Federal mining law was crafted by Nevada Sen. William Stewart (upper right), and signed into law by President U.S. Grant in 1872. Nevada politicians, most recently Sen. Catherine Cortez Masto, have helped stave off reforms to the law ever since.
It’s got a new name.
But the effort to overhaul the nation’s 150 year-old law that governs mining of hardrock and other minerals on federal lands still faces old obstacles, not least the senior senator from Nevada.
Mining reform was last seen being crushed in the now defunct Build Back Better legislation.
“The senator from Nevada, almost single-handedly in the protection of the mining industry, is trying to eliminate many of the initiatives of the committee,” Democratic Rep. Raul Grijalva of Arizona said at the time.
Grijalva is the chairman of the House Natural Resources Committee, and the champion of mining reform in the House.
The Nevada senator he was referring to was fellow Catherine Cortez Masto, the hardrock mining industry’s staunchest defender among Senate Democrats.
Tuesday, reform advocates in and out of Congress used the 150th anniversary of the General Mining Act of 1872 to highlight their renewed attempt to update the law in stand-alone legislation. But in keeping with a congressional sense of urgency for elements needed for battery manufacturing, as high gas prices and Russia’s war in Ukraine underline the need to transition from oil and gas to renewable energy sources, reform backers have rebranded the legislation. Known in past years as the “Mining Reform Act,” or the “Hardrock Mining Reform Act,” the latest iteration is dubbed the “Clean Energy Minerals Reform Act.”
Grijalva and Sen. Martin Heinrich of New Mexico have each sponsored bills that would set environmental and reclamation standards.
Their legislation also would require mining companies to clean up abandoned mines, lease the federal lands they operate on, require consultation with tribes, and – the issue that Cortez Masto has zeroed in on as a deal breaker in earlier mining law reform hearings – pay royalties for the revenue from public lands.
“We’re living in a completely different world than we were 150 years ago,” Grijalva said at a press conference Tuesday.
Under the law, miners have been able to operate “without any semblance of accountability,” Grijalva said.
Grijalva said he didn’t seek to end mining through the legislation. California House Democrat Alan Lowenthal said he and Grijalva opposed new mining, but that the bill concedes the industry’s continuation while attempting to mitigate its harms.
“The transition to a clean-energy future will inevitably involve mining,” Grijalva said. “That’s not the argument we have. But … we cannot build a 21st century clean-energy economy with a 19th century law.”
Under the House bill, new mines would have to pay a 12.5% royalty rate for operations on federal lands. Existing lands would see an 8% royalty rate. One-quarter of that royalty would go to the state where the mine is located.
The Senate version introduced by Heinrich is significantly more modest. It would create royalties of “not less than 5% and not greater than 8% based on the gross income of production on federal land,” and “would not apply to mining operations already in commercial production or those with an approved plan of operations.”
Senate cosponsors of Heinrich’s bill are Michael Bennet (CO), Jeff Merkley (OR), Ben Ray Lujan (NM), Cory Booker (NJ), Ron Wyden (OR), and Ed Markey (MA).
As the senator from the state with by far the largest dollar value of hardrock minerals produced on federal lands, Cortez Masto’s absence from the list of cosponsors is both conspicuous and predictable.
Heinrich’s royalty proposal, though considerably milder than the version in the Build Back Better bill passed by the House, would still not be palatable to Nevada’s senior senator.
“Senator Cortez Masto will continue to oppose legislation that negatively impacts Nevada’s mining industry and the over 30,000 jobs it supports,” said Lauren Wodarski, a spokesperson for Cortez Masto.
Last year West Virginia Sen. Joe Manchin, chairman of the Senate Energy and Natural Resources Committee, convened a hearing at Cortez Masto’s request to address mining reform generally, and the royalty question specifically. At that hearing Cortez Masto pushed back against any federal mineral royalty on gross income, instead joining with mining industry officials also testifying at the hearing to praise Nevada’s system for taxing mining. Instead of taxing gross income, Nevada allows generous deductions from value and then only taxes the remaining net proceeds.
Nevada’s system of mining taxation has been promoted by the industry several times over the years when Congress has taken up reform of the 1872 law. By taking the same line last year, Cortez Masto was echoing not only the industry but also the examples set by former Nevadans in Congress, including Dean Heller when he was in the House, and more notably, Sen. Harry Reid.
But creating a federal royalty on net proceeds, like every substantial reform to the mining law, has never come to pass.
Needed for transition
The most recent mining reform legislation pushed by Grijalva and Heinrich would also earmark mining royalty revenues to a new Hardrock Mine Reclamation Fund, which was created under the $1.2 trillion infrastructure law President Joe Biden signed last year, to clean up abandoned mining sites.
Heinrich Tuesday said the new dedicated funding stream for abandoned mine cleanup was the most important part of the bill.
Defunct mines can leach chemicals into the nearby water and soil, Heinrich said. He referenced the Gold King Mine wastewater spill in Colorado that turned waters in New Mexico “the color of Tang” because of heavy metals and other contaminants.
The legislation was more urgent because of the recent push to increase domestic energy, Heinrich said. Volatility in the oil and gas market that resulted from the pandemic and Russia’s invasion of Ukraine has spurred calls in Washington to produce more domestic energy.
“Isn’t it time we had a 21st century approach to mining in this country?” he said. “Especially at a moment when we are making increased efforts to create domestic supply.”
Lauren Pagel, the policy director for the environmental group Earthworks, said a transition to “a fully renewable energy future” was needed as soon as possible. Cleaning up mining was essential to reach fully renewable energy, she said.
“We cannot do that on the backs of dirty mining and mining-impacted communities,” she said. “And that’s where we’re headed right now if we don’t reform this.”
Private mining companies have extracted $300 billion of minerals from public lands, without paying royalties and while sticking taxpayers with cleanup bills, Lowenthal said.
“If the federal government is going to allow private companies to extract resources from public lands, the American taxpayer must be compensated,” he said. “Right now they are not being compensated or protected.”
Grijalva said mining would be part of a clean-energy future because metals like copper, lithium and nickel are needed for battery storage, a critical component for electric cars.
Cortez Masto has been crafting separate legislation to give tax credits to battery and rare earth magnet manufacturers to increase production of materials used in electric vehicles.
Grijalva has scheduled a hearing on his mining reform bill for Thursday at the Energy and Mineral Resources Subcommittee, which Lowenthal chairs. A spokeswoman for the House Natural Resources Committee said the panel would mark it up this year, though a schedule has not been finalized.
Heinrich’s bill has not been scheduled for consideration in the Senate Energy and Natural Resources Committee, whose members include Cortez Masto.
Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.