Air Date: Week of January 14, 1994
Both Congress and the Senate have drafted new versions of the Mining Act. Host Steve Curwood talks to Senator Larry Craig, the chief sponsor of the Senate bill. Craig agrees that mining interests need to pay higher prices, but argues that Congressional reform costs too much and relies too heavily on Federal restrictions.
CURWOOD: As Richard Mahler reported, the differences between the two versions of the mining reform bill will be worked out by a House Senate Conference Committee. One of the major issues is money. Both chambers agree that the Federal government should no longer simply give away valuable minerals. But they disagree on the fair price. The Senate plan would charge a 2% royalty on the net value of the minerals, or about 21 cents an ounce for gold, while the House version would charge 8% of the gross, which is closer to $27 for an ounce of gold. Another big sticking point is what's called suitability. Right now, miners can patent almost any proven claim on public lands, even if a mine would ruin a scenic place or an important ecosystem. The House bill would limit that right, while the Senate bill would not. There are also differences over pollution control and reclamation of damaged land. The House would launch a Federal effort to clean up the tens of thousands of abandoned mines. The Senate version would leave cleanup efforts to the states.
The House bill's chief sponsor is Democrat Nick Rayhall II of West Virginia. The Senate effort is being led by Republican Larry Craig of Idaho. We invited both to speak with us. Representative Rahall declined our invitation, while Senator Craig came on the line from Washington.
CRAIG: Most of us who deal with mining law recognize the need for some reform. But to remember the economy is generally operating on metals and minerals. You know, we're driving cars and we're sitting in metal chairs and we're building metal houses nowadays, because nobody wants to cut trees. The question I think is, do you want a mining industry and do you want people working in it for the well-being of our economy? If you do, how much can you charge without putting people out of business?
CURWOOD: And you contend that anything higher than the 2% rate would put many, many miners out of business.
CRAIG: Well, I am saying that anything higher than 2% begins to put people out of business.
CURWOOD: Now, Senator, I want to ask you: what's your basis of having such a disparity in a royalty rate? When you look at coal it's about 8%; if you look at oil it's about 15%; natural gas is 16%, I think offshore's a little higher, 17%. Why do you call for such a much lower formula for the extraction of gold and other hard rock minerals?
CRAIG: Steve, you cannot look at one mineral and accept that as all. All costs of production are different. Our evaluation is one that was based on maximizing return without putting people out of business. It is the projection of some economists who've looked at this pretty hard that the 8% that is proposed in the House will put about 25,000 working men and women out of business.
CURWOOD: Senator, the House bill would create some 25,000 jobs, the advocates say, by having an aggressive Federal reclamation program. What about that aspect?
CRAIG: Federal jobs paid for by tax money, I'll tell you I am not that kind of an advocate.
CURWOOD: They say we pay for it out of the royalties that they will collect at the higher royalty rate.
CRAIG: That's a Federal tax that is leveled. I cannot believe the convoluted logic of a Federal legislator who says, well we're going to put 20,000 people out of work in the mining industry, but gee whiz, we're going to hire another 20,000 people to clean up the mess. Why don't we keep the people who are working, working, and hire the additional 10 or 12 thousand people to go in and do reclamation? Then you've got a net positive instead of a net zero.
CURWOOD: There are more than a half a million mine sites that have been abandoned, and many of these are quite dangerous hazards. Kids fall down them. One person, I guess, rode a motorcycle into one. How would your bill ensure that these hazards would be taken care of?
CRAIG: I don't believe, nor have I ever seen a Federal agency that can work and operate as efficiently and responsibly as a state agency. And so that's why my bill says state primacy, state responsibility. And that where there is an absence of state law, that there would be a minimal Federal standard that the states would have to come into compliance with. Then we provide the grants; we provide the stimulus money from the Federal level and from the royalty fees that come in, to help pay for these costs.
CURWOOD: Now, you say the state should do this. What about the Summitville mine in Colorado which many people say is a huge disaster of pollution? The company there went bankrupt; it's perhaps $60 million to try to clean up this mess. The bond was $4 million. That leaves taxpayers holding the bag for more than $50 million. Now the state regulations there didn't protect the people in Colorado and that watershed. What do you have in your bill that would ensure that if companies leave behind environmental disasters, that they'll be forced to pay for it and not the public?
CRAIG: Well Steve, first of all, you used the worst-case example, and where there is one worst-case there are hundreds of good cases that are working right now. You can always have a bankrupt company, no matter how much you bond. But I cannot use the logic that if the Federal government had been there, Summitville wouldn't be a problem. There are other areas where there is Federal primacy, in surface reclamation with coal, and yet we still have problems. In other words, it is not a risk-proof environment that we're working in.
CURWOOD: How much money would your bill raise for states to handle reclamation?
CRAIG: Well, I think that's hard to say. You can talk averages, and we're talking millions of dollars. it depends on the market.
CURWOOD: How about at today's price, then?
CRAIG: I don't have that figure at this moment at today's price.
CURWOOD: What about the notion of suitability?
CRAIG: Suitability is basically a simple question. When you find the metal or mineral in this location, can you mind it? Or do you allow the Federal government to say no, that's better habitat for an elk or a deer or a fish? And if you allow the Federal government that right, you've basically destroyed any new discovery or the mining industry itself. The question becomes, when you discover the metal, is how best to mine it in the most environmentally safe way, not to say you can't mine it because it's unsuitable. The environmental community would love the provision of unsuitability. If that provision is in the law, no compromise, we're back to the old law, we'll fight to not allow the reform.
CURWOOD: Thank you very much, Senator. Senator Larry Craig, a Republican from Idaho, is the chief sponsor of the Senate provision to reform the Hard Rock Mining Act.
CRAIG: Steve, thank you very much.
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