The federal government has no idea exactly how much gold, silver and copper is being removed from public lands, according to a report released Wednesday. That’s because of a 140-year-old mining law that lawmakers say should be updated.
When companies drill for oil, natural gas or coal, they are responsible for reporting how much they obtain. And they pay royalties to the government for the minerals they extract. The Government Accountability Office reports that oil, gas and natural gas account for $10-billion dollars every year in royalties that puts $10-billion dollars into the US treasury every year.
But companies that mine hard rock minerals like gold, silver and copper don’t have to pay royalties. Critics point to the General Mining Act of 1872. It only requires an upfront fee and annual maintenance fees when a company files for a permit to mine hard rock minerals.
Sen. Tom Udall, a Democrat from New Mexico, is supporting an effort to revise the 1872 law. He contends that adding a royalty to hard rock mineral extraction could raise hundreds of millions in revenue each year. He is mounting the push as lawmakers are looking for ways to cut spending and raise revenue in order to balance the budget.
“We can’t ignore these potential revenues any longer — not when the American people are counting on us to solve our economic challenges,” Udall said in a statement. “Hard rock mining reform should be part of that discussion.”
Udall and Rep. Raul Grijalva, D-Ariz., requested the GAO study. They are both working to reform the mining law. Similar efforts have fallen short in the past.
The Associated Press reports that the mining industry, which has fought to kill similar reform bills, is taking aim at Udall and Grijalva’s effort.
An industry spokeswoman told the news service that mining companies already pay billions in taxes involving mines located on state and private lands.
“In 2008, there were $20 billion in sales in U.S. metals, and we paid about $8.3 billion in various taxes on that,” said Carol Raulston, a spokeswoman for the National Mining Association. She said the industry supports fair compensation for the government but not a royalty comparable to what is paid by the oil industry.
Grijalva and Udall said they plan to make their case in the next session of Congress. Grijalva said he intends to introduce a bill calling for royalties on the mining of metals on public land.
The new revenue — which Grijalva said could total as much as $2 billion annually depending on production — might be used for cleaning up abandoned mines, national parks and public lands. The bill would also require companies to disclose production levels on federal lands.
(The Associated Press contributed to this report.)
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