July 28, 2007

Attack on 1872 Mining Act Flawed, Unfair to Miners


By Mark R. Welch
Retired Mining Engineer
Albuquerque Journal

With reference to the article written by Oscar Simpson purporting to represent the New Mexico Wildlife Federation in the July 12 Journal titled "Wilson Can Save N.M.'s Outdoors Again," he made some seriously misleading statements regarding the 1872 Mining Act and mining on Federal lands.

Mr. Simpson stated that the act needed updating, but in fact, it has been indirectly updated through numerous regulations and laws over the years, especially with regards to environment considerations. The Act has served this nation very well, allowing the country to develop its mineral resources that are the basis, along with agriculture, of all of the wealth of the nation.

Then Mr. Simpson stated that mining companies pay $5 per acre to stake a claim of ownership on "our public lands." In the first place, the law applies to any citizen, not just mining companies.

Secondly, there is a recording fee and annual maintenance payment of $100 per claim that is required to be paid, but the $5 per acre fee he erroneously mentions pertains to the fee to be paid at the time a patent is issued to the claimant. However, due to a Congressional moratorium, no patents have been issued since 1994.

Further, by the time a patent is issued— if ever— the miner or mining company will have spent enormous sums of money to prove up the claim to the satisfaction of the U.S. Bureau of Land Management. Mining companies routinely spend millions of dollars just to evaluate a mineral deposit, let alone develop it. When he states that public lands the size of Connecticut have been made private over the years, he fails to point out that most patents were issued in the 1800s and early 1900s at a time that the nation was growing.

Where he comes up with Congress granting a tax break of $823 million to mining companies is unknown, but it should be noted that companies or individuals who are successful in developing a mine— approximately one prospect out of 1,000 examined— pay all kinds of taxes, including income taxes, if the project is profitable, property taxes, sales taxes, employment taxes, fuel taxes, and so on.

Then Mr. Simpson makes his most disingenuous statement, where he said that "mining companies are not even responsible for subsequent cleanup of the site once the claim is exhausted" and "the taxpayer get stuck with the bill— billions of dollars."

Either Mr. Simpson did not do his homework or is intentionally misleading the reading public. Had he bothered to look at the laws and regulations pertaining to mining claims (see Title 43 CFR Parts 3700 and 3800 as well as information put out by the U.S. Bureau of Land Management), he would have noticed that there are numerous federal regulations and laws that require a miner to file a Plan of Operations with the U.S. Forest Service or USBLM, which must go into detailed information on environmental assessments or impact statements, detailed descriptions of mining operations, detailed information on protection of the environment, and, not least, detailed information on reclamation procedures.

In addition, the miner must comply with a host of laws such as the Endangered Species Act, the National Environmental Policy Act, and the Federal Land Policy and Management Act, among others. If the applicant cannot meet the permitting requirements of the Federal agencies in accordance with all of the applicable laws and regulations, an operations permit will not be issued. It is as simple as that.

It is true that we have suffered from environmental degradation from mining operations conducted in the 1800s and into the 1900s, but today's mining company is most cognizant of its responsibilities to be a good citizen and do more than its share to mitigate any environmental damage caused by mining and exploration operations.

A typical mine takes somewhere between 10 and 15 years to develop— if it is a viable prospect— from the time it is discovered and many mines routinely cost in excess of $100 million to develop. Oftentimes, a mineral property will sit idle for decades awaiting new technologies or favorable mineral prices before it becomes possible to develop. It is hard, costly and demanding work and not for the faint of heart. The citizenry should bear that in mind when we lock up millions of acres from access to mining— wilderness areas, wilderness study areas, roadless areas, national monuments etc. I enjoy wild areas as much as anyone, and some areas are truly deserving of preservation. But, from a practical standpoint, we simply cannot develop a mine overnight if we really need the minerals during a national emergency.

By the way, Connecticut has an area of 3 million acres. The USBLM administers in excess of 260 million acres subject to mining claims in 19 states, primarily in the western U.S., and the U.S. Forest Service manages another 193 million acres. Assuming Mr. Simpson is correct in his numbers, the total land historically transferred as patented claims amounts to 7/10ths of 1 percent of the USBLM/USFS-managed public lands. This is about the same as the floor of an average two-car garage being superimposed on a football field. This is not very much considering the tremendous national wealth that has been generated by mining on public lands.

Finally, the public is encouraged to visit mining operations today and see for themselves how operations are conducted, and then, if they so choose, go prospecting and stake their own claims if they find a locatable mineral deposit.

It is their right as a citizen of the United States.

Mark Welch is the former Chief Executive Officer of Nord Pacific Ltd., a New Mexico-based mining company. He retired after more than 35 years in the mining industry, both as a mining engineer and executive.