Mining reform attempt on tap

In addition to rewriting the Mining Law of 1872, the measure would impose royalties on the hard-rock mining industry.

"Given our current economic crisis and the empty state of our national treasury, it is ludicrous to be allowing this outmoded law to continue to exempt these lucrative mining activities from paying a fair return to the American people," said Rep. Nick Rahall, D-W.Va., the chairman of the House Resource Committee who introduced the bill Tuesday.

Rahall said the current economic crisis makes it more important than ever to generate royalties from minerals mined on public lands. The National Mining Association disagrees.

"Mines are already operating in the highest cost environment in the world. They certainly cant withstand one of the highest, if not the highest, royalty in the world," said Luke Popovich, vice president of external communities for the Washington-based organization.

"The economy is so fragile, so it’s a particularly bad time," he said. "We are already seeing member companies announcing layoffs and mine closures."

Rep. Dean Heller, R-Nev., also pointed to Nevada’s suffering economy as a key reason he will oppose the Rahall bill.

"With Nevada’s unemployment at 9.1 percent, the mining industry and the jobs it creates is one of the few bright spots in our current economic environment. It would be misguided to burden the mining industry with excessive regulations and taxes if we want our economy in Nevada to thrive," Heller said.

The bill Rahall reintroduced calls for an 8 percent gross royalty on mineral production from new mines on public lands and a 4 percent gross royalty on mines that are already in operation.

Popovich said the NMA is willing to work on mining law reform, but any royalty should be a net royalty on production, not gross, and certainly 8 percent is too high.

Environmentalists support Rahall’s effort to get the reform bill back on the table this session, however.