[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]



``THE LONG OVERDUE NEED TO REFORM THE MINING LAW OF 1872,'' INCLUDING 
    THE FOLLOWING BILL, AND OTHER RELATED MEASURES: H.R. 2579, THE 
             HARDROCK LEASING AND RECLAMATION ACT OF 2019

=======================================================================

                          LEGISLATIVE HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON ENERGY AND
                           MINERAL RESOURCES

                                 OF THE

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION
                               __________

                         Thursday, May 9, 2019
                               __________

                           Serial No. 116-15
                               __________

       Printed for the use of the Committee on Natural Resources

                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                                   
        Available via the World Wide Web: http://www.govinfo.gov
                                   or
          Committee address: http://naturalresources.house.gov
          
                              ___________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
36-319 PDF                WASHINGTON : 2019          

      

                     COMMITTEE ON NATURAL RESOURCES

                      RAUL M. GRIJALVA, AZ, Chair
                    DEBRA A. HAALAND, NM, Vice Chair
   GREGORIO KILILI CAMACHO SABLAN, CNMI, Vice Chair, Insular Affairs
               ROB BISHOP, UT, Ranking Republican Member

Grace F. Napolitano, CA              Don Young, AK
Jim Costa, CA                        Louie Gohmert, TX
Gregorio Kilili Camacho Sablan,      Doug Lamborn, CO
    CNMI                             Robert J. Wittman, VA
Jared Huffman, CA                    Tom McClintock, CA
Alan S. Lowenthal, CA                Paul A. Gosar, AZ
Ruben Gallego, AZ                    Paul Cook, CA
TJ Cox, CA                           Bruce Westerman, AR
Joe Neguse, CO                       Garret Graves, LA
Mike Levin, CA                       Jody B. Hice, GA
Debra A. Haaland, NM                 Aumua Amata Coleman Radewagen, AS
Jefferson Van Drew, NJ               Daniel Webster, FL
Joe Cunningham, SC                   Liz Cheney, WY
Nydia M. Velazquez, NY               Mike Johnson, LA
Diana DeGette, CO                    Jenniffer Gonzalez-Colon, PR
Wm. Lacy Clay, MO                    John R. Curtis, UT
Debbie Dingell, MI                   Kevin Hern, OK
Anthony G. Brown, MD                 Russ Fulcher, ID
A. Donald McEachin, VA
Darren Soto, FL
Ed Case, HI
Steven Horsford, NV
Michael F. Q. San Nicolas, GU
Matt Cartwright, PA
Paul Tonko, NY
Vacancy

                     David Watkins, Chief of Staff
                        Sarah Lim, Chief Counsel
                Parish Braden, Republican Staff Director
                   http://naturalresources.house.gov
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                      ALAN S. LOWENTHAL, CA, Chair
              PAUL A. GOSAR, AZ, Ranking Republican Member

Mike Levin, CA                       Doug Lamborn, CO
Joe Cunningham, SC                   Bruce Westerman, AR
A. Donald McEachin, VA               Garret Graves, LA
Diana DeGette, CO                    Liz Cheney, WY
Anthony G. Brown, MD                 Kevin Hern, OK
Jared Huffman, CA                    Rob Bishop, UT, ex officio
Matt Cartwright, PA
Raul M. Grijalva, AZ, ex officio

                                 ------                                


                               CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, May 9, 2019............................     1

Statement of Members:
    Gosar, Hon. Paul A., a Representative in Congress from the 
      State of Arizona...........................................     4

    Lowenthal, Hon. Alan S., a Representative in Congress from 
      the State of California....................................     1
        Prepared statement of....................................     3

Statement of Witnesses:
    Comer, Robert D., Partner, Norton Rose Fulbright US LLP, 
      Denver, Colorado...........................................    19
        Prepared statement of....................................    20
        Questions submitted for the record.......................    35
    Davis, Colin, Member, Yellowstone Gateway Business Coalition, 
      Paradise Valley, Montana...................................    12
        Prepared statement of....................................    14
    Lachelt, Gwen, County Commissioner, La Plata County, Colorado    16
        Prepared statement of....................................    18
    Manuel, Hon. Edward D., Chairman, Tohono O'odham Nation, 
      Sells, Arizona.............................................    10
        Prepared statement of....................................    11

Additional Materials Submitted for the Record:

    List of documents submitted for the record retained in the 
      Committee's official files.................................    74

    Patagonia Area Resource Alliance, WE THE PEOPLE, submission 
      by Carolyn Shafer..........................................    70

    Submissions for the Record by Representative Gosar

        American Exploration & Mining Association, Hardrock 
          Mining Timeline........................................     8

        Arizona Chamber of Commerce & Industry, Letter to Rep. 
          Gosar, May 4, 2019.....................................     7

        Chinese Resource Strategy: China is securing minerals and 
          metals for which it is net import reliant..............     9

        Reuters, ``Exclusive: Tesla expects global shortage of 
          electric vehicle battery minerals-sources,'' by Ernest 
          Scheyder, May 3, 2019..................................     6

