mining law

Grijalva’s Proposed Change to Mining Law Would Be Disastrous for America

Congressman Raul Grijalva is at it again with his proposed H.R. 2579 Hardrock Leasing and Reclamation Act of 2019 which would probably make future mining in America uneconomic. Among other things, the law would impose a 12.5% royalty on productions and eliminate valid mining claims after 20 years (read full text). The royalty is extremely punitive to an industry that already pays over 45 percent of its earnings to federal, state and local governments, in the form of taxes, fees, royalties and other assessments. Currently, the U.S. is 100% import-reliant for 18 minerals – 14 of which have been deemed “critical” by the departments of defense or interior.

The American Exploration & Mining Association (AEMA) notes that:

The sweeping changes in Rep. Grijalva’s legislation are unnecessary and a disaster in the making for the domestic mining industry and for America.

The fact is, hardrock mining is fundamentally different than oil, gas, and coal because it is much more difficult to find and develop hardrock mineral resources. This bill ignores these differences and seeks to force-fit royalty and leasing programs for coal, oil, and gas on hardrock mining. Without question, the Grijalva bill, if enacted, would substantially chill private-sector investment in exploring for and developing minerals on federal land and dramatically increase our already extensive reliance on foreign sources of minerals.

This bill poses a significant threat to our Nation’s economic security and to our defense, technology, manufacturing, infrastructure, and renewable energy sectors, all of which rely on minerals from mining. The country will suffer as high paying family-wage jobs are exported, and our rural communities will experience disproportionately severe economic hardships.

Geologist Ned Mamula (adjunct scholar in Geosciences at the Center for the Study of Science, Cato Institute) opines that:

Mining is a long-term investment process and, although two decades is a long time, some hardrock mines now take 10 years or more just to get approved. What company would be willing to invest hundreds of millions of dollars in a new mine only to see its mining claims suddenly revoked?

Remarkably, the timing of this “reform” is just as bad as the substance. U.S. demand for minerals is climbing steadily: for hundreds of defense, aerospace, electronic, energy, medical, computing, transportation and other applications. Yet, our dependence on China for minerals is at an all-time high and growing, despite increasingly tense diplomatic relations. (Read full article)

Matthew Kandrach, President of Consumer Action for a Strong Economy notes:

The taboo against hard-rock mining in the United States is nonsensical and should be abandoned. Instead, America should embrace a far wiser policy of ensuring greater access to minerals on our public lands, since it’s in our national and economic interest. This would help reduce our heavy dependence on foreign nations for minerals that are needed in the production of advanced weapons systems and a multitude of consumer technologies.

The current problem stems from America adhering to a highly duplicative and inefficient system of regulatory permits and oversight that governs domestic mining. Over all, the mining industry is struggling with a regulatory system that forces them to wait seven to 10 years to obtain a mining permit, in contrast to Canada and Australia where the process takes two to three years.

The permit system was set up during a very different era when the U.S. dominated the production and use of minerals. But those days are long past. China is now the world’s leading producer and exporter of minerals and metals, supplying many that are critical to U.S. manufacturing, our technology and energy sectors, and national defense. Our ongoing dependence is not only a potential vulnerability during a time of increased global tensions, but greatly limits our nation’s ability to capitalize on our mineral wealth. (Read more)

See also:

A Short History of Mining Law 

A Short History of Mining Law

In view of the controversies surrounding the proposed Rosemont mine south of Tucson, the proposed mine near Florence, and the Resolution mine near Superior, it is perhaps well to review the history of the rules by which we produce the minerals we need because:

If we remove metals from the service of man, all methods of protecting and sustaining health and more carefully preserving the course of life are done away with.  If there were no metals, men would pass a horrible and wretched existence in the midst of wild beasts…  Georgius Agricola, 1556

Some say that the General Mining Law of 1872 is antiquated, but curiously, they don’t feel the same way about another law of 1872 which established Yellowstone National Park.  The General Mining Law of 1872 is not antiquated, but its roots are ancient, stemming from Greek and Roman law, and continued in English and Spanish law.  The recorded laws and practices of mining extend back nearly 3000 years. Throughout this long history, certain principles remain constant: mineral rights have generally been held by governments; miners have had the right to enter land to explore for and mine minerals; and miners had to pay some kind of fee to landowners or government. The General Mining Law of 1872 maintains the thread of these practical principles and long experience.

