by REP Policy Director Jim DiPeso published June 25, 2002 in the Albuquerque Tribune
Imagine a property manager that allows a business to occupy floor space for free and fails to collect a sufficient cleaning deposit.
No sane property owner would put up with such lackadaisical management. Yet that’s the situation with mining on federal lands owned by all of America’s citizens. It’s time to tell our property managers to shape up and bring mining management into the 21st century.
The American people are landlords over 270 million acres of public lands open to mining claims. Current federal law allows mining companies to extract copper, gold, silver, uranium, mica, and other "hardrock" minerals from BLM and national forest lands without charge, a subsidy which distorts markets and encourages development of marginal, environmentally risky operations.
A legacy of mining has been poor stewardship of public property. The West is littered with tens of thousands of abandoned mines, many polluting rivers, lakes and groundwater with acidic runoff, lead, arsenic, cadmium and other toxins. Cleanup costs could range as high as $72 billion. In New Mexico alone, an estimated 3,000 abandoned mines are on BLM land.
Mine operators must be held to stronger reclamation standards to ensure they return public lands and water resources to their citizen owners in good condition. Royalties must be charged to ensure a fair economic return for the taxpayers and to fund cleanup of abandoned mines.
Hardrock mining on federal lands is governed by the General Mining Law of 1872. The law was passed in a bygone era, when the federal government sought to populate the remote West. Not surprisingly for 19th century legislation, the law did not impose environmental performance or mine site reclamation standards.
Mining policy reform has kicked around Congress for years. The latest effort is the Mineral Exploration and Development Act of 2002. The bipartisan bill, introduced by Reps. Chris Shays, R-CT, Jay Inslee, D-WA, and Nick Rahall, D-WV, contains numerous taxpayer and environmental protection features:
* "Patenting" would be ended permanently. Under current law, mining companies can patent, or privatize, public lands at 19th century prices of $2.50 or $5 per acre, a giveaway which smacks of socialist economics.
* Strong environmental performance standards would be imposed for new mining permits on public lands. Reclamation bonding requirements would ensure that financial responsibility for cleanup falls to mine operators, where it belongs.
* Mining permits could be denied for public lands where mining poses too many environmental risks.
* Repeat offenders – operators that habitually violate the legislation’s environmental performance standards – would be ineligible for future permits.
* Eight percent royalties on net smelter return would be collected, Hardrock mining royalties, like coal royalties that have been in place since 1977, would fund abandoned mines cleanup, ensuring that the mining industry bears a greater share of mining’s legacy costs.
Reform efforts are not a campaign to drive mineral production off federal lands. Hardrock mining is a necessary industry that provides the metals and other materials our nation needs. The economies of many rural Western communities are based on mining.
The benefits, however, don’t justify special treatment. Unless lands have been withdrawn from mineral production, the 1872 law gives hardrock mining first claim on public domain land in 19 states, even if those lands are far better suited for other uses, such as watershed protection.
If not held to strong environmental performance standards, mining can cause long-lasting harm to water and wildlife habitat – and hefty cleanup bills for the taxpayers.
A vivid example is a stretch of the Red River, north of Taos. The river is a dead zone as a result of waste slurry spills and contaminated runoff from a now-closed surface molybdenum mine on patented land. New Mexico state officials have documented more than 200 tailings spills at the site since 1965.
Reclamation costs are not cheap. Modern mines operate at enormous scales and with powerful extraction methods, such as cyanide heap leaching. Acid mine drainage is a wild card that can cause reclamation costs to skyrocket if not addressed early. The New Mexico state Environment Department has estimated reclamation bonding exceeding $800 million will be needed to restore the sites of Phelps Dodge’s Chino and Tyrone copper mines in Grant County.
In settlement negotiations for a state groundwater discharge permit, Molycorp agreed to put up $152 million to keep contaminated seepage out of the Red River. But restoring the Red River to its former glory as a blue-ribbon trout fishery remains unfunded.
Strong standards are needed because trouble is not limited to "old" mines dug and abandoned in simpler times. The Summitville mine disaster in southwestern Colorado took place between 1986 and 1992. The poorly built facility started leaking almost from the beginning. Pollution damage from leaking acids, heavy metals, and cyanide vastly exceeded the $6.7 million in reclamation bonds put up by operator Galactic Resources Ltd., which filed for bankruptcy, walked away from the site, and sent the cleanup bill to America’s taxpayers.
The federal reform bill would complement state reclamation requirements. All states with hardrock mining, including New Mexico, require reclamation bonding. But questions persist about the adequacy of current bonding requirements. In 13 Western states, unfunded reclamation liability for hardrock mines ranges up to $1 billion, according to a 2000 report co-authored by James Kuipers, an independent mining and resource consultant.
Reclamation requirements vary greatly in rigor. Some, such as Arizona, permit companies to put up corporate guarantees as a financial assurance, which can leave taxpayers holding the bag if the company goes broke. New Mexico’s reclamation law is considered one of the better programs. The state’s bonding requirements cover federal, state and private lands. Self-guarantees are not allowed. Reclamation standards are designed to restore former mine sites as self-sustaining natural ecosystems. But political influence can undercut even the most well-written state standards. A future legislature pandering to lobbyists could weaken the law.
By imposing stronger reclamation standards, federal mining reform legislation would backstop state laws. The Shays-Inslee-Rahall bill would codify federal bonding requirements and link them to clear reclamation standards, ensuring that public lands can be restored to their former uses. The legislation would require bonding with real money – cash, bonds, letters of credit, or certificates of deposit --discouraging "bad actors" harmful to the mining industry as well as the environment.
The legislation would beef up standards to protect water and other natural resources. While mines on public lands are subject to federal environmental laws such as the Clean Water Act, there is no federal statute that addresses the special risks and impacts of hardrock mining. The Clean Water Act, for example, does not apply to groundwater, a critically important resource in New Mexico.
The bill would greatly improve public lands stewardship by taking away mining’s privileged position. Permits could be denied on lands with special characteristics, such as proximity to protected areas. Never again should the nation face another Crown Butte battle, in which the taxpayers shelled out $65 million to stop development of an open pit, cyanide leach gold mine on patented land adjacent to Yellowstone National Park.
Not every public land is as special as Yellowstone or the national monuments and wilderness areas that grace New Mexico. There are many federal lands where hardrock mining is an appropriate and valuable activity that serves our nation’s interests. Oversight of mining on public lands, however, must be modernized for today’s circumstances. The privilege of doing business on the public’s lands should come with the responsibility of returning the lands in good condition to their owners.
Public lands are every American’s heritage. As population and other environmental pressures grow, public lands conservation will be increasingly important for protecting our quality of life in the 21st century and beyond.
