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CANADIAN MINING PERSPECTIVES – US mining law overdue for overhaul

The U.S. House of Representatives has introduced a bill to overhaul the 1872 mining law and require producers to pa...



The U.S. House of Representatives has introduced a bill to overhaul the 1872 mining law and require producers to pay an 8% royalty on metals output.

The bill is sponsored by Nick Rahall (Democrat, West Virginia) who is chairman of the House Natural Resources Committee. He called the existing rules the Jurassic Park of all federal laws, noting that Custers last stand at Little Bighorn was still four years away when the law was passed.

Briefly described, mining reform law has three goals.

First, it levies an 8% net smelter return on the value of metals produced from hardrock mines on federal lands. For 135 years, metal mines on federal lands have been exempt from royalties and many environmental reviews, unlike coal and oil & gas producers.

Second, it provides that two-thirds of the money collected will go into a fund for the reclamation of abandoned mines and one-third will be spent on public health, water treatment and reclamation.

Third, it specifies which lands may be mined and which may not (wild and scenic rivers, areas of environmental concern, wilderness areas, and lands designated sacred sites of aboriginal peoples).

The legislation further sets out requirements for permits and the conditions under which they will be granted. As is the case in Canada, U.S. miners will have to file environmental, operations and reclamation plans as well as proof of financial means to carry them out.

Mining reform in the United States is enjoying fairly widespread support. The National Mining Association is backing Rahalls efforts, including the payments of a royalty. Environmentalists are applauding the new laws provisions to protect lands and water during mining and after.

The man left between a rock and a hard place is Senate Majority Leader Harry Reid (Democrat, Nevada). Ordinarily, the Senate leader would co-sponsor his partys legislation, but Reid is the son of a miner and has a reputation for siding with the industry first. Nevada miners have long benefited from the absence of royalties and environmental regulations, and until now Reid has sided with them. The problem is that, in this case, most of the American mining industry supports reform. If Reid throws his weight behind new mining laws, he may become unpopular (meaning: fail when he runs for re-election 2010) in his home state. Watch for politics to come into play.

The Hardrock Mining and Reclamation Act of 2007 (H.R. 2262.IH) may be read in its entirety at http://thomas.loc.gov/cgi-bin/query/D?c110:2:./temp/~c110QIrCuA:: or search for mining law at http://thomas.loc.gov/home/c110query.html.


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