U.S. GOVERNMENT PUBLISHING OFFICE

36–319 PDF WASHINGTON : 2019

‘‘THE LONG OVERDUE NEED TO REFORM 

THE MINING LAW OF 1872,’’ INCLUDING 

THE FOLLOWING BILL, AND OTHER RELATED MEASURES: H.R. 2579, THE 

HARDROCK LEASING AND RECLAMATION 

ACT OF 2019 

LEGISLATIVE HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND 

MINERAL RESOURCES 

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED SIXTEENTH CONGRESS 

FIRST SESSION 

Thursday, May 9, 2019 

Serial No. 116–15 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.govinfo.gov 

or 

Committee address: http://naturalresources.house.gov 
(II) 

COMMITTEE ON NATURAL RESOURCES 

RAU ́ L M. GRIJALVA, AZ, Chair 

DEBRA A. HAALAND, NM, Vice Chair 

GREGORIO KILILI CAMACHO SABLAN, CNMI, Vice Chair, Insular Affairs 

ROB BISHOP, UT, Ranking Republican Member 

Grace F. Napolitano, CA 

Jim Costa, CA 

Gregorio Kilili Camacho Sablan, CNMI 

Jared Huffman, CA 

Alan S. Lowenthal, CA 

Ruben Gallego, AZ 

TJ Cox, CA 

Joe Neguse, CO 

Mike Levin, CA 

Debra A. Haaland, NM 

Jefferson Van Drew, NJ 

Joe Cunningham, SC 

Nydia M. Vela ́zquez, NY 

Diana DeGette, CO 

Wm. Lacy Clay, MO 

Debbie Dingell, MI 

Anthony G. Brown, MD 

A. Donald McEachin, VA 

Darren Soto, FL 

Ed Case, HI 

Steven Horsford, NV 

Michael F. Q. San Nicolas, GU 

Matt Cartwright, PA 

Paul Tonko, NY 

Vacancy 

Don Young, AK 

Louie Gohmert, TX 

Doug Lamborn, CO 

Robert J. Wittman, VA 

Tom McClintock, CA 

Paul A. Gosar, AZ 

Paul Cook, CA 

Bruce Westerman, AR 

Garret Graves, LA 

Jody B. Hice, GA 

Aumua Amata Coleman Radewagen, AS 

Daniel Webster, FL 

Liz Cheney, WY 

Mike Johnson, LA 

Jenniffer Gonza ́lez-Colo ́n, PR 

John R. Curtis, UT 

Kevin Hern, OK 

Russ Fulcher, ID 

David Watkins, Chief of Staff 

Sarah Lim, Chief Counsel 

Parish Braden, Republican Staff Director 

http://naturalresources.house.gov 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES 

ALAN S. LOWENTHAL, CA, Chair 

PAUL A. GOSAR, AZ, Ranking Republican Member 

Mike Levin, CA 

Joe Cunningham, SC 

A. Donald McEachin, VA 

Diana DeGette, CO 

Anthony G. Brown, MD 

Jared Huffman, CA 

Matt Cartwright, PA 

Rau ́l M. Grijalva, AZ, ex officio 

Doug Lamborn, CO 

Bruce Westerman, AR 

Garret Graves, LA 

Liz Cheney, WY 

Kevin Hern, OK 

Rob Bishop, UT, ex officio 
(III) 

CONTENTS 

Page 

Hearing held on Thursday, May 9, 2019 ............................................................... 1 

Statement of Members: 

Gosar, Hon. Paul A., a Representative in Congress from the State of 

Arizona ........................................................................................................... 4 

Lowenthal, Hon. Alan S., a Representative in Congress from the State 

of California ................................................................................................... 1 

Prepared statement of ............................................................................... 3 

Statement of Witnesses: 

Comer, Robert D., Partner, Norton Rose Fulbright US LLP, Denver, 

Colorado ......................................................................................................... 19 

Prepared statement of ............................................................................... 20 

Questions submitted for the record ......................................................... 35 

Davis, Colin, Member, Yellowstone Gateway Business Coalition, Paradise 

Valley, Montana ............................................................................................ 12 

Prepared statement of ............................................................................... 14 

Lachelt, Gwen, County Commissioner, La Plata County, Colorado ............. 16 

Prepared statement of ............................................................................... 18 

Manuel, Hon. Edward D., Chairman, Tohono O’odham Nation, Sells, 

Arizona ........................................................................................................... 10 

Prepared statement of ............................................................................... 11 

Additional Materials Submitted for the Record: 

List of documents submitted for the record retained in the Committee’s 

official files .................................................................................................... 74 

Patagonia Area Resource Alliance, WE THE PEOPLE, submission by 

Carolyn Shafer .............................................................................................. 70 

Submissions for the Record by Representative Gosar 

American Exploration & Mining Association, Hardrock Mining 

Timeline .................................................................................................. 8 

Arizona Chamber of Commerce & Industry, Letter to Rep. Gosar, 

May 4, 2019 ............................................................................................ 7 

Chinese Resource Strategy: China is securing minerals and metals 

for which it is net import reliant .......................................................... 9 

Reuters, ‘‘Exclusive: Tesla expects global shortage of electric vehicle 

battery minerals-sources,’’ by Ernest Scheyder, May 3, 2019 ............ 6 

Slides Used During the Hearing .............................................................. 68 

(1) 

LEGISLATIVE HEARING ON ‘‘THE LONG OVERDUE NEED TO REFORM THE MINING LAW 

OF 1872,’’ INCLUDING THE FOLLOWING 

BILL, AND OTHER RELATED MEASURES: 

H.R. 2579, THE HARDROCK LEASING AND 

RECLAMATION ACT OF 2019 

Thursday, May 9, 2019 

U.S. House of Representatives 

Subcommittee on Energy and Mineral Resources 

Committee on Natural Resources 

Washington, DC 

The Subcommittee met, pursuant to notice, at 10:05 a.m., in 

room 1334, Longworth House Office Building, Hon. Alan Lowenthal 

[Chairman of the Subcommittee] presiding. 

Present: Representatives Lowenthal, Cunningham, DeGette, 

Grijalva (ex officio); Gosar, Graves, and Hern. 

Also present: Representatives Stauber and Amodei. 

Dr. LOWENTHAL. The Subcommittee on Energy and Mineral 

Resources will come to order. The Subcommittee is meeting today 

to hear testimony on the long overdue need to reform the Mining 

Law of 1872, and on H.R. 2579, we are going to hear Chairman 

Grijalva’s Hardrock Leasing and Reclamation Act of 2019. 

Under Committee Rule 4(f), any oral opening statements at hearings are limited to the Chair and to the Ranking Minority Member 

or their designee. I am going to ask unanimous consent that all 

other Members’ opening statements be made part of the hearing 

record if they are submitted to the Subcommittee Clerk by 5 p.m. 

today. Hearing no objection, so ordered. 

STATEMENT OF THE HON. ALAN S. LOWENTHAL, A REPRESENTATIVE IN CONGRESS FROM THE STATE 

OF CALIFORNIA 

Dr. LOWENTHAL. First, I would like to welcome our witnesses, 

and thank you for traveling so far today to be before us. 

The Mining Law of 1872 is one of the most obsolete laws that 

are still on the books. It comes to us from a time of the Wild West, 

when Civil War veterans would head West and try to make their 

fortunes with a pick, a shovel, a donkey, and a dream. 

But there are no more picks, shovels, or donkeys in today’s 

mining. Instead, there are earth-moving trucks weighing over 350 

tons and standing nearly three stories tall, and the dreams are 

those of CEOs in boardrooms in Vancouver, Sydney, and Santiago, 

Chile. 

In 1872, land was plentiful and cheap, and President Ulysses S. 

Grant’s goal was to give it away as fast as possible and encourage 

people to settle the West, paying little attention to the original 
2 

inhabitants of those areas. The Mining Law is designed to give 

land and minerals away for next to nothing. The operating responsibility was an afterthought, if it was even considered at all. 

The government effectively posted a sign on our public lands saying, ‘‘Free gold. Free silver. Free copper. Free land. No royalties or 

cleanup required.’’ Mining companies took advantage, extracting 

over $300 billion of precious metals from public land without paying a single cent in royalties to the American people and without 

bothering to clean up their legacy of half a million abandoned 

mines. 

I would like to introduce a little breaking news. You have heard 

it here first. This was done by President Ulysses Grant to settle 

the West, as I pointed out. This may be a surprise to everyone here 

on the panel and in the office, but the West has been settled. Yes, 

there is no doubt that the West has been settled. So, we now need 

to begin to look at what we need to do now. 

It is no surprise that mining companies do not want and oppose 

any reform. Who would want to give up a 147-year-old free ride? 

Yet, as we all know, many things have changed in the past century and a half. Hardrock mining in America now has to comply 

with the Federal Land Policy and Management Act, the National 

Environmental Policy Act, and the Clean Water Act, among others. 

But none of these laws help land managers plan for the specific 

environmental challenges that come with hardrock mining, or address the exalted status that mining has managed to maintain on 

our public lands. Half a million abandoned hardrock mines litter 

the country, posing safety threats and polluting thousands of miles 

of rivers and streams with toxic runoff. Fifty million gallons of 

toxic wastewater, the equivalent of 2,000 tanker trucks, flows out 

of hardrock mines every single day. 

Congress tackled this issue for coal mines over 40 years ago. The 

industry was asked to pay a small fee for each ton of mined coal, 

and that money goes to remediating the harmful legacy of countless abandoned coal mines. There is no similar program for cleaning up abandoned hardrock mines. That can only happen if the 

mining industry steps up and meaningfully deals with its own long 

history of pollution, just as the coal industry has done. 

There are many ways to raise that revenue, and one option 

would be a long-needed and overdue royalty on hardrock mining. 

For nearly a century, the American people have received a royalty 

for oil, gas, coal, potash, soda ash, and many other resources that 

are extracted from public lands. It should be no different for gold, 

silver, copper, or any other mineral. 

We can establish an abandoned mine land fund so that our 

public lands are safe and accessible for generations to come. We 

can reaffirm that there are places mining shouldn’t happen, where 

the impacts on public health, the environment, or places sacred to 

tribes will be too great. And we can finally get rid of this idea that 

mining is always the highest and best use of our public lands. 

The mining industry says everything is working just fine. Yet, in 

the same breath they complain that the permitting system is completely broken. I say to them, that is because there is no permitting 

system, just modern environmental laws piled on top of a creaky, 

rotting 150-year-old foundation. 
3 

They will argue that we need more mines to cut our import 

dependence or find the minerals needed to realize our clean energy 

future. But they need to acknowledge that this can’t happen and 

will not happen if they insist on creating a future for mining using 

a relic of the distant past. The Mining Law of 1872 must go. 

[The prepared statement of Dr. Lowenthal follows:] 

PREPARED STATEMENT OF THE HON. ALAN S. LOWENTHAL, CHAIRMAN, 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

First, I would like to welcome to our witnesses and thank you for traveling so far 

to be here today. 

The Mining Law of 1872 is one of the most obsolete laws still on the books. It 

comes to us from a time of the Wild West, when Civil War veterans would head 

West and try to make their fortune with a pick, a shovel, a donkey, and a dream. 

But there are no picks, shovels, or donkeys in today’s mining. Instead there are 

earth-moving trucks weighing over 350 tons and standing nearly three stories tall. 

And the dreams are those of C-E-Os in boardrooms in Vancouver, Sydney, and 

Santiago, Chile. 

In 1872, land was plentiful and cheap, and President Ulysses S. Grant’s goal was 

to give it away as fast as possible and encourage people to settle the West, paying 

little attention to the original inhabitants of those areas. The Mining Law is designed to give land and minerals away for next to nothing. Operating responsibly 

was an afterthought if it was even considered at all. 

The government effectively posted a sign on our public lands saying: ‘‘Free gold! 

Free silver! Free copper! Free land! No royalties or cleanup required!’’ 

Mining companies took advantage, extracting over $300 billion of precious metals 

from public land without paying a cent in royalties to the American people, and 

without bothering to clean up their legacy of half a million abandoned mines. 

We are no longer in the mid-19th century. And as a Californian, let me assure 

you: the West is settled! 

It’s no surprise that the mining industry opposes any reform. Who would want 

to give up a 147-year-old free ride? 

Yes, some things have changed in the past century and a half. Hardrock mining 

in America has to comply with the Federal Land Policy and Management Act, the 

National Environmental Policy Act, and the Clean Water Act, among others. 

But none of those laws help land managers plan for the specific environmental 

challenges that come with hardrock mining, or address the exalted status that 

mining has managed to maintain on our public lands. Half-a-million abandoned 

hardrock mines litter the country, posing safety threats and polluting thousands of 

miles of rivers and streams with toxic runoff. 

Fifty million gallons of toxic wastewater—the equivalent of 2,000 tanker trucks— 

flows out of hardrock mining sites every day. 

Congress tackled this issue for coal mines over 40 years ago. Industry was asked 

to pay a small fee for each ton of mined coal, and that money goes to remediating 

the harmful legacy of countless abandoned coal mines. 

There is no similar program for cleaning up abandoned hardrock mines. 

That can only happen if the mining industry steps up and meaningfully deals 

with its own long history of pollution, just like the coal industry has done. 

There are many ways to raise that revenue, and one option would be a longoverdue royalty on hardrock mining. For nearly a century, the American people 

have received a royalty for oil, gas, coal, potash, soda ash, and many other resources 

that are extracted from public lands. It should be no different for gold, silver, 

copper, or any other mineral. 

We can establish an abandoned mine land fund so that our public lands are safe 

and accessible for generations to come. We can reaffirm that there are places mining 

shouldn’t happen, where the impacts on public health, the environment, or places 

sacred to tribes will be too great. And we can finally get rid of this idea that mining 

is always the highest and best use of our public lands. 

The mining industry says everything is working just fine. Yet, in the same breath 

they complain that the permitting system is completely broken. I say to them that 

this is because there is no permitting system, just modern environmental laws piled 

on top of a creaky, rotting, 150-year-old foundation. 
4 

They will argue that we need more mines to cut our import dependence, or find 

the minerals needed to realize our clean energy future. But they need to acknowledge that this can’t happen, and that this won’t happen, if they insist on creating 

a future for mining using a relic of the distant past. The Mining Law of 1872 must 

go. 

Dr. LOWENTHAL. With that, I look forward to the testimony from 

our witnesses. And I will now recognize Ranking Member Gosar for 

his opening statement. 

STATEMENT OF THE HON. PAUL A. GOSAR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA 

Dr. GOSAR. Thank you, Mr. Chairman, and thanks for yielding 

time. And thanks to all the witnesses for being here today. 

Today, we are going to consider the Hardrock Leasing and 

Reclamation Act of 2019. This misinformation and misguided 

legislation seeks to transform the general Mining Law of 1872. 

Specifically, this bill would convert the existing mining claim system to a leasing system, and impose an 8 percent gross royalty on 

existing operations and a 12.5 percent gross royalty on new mining 

operations on Federal lands. 

While my colleagues on the other side claim that they are simply 

seeking to update an outdated statute, in fact this legislation is designed to cripple the domestic mining industry by making new and 

existing operations unprofitable. Without a doubt, this legislation 

would drive mining investment away from the United States, furthering our dependence on foreign imports and threatening the 

U.S. supply chain for countless industries and products. 

Hardrock mining is critical to our national security, manufacturing, and infrastructure sectors, and even renewable 

technologies. If you will bring up Slide 1 showing the components 

of a cell phone. 

[Slide.] 

In order to make missiles, modern weapon systems, solar panels, 

wind turbines, batteries for electric vehicles, smartphones, tablets, 

and even smart home devices, you must first mine and process 

hardrock minerals. For example, electric vehicles require large 

amounts of lithium, cobalt, graphite, and copper. Presently, the 

United States is dependent on foreign imports for each of these 

minerals. Would you please show Slide 2. 

[Slide.] 

According to the U.S. Geological Survey, the United States is 

currently 100 percent import-reliant on 18 minerals and more than 

50 percent reliant on another 30 minerals. Please push Slide 3. 

[Slide.] 

Look at the corresponding change. As you see here, we have 

greatly increased our dependency on foreign minerals, particularly 

from China, which has happened over the last two decades. In the 

previous slide, if you looked—can I go back to the previous slide— 

way down at the very bottom, it shows ‘‘rare earth.’’ This is one of 

our technology marvels that we need. It is at 2 percent that we 

were relying on everybody else. 

Now let’s go back to the previous slide. It is 100 percent. China 

dictates a whole marketplace. That is why you have seen batteries 
5 

move over to China. They dictate the whole process in this aspect. 

We are import-reliant for 14 of the 15 minerals required in most 

renewable energy technologies, and demand will soon outpace supply. Just last week at a conference here in DC, Tesla warned that 

a lack of investment in the mining sector is creating a shortage of 

key minerals needed to build electric vehicles. 

My colleagues say that the Mining Law is antiquated and that 

companies are free to mine anywhere they would like without paying their fair share. However, hardrock mining must comply with 

the same environmental statutes and regulations as all other 

industries. In fact, the general Mining Law has been amended several times to require additional environmental protections and 

establish fees for mining claims. 

In addition to state and local laws, hardrock mining operations 

must comply with at least three dozen Federal environmental laws 

and regulations, including FLPMA, NEPA, the Endangered Species 

Act, the Clean Water Act, the Clean Air Act, the National Historic 

Preservation Act, just to name a few. Each of these laws ensures 

that mining operations protect public health, safety, as well as the 

environment. 

While my colleagues are quick to claim that this industry can 

mine on our federally owned land free of charge, that is not the 

case. In Fiscal Year 2017, the industry paid $65 million in mining 

claim fees and 40 to 50 percent of all earnings in taxes, fees, and 

state royalties. 

My colleagues’ proposal to convert the current claim system to a 

leasing system would drive away investment from the domestic 

mining industry. Under a leasing system, the Federal Government 

can cancel a lease for political reasons, even after significant upfront investment has been made in exploration and before any 

resources have been recovered. 

In fact, that is actually trying to happen right now. My 

colleagues on the other side are trying to dispute a claim that has 

already been settled. Hardrock mining exploration involves significant financial risk, as it can take decades to locate a deposit that 

is economical to mine. According to the USGS, only 1 in 1,000 

potential targets for a potential operation actually become a mine. 

The average timeline from concept to discovery is 10 years, and the 

average permitting timeline is 7 to 10 years. 

Under this legislation, a company would need to negotiate 

renewal of the lease before permitting has even concluded. Given 

that the average up-front investment before mining even begins is 

$244 million, the arbitrary lease renewal requirements would undoubtedly curtail investment in any new mines. 

Because most of the $244 million is spent on environmental compliance imposing a system that encourages companies to race 

toward production under the new threat of a lease cancellation, 

that would pose a greater risk to the environment. Further, the 

royalty rates suggested in this draft legislation are designed not to 

generate fair return to the taxpayers, but to put the domestic 

mining industry out of business. Under this legislation, there 

would be no mining industry to pay for the abandoned mine 

cleanup. 
6 

At a time when we are facing shortfalls in critical minerals like 

lithium and copper, we should be focusing on streamlining the 

permitting process to bolster domestic production, not enacting 

legislation that can put the U.S.-based industry out of business. 

The foolish policies in this legislation would only further exacerbate 

our reliance on China and other nations for minerals we need for 

our economic and national security. 

Before I turn back over the microphone, I have several things 

that I want to submit for the record. We have ‘‘Mining the Future’’ 

that would be submitted into the record. We also have a summary 

from Tesla to be submitted into the record. 

Dr. LOWENTHAL. So ordered. 

Dr. GOSAR. I also have a letter from the Arizona Chamber of 

Commerce to hand out. This would have an impact of $4.29 billion 

and 44,000 direct and indirect jobs will be associated with impact 

because of this bill. I would like to have that submitted for the 

record. 

Dr. LOWENTHAL. It will be submitted for the record. So ordered. 

Dr. GOSAR. I would like to have the timeline in regards to what 

it takes, a hardrock mining timeline from before production, to be 

placed in the record. 

Dr. LOWENTHAL. So ordered. 

Dr. GOSAR. I also have ‘‘China Resource Strategy: The Extortive 

Aspect,’’ in which China ‘‘One Belt, One Road’’ is nominating all 

resources around the world and where they are at for the record. 

Dr. LOWENTHAL. So ordered. 

Dr. GOSAR. I thank the Chairman and yield back. 

[The information follows:] 

Submissions for the Record by Rep. Gosar 

Exclusive: Tesla expects global shortage of electric vehicle battery 

minerals-sources 

By Ernest Scheyder 

Reuters 

May 3, 2019 

WASHINGTON (Reuters)—Tesla Inc expects global shortages of nickel, copper and 

other electric-vehicle battery minerals down the road due to underinvestment in the 

mining sector, the company’s global supply manager for battery metals told an 

industry conference on Thursday, according to two sources. 

The company, a major minerals consumer, has rarely talked publicly about its views 

on the metals industry. Copper, nickel, lithium and related minerals are key 

components used to make electric-vehicle batteries and other parts. 

Sarah Maryssael, Tesla’s global supply manager for battery metals, told a closeddoor Washington conference of miners, regulators and lawmakers that the 

automaker sees a shortage of key EV minerals coming, according to the sources. 

According to a Tesla spokesman, the comments were industry-specific and referring 

to the long-term supply challenges that may occur with regards to these metals. 

The copper industry has suffered from years of underinvestment, and it is now 

working feverishly to develop new mines and bring fresh supply online as the electrification trend envelops the global economy. Freeport-McMoRan Inc, the world’s 

largest publicly traded copper producer, is expanding in the United States and 

Indonesia. 

Electric cars use twice as much copper as internal combustion engines. So-called 

smart-home systems—such as Alphabet Inc’s Nest thermostat and Amazon.com 

Inc’s Alexa personal assistant—will consume about 1.5 million tonnes of copper by 

2030, up from 38,000 tonnes today, according to data from consultancy BSRIA. 
7 

All that will make the red metal—and other minerals—scarcer commodities, which 

worries Tesla. 

Maryssael added, according to the sources, that Tesla will continue to focus more 

on nickel, part of a plan by Chief Executive Elon Musk to use less cobalt in battery 

cathodes. Cobalt is primarily mined in the Democratic Republic of the Congo, and 

some extraction techniques—especially those using child labor—have made its use 

deeply unpopular across the battery industry, especially with Musk. 

Maryssael told the conference, hosted by commodity pricing tracker Benchmark 

Minerals Intelligence, that there is ‘‘huge potential’’ to partner with mines in 

Australia or the United States, according to the sources. 

Australia late last year signed a preliminary deal with the United States to support 

joint research and development of minerals deemed critical to the U.S. economy. 

The conference, attended by more than 100 people, featured speakers from the U.S. 

Department of State and Department of Energy, as well as Standard Lithium Ltd, 

ioneer Ltd and other companies working to develop U.S. lithium mines. 

(This story corrects Tesla executive’s title to global supply manager for battery 

metals instead of head of minerals procurement, paragraph 1.) 

ARIZONA CHAMBER OF COMMERCE & INDUSTRY, 

PHOENIX, AZ 

May 4, 2019 

Hon. PAUL GOSAR, Ranking Member, 

House Subcommittee on Energy and Mineral Resources, 

1324 Longworth House Office Building, 

Washington, DC 20515. 

Dear Ranking Member Gosar: 

We write to you today to express our concern regarding the Hardrock Leasing and 

Reclamation Act of 2019, as drafted. The mining industry in Arizona has a long and 

proud history, delivering significant economic growth since before we became a 

state. In recognition of this important contribution, our state flag even features a 

copper star. 

The Arizona Chamber of Commerce and Industry advocates in support of freemarket policies that stimulate economic growth and prosperity for all Arizonans. We 

believe that to maintain a strong economy, Arizona must attract and develop businesses in diverse industry sectors. The Chamber supports policies that improve 

Arizona’s economic vitality, retain existing businesses, and spur new business 

growth and job creation. 

Mining continues to play an important role in the continued economic growth and 

development of Arizona’s future. The total economic impact of the hard rock mining 

industry in Arizona is $4.29 billion and creates nearly 44,000 direct and indirect 

jobs. Further, the total state and local taxes generated by mining companies and 

their employees in the state is $482 million, with even more tax revenues going to 

the federal government. 

As one of the most regulated industries in the United States, hard rock mining 

is subject to a myriad of federal and state environmental regulations governing the 

initiation, operation, and cleanup of mine sites. We support this existing and rigorous framework because it promotes a safer mining industry and helps to protect 

the people of our state and its remarkable treasures. However, duplicative and onerous regulatory burdens do not improve outcomes, but rather result in chilled 

economic investment, fleeing industries, and significant job losses. 

While we seek to ensure an appropriate regulatory balance between protecting 

Arizonans and supporting new and existing economic growth, we oppose targeted 

legislative proposals that would imperil longstanding and important industries such 

as mining. Inversely, we support legislative efforts that promote responsible governance and wise regulation. 

Sincerely, 

GLENN HAMER, 

President and CEO. 
8 

Hardrock Mining Timeline 

American Exploration & Mining Association 

Hardrock Mining 

Timeline: Before 

Production 

Hardrock Mining 

Timeline: Before 

Production 
9 

Chinese Resource Strategy 

Dr. LOWENTHAL. Thank you. I am now going to ask unanimous 

consent for Congressman Amodei and Congressman Stauber to sit 

on the dais and participate in this morning’s hearing. Hearing no 

objection, it has been so ordered. 

I will now introduce today’s witnesses. First we have the 

Honorable Edward Manuel, Chairman of the Tohono O’odham 

Nation; next we have Mr. Colin Davis, owner of Chico Hot Springs 

Resort and a member of the Yellowstone Gateway Business 

Coalition; next we have Ms. Gwen Lachelt, County Commissioner 

of La Plata County, Colorado; and finally, Mr. Robert Comer, 

partner at Norton Rose Fulbright. 

Let me remind the witnesses that they must limit their oral 

statements to 5 minutes, but their entire statement will appear in 

the hearing record. 

When you begin, the lights on the witness table in front of you 

will turn green. After 4 minutes, the light will turn yellow, and 

then your time will expire when the red light comes on 1 minute 

later. I will ask you to please complete your statement at that time. 
10 

I will also allow the entire panel to testify before questioning the 

witnesses. 

Let’s begin. The Chair now recognizes Chairman Manuel to 

testify. 

STATEMENT OF THE HON. EDWARD D. MANUEL, CHAIRMAN, 

TOHONO O’ODHAM NATION, SELLS, ARIZONA 

Mr. MANUEL. Good morning, Chairman Lowenthal, Chairman 

Grijalva, Ranking Member Gosar, and distinguished members of 

the Subcommittee. My name is Edward D. Manuel, and I am 

Chairman of the Tohono O’odham Nation, a federally recognized 

tribe with more than 34,000 members located in southern and 

central Arizona. 

As the Subcommittee is likely aware, mining has caused much 

turmoil throughout Indian Country. Mining has generated untold 

amounts of pollution, destroyed natural resources, and caused untold amounts of healthcare issues. These problems have been aided 

by the 1872 Mining Law. It is time for reform. 

The 1872 Mining Law has adversely affected the Tohono 

O’odham Nation in many ways. I would like to address three today. 

