Congress is moving quickly on multiple fronts in response to the August 2015 spill at the abandoned Gold King Mine in Colorado. Republicans in the House held a hearing on a package of mining reform bills proposed by Rep. Lamborn (R-CO), Rep. Hice (R-GA), and Rep. Hardy (R-NV) that would, respectively, promote private sector remediation of abandoned mines and facilitate abandoned mine cleanup through an energy and mineral reclamation foundation, and redirect federal funding towards accredited mining schools to develop new leadership in the mining industry. But, Republicans are not alone in this effort. Democratic members in the House and Senate have proposed sweeping legislation that would significantly revamp the current laws governing hardrock mining on federal land by forcing hardrock mining companies to pay production royalties and reclamation fees to the US Government for cleanup of abandoned mines and by imposing greater permitting and financial assurance requirements on operators. Neither Republican nor Democratic proposals are likely to move forward for serious consideration on their own. However, each proposal contains elements that could be considered as part of a larger, bipartisan effort to update hardrock mining laws in the 114th Congress.
Congress Responds to the Gold King Mine Disaster
Calls for reform of the General Mining Act of 1872 and related statutes, which govern mining on federal public lands of hardrock minerals, such as gold, silver, copper, nickel, and uranium, have been surfacing for decades. However, the release on August 5, 2015 by a US EPA contractor of three million gallons of what has been described as mustard-colored sludge evidently containing arsenic, lead, copper, zinc and other toxins from the abandoned Gold King Mine into a tributary of the Animas River in Colorado sparked national interest in the potential environmental threats posed by the more than 500,000 abandoned mines across the US and galvanized congressional action. Committees in the House and Senate held hearings in September 2015 to investigate the cause of the Gold King Mine blowout, and lawmakers from both parties introduced legislation thereafter aimed at addressing a range of issues from compensation of those impacted by the spill to more sweeping mining reform bills.
The House Natural Resources Committee took a step further on November 4th by holding a legislative hearing to review H.R. 3843, the “Locatable Minerals Claim Location and Maintenance Fees Act,” H.R. 3844, the “Energy and Minerals Reclamation Foundation Act,” and H.R. 3734, the “Mining Schools Enhancement Act.” Each bill presents a relatively narrow solution to “systemic” problems that Committee members and witnesses addressed in oversight hearings following the Gold King incident. Additional committee consideration for the Republican mining package should follow in relatively short order.
Congressional Democrats Propose Sweeping Hardrock Mining Reform Bills
In contrast to congressional Republicans’ discreet approach to the Gold King response, several Democratic members proposed comprehensive solutions that could have a broad impact on the mining community well beyond the scope of disaster response and prevention. On November 5, 2015, Senate sponsor Tom Udall (D-NM) and co-sponsors Martin Heinrich (D-NM), Michael Bennett (D-CO), Ron Wyden (D-OR) and Edward Markey (D-MA) introduced S.2254, the “Hardrock Mining and Reclamation Act of 2015.” A similar bill, H.R.963, the “Hardrock Mining Reform and Reclamation Act of 2015,” was introduced by Rep. Raul Grijalva (D-AZ) and 30 Democratic co-sponsors in the House. The proposed legislation would represent a sea change for those miners and companies who are accustomed to operating on federal land under the 1872 system. The key reform priorities of both bills are described below:
Royalties: In addition to eliminating the land patent system, whereby mining claimants who discover valuable mineral deposits can purchase fee title to the subject acreage from the federal government, both the Senate and House bills impose a new royalty scheme on hardrock minerals produced from any mining claim located under the general mining laws. Specifically, S.2254 provides the Secretary of the Interior (the Secretary) discretion to set a “reasonable” royalty rate of not less than 2 percent and not more than 5 percent “of the gross income from mining for production of all locatable minerals.” The royalty rate could vary based on the locatable mineral concerned, and the Secretary would have authority to reduce the royalty rate if operators show by clear and convincing evidence that without a reduction, production would not occur. Notably and in contrast to the House bill, the Senate bill would exempt royalty payments from mines that are already producing locatable minerals on federal land in commercial quantities as of the date of enactment. The House bill would levy an 8% royalty of the gross income from mining for new mines, and a 4% royalty on existing mines.