        Slides Used During the Hearing...........................    68


 
           
LEGISLATIVE HEARING ON ``THE LONG OVERDUE NEED TO REFORM THE MINING LAW 
 OF 1872,'' INCLUDING THE FOLLOWING BILL, AND OTHER RELATED MEASURES: 
      H.R. 2579, THE HARDROCK LEASING AND RECLAMATION ACT OF 2019

                              ----------                              


                         Thursday, May 9, 2019

                     U.S. House of Representatives

              Subcommittee on Energy and Mineral Resources

                     Committee on Natural Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to notice, at 10:05 a.m., in 
room 1334, Longworth House Office Building, Hon. Alan Lowenthal 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Lowenthal, Cunningham, DeGette, 
Grijalva (ex officio); Gosar, Graves, and Hern.
    Also present: Representatives Stauber and Amodei.

    Dr. Lowenthal. The Subcommittee on Energy and Mineral 
Resources will come to order. The Subcommittee is meeting today 
to hear testimony on the long overdue need to reform the Mining 
Law of 1872, and on H.R. 2579, we are going to hear Chairman 
Grijalva's Hardrock Leasing and Reclamation Act of 2019.
    Under Committee Rule 4(f), any oral opening statements at 
hearings are limited to the Chair and to the Ranking Minority 
Member or their designee. I am going to ask unanimous consent 
that all other Members' opening statements be made part of the 
hearing record if they are submitted to the Subcommittee Clerk 
by 5 p.m. today. Hearing no objection, so ordered.

 STATEMENT OF THE HON. ALAN S. LOWENTHAL, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Dr. Lowenthal. First, I would like to welcome our 
witnesses, and thank you for traveling so far today to be 
before us.
    The Mining Law of 1872 is one of the most obsolete laws 
that are still on the books. It comes to us from a time of the 
Wild West, when Civil War veterans would head West and try to 
make their fortunes with a pick, a shovel, a donkey, and a 
dream.
    But there are no more picks, shovels, or donkeys in today's 
mining. Instead, there are earth-moving trucks weighing over 
350 tons and standing nearly three stories tall, and the dreams 
are those of CEOs in boardrooms in Vancouver, Sydney, and 
Santiago, Chile.
    In 1872, land was plentiful and cheap, and President 
Ulysses S. Grant's goal was to give it away as fast as possible 
and encourage people to settle the West, paying little 
attention to the original inhabitants of those areas. The 
Mining Law is designed to give land and minerals away for next 
to nothing. The operating responsibility was an afterthought, 
if it was even considered at all.
    The government effectively posted a sign on our public 
lands saying, ``Free gold. Free silver. Free copper. Free land. 
No royalties or cleanup required.'' Mining companies took 
advantage, extracting over $300 billion of precious metals from 
public land without paying a single cent in royalties to the 
American people and without bothering to clean up their legacy 
of half a million abandoned mines.
    I would like to introduce a little breaking news. You have 
heard it here first. This was done by President Ulysses Grant 
to settle the West, as I pointed out. This may be a surprise to 
everyone here on the panel and in the office, but the West has 
been settled. Yes, there is no doubt that the West has been 
settled. So, we now need to begin to look at what we need to do 
now.
    It is no surprise that mining companies do not want and 
oppose any reform. Who would want to give up a 147-year-old 
free ride?
    Yet, as we all know, many things have changed in the past 
century and a half. Hardrock mining in America now has to 
comply with the Federal Land Policy and Management Act, the 
National Environmental Policy Act, and the Clean Water Act, 
among others.
    But none of these laws help land managers plan for the 
specific environmental challenges that come with hardrock 
mining, or address the exalted status that mining has managed 
to maintain on our public lands. Half a million abandoned 
hardrock mines litter the country, posing safety threats and 
polluting thousands of miles of rivers and streams with toxic 
runoff. Fifty million gallons of toxic wastewater, the 
equivalent of 2,000 tanker trucks, flows out of hardrock mines 
every single day.
    Congress tackled this issue for coal mines over 40 years 
ago. The industry was asked to pay a small fee for each ton of 
mined coal, and that money goes to remediating the harmful 
legacy of countless abandoned coal mines. There is no similar 
program for cleaning up abandoned hardrock mines. That can only 
happen if the mining industry steps up and meaningfully deals 
with its own long history of pollution, just as the coal 
industry has done.
    There are many ways to raise that revenue, and one option 
would be a long-needed and overdue royalty on hardrock mining. 
For nearly a century, the American people have received a 
royalty for oil, gas, coal, potash, soda ash, and many other 
resources that are extracted from public lands. It should be no 
different for gold, silver, copper, or any other mineral.
    We can establish an abandoned mine land fund so that our 
public lands are safe and accessible for generations to come. 
We can reaffirm that there are places mining shouldn't happen, 
where the impacts on public health, the environment, or places 
sacred to tribes will be too great. And we can finally get rid 
of this idea that mining is always the highest and best use of 
our public lands.
    The mining industry says everything is working just fine. 
Yet, in the same breath they complain that the permitting 
system is completely broken. I say to them, that is because 
there is no permitting system, just modern environmental laws 
piled on top of a creaky, rotting 150-year-old foundation.
    They will argue that we need more mines to cut our import 
dependence or find the minerals needed to realize our clean 
energy future. But they need to acknowledge that this can't 
happen and will not happen if they insist on creating a future 
for mining using a relic of the distant past. The Mining Law of 
1872 must go.