One of the earliest comprehensive works on mining is De Re Metallica by Georgius Agricola, published in 1556, and translated by a famous mining engineer, President Herbert Hoover.  Some of the following is taken from Hoover’s footnotes to this translation.

“There is no branch of the law of property, of which the development is more interesting and illuminating from a social point of view than that relating to minerals.  Unlike the land, the minerals have ever been regarded as a sort of fortuitous property, for the title of which there have been four principal claimants:.. The Overlord [King]…, the State,…the Landowner; and the Mine Operator.  The one of these that possessed the dominant right reflects vividly the social state and sentiment of the period.  The Divine Right of Kings; the measure of freedom of their subjects; the tyranny of the land-owning class; the rights of the Community as opposed to its individual members; the rise of individualism; and finally, the modern return to more communal view, have all been reflected promptly in the mineral title.  Of these parties, the claims of the Overlord have been limited only by the resistance of his subjects; those of the State limited by the landlord; those of the landlord by the Sovereign..; while the miner, ever in a minority in influence as well as in number, has been buffeted from pillar to post, his only protection being the fact that all other parties depended upon his exertion and skill.”

The first extensive body of mining literature, including record of the first mining lawsuit, comes from the Greeks who operated mines at Mount Laurion from 700 to 200 B.C.  Minerals were the property of the State.  In the US today, mineral rights on public land and some private land are reserved by federal or state governments.  Ancient Greek miners could obtain leases to operate and had to continuously operate the mine to hold title.  This is reflected in the General Mining Law of 1872 by the annual assessment work requirement for unpatented mining claims, a requirement which was just recently changed to require that a fee be paid to the government instead of doing work beneficial to the property.  Greek miners had to pay a tribute to the State.  Today that tribute is called income tax.

“The Romans were most intensive miners and searchers after metallic wealth.”  A map of Roman conquest coincides remarkably with the metal distribution of Europe, Asia and North Africa.  Under Roman law, existing mines in conquered territory were operated by the State and also leased to public companies and individuals.  Mines discovered through exploration were operated by individuals who had to pay tithe to the State.

“In the chaos of the Middle Ages, Europe was governed by hundreds of potentates, great and small, who were unanimous on one point, …that the minerals were their property.”  This chaos gradually evolved into practical codes of mining law, the earliest of which was the charter of the Bishop of Trent in 1185.  The State still held the mineral rights but miners had the right of free entry to explore and mine.  If the land was private, the landlord was due a piece of the action.  In the US today, much government land is deemed off limits to entry and exploration

Agricola goes into great detail describing the laws and regulations for staking mining claims which had specific sizes and marking requirements similar to current law.  In his time, the unit of linear measure was the fathom (about six feet).  I mention this only because I recall examining a mine in Colorado which was demarcated in fathoms.

“A charter of King John in 1201, while granting free right of entry to the miners,…usurped the rights of the landlords, a claim which he was compelled by the Barons to moderate.”  It was not until Richard Carew’s “Survey of Cornwall” in 1602 “that we obtain much insight into details of miners’ title, and the customs there set out were maintained in broad principle down to the 19th century.”  In Carew’s time, miners were allow free right of entry on public lands and could stake a claim, but mineral rights were limited to the vertical boundaries of the claim.  The miner still had to give a tithe to the State or local baron.  The miner did not have the right of entry on private land where the landowner also held the mineral rights, but he could strike private arrangements with the owner.  This is essentially the situation today in the US.

