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Originally published Tuesday, May 12, 2009 at 10:46 AM

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Advocates say time is right to reform mining law

When Congress approved the rules governing the nation's mining operations, Ulysses S. Grant was in the White House, George Armstrong Custer was fighting Native Americans and Congress was looking for ways to encourage greater settlement of the nation's vast frontier.

Associated Press Writer

WASHINGTON —

When Congress approved the rules governing the nation's mining operations, Ulysses S. Grant was in the White House, George Armstrong Custer was fighting Native Americans and Congress was looking for ways to encourage greater settlement of the nation's vast frontier.

A lot has changed since the General Mining Law was passed in 1872, but very little has changed about the law itself. Those who want it to be modernized say this finally may be the year they get reform.

Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, D-N.M., has introduced a reform bill, and House Natural Resources Committee Chairman Nick Rahall, D-W.Va., already has held a hearing on his own legislation.

"Given the current economic crisis in which we find ourselves, the empty state of the national treasury, it's ludicrous in my opinion to allow this outmoded law to continue to exempt these lucrative mining activities - and they are making money today, make no mistake about it - from paying a fair return to the American people while at the same time sticking the taxpayers with a multibillion dollar bill to clean up after them," Rahall said.

Interior Secretary Ken Salazar, a former senator from Colorado, is a longtime advocate of mining law reform.

His spokeswoman, Kendra Barkoff, said Salazar is committed to trying to pass a bill that provides the mining industry with the kind of regulatory certainty needed to make financial investments. But he also wants to require royalties to the government, environmental protections and a cleanup fund for abandoned mines.

Attempts over the years to change the law have foundered against the political influence of the mining industry, but members of Congress say prospects for an overhaul are the best they've been in more than a decade. The 2008 election increased Democratic majorities in the House and Senate, including a crop of conservation-minded Westerners, and President Barack Obama is expected to be more sympathetic than his predecessor, who threatened to veto mining legislation.

The 137-year-old law is the legacy of a bygone era.

It still allows anyone to hammer a stake in the ground and lay claim to gold, silver and other hardrock minerals beneath federal land. It also gives preference to mining over other uses, except for specifically protected areas such as national parks and wilderness.

And until 15 years ago, claimholders could actually buy federal land for a mere $5 an acre. Several high-profile abuses finally led to a moratorium on such purchases, called "patenting," in 1994.

Unlike the coal, oil and gas industries, hardrock mining companies are not required to pay government royalties on the estimated $1 billion in minerals they extract annually. Moreover, tens of thousands of abandoned mines are scattered across the West, many of them exposing people to dangerous contaminants such as arsenic, lead and mercury.

In former mining towns such as Crested Butte, Colo., where tourism is now big business, the last thing residents want is an operating mine that might spoil the scenery, water and their main source of income. But they say the law makes it difficult to fight new mines proposed for national forests or other federal land.

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"Tourism is essentially everything for us," said John Belkin, attorney for Crested Butte, where a mining company has its eye on the molybdenum - used as a steel hardener - beneath a mountain slope that dominates the town's western vista.

He insists the town isn't opposed to mining, which is part of the region's roots.

"But there are some spots it just shouldn't be allowed, like a watershed, unless you are prepared to say to the community, 'You have to be a sacrifice,'" Belkin said.

The site being studied by Thompson Creek Metals of Denver is in the town's watershed. The company says mining claims on Mt. Emmons contain one of the world's largest and purest deposits of molybdenum.

"It's not as though somebody is going to look up and all of sudden there's going to be a mine on Mt. Emmons. This is a multiyear process," said Larry Clark, manager of Thompson Creek's Mt. Emmons subsidiary. "There are many mines that are operated in an environmentally sound manner without discharges off the property."

The biggest question mark hanging over reform efforts is Senate Majority Leader Harry Reid. Nevada, his home state, has more mining than any other.

"Mining is one of Nevada's largest industries and the largest employer in the state's rural communities," Reid said in a statement to The Associated Press. "I support responsible mining law reform that is fair to all sides and protects these important jobs."

The mining industry has contributed nearly $274,000 to Reid over the course of his career, according Opensecrets.org, which tracks political money. Nevertheless, reform proponents who have spoken to Reid said he isn't set against changes.

"He's not a die-hard, 'over my dead body' type of person," said mining law expert John Leshy, a former Interior Department solicitor general. "If there is some sort of compromise that will allow him to tell the industry in Nevada, 'You can live with this,' then it can happen."

A major sticking point is how much of a royalty to charge mining companies. Rahall's bill calls for a 4 percent royalty on existing mining operations and 8 percent on new mines. The National Mining Association says that's too high and would cost jobs.

More than 50,000 people work in metal mining in the United States.

Bingaman's bill calls for a royalty of between 2 percent and 5 percent on the value of production, minus transportation and certain other costs. The royalty would apply only to new mines.

The industry also opposes a requirement in the House bill that would allow the government to write environmental standards for mining on federal land, saying new standards would duplicate existing laws.

"We already have to comply with at least 13 or 14 federal laws, to say nothing of the laws the states themselves impose," said Luke Popovich, vice president of the National Mining Association.

The Environmental Protection Agency says metal mining accounts for 28 percent of the 4.1 billion pounds of toxics released in the U.S. in 2007, the most of any industry.

The closest Congress came to an overhaul of the mining law was 1993, when the House and Senate were unable to reach a compromise on differing bills. That effort was prompted in part by two high profile cases, one involving a Canadian mining company obtaining access to an estimated $10 billion in gold reserves in Nevada at a cost of just $10,000. The other was a cyanide spill and acid drainage from a Colorado gold mine that killed all life in the Alamosa River for miles.

"We know there needs to be mining - it's an important part of the economy, especially in rural areas - but under the 1872 mining law, there has just been too much damage environmentally, especially to water resources," said Lauren Pagel, policy director of Earthworks.

Copyright © 2009 The Seattle Times Company

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