    [The prepared statement of Dr. Lowenthal follows:]
      Prepared Statement of the Hon. Alan S. Lowenthal, Chairman, 
              Subcommittee on Energy and Mineral Resources

    First, I would like to welcome to our witnesses and thank you for 
traveling so far to be here today.
    The Mining Law of 1872 is one of the most obsolete laws still on 
the books. It comes to us from a time of the Wild West, when Civil War 
veterans would head West and try to make their fortune with a pick, a 
shovel, a donkey, and a dream.
    But there are no picks, shovels, or donkeys in today's mining. 
Instead there are earth-moving trucks weighing over 350 tons and 
standing nearly three stories tall. And the dreams are those of C-E-Os 
in boardrooms in Vancouver, Sydney, and Santiago, Chile.
    In 1872, land was plentiful and cheap, and President Ulysses S. 
Grant's goal was to give it away as fast as possible and encourage 
people to settle the West, paying little attention to the original 
inhabitants of those areas. The Mining Law is designed to give land and 
minerals away for next to nothing. Operating responsibly was an 
afterthought if it was even considered at all.
    The government effectively posted a sign on our public lands 
saying: ``Free gold! Free silver! Free copper! Free land! No royalties 
or cleanup required!''
    Mining companies took advantage, extracting over $300 billion of 
precious metals from public land without paying a cent in royalties to 
the American people, and without bothering to clean up their legacy of 
half a million abandoned mines.
    We are no longer in the mid-19th century. And as a Californian, let 
me assure you: the West is settled!
    It's no surprise that the mining industry opposes any reform. Who 
would want to give up a 147-year-old free ride?
    Yes, some things have changed in the past century and a half. 
Hardrock mining in America has to comply with the Federal Land Policy 
and Management Act, the National Environmental Policy Act, and the 
Clean Water Act, among others.
    But none of those laws help land managers plan for the specific 
environmental challenges that come with hardrock mining, or address the 
exalted status that mining has managed to maintain on our public lands. 
Half-a-million abandoned hardrock mines litter the country, posing 
safety threats and polluting thousands of miles of rivers and streams 
with toxic runoff.
    Fifty million gallons of toxic wastewater--the equivalent of 2,000 
tanker trucks--flows out of hardrock mining sites every day.
    Congress tackled this issue for coal mines over 40 years ago. 
Industry was asked to pay a small fee for each ton of mined coal, and 
that money goes to remediating the harmful legacy of countless 
abandoned coal mines.
    There is no similar program for cleaning up abandoned hardrock 
mines.
    That can only happen if the mining industry steps up and 
meaningfully deals with its own long history of pollution, just like 
the coal industry has done.
    There are many ways to raise that revenue, and one option would be 
a long-overdue royalty on hardrock mining. For nearly a century, the 
American people have received a royalty for oil, gas, coal, potash, 
soda ash, and many other resources that are extracted from public 
lands. It should be no different for gold, silver, copper, or any other 
mineral.
    We can establish an abandoned mine land fund so that our public 
lands are safe and accessible for generations to come. We can reaffirm 
that there are places mining shouldn't happen, where the impacts on 
public health, the environment, or places sacred to tribes will be too 
great. And we can finally get rid of this idea that mining is always 
the highest and best use of our public lands.
    The mining industry says everything is working just fine. Yet, in 
the same breath they complain that the permitting system is completely 
broken. I say to them that this is because there is no permitting 
system, just modern environmental laws piled on top of a creaky, 
rotting, 150-year-old foundation.
    They will argue that we need more mines to cut our import 
dependence, or find the minerals needed to realize our clean energy 
future. But they need to acknowledge that this can't happen, and that 
this won't happen, if they insist on creating a future for mining using 
a relic of the distant past. The Mining Law of 1872 must go.

                                 ______
                                 

    Dr. Lowenthal. With that, I look forward to the testimony 
from our witnesses. And I will now recognize Ranking Member 
Gosar for his opening statement.

