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Interior secretary: Mining reform a top priority

Companies don't pay royalties mining on public lands under 137-year-old law

Posted: Wednesday, July 15, 2009

WASHINGTON - The Obama administration will make overhauling the nation's 137-year-old hard-rock mining law a top priority despite a full plate of higher-profile issues, Interior Secretary Ken Salazar said Tuesday.

Salazar told a Senate committee considering such legislation that "it is time to ensure a fair return to the public for mining activities that occur on public lands and to address the cleanup of abandoned mines."

The General Mining Act of 1872, which gives mining preference over other uses on much of the nation's public lands, has left a legacy of hundreds of thousands of abandoned mines that are polluting rivers and streams throughout the West. Mining companies also don't pay royalties on gold, silver, copper and other hard-rock minerals mined on public land.

Reform bills have been introduced in the House and Senate, but past attempts at reform have foundered in the face of opposition from industry and many Western lawmakers.

However, a new crop of conservation-minded lawmakers from the West and a new administration sympathetic to reforming the law have generated renewed interest in an overhaul.

Despite the press of health care reform and other signature issues embraced by President Obama, Congress still needs to take care of important but more mundane business like mining reform, Salazar told the Senate Energy and Natural Resources Committee.

Salazar, a former Colorado senator, said he sees "an emergence of bipartisan pressure to get this done."

He said when he meets with key members of this department, mining law reform will be among several "top tier" issues.

"We are committing significant resources from the Department of Interior to get this done," Salazar told reporters after the hearing. "I think there is a possibility we can get mining reform done in this Congress."

The Environmental Protection Agency's announcement Monday that it plans to develop new regulations related to bonds or other financial assurance by mining companies to protect against environmental abuses creates "a greater sense of urgency" for reform, Salazar said.

The EPA announcement follows a recent Supreme Court decision giving a mining company the go-ahead to dump waste from the Kensington gold mine into the nearby 23-acre Lower Slate Lake, although the material will kill all of the lake's fish.

The National Mining Association has said it supports reform in principle, but it has expressed reservations about the details of legislative proposals, particularly royalty formulas.

Some of the proposed royalty formulas would put otherwise profitable mines out of business and cost jobs, Hecla Mining Co. President and CEO Phillips Baker Jr. told the committee. Hecla Mining is part owner of the Greens Creek Mine on Admiralty Island.

Sen. Lisa Murkowski of Alaska, the senior Republican on the committee, also cautioned against choosing a royalty formula without carefully considering its impact on the mining industry.

If U.S. mines close, the nation risks trading a reliance on foreign oil for a reliance on strategic minerals from other nations, the Alaska senator said.

But Sen. Ron Wyden, D-Ore., said the mining industry is responsible for "decades of taxpayer rip-offs and environmental destruction" and "they ought to have to pay their fair share."

Environmentalists said they were surprised and pleased by Salazar's testimony and the forcefulness of his remarks to reporters afterward.

"I think it's a very positive development that we have an Interior secretary in the Obama administration saying mining reform is a top priority and it needs to be done in this Congress," said Jane Danowitz, director of U.S. public lands programs at the Pew Environment Group.

Salazar also said that holds announced by Sen. John McCain last week on the confirmation of two high-level Interior Department officials could slow mining changes and limit the department's ability to deal with an array of public lands issues of importance to Western states.

McCain has said he wants the Obama administration to take a position on a proposed land-swap bill intended to pave the way for an Arizona copper mine.

The U.S. Forest Service is crafting a reply to the Arizona Republican, Salazar said.



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