First, our mineral resource program oversees Freeport-McMoRan 

Mine in the northern part of the reservation as well as a historical 

mine located on our reservation near Tucson. These operations 

were permitted under an old system, where mining companies 

could claim minerals underneath our lands without our consent. 

The 1872 Mining Law has no environmental standards, so these 

mines were allowed to generate pollution that impacted our lands 

and waters. The Freeport-McMoRan Mine has generated pollution 

that has infiltrated the underground aquifer. The pollution is such 

that the U.S. Environmental Protection Agency has designated it 

as an alternative Superfund Site. 

The Asarco Mine was able to operate from 1957 to 2001 without 

a mine plan of operation. It took years of legal wrangling from the 

Nation to be able to better assure environmental protection in and 

around the Asarco Mine. If the proposed reforms were in place 

when the mine started, we could have alleviated many of these 

heartaches. 

Second, the current system has divided mineral rights throughout our reservation lands in the United States among a patchwork 

of patented, unpatented, public, and allotted lands. The patented 

mining claims in particular are a great source of pain for the 

Nation. There are dozens of patented mining claims throughout the 

Nation. 

This makes pockets of land throughout the Nation that we do not 

have control of. As a result, we still devote some of our financial 

and administrative resources to buying back mineral rights 

privatized under the antiquated statute. If the proposed reforms 

were in place, it is likely the Nation would not have lost so much 

control of its land. 

Finally, the 1872 Mining Law threatens our natural resources 

near the reservation. Hudbay is seeking to open the Rosemont 

Mine in the Santa Rita Mountains outside of Tucson. The U.S. 

Forest Service approved the mine without meaningful tribal consultation. Instead, the Forest Service ignored its authority to 
11 

protect cultural resources on public lands where there was no discovery of a valuable mineral deposit. Again, if the proposed reforms 

were in place, we would have had a seat at the table to allow our 

concerns to be meaningfully considered. 

Reform of the 1872 Mining Law will help prevent the pollution 

of our lands and waters by providing an independent, dedicated 

funding source for the clean up of abandoned mines. Revenues from 

this reclamation fee could be distributed to our mining or mineral 

resource program and potentially used to employ our Nation’s 

members, not just in mining operations but also in reclamation 

projects. 

It will also permanently end patenting. This privatization of 

minerals underneath our reservation provides just another way to 

take our lands from us. Most importantly, this reform respects 

tribal sovereignty with the consultation process, where Federal 

agencies received input from tribes. 

But I must make clear that this will be for naught if the Federal 

agencies do not proactively take steps to avoid and minimize the 

impacts to cultural resources. Finally, this reform clarifies the 

authority of both tribal governments and the Federal Government 

to balance mining with other competing land uses. 

Thank you again for the opportunity to testify before you. For the 

above reasons, I respectfully ask for your support of this important 

mining reform legislation. Thank you. 

[The prepared statement of Mr. Manuel follows:] 

PREPARED STATEMENT OF THE HONORABLE EDWARD D. MANUEL, CHAIRMAN, TOHONO

O’ODHAM NATION OF ARIZONA

INTRODUCTION

Good morning Chairman Grijalva, Chairman Lowenthal, Ranking Member Gosar, 

and distinguished members of the Subcommittee. My name is Edward Manuel and 

I am the Chairman of the Tohono O’odham Nation, a federally recognized tribe with 

more than 34,000 members located in southern and central Arizona. Our traditional 

lands span across the United States/Mexico border from Sonora to Phoenix, west to 

the Gulf of California and east to the San Pedro River. As the Subcommittee is 

likely aware, mining has caused much turmoil throughout Indian Country. Mining 

has generated untold amounts pollution, destroyed sacred sites and caused untold 

amounts of sickness. These problems have been aided by the 1872 Mining Law. It 

is time for reform. 

The 1872 Mining Law has adversely affected the Tohono O’odham Nation in many 

ways. I would like to address three today. First, our Mineral Resources Program administers operations at a Freeport McMoran mine in the northern part of our 

Reservation, as well as an ASARCO mine located on our Reservation near Tucson. 

These operations were permitted under an old system, where mining companies 

could claim minerals underneath our lands without our consent. The 1872 Mining 

Law has no environmental standards and so these mines were allowed to generate 

pollution that impacts our lands and waters. The Freeport McMoran mine has generated pollution that has infiltrated the underground aquifer. The pollution is such 

that the U.S. Environmental Protection Agency has designated it an Alternate 

Superfund Site. The ASARCO mine was able to operate from 1957–2001 without a 

Mine Plan of Operation. It took years of legal wrangling for the Nation to be able 

to better assure environmental protections in and around the ASARCO mine. If the 

proposed reforms were in place when the mines started, we could have alleviated 

much of this heartache. 

Second, the current system has divided mineral rights throughout our reservation 

lands in the United States among a patchwork of patented, unpatented, public, and 

allotted lands. The patented mining claims in particular are a great source of pain 

for the Nation. There are dozens of patented mining claims throughout the Nation. 

Since owners of patented mining claims can put the land to ANY use, this makes 

pockets of land throughout the Nation that we do not have control of. As a result, 
12 

we still devote some of our financial and administrative resources to buying back 

mineral rights privatized under this antiquated statute. If the proposed reforms 

were in place, it is likely the Nation would not have lost control to so much of its 

land. 

Finally, the 1872 Mining Law is currently causing issues with sacred sites near 

the Reservation. Hudbay is seeking to open the Rosemont Mine in the Santa Rita 

Mountains outside of Tucson. The Nation is currently in litigation with the U.S. 

Forest Service over the proposed mine. The litigation is centered around the fact the 

Forest Service, with no meaningful tribal consultation, assumed away its authority 

to protect cultural resources on public lands where there was no discovery of a valuable mineral deposit. Again, if the proposed reform were in place, we would have 

a seat at the table to allow our concerns to be meaningfully considered. 

Reform of the 1872 Mining Law will help prevent the pollution of our lands and 

waters by providing an independent dedicated funding source for the cleanup of 

abandoned mines. Revenue from this reclamation fee could be distributed to our 

Mineral Resources Program and potentially used to employ our Nation’s people, not 

just in mining operations, but also in reclamation projects. 

It will also permanently end patenting. This privatization of minerals underneath 

our reservation provides just another way to take our lands from us. Most importantly, this reform respects tribal sovereignty with a consultation process where 

Federal agencies receive input from tribes. But I must make clear that this will be 

for naught if the Federal agencies do not take into meaningful consideration this 

input received by tribes and proactively take steps to avoid and minimize impacts 

to cultural resources. Finally, this reform clarifies the authority of both tribal 

governments and the Federal Government to balance mining with other competing 

land uses. 

Thank you again for the opportunity to testify before you. For the above reasons, 

I respectfully ask for your support of this important mining reform legislation. 

Dr. LOWENTHAL. Thank you, Chairman Manuel. 

The Chair now recognizes Mr. Davis to testify for 5 minutes. 

STATEMENT OF COLIN DAVIS, MEMBER, YELLOWSTONE 

GATEWAY BUSINESS COALITION, PARADISE VALLEY, 

MONTANA 

Mr. DAVIS. I would like to thank the Chairman and the entire 

Committee for inviting me to speak today on behalf of the urgent 

need to reform the 1872 Mining Law in order to protect our 

Nation’s resources, our free competition, and above all, our communities. I have had the privilege of testifying before this Committee 

in 2018 while I was fighting for my own home, my own way of life. 

Today, I feel I am doing the same for my country. 

I sit here today as a founding member of the Yellowstone 

Gateway Business Coalition, also as a business owner and a proud 

steward of Montana’s Paradise Valley. Not unlike Yellowstone 

National Park, the Paradise Valley is one of God’s greatest creations. From the majestic mountains and the flowing river to the 

thriving ranches, our outdoor lifestyle is clearly abundant. That is 

where my wife, my daughters, and I, we hike, we hunt, we fish, 

we recreate. My daughter is here today; she can testify to all of 

those. 

More importantly, it is the gateway to Yellowstone National 

Park, which draws visitors from around the country but also, as 

you know, from around the world. And it drives our local economy. 

Paradise Valley is as fruitful for commerce as it is for recreation. 

Our family business, Chico Hot Springs Resort, has thrived for 120 

years, primarily thanks to the wonders of the surrounding landscapes. Our family works extremely hard, and we take immense 
13 

pride in preserving the springs and our legacy, and we love to 

share them with others. It is hard work and independence that are 

a way of life, but it is also a Montana ethic and a Montana way 

of life. 

The other businesses surrounding Yellowstone are equally committed to preserving this place. To that end, over 400 businesses 

and stakeholders banded together in a successful effort to fight one 

of the greatest threats our region had ever faced. We stood together 

to prevent two industrial-scale gold mines from ripping apart our 

valley, our land, our life, and our businesses. And it was all being 

done without giving our community a say in the future of these 

lands, in the future of our own backyard. 

We formed this coalition based on three principles. It was formed 

on pro-business, pro-mining, and pro-property rights. We support 

development, including mining, when it is done right and it is good 

for our community. When it is not done right, it should be our right 

and is our right to oppose it. 

The mines would have had a dramatic and negative impact on 

our already flourishing regional economy. It is important to underscore we are not anti-mining, and this is one of our core principles. 

We understand the West is rich in extractable minerals, which can 

be vital to parts of the economy. Our membership includes miners. 

Mining, like all industries, like my own, can be done well or it can 

be done poorly. 

We also believe in property rights. That being said, mining, even 

on public lands, can unjustly damage private business interests. 

We, as the public, should have a loud, loud voice in what happens 

to our public lands, especially when they are local. 

Our principles are consistent with individual liberty and free 

enterprise, which our Nation values so highly. The tenet of free enterprise should give us a voice in managing, not wasting, these 

natural resources. What I am sharing with you is nothing new, but 

our community chose to stand and fight together. It is why our region is now protected from industrial-scale mining via the Gateway 

Protection Act, which passed in a recent public lands package. It 

was no easy feat. 

Our coalition spent over 4 years, money we did not have, money 

we could not afford, and countless hours away from our homes and 

our families, simply to fight foreign corporations that stood to profit 

from legal loopholes in our own law. And it would have been at our 

expense. Fortunately, we were successful. But many communities 

and businesses across the West are facing similar fights. 

Today’s problems with the 1872 Mining Law were not always 

problems. In 1872, it made sense to encourage Americans to go 

West and incentivize them to dig. But today it really does not. The 

world has changed dramatically in 147 years, but this law simply 

has not. 

The law gives hardrock mining a very unfair advantage in multiple ways. It creates externalities and stifles competition. It gives 

mining companies a free pass to mine without paying royalties that 

other extractive industries, such as coal and oil, have to pay. The 

law, especially, declares mining the best use of public lands with 

zero cost-benefit analysis. This special treatment frustrates fair 

competition. Finally, hardrock mining does pump more pollution 
14 

than any other source, according to the EPA. This means the 

industry placing the biggest boot on the taxpayer’s back also leaves 

the biggest footprint on the land. 

The way forward, to me, is clear and it is simple. Stop subsidies. 

Make companies pay royalties. Ensure companies pay for cleanup. 

And above all, let land managers and local communities choose the 

true best use of those public lands. 

In conclusion, I would like to say that while it was a real honor 

to be one of the leaders of the Yellowstone Gateway Business 

Coalition and an honor to win this fight, I would have much rather 

been at home running my own business and spending the last 4 

years with my family. 

I hope Congress can find the same bipartisan path it did with 

the lands package in updating this law. Our lives, our businesses, 

and our communities should be ours to control and care for. Thank 

you very much. 

[The prepared statement of Mr. Davis follows:] 

PREPARED STATEMENT OF TESTIMONY OF COLIN DAVIS, MEMBER, YELLOWSTONE

GATEWAY BUSINESS COALITION

INTRODUCTORY REMARKS

Thank you for inviting me back here to speak on the urgent need to reform the 

1872 mining law in order to protect our nation’s most valuable resources, our 

commitment to free and fair competition, and our millions of small businesses and 

communities living adjacent to public lands. While I came here advocating for my 

home in 2018, I’m advocating today on behalf of my country. 

HOW AN OUTDATED LAW NEARLY DESTROYED ONE OF GOD’S GREATEST CREATIONS AND

HUNDREDS OF SMALL BUSINESSES

I stand before you as a small business owner, a community leader, and a proud 

steward of one of God’s greatest creations—Montana’s Paradise Valley. Paradise 

Valley is indeed paradise—the kind that we ourselves cannot make, but can certainly enjoy. From majestic mountains and cottonwood glades, to thriving farms and 

ranches, the Valley offers commercial and recreational opportunities beyond number. My family and I have religiously hunted, hiked, and fished through the seasons 

of our dynamic landscape for generations, as my daughter who’s here today can tell 

you. The Valley is also the doorstep of the Yellowstone National Park, through 

which Americans from across the country, and tourists from across the world, come 

to marvel at the beauty of our national treasure. 

Paradise Valley is as fruitful for commerce as it is for recreation, when done right. 

Our family business, the Chico Hot Springs Resort, has thrived thanks to the wonders of the land it sits on. We take pride in presenting the hot springs to others, 

and we work hard to preserve the springs and our historic resort in the state we 

received them. 

Hard work and independence are a way of life that has sustained our region for 

generations. Small businesses in and around Yellowstone are so committed to preserving this way of life that over 400 regional businesses from across the political 

spectrum came together to fight the greatest threat our region has ever faced. The 

Yellowstone Gateway Business Coalition formed to prevent two proposed gold mines 

from ripping apart our land, our views, and our generations-old businesses, without 

giving any of us who actually live here a say in how we wanted our land used. 

The coalition formed with three simple principles, and we still hold these 

principles today: 

• Number 1: We are pro-business. And I can tell you that pursuing short-term 

profit over long-term gain is a great way to go bankrupt. That is why we support development, including mining, when the development is good for 

business, and we oppose it when it’s not. The proposed gold mines, at commercially viable scale, would have hurt the economic prospects of thousands 

of Montanans, so our coalition opposed them. 
15 

• Number 2: In case this needs repeating, we are not anti-mining. Our group 

includes members who are themselves miners. Mining, like all forms of 

industry, can be done well, or done poorly. It can produce a net gain or a net 

loss. Mining at the front doorstep to Yellowstone is a quick way to destroy 

both resources and the jobs of thousands of people whose businesses depend 

on them. Saying ‘‘not here’’ does not mean ‘‘not anywhere.’’ 

• Number 3: We believe in the sanctity of private property rights and we reject 

any policy that infringes on those rights. Mining that damages private 

business interests and property values is unjust, and the community and 

businesses who will bear the brunt of the impact from mining should have 

a say in whether and how the mining happens. Private landowners simply 

cannot be saddled with the risks and costs of hardrock mining without having 

any say in the matter. 

These three principles are consistent with the principles of individual liberty and 

robust enterprise that undergird our nation and our economy. You don’t have to be 

an environmentalist to agree that giving away public resources so that private corporations can profit at the expense of the public is both foolish and immoral. The 

net cost of mining gold in Yellowstone is so staggeringly high that it is hard to think 

anyone ever put the proposition through a balance sheet. 

SPARING FUTURE GENERATIONS THIS FIGHT

Inclusion in Public Lands Package 

I’m not telling you all anything new. We all agree on the three principles I just 

shared. Both parties agree that mining on the doorstep to Yellowstone would be a 

terrible idea, and that’s why our valuable region was permanently protected from 

mining under the public lands package passed this February. But reaching that 

common-sense conclusion wasn’t a simple matter of me or any other resident of 

Paradise Valley explaining to you the huge net loss of mining there. It wasn’t the 

result of a fair, transparent process in which the people who actually live in an area 

are consulted about how they’d like to use it. Instead, we had to take huge amounts 

of time, energy, and money away from our businesses and our families in order to 

protect them from outside forces. 

Our coalition spent 4 years spreading the word that America was about to lose 

one of its greatest treasures for good, all thanks to an outdated law and unaccountable foreign corporations. The corporation that wanted to build a gold mine above 

Chico was not family-owned, not regional or local, not even American. Yet it stood 

to benefit hugely from a loophole in U.S. law, at the expense of our entire nation 

and especially my community. And my story is just one of many. Small business 

owners across the West are facing the same fight we did, and most of them do not 

come out on the other side with their communities and livelihoods intact. 

Images and numbers capture the devastating effects of hardrock mining on the 

towns and businesses in its vicinity: the mustard-yellow Animus River in Colorado, 

swollen with 3 million gallons of contamination after the Gold King Mine disaster; 

the $30,000 per day cost of treating contamination from the Summitville Mine, estimated to reach at least $170 million; the 40 percent of all watersheds in the West 

that are contaminated from mining alone. Mining is spilling its deadly effects across 

our country at an ever-expanding rate and an ever-expanding cost. Communities 

should have the right to ‘‘say no’’ to corporations that would cause these impacts 

in their backyards. 

Need for 1872 Reform 

The problems with the existing 1872 mining law are not hard to spot. In 1872, 

allowing people to mine public lands without paying a penny in royalties was designed to motivate individuals to move West, and it worked. But while this may 

have made sense more than a century ago, this massive mining subsidy clearly is 

not working anymore—at least not for the American people. 

There are at least glaring problems with the 1872 mining law that Congress 

should fix. logical fallacies of this law are (1) its fiscal inadequacy, (2) its lack of 

cost-benefit analysis, and (3) hardrock mining’s disproportionate contribution to 

environmental expenses. 

1. The 1872 law declares hardrock mining the ‘‘highest and best use’’ of public 

lands without accounting for other possible uses, or for the uses of adjacent 

private lands. Again, this special treatment afforded hardrock mining companies comes at the expense of local communities, who have no input into the 

development of their public lands for this purpose. 
16 

2. The 1872 law gives mining companies a free pass to mine Federal lands without requiring them to pay the standard royalties that other extractive 

industries, like coal, oil, and natural gas, pay for their profit. 

3. Finally, hardrock mining pumps more toxic pollution into our lands than does 

any other source, according to the Environmental Protection Agency. This 

means that the industry placing the biggest boot on the back of our taxpayers 

is also leaving the biggest footprint of pollution on the lands it claims. In 

Montana, the shameful legacy of irresponsible hardrock mining on public 

lands is still being felt—in our waterways and our pocket books. 

Fixing the 1872 Mining Law is as easy as identifying its flaws. Simply apply the 

same standards to hardrock mining that we do to all other mining industries. 

Require hardrock mining companies to pay royalties and reclamation fees, so that 

taxpayers get their fair share of profit from mining on public lands. Require mining 

companies to pay for the cleanup of their operations, rather than leaving taxpayers 

to foot the bill. And most importantly, give communities the opportunity to help 

choose the true best use of their lands, rather than letting foreign corporations 

decide for them. 

Beyond these immediate fixes, an additional step is needed to help protect 

communities from hardrock mining. While other extractive industries have to meet 

environmental standards, there is currently no direct statutory authority for 

environmental protection under the 1872 law, and existing environmental laws are 

clearly not ensuring that mining is done responsibly. Federal land managers must 

be given clear regulatory authority over reclamation of mining sites, or else cleanup 

will continue to be no one’s job and taxpayers’ burden. 

Taxpayers are subsidizing one of the most lucrative and most damaging industries 

in the nation for no reason other than an outdated law. We cannot let sheer inertia 

leave our laws in the 1800s, while our economy and population have 21st century 

needs. 

CONCLUSION

While it has been an honor and a privilege to work with my colleagues on the 

coalition, I would much rather be running my business. That is what I chose to do 

16 years ago and hope to continue doing without being threatened by outdated laws. 

I hope Congress takes bipartisan action to update this law and allow the millions 

of Americans living near public lands to live in peace, knowing our businesses and 

communities are ours to care for and control. 

Dr. LOWENTHAL. Thank you, Mr. Davis. 

The Chair now recognizes Ms. Lachelt to testify for 5 minutes. 

Welcome to the Committee. 

STATEMENT OF GWEN LACHELT, COUNTY COMMISSIONER, LA 

PLATA COUNTY, COLORADO 

Ms. LACHELT. Thank you, Chairman, Ranking Member, and 

members of the Committee. My name is Gwen Lachelt. I am a 

County Commissioner from La Plata County, Colorado. 

In 2015, polluted water spilled out of the Gold King Mine, turning the Animas River—the lifeblood of our corner of southwest 

Colorado—a toxic orange. Three million gallons of acidic waste 

laden with arsenic, lead, and other harmful contaminants spilled 

out of the inactive gold mine, flowing directly into the Animas 

River. The people of southwest Colorado rely on the river for drinking water, to irrigate fields, to sustain wildlife, and to support a 

lucrative outdoor recreation industry. 

The 1872 Mining Law reform and the reclamation fund it would 

create would help communities like mine clean up the hundreds of 

thousands of abandoned hardrock mines that litter the West. To 

date, there is still no comprehensive inventory of abandoned 

hardrock mines, no system to prioritize cleanup of the most 
17 

dangerous of these mines, and almost no funds to pay for it. 

According to the EPA, estimated clean-up costs are around $50 

billion. 

La Plata County is not alone in feeling the impacts of abandoned 

mines. The hardrock mining industry is the country’s largest 

source of toxic pollution, according to the EPA’s Toxic Release 

Inventory. And because the 150-year-old Mining Law continues to 

govern in the 21st century, both abandoned and operating mines 

leave behind environmental, public health, and economic devastation that taxpayers must pay for and communities must endure. 

Just last week, the Blue River that flows through Breckenridge, 

Colorado turned orange because of recent precipitation that mobilized runoff from an abandoned mine upstream. One of the biggest 

concerns following the river’s dramatic change in color last weekend has been about the safety of drinking water supplies, given 

that hundreds of thousands of people in Colorado rely on Dillon 

Reservoir, which is downstream from the pollution. 

Communities across the country rely on their rivers the way we 

rely on the Animas. Our health and prosperity depend on clean 

water. Reforming the 1872 Mining Law to bring it into the modern 

age can help us clean up old mines and safeguard our precious 

water resources from future mine disasters. 

The time to change U.S. mining policy is long overdue. The 

General Mining Law that governs today’s mining industry was 

signed into law more than 147 years ago, when miners worked 

with picks and shovels—a far cry from the modern mines that can 

decimate entire watersheds. We have an opportunity to make sure 

that there is never another Gold King Mine spill. By reforming the 

1872 Mining Law, we not only create a robust reclamation fund to 

clean up old mines, but we also create jobs. 

An Abandoned Mine reclamation program with a significant, 

dedicated funding source can act as an economic driver. Across the 

country, the Surface Mining Control and Reclamation Act’s 

Abandoned Mine program has reclaimed over $5.7 billion worth of 

mine pollution and nearly 800,000 acres of damaged land and 

water. This work cannot be outsourced. The program delivered a 

total impact of $778 million to the U.S. economy in Fiscal Year 

2013, and supported 4,761 jobs across the country, 1,317 of which 

were in Central Appalachian states. 

The Congressional Budget Office estimates that for each $1 

million spent on mine cleanup, 14 to 33 new jobs are created. In 

Ohio, the Surface Mining Control and Reclamation Act funds generated 10 jobs per million dollars invested. Between 2008 and 2013, 

Federal funding to the AML program generated more than $1.8 

million in Ohio State and local tax revenue. Stream restoration has 

a positive economic impact as well. In West Virginia, estimated 

benefits from restoration of Deckers Creek total about $1.9 million 

annually. 

Without 1872 Mining Law reform, we simply do not have enough 

money to pay for mine cleanup and spill prevention for the hundreds of thousands of abandoned and inactive mines that litter our 

country. The public and the environment have paid the price for 

too long. Western communities and water resources need Congress 

to act now to protect our important water resources. 
18 

Thank you very much. 

[The prepared statement of Ms. Lachelt follows:] 

PREPARED STATEMENT OF GWEN ALEXANDRA LACHELT, COUNTY COMMISSIONER, 

LA PLATA COUNTY, COLORADO

Thank you Chairman Grijalva, Chairman Lowenthal, Ranking Member Gosar and 

members of the Committee, for inviting me to testify today. My name is Gwen 

Alexandra Lachelt, and I am a county commissioner from La Plata County, 

Colorado. In 2015, polluted water spilled out of the Gold King mine turning the 

Animas River—the lifeblood of our corner of southwest Colorado—a toxic orange. 

Three million gallons of acidic waste laden with arsenic, lead and other harmful 

contaminants spilled out of the inactive gold mine, flowing directly into the Animas 

River. The people of southwest Colorado rely on the river for drinking water, to irrigate fields, to sustain wildlife and to support a lucrative outdoor recreation industry. 

1872 Mining Law reform, and the reclamation fund it would create, would help 

communities like mine clean up the hundreds of thousands of abandoned hardrock 

mines that litter the West. To date, there is still no comprehensive inventory of 

abandoned hardrock mines, no system to prioritize cleanup of the most dangerous 

of these mines, and almost no funds to pay for it. According to the Environmental 

Protection Agency (EPA), estimated clean-up costs total approximately $50 billion. 

La Plata County is not alone in feeling the impacts of abandoned mines. The 

hardrock mining industry is the country’s largest source of toxic pollution, according 

to the EPA’s Toxic Release Inventory. And because the 150-year-old Mining Law 

continues to govern the industry in the 21st century, both abandoned and operating 

mines leave behind environmental, public health and economic devastation that taxpayers must pay for and communities must endure. 

Just last week, the Blue River that flows through Breckenridge, Colorado, turned 

orange because recent precipitation mobilized runoff from an abandoned mine upstream. One of the biggest concerns following the river’s dramatic change in color 

this weekend has been about the safety of drinking water supplies, given that hundreds of thousands of people living on the Front Range rely on Dillon Reservoir, 

which is downstream from the pollution. 

Communities across the country rely on their rivers the way we rely on the 

Animas. Our health and prosperity depend on clean water. Reforming the 1872 

Mining Law to bring it into the modern age can help us clean up old mine sites 

and safeguard our precious water resources from future mine disasters. 

The time to change U.S. mining policy is long overdue. The General Mining Law 

that governs today’s mining industry was signed into law more than 147 years ago, 

when miners worked with hammer and chisel—a far cry from the modern mines 

that can decimate entire watersheds. 

We have an opportunity to make sure that there is never another Gold King Mine 

spill. By reforming the 1872 Mining Law, we not only create a robust reclamation 

fund to clean up old mines, we also create jobs. 

An Abandoned Mine Land (AML) reclamation program with a significant, dedicated funding source can act as an economic driver. Across the country, the Surface 

Mining Control and Reclamation Act’s (SMCRA) AML program has reclaimed over 

$5.7 billion worth of mine pollution and nearly 800,000 acres of damaged land and 

water. This work cannot be outsourced. The program delivered a total impact of 

$778 million to the U.S. economy in FY 2013, and supported 4,761 jobs across the 

country, 1,317 of which were in Central Appalachian states. 

The Congressional Budget Office (CBO) estimates that for each $1 million spent 

on mine cleanup, 14 to 33 new jobs are created. In Ohio, SMCRA coal reclamation 

funds generated 10 jobs per million dollars invested. Between 2008 and 2013, 

Federal funding to the AML Program generated more than $1.8 million in Ohio 

state and local tax revenue. Stream restoration has a positive economic impact as 

well. In West Virginia, estimated benefits from restoration of Deckers Creek total 

about $1.9 million annually. 

