President Biden’s Build Back Better Act was introduced in the House on September 27, 2021 by Representative John A. Yarmuth (D-KY-3). The Bill was sent to the House Committee on the Budget. While this Bill holds a lot of important changes, one notable section on mining stimulated significant discussion in the Senate Natural Resources and Energy Committee, which was focused on reforming the General Mining Law of 1872.
“I know we can pursue mining reform responsibly, bearing in mind mining’s importance to our national defense and economic security” -- Senate Committee on Natural Resources and Energy Chair, Joe Manchin (D-WV) Why is hardrock mining important? Mining has been critical to the development of the United States, and encompasses everything from national defense to economic security. Hardrock mining in particular is the process of extracting essential elements such as copper, gold, iron, uranium, phosphate, and more from rock (2). It provides critical materials necessary for many essential products on the market, including smartphones, laptops, solar panels, airplanes, car parts, and more. The need for minerals is increasing exponentially as the demand for low carbon energy solutions requiring hardrock minerals increases. What is the mining law of 1872, and why Congress is proposing updates Originally, the Mining Law was set in place as part of the California Gold Rush and other mining booms. The purpose was to encourage westward expansion by allowing people to stake claims to mineral deposits such as gold, silver, copper, and others found on land that is owned by the United States (3), without being taxed. Individuals only had to pay a $100 holding fee and could obtain a mineral permit for $2.50-$5 per acre of land. This entitled them to the mineral resources on this land. Though some amendments have been made to the law, the part that does not require any tax on hardrock mining on federal lands has not been updated, and is certainly out-dated. Unlike other mining industries including oil and gas that are required by law to pay a federal royalty tax on crude oil and gas taken from federal lands, mining companies currently do not have to pay a royalty. Though it is known that minerals mined on federal land bring in millions of dollars of revenue each year, the data are poorly constrained since agencies don’t collect royalty fees. As a result, there is no concrete data about how profitable mines are. Additionally, there are over 500,000 abandoned hardrock mines in the US that are having significant environmental impacts on our watersheds, wildlife and landscapes (5). While there is the possibility that ~$5 billion could be devoted to abandoned mine reclamation from the combination of appropriations and reconciliation this year, it is estimated that it will take over $50 billion to clean up these mines and mitigate the damage that has already been done. THE BILL: Build Back Better Act: H.R. 5376 What does this part of the Bill do? Section 70807 of the Bill proposes changes to hardrock mining in the United States. First, it would provide funding of $2.5B for 2022-2031 to assist with abandoned mine land cleanup. The funds would help to assess, decommission, and reclaim the land. Additionally, the Bill would provide $3M in funding to the Bureau of Land Management to prevent environmental damage from mining. These funds would be available until 2031. A major portion of this part of the bill is dedicated to adding an 8% gross royalty tax to the income from mining claims covered under the Act. The royalty would be 4% for mines with a preexisting plan of operations on federal land on the date the bill is enacted. The royalty would not be applied to small mines, or miners that had a gross income of <$100,000. Additionally, the Bill would introduce a Reclamation Fee, or the “dirt tax”, which would be a fee of 7 cents/ton of material displaced by hardrock mineral activities that’s paid to the Secretary of the Interior. Displaced materials include any waste or unprocessed ore that’s moved from its original location when mining happens.The Bill would require the mining company to report on and notarize the amount of material it displaces. If improperly reported, mines could incur a $10,000 penalty. There would also be a claim maintenance fee of $200 imposed for any unpatented mining claim, mill or tunnel site on federal lands. Benefits Mining law reform overall would help in the pursuit of more responsibly mining critical materials. New mining laws that impose a royalty could directly help to address abandoned mine lands by creating a fund for reclamation. Additionally, they would provide for reasonable land management, while also ensuring a fair return to taxpayers for utilizing public lands. Challenges The process of mining is an extremely controversial practice. While it provides essential minerals and materials for the economy and modern technologies, it also is extremely destructive. Not all land is economical to mine, so it takes vast areas of exploration to find the best places to mine. These ideal locations may cross important waterways used for drinking or recreation, sensitive ecosystems, or local communities. The waste discharged from mining, such as acid mine drainage (6) or elevated levels of metals, can have extremely detrimental effects on the surrounding ecosystem and the health of local communities. While mining can take place legally on federal lands, the harmful impacts of mining such as contamination, noise, dust, blast vibrations, and more can extend beyond geopolitical borders. Challenges will also vary with the material being mined. A challenge specific to Uranium mining includes ensuring the proper handling of radioactive materials and properly disposing of waste. It also involves a major environmental justice issue - Indigenous Nations such as the Navajo living in proximity to uranium mining operations have been severely impacted by exposure to uranium via abandoned mines and mine waste out West (7). While this Bill addresses the need for a reclamation fund to clean up abandoned mines, it does not fully address their challenges and concerns. Unless another economically viable alternative is proposed, as minerals are needed for modern technology, mining will happen somewhere on Earth. The majority of mining in the West is done on federal lands. If laws are not crafted carefully and responsibly such that they do not protect US workers, the United States will not be able to compete on a global scale, mines will likely be forced to close, mining communities will suffer, and the US will be more dependent on other nations for these critical resources. While this would help the health of US residents, it could be at the detriment to countries elsewhere mining with even less responsible laws. While a “dirt tax” on earth moved could be a viable way to make sure that companies don’t do more damage than necessary, depending on the way the tax law is written it could also be harmful since a lot of material has to be moved in the exploration process before it is known whether or not there are viable mineral resources for mining. If the dirt tax is implemented, companies will be forced to divert more funds toward their tax, and away from exploration which could impact the mining supply chain. The reality of Congress Republicans and Democrats alike agree to varying extents that the Mining Law of 1872 is outdated and in need of reform. Both sides agree that some type of royalty makes sense, as the taxpayers are not receiving any benefit from hardrock mines operated on federal lands as they do for similar coal, oil, and gas operations (8). The ideas proposed in Reconciliation may not become law, but they promoted a hearing to discuss updates to the mining law and discussion of what appropriate changes should look like (8). Want to advocate? Does this Bill resonate with you? Do you want to see it become a law? Have concerns or thoughts you would like to discuss? You can email your policymakers by finding their emails at https://www.congress.gov/members?searchResultViewType=expanded or call their offices to voice your thoughts. Remember to use our Resources page for more information and guidance when reaching out! Footnotes
0 Comments
Leave a Reply. |