   STATEMENT OF THE HON. PAUL A. GOSAR, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Dr. Gosar. Thank you, Mr. Chairman, and thanks for yielding 
time. And thanks to all the witnesses for being here today.
    Today, we are going to consider the Hardrock Leasing and 
Reclamation Act of 2019. This misinformation and misguided 
legislation seeks to transform the general Mining Law of 1872. 
Specifically, this bill would convert the existing mining claim 
system to a leasing system, and impose an 8 percent gross 
royalty on existing operations and a 12.5 percent gross royalty 
on new mining operations on Federal lands.
    While my colleagues on the other side claim that they are 
simply seeking to update an outdated statute, in fact this 
legislation is designed to cripple the domestic mining industry 
by making new and existing operations unprofitable. Without a 
doubt, this legislation would drive mining investment away from 
the United States, furthering our dependence on foreign imports 
and threatening the U.S. supply chain for countless industries 
and products.
    Hardrock mining is critical to our national security, 
manufacturing, and infrastructure sectors, and even renewable 
technologies. If you will bring up Slide 1 showing the 
components of a cell phone.
    [Slide.]
    In order to make missiles, modern weapon systems, solar 
panels, wind turbines, batteries for electric vehicles, 
smartphones, tablets, and even smart home devices, you must 
first mine and process hardrock minerals. For example, electric 
vehicles require large amounts of lithium, cobalt, graphite, 
and copper. Presently, the United States is dependent on 
foreign imports for each of these minerals. Would you please 
show Slide 2.
    [Slide.]
    According to the U.S. Geological Survey, the United States 
is currently 100 percent import-reliant on 18 minerals and more 
than 50 percent reliant on another 30 minerals. Please push 
Slide 3.
    [Slide.]
    Look at the corresponding change. As you see here, we have 
greatly increased our dependency on foreign minerals, 
particularly from China, which has happened over the last two 
decades. In the previous slide, if you looked--can I go back to 
the previous slide--way down at the very bottom, it shows 
``rare earth.'' This is one of our technology marvels that we 
need. It is at 2 percent that we were relying on everybody 
else.
    Now let's go back to the previous slide. It is 100 percent. 
China dictates a whole marketplace. That is why you have seen 
batteries move over to China. They dictate the whole process in 
this aspect. We are import-reliant for 14 of the 15 minerals 
required in most renewable energy technologies, and demand will 
soon outpace supply. Just last week at a conference here in DC, 
Tesla warned that a lack of investment in the mining sector is 
creating a shortage of key minerals needed to build electric 
vehicles.
    My colleagues say that the Mining Law is antiquated and 
that companies are free to mine anywhere they would like 
without paying their fair share. However, hardrock mining must 
comply with the same environmental statutes and regulations as 
all other industries. In fact, the general Mining Law has been 
amended several times to require additional environmental 
protections and establish fees for mining claims.
    In addition to state and local laws, hardrock mining 
operations must comply with at least three dozen Federal 
environmental laws and regulations, including FLPMA, NEPA, the 
Endangered Species Act, the Clean Water Act, the Clean Air Act, 
the National Historic Preservation Act, just to name a few. 
Each of these laws ensures that mining operations protect 
public health, safety, as well as the environment.
    While my colleagues are quick to claim that this industry 
can mine on our federally owned land free of charge, that is 
not the case. In Fiscal Year 2017, the industry paid $65 
million in mining claim fees and 40 to 50 percent of all 
earnings in taxes, fees, and state royalties.
    My colleagues' proposal to convert the current claim system 
to a leasing system would drive away investment from the 
domestic mining industry. Under a leasing system, the Federal 
Government can cancel a lease for political reasons, even after 
significant up-front investment has been made in exploration 
and before any resources have been recovered.
    In fact, that is actually trying to happen right now. My 
colleagues on the other side are trying to dispute a claim that 
has already been settled. Hardrock mining exploration involves 
significant financial risk, as it can take decades to locate a 
deposit that is economical to mine. According to the USGS, only 
1 in 1,000 potential targets for a potential operation actually 
become a mine. The average timeline from concept to discovery 
is 10 years, and the average permitting timeline is 7 to 10 
years.
    Under this legislation, a company would need to negotiate 
renewal of the lease before permitting has even concluded. 
Given that the average up-front investment before mining even 
begins is $244 million, the arbitrary lease renewal 
requirements would undoubtedly curtail investment in any new 
mines.
    Because most of the $244 million is spent on environmental 
compliance imposing a system that encourages companies to race 
toward production under the new threat of a lease cancellation, 
that would pose a greater risk to the environment. Further, the 
royalty rates suggested in this draft legislation are designed 
not to generate fair return to the taxpayers, but to put the 
domestic mining industry out of business. Under this 
legislation, there would be no mining industry to pay for the 
abandoned mine cleanup.
    At a time when we are facing shortfalls in critical 
minerals like lithium and copper, we should be focusing on 
streamlining the permitting process to bolster domestic 
production, not enacting legislation that can put the U.S.-
based industry out of business. The foolish policies in this 
legislation would only further exacerbate our reliance on China 
and other nations for minerals we need for our economic and 
national security.
    Before I turn back over the microphone, I have several 
things that I want to submit for the record. We have ``Mining 
the Future'' that would be submitted into the record. We also 
have a summary from Tesla to be submitted into the record.
    Dr. Lowenthal. So ordered.
    Dr. Gosar. I also have a letter from the Arizona Chamber of 
Commerce to hand out. This would have an impact of $4.29 
billion and 44,000 direct and indirect jobs will be associated 
with impact because of this bill. I would like to have that 
submitted for the record.
    Dr. Lowenthal. It will be submitted for the record. So 
ordered.
    Dr. Gosar. I would like to have the timeline in regards to 
what it takes, a hardrock mining timeline from before 
production, to be placed in the record.
    Dr. Lowenthal. So ordered.
    Dr. Gosar. I also have ``China Resource Strategy: The 
Extortive Aspect,'' in which China ``One Belt, One Road'' is 
nominating all resources around the world and where they are at 
for the record.
    Dr. Lowenthal. So ordered.
    Dr. Gosar. I thank the Chairman and yield back.