Hardrock Minerals Reclamation Fund: Under the Senate bill, every operator of a new or existing hardrock mine would be forced to pay a reclamation fee of between .6 percent and 2 percent of the value of the production from a hardrock mining operation for each calendar year. All fees and royalties collected under the Senate bill would be deposited into a newly created US Treasury Hardrock Minerals Reclamation Fund (which would be distinct from the Superfund program). The Secretary would be authorized to use amounts in the Fund for abandoned mine cleanup, including reclamation and restoration of land and water resources adversely affected by past hardrock mining. Sponsors of the Senate bill estimate that the reclamation fees alone could generate up to $100 million annually. On the House side, H.R. 963 requires each hardrock mining operator to pay a displaced material reclamation fee of 7 cents per ton of displaced material into the Hardrock Minerals Fund.
Robust Permit and Financial Assurance Requirements: Both bills propose significant new layers of regulation for mining claimants, including requiring claimants to apply for and obtain two new federal environmental permits – an exploration permit and an operation permit. Both permit applications would require submission of reclamation plans and substantial evidence of financial assurances. Under both bills, claimants would be forced to hold financial assurances for the duration of the mineral activities and until reclamation and long term maintenance are complete. Under the Senate bill, the sufficiency of a claimant’s bond, surety, or other financial assurance would be subject to public notice and comment to ensure its adequacy to complete the reclamation and restoration activities required under the Act.
Land Withdrawals: Both bills would permit states and tribes to petition the Secretary to withdraw specific tracts of federal lands from all mining activity. The Senate bill would further require the Secretary to conduct an expedited review of all public domain lands open to mining under the 1872 law to determine whether certain areas, such as areas of critical environmental concern or areas designated for inclusion in the National Wild and Scenic Rivers System, should be withdrawn from mineral entry. Significantly, the House bill would simply remove from entry under the general mining laws, subject to valid existing rights, all wilderness study areas, areas of critical environmental concern, areas covered by or designated for inclusion in the Wild and Scenic Rivers System, and roadless areas.
Good Samaritan Cleanup: Unlike the Senate bill, H.R. 963 contains a “Good Samaritan” cleanup provision that is designed to accomplish two goals. First, the provision encourages remediation of inactive and abandoned mine sites by Good Samaritans (defined as individuals or entities who had no role in the creation of the historic mine residue or any resulting environmental pollution and are not legally responsible for the remediation of the historic mine residue). Second, the provision amends the Clean Water Act to authorize a permitting authority with an approved Good Samaritan program to issue Good Samaritan discharge permits, subject to certain permit requirements. Good Samaritans who comply with a discharge permit approved under the proposed Act would be shielded from liability.
Both bills have been referred to the committees of jurisdiction – H.R. 963 to the House Natural Resources Subcommittee on Energy and Mineral Resources and S. 2254 to the Senate Energy and Natural Resources Committee; though neither bill is yet scheduled for hearing or markup.
Congressional consideration of mining reform legislation should continue well into 2016, though prospects for passage of any one bill appear low given the Republicans’ narrow control over Congress but unlikely ability to overcome a presidential veto threat. However, given the vehemence of the public outcry in the aftermath of the Gold King Mine spill, each bill signals the key principles that Republicans and Democrats want to address. Because Republicans must secure at least 60 votes in the Senate (and 67 to overcome a presidential veto, and 2/3 of the House to do the same), Republicans likely cannot pass mining reform without addressing at least some of the Democratic priorities described above. Likewise, Democratic members cannot hope to advance their reform ideas without incorporation of at least some Republican reform proposals. Consequently, there could be room for compromise – particularly in the creation of an independent Reclamation Fund and perhaps in the concept of Good Samaritan remediation, so long as both parties coalesce around critical components that enjoy at least some measure of bipartisan support.