Effects Of Proposed Federal Mining Policy Changes
On Mining Industry And On State & Local Revenues
To Be Focus of Congressional Hearing In Spokane
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."
Spokane Witness List
Background on Federal Royalty Proposals
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.
Proposals to Limit Amount of Land Available to Support Mining Activities
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.
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