1872 mining law: meet 1993 reform; the last great land giveaway.

One hundred and twenty-two years ago, Ulysses S. Grant was President, Charles Darwin continued work on his evolution theory, George Pullman introduced the "sleeper car," and the General Mining Law of 1872 was enacted. Since then, we've had 24 new presidents, evolution has become a science and the sleeper car has lost out to air travel. But the mining law remains. Passed by Congress primarily to bring law and order to a 19th century "Wild West" shooting itself apart over mining claims, the 1872 Law also sought to lure immigrants and Easterners to settle the vast stretches of public land in the West. In 1993, however, the miners are usually wealthy and the mining companies often foreign-owned, and just about everybody--except mining companies and their powerful lobby--thinks the law has long overstayed its welcome.

As incredible as it may sound, under the archaic law, miners can stake a "claim" and mine any federal land, except within National Parks and Wilderness Areas, simply by declaring that they think the land holds valuable minerals. They pay the government no rent on the land and no royalties on the minerals extracted, but they may lease the land to others and charge them rent and royalties. And if "valuable minerals" are found, the claimholder may "patent" or purchase title to the land for $5 or less an acre. Referred to as "the last of the great land giveaways," the law has sold off 3.2 million acres of public land--an area the size of Connecticut.

But the worst aspect of the law may be that it allows the managing agencies--the Bureau of Land Management (BLM) and the Forest Service--no recourse for environmental protection. Mining can take place in sensitive areas, and there is no provision for reclamation of damaged land. The result: 52 mines on the Environmental Protection Agency's (EPA) Superfund National Priorities List of the worst toxic waste sites in the country; 424,000 acres of unreclaimed federal land left by hardrock mining; and 10,000 miles of rivers polluted from mining operations, as estimated by the U.S. Bureau of Mines. Says Jim Lyon of the Mineral Policy Center in Washington, DC, "no one really knows" the whole scope of the damage. "Probably the worst problem from hardrock mining is degraded water quality from heavy metals and mine drainage. Once it starts, it's almost impossible to stop, it can severely impact a large area, and it will take generations to clean up."

Of the thousands of abandoned sites, only a handful are being restored. It's much more common for a company to abandon the mine site, file for bankruptcy to avoid future liability costs, and leave the public with the cleanup bill. The Atlas Asbestos Mine Superfund site in Fresno County, California, for example, was listed on the EPA's National Priorities List in 1984. Located on 435 acres of BLM land, it has three open pit mines and numerous piles of asbestos waste. After abandoning the site in 1979, Wheeler Properties filed for bankruptcy, leaving the public with the cleanup bill. Soil erosion on the steep slopes has prevented revegetation, and wind erosion and water runoff has caused the levels of asbestos in nearby surface water to exceed EPA standards for human health. It now threatens the drinking water in the California Aqueduct and nearby communities. In 1991, the EPA approved a $4.29 million effort to contain asbestos at the site to prevent further contamination, but the agency is still seeking responsible parties to help pay the costs.

Apart from all the destruction, lost government revenues from the law has opened some eyes. According to the Mineral Policy Center, mining operations on federal lands produce $3 to $4 billion worth of minerals each year--and the public doesn't get a cent. Royalties, which nearly every other developed country charges, would add hundreds of millions of dollars to the federal treasury.

The 5,000-acre Stillwater Mine outside Yellowstone National Park holds platinum and palladium deposits worth $30 billion. The Johns Manville and Chevron companies have jointly applied to buy the land for $20,000--less than $5 an acre. "Clearly, the American people, who own the $30 billion worth of minerals, ought to get a fair return on that," Lyon says. "And the land should not be sold," he added. "That's in violation of the Federal Land Management Act, which says that the land policy should encourage the retention of public land, not create inholdings."

In recent years, legislators have introduced bills to reform the Mining Law, only to see them blocked by industry lobbying. But the current Congress offers better hope for change. The environmental community supports a bill introduced by Representative Nick Rahall (D-WV). It calls for an eight percent royalty on gross production, abolishes patenting (meaning that all land will be retained by the federal government), and charges a $100-a-year fee per claim for companies to hold the mineral rights. It also includes strong environmental standards, such as: requiring a company to demonstrate up front that its mining will not harm the environment; giving regulators authority to stop damaging operations; establishing strong inspection and enforcement provisions; allowing citizen lawsuits to give the public the opportunity to compel enforcement and to stop bad operations; and establishing an abandoned-mine cleanup program to be funded by the royalties, permit fees and penalties.

But the Rahall bill faces stiff competition. In the Senate, Dale Bumpers (D-AR) has introduced an identical bill, which can't get by the Energy Committee. Instead, Senator Larry Craig (R-ID) has proposed a bill that the Mineral Policy Center calls "sham reform." It asks for a two percent net royalty. Lyon calls this a "full employment program for corporate accountants" that won't bring the federal treasury any money. It also doesn't provide environmental constraints or a cleanup program.

The Clinton Administration, under the aegis of deficit reduction, last spring asked for a 12.5 percent royalty on minerals extracted from federal lands, but Western Democrat Senators convinced the President to back down, and Senator Bennett Johnston (D-LA), chair of the Energy Committee, agreed to move a reform bill forward this year only if it were taken out of the budget process. He plans to bring supporters of both Senate bills into conference with the House reformers to write a final compromise version this fall.

Industry has countless arguments against real reform. They claim that royalties and expensive environmental measures will close down mining operations everywhere. They present scenarios of thriving communities turned into ghost towns, skyrocketing consumer prices and general economic disaster. But Lyon replies: "Mining has never been a sustainable industry. It's always been boom or bust. We think that the idea of reform putting the industry out of business is a red herring." The 1872 Mining Law only covers one-third of hardrock mining in the U.S. The rest is on private, state or tribal lands, where the industry has no trouble paying royalties, and companies often lease lands to each other, charging royalties ranging from five to 20 percent. Even the family of Senator Max Baucus (D-MT) gets royalties for mining on its land. Yet Baucus has told Clinton that collecting royalties from federal lands will break the industry. "If royalties are good enough for the Baucus family ranch," Lyon asked, "why aren't they good enough for the American people?"

Contact: Mineral Policy Center, 1325 Massachusetts Avenue NW, Washington DC 20005/[phone].