Without 1872 Mining Law reform, we simply don’t have enough money to pay for 

mine cleanup and spill prevention for the hundreds of thousands of abandoned and 

inactive mines that litter our country. The public and the environment have paid 

the price for too long. Western communities and water resources need Congress to 

act now to protect our important water resources. 

Thank you. 
19 

Dr. LOWENTHAL. And we thank you, Ms. Lachelt. 

The Chair now recognizes Mr. Comer to testify for 5 minutes. 

Welcome. 

STATEMENT OF ROBERT D. COMER, PARTNER, NORTON ROSE 

FULBRIGHT US LLP, DENVER, COLORADO 

Mr. COMER. Thank you, Mr. Chairman, Ranking Member, and 

Members. I am Bob Comer, a mining and environmental lawyer, 

and a former associate and regional solicitor for the Department of 

the Interior. My career has been devoted to the conservation and 

protection of sensitive resources in the environment and in 

advancement of mineral and other land uses. My comments are 

supplemented by written testimony. 

The General Mining Law, as amended, governs how U.S. citizens 

may gain access to hardrock minerals so important to our economy, 

renewable energy future, and daily lives. No modern city, home, 

factory, computer, telephone, solar panel, train, plane, automobile, 

or national defense system can be built without minerals. 

The proposed legislation will harm our Nation by severely limiting access and tenure to minerals at a time when the national 

agenda demands more. Because renewable energy cannot be 

achieved without minerals, the proposed legislation is inconsistent 

with the country’s renewable energy expansion objectives. Solar 

panels, EV cars, rechargeable batteries, and wind turbines require 

an array of hardrock minerals. Smartphones require over 40 

minerals. 

Just last week, the World Bank Group launched its Climate 

Smart Mining Initiative that focused on mining’s indispensable role 

in renewables. It showed an alarming reliance on foreign minerals, 

including 14 of the 15 minerals identified as essential for renewables. The world will demand the same amount of copper in the 

next 25 years as has been mined over the last 500 years, yet our 

dependence on many essential minerals has greatly increased over 

the past 20 years despite our substantial mineral wealth. 

The sweeping changes proposed to the Mining Law are unwarranted, given how little Federal land is used for hardrock mineral 

activities. There are about 350,000 active mining claims, with 

roughly half being in Nevada, which is less than 1 percent of the 

lands with our Nation’s mineral wealth. And only 313,000 mineral 

acres have been authorized for service disturbance. When viewed 

in perspective, this far-reaching proposed legislation is grossly out 

of proportion to mining’s very minor impact on Federal lands. 

Self-initiation allows U.S. citizens to locate mining claims on 

Federal lands to explore for minerals with the hope of discovery. 

The National Academy of Sciences estimates that 1,000 mineral 

targets must be evaluated to discover just one deposit. These are 

daunting odds. 

Self-initiation leverages private investment to finance the costly 

physical and drilling programs at no risk or expense whatsoever to 

U.S. taxpayers. Mines can only be developed where the minerals 

exist. The irony of this legislation is that it would cloak a functioning mining law in a century-old leasing system. 

The proposed leasing program is fraught with problems that will 

precipitate the forfeiture of private property rights. It will cause a 
20 

premature shutdown of mines. In Nevada alone, several large 

mining companies operate numerous mines that exceed the acreage 

limitations contained in this legislation. This will create a substantial impact and burden on many communities and the country. 

One of the stated drivers for the proposed legislation is to create 

mechanisms to say no to mining—in other words, to leave more 

mineral in the ground. There is no need for another law to put 

Federal lands off-limits to mining as nearly 50 percent of the 

Federal mineral estate already is off-limits to mining. The new 

suitability provisions would prohibit mining. They are unnecessary. 

They eliminate the balance that the Federal land management and 

environmental laws create. And they elevate virtually all other 

uses over mining. 

Congress has amended the mining law many times over the 

years to respond to evolving environmental and land management 

requirements. Any hardrock royalty must promote a fair return to 

the public while ensuring the viability of hardrock mining on 

Federal lands, which the proposed royalty does not achieve. 

Modeling a hardrock royalty after coal, oil, or gas programs does 

not consider the differences that exist between these minerals, 

from exploration through processing. Finally, the royalty and dirt 

tax revenues are illusory because the royalty base will be dramatically reduced due to the many onerous provisions in the proposed 

legislation. 

Congress should consider policies that encourage responsible 

mineral exploration and development to discover the domestic 

minerals needed for American security and society. Amending the 

Mining Law to provide a fair return to the public, while preserving 

certainty, land tenure, and private investment for finding, developing, and producing domestic minerals, would be an important 

step toward energy independence and a clean energy future and a 

stronger America. 

Thank you for the opportunity to testify, and I look forward to 

answering any questions you may have. 

[The prepared statement of Mr. Comer follows:] 

PREPARED STATEMENT OF ROBERT D. COMER, ESQ., CO-HEAD OF MINING, NORTON

ROSE FULBRIGHT US LLP 

INTRODUCTION

Mr. Chairman, Ranking Member, and members of the Committee, my name is 

Bob Comer. I am honored to testify today at the request of the Committee. I am 

co-head of Mining at the Norton Rose Fulbright US LLP law firm and former 

Associate and Regional Solicitor for the Department of the Interior. My career has 

been devoted to the conservation and protection of sensitive resources and the environment in the advancement of mineral resources and other land uses. I have 

served leadership roles in educational and professional organizations, having been 

the Natural Resources Practitioner in Residence at the DU law school, Chair of the 

ABA Mining Law Section, Chair of the CBA Natural Resource and Energy Law 

Section, a Trustee of the Rocky Mountain Mineral Law Foundation, and on the 

Advisory Boards of the CU Graduate Energy Management Program and Innovative 

Energy Initiative. My recognitions include an environmental achievement award 

from EPA for a pioneering Good Samaritan cleanup. I also serve as a reviser to the 

American Law of Mining Treatise. 

Thank you for the opportunity to appear today to discuss the numerous policy 

challenges contained in the discussion draft of the Hardrock Leasing and 

Reclamation Act of 2019 (the ‘‘proposed legislation’’) and how they will adversely 
21 

1 U.S. Geological Survey, 2019, Mineral commodity summaries 2019: U.S. Geological Survey, 

200 p., https://doi.org/10.3133/70202434. 2 U.S. Geological Survey, 1996, Mineral commodity summaries 1995: U.S. Geological Survey, 

https://minerals/pubs/mcs/1996/nir.gif. 

affect America’s national security, energy future and social fabric by deterring, and 

in many instances eliminating, mining on Federal lands. 

The General Mining Law, as amended, governs how U.S. citizens may gain access 

to hardrock minerals (also known as locatable minerals) like copper, gold, silver, 

zinc, lithium, cobalt, rare earths, nickel, and other minerals on Federal lands in the 

western states. These and other locatable minerals are essential building blocks of 

our economy, providing the essential foundation for infrastructure, technology, 

manufacturing, conventional and renewable energy, and national defense. No modern city, home, factory, computer, telephone, train, car, airplane or national defense 

system has ever been built or can be built without minerals. 

The proposed legislation will harm the Nation because this bill as designed will 

reduce the mineral resources available to extraction on Federal land. The bill 

severely limits access and tenure to the mineral resources on the Nation’s public 

lands at a time when the national agenda demands minerals for national security, 

global economic competition, renewable energy development and to revitalize our infrastructure. If enacted, it would contribute to America’s already alarming reliance 

on foreign sources of essential minerals—including the many hardrock minerals that 

are in cell phones and renewable energy applications like wind turbines, solar 

panels, electric vehicles and rechargeable storage batteries. The proposed legislation 

terminates mining claims, prohibits the staking of new claims, and creates an unworkable leasing system with arbitrary term and acreage limits that extinguish private property rights and expose the Federal Government to substantial takings 

litigation. 

Although the bill is touted as a ‘‘modernization’’ of the Mining Law, it is hard to 

escape the irony that its essential feature is to cloak the adequately functioning 

Mining Law in a century-old mineral leasing law intended for development of very 

different types of mineral deposits. 

THE HARDROCK LEASING AND RECLAMATION ACT OF 2019 WILL INCREASE AMERICA’S

RELIANCE ON FOREIGN MINERALS—INCLUDING MINERALS NECESSARY FOR DEVELOPING

RENEWABLE ENERGY

The U.S. Geological Survey’s 2019 Mineral Commodity Summary 1 shows the 

United States is 100 percent reliant on foreign countries, including Russia and 

China, for 18 important minerals such as the rare earth minerals that are needed 

to manufacture the magnets in wind turbines, and at least 50 percent reliant on 

imports from foreign countries for 30 other minerals. Our reliance on foreign 

minerals has been increasing at an alarming rate. For example, the USGS 1995 

Mineral Commodity Summary 2 shows that we imported only 2 percent of the rare 

earths needed at the time. (See the two USGS mineral reliance charts at the end 

of this testimony). 

Our increasing reliance on foreign minerals is not because America lacks domestic 

mineral resources. To the contrary, the United States is blessed with a rich mineral 

endowment, much of which is located on Federal lands administered by the U.S. 

Bureau of Land Management (BLM) and the U.S. Forest Service where hardrock 

minerals are governed by the Mining Law. The dramatic decline in the production 

of domestic minerals is due in large part to unfavorable policies that have substantially chilled investment in domestic mineral exploration and development including 

measures that put more and more lands off limits to mining, and BLM’s and the 

Forest Services’ time-consuming permitting processes, which do not compare favorably to other mineral-rich countries like Canada, Australia, and Mexico that have 

much more practical mineral development and investment policies. 

Given the country’s current focus on renewable energy, it is especially important 

to recognize that the proposed legislation would severely constrain our ability to find 

and develop domestic sources of minerals that are needed to build renewable energy 

infrastructure. Solar panels require silver, tin, copper, and lead; wind turbines use 

rare earths, copper, aluminum, and zinc; electric vehicles are built with copper, 

aluminum, iron, molybdenum; and rechargeable storage batteries use lithium, 

vanadium, nickel, cobalt, and manganese. Approximately 40 percent of the gold now 

produced is used in electronics and computer chips that are an integral part of 

renewable energy technologies. These are all locatable minerals targeted by this proposed legislation. 
22 

3 Arrobas, Daniele La Porta, et al, 2017, The Growing Role of Minerals and Metals for a Low 

Carbon Future, Washington, DC, World Bank Group. 4 Nature, Ali et al. 2017, p. 367 as cited on page xvi of the World Bank report. 5http: / / www.riotinto.com/documents/190409_Arnaud_Soirat_World_Copper_Conference_ 

presentation_speech.pdf. 6See Exhibit I, Burnell, J.R., You Say Alternatives are the Answer . . . Let’s Talk: Resource 

Constraints on Alternative Energy Development, American Institute of Professional Geologists, 

in, The Professional Geologist, March/April 2009 pp. 33–37. 7Public Land Statistics 2017, Volume 202, June 2018, U.S. Department of the Interior Bureau 

of Land Management, BLM/OC/ST-18/001=1165, P-108-7. 

Just last week on May 1, the World Bank Group convened a conference in 

Washington, DC to discuss its recently published report, ‘‘The Growing Role of 

Minerals for a Low Carbon Future,3’’ and to launch its ‘‘Climate Smart Mining/ 

Minerals for Climate Action Initiative.’’ Citing an article in Nature, the World Bank 

report states: 

‘‘A transition to a low carbon society, [is] a change that will require vast 

amounts of metals and minerals. Mineral resourcing and climate change 

are inextricably linked, not only because mining requires a large amount 

of energy, but also because the world cannot tackle climate change without 

adequate supply of raw materials to manufacture clean technologies.’’ 4

The World Bank report identifies 15 minerals that are critical for renewable 

energy. A comparison of the World Bank’s list to the USGS 2019 Mineral 

Commodity Summary reveals that the U.S. relies on imports for 14 of the 15 renewable energy minerals—even though we have substantial deposits of many of these 

minerals. For example, the United States imports 32 percent of the copper we use 

despite the fact that there are significant copper deposits in Arizona, Utah, New 

Mexico, Nevada, Montana, Michigan, Minnesota, and Missouri. Electric vehicles use 

nearly four times the amount of copper as conventional vehicles, so we should expect 

the demand for copper to continue to grow to satisfy renewable energy expansion 

objectives. Experts estimate that the world will need the same amount of copper in 

the next 25 years that it produced in the last 500 years to meet global demand.5

Renewable energy applications, including increased use of electric vehicles, accounts 

for some of this increased demand for copper. Similarly, we import 62 percent of the 

silver we use rather than relying on domestic silver deposits in Alaska, Nevada, and 

Idaho to meet our needs. Silver (and copper) are used to manufacture solar panels. 

A peer-reviewed study published by the American Institute of Professional 

Geologists 6 found that global supply and price issues constrain the availability of 

the strategic minerals needed for renewable energy. This study states that U.S. 

policies should support exploration and development of domestic sources of 

renewable energy minerals and notes that policies that limit mining will impede renewable energy objectives. 

Obtaining these minerals from other countries is inconsistent with low carbon and 

renewable energy objectives because shipping renewable energy minerals to the 

United States increases their carbon footprint. Domestic production of renewable 

energy minerals would eliminate this carbon footprint. Another serious concern is 

that we rely on adversarial nations like Russia and China or countries with inferior 

environmental protection and worker health and safety laws as sources for some 

renewable energy minerals. In particular, cobalt sourced from the Congo is likely 

being mined with child labor. 

A TOTAL OVERHAUL OF THE MINING LAW IS UNWARRANTED GIVEN MINING’S VERY

SMALL FOOTPRINT ON FEDERAL LAND

In discussing whether the dramatic changes to the Mining Law in the proposed 

legislation are warranted, it is important to understand how little Federal land is 

currently being used for hardrock mineral activities. The sweeping changes proposed 

to the Mining Law must be evaluated in the context of the very limited footprint 

that mining has on Federal land. When mining is put into proper perspective, it becomes clear how the far-reaching changes proposed in the Hardrock Leasing and 

Reclamation Act of 2019 are grossly out of proportion to mining’s impact on Federal 

land. In fact, the miniscule amount of Federal lands being used for hardrock mining 

calls into question whether Congress should devote much effort to discussion about 

changing the Mining Law. 

BLM’s 2017 Public Lands Statistics 7 show that at the end of FY 2017, there were 

only 358,983 active mining claims distributed in the western states, with roughly 

half of these claims located in Nevada. (The number of claims in Nevada reflects 

the fact that if Nevada were a country it would be the fourth largest gold producing 
23 

8https://en.wikipedia.org/wiki/Maricopa_County,_Arizona. 9 Hardrock Mining on Federal Lands, 1999, National Research Council, National Academy of 

Sciences, 247 p. 10See United States v. Locke, 471 U.S. 84 (1985) and Hickel v. Oil Shale Corp., 400 U.S. 48 

(1970). 

country in the world). BLM’s annual public lands statistics show that since 2001, 

the number of active mining claims has fluctuated largely in response to commodity 

prices from a low of 203,354 claims in 2002 when gold prices ranged from about 

$278 to $349 per ounce to a high of 406,140 claims in 2012 when gold prices were 

as high as $1,789 per ounce. 

Under the Mining Law, a lode mining claim is limited to a maximum of 20 acres. 

Thus, the aggregate footprint of the active claims in 2017 covered roughly 7.8 

million acres, which is a minute fraction—less than 1 percent—of the Nation’s 800 

million-acre Federal mineral estate. About half of this footprint is located in 

Nevada; the rest is scattered throughout the West. According to BLM, in 2017, there 

were 43,401 mining claims in Arizona covering 863,791 acres. By way of comparison, Maricopa County, Arizona covers roughly 9,224 square miles 8 or 5.9 million 

acres. The states of Alaska, Colorado, New Mexico, Oregon, and Washington each 

had fewer than 10,000 claims in 2017. 

Even more revealing is that as of March 2019, BLM’s LR 2000 database shows 

that the agency has authorized just 313,042 acres of surface disturbance on 587 

mineral exploration and mining projects on mining claims located on BLMadministered lands throughout the West, with nearly 60 percent of the authorized 

surface disturbance located in Nevada. In Chairman Grijalva’s state of Arizona, 

BLM has authorized a mere 3,465 acres of surface disturbance on 37 mineral 

projects. 

Hardrock mineral activities affect a very small amount of Federal land because 

hardrock mineral deposits are rare, and as such, very difficult to find. According to 

the National Academy of Sciences,9 1,000 mineral targets must be identified and 

evaluated to discover a deposit that can become a mine. Given these daunting discovery odds, policymakers should be very concerned that current exploration levels 

are insufficient to discover the domestic minerals needed for our future. The limited 

domestic exploration for minerals is one of the key reasons why the country is so 

reliant on foreign sources of minerals. 

The draconian changes proposed in the proposed legislation will exacerbate this 

problem by decreasing mineral activities on Federal land. Rather than measures 

that eliminate or make exploration and mining more difficult on Federal land, this 

country needs policies to encourage responsible exploration and development of our 

mineral resources, consistent with the policy objectives in Section 102(a)(12) of the 

Federal Land Policy and Management Act of 1976, (43 U.S.C. 1701 et seq), the 

National Materials and Minerals Policy Research and Development Act of 1980 (30 

U.S.C. 1601 et seq) and other laws. 

PREVIOUS AMENDMENTS TO THE MINING LAW HAVE ALREADY MET MODERN

POLICY OBJECTIVES

Proponents of the proposed legislation assert that the Mining Law is antiquated 

and thus requires radical amendments. But this characterization of the law is misleading and inaccurate because Congress has amended and updated the law many 

times since its enactment. In the past, congressional actions to amend the Mining 

Law have preserved the Mining Law’s core principles including the property rights 

created by efforts to identify and advance economic mining claims. The historical 

amendments to the Mining Law stand in marked contrast to the proposed bill, 

which guts these rights and replaces them with an unworkable and unrealistic 

leasing system. 

The Minerals Leasing Act of 1920 

The 1920 Minerals Leasing Act removed coal, petroleum, natural gas, phosphates, 

sodium, sulfur, and potassium from the Mining Law and established leasing programs for these resources while preserving the claim location system for hardrock 

minerals. Examining the scope of and historical implementation of the leasing system in the Minerals Leasing Act is very informative when compared to the leasing 

system proposed in the Hardrock Leasing and Reclamation Act of 2019. 

The 1920 Minerals Leasing Act created a prospective leasing system that did not 

interfere with the Mining Law rights to oil and gas mining claims that existed on 

the date of enactment. Section 37 10 of the 1920 Minerals Leasing Act is a savings 

clause which preserved the property rights under the Mining Law on existing claims 

of oil, gas, and the other Minerals Leasing Act minerals that going forward would 
24 

11 43 CFR 3809 §§ .5, .401, .415, and .420. 12https://www.fs.fed.us/geology/1975_mining%20in%20national%20forests.pdf. 

require a lease rather than a mining claim. The Section 37 savings clause allowed 

claim owners to continue to explore and develop their existing oil and gas mining 

claims, to make discoveries, and to secure patents to those claims under the 

provisions of the Mining Law. 

In marked contrast, this proposed legislation contains no such savings clause for 

currently existing mining claims. The mandatory conversion of mining claims into 

leases will abruptly terminate the claim owners’ current Mining Law property 

rights. By extinguishing claimants’ property rights and substituting term- and 

acreage-limited discretionary leases, the proposed legislation will expose the Federal 

Government to Fifth Amendment takings claims. 

The Mining and Minerals Policy Act of 1970 

When Congress enacted the Mining and Minerals Policy Act of 1970, it declared 

that ‘‘it is the continuing policy of the Federal Government in the national interest 

to foster and encourage private enterprise in (1) the development of economically 

sound and stable domestic mining, minerals, metal and mineral reclamation 

industries, (2) the orderly and economic development of domestic mineral resources, 

reserves, and reclamation of metals and minerals to help assure satisfaction of industrial, security and environmental needs.’’ (30 U.S.C. § 21a). The mineral directives in this Act apply to BLM-administered public lands and National Forest 

System lands. These are compatible objectives that operate to encourage deployment 

of privately-funded, domestic mineral production while protecting the environment. 

The Federal Land Policy and Management Act of 1976 (FLPMA) 

Congress made other important changes to the Mining Law when it enacted 

FLPMA in 1976. Among other things, FLPMA mandated a claim filing and recordation system to give BLM a mechanism to rid the Federal lands of stale mining 

claims and created an environmental protection mandate prohibiting unnecessary or 

undue degradation (UUD) of public lands subject to mineral activities. When mining 

critics assert the Mining Law needs to be changed because it does not include environmental protection requirements they are ignoring how FLPMA significantly 

changed the Mining Law by inserting the UUD environmental performance standard, which specifically applies to mineral exploration and mining projects. 

In 1980, BLM finalized the 43 CFR 3809 surface management regulations for 

locatable minerals to implement the FLPMA UUD mandate. The stated purpose of 

these regulations is to ‘‘[p]revent unnecessary or undue degradation of public lands 

by operations authorized by the mining laws [and to] establish procedures and 

standards to ensure that operators and mining claimants meet this responsibility 

. . . and reclaim disturbed areas.’’ (43 CFR § 3809.1) The UUD provisions in the 43 

CFR 3809 regulations contain explicit directives that mineral activities must comply 

with all applicable state and Federal regulations to protect the environment and cultural resources, and satisfy a long list of environmental performance standards.11

Prior to commencing mineral activities on public lands, project proponents must provide BLM with financial assurance (reclamation bonds) to guarantee that lands 

affected by exploration and mining will be properly reclaimed. 

National Forest Management Act of 1976 

The laws governing National Forest System lands are similarly protective. In 

1976, Congress enacted the National Forest Management Act, which mandates a 

land use planning process that ensures mineral resource development is given proper consideration consistent with the mandate in the Mining and Minerals Policy Act 

of 1970 while minimizing resource conflicts and balancing environmental concerns. 

The Forest Service recognizes that minerals are usually hidden, relatively rare, and 

governs by land management planning procedures.12

The Forest Service’s 36 CFR 228 Subpart A surface management regulations for 

locatable minerals include environmental protection measures that require operators of mineral exploration and mining projects to minimize adverse impacts on 

National Forest surface resources where feasible (36 CFR § 228.8). Like the BLM, 

Forest Service’s surface management regulations provide comprehensive and effective environmental protection at mineral projects on National Forest System lands 

including requirements for financial assurance before activities can commence. 
25 

13GAO-16-699. 14https://www.fs.fed.us/geology/1975_mining%20in%20national%20forests.pdf. 

The National Materials and Minerals Policy Research and Development Act of 1980 

In September 2016, the Government Accountability Office (‘‘GAO’’) published a 

report entitled ‘‘Strengthened Federal Approach Needed to Help Identify and 

Mitigate Supply Risks for Critical Raw Materials.’’ 13 This reported evaluated 

‘‘certain metals, minerals, and other ‘‘critical’’ raw materials [that] play an important role in the production of advanced technologies across a range of industrial sectors and defense applications.’’ The GAO report found several limitations in the 

scope of Federal critical mineral programs that are inconsistent with the directives 

in the National Materials and Minerals Policy, Research and Development Act of 

1980. (30 U.S.C. §§ 1602–1605), hereinafter referred to as the 1980 Act. 

In the 1980 Act, Congress found: 

‘‘the United States lacks a coherent national materials policy and a coordinated program to assure the availability of materials critical for national 

economic well-being, national defense, and industrial production, including 

interstate commerce and foreign trade.’’ (30 U.S.C. § 1601(7). 

In response to this finding, Congress declared: 

‘‘. . . it is the continuing policy of the United States to promote an 

adequate and stable supply of materials necessary to maintain national 

security, economic well-being and industrial production with appropriate attention to a long-term balance between resource production, energy use, a 

healthy environment, natural resource conservation, and social needs.’’ (30 

U.S.C. § 1602) 

The proposed legislation is completely inconsistent with the 1980 Act because it 

will significantly increase the country’s reliance on the minerals needed for all sectors of the American economy, and to advance our renewable energy agenda. In fact, 

Section 401(b) of the proposed legislation specifically amends the 1980 Act to exempt National Forest System lands from the requirement to improve mineral data 

availability and analysis requirements in the 1980 Act, signaling the intention to 

drastically reduce and even eliminate mining on National Forest System lands. 

According to the U.S. Forest Service, ‘‘the National Forests contain much of the 

country’s remaining stores of mineral.’’ 14

Enactment of Claims Maintenance Fee Requirements 

In 1992, Congress made another significant change to the Mining Law using the 

appropriations process to establish an annual fee, the Claims Maintenance Fee, in 

lieu of the annual assessment work requirement in Section 28 of the Mining Law 

and to place a moratorium on patenting. As a result of this change, claimholders 

currently must pay $155 per claim to keep their claims in good standing. This fee, 

which is adjusted every 5 years to reflect the Consumer Price Index will increase 

in 2019. By making timely payment of this fee, claimants secure the right to use 

and occupy Federal lands, subject to compliance with the 43 CFR 3809 and 36 CFR 

228A surface management regulations and all other applicable state and Federal 

environmental protection regulations. 

The Claims Maintenance Fee, which has been continued in annual appropriations 

measures since 1992, gives BLM a powerful land management tool that accomplishes several important objectives. First, it provides real-time information about 

where claims are located, who owns the claims, and whether the claims remain in 

good standing. Claims for which the fee is not paid by the August 31 fee payment 

deadline are categorically voided. Second, the substitution of a fee for the on-theground assessment work requirement has virtually eliminated unnecessary grounddisturbances associated with performing the annual assessment work that was 

previously required to maintain a claim in good standing. The fee has thus significantly reduced the environmental impact of mineral exploration activity. Third, the 

fee raises sufficient revenue to fund the Department of the Interior’s Mining Law 

program, with leftover revenue that goes to the Treasury. BLM’s Public Land 

Statistics show mining claimants paid over $65 million in Claims Maintenance Fees 

in FY 2017. 

The 1920 Mineral Leasing Act, FLPMA, and the annual Claims Maintenance Fee 

are examples of how Congress has continually updated the Mining Law since its 

enactment in response to evolving land management requirements, and clearly demonstrate that the law is not antiquated. To the contrary, the Law as amended serves 

the country well. If the Law is amended in the future, the changes should be 
26 

surgical and tailored to respond to specific land management objectives—and not a 

wholesale overhaul like that in the proposed legislation, which is completely 

unwarranted in light of the very limited use of Federal lands for hardrock mineral 

activities and counter-productive to satisfying the Nation’s demand for minerals. 

Additionally, if changes are enacted, they should be prospective in nature—they 

must not be retrospective—to avoid exposing the Federal Government to takings 

claims. Congress recognized this in 1920 when it enacted the Minerals Leasing Act 

and removed oil, gas, and other minerals from the jurisdiction of the Mining Law. 

If this Congress elects to create a leasing program for what are currently locatable 

minerals, this change must be forward looking and not be imposed on existing 

mining claims. 

The Myriad Environmental and Sensitive Resource Protection Laws 

The proposed legislation also ignores the myriad laws that require all mines to 

protect the environment and sensitive resource values. Mines must comply for example with the laws protecting air, water, wildlife, endangered species, and wetlands, among other requirements, many of which exist at the local and state levels 

as well. 

