|A fair return to
the Federal Treasury
September 11, 1999
NWMA (The Northwest Mining Association) supports a 5% net proceeds royalty imposed on production from
federal public lands. A net proceeds royalty places the federal
government and the mining company on the same side of the economic
equation. An equitable royalty will provide maximum revenues over the
long term by continuing to encourage substantial investment in mineral
development and avoiding the waste of valuable mineral resources.
· NWMA supports updating the patent provisions of the 1872
Current industry proposals provide for the payment of fair market value
for the surface of the land in addition to the royalty on the minerals
mined. NWMA supports the federal government reserving a "right of
reverter" which would provide the Secretary of Interior the right
to revoke title to patented lands if the lands are ever used for
· Abandoned mine land reclamation.
NWMA supports making the claim maintenance and location fees permanent
and placing one-half of the money collected in an abandoned mine land
reclamation fund that would be distributed to state abandoned mine land
cleanup programs. We believe half of the fees collected are adequate to
cover costs reasonably associated with administering the BLM and USFS
mineral programs. We also support depositing all royalties collected
into the AML fund.
Reasonable, constructive and balanced Mining Law amendments are the best
approach to maximizing the return to the federal treasury while
preserving a critical industry essential to providing the mineral needs
necessary to sustain America's high standard of living. They are the
best approach to ending the seemingly endless debate and bringing some
much needed certainty to the process. And, most importantly, we believe
the people will see these amendments as fair to all concerned.
IV. The 43 CFR 3809 Rulemaking
Apparently frustrated that Congress would not enact legislation to
implement his personal agenda, even when Congress was controlled by his
own party, Secretary Babbitt announced that he was going to re-write the
surface management regulations (43 CFR 3809) that govern hardrock mining
activities on BLM administered lands, saying, "It is plainly no
longer in the public interest to wait for Congress to enact legislation
that corrects the remaining shortcomings of the 3809 regulations."
Since when does an unelected bureaucrat represent the public interest?
Secretary Babbitt's attempt to re-write the 3809 regulations has been
described by former Secretary of the Interior and four-term Democratic
governor of the State of Idaho, Cecil D. Andrus, as "an attempt to
"…accomplish some mining law reform through the back door."
Throughout the two and one half-year process, Secretary Babbitt has
ignored request after request from the western governors, from Congress
and from industry to identify what is wrong with the current
regulations. He has refused to consult with the states despite language
in a prior appropriations act requiring him to do just that.
Last year, the Western Governors' Association, frustrated with the lack
of cooperation from the Secretary, asked Congress to order a study by
the National Academy of Sciences (NAS) to determine the effectiveness of
the current state-federal regime for regulating the environmental
impacts of hardrock mining on federal public lands. Congress
appropriated $800,000 for this study and it is due to be released next
Secretary Babbitt published a proposed rule in February 1999 with a 90
comment period ending May 10, 1999. The proposed rule virtually ignored
the concerns of the western states and the industry. Despite numerous
requests for an extension of time and despite the fact that the NAS
study was not due out before July 31, 1999, Secretary Babbitt's response
was that he had waited long enough, that these rules were necessary to
protect the environment, and that he might consider the NAS study in a
final rule if he found it relevant. Congress responded by requiring the
Secretary to re-open the comment period for at least 120 days after the
NAS study is received.
Does this committee really believe that Secretary Babbitt intends to
consider the NAS study in the final rule? His track record is that he
has already made up his mind and Congress is, again, getting in his way.
We believe that Congress must include language in the FY 2000 Interior
Appropriations Act that prevents Secretary Babbitt from promulgating a
final rule that is inconsistent with the findings of the NAS report. We
suggest that you prohibit Secretary Babbitt from issuing a final rule
unless Congress first approves it. It is the only thing he will
Secretary Babbitt will argue that the new rules are necessary to protect
the environment. They are not. Currently, there are more than 36 federal
environmental laws that apply to mining on federal lands. Every western
state has stringent environmental laws and regulations that all mining
operations must follow. Today, comprehensive, stringent environmental
laws and regulations, modern environmental control technology and
corporate commitment combine to produce environmentally responsible
An objective examination of the facts clearly reveals that the modern
mining industry practices environmentally responsible mining. The
leaders of the mining community are fully cognizant of their
responsibilities to the environment. American society has sent a clear
message to all industries, not just mining, that environmental concerns
are important, and we have heard that message. NWMA's Statement of
Environmental Principles (attached) reflects the philosophy, and most
importantly, the actual practice of the modern U.S. mining industry.