The “apex” law first appeared in the Iglau Charter of 1249.  For you non-miners, I will explain.  Mining claims are usually located with their long dimension along the trend of a mineral vein.  The “apex” law gives the miner right to follow that vein downward even beyond the surface boundaries of the claim side lines, but not beyond the end boundaries.  This is current law in the US.

Spanish mining law was static until the middle of the 16th Century when Spain  developed codes to deal with mining in its colonies in the New World.  Spanish law incorporated the principles of the right of free entry to public and private lands, the necessity to register a claim and the right of the discoverer to exploit the mine without further specific authorization.  Unfortunately, the Spanish Crown didn’t stop there.  As rich new gold mines were discovered, the Crown imposed ever increasing royalties which became known as the “Royal Fifth.”  This resulted in decreased production at existing mines and many new discoveries were not reported at all.  Smuggling and official corruption became entrenched.  These problems were partially rectified by a new mining code in 1783 (Mining in the New World, Carlos Prieto).

In the early years of the US, miners generally followed English law and the Spanish Royal Codes of 1783.  There were some US laws passed as early as 1807 dealing mainly with lead mines and salt springs.  But things really came to a head with the California gold rush of 1848 and the Nevada silver boom of 1854.  According to the Handbook of Mineral Law by Terry S. Daley, a tremendous controversy arose “between the Federal Government and the State of California.  During this time, many schemes on both sides were proposed concerning how such mineral lands should be mined.  There were numerous proposals to tax the mines, lease mineral lands and sell permits to mine.  California miners did not want minerals to be sold or leased by the Federal Government, but instead desired that the State of California administer the disposal of minerals.  All through this period of controversy, rules and regulations proposed and established by the miners allowed a reasonable amount of stability in the mining camps.  These rules and regulations provided primarily for a system of location, specifying size of claims, location procedure and work required to hold a claim.” The result was that each mining district had its own rules. Finally, in 1866, the US Congress passed the Lode Law which was amended in 1870 to include placer claims.  These laws were based on the rules and regulations in common use by the miners.

In 1872, Congress amended the Lode and Placer acts to include protection for agricultural rights and to establish a consistent set of Federal rules.  This act became know as the General Mining Law of 1872 and, although it too, has been amended, the law still serves well because of its practicality.  Further amendments may be desirable, but wholesale revision is unwarranted.  The current law allows those who take the risk to reap the rewards.  It also helps ensure a supply of needed minerals by encouraging exploration by both large companies and individuals.

Some complain that the 1872 law does not address environmental concerns,   but it need not because mining is subject to all the general environmental laws, see list below.  Opponents of mining make much of the low statutory fee charged to transfer surface rights when claims go to patent. However, the mining industry has always been flexible on this point and has no objection to paying  appraised surface value, because even this cost is minor compared to the expense of developing  a mine.  Such a change could be effected by the Interior Department without an act of Congress, but the issue is too valuable to green advocacy groups.  Others advocate charging government royalties on production.  Royalties increase costs and decrease the amount of mineralization that can be mined at a profit.  This wastes part of the mineral resource.  The most efficient method of taxing mineral production is through corporate income tax.

The General Mining Law of 1872 embodies ancient law and time-tested practices.  It deals with the rights and interests of the various sovereign entities, much like the Magna Carta and US Constitution.  We should not lightly do away with these principles, or to put it in another way: “If it ain’t broke, don’t fix it.”