THE PROPOSED LEASING SYSTEM INTERFERES WITH EXISTING PROPERTY RIGHTS AND

WILL LEAD TO TAKINGS LITIGATION

An essential and unique element of the Mining Law is the ‘‘self-initiation’’ process, 

which allows U.S. citizens to enter Federal lands open to operation of the Mining 

Law, to locate mining claims on lands that may have favorable geologic conditions 

for finding a mineral deposit. Once the claim is located, the claim owner can use 

the surface of a mining claim for mineral exploration and development purposes so 

long as they comply with the surface management regulations and other environmental protection requirements. 

Self-initiation is especially critical to the prospecting and early-stage mineral exploration phases of the mining life cycle when geologists continually test and refine 

their mineral target concepts and exploration techniques. Because exploration is an 

iterative process that uses new information to vector toward mineralized zones, the 

ability to expand a claim block based on new information is critically important. The 

1 in 1,000 odds of making a discovery are akin to looking for the proverbial needle 

in the haystack and drive the need to preserve self-initiation to facilitate locating 

additional claims on lands with potentially favorable geology in response to the onthe-ground realities of exploring for rare mineral deposits that are very difficult to 

find. 

Under current law, claim owners deploy private investment and take the initiative to locate claims based on preliminary concepts about where minerals may be 

located and then make substantial investments of time, knowledge, and money to 

test these concepts to explore for minerals on their claims with the hope of discovering a mineral deposit that can be developed into a mine. This self-initiation process greatly benefits our Nation because it effectively leverages private investments 

that transform undeveloped Federal land into mining operations that create jobs, 

pay taxes, and provide the minerals the country needs—at no risk or expense whatsoever to U.S. taxpayers. 

In contrast to the proposed legislation’s introductory statement that it is 

‘‘consistent with the principles of self-initiation,’’ the proposal completely destroys 

self-initiation by eliminating the current mining claim system and substituting a 

discretionary leasing system. As proposed, the Federal Government will decide 

where geologists can look for minerals and where miners can develop mines. 

Eliminating mining claims and self-initiation is not in the public’s best interest because it will severely compromise the Nation’s ability to capitalize on private-sector 

investments to discover and develop domestic mineral deposits. It will significantly 

chill investment in the Nation’s mineral resources and increase the country’s reliance on foreign minerals. 

The licensing and leasing acreage limits in the proposed legislation will only serve 

to discourage mining on Federal lands. Mining companies that operate more than 

one mine in a given state currently own thousands of mining claims that cover their 

active mining operations. This describes the current situation in Nevada where several large mining companies operate numerous mines throughout the state. The 

20,480-acre per company per state limit, which is the equivalent of only 1,024 

mining claims, will require forfeiture of the private property rights on thousands of 

mining claims located within the boundaries of currently producing mining properties. This private property seizure will completely disrupt active mining 

operations and precipitate numerous takings claims as the government forces the 

premature closure of viable mining operations or the divestiture of lands that are 
27 

part of productive mining operations. Then the government will have to expend taxpayer funds to satisfy Constitutional taking claims without the benefit of any 

mineral production. 

This property forfeiture is clearly not in the public’s interest. Besides exposing the 

Federal Government to substantial takings litigation, this baseless extinguishment 

of private property rights will destroy the economic engines that sustain rural 

mining communities. Forced mine closures will kill high-paying mining jobs, deprive 

states and local communities of the tax revenues and other substantial economic 

benefits that the mines generate, and increase the country’s reliance on foreign 

minerals. 

The temporary and spatially constrained prospecting license in the proposed legislation is completely inappropriate and unworkable for hardrock minerals. 

Prospecting licenses have a primary term of only 2 years, with the possibility of a 

4-year extension, and cannot cover more than 2,560 acres, the equivalent of just 128 

20-acre mining claims. To put this artificial acreage limit into perspective, most 

promising mineral exploration projects are typically comprised of several hundred 

to several thousand claims to give the owner the ability to conduct mineral exploration over a broad area with mineral potential. 

The totally unrealistic time and areal constraints in the proposed draft bill will 

severely curtail if not virtually eliminate mineral exploration on Federal lands. 

Because the exact location of hardrock mineral deposits is generally unknown, these 

deposits are difficult to find and discovery typically takes 10 years or longer. Investment in mineral exploration will become even riskier and less attractive if an arbitrary and unrealistic term limit of 2 to 6 years is imposed on what is already a very 

high-risk endeavor. 

If prospecting licensees are skillful and lucky enough to have discovered a valuable mineral deposit (a term that is undefined in the discussion draft), they may 

apply for a 20-year non-competitive mining lease if the surface management agency 

consents to issuance of the lease. By requiring the consent of the BLM or the Forest 

Service for issuance of a mining lease and providing no guidelines on when the 

agency is authorized to withhold its consent, the discussion draft creates a carte 

blanche opportunity for denial of lease applications with no opportunity for legal review as there is no standard to apply. This possibility puts at risk a company’s 

entire exploration investment and creates uncertainty that will completely chill 

mineral exploration and development in the United States. Companies will not be 

able to justify to their shareholders expenditures of the tens to hundreds of millions 

of dollars required to discover a valuable mineral deposit if there is no guarantee 

that they will have the right to develop those minerals. 

The 20-year primary term lease is another serious barrier to mineral investment 

because it is not unusual for mines to operate for several decades. Without the 

assurance that a mine can continue to operate longer than 20 years, companies will 

be very reluctant to invest the hundreds of millions and sometimes billions of 

dollars needed to develop a mine. Together, this will lead to the collapse of a sustainable, viable mining industry, the jobs it provides and the societal advancements 

it makes possible. 

Although creating a one-size-fits-all leasing process for hardrock minerals, coal, 

oil, gas, etc. might sound like a desirable policy objective, it fails to realize the significant geologic differences between oil, gas, coal and hardrock mineral deposits 

that make a uniform hardrock leasing program untenable. Oil and gas are fluid 

minerals that occur in well understood sedimentary basins where geophysical surveys that do not disturb the surface can identify oil and gas targets with a high 

likelihood of success. Once an oil well is drilled, it can readily be modified into a 

production well. 

In contrast, hardrock mineral deposits are solid minerals that occur in areas with 

much more complex geology and typically have unique geologic, geochemical, and 

metallurgical characteristics that distinguish them from other similar mineral 

deposits. Defining a hardrock mineral deposit requires extensive exploration and 

development drilling. Once drilling has sufficiently defined the deposit to support 

a decision to develop a mine, huge investments are required to build the mine and 

processing facilities. Therefore, the proposal to create a leasing system for hardrock 

minerals modeled after oil and gas leasing is ill conceived, impractical and 

unworkable. 

THE HARDROCK LEASING AND RECLAMATION ACT OF 2019 WILL PUT MORE LAND OFFLIMITS TO MINERAL EXPLORATION AND DEVELOPMENT

One of the stated drivers for the proposed legislation is to create mechanisms to 

say no to mining. We question the need for yet another way to put lands off-limits 
28 

15Public Lands, On-shore Federal and Indian Minerals in Lands of the U.S.: Responsibilities 

of the Bureau of Land Management, Dec. 1, 2000. 

to mining when the Federal Government has already eliminated mining on half of 

the Federal mineral estate.15 Congress and the Federal land management agencies 

already have established effective statutory and regulatory tools to prohibit mining 

on large swaths of Federal lands. The suitability determination proposed in Section 

112 is unnecessary in light of the numerous other mechanisms to segregate Federal 

lands from mining. Additionally, no one group should be given the authority as 

proposed in Section 112 to declare lands unsuitable for mining. 

Section 112 also is impractical because it creates a list of so called ‘‘special characteristics’’ that would deem an area unsuitable for mining. These special characteristics include fairly common and widespread features such as ‘‘any aquifer or aquifer 

recharge area,’’ areas listed on the National Register of Historic Places, lands within 

or adjacent to National Conservation System lands or National Research Lands, 

lands with critical habitat, lands where ill-defined other ‘‘resource values’’ have been 

identified by field testing or ‘‘credible information,’’ and lands containing tribal 

sacred sites. Other laws recognize the need to balance resource development and 

other land uses—the proposed legislation elevates virtually all other uses over 

mining. 

This suitability determination will create an unlimited opportunity to put lands 

off-limits to mining which will further chill investment in mineral exploration and 

mining and increase our reliance on foreign minerals. Section 112 establishes a continual mechanism to expand the inventory of lands that cannot be explored or developed despite their mineral potential. The anti-mining NGO, Earthworks’ press 

materials on the proposed legislation incorrectly assert that mining ‘‘enjoys nearly 

unfettered access on nearly all public lands.’’ This is simply untrue. At a minimum, 

there are already over 350 million acres of land off-limits to mining. Access for 

mining purposes on lands that remain open to the Mining Law is hardly unfettered. 

It is governed by stringent surface management regulations to protect the 

environment. 

In the last Congress, minority members of this Committee asserted that the 

Hardrock Leasing and Reclamation Act of 2018 was necessary to: ‘‘[e]liminate the 

exalted status that mining currently enjoys on public lands [and to] level the playing field with all other uses of public lands . . .’’ This assertion ignores the numerous environmental protection regulations that govern hardrock mineral exploration 

and development and an essential geologic reality that hardrock minerals can only 

be mined exactly where they are discovered. The economics of developing hardrock 

mineral deposits are therefore very different from oil and gas, which may be able 

to withstand no surface occupancy restrictions and be produced from off-site well 

fields. Additionally, specific geologic features such as faults and folds typically play 

an important role in localizing and controlling mineralization. In contrast to oil and 

gas which occur over broad areas in geologic basins, hardrock mineral deposits have 

much more limited areal extents and knife-edge boundaries between mineralized 

and unmineralized rocks, necessitating a very precise location for the mine. 

Sound public policies governing mineral exploration and development must 

consider these basic geologic principles. Current law does not confer an ‘‘exalted 

status’’ for locatable minerals. It does, however, consider the geologic reality that 

mines can only be developed where minerals are located and have been discovered. 

Changes to the Mining Law that are not responsive to this geologic reality will substantially chill investment in mineral exploration and mining, impede the development of the Nation’s mineral resources, and increase our reliance on foreign 

minerals—including renewable energy minerals. These are not desirable outcomes. 

Additionally, the law should not create post-discovery opportunities like the 

Section 112 suitability determination to declare the discovery site as unsuitable for 

mining and to eliminate the possibility of responsibly developing the mineral 

resource if the project proponent can demonstrate the mine will be able to comply 

with many state and Federal environmental protection requirements. Mining critics 

ignore the significant state and Federal environmental protection regulatory requirements applicable to all mineral exploration and development projects on 

Federal lands. During the rigorous mineral project permitting process, project proponents must demonstrate that the proposed operation will comply with numerous 

stringent state and Federal environmental protection requirements and environmental standards. 

Using this permitting process, BLM, the Forest Service, EPA, and state regulatory 

agencies already have the authority to say no to mining if there are doubts that the 

project can meet specific environmental protection regulatory requirements. During 

the permitting process, regulators can require project proponents to go back to the 
29 

16 Exhibit II, James Cress’ January 24, 2007 testimony before the House Natural Resources 

Committee/Energy and Natural Resources Subcommittee. 

drawing board to redesign a project to address concerns about environmental impacts. Additionally, the NEPA process requires detailed alternatives analysis to 

identify the project configuration that best eliminates or mitigates potential impacts. 

Numerous other Federal environmental statutes also govern mining including but 

not limited to the Endangered Species Act, the Clean Air Act, the Clean Water Act, 

the National Historic Preservation Act, Archaeological Resources Protection Act, the 

Resource Conservation and Recovery Act, and the Comprehensive Environmental 

Response Compensation and Liability Act. 

The current system achieves the appropriate balance between mine development 

and environmental protection. There is no exalted status. Rather, there is a rigorous 

demonstration that all aspects of the environment at a proposed mine will be protected. The suitability determination and the duplicative environmental provisions 

would completely upset this balance, making it much more difficult if not impossible 

to develop the mine if the lands are deemed unsuitable for mining. 

Moreover, the Federal Government already has effective tools for putting lands 

off-limits to mining if an area is determined to be unsuitable for mining. Using existing statutory and regulatory tools, Congress and regulators have already permanently prohibited mining on half of the Nation’s Federal mineral estate. Regulators 

can also place 20-year moratoria on mining, such as the Department of the Interior 

has recently done at the Grand Canyon Arizona Strip by withdrawing these lands 

from operation of the Mining Law for 20 years. 

The Section 204(c)(1)(H) prohibition against authorizing mines that require water 

treatment facilities that must operate for longer than 10 years after mine closure 

is too limiting. At highly regulated and fully bonded modern mines, the investments 

made in water treatment systems to meet water quality criteria often can be viewed 

as a long-term asset that benefits the public long after mining has ceased. Under 

BLM’s and the Forest Services’ financial assurance regulations, mine operators 

must provide long-term financial assurance instruments to cover the operating costs 

for post-mining water treatment facilities. In some cases, these financial assurance 

instruments are designed to provide funding for in perpetuity operation of water 

treatment facilities. Post-mining water treatment facilities can also be passive in 

nature and assure the conservation of water resources. 

Consequently, water treatment facilities are not necessarily a liability and pose 

no real risk to taxpayers. To the contrary, long-term, post-closure operation of water 

treatment facilities could provide a source of valuable clean water available for nonmining uses including but not limited to habitat enhancement, redevelopment of 

mine sites as renewable energy sites or other non-mining industrial uses, and even 

municipal water supplies in the arid West. 

THE ROYALTY AND MATERIALS DISPOSAL FEE PROVISIONS IN THE HARDROCK LEASING

AND RECLAMATION ACT OF 2019 ARE UNFAIR AND ILLUSORY

The proposed legislation establishes a royalty for production of minerals on 

Federal lands. The mining industry has long asserted that a hardrock royalty program must be structured to promote a fair return to the public while at the same 

time ensuring the continued viability of hardrock mining on Federal lands.16 As 

discussed in detail below, the royalty provisions in the proposed legislation are seriously flawed and will not achieve the important objective of providing the American 

public with royalty revenues from hardrock mining, which can only be accomplished 

if mining on Federal lands remains economically feasible. The numerous provisions 

in the proposed legislation that make mining impractical and even impossible will 

adversely affect mineral production and lead to a drastic reduction of mining on 

Federal lands. Consequently, the royalty and fee revenues anticipated by the legislation are illusory. 

The proposed royalty would apply retroactively to mining claims located prior to 

enactment. The proposed legislation would require that existing claims be converted 

to new leases or forfeited. In many cases, existing claims have been held by companies and individuals for many years in reliance on their property rights and security 

of tenure under the General Mining Laws. Claimholders have advanced their claims 

at great expense through exploration, development, feasibility, financing construction, and in some cases to production. Either the imposition of a retroactive royalty 

or the forfeiture of claims entirely deprives claimholders and other stakeholders in 

the claims of property rights in violation of the Fifth Amendment. 

The royalty and the material disposal fee in the proposed legislation will be new 

and additional costs that will impact project economics of every mine and likely 
30 

17 Exhibit III, James Cress’ July 20, 2017 testimony before the House Natural Resources 

Committee/Energy and Natural Resources Subcommittee. 

make some currently operating mines uneconomic. They are certain to shorten the 

viable operating life of many mines, forcing premature closure of what would otherwise be profitable mining operations, which defeats conservation objectives. The immediate adverse economic impacts will be loss of high-paying direct jobs and the 

many indirect jobs that mines create, and tax revenues for local, state, and federal 

governments. 

In addition, the royalty and materials disposal fee in the proposed legislation will 

surely impact projects on the drawing board by rendering projects economically infeasible. Many projects will not be funded and construction of mines and processing 

facilities will be deferred or canceled. 

Finally, as mines prematurely close and new mines are deferred or canceled, the 

domestic supply of the minerals critical to the Nation will decrease and exacerbate 

our dependence on foreign sources of strategic and critical minerals indispensable 

to advancing the country’s high-priority renewable energy, technology, and infrastructure agendas. 

In light of this threat, the mining industry requests that the Committee consider 

preparing an economic impact study of the proposed bill and pledges its assistance 

in the preparation of such a study. 

Production Royalty 

The bill imposes a royalty on the gross value of minerals or mineral products of 

not less than 12.5 percent of the gross value of the products derived from the lease. 

For producing mines that are forced to convert to a lease, the proposed legislation 

imposes a gross royalty of 8 percent. 

As explained in detail in testimony presented to this Committee in 2007 (see 

Exhibit II) and in 2017 (see Exhibit III), the mining industry has gone on record 

for many years as opposing a gross royalty like the royalty in the proposed legislation because such royalties are unfair and will significantly diminish mining on 

Federal lands. As the industry has previously explained, (see Exhibits II and III), 

modeling a hardrock royalty after the coal, oil, and gas royalty programs is unworkable due to the substantially different geologic characteristics of oil, gas, and coal 

compared to hardrock minerals. Additionally, discovering and developing a hardrock 

mineral deposit requires a much larger investment of time and resources compared 

to oil, gas, or coal, which are much more abundant and easier to find and develop. 

Royalty payments to the United States should be based on the value of the 

Federal Government’s ownership interest in the minerals. Instead, the royalty base 

in the proposed legislation includes the mine operator’s costs associated with the 

value-added mineral processing steps that are necessary to produce a salable 

mineral product. Including these costs in the royalty base is confiscatory and highly 

inappropriate. It also differs significantly from the ways in which states typically 

assess royalties and severance taxes as discussed in Exhibit III.17

The royalty in the proposed bill is a ‘‘gross royalty’’ calculated on the gross value 

of mineral products derived from leases. This gross royalty is unfair to the operator, 

because it includes the value added by the operator to process, refine, and produce 

a salable mineral product from the raw minerals removed during mining. Unlike oil 

and gas and coal operations, the raw minerals produced during mining are not 

salable; they must undergo costly processing steps to produce a product that can be 

sold. As a general proposition, it is important to understand that although Federal 

royalties for oil, gas, and coal are simplistically called gross royalties, they are comparable to a net royalty because they are based on the value of the unrefined yet 

marketable products from an oil and gas well or a coal mine. (See Exhibit III, at 

4–5). 

The costs an operator must incur to produce a salable product from raw minerals 

should be deducted from the royalty base on which a Federal royalty is calculated. 

The Federal Government’s contribution upon which the royalty is based must be 

limited to the value of the raw, unrefined minerals and should not be inflated with 

the operator’s costs once the minerals have been mined. A net income or net proceeds royalty based on the value of the minerals at the mine (or that allows deductions for transportation and processing costs to produce a marketable product) is 

fair to both the operator and the Federal Government, which is paid a share of the 

value of minerals at the mine consistent with the Federal Government’s ownership 

interests in minerals on Federal lands. 
31 

The Hardrock Leasing and Reclamation Act of 2019 Royalty Increases 

Financial Risk 

Mine operators must pay production royalties out the margin between costs and 

realized price. Costs tend to vary from mine to mine, even for mines extracting the 

same commodity. In addition, costs tend to vary in a single mine over the mine life, 

as ore grades rise and fall and as the mineralogical characteristics change. 

Operators have no control over price, and little ability to insulate themselves from 

price fluctuations. As a gross royalty, the discussion draft takes a bigger bite out 

of the margins between cost and price, and therefore reduces the viability of the 

project. This greater risk constrains the availability of the project financing necessary to construct mines, and could make project financing unavailable altogether. 

Retroactive Imposition of the Royalty on Existing Claims 

The retroactive imposition of the gross royalty on existing claims will be highly 

disruptive to the structure of the industry today. Many projects in development or 

in production have relied on construction finance packages to construct the mine. 

The retroactive royalty has the potential to trigger immediate defaults of those credit facilities, creating serious financial problems for operators and mine financiers. 

However, it is important to understand that the 8 percent royalty on existing mines 

will affect more than just mine operators and the financial institutions that have 

provided mine financing. It will also affect BLM and the Forest Service because 

these agencies will be faced with mining operations that may be forced to close 

prematurely. 

Administration’s 2007 Statement of Policy 

In November 2007, the Bush administration issued a Statement of Administration 

Policy (SAP) stating: ‘‘The Administration believes that royalty provisions should be 

prospective, should avoid constitutional concerns, and should be set at a level that 

does not threaten the continued, reliable domestic mineral production on which this 

Nation relies.’’ This statement is consistent with the mining industry’s long-held 

position on royalties and amending the Mining Law. 

The 2007 SAP expresses concerns that the retroactive royalty being considered in 

H.R. 2262, a Mining Law bill being considered by this Committee during the 110th 

Congress, would expose the Federal Government to takings claims. As explained in 

the SAP, ‘‘The royalty structure in H.R. 2262 will likely generate Takings Clause 

challenges because it fails to take into consideration property rights relating to 

properly maintained claims established prior to enactment of the bill.’’ 

Because the royalty proposed in the proposed legislation is similar to that 

proposed 12 years ago in H.R. 2262, the same takings concerns are applicable. It 

is important to recognize that the universe of potential takings claims litigants goes 

beyond mine owners and operators and includes the entities that have provided 

mine financing and companies and individuals with third-party royalty agreements 

for these mines. It could potentially include states that currently derive royalty or 

severance tax revenues from hardrock mines. 

THE HARDROCK LEASING AND RECLAMATION ACT OF 2019 WILL NOT CREATE A VIABLE

ABANDONED MINE RECLAMATION FUND

The proposed legislation creates a Hardrock Mining Reclamation Fund with the 

proceeds from royalty payments and the seven cents per ton displaced material 

reclamation fee in Section 303. This fund would be used to clean up Abandoned 

Mine Lands (AMLs), which are historic mine sites that were developed prior to 

modern environmental protection and reclamation laws and regulations. 

The problem with this fund is that it is illusory. The negative implications of the 

proposed legislation on mineral production that will diminish mining on Federal 

lands will mean there will be insufficient mining to achieve the funding objectives. 

For more than two decades, the mining industry has been seeking legislation to 

enable Good Samaritan reclamation of AMLs. Liability provisions in both the Clean 

Water Act (CWA) and the Comprehensive Environmental Response Compensation 

and Liability Act (CERCLA) currently obstruct Good Samaritans from cleaning up 

AML sites. These liability concerns affect numerous stakeholders—local 

communities, conservation groups like Trout Unlimited, and mining companies 

alike. 

Two Good Samaritan meetings in April 2019 in Reno, Nevada and Denver, 

Colorado discussed this problem. Participants in these meetings included state and 

Federal regulators, conservation groups involved with limited AML cleanups, environmental and reclamation professionals, and mining companies. Although there is 

widespread interest in addressing the AML problem, CWA and CERCLA liability 
32 

concerns are recognized as a serious obstacle. Good Samaritan legislation is clearly 

needed to facilitate reclamation of AML sites where there are water quality issues. 

Maintaining a viable hardrock mining industry is an essential component of addressing the AML issue. Some historic, pre-regulation mine sites still contain 

mineral resources that could be developed into a modern mine by a new mining 

company that was not involved with the previous mining activities. Modern mining 

at an historic site creates an important opportunity to integrate the cleanup and 

remediation of historic, unreclaimed mine features into a modern mine designed to 

protect the environment and achieve conservation objectives. 

Taken together, the Hardrock Leasing and Reclamation Act of 2019 and CWA and 

CERCLA liability concerns will create an insurmountable barrier to AML cleanup. 

Mining projects on Federal lands will be drastically diminished under the discussion 

draft. If the proposed legislation is enacted, mining operations that may be viable 

will be unlikely to undertake AML reclamation due to the CWA and CERCLA liability associated with old mine sites. The revenue stream for the Hardrock Mining 

Reclamation Fund will be insignificant and the AML problem will remain 

unresolved. 

CONCLUSION

I would like to thank this Subcommittee for the opportunity to testify on the 

important topic of hardrock mining on Federal land, which has such far-reaching 

implications for all aspects of the country’s economy, national security, energy use, 

infrastructure, technology, and manufacturing. 

If you choose to amend the Mining Law in a way that provides a fair return to 

the public while preserving certainty and land tenure rights, and encourages private 

investment in finding, developing and producing domestic mineral resources, you 

will take an important step toward energy independence and a clean energy future 

and a stronger America. 

However, if you enact the changes proposed in the proposed legislation, you will 

create uncertainty, discourage or eliminate private investment in U.S. minerals, 

prematurely close producing mines, export tens of thousands of high paying mining 

jobs and exacerbate an unhealthy reliance on foreign sources of minerals for 

national defense, manufacturing, infrastructure and clean energy. 