    [The information follows:]
Submissions for the Record by Rep. Gosar

Exclusive: Tesla expects global shortage of electric vehicle battery 
        minerals-sources

By Ernest Scheyder

Reuters

May 3, 2019

WASHINGTON (Reuters)--Tesla Inc expects global shortages of nickel, 
copper and other electric-vehicle battery minerals down the road due to 
underinvestment in the mining sector, the company's global supply 
manager for battery metals told an industry conference on Thursday, 
according to two sources.

The company, a major minerals consumer, has rarely talked publicly 
about its views on the metals industry. Copper, nickel, lithium and 
related minerals are key components used to make electric-vehicle 
batteries and other parts.

Sarah Maryssael, Tesla's global supply manager for battery metals, told 
a closed-door Washington conference of miners, regulators and lawmakers 
that the automaker sees a shortage of key EV minerals coming, according 
to the sources.

According to a Tesla spokesman, the comments were industry-specific and 
referring to the long-term supply challenges that may occur with 
regards to these metals.

The copper industry has suffered from years of underinvestment, and it 
is now working feverishly to develop new mines and bring fresh supply 
online as the electrification trend envelops the global economy. 
Freeport-McMoRan Inc, the world's largest publicly traded copper 
producer, is expanding in the United States and Indonesia.

Electric cars use twice as much copper as internal combustion engines. 
So-called smart-home systems--such as Alphabet Inc's Nest thermostat 
and Amazon.com Inc's Alexa personal assistant--will consume about 1.5 
million tonnes of copper by 2030, up from 38,000 tonnes today, 
according to data from consultancy BSRIA.

All that will make the red metal--and other minerals--scarcer 
commodities, which worries Tesla.

Maryssael added, according to the sources, that Tesla will continue to 
focus more on nickel, part of a plan by Chief Executive Elon Musk to 
use less cobalt in battery cathodes. Cobalt is primarily mined in the 
Democratic Republic of the Congo, and some extraction techniques--
especially those using child labor--have made its use deeply unpopular 
across the battery industry, especially with Musk.

Maryssael told the conference, hosted by commodity pricing tracker 
Benchmark Minerals Intelligence, that there is ``huge potential'' to 
partner with mines in Australia or the United States, according to the 
sources.

Australia late last year signed a preliminary deal with the United 
States to support joint research and development of minerals deemed 
critical to the U.S. economy.

The conference, attended by more than 100 people, featured speakers 
from the U.S. Department of State and Department of Energy, as well as 
Standard Lithium Ltd, ioneer Ltd and other companies working to develop 
U.S. lithium mines.

(This story corrects Tesla executive's title to global supply manager 
for battery metals instead of head of minerals procurement, paragraph 
1.)

                                 ______
                                 

            Arizona Chamber of Commerce & Industry,
                                                Phoenix, AZ

                                                        May 4, 2019

Hon. Paul Gosar, Ranking Member,
House Subcommittee on Energy and Mineral Resources,
1324 Longworth House Office Building,
Washington, DC 20515.

    Dear Ranking Member Gosar:

    We write to you today to express our concern regarding the Hardrock 
Leasing and Reclamation Act of 2019, as drafted. The mining industry in 
Arizona has a long and proud history, delivering significant economic 
growth since before we became a state. In recognition of this important 
contribution, our state flag even features a copper star.

    The Arizona Chamber of Commerce and Industry advocates in support 
of free-market policies that stimulate economic growth and prosperity 
for all Arizonans. We believe that to maintain a strong economy, 
Arizona must attract and develop businesses in diverse industry 
sectors. The Chamber supports policies that improve Arizona's economic 
vitality, retain existing businesses, and spur new business growth and 
job creation.

    Mining continues to play an important role in the continued 
economic growth and development of Arizona's future. The total economic 
impact of the hard rock mining industry in Arizona is $4.29 billion and 
creates nearly 44,000 direct and indirect jobs. Further, the total 
state and local taxes generated by mining companies and their employees 
in the state is $482 million, with even more tax revenues going to the 
federal government.

    As one of the most regulated industries in the United States, hard 
rock mining is subject to a myriad of federal and state environmental 
regulations governing the initiation, operation, and cleanup of mine 
sites. We support this existing and rigorous framework because it 
promotes a safer mining industry and helps to protect the people of our 
state and its remarkable treasures. However, duplicative and onerous 
regulatory burdens do not improve outcomes, but rather result in 
chilled economic investment, fleeing industries, and significant job 
losses.

