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Hard Rock Mining in America. Miners get the Minerals, and the Taxpayers Get the Shaft.

How the Times have Changed

In 1872, when the business of mining consisted of men, mules, and pickaxes, the United States Government passed the Mining Act.  The main goal of this legislation was to assist in settling America’s West and to obtain the minerals that the West contained.  To incentivize the miners, the government did not demand any royalties for the extracted minerals.

That policy still stands today; mining companies, both domestic and foreign-owned, pay no royalties for all the hard rock minerals taken. Hard rock minerals include gold, silver, copper, uranium, lead, zinc, barite, molybdenum, and fluorspar.

Hard rock mining is no longer men, mules, and pickaxes; rather, it is a dirty and highly mechanized industry. The number of minerals taken today far surpasses the amounts taken in the early days. 

Getting Away with Trouble

Oil, gas, and coal miners all have to pay royalties on energy resources they extract on federal land. In 2019, the Department of Interior reported income of about $12 billion from mining fees, royalties, and land rental. That amount is mainly from oil, gas, and coal miners.  Additionally, some state governments get nominal fees from mining and drilling operations within their boundaries. 

The Department of the Interior, along with the Bureau of Land Management, the EPA, and other government agencies, have done a terrible job of holding mining companies accountable. They don’t track what amount of minerals or what dollar value is taken out of federal lands. They don’t keep watch over the financial health of the companies. They underestimate the cleanup costs and accept collateral that turns out to be worth far less than anticipated, and the companies are not held responsible. The lack of integrity among these agencies has a direct impact on tax-paying citizens. The Government Accountability Office (GAO) has written several reports that focus on how to rectify these problems. 

No one knows how much money could be gained by charging royalties, but here are some estimates: The GAO estimates that if hard rock miners paid royalties similar to oil and gas companies, it would bring in $800 million a year. Another GAO report written for Senator Udall when he was putting forth a bill to start charging royalties on hard rock miners says $300 billion worth minerals have been mined since 1872. The Nevada Current, a business newspaper, said that $26.6 billion of gold was taken out of Nevada from 2008 to 2017, so even a 5% royalty on gold would amount to $1.3 billion.

#1 in Pollution

Hard Rock mining is the number one toxic polluter in the United States. A rule enacted in 1977 mandated bonds or collateral to ensure the mining company’s ability to clean up its mine site.  President Trump eliminated the law, so companies no longer have to prove that they have the financial ability to reclaim the mining site. 

It Gets Worse…

The federal government owns 662 million acres of land in America. Since 1867, the federal government has turned over 3 million acres at $2.50 to $5.00 an acre to hard rock mining companies.

Congress has drafted legislation to correct many of these shortcomings, but the mining lobbyists always manage to beat it back.   Everything considered mining companies get the minerals, and taxpayers get the shaft.

Sources Cited:

“EPA Passes on Rule Covering U.S. Hardrock Miners’ Cleanup Costs.” Reuters, Thomson https://www.reuters.com/article/us-usa-mining-epa/epa-passes-on-rule-covering-u-s-hardrock-miners-cleanup-costs-idUSKBN1DW00J

Office, U.S. Government Accountability. “Hardrock Mining on Federal Lands.” U.S. Government Accountability Office (U.S. GAO), www.gao.gov/key_issues/hardrock_mining_federal_lands/issue_summary.

The Pew Charitable Trusts. The 1872 Mining Law: Time for Reform. The PEW Campaign for Responsible Mining, Jan. 2009, https://www.pewtrusts.org/~/media/assets/2009/01/24/mining-law-time-for-reform.pdf

United States Government Accountability Office. ABANDONED HARDROCK MINES Information on Number of Mines, Expenditures, and Factors That Limit Efforts to Address Hazards. United States Government Accountability Office, Mar. 2020, https://www.gao.gov/products/GAO-20-238