Some of the regulations that affect mining in Arizona:  Mining Law of 1872, Clean Air Act (CAA), Clean Water Act (CWA), Arizona Air Pollution Rules, Local Planning and Zoning Rules, Historic Preservation Act (SHPO), Safe Drinking Water Act (SDWA), Arizona Solid Waste Disposal Act, Mining Safety & Health Act (MSHA), Arizona Mined Land Reclamation Act, Toxic Substances Control Act (TSCA), Underground Storage Tank Laws (UST), Wastewater Treatment Plant Registration, National Environmental Policy Act (NEPA), Occupational Safety and Health Act (OSHA), Arizona Aquifer Protection Permit (APP) Rules, Hazardous Material Transportation Act (HMTA), Water Well Registration and Water Rights Permit, Resource Conservation and Recovery Act (RCRA), Federal Communications Commission (FCC) Rules, Asbestos Hazard Emergency Response Act (AHERA), Non-Community, Non-Transient Water Systems Rules, U.S. Army Corps of Engineers, Dredge and Fill Permit, Bureau of Alcohol, Tobacco, and Firearms (BATF) Rules, Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), Arizona Water Quality Assurance Revolving Fund (WQARF), Emergency Planning and Community Right-to-Know Act (EPCRA), Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), Surface Management Regulations for Locatable Mineral Operations (43 CFR 3809).

Local Politicians Against Jobs

Southern Arizona is blessed with abundant mineral resources, and cursed with a Congressional delegation and county supervisors, such as Ray Carroll, who would deny us that blessing.

Representatives Gabrielle Giffords and Raul Grijalva have introduced HR2944, the Southern Arizona Public Lands Protection Act of 2009 into the House. This bill would prohibit staking of mining claims, mineral leases, and geothermal projects on all federal land in Pima and Santa Cruz Counties (subject to pre-existing rights). This is essentially a response to the Rosemont mining venture.

Apparently, these politicians are not in favor of good jobs or economic opportunity.

According to testimony before the House Subcommittee on National Parks, Forests and Public Lands, the Steelworkers union opposes the bill. “HR 2944 is bad public policy. The bill would completely bypass the federal EIS process put in place under the National Environmental Policy Act for consideration of proposed mining and minerals operations that involve public lands. The EIS (environmental impact statement) process involves state and local agencies on a collaborating basis and works well to thoroughly examine proposed projects. Congressional intervention to enact land use and resources development policy on a county-by-county basis is a bad idea. In addition, job creation would be sacrificed in this bill. Mining plays a strong economic role and has done so for more than a century in Arizona.”

“In Arizona, the average mining job pays $60,000, which is 44% higher than the average pay in the state. Tourism and retail jobs on the other hand pay, on average, about half this amount or just over $29,000. In addition, for every new mining job, another 4 indirect jobs are created. Arizona is home to 411 mining operations that provide direct employment to about 18,480 people and another 34,360 people indirectly from mining activity occurring both in and outside the state for a total of 52,840 jobs statewide.”

The law is also poorly written and may have unintended consequences. For instance, the law would prohibit “all forms of entry, appropriation, and disposal under the public land laws.” The word “entry,” in what I think is the intended context, means “mineral entry” the terminology used for staking and registering a mining claim. But, as written, the law could be construed to prohibit cattle grazing, hunting, hiking, other forms of recreation, and use by the border patrol. The only “entry” we will see is by illegal aliens and drug smugglers.

To give you some idea of the mineral potential of Pima County and the folly of HR2944, I present below, excerpts from a 2001 publication, “Mineral Potential of Eastern Pima County, Arizona” published by the Arizona Geological Survey as Contributed Report 01-B. This report was written in response to Pima County’s Sonoran Desert Conservation Plan by The Southwestern Minerals Exploration Association, a group of local geologists (I am a co-author of the report).

Mineral production has always been viewed as an essential industry, not only to generate wealth and provide employment, but also for the array of products that are consumed by a society. Terms such as Bronze Age and Iron Age have served to demonstrate the essential role of minerals in improving a society’s standard of living. Today, in what we have come to call the Technology Age, the demand for minerals and mineral-bearing products has grown exponentially. This is not surprising, over the last four thousand years, societies with mineral technologies have flourished, while those lacking mineral resources have either conquered to take others, or have ultimately perished.

