Change 1872 Mining Law? Move Causes a Stir

Change 1872 Mining Law? Move Causes a Stir

Reuters

Thursday 27 October 2005

Industry, activists disagree on selling federal land.

Washington - The House Resources Committee passed a budget package Wednesday that would revise the nation's 1872 mining law and end a ban on the sale of public land to mining companies. Environmental groups criticized the proposal, saying it lets mining companies buy Western land at fire-sale prices as part of a budget plan to raise funds and cut federal spending.

For the past decade, Congress has barred selling government-owned land for mining, which had been allowed under an antiquated law that set prices at just $2.50 to $5 per acre.

Republican Richard Pombo of California, chairman of the House panel, proposed allowing sales to resume for $1,000 per acre.

Democrat Tom Udall of New Mexico said that amount was not adequate. "It's a massive giveaway of public resources," he said, adding that such major reforms to an outdated mining law should not be inserted into a budget bill.

The committee rejected Udall's amendment to strike the mining changes from the bill. The panel did agree to amend the bill to limit mining in national parks and conservation areas.

Congress is trying to wrap up work this month on broad government-wide budget cuts to rein in spending and the federal deficit. Pombo says this package would raise at least $2.4 billion over five years for the federal government. It will now be reviewed by the House Budget Committee.

Industry Reaction

The National Mining Association, which represents mining companies, said it supported the mining plan. Companies would be allowed to mine in desirable areas, but for a higher cost.

"No one likes to see their cost of business increase, but the federal treasury needs the money and we need the certainty," said Luke Popovich, a spokesman for the industry group. He estimated that buying the land and paying related fees would cost the industry about $151 million over the next five years.

When the US moratorium began in 1995, Popovich said, minerals commanded lower prices.

"Since then, we've had a boom in commodity prices," he said. "We've had rapidly accelerating prices for copper, for gold, and for other minerals that we get largely from federal land."

It is because of this boom that environmental groups say the land is worth more than the $1,000 per acre rate that Pombo suggested.

Environmental Reaction

Lauren Pagel, legislative coordinator for Earthworks, said that with gold selling for more than $460 an ounce in New York and London, the $1,000 per acre rate is "pretty cheap."

"It's still way below market value for those lands. It still allows huge chunks of our national treasures to be privatized," Pagel said.

Calling the proposed legislation a "Trojan Horse," Pagel said that House members are pulling mining issues from public view by trying to fold a significant policy change into budget legislation.

"In reality, with this budget reconciliation bill, it doesn't get as much debate as a real bill to reform the mining law," Pagel said. "This is something Congress is doing to raise revenue."