Colorado wasn’t even a state and Leadville’s great silver boom was still in the future when the nation’s basic mining law was enacted in 1872.
Colorado’s been a state for more than a century and Leadville has boomed and busted more than once, but the General Mining Act, signed into law by President Ulysses S. Grant, is still on the books.
It’s way past time for an update.
The law has allowed mining companies to extract an estimated $245 billion in metals without paying a dime to the taxpayers. Until a moratorium was imposed 13 years ago, mining companies could buy federal land for $5 an acre or less. (Thankfully, different rules – including royalties paid to the government – apply to coal mining and oil and natural gas extraction.)
Rep. Nick Rahall, D-W.Va., wants to bring the law into the 21st century. Like a prospector stubbornly working an unpromising claim, Rayhall has introduced reform legislation every year since 1985. Now, it looks like he may finally strike pay dirt this year or next.
The bill would impose an 8 percent royalty on the value of minerals extracted, close places like wilderness and roadless areas to mining, install additional environmental requirements and create a cleanup fund.
That last provision would be vitally important to much of the West, which has an estimated 500,000 abandoned hardrock mines, many of which continue to ooze toxic waste (cyanide, lead, arsenic, mercury – that sort of thing) decades after they closed. In Colorado, there are at least 22,000 old mines, shafts and exploration holes. An 8 percent royalty could raise $100 million a year to start making a tiny dent in the $32 billion estimated cost of a total cleanup.
The reason Rahall may be close to making a strike is that the ideal of repealing the law has gained some interesting supporters. The industry says it’s willing to work on modernizing the bill. Predictably, it doesn’t like an 8 percent royalty rate, even though prices for things like gold and uranium have soared in recent years. Even Senate Majority Leader Harry Reid of mining-dependent Nevada signals he’s flexible but that reform might not come until 2008. He dynamited previous reform plans.
Mike Kowalski, CEO of big gold buyer Tiffany & Co., says his industry wants reform. “Ultimately, this cost will make it more expensive to produce jewelry, but it is the right thing to do,” he wrote in a column recently published in a Las Vegas newspaper.
We’re looking forward to Congress erasing the General Mining Act of 1872 from the law books and moving it to the history books.