    While we seek to ensure an appropriate regulatory balance between 
protecting Arizonans and supporting new and existing economic growth, 
we oppose targeted legislative proposals that would imperil 
longstanding and important industries such as mining. Inversely, we 
support legislative efforts that promote responsible governance and 
wise regulation.

            Sincerely,

                                               Glenn Hamer,
                                                 President and CEO.

                                 ______
                                 

                        Hardrock Mining Timeline

               American Exploration & Mining Association

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                 

                       Chinese Resource Strategy
                       
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                                 

    Dr. Lowenthal. Thank you. I am now going to ask unanimous 
consent for Congressman Amodei and Congressman Stauber to sit 
on the dais and participate in this morning's hearing. Hearing 
no objection, it has been so ordered.
    I will now introduce today's witnesses. First we have the 
Honorable Edward Manuel, Chairman of the Tohono O'odham Nation; 
next we have Mr. Colin Davis, owner of Chico Hot Springs Resort 
and a member of the Yellowstone Gateway Business Coalition; 
next we have Ms. Gwen Lachelt, County Commissioner of La Plata 
County, Colorado; and finally, Mr. Robert Comer, partner at 
Norton Rose Fulbright.
    Let me remind the witnesses that they must limit their oral 
statements to 5 minutes, but their entire statement will appear 
in the hearing record.
    When you begin, the lights on the witness table in front of 
you will turn green. After 4 minutes, the light will turn 
yellow, and then your time will expire when the red light comes 
on 1 minute later. I will ask you to please complete your 
statement at that time. I will also allow the entire panel to 
testify before questioning the witnesses.
    Let's begin. The Chair now recognizes Chairman Manuel to 
testify.

   STATEMENT OF THE HON. EDWARD D. MANUEL, CHAIRMAN, TOHONO 
                 O'ODHAM NATION, SELLS, ARIZONA

    Mr. Manuel. Good morning, Chairman Lowenthal, Chairman 
Grijalva, Ranking Member Gosar, and distinguished members of 
the Subcommittee. My name is Edward D. Manuel, and I am 
Chairman of the Tohono O'odham Nation, a federally recognized 
tribe with more than 34,000 members located in southern and 
central Arizona.
    As the Subcommittee is likely aware, mining has caused much 
turmoil throughout Indian Country. Mining has generated untold 
amounts of pollution, destroyed natural resources, and caused 
untold amounts of healthcare issues. These problems have been 
aided by the 1872 Mining Law. It is time for reform.
    The 1872 Mining Law has adversely affected the Tohono 
O'odham Nation in many ways. I would like to address three 
today.
    First, our mineral resource program oversees Freeport-
McMoRan Mine in the northern part of the reservation as well as 
a historical mine located on our reservation near Tucson. These 
operations were permitted under an old system, where mining 
companies could claim minerals underneath our lands without our 
consent.
    The 1872 Mining Law has no environmental standards, so 
these mines were allowed to generate pollution that impacted 
our lands and waters. The Freeport-McMoRan Mine has generated 
pollution that has infiltrated the underground aquifer. The 
pollution is such that the U.S. Environmental Protection Agency 
has designated it as an alternative Superfund Site.
    The Asarco Mine was able to operate from 1957 to 2001 
without a mine plan of operation. It took years of legal 
wrangling from the Nation to be able to better assure 
environmental protection in and around the Asarco Mine. If the 
proposed reforms were in place when the mine started, we could 
have alleviated many of these heartaches.
    Second, the current system has divided mineral rights 
throughout our reservation lands in the United States among a 
patchwork of patented, unpatented, public, and allotted lands. 
The patented mining claims in particular are a great source of 
pain for the Nation. There are dozens of patented mining claims 
throughout the Nation.
    This makes pockets of land throughout the Nation that we do 
not have control of. As a result, we still devote some of our 
financial and administrative resources to buying back mineral 
rights privatized under the antiquated statute. If the proposed 
reforms were in place, it is likely the Nation would not have 
lost so much control of its land.
    Finally, the 1872 Mining Law threatens our natural 
resources near the reservation. Hudbay is seeking to open the 
Rosemont Mine in the Santa Rita Mountains outside of Tucson. 
The U.S. Forest Service approved the mine without meaningful 
tribal consultation. Instead, the Forest Service ignored its 
authority to protect cultural resources on public lands where 
there was no discovery of a valuable mineral deposit. Again, if 
the proposed reforms were in place, we would have had a seat at 
the table to allow our concerns to be meaningfully considered.
    Reform of the 1872 Mining Law will help prevent the 
pollution of our lands and waters by providing an independent, 
dedicated funding source for the clean up of abandoned mines. 
Revenues from this reclamation fee could be distributed to our 
mining or mineral resource program and potentially used to 
employ our Nation's members, not just in mining operations but 
also in reclamation projects.
    It will also permanently end patenting. This privatization 
of minerals underneath our reservation provides just another 
way to take our lands from us. Most importantly, this reform 
respects tribal sovereignty with the consultation process, 
where Federal agencies received input from tribes.
    But I must make clear that this will be for naught if the 
Federal agencies do not proactively take steps to avoid and 
minimize the impacts to cultural resources. Finally, this 
reform clarifies the authority of both tribal governments and 
the Federal Government to balance mining with other competing 
land uses.
    Thank you again for the opportunity to testify before you. 
For the above reasons, I respectfully ask for your support of 
this important mining reform legislation. Thank you.

