On the one hand we have John Chadwick. I have had many a drink with John in luxury bars in Denver. He is British, loves traipsing around Africa on company planes and writing about mining. He reminds me of the perfect old gentleman for whom drinking before sundown in the colonies was nigh on immoral. But once you started drinking, why the sun never set on the British Empire. He regards all Americans with wry humor, a species that made a gross mistake long ago in leaving the happy warmth of the Crown’s protection. His brand of humor is straight out of the pages of dusty copies of Punch. Here is what he published on his blog this morning:
World’s highest royalty on metals mining, which is threatened, would make US operations noncompetitive; threaten mining-dependent communities throughout the American West. The following statement was released today by National Mining Association (NMA) President and CEO Hal Quinn upon the introduction of legislation to amend the General Mining Law by House Natural Resources Committee Chairman Nick J. Rahall.
“Thousands of high-paying mining jobs and mining-dependent communities throughout the West are put at risk by the Hardrock Mining and Reclamation Act of 2009(H.R. 699), which was introduced today by House Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.) and others. These are jobs and operations that can play a vital role in rebuilding America, but they cannot shoulder the world’s highest royalty and remain competitive in the international marketplace.
“More than 50,000 Americans are employed at US metals mines. They meet half of this country’s manufacturing needs and can do more. Another 200,000 jobs are created because of US metals mines-generating $12.5 billion in payroll and $4.2 billion in personal income and payroll taxes. These operations truly are the economic engines that drive countless communities across the West.
“An 8% royalty on metals produced on federal lands would be the world’s highest. This royalty and other provisions of H.R. 699 that are duplicative of other US laws and regulations would needlessly jeopardize US metals mining – further increasing our dependence on foreign sources for the metals we will need to rebuild America. NMA supports responsible updates to the General Mining Law to keep US mining strong, but this is the wrong medicine for our economy and crushing news for thousands of families in America’s mining community.”
“I have labored to reform the Mining Law of 1872 for nearly three decades-not just to fight the giveaway of public lands and valuable minerals, and to combat the threats to human health and safety from abandoned mine lands-but because I am a supporter of mining,” Rahall said. “I believe we can no longer expect a viable hardrock mining industry to exist on public domain lands in the future if we do not make corrections to the law today.”
The Salt Lake Tribune includes this comment from the National Mining Association:
“If Congress wouldn’t pass this bill when the economy was up and running last year, why would they pass it now that the economy is prostrate with a toe tag?” association spokesman Luke Popovich asked. “Our member companies have just this week announced layoffs and mine closures in the hard-rock West. Raising their costs of doing business.”
A report from the Pew Campaign for Responsible Mining claims that failure to reform the law will cost taxpayers$1.6B in the next decade. The report says money will be lost for these reasons:
- a royalty-free giveaway of gold, uranium and other valuable metals found on public lands – at a 10-year cost of $400 million;
- failure to collect a reclamation fee similar to that placed on coal for cleanup of abandoned mines – at a 10-year cost of $290 million; and,
- special tax breaks that allow mining companies to deduct costs in excess of investment – at a 10-year cost of $1 billion.
They add this statement about the cleanup costs of abandoned mines: “According to the Environmental Protection Agency, the cost for cleanup of abandoned hardrock mines could run as high as $54 billion. Much of that cost could ultimately be borne by U.S. taxpayers.”
Is it any wonder this is confusing. I mean can you be sure those American mining people are not simply joking? For it appears some in Denver have difficulty distinguising humor, humour, sarcasm, funny, and grossly stupid. Afterall, it is just possible that if this bill passes, and the US mining industry dies, that the US truly will have to take over Canada as a source of minerals. And that will turn the US inevitably socialistic. Seems to me with that dire prospect in the offering, the conservative American miner must now mount a march in the woods to protect sacred ground. His religion is at stake.
The terms of this debate are framed in such stark opposing views. I cannot discern the truth. Or maybe there is no truth and this is a partisan issue based on faith, belief, and immediate financial gain. This is another of those debates on the use of the commons, and nobody stands to win in such situations. Thus we must simply seek out the way that leads to optimum good.
It seems to me that there is no harm in taking a royalty of those people from Canada and England and Brazil who come to mine in the US and then flee before they clean up their mess, leaving the cost burden to the average taxpayer who is ponzied into believing they have another job in the next valley.