Washington, D.C. - Proposals for a Federal royalty on hardrock minerals extracted from public land and proposals to limit support acreage for the safe and practical operation of a mine will be the subject of a hearing by the U.S. House Subcommittee on Energy and Mineral Resources on Saturday in Spokane, Washington.

Time:        9:00 a.m., Saturday, September 11
Location:  Riverpoint Higher Education Park
                 668 N. Riverpoint Blvd., Spokane, Washington

"I welcome the House Resources Committee to Spokane and look forward to having my colleagues get a better understanding of the diversity of the mining industry in the Pacific Northwest and the responsible way in which modern mining companies conduct business," said U.S. Rep. George Nethercutt (R-WA). "With Solicitor General John Leshy's March decision and the effect it could have had on the Crown Jewel Mine in Okanogan County, I am grateful to share first hand the potential negative impacts that decision would have on the rural communities surrounding the mine."

• Charles Wassinger, Associate State Director, Oregon & Washington, Bureau of Land Management, U.S. Dept. of the Interior
• Kimberly Bown, Director of Recreation, Lands and Minerals for the Pacific Northwest Region of the Forest Service, U.S. Department of Agriculture
• George F. Leaming, Western Economic Analysis Center
• John L. Dobra, Ph.D., Director, Natural Resource Industry Institute
• Laura Jones, The Fraser Institute
• Laura Skaer, Executive Director, Northwest Mining Association
• David Kliegman, Executive Director, Okanogan Highlands Alliance
• Jerry Fish, Stoel Rives
• Cesar Hernandez, Montana Wilderness Association
• Don Fife, Director, Holcomb Valley Mining District
• Michelle Nanni, The Lands Council
• Stephannie Schammel, Montana Rancher

Presently, the Federal government does not levy a royalty on hardrock minerals extracted from public land. Many critics of the general mining law say that it is only fair that the Federal government charge a royalty. Suggested mining royalties range from 3 percent of net proceeds to 12.5 percent of gross proceeds. Opponents of the royalty proposals argue that inflated values used in the rhetorical war against the mining industry are predicated upon grossly optimistic estimates of the "in-place" value of minerals using the market price of the metal or other mineral commodity in a finished state, without respect to actual recovery rates of the mineral, the time value of money or any costs associated with finding, mining and refining the mineral to a marketable product.

If a Federal royalty is imposed which causes many mines to close and makes future mines uneconomic, the government will lose hundreds of millions in personal and corporate income tax revenues - a loss greatly exceeding any revenue gains from the royalty.

State and local tax revenues are also severely impacted by a high Federal mining royalty. Federal royalties are deductible from the base on which many State and local taxes are levied, and State and local governments also share in tax losses caused by reduced mining activity.

The latest Interior Department policy initiative against mining is the Solicitor's millsite opinion affecting the Crown Jewel Mine in Okanagan County, Washington, issued in November 1997. This opinion is being used to prohibit a mine on public land from using more than 1 acre of land in support of the mine for every 4 acres within the actual mining area. Support acreage for a mine is used for mill facilities, maintenance shops, waste rock disposal, tailings ponds and transportation facilities. Although the Solicitor maintains that the law clearly supports his ruling, the opinion contradicts both past practice and the current Bureau of Land Management and Forest Service manuals, which state that as many 5-acre millsites as are necessary for the safe and practical operation of a mine may be granted - without regard to any lode claim to millsite ratio.