These nine principles affirm what we in the industry know to be true,
that environmental protection is an essential
element of modern mining.
V. Does Mining Really Matter?
Why are Interior and the Clinton-Gore Administration conducting an
all-out war against the U.S. mining industry? Why are they implementing
policy after policy that is destroying the very fabric of rural America?
They act as if mining is an evil pursuit driven by corporate greed that
results in environmental damage, and, therefore, must be stopped.
Interior and opponents of mining cling to the somewhat naïve notion
that mining is not necessary. Our industry tends to counter with
statistics about the number of jobs that will be created, taxes paid,
and overall economic benefits to the local economy. All of these are
very important to be sure, but they fail to convey to our society why
mining must be encouraged if it is to succeed. All past successful
societies have encouraged mining, as will all future successful
Modern civilization began from humble agrarian origins. Over time, a few
clever people were soon able to discover the basic principles of first
copper, then bronze metallurgy. It was not long before these processes
were used to develop tools that began transforming society. But unlike
today, the people of years past never lost sight of the fact that they
were all dependent on what came from the earth for their continued
survival, as well as their newly found wealth. These fundamental
concepts are as valid today as they were in ancient times, even though
our civilization has grown so complex that it is easy to loose sight of
The basic fact is that we mine minerals because our society demands that
we do so, and that is why a profit can be made from time to time. Mining
makes everything else happen. Mining provides the strategic metals and
minerals that are essential for agriculture, construction and
manufacturing. Minerals are essential in order to satisfy the basic
requirements of an individual's well-being -- food, clothing and
shelter. Mining makes civilization, our high living standards and
today's sophisticated technologies possible. Without mining there is no
civilization, pure and simple - no art, no science, no temples.
Unfortunately, our society and our government are filled with people who
do not understand these basic fundamentals.
According to the National Research Council, one of the primary
advantages the United States possesses over it's strongest industrial
competitors, Japan and Western Europe, is it's domestic resource base.
The U.S. mining industry provides about 50% of the metals used by U.S.
manufacturing companies. During most of the 1990's, while global mineral
exploration trends are strong, U.S. mineral exploration was on the
decline. Unless this trend is reversed, significant declines and
domestic mineral production must occur as present reserves are
exhausted, and more capital, jobs and tax revenues will find a home
outside of the U.S.
Society's demand for mineral products is increasing at an increasing
rate. Meeting that demand is an international business - one in which
the United States must remain competitive with other nations for scarce
As a society we have three choices:
· We can choose not to meet the increasing demand for
mineral products. The result will be a lower standard of living for
ourselves and future generations as scarcity of mineral supplies force
prices to skyrocket and inflation to once again run rampant. The net
result will be a lower standard of living and an increase in poverty.
· We could meet the demand for increasing mineral products
by mining those minerals outside of the United States. This choice
has adverse economic and ecological consequences for our country.
Poverty is the worst polluter, for without economic health there can be
no ecological health. As a society, can we truly afford to become
dependent on other countries to supply our basic mineral raw materials?
Can we afford to do without the wealth creating investment dollars,
jobs, and taxes? A decline in U.S. mineral production will increase
reliance on foreign sources of minerals for our national defense,
increase our national trade deficit, and eliminate thousands of high
paying skilled jobs in America. If we allow this to happen, how long can
our nation remain the world's great economic engine?
· American society's third choice is to produce the
minerals we need to maintain our high standard of living in the United
States in an environmentally responsible manner. The consequences of
this decision are jobs, economic growth, and a clean, healthy
environment. We believe the choice is obvious, but before long-term
investments of hundreds of millions of dollars are going to be directed
toward the U.S. mining industry, investors must see a predictable legal
system, and a government that operates by the rule of law. Investors
must know that our government will uphold property rights as their
investments prove successful. They will not risk instant losses to
"surprise" decisions by unelected bureaucrats. We stand ready,
willing and able to work with you to ensure that mining has a long,
sound future in the United States.
Thank you for the opportunity to address you today concerning these
matters of most importance.
Respectfully submitted this 11th day of September 1999.
Executive Director For the Northwest Mining Association
10 N. Post St. #414
Spokane WA 99201