Mineral production is essential to our civilization because minerals provide the raw materials which allow our society to function. Pima County is endowed with many mineral resources, not only copper mines, but also the important products such as sand, gravel, and limestone used everyday in supporting the infrastructure of our cities. It is essential that these mineral resources, and the lands where they occur, remain available for exploration and development.

Pima County has a unique, and complex, geological history which makes it critical habitat for large copper deposits, geothermal resources, and many industrial minerals such as sand, gravel, gypsum, and limestone. This report documents known occurrences of these mineral deposits, and delineates areas with the greatest potential for future discovery of additional mineral deposits, based on existing geological and geochemical data, and upon proven methods of investigation.

Spencer R. Titley, University of Arizona Professor, wrote in 1982: “The porphyry copper deposits of southeastern Arizona and contiguous regions compose one of the richest copper metallogenic provinces on earth and perhaps the richest of seven separate porphyry copper provinces which surround the Pacific Basin. At least thirty-five separately named significant occurrences of porphyry-intrusion-related concentrations of copper occur here and the

record of discovery suggests that more will be found.” (Titley, Spencer R., 1982, Advances in Geology of the Porphyry Copper Deposits, Southwestern North America: University of Arizona Press, Tucson Arizona 560 pp.)

The first map below shows the distribution of known copper deposits in Pima and Santa Cruz Counties. The red color show outcrops of Laramide intrusives, which can be the generators of the mineral deposits. The brown shows outcrops of older host rocks. Additional potential occurs in the valleys under cover.

EPCcopperdeposits

The next map shows the mines and areas that hold additional potential for discovery in Pima County. The broad orange arcs are areas favorable for exploration and discovery of porphyry copper deposits as defined by members of the Southwestern Mineral Exploration Association. The yellow areas (e.g. G-1) are tracts permissive for the occurrence of porphyry copper deposits defined by the U.S.Geological Survey in OFR 90-276 “Preliminary Mineral Resource Assessment of the Tucson and Nogales 1 x 2 Quadrangles, Arizona.” The green areas (e.g. T-1) are tracts favorable for the presence of undiscovered mineral deposits – High Potential Tract defined by the U. S. Geological Survey in Bulletin 2083 A-K “Resource Potential and Geology of Coronado National Forest, Southeastern Arizona and Southwestern N.M.”

EPC-favorable-copper-areas

The next map shows (in blue) the geothermal potential in Pima County. This is a low temperature resource suitable for space heating and cooling for industrial parks and residential developments such as apartments, town houses, condominiums and neighborhoods composed of single-family dwellings. This type of resource is also suitable for aquaculture and greenhouse agriculture. Studies show that 30 degree C water is ubiquitous at depths of 300m and that potential exists for potential for 50- to 55 degree C water at a depth of 1,000 m.

The red area is a mercury anomaly which sits below our water recharge project in Avra Valley (does Tucson Water know about this?). Not to worry though, the mercury anomaly is 75-750 ppb Hg while ADEQ allowable residential standard is 6,700 ppb Hg. (Reference: Hahman, W. R. and Allen, T. J., 1981, Subsurface stratigraphy and geothermal resource potential of the Avra Vally, Pima County Arizona: Arizona Bureau Geol & Min. Technology, OFR 81-5).

EPCgeothermal

The American mining industry pioneered Arizona. For more than one hundred years, metal and aggregate companies have operated under the rules and regulations set out in legal frameworks.

Few anticipated that they would lose access to land for future mineral development. Viewed as a societal good, access to the land encouraged growth. The mineral products provided much needed materials for construction, trade, and local economies. Land-use planning was motivated by economic development needs, manifest in the desire for improved tax bases and infrastructure. Therefore mining plays a key role. We should not let short-sighted politicians deprive us of these benefits.

(Disclaimer: I spent my professional career exploring for and helping develop mineral deposits, and I worked for a major mining company. I have, however, no connection with Rosemont or Augusta Resources.)