I look forward to answering your questions. 
33 

ATTACHMENTS 

2018 U.S. NET IMPORT RELIANCE1 

commodity 

ARSENK: (trioxide) 

Percent 

ASBESTOS 

CESIUM 

FLUORSPAR 

GALLIUM GRAPHITE (natural) INDIUM 

MANGANESE 

~J~~~~~m~~E~ITE11 

~~~ ~,tlf~~(~~~~~ndsand metotls)3 RUBIDIUM 

SCANDIUM 

STRONTIUM 

TANTALUM 

THORIUM 

VANADIUM GEMSTONES 

BISMUTH 

YTTRIUM 

POTASH 

TITANIUM MINERAL CONCENTRATES 

~'rf'r~~~Z~1~:~~f t omd powder) 

ZINC 

BARITE 

RHENIUM 

STONE (dimension) TIN 

ABRASIVES, fused .Jiuminum oxide (crude) 

ABRASIVES, silicon carbide (crude) BAUXITE 

TELLURIUM TITANIUM (sponge) 

PLATINUM 

CHROMIUM 

PEAT 

GARNET (industrial) SILVER COBALT 

NICKEL 

GERMANIUM 

IODINE 

IRON OXIDE PIGMENTS {natural) IRON OXIDE PIGMENTS (synthetic) LITHIUM 

TUNGSTEN 

ALUMINUM MAGNESIUM COMPOUNDS 

ALUMINA 

SILICON 

PALLADIUM 

COPPER 

VERMICULITE LEAD 

PUMICE SALT 

~EI~JEcrap and flake, natural) 

BROMINE CADMIUM 

MAGNESIUM METAL IRON and STEEL 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

99 

96 

>95 

92 

91 

89 

85 

8S 

84 

84 

82 

78 

>75 

>75 

>75 

>75 

7S 

73 

71 

70 

68 

65 

61 

52 

>SO 

>SO 

>SO 

>SO 

>SO 

>SO 

so 

48 

4S 

34 

33 

32 

30 

29 

29 

28 

26 

25 

<2S 

<2S 

<25 

24 

Mal or import sources (2014-17)2 

Morocco, China, Belgium 

Brazil, Russia canada 

Mexico, Vietnam, South Africei, China 

China, United Kingdom, Germany, Ukraine 

China, Mexico, Canada, Brazil Ch n<~~, Can011d.a, Republ1c of Kore011, Taiwan 

South Africa, Gabon, Australia, Georgia 

China, BraLil, Belgium, Austria Canada Brazil, Can011da, Russia, Germany 

~~·~bEstonia, France, Japan 

Europe, China, Japan, Russia Mex100, Germany, China 

Brazil, Rwanda, Australia, Congo {Kinshasa) 

~~~:;i~~~::!~~~~~bli cof Korea, Russia India, lsr.ael, Belgium, South Afric011 

~:: ::~~~i~· ~~~~~e~~C~~~~ ~~~~!ea Canada, Russia, Belarus, Israel South Africa, Australia, Canada, Mozambique 

China, Ireland, Republic of Korea, Rom.ania 

~~ ~~i!~rcdo, ~~~~~~u:t~~~!OII China, India, Mexico, Moroeco 

~~~~f, ~~la ~~~i~y Poland 

4~~.ef~!'n~~~~~~ ~~~u , ~~~~a China, Netherlands, Sout~ Africa, Romania Jamaica, Brazil, Guinea, Guyana 

Canada, China, Germany Japan, Kazakhstan, Ukraine, China, 

South Afric.a, Germany, United Kingdom, Italy South Afric.1, Kazakhstan, Russia 

Canada 

Australia, India, South Africa, China 

~~r)(~c;>y,~ ~.aj::;~; ~~lau c of Korea 

~~:a8e~~~.YG:~~~~~~·R~~~r~"' 

~~~~~~E~~in , France, Austria 

C~ na, Germany, Brazil, Canada, Ar$entina, Chile, China, Russia 

~~~a~~~~:i .. ~Urnit~YA~bE~~~ates, China 

China, Canada, Australia, Brazil Australia, Brazil, Suriname, Jamaica 

Russia, Brazil, Canada, China South Africa, Russia, Italy, United Kingdom 

~~ih S..fri~~.aB~;i:China , Zimbabwe 

canada, Mexico, Republic of Korea, India Greece, Iceland, Mexico 

Chile, Canada, Mexico, Egypt Canada, China, India, Japa n Greece, Mexico, Turkey Israel, Jord.1n, Chin.a 

Canada, Australia •. China, Belgium 

~~~~!:~~~~( ~~~~egli~~f~~~a Mexico 

1

Not all mincml comrno ditia; QOvCTCd in th is. publication 11re listed her~. Tholi<' not shown include mineral commodities for Yrh ich the Unitc:d State;; is a net export(t" (nbrasi\·es, 

metallic; OOron; clays; diatomite; gold; helium; iron and steel s.::rap; iron ore; k)•anite; rmlybdenum co~rat ; sand and gravel, indu...<trial; ~~e iu ; sod'i ash; titar1iunr 

dioxide pigment, woll:astonite; zeolites; and zircorrium) or less than 24% irnpO!t reliant (beryllium; oement; diamond. industrial stones; feldspa.r. gypsum: iron and steel slag; 

lime; itrog~n (ficccxl)-amrnonia; phosphate rock; sand a nd gmn-1, construction; stone, CIU'lhed; sulfur, and tale and pyrophyllitc). For some mineral conunoditieos (hafnium; 

mercury; qu:ntz Cl)'!ital, indmb"ial; and thalliw11), not enough infonnation is available to cak ulat« the «xact ~ntage of inrpoTI relianc«. 

ln dcsoen ng O«<cr of import share. 

JData include lanthanides 

Data from US. Geological Survey, Z019, Mineral commodity summaries 20 19: U.S. Geological Stn..,·ey, 200 p., htte:f/doi.orw'I0.3133.17020Z434,Pag.: 6. 
34 

***** 

The following documents were submitted as supplements to Mr. Comer’s testimony. 

These documents are part of the hearing record and are being retained in the 

Committee’s official files: 

— Exhibit I: You Say Alternatives are the Answer . . . Let’s Talk: Resource 

Constraints on Alternative Energy Development, Burnell, J.R., American 

Institute of Professional Geologists, in The Professional Geologist, March/ 

April 2009, pp. 33–37. 

— Exhibit II: James Cress’ January 24, 2007 Testimony before the Senate 

Energy and Natural Resources Committee. 

— Exhibit III: James Cress’ July 20, 2017 Testimony before the House Natural 

Resources Committee/Energy and Mineral Resources Subcommittee. 
35 

QUESTIONS SUBMITTED FOR THE RECORD BY REP. GOSAR TO ROBERT D. COMER, ESQ. 

Question 1. This bill would apply a 12.5 percent royalty on new mines, and an 

8 percent royalty on existing mines. Why shouldn’t hardrock mining have the same? 

What about this particular industry makes a large gross royalty such a bad fit? 

Answer. To determine the burden of a Federal mineral royalty, both the royalty 

rate and the royalty base must be considered. Federal royalties on natural resource 

commodities produced from Federal lands should satisfy the following overarching 

objectives: 

Royalty Rates: 

Royalty rates must be responsive to the mineral commodities in question. As 

demonstrated by the Mineral Leasing Act of 1920 (MLA) 30 U.S.C. 181 et seq., a uniform royalty rate is not practical. Under the MLA, royalty rates for oil, 

gas, coal, phosphate, sodium, potassium, and sulfur range from 12.5 percent to 

2 percent. Oil and gas are valued, with some exceptions, at the well head. Coal 

is valued at the mine mouth typically after only nominal processing. For example, there is a well-developed market for a barrel of crude oil, for MMBtu (1,000 

cubic feet of 1,000 Btu) of natural gas, and for raw crude coal at the mine. For 

purposes of assessing the Federal royalty the other leasable minerals are valued 

when they first become marketable products. The processing necessary to create 

a marketable product varies greatly by mineral commodity, nature of the 

orebody and other factors, and generally is much more complex for hardrock 

minerals than for coal, oil, and gas. 

Royalty Base: 

The royalty base is the amount against which the royalty rate is applied. For 

example, a royalty base might be the proceeds of sale of a marketable product, 

less certain allowable costs. The royalty base must allow reasonable deductions 

for the costs to produce a marketable product. The Federal royalty regulations 

for the minerals governed by the MLA allow certain deductions that vary depending on the mineral. The royalty base for hardrock mineral commodities 

should similarly allow deductions to back out the post-mining costs necessary 

to produce the first marketable products of the various hardrock mineral 

products. 

Promote Mineral Production and Provide a Fair Return to Taxpayers: 

Because the main purpose of assessing Federal royalties is to provide a fair return to taxpayers from production of minerals from Federal lands, the royalty 

must be workable and responsive to the business dynamics and economic conditions that apply to each mineral commodity. An unfair or confiscatory royalty 

will be at cross purposes with this objective because it will reduce mineral 

production. 

Unfortunately, the royalty proposed in H.R. 2579 does not satisfy any of these 

objectives. First it simplistically force-fits the 12.5 percent Federal royalty rate applicable to oil, gas and surface-mined coal onto hardrock minerals, which fails to 

consider the substantial economic and business differences between discovering and 

producing marketable coal, crude oil, and gas versus the much greater complexity 

in finding, mining, and processing hardrock minerals into marketable products. 

Second, the proposed structure for the hardrock mineral royalty does not allow 

any deductions for the numerous and costly processing steps required to transform 

hardrock mineral ores (rocks that contain minute quantities of valuable metals) into 

marketable metal products. Unlike raw hardrock mineral ores for which there is no 

market, unrefined crude oil and gas are marketable commodities that are typically 

sold directly in either arm’s length or non-arm’s length transactions. Oil and gas 

royalties, which are assessed on crude oil and gas as they come out of the ground 

at the well head, allow crude oil and gas producers to deduct the transportation 

costs to deliver the crude oil and gas to buyers of these products. Other types of 

deductions are allowed for the other MLA minerals. 

Finally, the H.R. 2579 royalty, along with the unworkable and onerous leasing 

and environmental provisions in the bill, will significantly chill investment in 

hardrock minerals and cause a dramatic decline in hardrock mineral production 

from Federal lands. Instead of rewarding taxpayers with increased revenue from 

hardrock mining, H.R. 2579 will reduce existing hardrock mining revenues such as 

claims maintenance fees, and will produce only paltry hardrock royalty revenues. 

The 12.5 percent royalty rate on oil, gas, and coal produced from surface mines 

works for these commodities because they are much easier to find compared to 

hardrock minerals (see the response to Question No. 5) and do not require complex 
36 

1Like coal, many hardrock minerals may be mined from underground or surface mines 

depending on the geologic characteristics of the specific deposit. 2https://www.law.cornell.edu/cfr/text/43/3504.21. 

3Statement of Deborah Gibbs Tschudy, Deputy Associate Director, Minerals Revenue Management, Minerals Management Service, U.S. Department of the Interior, before the Senate 

Committee on Energy and Natural Resources, January 24, 2008. 4There is a worldwide market for crude oil and natural gas in their unrefined state. On May 

24, 2019 the Wall Street Journal (page B7) listed the price for crude oil at $57.91 per barrel; 

the price for natural gas was $2.578 per one million Btu (MMBtu). 

and costly post-extraction processing to produce marketable products. The lower 

Federal royalty of 8 percent on coal produced from underground mines 1 reflects the 

higher extraction costs associated with underground coal mines compared to surface 

mines and clearly illustrates that a uniform Federal royalty rate is unworkable— 

even for leasable minerals. The uniform 12.5 percent royalty in H.R. 2579 for all 

hardrock minerals is similarly impractical. 

In evaluating the inappropriateness of a uniform 12.5 percent hardrock mineral 

royalty, it is instructive to consider the different royalty rates that apply to the 

MLA minerals as shown in Table 1. The MLA imposes a different royalty rate and 

royalty valuation (the point in the production cycle at which the royalty is assessed) 

for the various MLA minerals. 

TABLE 1 2

Comparative Federal Royalty Rates for Minerals Governed by the MLA 

Commodity Royalty Rates and Valuation Basis 

Crude Oil 12.5% at the well head 

Natural Gas 12.5% at the well head 

Coal 12.5% of the gross value for surface mined coal and 8% for coal produced from underground mines 

Phosphate 5% of gross value of the output of phosphates or phosphate rock and associated or related minerals 

Sodium 2% of the quantity or gross value of the output of sodium compounds and related products at the point 

of shipment to market 

Potassium 2% of the quantity or gross value of the output of potassium compounds and related products at the 

point of shipment to market 

Sulfur 5% of the quantity or gross value of the output of sulfur at the point of shipment to market 

The different royalty rates and valuation bases for the MLA commodities clearly 

demonstrates that a one-size-fits all royalty for leasable minerals is just as infeasible as it would be for hardrock minerals because leasable minerals have different 

geologic characteristics, processing requirements, and business parameters that 

must be considered in establishing a fair and workable Federal royalty—with the 

ultimate goal of producing royalty revenues for the Federal Government. Imposing 

the 12.5 percent royalty rate that works for oil, gas, and surface coal on the other 

leasable minerals (underground coal, phosphate, sodium, potassium, or sulfur) 

would make production of these minerals uneconomic and would produce zero 

royalty revenues for taxpayers. 

The substantially lower royalty rates for sodium, potassium, and sulfur compared 

to the 12.5 percent oil and gas royalty reflect the different business parameters applicable to these leasable solid minerals versus those affecting production of oil and 

gas, which are classified and regulated as fluid minerals. Generally speaking, 

leasable solid minerals require more post-extraction processing to produce a marketable product. For example, in the case of sodium and potassium, the royalty is 

assessed on the value of the first marketable product produced from processing raw 

sodium and potassium ores or sodium and potassium brines.3 Oil and gas are marketable commodities at the point of extraction (i.e., at the well head), without 

further processing.4

In contrast, there is no market for unrefined ores of sodium, potassium, or sulfur. 

These ores require post-extraction processing to make a marketable product. Therefore, the Federal royalty is assessed at the point of shipment—not at the point of 

extraction (the mine mouth). The royalty for these minerals is calculated on the 
37 

5Most hardrock minerals must also undergo further processing at off-site smelters and 

refineries to produce finished product metals. But unlike the costs to refine oil and gas into 

consumer products like diesel and gasoline, which can be passed on to the consumer, the costs 

to refine metals into consumer products is not reflected in metals commodity prices. 

value of these minerals after certain processing costs have been deducted. The 

royalty rates for these minerals reflect the economics of producing these minerals 

and is assessed at a rate that sodium, potassium, and sulfur mining operations can 

withstand and still operate at a profit. 

There is no commodity market for raw (crude) hardrock mineral ores as they are 

produced from the mine (i.e., at the mine mouth). Transforming raw gold ore from 

the gold-bearing rocks produced at a mine into salable dore ́ or producing marketable 

base metal concentrates from base metal ores extracted from deposits of copper, 

zinc, lead, nickel, etc. requires costly mineral processing techniques performed at or 

near the mine site.5 Because hardrock minerals have significant processing costs 

associated with these processing steps to produce a marketable product, a hardrock 

minerals royalty must allow deductions for these processing costs. 

Every hardrock mineral deposit has unique mineralogy that requires depositspecific metallurgical treatments to optimize mineral recoveries. Examples of 

hardrock minerals processing steps include crushing, grinding, milling, thickening, 

flotation, leaching, roasting, autoclaving, and gravity separation. Mining companies 

perform detailed metallurgical studies to determine the most efficient and economic 

processing techniques to maximize mineral recovery rates and typically invest hundreds of millions to billions of dollars to construct mining and mineral processing 

facilities. Given the substantial capital required to build hardrock mining facilities, 

a Federal hardrock royalty must be structured to allow deductions for the processing 

costs applicable to each mining operation. 

Just as a uniform royalty rate under the MLA on leasable minerals is unfeasible, 

a single royalty rate for hardrock minerals would be similarly impractical. 

Compared to the solid leasable minerals, hardrock minerals are much more diverse 

in nature. (See the response to Question No. 3). Therefore, in the event Congress 

enacts a royalty on hardrock minerals, it needs to reflect the broad diversity of 

hardrock minerals and the costs associated with the various and numerous processing steps required to produce marketable products from the wide array of 

hardrock minerals. The different royalty rates for phosphate, sodium, potassium, 

and sulfur under the MLA reflect the variable business realities influencing mining 

and producing these minerals, which are substantially different than for coal, oil, 

and gas. Similarly, a hardrock Federal royalty must be structured to reflect the different economics of producing the diverse group of hardrock minerals that are governed by the Mining Law. A Federal hardrock royalty must accommodate the 

different business models applicable to each hardrock mineral commodity. 

Question 2. Is the royalty system described in Chairman Grijalva’s bill a useful 

way to achieve greater returns for the public? 

Answer. The royalty system in Chairman Grijalva’s bill is not a useful way to provide taxpayers with revenue from hardrock mining operations on Federal land. As 

explained in the response to Question No. 1, a hardrock mining royalty must account for the costs to produce a marketable mineral product like dore ́ or 

concentrates, which is consistent with the way in which royalties are assessed on 

leasable minerals. The 12.5 percent gross royalty proposed in H.R. 2579 on 

‘‘production or concentrates or products derived from hardrock minerals’’ is not comparable to the 12.5 percent net royalty assessed on marketable crude oil and gas 

at the well head, and is itself written in an ambiguous manner. 

Hardrock mining royalties should allow deductions for the costs to process raw ore 

into a marketable product, which would be consistent with the way that the MLA 

assesses royalties on both fluid and solid leasable minerals that allow deductions 

to develop marketable products. Additionally, the high, uniform royalty rates of 12.5 

and 8 percent in H.R. 2579 are not appropriate for hardrock minerals—just like the 

12.5 percent royalty rate on oil, gas, and surface coal is not applicable to the other 

leasable minerals governed by the MLA. 

The proposed H.R. 2579 royalty treats hardrock minerals differently than any of 

the leasable minerals for which certain deductions are allowed prior to calculating 

the royalty. There is no public policy rationale for assessing a hardrock mineral 

royalty in a radically different manner compared to the way in which royalties are 

assessed on leasable minerals. Hardrock minerals should not be subjected to a 

unique, unfair, and confiscatory royalty that disallows any deductions to make a 

salable mineral product. 
38 

6 Hardrock mining operations pay numerous state, local, and Federal taxes including but not 

limited to property taxes, sales and use taxes, payroll taxes, and corporate income taxes. 7Otto, Bataresh, and Cordes, Institute for Global Resources & Policy Management/Global 

Mining Taxation, March 2000. 8 2017 BLM Public Land Statistics, Table 3–25. 

As written, the H.R. 2579 royalty gives the Federal Government a financial interest in the costly investments that hardrock mining companies must make in order 

to produce a salable product. Not only is this inconsistent with the way in which 

the Federal Government treats leasable minerals, it is inappropriate. 

A Federal hardrock royalty should be based solely on the government’s ownership 

interest in the Federal hardrock minerals. It must not be expanded to include the 

mining companies’ enormous investments in finding, mining, and processing 

minerals into marketable mineral products. Company costs for these value-added 

steps must be deducted from the royalty calculation. The Federal Government does 

not contribute anything to find, mine, and process hardrock minerals; these costs 

are borne solely by private-sector mining companies and should be excluded from 

the royalty valuation. 

In assessing an appropriate Federal royalty rate for hardrock minerals, the total 

government take (state royalties, taxes, and fees) that are already imposed upon 

these minerals must be considered. As shown in Exhibit I, the American 

Exploration & Mining Association (AEMA) recently compiled statistics showing that 

the average hardrock mine operates with a very slim 3 percent profit margin (i.e., 

the difference between a mine’s total costs and its total revenues). Obviously, mines 

operating with only a 3 percent margin cannot afford to pay a 12.5 percent royalty. 

Roughly 40 percent of the revenue from hardrock mines goes toward paying state 

royalties and Federal and state fees and taxes; 6 24 percent is spent on operating 

costs; labor costs consume the remaining 33 percent. The H.R. 2579 12.5 percent 

royalty takes a bigger bite out of the economic pie than most mining operations can 

sustain. Moreover, the economic pie cannot be easily reapportioned because existing 

state and Federal royalties, fees, and taxes are fixed costs; they cannot be readily 

reduced to accommodate payment of a new Federal royalty that exceeds the mine’s 

profit margin. 

The 2000 study entitled ‘‘Global Mining Taxation Comparative Study (Second 

Edition) 7 by Professor James Otto and others evaluated direct and indirect taxes 

and royalties on hardrock mining operations in 24 countries. This analysis showed 

that the projected government ‘‘take’’ in 2000 on a hypothetical medium-sized profitable Nevada gold mine was 49.3 percent. A similar projection for a hypothetical Arizona copper mine was 49.9 percent. In 2008, the testimony that Dr. Otto presented 

to the Senate Energy and Natural Resources Committee showed that many mineralproducing countries have a total government take in the range of 40 to 50 percent. 

Dr. Otto’s work reveals that even a small Federal royalty would make the U.S. less 

competitive for mining investment because the total government take is already at 

the high end of the range and would exceed the 40 to 50 percent government take 

that is typical in mineral producing countries. 

Imposition of the 12.5 percent royalty in H.R. 2579 would cause many mines to 

close because they would no longer be economic to operate. Obviously, mines that 

are forced to close due to the 12.5 percent royalty would generate zero Federal 

royalties. But the adverse economic impacts of the unrealistic and confiscatory royalty in H.R. 2579 would not be limited to the lack of Federal royalty payments. The 

premature closure of these mines would have a harmful economic ripple effect due 

to the substantial loss of high-paying mining jobs, state royalty payments, and the 

other local, state, and Federal taxes and fees associated with operating mines. 

Premature mine closures would also destroy the many indirect jobs that mining 

projects create. In rural mining communities, operating mines create essential economic engines that would grind to a halt as the H.R. 2579 royalty renders mining 

operations uneconomic to operate, forcing them to close. 

Thus, the proposed royalty would create a significantly negative overall economic 

footprint that would harm mining communities and reduce local, state, and Federal 

revenues. As discussed in Question No. 4, the leasing provisions in H.R. 2579 would 

force claim forfeitures and divestments, expose the Federal Government to takings 

litigation associated with these forfeitures and divestitures, and eliminate claims 

maintenance fees and service charges which currently amounted to roughly $65 

million in FY 2017,8 further exacerbating the economic harm resulting from the 

H.R. 2579 royalty. 
39 

9https://www.commerce.gov/news/reports/2019/06/federal-strategy-ensure-secure-and-reliablesupplies-critical-minerals, A Federal Strategy to Ensure Secure and Reliable Supplies of Critical 

Minerals, June 4, 2019. 10https://www.blm.gov/programs/energy-and-minerals/mining-and-minerals/locatable-minerals. 11Public Land Statistics 2017, Volume 202, June 2018, U.S. Department of the Interior 

Bureau of Land Management, BLM/OC/ST-18/001=1165, P-108-7. 12https://www.federalregister.gov/documents/2018/09/13/2018-19961/locatable-minerals. 

Question 3. Hardrock mineral commodities all have different price points and level 

of rarity. What would a single blanket Federal royalty do if applied to all these 

minerals in the same way? 

Answer. A single, blanket Federal royalty for hardrock mineral commodities 

would be completely unworkable given the wide range of locatable minerals that are 

governed by the Mining Law and the different types of mining and processing techniques needed to produce marketable hardrock mineral commodities based on the 

widely varying orebody characteristics. Imposition of a uniform royalty—like the 

confiscatory 12.5 percent royalty in H.R. 2579—would make mining many hardrock 

minerals uneconomic. Most hardrock mineral deposits could not withstand a 12.5 

percent royalty that does not allow any deductions for the costs to produce a marketable product. Because the H.R. 2579 royalty fails to take into account the differences between the various hardrock minerals in terms of mineralogy, processing 

techniques and costs, and the different points at which hardrock minerals become 

marketable products, it would lead to premature mine closures, would chill investment in exploration and mineral development, and lead to a substantial increase in 

the Nation’s reliance on foreign countries for the minerals we need for our economy, 

infrastructure, technology, manufacturing, conventional and renewable energy, and 

national defense. 

The increased reliance on foreign minerals that would result from H.R. 2579 

would be completely inconsistent with President Trump’s Executive Order 13817, A 

Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals. This 

Executive Order directs the Secretary of Commerce, in coordination with heads of 

selected executive branch agencies and offices, to submit a report to the President 

to outline ways to reduce the country’s reliance on foreign minerals. The U.S. 

Department of Commerce just published this report.9

The royalty, the onerous land tenure restrictions, and the unsuitability provisions 

in H.R. 2579 would completely thwart Call for Action No. 5 ‘‘Improve Access to 

Domestic Critical Mineral Resources on Federal Lands and Reduce Federal 

Permitting Timeframes’’ in the Department of Commerce’s report. H.R. 2579 would 

interfere with this objective because the bill is designed to decrease access to 

hardrock minerals, many of which are critical minerals, by putting more lands offlimits to mining and creating additional permitting hurdles. Additionally, H.R. 2579 

would render Call for Action No. 4, ‘‘Improve Understanding of Domestic Critical 

Mineral Resources’’ pointless. The research recommended to identify new domestic 

critical minerals resources would become a purely academic exercise on Federal 

lands given the barriers to exploration and development in H.R. 2579. 

Compared to the solid, non-fuel leasable minerals (phosphate, sodium, potassium, 

and sulfur) hardrock minerals are much more numerous and diverse. The U.S. 

Bureau of Land Management (BLM) describes hardrock minerals as ‘‘includ[ing] 

most metallic mineral deposits and certain nonmetallic and industrial minerals’’ 10

and lists the following as examples of locatable minerals: copper, nickel, lead, zinc, 

cadmium, cobalt, gold, silver, garnet, uncommon-variety limestone or clay, platinum, 

palladium, quartz crystals, semiprecious gemstones, uranium, or other minerals.11

Similarly, the U.S. Forest Service’s long list of locatable minerals consists of: ‘‘base 

and precious metal ores, ferrous metal ores, and certain classes of industrial 

minerals that include but are not limited to gold, silver, platinum, copper, lead, zinc, 

magnesium, nickel, tungsten, bentonite, barite, fluorspar, uranium, and uncommon 

varieties of sand, gravel, and dimension stone.’’ 12

There is far greater diversity and complexity in all aspects of discovering, mining, 

and processing hardrock minerals compared to leasable minerals. Leasable minerals 

generally occur in sedimentary basins whereas hardrock minerals occur in a wide 

range of geologic terrains, which is one of the reasons that hardrock minerals are 

more difficult to find than leasable minerals. Additionally, hardrock mineral deposits have unique and site-specific geological, mineralogical, and metallurgical characteristics that require deposit-specific mine plans and processing facilities. 

If Congress decides to establish a Federal hardrock mining royalty, the royalty 

must be structured to accommodate the complexities and diversity of mining and 

processing the broad list of hardrock minerals governed by the Mining Law. In order 

to avoid making hardrock mining on Federal lands economically infeasible, which 
40 

13 Hardrock Mining on Federal Lands, 1999, National Research Council, National Academy of 

Sciences, 247 p. 14 It is not uncommon for claims that have been explored and dropped by one company to be 

re-located by a different company that will conduct additional exploration work with the hopes 

of discovering a valuable mineral deposit. 

would cause a significant reduction in the production of hardrock minerals, a 

Federal hardrock royalty must account for the fact that the many different locatable 

minerals have unique characteristics that are reflected in the mining and processing 

techniques used for each specific hardrock mineral. 

A Federal hardrock royalty must be responsive to the highly diverse business 

dynamics and economics applicable to each of the hardrock minerals. For example, 

mining operations for locatable uncommon varieties of sand, gravel and dimension 

stone are significantly different than underground mining operations for precious or 

base metals. The mining and processing techniques applicable to locatable uncommon varieties of sand, gravel and dimension stone differ substantially from what is 

required to mine and process ores of gold, silver, copper, and most other locatable 

minerals. A Federal hardrock royalty must not make production of the wide group 

of locatable minerals uneconomic by failing to account for the complexity, diversity, 

and variability of hardrock minerals. 

Please see the response to Question No. 5 for a discussion of the relative rarity 

of hardrock minerals compared to leasable minerals—especially oil and gas. 

Question 4. One of the major changes this bill would make is transitioning the 

General Mining Law from a claim system into a leasing system. It would allow an 

initial 20-year lease term, plus the option to renew for 10 years after that. Other 

minerals like coal seem to function with a leasing system. Why should hardrock be 

treated differently? 

Answer. The elimination of the mining claim system and the forced conversion of 

mining claims into leases are especially problematic aspects of H.R. 2579. The H.R. 

2579 leasing proposal attempts to impose a scheme appropriate for coal, oil, and gas 

onto hardrock minerals. The above-described geological and operational differences 

between coal, oil, and gas compared to hardrock minerals are the reason that a 

leasing system will not work for hardrock minerals. 

The H.R. 2579 leasing provisions would destroy self-initiation, a unique aspect of 

the Mining Law that benefits the Nation by using private-sector investments to discover and develop domestic mineral deposits. Under the current Mining Law, U.S. 

citizens can enter Federal lands open to operation of the Mining Law and locate 

mining claims in areas they think have favorable geology for finding a mineral 

deposit. This self-driven process, known as self-initiation, greatly benefits our 

Nation because it effectively leverages private investments that transform undeveloped Federal land into mining operations that create jobs, pay taxes, and provide 

the minerals the country needs—at no risk or expense whatsoever to U.S. taxpayers. 

The National Academy of Sciences estimates that 1,000 hardrock mineral targets 

must be identified and evaluated to discover a deposit that can become a mine.13

This 0.001 odds makes finding mineral deposits a very difficult and high-risk 

endeavor that is expensive and time consuming. 