    [The prepared statement of Mr. Manuel follows:]
Prepared Statement of the Honorable Edward D. Manuel, Chairman, Tohono 
                       O'odham Nation of Arizona
                              introduction
    Good morning Chairman Grijalva, Chairman Lowenthal, Ranking Member 
Gosar, and distinguished members of the Subcommittee. My name is Edward 
Manuel and I am the Chairman of the Tohono O'odham Nation, a federally 
recognized tribe with more than 34,000 members located in southern and 
central Arizona. Our traditional lands span across the United States/
Mexico border from Sonora to Phoenix, west to the Gulf of California 
and east to the San Pedro River. As the Subcommittee is likely aware, 
mining has caused much turmoil throughout Indian Country. Mining has 
generated untold amounts pollution, destroyed sacred sites and caused 
untold amounts of sickness. These problems have been aided by the 1872 
Mining Law. It is time for reform.
    The 1872 Mining Law has adversely affected the Tohono O'odham 
Nation in many ways. I would like to address three today. First, our 
Mineral Resources Program administers operations at a Freeport McMoran 
mine in the northern part of our Reservation, as well as an ASARCO mine 
located on our Reservation near Tucson. These operations were permitted 
under an old system, where mining companies could claim minerals 
underneath our lands without our consent. The 1872 Mining Law has no 
environmental standards and so these mines were allowed to generate 
pollution that impacts our lands and waters. The Freeport McMoran mine 
has generated pollution that has infiltrated the underground aquifer. 
The pollution is such that the U.S. Environmental Protection Agency has 
designated it an Alternate Superfund Site. The ASARCO mine was able to 
operate from 1957-2001 without a Mine Plan of Operation. It took years 
of legal wrangling for the Nation to be able to better assure 
environmental protections in and around the ASARCO mine. If the 
proposed reforms were in place when the mines started, we could have 
alleviated much of this heartache.
    Second, the current system has divided mineral rights throughout 
our reservation lands in the United States among a patchwork of 
patented, unpatented, public, and allotted lands. The patented mining 
claims in particular are a great source of pain for the Nation. There 
are dozens of patented mining claims throughout the Nation. Since 
owners of patented mining claims can put the land to ANY use, this 
makes pockets of land throughout the Nation that we do not have control 
of. As a result, we still devote some of our financial and 
administrative resources to buying back mineral rights privatized under 
this antiquated statute. If the proposed reforms were in place, it is 
likely the Nation would not have lost control to so much of its land.
    Finally, the 1872 Mining Law is currently causing issues with 
sacred sites near the Reservation. Hudbay is seeking to open the 
Rosemont Mine in the Santa Rita Mountains outside of Tucson. The Nation 
is currently in litigation with the U.S. Forest Service over the 
proposed mine. The litigation is centered around the fact the Forest 
Service, with no meaningful tribal consultation, assumed away its 
authority to protect cultural resources on public lands where there was 
no discovery of a valuable mineral deposit. Again, if the proposed 
reform were in place, we would have a seat at the table to allow our 
concerns to be meaningfully considered.
    Reform of the 1872 Mining Law will help prevent the pollution of 
our lands and waters by providing an independent dedicated funding 
source for the cleanup of abandoned mines. Revenue from this 
reclamation fee could be distributed to our Mineral Resources Program 
and potentially used to employ our Nation's people, not just in mining 
operations, but also in reclamation projects.
    It will also permanently end patenting. This privatization of 
minerals underneath our reservation provides just another way to take 
our lands from us. Most importantly, this reform respects tribal 
sovereignty with a consultation process where Federal agencies receive 
input from tribes. But I must make clear that this will be for naught 
if the Federal agencies do not take into meaningful consideration this 
input received by tribes and proactively take steps to avoid and 
minimize impacts to cultural resources. Finally, this reform clarifies 
the authority of both tribal governments and the Federal Government to 
balance mining with other competing land uses.
    Thank you again for the opportunity to testify before you. For the 
above reasons, I respectfully ask for your support of this important 
mining reform legislation.

                                 ______
                                 

    Dr. Lowenthal. Thank you, Chairman Manuel.
    The Chair now recognizes Mr. Davis to testify for 5 
minutes.

