Efforts by President Obama to overhaul federal oversight of the hardrock mining industry may fall short despite bipartisan agreement that some reforms are overdue.
The president's budget blueprint would enact a new fee on hardrock mineral production to help pay for reclamation of abandoned hardrock mines. It also requires royalties from companies mining certain minerals, including gold, copper, lead and uranium.
Obama's proposal is a nod to environmentalists and other advocates who say the 1872 General Mining Act is in desperate need of an overhaul.
"Certainly we are pleased the Obama administration is taking a step in the right direction," said Jane Danowitz, public lands director for the Pew Environment Group, in a recent interview. "This is a law that basically hasn't been changed in almost 140 years."
The law allows hardrock mining companies to take minerals without paying royalties to the government. It also lets companies acquire or "patent" government land for just a few dollars an acre. There is currently a moratorium on the practice.
Nathan Newcomer, associate director at the New Mexico Wilderness Alliance, said the law "was designed to encourage Americans to go West and prosper."
"This perhaps made sense in 1872, but in 2011 it is simply irresponsible," read a recent New York Times editorial blasting congressional inaction on reforming the law.
Environmentalists say the current hardrock mining rules give mineral companies preference over other land uses like recreation and conservation. And they do not require enough from hardrock mine operators to protect the environment and reclaim abandoned mines.
"It's up to states at this point," Newcomer said.
In defense of the White House proposal to enact a reclamation fee on hardrock mining, budget documents say: "Just as the coal industry is held responsible for the actions of its predecessors, the Administration proposes to hold the hardrock mining industry responsible for abandoned hardrock mines."
Reform advocates point out that new requirements on hardrock mining companies would save taxpayers billions of dollars in cleanup costs and losses from lack of royalty payments.
"It's nice to see the Obama administration putting forth these common-sense proposals -- you would think Congress would jump on the opportunity to reform this thing," Newcomer said.
Rep. Nick Rahall (D-W.Va.), who led the reform effort in 2007, said he saw no chances of hardrock mining reform coming up during the current Congress.
"No," he said in a recent interview. "You have to look at the new chairman of the Natural Resources Committee and the still-majority leader in the other body to answer that in the negative."
The New York Times also blamed Senate Majority Leader Harry Reid (D-Nev.), whose state is among the world's top gold producing regions.
"Congress has talked for years about reforming this law only to have the effort blocked by Western senators," according to the editorial. "The Majority Leader, Harry Reid of Nevada, has long been the leading opponent."
But environmentalists say Reid has been willing to negotiate in the past.
"I'm willing to consider any proposal for mining reform that protects the mining industry, doesn't kill jobs and shares revenues with the state," Reid said in a statement provided for this story. "I will carefully study any proposal to determine whether it meets these criteria and ensures that one of the pillars of the state's economy can continue to create jobs and strengthen the economy."
Still, many lawmakers, especially Republicans, see the president's plan as a tax on the mining industry that could hurt job creation. They see new fees and taxes as the opposite of what voters called for during the midterm elections.
"The hardrock mining proposal in the budget is ... problematic," said Rep. Mike Simpson (R-Idaho), chairman of the House Interior and Environment Appropriations Subcommittee, at a hearing earlier this year with Bureau of Land Management Director Bob Abbey. "The budget would basically raise taxes on hardrock mining."
Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M), who helped lead an effort to reform hardrock mining rules in 2009, frets that there are enough Senate votes for reform.
"I think it's an important thing to do if we can get the votes for it," he said.
Industry to blame?
Advocates blame the mining industry for the lack of serious reform.
"As a result, a rare opportunity to update what is arguably the nation's most archaic regulatory structure has been lost at the expense of American taxpayers who must continue paying an ever higher bill for mine cleanup," according to an information document by the Pew Campaign for Responsible Mining on the efforts during the 110th Congress.
But Carol Raulston, senior vice president for Communications at the National Mining Association, took issue with claims the industry is against change. Producers just want lawmakers and environmentalists to understand what they're up against, she said.
Raulston said investment in U.S. mineral production has declined over the years and, as a result, the country has become more reliant on imports. She blamed the long permitting process for at least some of that investment drop.
"Almost all of the metals covered by the general mining law are sold on a world market," Raulston said. "Those prices are set twice a day. You have to be able to be competitive in your cost of production in order to attract investment."
Raulston also spoke about how difficult it can be to remove minerals from the ground. Other industry leaders echo her comments.
"Minerals are difficult to find, they are expensive to develop, expensive to mine," Stuart Sanderson, president of the Colorado Mining Association, said in a recent interview.
"It takes significant processing and refinement," Raulston said.
Obama's budget proposal includes a royalty of no less than 5 percent of gross proceeds. Raulston said the industry prefers a net proceeds formulation -- "something that will keep us competitive."
But environmentalists see the hardrock industry as wanting to perpetuate its privileged status in American law.
"They have power. They have a lot of power," Newcomer said. "They have money."
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