Searching for the one-in-one-thousand needle in a haystack mineral deposit is an 

iterative process that makes self-initiation is critically important because it gives 

geologists the ability to expand their search for minerals and locate new claims— 

or to narrow their search and drop those claims on lands that no longer appear to 

have mineral potential. Each step in this process evaluates the available data to 

hone in on the mineral target. The exploration process requires having the on-theground flexibility to follow the geologic data to explore adjacent or new areas, to 

locate new claims on prospective ground, and to drop claims on lands that have been 

evaluated and determined to lack sufficient mineralization to meet that company’s 

criteria to warrant further investment.14 Self-initiation makes exploration possible 

because it supports the iterative process of looking for minerals to find mineral 

deposits that are very difficult to find. 

This iterative process becomes impossible under a leasing system because the 

Federal Government determines where companies can and cannot look for minerals. 

Leasing substitutes the Federal Government’s geologic acumen about where 

minerals are located for the private sector’s knowledge and expertise. Rather than 

capitalizing upon the private sector’s substantial understanding about where minerals may be located, the Federal Government becomes the initial prospector, without the benefit of any or much geologic data, and determines where companies may 

be allowed to look for minerals. 
41 

The government-as-prospector leasing system may work for leasable minerals like 

coal, oil, and gas, which are much more abundant than hardrock minerals and generally less difficult to find (i.e., have much higher and more predictable rates of discovery compared to hardrock minerals as discussed in more detail in Question No. 

5). However, it is wholly inappropriate for hardrock minerals given their relative 

rarity. Prior to discovery, the specific location of hardrock mineral deposits is generally unknown, making them difficult to find and develop. Consequently, hardrock 

mineral exploration is a very risky business. The Federal Government is ill-suited 

for this high-risk endeavor and should not get into the hardrock exploration and development business, as required under the H.R. 2579 Federal leasing scheme. 

In contrast, there are well-defined and well-understood vast geologic basins where 

coal, oil and gas are already known to occur such as the Powder River Coal basin 

in northeastern Wyoming and southeastern Montana or the vast Permian oil and 

gas basin in western Texas and southeastern New Mexico. A Federal leasing system 

for tracts of land in previously identified coal, oil, or gas provinces is feasible because the Federal Government already knows the location of the targeted resources. 

Moreover, because the odds of discovering additional oil and gas reserves in an established oil and gas or coal province are much higher than the one-in-one-thousand 

odds of discovering a hardrock mineral deposit, companies have an incentive to bid 

on and acquire Federal leases. (See the response to Question No. 5). 

The H.R. 2579 lease term and acreage limits will create significant barriers to 

hardrock mineral exploration and development on Federal lands. The 2-year 

primary term for a prospecting license (i.e., an exploration lease) is completely unrealistic and inappropriate for hardrock minerals. Even with the allowable 4-year 

extension, the prospecting license term limit is much too short. 

Discovering and developing a hardrock mineral deposit typically takes 10 years 

or longer, making hardrock mineral exploration a very risky and costly business. 

Depending on the deposit type and complexity of the geologic setting, exploration 

costs on the order of hundreds of millions of dollars are typical. (See Exhibit I). 

Hardrock mineral exploration will become even riskier and less attractive if an arbitrary and unrealistic term limit of 2 to 6 years is imposed on what is already a very 

high-risk endeavor. The H.R. 2579 exploration term limit will most certainly chill 

private-sector investment in exploring for minerals on Federal lands. 

The amount of land that can be explored under an H.R. 2759 prospecting license 

is limited to an arbitrary 2,560 acres, which is the equivalent of just 128 20-acre 

mining claims. This limitation is inconsistent with the iterative mineral exploration 

process described above in which large target areas that may be comprised of several hundred to several thousand claims covering a broad area with mineral potential are initially examined, with each step of the exploration process vectoring toward a more defined and promising mineral target. The time and spatial constraints 

associated with the H.R. 2759 prospecting licenses will significantly reduce the likelihood of future mineral discoveries and chill investment in mineral exploration. 

This arbitrary acreage limit could precipitate adverse environmental consequences 

because it would eliminate the ability for companies to focus their efforts in areas 

in which they are already operating where there is existing infrastructure that could 

be used to expand an existing operation or develop a nearby, satellite deposit. 

Rather than capitalizing on existing facilities in a ‘‘brownfields’’ setting, this acreage 

limit would have the perverse effect of creating new disturbances in ‘‘greenfield’’ 

areas where the company does not have any leases or operations. 

The H.R. 2579 leasing provisions compound the risks and add more disincentives 

to hardrock minerals exploration and development, which is already a high-risk 

business. Although successful prospecting licensees may apply for a 20-year noncompetitive mining lease, the Federal land management agencies (e.g., BLM or the 

Forest Service) have the discretionary authority to deny issuance of the lease. H.R. 

2579 gives these agencies broad discretionary authority to deny lease applications, 

which puts a company’s entire exploration investment under its prospecting license 

at risk. Because H.R. 2579 does not provide specific guidelines dictating when the 

agencies are authorized to deny a lease application, the bill creates a carte blanche 

opportunity for BLM and the Forest Service to withhold their consent to lease lands 

on which minerals have been discovered for mine development. 

The very real possibility that the Federal Government may not grant leases for 

the minerals discovered under a prospecting license creates intolerable uncertainty 

that will completely chill mineral exploration and development in the United States. 

Companies will not be able to justify to their shareholders expenditures of the tens 

to hundreds of millions of dollars required to discover a valuable mineral deposit 

if there is no guarantee that they will have the right to develop the minerals they 

discover. 
42 

15 It should be noted that H.R. 2579 targets public lands in the western United States that 

are open to operation of the General Mining Law (30 U.S.C. 21a et seq)—not public domain 

lands which are not subject to the General Mining Law. 16The Duluth Complex on the Superior National Forest in Minnesota contains very large 

copper, nickel, and platinum group mineral deposits that are truly world class. 17 Not every wildcat well that discovers hydrocarbons will be economic to develop. 

The 20-year primary term lease in H.R. 2759 is another serious barrier to mineral 

investment because it is not unusual for mines to operate for several decades. Without the assurance that a mine can continue to operate longer than 20 years, companies will be very reluctant to invest the hundreds of millions and sometimes billions 

of dollars needed to develop a mine. Similarly, financial institutions will be 

unwilling to finance mine construction. 

Finally, it is important to understand that the arbitrary and unrealistic 20,480- 

acre per company per state leasing limit in H.R. 2759 will expose the Federal 

Government to takings litigation. This acreage limit, which is the equivalent of only 

1,024 mining claims, fails to recognize that it is not unusual for mining companies 

to operate several mines in a state and own more than 1,024 mining claims. This 

is the case in Nevada and other mining states where several large mining companies operate multiple mines comprised of thousands of mining claims. 

The H.R. 2579 leasing acreage restrictions will result in forfeitures of the private 

property rights on thousands of mining claims located within the boundaries of currently producing mining properties. There are no public policy benefits or justifications for this private property seizure, which will completely disrupt active mining 

operations. The acreage restrictions will precipitate numerous takings claims as the 

government forces the premature closure of viable mining operations or the divestiture of lands that are part of productive mining operations. 

There is a compelling public interest in maintaining the mining claim system and 

self-initiation process, which capitalizes upon private-sector knowledge and investment to find and develop the minerals essential to American life. Under the current 

law, individuals and mining companies do the educated guesswork on where to 

spend private-sector resources to look for minerals and in exploring for minerals. 

The Federal Government is ill-suited to identifying prospective mineral targets. 

Ironically, the stated purpose of H.R. 2579 is ‘‘[t]o modify the requirements applicable to locatable minerals on public domain lands,15 consistent with the principles 

of self-initiation of mining claims . . .’’ Nothing could be further from the truth because H.R. 2579 completely destroys self-initiation by abolishing future mining 

claims and forcing the conversion of existing mining claims into leases. 

Finally, the paucity of operating mines and mineral exploration programs on acquired Federal lands provides compelling evidence of the chilling effect that a 

Federal leasing system has on hardrock minerals exploration and development. 

Despite the fact that Federal acquired lands in Missouri, Minnesota, and elsewhere 

have significant—even world class 16—mineral endowments, mineral exploration 

and production from these lands is very limited. The current minerals leasing program for acquired lands is failing to achieve the basic purpose of a Federal royalty 

program, which is to generate revenue from mineral production on Federal lands. 

The H.R. 2579 Federal leasing program would similarly fail to produce meaningful royalty payments from mining on Federal lands open to location under the 

Mining Law in the western United States. There would be no public policy benefits 

or justification for replicating the failing leasing system for acquired lands on 

western Federal lands. 

Question 5. How difficult are these resources to find, exactly? How much yield is 

there mining for hardrock minerals than for coal, for example? 

Answer. As discussed in the response to Question No. 4, the National Academy 

of Sciences has found that it is necessary to examine 1,000 hardrock mineral targets 

in order to discover a mineral deposit that can ultimately be developed into a profitable mining operation. These one-in-one-thousand (1:1,000) odds of discovering a 

viable hardrock mineral project stand in stark contrast to the relative ease with 

which hydrocarbons are discovered. The oil and gas industry uses a rule of thumb 

that 1 in 10 wildcat oil and gas exploratory wells will successfully discover hydrocarbons.17 This high rate of discovery of oil and gas resources reflects the predictable geology in the sedimentary basins that contain most of the world’s hydrocarbon 

reserves. The geologic conditions that are very favorable locations for discovering 

and producing hydrocarbons in sedimentary basins like the Permian and Williston 

basins are relatively well understood because these basins have already been 
43 

18https://www.blm.gov/programs/energy-and-minerals/oil-and-gas/about. 19Public Land Statistics 2017, Volume 202, June 2018, U.S. Department of the Interior 

Bureau of Land Management, BLM/OC/ST-18/001=1165, P-108-7. 20March 2019 LR 2000 database showing acres of authorized surface disturbance for mineral 

exploration, development, and mining on BLM-administered lands. 

extensively drilled and have comparatively simple geology in contrast to hardrock 

minerals. 

BLM’s statistics show there is a high discovery rate for oil and gas resources on 

Federal leases. According to BLM, Federal oil and gas leases covered roughly 26 

million acres at the end of FY 2018. Nearly half of these leased areas—12.8 million 

acres—produce oil and gas in economic quantities.18

Comparing the footprint of hardrock mineral activities for exploration, development, and mining on Federal lands with Federal lands where oil and gas is being 

produced vividly demonstrates that hardrock mineral deposits are much rarer than 

oil and gas deposits. BLM’s statistics show that at the end of FY 2017, mining 

claims covered only about 8 million acres 19—less than one-third the footprint of the 

Federal lands leased for oil and gas. Using the footprints of Federal oil and gas 

leases and mining claims as proxies for the distribution and frequency of occurrence 

of oil and gas compared to hardrock minerals, it is evident that oil and gas 

resources are much more abundant and widespread than hardrock mineral 

resources. 

Active mineral exploration and mining projects are taking place on just a small 

fraction of mining claims. BLM’s data show that the agency has authorized surfacedisturbing mineral exploration, development, and mining activities on a mere 

313,042 acres, which represents less than 4 percent of the area covered by mining 

claims.20 This small mineral activity footprint reflects the rarity of hardrock mineral 

deposits—hence the one-in-one thousand odds of making a discovery. Oil and gas, 

on the other hand, are much easier to discover, as the production statistics from 

Federal leases show, with producing wells on roughly half of the acres currently 

subject to Federal leases. 

It’s also important to understand the different economics and time frames associated with oil and gas exploration and development compared to hardrock exploration and mining. Once an exploratory well is drilled into an oil and gas field, the 

wildcat well can be readily retrofitted into a production well from which marketable 

crude oil or natural gas can be produced. Subsequent wells drilled into the same 

oil and gas deposit have a high probability (greater than 1 in 10 chance) of being 

productive. Similarly, discovery of a coal deposit is relatively easy given the abundance of coal. Coal seams typically have continuity and predictability. 

In contrast to oil and gas wildcat wells that can be transformed into producing 

wells, hardrock mineral exploration drill holes cannot be turned into a mine. A drill 

hole that discovers hardrock minerals is just the start of a time-consuming and expensive process to drill many other holes to confirm the presence of a mineral 

deposit of sufficient size and grade to warrant development of the mine. Even 

though geophysical surveys, geological mapping, sampling, and drilling provide important information that may help identify that one-in-one thousand project that 

can become a mine, they do not guarantee discovery of a viable mineral deposit. 

Companies spend tens to hundreds of millions exploring for minerals with no guarantee that their efforts will discover a deposit that can be developed into a mine. 

If the exploration data and engineering studies are favorable enough to warrant the 

decision to build a mine, an enormous investment on the order of hundreds of 

millions to billions of dollars will be required to design and construct the mine and 

associated mineral processing facilities. 

As discussed in the response to Question No. 1, numerous processing steps are 

required to produce a marketable product like metal concentrates or dore ́ from the 

hardrock mineral ores that are extracted from the mine. In contrast, leasable 

minerals like coal, oil and gas require comparatively less processing to produce a 

marketable product. Additionally, hardrock mineral ores contain only small concentrations of valuable metals. The processing steps are required to separate the 

metals from the ore (the rocks that contain the metal). As shown in Exhibit I, 300 

tons of coal coming out of the ground at a mine has an immediate value at the mine 

mouth because nearly all of the produced coal is marketable, requiring relatively little processing. In contrast, 300 tons of gold ore coming out of the mine is comprised 

of rock that contains a very small amount of gold. This gold ore must be processed 

in order to separate the gold from the rock. Thus the ‘‘yield’’ from raw, unprocessed 

hardrock mineral ores is much smaller than the yield from coal at the mine mouth 

or crude oil and gas at the well head. 
44 

21 Underground mines may be developed several hundred to several thousand feet below the 

ground surface, with some deposits being as much as 1 mile underground. 

The gold ores produced at surface gold mining operations typically contain less 

than one-tenth of an ounce of gold for every ton of rock mined (a grade of <0.1 

ounces of gold per ton). Many surface gold mines produce gold from exceptionally 

low-grade gold ores that contain hundredths of ounces of gold (i.e., gold grades of 

less than 0.09 ounces of gold per ton). Other hardrock minerals comprise similarly 

small fractions of the rocks in which they are found. 

Question 6. What contributes to the total average costs of starting up a mine before 

production can start? Where do those expenses mostly come from? 

Answer. It is not practical to provide a total average cost of starting up a hardrock 

mineral mine due to the diversity of hardrock minerals. Because each hardrock 

mineral deposit has unique geological and metallurgical characteristics, mine plans 

and processing plants must be custom-tailored to fit that deposit. Additionally, sitespecific environmental conditions such as the proximity to surface water and 

groundwater aquifers or the presence of important wildlife habitat or cultural 

resources will influence the mine design. The goal is to engineer mining and mineral 

processing operations to optimize economic returns and minimize capital and 

operating costs and environmental and social impacts. 

Therefore, there is no such thing as an average mine, which is the reason why 

the royalty base (the valuation upon which a Federal hardrock mineral royalty is 

calculated) must consider the costs driven by this diversity and complexity. No two 

mines will have identical startup or operating costs. 

Despite the wide range of factors that contribute to startup and operating costs, 

it is possible to offer some generalizations. Startup costs for locatable industrial 

minerals and the uncommon varieties of sand, gravel and dimension stone that are 

considered locatable minerals will be considerably less than the startup costs for 

hardrock metals mines. Generally speaking, industrial minerals and uncommon varieties will be located at or near the ground surface and can be mined using simple 

surface mining techniques. Typically, these minerals do not require complex processing to make a marketable product. Examples of processing necessary for these 

minerals include washing, sorting, sizing, screening, and packaging. Some industrial 

minerals may also require crushing. 

On the other end of the spectrum, deeply buried metallic mineral deposits 21 must 

be mined using underground mining techniques and require expensive processing to 

separate the metals from the ore (metals-bearing rocks). Development of an underground mine takes an enormous investment of capital. Similarly, processing facilities are very costly to develop—especially if they involve numerous processing steps 

such as crushing, grinding, flotation, leaching, roasting, and autoclaving. The design 

of a mineral processing facility will depend on the mineralogical and metallurgical 

characteristics of the deposit, which will be unique to that deposit. Generally speaking, underground hardrock mineral deposits that require complex mineral 

processing will have the most expensive startup costs. 

The startup costs to develop a surface mine will typically be less than the costs 

associated with developing an underground mine. The mineral processing costs at 

surface mines will depend on the mineralogy and metallurgy of the deposit being 

mined. Deposits of oxidized or partially oxidized precious metals or copper may be 

processed using heap leaching techniques, which are generally less expensive to 

build and operate than a milling facility. However, many surface mining operations 

produce ores that require many or all of the above-described processing steps to 

produce a marketable product. For example, some of the large surface gold mines 

in Nevada have complex milling facilities that have roasters and autoclaves in addition to crushing, grinding, leaching, and flotation components. 

Startup costs in the range of hundreds of millions of dollars are fairly typical for 

mid-sized surface metallic mineral mines that do not require complex mineral processing facilities. However, much higher startup costs—on the order of several 

billions of dollars—are required for large surface or underground mining operations 

that need complex mineral processing facilities. 

The substantial investment of capital required to start a hardrock metal mine is 

one of the key reasons that the H.R. 2579 leasing scheme is unworkable. In order 

to secure financing to build a multi-million or billion dollar mine, mining companies 

and their lenders must have security of tenure to assure that the mine and mineral 

processing facilities can continue to operate during the projected mine life in order 

to amortize the investment required to build the mine. The limited leasing time 

frame in H.R. 2579 (a 20-year primary term with the possibility—but not the 

guarantee—that the mine can continue to operate longer than 20 years) will make 
45 

financing large mines with mine lives that exceed 20 years very difficult if not 

impossible. 

Lenders will be very reluctant to provide the necessary capital to build mines if 

there is uncertainty about whether the mine can continue to operate past the 

primary lease term. It is not uncommon for large base metal and some precious 

metal deposits to be developed into mines that operate for decades. Thus the 20- 

year leasing term limit in H.R. 2579 will likely thwart the future development of 

these deposits, which otherwise would be some of the Nation’s most important mineral resources. Most mines continue to operate so long as it is economic to stay in 

operation. 

Question 7. What state and Federal regulations must hardrock operations follow 

today? 

Answer. The panoply of Federal environmental statutes that protect the Nation’s 

environment apply to mining in the same way they apply to all other industries. 

There are no mining exceptions or exemptions. Federal statutes applicable to 

mining include but are not limited to the National Environmental Policy Act, the 

Endangered Species Act, the Clean Air Act, the Clean Water Act, the Safe Drinking 

Water Act, the Toxic Substances Control Act, the National Historic Preservation 

Act, Archaeological Resources Protection Act, the Migratory Bird Treaty Act, the 

Resource Conservation and Recovery Act, the Comprehensive Environmental 

Response Compensation and Liability Act, and the Emergency Planning and 

Community Right to Know Act. In addition to these universally applicable environmental laws, the Federal Land Policy and Management Act (FLPMA) governs 

mineral activities on BLM-administered public lands. The Forest Service’s Organic 

Administration Act applies to mining on National Forest System lands. 

FLPMA mandates that all activities on public lands—including mineral activities 

conducted pursuant to the U.S. Mining Law—must prevent unnecessary or undue 

degradation (UUD). BLM’s 43 CFR Subpart 3809 surface management regulations 

for hardrock minerals implement the FLPMA mandate to prevent UUD. The 43 

Subpart 3809 regulations include detailed environmental performance standards to 

protect air quality, surface water, groundwater, wildlife habitat, cultural resources, 

visual resources, and other resource values. 

Under the authority of the Organic Administration Act, the Forest Service has 

developed the 36 CFR Part 228 Subpart A surface management regulations for 

hardrock mining. 36 CFR § 228.8 establishes the environmental protection standard 

which requires mining activities to minimize adverse impacts on National Forest 

System lands including air and water quality, scenic values, and wildlife and 

fisheries habitat. BLM’s and the Forest Service’s surface management regulations 

require reclamation and financial assurance before surface-disturbing activities can 

begin. In Nevada, the country’s largest gold mining state, BLM and the Forest 

Service co-manage over $2.8 billion in reclamation bonds for hardrock mineral 

projects. 

All of the western states with lands open to location under the U.S. Mining Law 

have enacted laws and implementing regulations specifically applicable to hardrock 

mining. Generally speaking, these laws and regulations establish environmental 

protection, reclamation, and financial assurance requirements that apply to 

hardrock mineral activities on both Federal and private lands. Table 2 is a partial 

list of the state laws governing hardrock mineral exploration and mining projects. 

TABLE 2 

Partial List of State Laws Governing Hardrock Minerals 

State Mining Statutes 

Alaska Alaska Mining Statute, AS Title 27 

Arizona Arizona Mined Land Reclamation Act, Ariz. Rev. Stat. Ann. §§ 27–901 through 1026 

Aquifer Protection Permit (APP), Ariz. Rev. Stat. Ann. §§ 49–241 through 252 

California California Surface Mining and Reclamation Act Public Resources Code, Sections 2710–2796 

Porter Cologne Water Quality Control Act, California Water Code Section 7 

Colorado Colorado Mined Land Reclamation Act, Title 34 Mineral Resources, Article 32 
46 

22https://www.washingtonpost.com/graphics/business/batteries/graphite-mining-pollution-inchina/. 

Partial List of State Laws Governing Hardrock Minerals—Continued 

State Mining Statutes 

Idaho Idaho Surface Mining Act, Idaho Code Title 47, Chapter 15 

Montana Montana Metal Mine Reclamation Act (‘‘MMMRA’’), Montana Code Annotated (‘‘MCA’’) §§ 82–4–301 

through 390 

Nevada Nevada Revised Statues 445A.300–445A.370, Water Pollution Control 

Nevada Revised Statutes 519A.010–519A.280, Reclamation of Land Subject to Mining Operations or 

Exploration Projects 

New Mexico New Mexico Mining Act of 1993, (69–36–1 to 60–36–20 NMSA 1978) 

New Mexico Water Quality Act (NMWQA), Chapter 74 

Oregon Oregon Mined Land Reclamation Act, OAR Chapter 632, Division 037 

Utah Utah Code Title 40, Mines and Mining—Chapter 8, Utah Mined Land Reclamation Act (‘‘UMLRA’’) 

Utah Code Title 19, the Environmental Quality title, Chapters 01–06, and 08 

Utah Code Title 73, Chapter 5a 

Washington Washington Metals Mining and Milling Act (‘‘WMMMA’’), Revised Code of Washington (‘‘RCW’’) Chapter 

78.56 §§ .010–902 

Wyoming Wyoming Environmental Quality Act (‘‘WEQA’’), Wyo. Stat. § 35–11–401, Article 4, Land Quality 

As a result of these laws and regulations, modern mining operations are designed, 

operated, and closed to protect the environment—in marked contrast to historic 

mines developed long before enactment of today’s environmental protection mandates. Mining companies devote considerable resources to ensuring compliance with 

all applicable local, state, and Federal environmental protection requirements. 

State and Federal environmental permits include extensive site monitoring and 

reporting requirements to document that a mine is operating properly and complying with all regulatory requirements. These environmental monitoring systems 

and reporting requirements act as real-time, early warning systems that provide 

regulators and operators with indicators of a possible problem. If project monitoring 

data indicate there may be an environmental issue, state and Federal regulations 

compel the operator to investigate the potential problem and remediate the problem 

if one is discovered. The monitoring systems at today’s highly regulated mining 

operations provide meaningful information about the performance of the site’s environmental controls. If the monitoring data suggest there may be a problem that 

needs to be evaluated, state and Federal regulators have all of the necessary regulatory and enforcement tools to require the operator to respond to the problem with 

investigatory and remediation measures. 

Question 8. How would you characterize the environmental protections in the 

United States, compared to other major producers of critical minerals in the world, 

such as China? How about Africa? 

Answer. As discussed in the response to Question No. 7, the United States has 

comprehensive and effective Federal and state environmental protection regulations 

governing all industries as well as regulations specific to mining. The United States 

also has extensive worker safety laws and regulations. Mining companies follow the 

mantra of ‘‘Safety First.’’ Mining companies place a great deal of importance on 

ensuring safe working conditions at their sites and on complying with all environmental protection requirements. Unfortunately, China, African countries, and other 

foreign countries do not have similarly stringent environmental and health and 

safety regulations. 

For example, the Washington Post reports significant pollution at Chinese graphite mines.22 Graphite is used to manufacture the lithium batteries that power cell 

phones and countless other electronic devices including electric vehicles. As noted 
47 

23https://www.rfa.org/english/news/tibet/mines-05062013154914.html. 24https://www.washingtonpost.com/graphics/business/batteries/congo-cobalt-mining-forlithium-ion-battery/. 25https://www.washingtonpost.com/graphics/business/batteries/tossed-aside-in-the-lithiumrush/. 26The Forest Service published an Advanced Notice of Proposed Rulemaking on January 3, 

2018 seeking public comments on how the efficiency of the 36 CFR 220 NEPA rules could be 

improved. 

in the Washington Post the Chinese graphite mines operate under ‘‘lax environmental controls and produce old fashioned pollution.’’ According to the Washington 

Post, the world’s demand for lithium-ion batteries to power smart phones, laptops, 

and electric vehicles comes at ‘‘a steep cost.’’ Villagers living near the Chinese 

graphite mines face dirty air, damaged crops, and polluted drinking water due to 

operation of these mines. The Washington Post states that Chinese officials do not 

enforce environmental regulations and ‘‘are inclined to look the other way to benefit 

a major employer.’’ 

Similarly, Radio Free Asia reports that ‘‘Chinese-operated mines in Lhundrub 

County have caused ‘‘severe’’ damage to local forests, grasslands, and drinking 

water. Waste from the mines, in operation since 2005, ‘‘has been dumped in the 

local river, and mining activities have polluted the air.’’ 23

The worldwide demand for the cobalt used in lithium-ion batteries is partially met 

from mines in the Congo, which employ child labor and operate with little or no 

environmental or worker health and safety controls. The Washington Post reports 

that cobalt mining in the Congo is performed by workers, including children ‘‘who 

labor in harsh and dangerous conditions . . . with little oversight and few safety 

measures. Deaths and injuries are common.’’ These mining operations ‘‘expose local 

communities to levels of toxic metals that appear to be linked to ailments that 

include breathing problems and birth defects.’’ 24

According to the Washington Post, lithium mining operations in Chile and 

Argentina used vast quantities of water to process lithium from deposits located in 

the high-elevation Atacama region—a high-altitude desert. Some of these operations 

provide paltry benefits to the indigenous Atacamas communities where they are 

located.25

In contrast to these unfortunate problems in countries with inadequate regulations or poor enforcement of their regulations, mining companies operating in the 

United States devote enormous resources to complying with the stringent environmental protection laws and regulations discussed in the response to Question No. 

7. Besides protecting the environment at their mine sites, mining companies operating in the United States are also committed to maintaining and enhancing their 

social licenses to operate. Many companies have corporate social responsibility programs that require meaningful interaction with the communities in which they mine 

to ensure that their mines are responsive to the culture and social fabric of the 

community as well as provide economic benefits. 

