Biden’s plan would overhaul 151-year-old mining law and require companies to pay royalties for copper and gold

By | September 12, 2023

WASHINGTON (AP) — The Biden administration is recommending changes to a 151-year-old law that regulates the mining of copper, gold and other hard minerals on U.S.-owned land, requiring for the first time that companies pay royalties on what they extract.

An Interior Department-led plan also calls for creating a mine leasing system and coordinating permitting efforts among a number of federal agencies. This comes as the White House pushes to increase domestic extraction of minerals needed for electric vehicles, solar panels and other clean energy.

Under the terms of an 1872 law, the United States does not collect royalties on minerals extracted from federal lands, a fact that Democratic lawmakers and environmental groups have long complained. The White House plan would impose a net royalty ranging from 4% to 8% on hard rock minerals produced on federal lands. The proposal requires congressional approval, which is unlikely when the House is controlled by Republicans who have long opposed such taxes.

Undeterred by that political reality, an interagency working group – led by Interior – touted the benefits of imposing royalties on about 750 hard rock mines on federal lands, mostly in the West. The figure does not include about 70 coal mines whose owners must pay federal royalties.

“A royalty would ensure that American taxpayers receive fair compensation for minerals extracted from federal lands,” the working group said in a report Tuesday. The tax could also fund programs to increase mining permits, clean up abandoned mine lands and help state and tribal governments that provide infrastructure and services to communities dependent on mining, the report said.

The United States stands out among other countries, such as Australia, Canada and Chile, that collect mineral royalties. At least a dozen Western states also collect royalties on hardrock mining.

“Although the mining industry has raised serious concerns about the current hard rock leasing system used on some federal lands,” the working group “received no arguments as to why a properly designed leasing system could not have the same happened in the United States,” the report reads.

Deputy Interior Secretary Tommy Beaudreau, who chaired the working group, called the plan released Tuesday “a modernized approach” that would “meet the needs of the clean energy economy while meeting our obligations to tribal nations, taxpayers, the environment and future generations.” ‘

“Ensuring a secure and sustainable supply of critical minerals will support a resilient manufacturing base for technologies at the heart of the President’s Americas investment agenda, including batteries, electric vehicles, wind turbines and solar panels,” said Joelle Gamble, deputy director of the National Economic Council of the White House.

Tribes and environmental groups welcomed the report but urged President Joe Biden to go further to protect communities, sacred sites and water resources. The White House formed the working group last year as Biden pledged to increase production of lithium, nickel and other minerals used to power electric vehicles and other clean energy.

“These modest reforms are a good first step, but they are not enough to safeguard our water and our communities,” said Allison Henderson, Southern Rocky Mountain director at the Center for Biological Diversity, a nonprofit organization based in Arizona. “The Biden administration should use its full authority to update these antiquated mining laws, prevent further devastation of the mining industry, and preserve a livable planet for future generations.”

Rich Nolan, president and CEO of the National Mining Association, said the report did little to advance Biden’s stated goal of securing domestic mineral supplies while supporting responsible mining.

The creation of a leasing system, the imposition of a punitive “dirty tax,” and proposed royalties of up to 8% “will throw further obstacles in the way of responsible domestic projects, forcing the United States to double our already excessive dependence on imports from countries with questionable labor, safety and environmental practices,” Nolan said in a statement.

Wyoming Sen. John Barrasso, the top Republican on the Senate Energy and Natural Resources Committee, said Biden “is taking a swing at reliable, affordable energy.”

If implemented, the proposed mining reforms “will force us to purchase more critical minerals” from China and other countries that use forced or child labor “instead of exploiting our abundant resources here at home,” Barrasso said.

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