More mining options urged

WASHINGTON — Mining patents on federal land are no longer politically viable, and other options need to be offered to mining investors, a lobbyist for Barrick Goldstrike Mines told a Senate panel on Thursday.

“People don’t make those kinds of investments if they don’t have some belief that the land that they’re sitting on is going to remain under their control,” Jim Butler told the Senate Energy and Natural Resources Committee.

A federal moratorium on mining patents has continued since 1994, and a bill by Rep. Nick Rahall, D-W.Va., would make the moratorium permanent.

The Senate also is considering reforming the 1872 Mining Law although a bill has not yet been introduced.

John Leshy, a law professor at the University of California who served as the Department of Interior solicitor during the Clinton administration, said mining patents on federal land should be repealed.

In his written testimony, Leshy cited an unsuccessful effort in 2005 by then Reps. Jim Gibbons, R-Nev., and Richard Pombo, R-Calif., to lift the moratorium and ease restrictions on mining patents.

“It’s time to close the loophole,” Leshy said.

A patented mining claim generally is for land for which the federal government has granted a deed or passed its title.

Leshy suggested mining operators should pay royalties to the federal government similar to oil and gas companies that have a lease on federal land.

Butler recommended the payment of fees by mining companies to secure title to federal land.

In written testimony, Butler noted mining companies in Nevada pay a 5 percent net proceeds tax that is shared between state and county governments.

Last year, Nevada received almost $62 million in the net proceeds tax, Butler said. Overall, the mining industry paid Nevada more than $192 million in taxes.

Congress should support state regulations that work, Butler said, instead of creating a new federal program.

Butler cited the Nevada program for abandoned mines, which secured 540 hazards last year with a budget of $350,000.

“It is axiomatic that if the government takes too much of the potential profit, investors will put their dollars elsewhere,” Butler said.

Sen. Pete Domenici, R-N.M., questioned why the government should be compensated for development of minerals on federal land.

“We’re obviously dead-set on moving toward royalties of some type so long as we don’t kill the cook,” Domenici said. “If you put too much of a royalty on, you’re not going to develop (necessary minerals).”

Sen. Larry Craig, R-Idaho, said patenting means “certainty.”

“If we’re not going to use patenting anymore … then we must provide certainty, stability for these kinds of huge investments to be made.”

Dusty Horwitt, a public lands analyst for the Environmental Working Group, told the committee there has been a “frenzy” of mining claims that are encroaching on national treasures like the Grand Canyon.