Land Potentially For Sale
Alaska 196,409 N/A
Arizona 641,883 34,314,000
California 635,225 45,210,000
Colorado 123,457 24,086,000
Idaho 260,185 32,605,000
Montana 245,869 26,067,000
Nevada 2,508,276 58,295,000
New Mexico 170,231 26,253,000
Oregon 191,391 32,298,000
South Dakota 22,036 N/A
Utah 367,244 32,762,000
Washington 50,632 12,091,000
Wyoming 353,499 30,455,000
Total 5,766,337 354,436,000

 

>Source: EWG, compiled from BLM LR2000 database.

>Note: Mining claim data current as of the 2004 calendar year. Land potentially for sale was calculated from U.S. Geological Survey data of federal surface land ownership in 11 western states. Land potentially for sale does not include National Parks, Wilderness, Department of Defense land or private land on which the federal government holds the mineral rights. For more information on land potentially for sale, see National Academies of Science (NAS). 1999. Hardrock Mining on Federal Lands, at 1. Accessed online November 2, 2005 at http://www.nap.edu/books/0309065968/html/R1.html.

Nevada also has the most acres that could be privatized inside or within five miles of natural treasures including National Parks, wilderness areas, wildlife refuges and other critical areas (902,267). Nevada is followed by California with 497,401 acres and Arizona with 381,775 acres.

Pombo's proposal would sell off millions of acres inside or adjacent to National Parks, Wilderness, and other treasured places*

State Acres in/within 5 miles of a natural treasure
Nevada 902,267
California 497,400
Arizona 381,775
Idaho 227,735
Montana 213,896
Wyoming 202,252
Utah 197,448
Oregon 143,317
New Mexico 121,139
Colorado 92,769
Washington 49,304
South Dakota 20,382
Total 3,049,684

 

* For a discussion of natural treasures at risk see Losing Ground

Source: EWG, compiled from BLM LR2000 database.

Selling land in National Parks

An 2005 analysis by EWG, Losing Ground, documented a dramatic encroachment on America's most treasured natural areas by mining and oil and gas interests. The Pombo plan would take this very disturbing trend and make it far worse by putting land up for sale just outside and even inside some of America's signature national parks. Parks at risk include Grand Canyon National Park, where Pombo's measure would allow the sale of 10 claims covering an estimated 200 or more acres within five miles of the Park's boundaries, and Yellowstone National Park, where Pombo would allow the sale of 20 claims covering an estimated 400 acres or more within five miles of the park. The legislation would even allow mining interests to buy land inside some parks including Death Valley in California/Nevada and Denali in Alaska where mining claims predated the creation of the parks (EWG 2005, Pombo 2005a).

National Parks with Land Inside or Within 5 Miles that Could be Privatized Under Pombo's Legislation

Park Claims Inside Park/Acres Claims w/in 5 miles of Park/Acres
Death Valley National Park 48 / 960 acres 1254 / 25080 acres
Joshua Tree National Park 3 / 60 acres 363 / 7260 acres
Capitol Reef National Park 0 240 / 4800 acres
Great Basin National Park 0 166 / 3320 acres
Yosemite National Park 3 / 60 acres 123 / 2460 acres
Kings Canyon National Park 0 26 / 520 acres
Yellowstone National Park 0 20 / 400 acres
Great Sand Dunes National Park 0 15 / 300 acres
Zion National Park 0 12 / 240 acres
Grand Canyon National Park 0 10 / 200 acres
North Cascades National Park 0 11 / 220 acres
Saguaro National Park 0 9 / 180 acres
Black Canyon of the Gunnison National Park 0 8 / 160 acres
Grand Teton National Park 0 8 / 160 acres
Arches National Park 0 7 / 140 acres
Sequoia National Park 0 6 / 120 acres
Mount Rainier National Park 0 5 / 100 acres
Wind Cave National Park 0 4 / 80 acres
Rocky Mountain National Park 0 1 / 20 acres

 

Source: EWG, compiled from BLM LR2000 database.

Foreign corporations to benefit

Another EWG analysis, Who Owns the West, examined millions of mining records from the Bureau of Land Management for 12 Western states and found that foreign corporations dominate the list of top claimholders in the U.S. Six of the top 10 claimholders in the U.S. are foreign-owned companies. These claimholders could privatize their land under Pombo's legislation.

Foreign corporations hold the most claims in Nevada, followed by Arizona and Wyoming. Almost a million acres of land in the three states currently owned by U.S. citizens could be transferred to foreign ownership under the Pombo scheme. Collectively, foreign corporations hold an estimated 1.2 million acres of U.S. public land.

