Hardrock mining companies pay 'a pittance' for minerals mined from public lands. Some say taxpayers need more.

A copper mine shaft 1,100 feet below the surface near
Superior, Ariz. (Photo by Tamir Kalifa, The New York Times)

Since 1872, mining companies have taken stores of gold and other metals from public lands without paying royalty fees to the federal government. The Biden administration says lawmakers need to "fix the Gold Rush-era General Mining Law so it can better manage the mineral resources buried under millions of acres of public land," reports Lisa Friedman of The New York Times. "A top priority: require companies to pay something in exchange for what they take. Unlike companies that extract oil, gas and coal from federal lands, hardrock miners pay no royalties to the federal government."

Initial plans suggest a 4 to 8 percent fee of the net value of mined materials, which "could translate into as much as $97 million annually and drew sharp opposition from mining operators," Friedman writes. Tommy Beaudreau, the deputy secretary of the Interior Department, told Friedman: "The biggest takeaway from our report is that our 150-year-old-law, the 1872 mining law, needs to be reformed and brought into the 21st century."

Beaudreau heads up a "working group of officials across federal agencies who reviewed policies and regulations for hardrock mining," Friedman explains. "The group found the law did not do enough to steer mineral exploration away from sensitive resources or to promote 'early and meaningful' engagement with tribes or other affected communities. . . . And the law should require mining companies that take resources from public lands to pay something for that privilege. . . .The report stated, [the law] 'fails to provide the American taxpayer with any direct financial compensation for the value of hardrock minerals extracted from most publicly owned lands.'"

While mining operations pay state royalties and taxes, operators on federal land "only pay the U.S. government one-time claim processing fees totaling $60. Many companies also pay an annual $165 maintenance fee per site, according to the report," Friedman writes. Mining companies oppose the change. Rich Nolan, chief executive of the National Mining Association, told Friedman that the changes would "throw additional obstacles in the way of responsible domestic projects and would-be investment, forcing the U.S. to double-down on our already outsized import reliance from countries with questionable labor, safety and environmental practices."

Environmental groups praised the proposed change. Chris Wood, the president of Trout Unlimited, a conservation group, told Friedman, “It’s the only commodity produced off of our public lands where there is no tax or royalty." Friedman reports, "Wood added that money raised from federal royalties could help to clean up an estimated half a million abandoned mines scattered across the American West."