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Gold, copper miners could pay 8% Federal royalties under new Biden mining proposal
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(Kitco News) -
The Biden administration is proposing a dramatic overhaul of a 151-year-old law that governs mining for gold, copper and other minerals on U.S.-owned lands, which would force companies to pay royalties to the Federal government on what they extract.
The final proposal, which was drafted by an interagency working group led by the Department of the Interior, also calls for the creation of a mine leasing system and the coordination of permitting among the various federal agencies.
Under the terms of the existing 1872 law, the U.S. government does not collect royalties on minerals extracted from federal lands. The new White House plan would impose a variable 4% to 8% net royalty on hardrock minerals extracted from federal lands.
The proposal comes amidst a push by the Biden administration to boost domestic production of minerals needed for electric vehicles, solar panels and other clean energy technologies.
The working group touted the benefits of collecting royalties on the approximately 750 hardrock mines located on federal lands, mostly in the Western United States. The figure does not include the 70 or so coal mines which already pay royalties to the Federal government.
“A royalty would ensure that American taxpayers receive fair compensation for minerals extracted from federal lands,” the working group said in a report released Tuesday. They said the royalties could also help pay for 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 activities.
The working group said that while “thoughtful concerns were raised by the mining industry regarding the existing hardrock leasing system that is used on certain federal lands,” they did not receive “any arguments as to why a properly designed leasing system could not be equally successful in the United States.”
The new plan is “a modernized approach” that would “meet the needs of the clean energy economy while respecting our obligations to tribal nations, taxpayers, the environment and future generations,” said Deputy Interior Secretary Tommy Beaudreau, who chaired the working group.
The White House formed the working group last year after Biden pledged to increase the country’s domestic production of lithium, nickel and other minerals used in electric vehicles and other clean energy solutions.
“Securing a safe, sustainable supply of critical minerals will support a resilient manufacturing base for technologies at the heart of the president’s investing-in-America agenda, including batteries, electric vehicles, wind turbines and solar panels,” said Joelle Gamble, deputy director of the White House National Economic Council.
The report was welcomed by tribes and environmental groups, and they urged President Biden to go further to protect communities, sacred places and water resources.
“These modest reforms are a good first step, but they’re not enough to safeguard our water and communities,” said Allison Henderson, southern Rockies director of the Arizona-based Center for Biological Diversity. “The Biden administration should use its full authority to update these antiquated mining laws, prevent more mining industry devastation and preserve a livable planet for future generations.”
But National Mining Association president and CEO Rich Nolan issued a statement claiming that the proposal does not meaningfully advance the President’s goal of securing domestic mineral supplies while supporting responsible mining.
Nolan said the creation of a leasing system, the imposition of a what he called a punitive “dirt tax,” and the proposed royalties of as much as 8% “will throw additional obstacles in the way of responsible domestic projects, forcing the U.S. to double-down on our already outsized import reliance from countries with questionable labor, safety and environmental practices.”
While the proposal is expected to enjoy the support of Democrats, it will face stiff opposition from the Republican-controlled Congress, as well as the GOP Senators who sit on key committees.
Biden’s proposal was “taking a sledgehammer to affordable, reliable energy,” said Wyoming’s John Barrasso, the top Republican on the Senate Energy and Natural Resources committee.
If enacted, Barrasso said the mining reforms “will force us to buy more critical minerals” from China and other countries that use forced or child labor “instead of harnessing our abundant resources here at home.”
The Biden administration was undeterred, however, with Joelle Gamble, deputy director of the White House National Economic Council, saying “Securing a safe, sustainable supply of critical minerals will support a resilient manufacturing base for technologies at the heart of the president’s investing-in-America agenda, including batteries, electric vehicles, wind turbines and solar panels.”
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