Six of the top 10 mining claim holders are foreign-owned companies

Rank Company Address Number
of Claims
Estimated Acreage
Claimed
1 Newmont Mining Corp Denver, CO 17,643 347,458
2 Placer Dome Inc Vancouver, British Columbia, Canada 13,766 268,758
3 Rio Tinto Limited Melbourne, Australia 10,097 191,928
4 Barrick Gold Corporation Toronto, Ontario, Canada 5,768 125,956
5 Phelps Dodge Mining Co Phoenix, AZ 7,105 124,297
6 Kinross Toronto, Ontario, Canada 4,306 98,853
7 Cameco Corp Saskatoon, Saskatchewan, Canada 3,209 66,204
8 ASARCO, a subsidiary of Grupo Mexico Colonia Roma Sur, Mexico 3,187 61,801
9 Dr Gordon Reynolds Price, UT 300 48,000
10 Carl Pescio Elko, NV 2,277 46,996

 

>Source: Environmental Working Group analysis of government land transaction data (BLM LR2000 database) and public records of corporate structures and mergers.

Details of the Proposal — Selling off America's Land

Under current federal rules, when land is claimed, mining companies hold only the mineral rights; they can mine the land but do not own it. Pombo proposes not only to reverse current prohibitions on selling mining lands, but to accelerate and dramatically expand the land area that could be claimed by eliminating current requirements that claimants provide proof of valuable mineral deposits under the land they claim.

Pombo's legislation does increase the price of claimed land to $1,000 an acre or fair market value, whichever is greater, but under the bill "fair market value" explicitly excludes the value of minerals hidden below the land's surface that could be worth billions of dollars (Pombo 2005a).

Recommendations

Metal mining interests enjoy a sweetheart deal with the taxpayers. Unlike other extractive industries — timber, coal, and oil and gas — mining companies pay no royalty on the metals they remove from public land.

This cozy relationship, an artifact of the 1872 Mining Act, has produced some of the most spectacular windfalls in American history. In 1994, a Canadian company, Barrick, purchased 1,900 acres near Elko Nevada for less than $10,000 and gained sole access to gold reserves worth $10 billion (McClure and Schneider 2001). In the early 1990's, Chevron and Manville Sales corporation pieced together claims on 2,000 acres of national forest in Montana, gaining control of $16 billion in platinum and paladium reserves, with nary a penny in royalties sent to the federal treasury (McClure and Schneider 2001, Bumpers 1998).

Rather than applying even a tiny royalty to these claims, Pombo would simply sell the land. He justifies his bill in terms of economic development but the legislation represents the worst possible option for taxpayers. At most, Pombo would raise $158 million over five years, while forever losing millions of acres of prized public assets in 12 western states and Alaska.

If Pombo wants to bring money to the treasury from mining lands, a modest four percent royalty on the market value of minerals extracted from current mining claims on public lands would yield about $175 million over the same 5 year period, and the public would still own that land and continue to collect royalties as long as the land were producing (Earthworks 2005).

Pombo's Proposal Would Sell Off Public Lands in Every Western State (Existing Claims)

map

Note: *Map does not include claims in Alaska. Alaska has 8,422 claims covering 196,408 acres on Bureau of Land Management land alone.

References:

Bumpers, Dale (Bumpers). 1998. 1872 Mining Law Belongs in Museum, Says Bumpers. Roll Call. April 20, 1998.

Bureau of Land Management (BLM). 2005. Public Lands Managed by the Bureau of Land Management. Accessed online November 3, 2005 at http://www.blm.gov /nhp/facts/maps/landsmap_m.html.

Earthworks (Earthworks). 2005. Pombo's Special Places Giveaway. Accessed online November 8, 2005 at http://www.earthworksaction.org:80/pombo.cfm.

Environmental Working Group (EWG). 2005. Losing Ground. Accessed online November 2, 2005 at http://www.ewg.org/research/losing-ground/.

Environmental Working Group (EWG). 2004. Who Owns the West? Mining. Accessed online November 2, 2005.

Recommendation for Budget Reconciliation (Pombo). 2005a. Title VI — Committee on Resources Section 6204. Accessed online November 3, 2005 at http://resourcescommittee.house.gov/issues/more/ reconciliation/cmteprintbudgetrec.pdf. Amendment by Rep. Jim Gibbons (R-NV). Accessed online November 3, 2005 at http://resourcescommittee.house.gov/archives/ 109/full/102605committeeaction.htm.

Recommendation for Budget Reconciliation (Pombo). 2005a. Title VI — Committee on Resources Section 6204. Accessed online November 3, 2005 at http://resourcescommittee.house.gov/issues/more/ reconciliation/cmteprintbudgetrec.pdf.

McClure, Robert and Andrew Schneider. A Good Deal for Miners Often Isn't for Uncle Sam. Seattle Post-Intelligencer. June 13, 2001, A1.

National Academies of Science (NAS). 1999. Hardrock Mining on Federal Lands, at 1. Accessed online November 2, 2005 at http://www.nap.edu/books/0309065968/html/R1.html.