House votes to make hard-rock mining industry pay royalties
Measure pertains to public lands, faces Senate fight
WASHINGTON - Not long after the Gold Rush, Congress passed a law meant to settle the West by letting prospectors stake claims and mine gold, silver, and other minerals for free. It's survived essentially unchanged for 135 years.
A bill passed by the House yesterday would change that by forcing the hard-rock mining industry to pay royalties on minerals extracted from public lands. Coal mining and the oil and gas industries already do.
The bill, which passed 244 to 166, also would put new environmental controls on hard-rock mining, set up a cleanup fund for abandoned mines, and permanently ban cheap sales of public lands for mining.
Under current law public lands can be sold for mining for as little as $2.50 an acre, although Congress has enacted annual prohibitions on that in recent years.
"This is a pirate story with the public lands profiteers robbing the American people blind," said Representative Nick Rahall, a West Virginia Democrat. "The robbery of American gold and silver must stop."
Republicans objected that the royalties would amount to a tax on a struggling industry and would send jobs overseas to countries that use child labor.
The bill still needs approval from the Senate, where it faces stronger opposition. And the White House has threatened to veto the measure, saying that putting royalties on existing operations would invite lawsuits.
Republican opponents also circulated a letter contending that the bill could threaten national security by limiting the domestic availability of minerals critical to the US military like magnesium, which is used to make airplanes and missiles.
The bill would impose a royalty of 4 percent of gross revenue on existing hard-rock mining operations and 8 percent of gross revenue on new operations.
The Congressional Budget Office estimates that about $1 billion a year would be subject to the proposed royalty.
The mining industry and its supporters say the bill's royalty scheme is too high. They prefer the way it's done in Nevada, where the royalty is put not on gross revenue, but on net income after taxes and other costs are subtracted.