Question 9. What kind of NEPA process do mining projects have to go through 

before mining can begin? 

Answer. The NEPA process for proposed mineral exploration and mining projects 

on BLM-administered public lands and on Forest Service-administered National 

Forest System lands is identical to the NEPA process for any other project that is 

determined to be a major Federal action that requires a NEPA analysis. Both BLM 

and the Forest Service must prepare thorough NEPA documents to analyze and disclose the potential environmental impacts associated with proposed mineral activities. Generally speaking, the agencies prepare an Environmental Assessment (EA) 

in response to a proposed mineral exploration project and an Environmental Impact 

Statement (EIS) for a proposed mining operation. 

BLM and Forest Service NEPA documents must comply with the Council on 

Environmental Quality (CEQ) regulations implementing NEPA at 40 CFR §§ 1500– 

1508. BLM prepares NEPA documents in accordance with its NEPA Handbook (H1790-1). The Forest Service NEPA documents follow the NEPA procedures outlined 

in its NEPA rules at 36 CFR § 220.26

The NEPA documents for proposed mineral exploration and mining projects have 

the same structure and content as NEPA documents prepared by Federal agencies 

for all types of proposed projects and include the following chapters: Purpose and 

Need; the Proposed Action and Alternatives to the Proposed Action; Affected 

Environment, which is a detailed discussion of the environmental setting of the 

Project Area and surrounding lands; Environmental Consequences, which presents 

a thorough analysis of the direct, indirect, and cumulative impacts that could result 

from the project; Consultation, which lists the tribes, agencies, organization, and 
48 

individuals contacted during the NEPA process; Preparers, which shows the agency 

and third-party personnel who prepared the document; and References Cited. 

Like NEPA documents prepared for non-mining projects, BLM and Forest Service 

NEPA documents for mineral exploration and mining projects are used as decision 

tools to assist the agencies in evaluating a proposed mineral project and alternatives 

to the project proponent’s project proposal (the Proposed Action) that would minimize or even eliminate environmental impacts. During the NEPA process, BLM and 

the Forest Service identify and analyze project alternatives like different locations 

for certain mine facilities that may mitigate environmental impacts. Based on this 

alternatives analysis process, BLM and the Forest Service select an Agency 

Preferred Alternative and identify an Environmentally Preferred Alternative, both 

of which may differ from the Project Proponent’s Proposed Action. 

The CEQ regulations require mitigation measures to avoid or minimize adverse 

environmental impacts. (See, for example 40 CFR 1502.14 and 1502.16). This mitigation requirement applies to all types of proposed projects including mineral exploration and mining projects. BLM and the Forest Service use the NEPA alternatives 

and environmental consequences analyses to evaluate ways to avoid and minimize 

environmental impacts. This aspect of the NEPA process is integrated into the agencies’ assessment of whether a proposed mineral project complies with the environmental performance standards in each agencies’ surface management regulations for 

hardrock minerals (e.g., BLM’s 43 CFR Subpart 3809 and the Forest Services’ 36 

CFR Part 228 Subpart A regulations). 

The NEPA process for proposed mineral exploration and mining projects includes 

public involvement that must comply with the public scoping requirements in 40 

CFR § 1506.6 to seek public comments on a proposed action. The EIS process 

includes a minimum of three opportunities for the public to provide comments on 

a proposed project during initial project scoping, on the Draft EIS, and on the Final 

EIS. 

The NEPA process is also applicable to hardrock minerals on acquired lands. 

Federal agencies must prepare NEPA documents in conjunction with issuing 

Federal leases for mineral exploration and development. Even initial exploration on 

acquired lands requires a lease and an associated NEPA analysis, which is typically 

a time-consuming process. It can take years of permitting and lease negotiation before initial exploration for minerals on acquired lands can begin. This is another 

reason why a leasing system is problematic and an extremely inefficient way to 

manage the Nation’s mineral resources. The self-initiation process under the mining 

claim system on lands subject to the Mining Law allows initial exploration activities 

like geologic mapping and other activities that do not involve disturbing the land 

to take place without a time-consuming permitting process. 
49 

EXHIBIT I 

The American Exploration & Mining Association is t he 

leading voice for public lands access. We advocate for the 

_:::;;.--T- issues most important to minerals mining in the U.S. 

Amencan 

Exploration & M n·ng Mining Law Briefing 

• Repealing 147 years of interpretation & precedent is bad 

public policy and results in decades of uncertainty & 

litigation. 

• Mining is the most regulated, yet most important industry 

to modern society, especially rural communities. 

• The Mining Law has, does, and will continue to responsibly 

manage access to public lands, to meet the multiple-use 

obligations mandated by Congress. 

• Strong domestic mining is critical for our nation's 

manufacturing, infrastructure, & national defense. 

Road to Mining with Regulations 

Mark Compton 

mcompton@miningamerica.org 509.624.1158 Matthew Ellsworth 

ellsworth@miningamerica.org 
50 

Dr. LOWENTHAL. Thank you, Mr. Comer. 

I would like to thank the panel for your testimony. And I want 

to remind the members of the Committee that Committee Rule 3(d) 

imposes a 5-minute limit on questions. I am now going to recognize 

Members for any questions they may wish to ask the witnesses. 

I recognize first Representative Cunningham for 5 minutes. 

Mr. CUNNINGHAM. Thank you, Mr. Chairman, and thank you to 

our witnesses for being here today. Thank you for traveling to testify. And it might be surprising that anyone from South Carolina 

would care much about a bill that deals largely with gold and 
51 

copper mining on Federal lands. You would think that is just an 

issue for Nevada. Right? 

Except that it is not. I had my staff look into it, and we found 

at least three hardrock mining Superfund sites in the state of 

South Carolina. And it is possible that there are responsible parties 

that are paying for the cleanup of all three of these. But it is also 

possible that they are not and the taxpayers of South Carolina will 

be forced to foot that bill. Either way, the point is that abandoned 

hardrock mines are not simply a Western issue. They are an 

American issue. 

A little over 40 years ago, Congress came together on a 

bipartisan basis to create a program, the Abandoned Mine Land 

program, to deal with abandoned coal mines. And Congress rightly 

acknowledged that the industry had a responsibility, a duty, to 

help address environmental and safety hazards that it had spent 

well over a century creating. 

We can do the same thing for hardrock mines as well. Every 

state has them, from coast to coast. But unlike coal mines, states 

get virtually no money from the Federal Government to help clean 

them up. Citizens of every state deserve to not be exposed to the 

toxic remains of old mines. These sites need to be cleaned up faster 

and with less of a burden on the taxpayers. 

And this is not a Republican issue or a Democratic issue. This 

is about fairness, it is about health, it is about safety—issues that 

are priorities for both sides of the aisle. So, I want to thank 

Chairman Grijalva for introducing this bill. I want to thank 

Chairman Lowenthal for holding this hearing. And I want to thank 

the witnesses again for taking the time to be here and explain their 

views on this very important and critical issue. 

And with that, I would yield back the balance of my time. 

Dr. LOWENTHAL. Thank you, Representative Cunningham. 

I would now like to recognize Representative Hern for 5 minutes 

of questioning. 

Mr. HERN. Thank you, Mr. Chairman, Ranking Member Gosar, 

and our witnesses for being here today to testify. 

Hardrock mining provides essential materials that are used in 

several industries across the country, including much of our high 

tech equipment. However, the majority of our supply of critical 

minerals comes from abroad, mostly from China. Because of this, 

any restriction on our ability to mine these materials would hamper our industries and their growth, and make us reliant on foreign 

materials. 

Mr. Comer, as someone who is considered a leading authority in 

natural resource permitting and compliance issues, and on your 

testimony today, I would like to just ask you—it is going to be a 

pretty short answer, I would think. But I would like to get to my 

colleague here from the mining world. 

Would you agree that this bill will have a huge negative effect 

on the mining industry in the United States, and gravely impacting 

our ability to develop renewable energy sources, and in fact, driving the Green New Deal cost even higher than the ridiculous estimates of $93 trillion that are already being accepted across the 

industry? 

Mr. COMER. Would you like an answer as simple as ‘‘Absolutely’’? 
52 

Mr. HERN. Absolutely. You can expound a little bit. 

Mr. COMER. Well, the impacts and the implications will be 

several-fold. It will greatly impede existing mines, their continuation, their operation, and their development. And it will impair 

the ability to acquire new mineral resources. And the United States 

has substantial mineral wealth. One of the things that we have not 

heard about today is some of the differences in mining today versus 

100 years ago. 

I look at the mural in the room, and that is a technology for a 

bygone era. 

Mr. HERN. Mr. Comer, I am going to ask you to hold the rest of 

that thought. I have a feeling you are going to be asked a few more 

questions, and I want to yield the balance of my time to my 

colleague from a mining part of the country. 

Mr. STAUBER. Thank you, Congressman Hern, for giving me 

some of your time. 

Chairman Lowenthal and Ranking Member Gosar, mining defines Minnesota’s past, present, and its future. So, I appreciate this 

opportunity to appear on this panel because I fear these proposed 

hardrock mining reforms would disincentivize any mining and irreversibly damage Minnesota’s economy. 

The first bill I introduced, the Superior National Forest Land 

Exchange Act, it codifies the land transfer that occurred last July 

between the Forest Service and PolyMet Mining. This bill passed 

the House last Congress under my predecessor former Representative Rick Nolan’s leadership with broad bipartisan support, including, Mr. Chairman, your support along with four other Democrats 

sitting on this Subcommittee. 

Mr. Comer, thank you for appearing today to discuss the crucial 

issue involving Minnesota. The Iron Range in my district produces 

the iron ore used to build America and help us win World War II. 

The economy on the Range is volatile. It ebbs and flows with the 

price of steel, and is constantly threatened by cheap iron ore from 

international competitors lacking any environmental or labor 

standards. 

Mr. Comer, how would instituting the proposed royalty and shift 

to a leasing system affect iron ore mining and steel production? 

Mr. COMER. It would have a major devastating effect on the ability to acquire new sources of iron ore in the Rocky Mountain West. 

And to this date, there still are no mines that have been developed 

under a leasing system in the Upper Midwest. These are different 

types of properties, the existing industry and the new industry, 

where it is developed with more Federal mineral. But we have not 

developed yet. We are still trying to after years and years of 

permitting and compliance activities. 

Mr. STAUBER. Thank you. Along with iron ore, there are two proposed copper nickel projects in northeastern Minnesota. The 

PolyMet Project surpassed all environmental standards, taking an 

incredible 14 years. Other countries mining copper and nickel have 

very little to no environmental standards. 

Mr. Comer, how can places like northeastern Minnesota compete 

internationally under this proposed legislation? 
53 

Mr. COMER. It would be very difficult, both in Minnesota and 

throughout the West. Land tenure, mineral tenure will be lost. It 

will be devastating, and I am not a ‘‘sky is falling’’ type person. 

Mr. STAUBER. Neither am I. Thank you for answering those 

questions, Mr. Comer, and for your testimony. 

My next question will be to Commissioner Lachelt. Commissioner, I appreciate your service as a County Commissioner. I too 

came from the County Commissioner realm, so I appreciate what 

you are doing and understand what you are going through. Thank 

you for testifying today. 

You listed clean, renewable energy as a priority. And continued 

energy diversification requires elements like copper, nickel, and 

iron ore. I want to ask you this: Would you rather power your county with elements harvested in places like northern Minnesota, who 

have strict environmental and great union labor standards? Or do 

you prefer to receive these elements from places that lack union 

labor and environmental standards like Brazil, China, and Russia? 

Ms. LACHELT. Sir, thank you for the question. And I think it is 

really important to honor the past. Our mining history in my part 

of the world, we honor how our region came to be, and the economy 

that it helped build. But we need to look to the future. And we 

work with a lot of solar companies in our region—— 

Mr. STAUBER. Commissioner, I have to yield my time back to 

Representative Hern. 

Dr. LOWENTHAL. Yes. You will get your opportunity again. you 

will be next, Mr. Stauber. 

Mr. STAUBER. Thank you, Mr. Chairman. Appreciate it, and yield 

back. 

Dr. LOWENTHAL. But no filibusters. 

[Laughter.] 

Dr. LOWENTHAL. Next I would like to recognize Congresswoman 

DeGette for 5 minutes. 

Ms. DEGETTE. Thank you so much, Mr. Chairman. Thank you for 

holding this hearing. I want to welcome my homies, Commissioner 

Lachelt and also Mr. Comer, from Colorado. And I want to apologize for toggling in and out. In the other Subcommittee on this Full 

Committee, we are having a hearing down the hall on wildfires, 

another huge issue for our state. I really want to thank you for 

coming. 

I want to start with you, Commissioner Lachelt, about the issue 

of cleaning up abandoned mines because, as you know, Colorado 

has one of the largest inventories of abandoned hardrock mines. 

And we were surely reminded of that when we had the Gold King 

Mine blow out in 2015. We all saw those pictures. It turned the 

rivers bright yellow and released about 3 million gallons of toxic 

wastewater. 

And in the meantime, according to an AP report from February, 

abandoned mining sites like Gold King are leaking 50 million 

gallons every single day into streams and rivers like groundwater 

supplies. And that is just from the sites that the AP looked at, so 

that is a floor and not a ceiling. 

I want to ask you, Ms. Lachelt, as a County Commissioner of 

southwestern Colorado, I know you have done a lot of wonderful 

work advocating the cleanup of these hardrock mines. Can you tell 
54 

me what we know about the scale of the problem? What is the 

estimated cost for this cleanup? 

Ms. LACHELT. Thank you, Representative DeGette. It is 

estimated that there are over 500,000 abandoned mines across the 

country, and the EPA estimates that clean-up costs could come in 

somewhere around $50 billion. 

Ms. DEGETTE. Fifty billion dollars? 

Ms. LACHELT. Yes. 

Ms. DEGETTE. And where is that money going to come from to 

clean up those mines? 

Ms. LACHELT. From the taxpayers. 

Ms. DEGETTE. Right. And do you think that if we don’t have a 

dedicated hardrock abandoned mine land fund, we could ever come 

close to cleaning up the scale of contamination? 

Ms. LACHELT. We need a dedicated source of funding in order to 

do this cleanup. 

Ms. DEGETTE. Yes. We can’t do it without it, I don’t think. 

Ms. LACHELT. Exactly. 

Ms. DEGETTE. Let me turn to you, Mr. Davis, because one of the 

features of the Mining Law of 1872 is that a company can freely 

mine on Federal lands, extract the minerals it wants, and then it 

doesn’t have to clean up after itself or pay a royalty to American 

taxpayers. 

In your testimony, you identified the lack of royalties as one of 

the biggest problems with the Mining Law of 1872. Do you think 

it is fair, as a small businessman, that hardrock mining companies 

don’t pay any royalties for mining Federal lands? 

Mr. DAVIS. I don’t think it is fair at all. I think it sets up a great 

inequality. I think there are so many other industries, such as oil 

and gas that do, but so does logging, so does agriculture. In my 

craft, there are so many standards I have to meet and so many regulations I have to meet. And they are all a cost to me. And when 

those costs change, I adapt my business to manage those costs, and 

traditionally, most industries pass those costs along to consumers. 

Ms. DEGETTE. Right. So, oil, gas, coal, solar, wind, livestock, logging, and outdoor recreation all pay to use the public lands, but 

mining does not. 

Mr. DAVIS. That is correct. 

Ms. DEGETTE. Does that seem fair to you? 

Mr. DAVIS. No. It does not seem fair. 

Ms. DEGETTE. Yes. And how does that impact taxpayers like 

you? 

Mr. DAVIS. We end up carrying the burden, and especially in a 

situation such as the one we faced in Montana, where the two corporations, one Australian and one Canadian, were coming over the 

border to start industrial-scale gold mines. And the impact of that, 

it was going to devastate our local economy. 

So, who picks up that cost? Who picks up the cost of my business, our entire valley? Our region has a billion-dollar industry employing 13,000 people. I listened to the gentleman to my left talk 

about the national agenda, and I am curious where the national 

agenda forgets about local communities and our ability to talk 

about what happens in our neighborhood. And we talk about 
55 

necessary imports. I am talking about gold mining specifically in 

my region. 

Ms. DEGETTE. Right. 

Mr. DAVIS. And the impact of that. It would be devastating. it 

would decimate my industry. 

Ms. DEGETTE. So, it decimates your industry, plus we don’t have 

the ability to clean up most of these abandoned mines. 

Mr. Chairman, this is why we need to update this law, and I 

appreciate you having this hearing. And I yield back. 

Dr. LOWENTHAL. Thank you. 

Now we return once more to Representative Stauber. 

Mr. STAUBER. Thank you, Chair Lowenthal. I appreciate it. I 

want to continue my conversation, but I want to restate the question. And Commissioner Lachelt, it will just be a yes or no answer 

because I have other questions. 

I am going to ask this: Would you rather power your county with 

elements harvested in places like northeastern Minnesota, with 

great EPA environmental standards and union labor? Or would you 

prefer to receive them from places with an utter lack of labor 

standards and environmental standards such as Brazil, China, or 

Russia? And that is just an either/or. 

Ms. LACHELT. Thank you, Representative. I prefer that any 

minerals are responsibly sourced. So, I would say yes to your question, and let you know that I work with solar—— 

Mr. STAUBER. Yes to harvest them in Minnesota, or other 

countries? 

Ms. LACHELT. Where there are apparently—and you represented 

that you have strong standards. I would say I would much prefer 

that than from—— 

Mr. STAUBER. Much prefer Minnesota? 

Ms. LACHELT. I would. 

Mr. STAUBER. Thank you. 

Ms. LACHELT. However, many of the companies operating on our 

public lands are foreign—— 

Mr. STAUBER. I will go to my next question. I appreciate you 

supporting my great state of Minnesota. 

[Laughter.] 

Mr. STAUBER. Mr. Comer, how long does the permitting process 

take for hardrock operations? And how does that compare to mining in other countries with comparable environmental standards? 

Mr. COMER. Thank you for the question. If you were to look at 

other countries such as Australia and Canada, they have very 

strong environmental laws, and they take 2 to 3 years to permit 

mines and properties and projects just as complicated as those that 

we permit here. 

One of the problems with the law as proposed is that it adds new 

layers of NEPA analysis and the leasing decisions as the Federal 

Government chooses which land should be available and should not 

be available for further exploration after having removed 50 

percent of those lands from availability. 

In the United States, a typical mine project, hardrock mining 

project, takes right around 10 years plus or minus. 
56 

Mr. STAUBER. Next question. How would you characterize the 

environmental protections in the United States compared to other 

major producers of critical minerals in the world such as China? 

Mr. COMER. The United States has top of class environmental 

protections. To say that there are no controls over how mines are 

developed or operated is just a simple fallacy. Part of the reason 

it takes 10 years is because of the 40-plus environmental and land 

management laws that have to be complied with. No mine is going 

to open today that will discharge air or water emissions that 

violate the law. Our protections are very strong. 

Mr. STAUBER. As they should. 

Mr. COMER. As they should be. 

Mr. STAUBER. Yes. Thank you for those questions. 

Chairman Lowenthal and Ranking Member Gosar, I want you to 

know, and other members of this panel, I want you to know how 

important mining is to the state of Minnesota and this Nation, the 

critical elements that we mine, copper and nickel. 

We need mining to transition into alternate sources of energy— 

windmills, thousands of pounds of copper. It can be mined in northern Minnesota, following strict standards. Good paying jobs. And it 

will be a great part of our economy. 

We have permitted the very first copper-nickel mine in the state 

of Minnesota that has met or exceeded every environmental standard. And we are going to bring great paying jobs to this state. It 

is called the Duluth Complex. It is the biggest precious metals find 

in the world. And we can mine it safely, following standards, 

bringing great-paying jobs to our community. 

And we talk about reclamation. I would invite anybody to come 

up to northern Minnesota’s Iron Range. I will show you reclamation, how it should be done. We have deer. We are harvesting hay. 

We have bees. We have ducks. We have birds. It is beautiful. 

Mr. Chair, I yield—— 

Dr. GOSAR. Would the gentleman yield for a second 

Mr. STAUBER. The gentleman will yield. 

Dr. GOSAR. Will the gentleman answer me a question? The 

cleanest water in Minnesota is located where? 

Mr. STAUBER. In the Iron Range. 

Dr. GOSAR. In reclaimed mines, is it not? 

Mr. STAUBER. That is correct. 

Dr. GOSAR. I thank the gentleman. 

Mr. STAUBER. Mr. Chair, that is all I have. I yield back. Thank 

you. 

Dr. LOWENTHAL. Thank you. 

I now recognize Chairman Grijalva, Chairman of the Natural 

Resources Committee, and also the sponsor of H.R. 2579, the Hard 

Rock Leasing and Reclamation Act of 2019. 

Mr. GRIJALVA. Let me first thank you, Chairman Lowenthal and 

Ranking Member, for having the hearing. It is a very important 

hearing. And the issue of reforming the 1872 Mining Law will, no 

doubt, as this legislation proceeds, be a source of debate, to say the 

least. But it is a necessary debate that we need to have. And I 

appreciate, Chairman Lowenthal, you scheduling this meeting, and 

to the witnesses, thank you for being here. 
57 

For a decade now in southern Arizona, the Rosemont Mine has 

been a point of opposition by the vast majority of the community. 

And yet, 10 years later, as Chairman Manuel said, the permits 

continue to be issued, have been issued for it, and the litigation 

continues in all the various courts around there. And it seems that 

litigation is the last stop. 

And regardless of the impacts on the environment, water quality, 

sacred sites, or the opposition of the Pascua Yaqui Tribe, the Hopi 

Tribe, the Tohono O’odham Tribe, the mine has been permitted. 

And that is because the land managers repeat that under the 

Mining Law of 1872, they are not allowed to turn down a mine regardless of impact. And their ability to say no is non-existent. 

And I think that much of the controversy around the issue of 

mining, and where it should be and where it should not be, rests 

with that clause and that particular power that has been given to 

the mining industry. And we are not talking about the little guy 

with his donkey going up the hill; somebody grubstaked him for 

him to go look for a precious metal, gold or silver. We are talking 

about a multi-national industry, particularly companies from 

Canada and Australia that were mentioned as being on the cutting 

edge of environmental protections. 

I want to ask you in one aspect of this whole discussion, 

Chairman Manuel, the O’odham Nation has long dealt with the impacts, as you mentioned in your statement of mining on your lands. 

Could you tell us the impacts to your land and water, elaborate 

a little more regarding the Freeport and Asarco Mines, Mr. 

Chairman? 

Mr. MANUEL. Thank you for the question, Chairman Grijalva. 

When the mine was put in place on the Nation back in the 1950s 

by Hecla Mining Company at that time, which was from Canada, 

and then they started mining. And it is up on a mound, and there 

are communities below those mounds. 

They started mining underground, the oxide and sulfide. And 

they started putting in acid underground. That acid got into the 

underground water and started traveling and got to the communities there. Right now, EPA is involved as far as the cleanup, and 

it is a Superfund site. We have walls around the area, and the contamination is still moving away from the mine. So, that is our 

major concern. 

Mr. GRIJALVA. Thank you, and I think the point that the 

Chairman made should not be ignored, that the lack of consultation 

on the part of the Federal Government with regard to a Federal 

asset, with a trust responsibility to consult in a meaningful and 

real way with tribes before the fact, not after the fact. And I think 

the Chairman pointed that out. 

Mr. Davis, your situation is very similar to the one that we are 

dealing with in Arizona. You fought the proposed mines at the 

doorstep of the Yellowstone? 

Mr. DAVIS. That is correct. 

Mr. GRIJALVA. And people are fighting to keep the Grand Canyon 

free from uranium mining, close to the Grand Canyon, an iconic 

treasure. And you mentioned also, and it was part of the overall 

lands package, that it was approved into law to create a buffer 

around that your organization fought so hard for, and that my 
58 

colleagues on the other side of the aisle supported, to create a 

buffer next to Yellowstone from mining, effectively banning mining 

from that area in order to conserve and protect that. 

I find that interesting because I am sure there will be oppositions to any kinds of equal protections in other parts of the 

country, which is another legislative tool that we have here in 

Congress to stop that. And I congratulate your group in doing that 

and getting that done, and convincing your elected officials to respond to that. 

These mines in Yellowstone, you said they are devastating to 

business. Could you elaborate on that? What would have 

happened? Employment? Revenue? Local tax base? Et cetera? 

Mr. DAVIS. Just my valley alone sees $70 million a year in tourist business based on fishing. But the region itself sees almost a 

billion dollars, and again, it drives 13,000 different jobs. So, I have 

to underscore, this is not about being anti-mining, and I certainly 

appreciate the gentleman from Minnesota. 

Montana is laden with extractable minerals. It is what we are 

going to mine, how we are going to mine, and where we are going 

to mine it. And our big contention is that communities should have 

a very loud say in whether that is the place it is going to happen, 

instead of having a golden ticket to come into your community, 

especially as a foreign corporation, and set up shop without any 

penalties or without any respect to the community and its way of 

life and what does drive that economy. 

Their right certainly should not supersede a right that has been 

entrenched for a hundred years. My business is 120 years old. I 

have my life on the line. I have my family’s life on the line. So, the 

impact, especially with today’s technology and today’s machinery, 

to come in 3 miles from the highway, the corridor to Yellowstone, 

and start open pit mining, it would devastate our economy. You 

would be trading one for another. 

Dr. LOWENTHAL. Thank you, Chairman Grijalva. 

I now recognize Representative Amodei for 5 minutes. 

Mr. AMODEI. Thank you, Mr. Chairman, and thank the 

Committee for its courtesies in allowing me to participate in a 

hearing for an industry that is fairly important in my district. 

First of all, I would like to ask anybody on the panel if you have 

any familiarity with the state of hardrock mining in Nevada. And 

if so, please raise your hand and tell me what that is. 

Mr. Comer? 

Mr. COMER. Thank you. I have visited mines in Nevada and am 

familiar with gold mining in Nevada. In addition, I reviewed, in 

some efforts in mine transactions between companies, many mines 

in Nevada. 

Mr. AMODEI. OK. I appreciate that. Anybody else? 

[No response.] 

Mr. AMODEI. OK. And it not that I expected you to or that is a 

wrong answer or anything like that. But I want to use my time to 

kind of, in keeping with the theme of the hearing, talk about reforming the Mining Law of 1872 because anything with a date of 

1872 suggests that perhaps it is time to take a look at that and 

update things. That is not a wild thought, and I support that. 
59 

But the challenge before us in doing that is doing that with an 

open mind, and doing that with your head on a swivel, and doing 

that with a mind to all things relevant, whether that is tax, whether that is permitting, whether it is all those things. And let me just 

state so it is clear, it is time. We should take a look at that, and 

we should do some reforms. 

But as we do that, we need to take a look at how things are 

going. And I am not going to tell you how things are in your jurisdictions or things like that. But I do know some things about what 

is going on in my jurisdiction. And in my jurisdiction, when we talk 

about what are we going to do, for instance, for taxing those 

Federal lands which most of the mining takes place on, it is like, 

fair enough. Let’s talk about that. Let’s talk about how mining in Nevada pays over $15,000 an employee in state, local, and Federal taxes. The next closest industry 

is about $1,100. That does not mean those industries are bad industries. It just means that we should not start, at least in that 

neck of the woods, on Federal land with the premise that it is not 

paying its way. 

