Bingaman Bill Seeks Mining Law Reform

Today, Chairman Jeff Bingaman introduced S. 796, the “Hardrock Mining and Reclamation Act of 2009” – legislation that will modernize an old and antiquated law, the Mining Law of 1872. Senate Energy Committee plans to take up this legislation after it has finished working on the bipartisan energy bill, with hearings likely this summer.

When the Mining Law was passed in 1872, following the California gold rush, Congress was trying to encourage settlement of the American West. It did this by offering free minerals and land to those who were willing to “go West” and mine. Past efforts to bring this law up to date, to make sure that Americans receive a reasonable return for public resources and to modernize land management requirements, have failed. That doesn’t make any sense to Chairman Bingaman, given the economic challenges that our nation currently faces and given concerns about the public health, safety and environmental issues that mining -- and in particular abandoned mine sites -- can raise.

“Efforts to comprehensively reform the Mining Law have been ongoing literally for decades, but results have thus far been elusive. There is renewed interest on the part of many in the industry and in the environmental community in trying to update this law,” Bingaman said. “The mining industry plays an important role in our part of the country: It fuels local economies. And it contributes to our national security. At the same time, the industry has been criticized on both fiscal and environmental grounds. The Hardrock Mining and Reclamation Act of 2009 will make responsible changes to this outmoded law.”

Also, the bill includes provisions to enact a robust abandoned mine land program for hardrock mine sites. While estimates vary, a recent survey of states indicated that there are as many as 500,000 abandoned hardrock mine sites nationwide, with most of these in the West. These abandoned mines pose serious public health and safety risks. They also degrade our environment and pose special threats to our most precious resource: water. A reclamation fee, modeled on one enacted in 1977 for abandoned coal mine reclamation, would fund this effort.

“For those of us who live in the West, the hundreds of thousands of abandoned mine sites that scar our landscapes and pollute our waters are a constant reminder of the unfortunate legacy of a colorful period of western history. Sen. Bingaman’s legislation will create a robust, well-funded program to restore abandoned mines that will provide a much-needed economic boost across the West,” Tom Kenworthy, Denver-based senior fellow at the Center for American Progress, said. “At a time of great economic distress, it will create well-paying jobs, as many as 65 jobs for every $1 million invested, according to a 2007 State of Montana study.”

"We appreciate the effort of Sen. Bingaman to incorporate needed funding for abandoned hardrock mines within his proposed mining law reform,” said Bill Brancard, director, Mining and Minerals, State of New Mexico. “New Mexico's long history of mining has left a legacy of thousands of abandoned mine features that pose a threat to public health and safety. This bill would provide a funding source to mitigate many of these hazards."

S. 796, like other reform proposals, reflects a view that the 137-year-old law needs to be amended to ensure that the public gets a fair return for its resources, that environmental and land use requirements are modernized, and that certainty is provided to the mining industry.

The key provisions of the Hardrock Mining and Reclamation Act of 2009 are:

Eliminates Patenting – The bill eliminates patenting of Federal lands, but grandfathers patent applications filed and meeting all requirements by September 30, 1994.

Fees – The bill makes modest increases in the annual claim maintenance fee (from $125 to $150) and claim location fee (from $30 to $50). The legislation requires the mine operator to pay a fee in exchange for the use of Federal land that is included within the mine permit area. The bill provides that fees collected are to be used for the administration of hardrock mining on federal lands. Any excess funds are deposited into the Hardrock Minerals Reclamation Fund.

Royalties – The bill provides that the production of all locatable minerals is subject to a royalty to be determined by the Interior Secretary by regulation of not less than 2 percent and not more than 5 percent of the value of production, not including reasonable transportation, beneficiation and processing costs. The royalty may vary based on the particular mineral concerned. No royalty will be collected from lands under permit that are producing in commercial quantities on the date of enactment. Royalty revenues will be deposited into the Hardrock Minerals Reclamation Fund. The bill includes a provision for royalty reductions for all or part of a mining operation where the person conducting the mineral activities shows by clear and convincing evidence that without the reduction, production would not occur.

Permits and Financial Assurances – The bill states that permits are required for all mineral activities on Federal land except for “casual use” that ordinarily results in no, or negligible, disturbance. Mining permits are for a term of 30 years and so long thereafter as production occurs in commercial quantities. The operator must provide evidence of approved financial assurances sufficient to ensure completion of reclamation if performed by the Secretary concerned.

Water Reclamation – Financial assurances attributable to the cost of water treatment will not be released until the discharge has ceased for at least 5 years or the operator has met all applicable water quality standards for at least 5 years. The operator may be required to establish a trust fund or other long-term funding mechanism to provide financial assurances for long-term treatment of water or other long-term post-mining maintenance or monitoring requirements.

Operation and Reclamation – The Secretary of Agriculture must take any action necessary to prevent unnecessary or undue degradation in administering mineral activities on National Forest System land. The bill directs the Secretaries of the Interior and Agriculture to jointly issue regulations.

Land Open to Location – Requires within three years a review of certain lands to determine whether they will be available for future mining claim location. The governor of a state, chairman of an Indian tribe, or appropriate local official may petition the Interior Secretary to undertake a review of an area.

Hardrock Minerals Reclamation Program – Establishes a program for the reclamation of abandoned hardrock mines in 14 western states. Creates a Hardrock Minerals Reclamation Fund comprised of hardrock royalties, fees, and donations. Each operator of a hardrock mining operation on Federal, state, tribal or private land must pay a reclamation fee established by the Secretary of not less than 0.3 percent, and not more than 1.0 percent, of the value of the production of the hardrock minerals for deposit into the Fund. The bill provides grant programs for all states for hardrock reclamation projects and for public entities and nonprofit organizations for collaborative restoration projects to improve fish and wildlife habitat affected by past hardrock mining.

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