Let’s talk about a living wage in Nevada, because guess what? 

If you pay high wages, you also pay Federal income taxes. So, when 

we talk about wages in the hardrock mining industry in my state, 

those people can afford their food. They can afford their health 

care. They can afford their medical care. They can afford all those 

things because they are paid very well. 

And let’s talk about their impact on public safety, because it is 

funny—those companies, before they turn you loose on their sites 

or underground, tend to do things like drug and alcohol test you. 

So, they are not commonly appearing in your courts and having to 

be dealt with in those contexts. It does not mean we should not 

look at them. It does not mean we should not update the law. But 

we should do it with an eye toward all facts that are relevant. 

Let’s take a look at another thing. The state of Nevada said, hey, 

we want you to pay net proceeds of minerals. So, after you do all 

the things you do, which is pay people, which is what we like; and 

after you do things like provide good health care and good retirement and all those sorts of things, we also say, we want you to pay 

net proceeds. 

You know a funny thing about net proceeds is, when we have an 

eye toward increasing those taxes, that is an automatic deduction 

from what their state net proceeds are. We should be mindful of 

what that does because I will tell you, as having served in Nevada 

Legislature, they will go, whoa. If you are going to affect our income stream, we are going to go back and revisit that. 

I’m not saying they should not. I am just saying we ought to 

know that before you enact something, which basically may say 

those 500 people working at that mine, extracting whatever the 

mineral is, may not have a job any more. May not. I’m not saying, 

‘‘Oh, my God, the sky is falling.’’ I am just saying, we should do 

that, all these things, with those things in mind. 

And let’s talk finally about permitting. If a mine is seeking a permit in an area that does not pass NEPA muster, then they should 

be denied. The process is set up for that. But let’s not start with 

the premise on permitting where it is like, oh, if you apply, you 
60 

should have one. There are denials and they should, quite frankly, 

be appropriate in some circumstances. 

But when we talk about refining what we do with minerals and 

minerals extraction on Federal lands and elsewhere in this country, 

let’s do so with a 360-degree look at all the issues, and do it in a 

way that says, if there is a part of it, then the final part is this. 

Nevada is a success story in reclamation. It doesn’t mean mission 

accomplished. You never say that. It is a success story in reclamation. So, when we talk about what are we going to do with reclamation and we are going to use some of these funds for that, let’s also 

have our head on a swivel because, quite frankly, if it isn’t broke 

in some areas, we don’t need to spend Federal money on it. 

Thank you, Mr. Chairman, for your indulgence, and I yield back. 

Dr. LOWENTHAL. Thank you, Mr. Amodei, and welcome to the 

Committee. 

I am now going to recognize myself for 5 minutes. And I want 

to go first to Chairman Manuel. 

Chairman Manuel, we have existing laws in this country that are 

designed to protect Native American cultural sites. Why aren’t 

those laws enough to protect the sites from the impacts of mining? 

Why aren’t the existing laws that we have sufficient to protect cultural sites from the impacts of mining? 

Mr. MANUEL. Thank you, Chairman, for the question. The existing laws that are in place right now are good. But the problem that 

we encounter as we do consultation with the branches of the government, they don’t fulfill their authority and their responsibility 

in protecting those in our behalf. 

That is why we are glad to see the laws being changed now to 

give us that consultation that is going to be put in place as far as 

protecting, fully protecting, these resources because right now, how 

we see it is the government does not really enforce that authority 

that they have on those entities. 

Dr. LOWENTHAL. Thank you. 

Mr. Comer, we have heard a lot about that if we move toward 

this leasing system, that it would be the end of mining in the 

United States. But other countries, such as Australia and Canada, 

have a thriving mining industry. In most of their territories, these 

countries utilize a mixed hybrid or a claims leasing system. 

Mining companies stake a claim until a discovery of a valuable 

mineral deposit occurs. At that time, these claims must be converted to a lease. Why shouldn’t the United States maintain two 

different mineral development systems, both the locatable, which 

we are talking about, and also leasable? We already know that 

Minnesota is a locatable system. I’m sorry, Minnesota is a leasable 

system already. 

Mr. COMER. That is correct. But there are no leasable mines in 

operation in Minnesota right now. Leasing has many issues in 

hardrock mining. One of the issues is it is difficult to find 

mineralization that will yield a mine. The ability to have claims allows you to establish those locations over time and then develop 

them and even chase the mineralization. 

The exploration that was initially done in Minnesota was done 

in the 1950s and the early 1960s. Under a leasing system, you 
61 

would not have your leases any more. They would have devolved 

to somebody else. 

Dr. LOWENTHAL. But I would like to follow that question. In both 

Australia and Canada, which have been cited as examples, and 

they are countries that have thriving mining, they have a hybrid 

system, one in which you originally receive a claim; once you strike 

the hardrock, you discover that mineral, that they must be converted to a lease. 

So, why is a lease not a problem there, and yet it would be a 

problem here in the United States? 

Mr. COMER. Mr. Chairman, you have to look at how the system 

operates. Certainly that is not what is described in this bill. This 

bill contains acreage limitations that would cause the forfeiture of 

leases. When we look at royalty—— 

Dr. LOWENTHAL. Let me just follow up. You would be agreeable 

to a hybrid system such as what we find in Australia and Canada? 

Mr. COMER. Mr. Chairman, it is not what I am agreeable to. 

There is an industry out there that is very engaged in these issues. 

I think you will find the mining industry is eminently reasonable 

in how it views how it should operate, and those are discussions 

that may be appropriate to take up. But this bill does not contain 

a workable leasing system. 

Dr. LOWENTHAL. So, the problem is, and I will just end now, on 

what are the specifics of this bill, not that you oppose a leasing 

system? 

Mr. COMER. Again, no one really cares what I think. 

Dr. LOWENTHAL. Can we strike his entire record, then? 

[Laughter.] 

Dr. LOWENTHAL. With that, I now recognize my friend, the 

Representative from Louisiana, Mr. Graves. 

Mr. GRAVES. Thank you, Mr. Chairman. Mr. Comer, I actually 

appreciated your testimony. 

I have a question, actually, for the Chairman, if that is OK—Mr. 

Chairman, the sponsor of the bill? Any chance? 

Dr. LOWENTHAL. Yes. 

Mr. GRAVES. I just want to make sure I understand the purpose 

of the legislation. You just feel that this is a public asset, the 

minerals that are being mined, and so you feel that the public 

should be able to have some type of value assigned to that and be 

able to benefit from that like we do for oil and gas and things like 

that. Is that accurate? 

Mr. GRIJALVA. Essentially, yes. 

Mr. GRAVES. Thank you. And that is the only question I had. I 

just wanted to make sure I understand that. 

Do any of you—and, in fact, anybody in this room—I am curious 

about the royalty rates. The royalty rates are established at $10 an 

acre on top of the 12.5 percent—well, I guess the royalty rate is 

12.5 percent. I think I saw there was a different royalty rate when 

they are at 8 percent as well. 

I am just curious, does anybody know where those numbers came 

from? Eight percent of the value of production, and then—yes, not 

less than 8 percent, but then it has a 12.5 percent threshold as 

well. But, does anybody know where those numbers came from, 8 

and then 12.5 percent? 
62 

Ms. LACHELT. Representative, my understanding for the 12.5 

percent royalty rate is that is the same royalty rate for oil and gas 

on public lands. 

Mr. GRAVES. OK. OK. 

Ms. LACHELT. It is consistent. 

Mr. GRAVES. So, we have it based on oil and gas. There is some 

basis, arguably, but then as we heard Mr. Comer say that there are 

significant differences between oil and gas, where you go in and extract from a large reservoir—whereas in this case, I think it is a 

different scenario. But at least there is a basis. 

So, do all of you agree that if you have a public asset, a public 

natural resource, and it is being mined or being utilized, that the 

public that owns it should get some type of compensation or benefit? Or does anybody disagree with that? Do any of you disagree 

with that? 

Ms. LACHELT. I do not disagree. I believe that it levels the playing field for the hardrock mining industry with all other industries 

on public lands—oil, gas, coal. 

Mr. GRAVES. OK. And in this case, under the legislation, 75 

percent of the royalties or the revenues, they go into reclamation. 

They go into helping to clean up abandoned mines. That is correct. 

Right? 

[No response.] 

Mr. GRAVES. I just find it curious that in this case we are going 

to clean up abandoned mines, wherever in other scenarios there 

are strong efforts to make sure user pays or polluter pays; whereas 

in this case this isn’t necessarily—this is disconnecting that. It is 

making other folks pay, potentially, for any type of environmental 

harm that may be caused. 

What are your feelings on the revenue sharing, where the states 

get 25 percent, the remaining revenues, 25 percent. So, none of this 

money is actually going to the Treasury. As I read, I think 100 

percent—is that right—100 percent is going out? Because 75 

percent goes to reclamation and 25 percent goes to states? What is 

that? 

Mr. COMER. Federal tax. 

Mr. GRAVES. Federal tax is what? Well, you still get Federal 

taxes. But of the royalties, though. so do you believe that 25 

percent should go to the states? 

Mr. DAVIS. I believe if the states are left with the impacts of 

reclamation—— 

Mr. GRAVES. No. But let’s go back and remember that 75 percent 

of the funds are going to actually do reclamation work. Right? 

Mr. DAVIS. Right. But the overall impact is going to affect the 

state. I personally believe that, yes. 

Mr. GRAVES. Anybody disagree with that, that states should get 

some type of compensation? 

[No response.] 

Mr. GRAVES. OK. The reason I bring this up, in Louisiana when 

we dig, when we mine, we hit water, so there is not a whole lot 

going on in Louisiana. The reason I bring this up is this. Under the 

Mineral Leasing Act right now, states get 50 percent of the money 

from energy production on Federal lands in their states. They get 

50 percent of the money, and there are no strings attached. They 
63 

can do whatever they want with it. An additional 40 percent of 

those funds goes into the reclamation fund for water projects in the 

western states. So, 90 percent of the money effectively goes back. 

In the case of where I represent, South Louisiana, we have pro- duced maybe $200 billion in royalties and bonus bids and rental 

payments to the Federal Government, and we get virtually nothing. 

I think we got 0.6 percent—0.6 percent. So, the Mineral Leasing 

Act gives up to 90 percent; under this bill they get 25 percent while 

the environmental impacts are being addressed. We have lost 2,000 

square miles of our coast and we get nothing. Zero. Zip. 

And I just find it interesting how this Committee continues—just 

last week, or 2 weeks ago, whenever it was, we did a bill providing 

royalty-sharing for offshore wind. I am not sure what the environmental impacts of that are, but the territories are getting, under 

this bill, revenue-sharing from offshore wind production. 

If we care about the environment, I just do not understand why 

we have such disparity in our policies? Let me say, Mr. Chairman, 

I actually will support legislation—I don’t know about the bill in 

its current form, but I will support legislation that provides some 

type of value back to the taxpayer. 

I believe there should be something there. I don’t know that 

these royalty rates are set appropriately; maybe we auction it and 

see what the market determines. But I actually think the public 

should get something back, which is not just the disparity—and I 

am wrapping, Mr. Chairman; thank you for your discretion—not 

just the disparity on the lack of revenue-sharing for Louisiana and 

states that produce offshore energy, but also I am going to bring 

in red snapper. I am bringing red snapper into this conversation. 

All my friends up here, they love it when I talk about this. 

But here we have again—and you are going to cut me off 

now—— 

[Laughter.] 

Mr. GRAVES. Here we have again a scenario where—red snapper 

is a natural resource. It is a public asset. It is a public asset, and 

we just give it away for free. Why is it that now some things are 

worth money and we need to have a market and make sure taxpayers are getting something back, and in other cases we just give 

it away for free. I don’t understand this Committee ever, ever. 

We have no consistency in policy, and it is all about just choosing 

winners and losers. And in this case, and the case of red snapper, 

the public loses. The public gets completely screwed. So, thank you. 

I am done. 

[Laughter.] 

Dr. LOWENTHAL. I am not sure I saw the exact relationship 

between the red snapper and this, but I always appreciate—— 

Mr. GRAVES. You cannot distinguish minerals and red snapper. 

They look identical. 

Dr. LOWENTHAL. I always appreciate my Representative from 

Louisiana educating us. It is a pleasure. 

[Laughter.] 

Dr. LOWENTHAL. I would like to thank the witnesses—oh, oh, yes. 

It is with great honor, and the operative word is honor, that I represent the Ranking Member for 5 minutes, Ranking Member 

Gosar. 
64 

Dr. GOSAR. Well, first of all, just to correct the record with my 

colleague from Louisiana, it is not a 50–50 split. As you will remember a couple years back, it is 48. Yes. The Federal Government 

stole 2 percent from the states. 

Just to correct a couple records here. Mr. Davis, do you take 

deductions on your taxes? 

Mr. DAVIS. Of course. 

Dr. GOSAR. That is what I thought. Let me ask all the members 

on the panel: Do you have a cell phone? 

Mr. DAVIS. Of course. 

Ms. LACHELT. Yes. 

Mr. COMER. Yes. 

Dr. GOSAR. How about you? 

Mr. MANUEL. Yes. 

Dr. GOSAR. You have one. 

Mr. Comer, when we look at litigation situations, Canada is a 

little bit different than the United States, is it not? 

Mr. COMER. Yes. 

Dr. GOSAR. So, what is that? I think it is English system, so 

what ends up happening? Loser pays? 

Mr. COMER. Yes, sir. 

Dr. GOSAR. Oh, so it’s a very, very different application here. And 

that is why we get the streamlined effects in Canada, because we 

do not get the frivolous lawsuits. OK? 

Another thing I need to set straight. Chairman Manuel, thank 

you for coming. You talked about government-to-government consultation. Is it not true that the government reached out to you and 

you refused to talk to them? Yes or no? 

Mr. MANUEL. No. 

Dr. GOSAR. Let the record reflect that they turned down 

government-to-government consultations numerous times with the 

Forest Service and with the company. 

So, when we start talking about production, Mr. Comer, when we 

do these rare earths in particular—I am going to be very pointed 

about these—they are a little harder to deal with, are they not? 

Mr. COMER. Yes, sir. 

Dr. GOSAR. Hardrock has some very different applications, does 

it not? 

Mr. COMER. Yes, sir. 

Dr. GOSAR. What do we have to do with these that makes it, 

particularly hardrock, a little bit different than everything else? 

Mr. COMER. Well, first of all they are called rare earths partly 

because of how they are described, but they are very rare. They are 

located in very small quantities. They require extensive processing. 

And they are even more difficult to find. Yet, their applications are 

essential to our current economic future. 

Dr. GOSAR. You saw the charts that I put up there. If we continue down this pathway, you see the bloom where we are more reliant on other forms of these minerals all the way around the 

world. How does that look to our intellectual property that is so 

much based upon these rare earths? 

Mr. COMER. It is a challenge. We don’t control any of the rare 

earths that are a critical part of our technology and energy 
65 

resources that we are advancing that are advanced, that are not 

conventional in nature. 

Dr. GOSAR. In fact, they have a monopoly, do they not? 

Mr. COMER. An absolute monopoly, sir. 

Dr. GOSAR. I mean, they actually run the worldwide market, so 

what ends up happening is, they keep raising the price, raising the 

price. And then it gets advantageous for companies to come in. And 

once they start investing money, what they do is they flood the 

market, do they not? 

Mr. COMER. That is certainly a possibility, sir. 

Dr. GOSAR. Well, they do. They do. Do you think the demand for 

these elements are going to go down, particularly with the less 

aspect for renewable energy in wind and solar? 

Mr. COMER. I don’t see any scenario in the short term where 

mineral demands will diminish. 

Dr. GOSAR. You made a comment that we would spend as much 

on copper in the next 5 years as we did in the last 500. 

Mr. COMER. Twenty-five years. 

Dr. GOSAR. Twenty-five years. I am sorry. Is that true? 

Mr. COMER. That is my understanding, yes, sir. 

Dr. GOSAR. Do new cars, electric cars, have less or more copper? 

Mr. COMER. A current electric vehicle uses four times the amount 

of copper as a conventional car, which uses substantially more than 

a car from 20 years ago. Just think of all the motors that exist in 

cars that have copper windings compared to the cars we grew up 

in. 

Dr. GOSAR. I am going to go back to mitigation because it was 

brought up. Once again, I just want to bring this up. There are 

abandoned mines, but the problem with that mine was alluded to 

by the EPA. Their decisions—my wife is from Durango, by the way, 

so I do know a lot of people there. The problem for that spill was 

a catastrophe of errors, and particularly with EPA. I did not ask 

a question. That is fact. 

So, when you look at these, Mr. Comer, as far as these rare 

earths, are they better done in this country or in China? 

Mr. COMER. There are many reasons we are better off having 

minerals produced in the United States. It creates jobs. It creates 

tax revenues. We do it too high, high environmental standards. 

There are a lot of benefits. In fact, you then control the market. 

Dr. GOSAR. And one last question. When we talk about abandoned mines, part of the big problem with abandoned mines is the 

litigation that prohibits us. We have been dealing with this on this 

Committee over and over again. For one, in Arizona, we have 

Resolution Copper that mitigated a past mine site and have invested almost a billion dollars in that reclamation application. 

And there are plenty of groups that want to do that. But what 

ends up happening is the environmental groups will refuse to sign 

off on the litigation. That is part of the problem. And that goes 

back to my whole application that in Canada they have a loser 

pays, so the frivolous lawsuits are few and far between. 

The last point I want to make is the reason why there are multinational companies is we have put all the American companies out 

of business. That is the problem. In order to mine in the United 

States, you have to have holdings around the world to subsidize 
66 

what you have to put through here because the time it takes from 

discovery to mining is sometimes 20 years. 

With that, Mr. Chairman, I yield back. 

Dr. LOWENTHAL. Thank you. And I want to thank the witnesses 

for their testimony and the questions. I think we had a full discussion of the issues before us. 

Before I kind of summarize and end it, I would like to ask the 

witnesses if there is anything that you would like to provide, some 

concluding statement? No more than a minute. Or some question 

that you wish you had been asked. Either some concluding statement or some question that you wish we had asked that you want 

to ask yourself and answer it here. 

No obligation. If you want to answer it, you can. Is there anything you would like to tell us now that we have not asked you? 

Mr. Davis? 

Mr. DAVIS. It is really not a question. It is just a thought. This 

mining law, which has not been touched for 147 years, needs to be 

overhauled. There is no question about that. I guess my question 

to you is: In my business, we sit once a year and we envision what 

the future looks like. If Congress, if a bipartisan Congress, were to 

sit down and rewrite this law, envision this law, rewrite this law 

today for the future, what would it look like? 

And I cannot imagine for a second that it would look anything 

like what is on the books now and what seemingly is ignored or 

passed away. We have heard how it needs to be worked on. It 

needs to be thought about. It does, and that is what today is about. 

Today is to begin that process. 

But if we were writing this law today fresh, if Congress was rewriting it, what would it look like? And I think that is my question 

to Congress, to a bipartisan Congress. 

Dr. LOWENTHAL. Thank you. Anyone else wish to make any final 

statement? Concluding statement? Or ask a question that we have 

not? Mr. Davis asked us a question. Yes? 

Mr. COMER. Members, thank you for this opportunity. Companies 

put hundreds of millions and billions of dollars into opening mines. 

If they don’t have security of mineral tenure, it is not a true investment if you are subject to losing that. 

With respect to how we look at royalties, if you look at the profits 

pie in mining, there is not 12 percent of a gross royalty. There is 

generally not 8 percent. There is less than 3 percent. So, the 

royalty issue is important because hardrock mineralization is difficult to find. It is expensive to process. 

If you look at a typical copper mine, you dig hard rock. you crush 

it. You screen it. You grind it. You mill it. Then you only have 30 

percent copper. And you may have had transportation skips. Then 

you send it to a smelter to get to 80 percent, and then to a refinery. 

It is very expensive. 

These are small deposits. They are not regional deposits. The exploration is challenging. So, when you look at a royalty, it is important to look at: What royalty number are you using? How are you 

applying it? And does it make sense for the mineral? So, it is not 

a one-size-fits-all, and mining is not one-size-fits-all. 

Thank you very much. 

Dr. LOWENTHAL. Thank you, Mr. Comer. 
67 

Chairman Manuel? 

Mr. MANUEL. I just want to state that I do understand the 

purpose and the intent of copper mining that is being done on our 

Nation’s lands and the benefits out of the mining. But I just wanted to say that we would rather have consultation so we can mitigate the negative impact it is going to have on us. 

I did meet twice with the U.S. Forest Service Director there in 

Tucson, and I met twice with the Corps of Engineers that is overseeing the project on the 404 permitting. So, we had those 

meetings. Thank you. 

Dr. LOWENTHAL. Thank you. 

Ms. Lachelt? 

Ms. LACHELT. Thank you, Chairman. I would like to start by just 

reiterating. This law is almost 150 years old, and we desperately 

need a source of funding to be able to clean up the 500,000 abandoned mines. This bill would provide for that. It would ensure that 

no community would have to go through what my community went 

through with the Gold King Mine spill. 

And even though the EPA was working, trying to fix the mine, 

it was a net inevitable that that mine was going to blow out. And 

we could experience another mine blowout at any point, so we very 

much need a source of funding for that. 

I would also like to respond by stating that the industry on 

Federal lands enjoys exemptions from many of our laws that 

protect water quality—the Clean Water Act, the Resource 

Conservation and Recovery Act. And in terms of NEPA, it doesn’t 

apply in terms of they cannot select a no-option alternative. This 

reform would also give communities input into the kind of development that may or may not be appropriate in their backyards. 

And I believe that every community needs a say, and not just to 

have a mine forced upon them in their watershed. And also, folks 

really want to make sure that they are sourcing their minerals 

from mines that practice best practices. And it is about responsible 

mining. We don’t want to source our minerals from companies that 

can destroy an entire watershed for a community. Thank you. 

Dr. LOWENTHAL. Thank you. And I would like to offer one concluding thought, after listening to both the panelists and also to 

the Members behind the dais. 

It is clear, and from the arguments from both sides on this issue 

and what was stated, I think quite eloquently, by the Representative from Louisiana, our hardrock mining system needs to be fixed, 

I think. The mining industry knows this. They are scared of changing the existing system. But they also have made it clear that the 

existing system that we have today is not ideal. 

Meanwhile, even though I do agree that it would be good to reduce our dependence on imports or the importance of finding new 

deposits of minerals here in the United States that we need for our 

new clean energy future, I cannot support doing that under the 

Mining Law of 1872. 

I think what I am saying is that there is a win/win to be found 

here. We need the mining industry to come to the table to find that 

win/win. And, unfortunately, we haven’t seen much appetite on 

their side to want to come to the table to do that. But I believe 

there is a way to reform the Mining Law, protect special places, as 
68 

has been identified, by respecting tribes; that we can clean up 

abandoned mines and solve some of the problems that the mining 

industry faces. But I think we are going to need to all work 

together to do that. 

In conclusion, I want to say that the Members may have some 

additional questions that they may want to ask you, members of 

the panel. And we will ask you to respond in writing to those requests. Under Committee Rule 3(o), members of the Committee 

may submit questions to the witnesses within 3 business days 

following this hearing. And the hearing record will be open for 10 

business days for you to respond to those questions. 

If there is no further business, and not hearing any, this 

Committee stands adjourned. 

[Whereupon, at 11:43 a.m., the Subcommittee was adjourned.] 

[ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]

Submission for the Record by Rep. Gosar 

Slides Used During the Hearing 
69 

Import 

Reliance in 

1995 

Source: USGS 

Import 

Reliance 

in 2018 

Source: USGS 

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70 

Submission for the Record by Carolyn Shafer, Patagonia 

WE THE PEOPLE 

OF 2019 ARE BEING GREATLY HARMED 

BY THE ANTIQUATED 1872 MINING LAW 

We the People 

of 2019 have no voice to speak for the ecosystem that is in 

harm’s way if a mining company ‘‘owns’’ 450 acres of patented, 

private land on which it can mount an underground mine with 

the intention to blast large tunnels under 23,000 acres of 

unpatented claims on Forest Service public lands through a 

highly fractured hydrogeology in a global biodiversity hotspot 

identified as one of the top five places in the world MOST IN 

NEED OF RESEARCH and PROTECTION. 

—Notes 1, 2, & 3 

We the People 

of 2019 and the next seven generations are being robbed of an 

abundant future which we define as a healthy planet and 

nutritious foods for all. 

We the People 

of 2019 recognize that as the anthropocene unfolds, it is vital 

to protect and foster the resilience of the ecosystem and to 

allow for the possibility that the highest value is that the 

materials should be left in the ground. 

We the People 

of 2019 continue to be financially impoverished by the environmental damages of legacy mining as we, the taxpayers, bear 

the economic and social cost of restoration. 
71 

We the People 

of 2019 suffer the health damages of legacy mining and 21st 

century industrialized mining. 

We the People 

of 2019 are puzzled that the government is giving away 

extracted materials for free to the mining companies. 

We the People 

of 2019 living in the Patagonia Mountains and Sonoita Creek 

watershed in Southern Arizona implore our elected federal 

officials to support ===bill #=== to stop the infringement of the 

rights of WE THE PEOPLE of 2019. 

NOTE 1 
72 

NOTE 2 

HALF- EARTH 

A OurP/ancr's 

,_, Fight for Lift 

EDWARDO. 

WILSON 

Hdlf-Earth proposes an achir.table plan to save our imperiled biosphere: 

devote half the surface of the Earth to nature. 

In order to stave off tile mass extinction of spedes, Including our own. we 

must mO'IIe swiftly to preserVe the biodiversity of our planet. $&)'$ EdwCird 0. 

Wilson in his most impassioned book to date. Half-Earth argues that the 

situation facing us is too large to be solved piecemeal and proposes a solution 

commensurate with the magnitude of the problem: dedicate fully half the 

svrf.;~ceoftheEa thton<~ture. 

If~ are to undertake such an ambitious endeavor, we first must understand 

just what the biosphere is, why it's essential to our survival, and the manifold 

threats now filclng lt. In doing so, Wilson de,scrib@S how our species. In only a 

mere bl•nl: of geological t•me, became the architects and rulers ofth•s epoch and outlines the consequences 

of this that will affect all of life, both ours and the natural world, far into the future. 

The Patagonia Mountains and Sonoita Creek Watershed are part 

of the M.ad.r.e.an. mountain chains of Mexico and the Sky Islands 

heights of the southwestern US. The world's senior naturalists 

(each with international expertise in biodiversity and ecology) 

include the Patagonia Mountains as " . .. one to five places in the 

world ... " considered best on the basis of richness, uniqueness, 

and MOST IN NEED OF RESEARCH and PROTECTION. 
73 

NOTE 3 

Patagonia Area Resource Alliance 

www.PatagoniaAlliance.org 
74 

[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE

COMMITTEE’S OFFICIAL FILES]

— Larch Company, Andy Kerr, Statement on H.R. 2579 

Submission for the Record by Rep. Gosar 

— Foreign Policy Analytics Special Report, ‘‘Mining the Future— 

How China is set to dominate the next Industrial Revolution,’’ 

May 2019. 

Æ