STATEMENT OF COLIN DAVIS, MEMBER, YELLOWSTONE GATEWAY BUSINESS 
              COALITION, PARADISE VALLEY, MONTANA

    Mr. Davis. I would like to thank the Chairman and the 
entire Committee for inviting me to speak today on behalf of 
the urgent need to reform the 1872 Mining Law in order to 
protect our Nation's resources, our free competition, and above 
all, our communities. I have had the privilege of testifying 
before this Committee in 2018 while I was fighting for my own 
home, my own way of life. Today, I feel I am doing the same for 
my country.
    I sit here today as a founding member of the Yellowstone 
Gateway Business Coalition, also as a business owner and a 
proud steward of Montana's Paradise Valley. Not unlike 
Yellowstone National Park, the Paradise Valley is one of God's 
greatest creations. From the majestic mountains and the flowing 
river to the thriving ranches, our outdoor lifestyle is clearly 
abundant. That is where my wife, my daughters, and I, we hike, 
we hunt, we fish, we recreate. My daughter is here today; she 
can testify to all of those.
    More importantly, it is the gateway to Yellowstone National 
Park, which draws visitors from around the country but also, as 
you know, from around the world. And it drives our local 
economy.
    Paradise Valley is as fruitful for commerce as it is for 
recreation. Our family business, Chico Hot Springs Resort, has 
thrived for 120 years, primarily thanks to the wonders of the 
surrounding landscapes. Our family works extremely hard, and we 
take immense pride in preserving the springs and our legacy, 
and we love to share them with others. It is hard work and 
independence that are a way of life, but it is also a Montana 
ethic and a Montana way of life.
    The other businesses surrounding Yellowstone are equally 
committed to preserving this place. To that end, over 400 
businesses and stakeholders banded together in a successful 
effort to fight one of the greatest threats our region had ever 
faced. We stood together to prevent two industrial-scale gold 
mines from ripping apart our valley, our land, our life, and 
our businesses. And it was all being done without giving our 
community a say in the future of these lands, in the future of 
our own backyard.
    We formed this coalition based on three principles. It was 
formed on pro-business, pro-mining, and pro-property rights. We 
support development, including mining, when it is done right 
and it is good for our community. When it is not done right, it 
should be our right and is our right to oppose it.
    The mines would have had a dramatic and negative impact on 
our already flourishing regional economy. It is important to 
underscore we are not anti-mining, and this is one of our core 
principles. We understand the West is rich in extractable 
minerals, which can be vital to parts of the economy. Our 
membership includes miners. Mining, like all industries, like 
my own, can be done well or it can be done poorly.
    We also believe in property rights. That being said, 
mining, even on public lands, can unjustly damage private 
business interests. We, as the public, should have a loud, loud 
voice in what happens to our public lands, especially when they 
are local.
    Our principles are consistent with individual liberty and 
free enterprise, which our Nation values so highly. The tenet 
of free enterprise should give us a voice in managing, not 
wasting, these natural resources. What I am sharing with you is 
nothing new, but our community chose to stand and fight 
together. It is why our region is now protected from 
industrial-scale mining via the Gateway Protection Act, which 
passed in a recent public lands package. It was no easy feat.
    Our coalition spent over 4 years, money we did not have, 
money we could not afford, and countless hours away from our 
homes and our families, simply to fight foreign corporations 
that stood to profit from legal loopholes in our own law. And 
it would have been at our expense. Fortunately, we were 
successful. But many communities and businesses across the West 
are facing similar fights.
    Today's problems with the 1872 Mining Law were not always 
problems. In 1872, it made sense to encourage Americans to go 
West and incentivize them to dig. But today it really does not. 
The world has changed dramatically in 147 years, but this law 
simply has not.
    The law gives hardrock mining a very unfair advantage in 
multiple ways. It creates externalities and stifles 
competition. It gives mining companies a free pass to mine 
without paying royalties that other extractive industries, such 
as coal and oil, have to pay. The law, especially, declares 
mining the best use of public lands with zero cost-benefit 
analysis. This special treatment frustrates fair competition. 
Finally, hardrock mining does pump more pollution than any 
other source, according to the EPA. This means the industry 
placing the biggest boot on the taxpayer's back also leaves the 
biggest footprint on the land.
    The way forward, to me, is clear and it is simple. Stop 
subsidies. Make companies pay royalties. Ensure companies pay 
for cleanup. And above all, let land managers and local 
communities choose the true best use of those public lands.
    In conclusion, I would like to say that while it was a real 
honor to be one of the leaders of the Yellowstone Gateway 
Business Coalition and an honor to win this fight, I would have 
much rather been at home running my own business and spending 
the last 4 years with my family.
    I hope Congress can find the same bipartisan path it did 
with the lands package in updating this law. Our lives, our 
businesses, and our communities should be ours to control and 
care for. Thank you very much.

    [The prepared statement of Mr. Davis follows:]
  Prepared Statement of Testimony of Colin Davis, Member, Yellowstone 
                       Gateway Business Coalition
                          introductory remarks
    Thank you for inviting me back here to speak on the urgent need to 
reform the 1872 mining law in order to protect our nation's most 
valuable resources, our commitment to free and fair competition, and 
our millions of small businesses and communities living adjacent to 
public lands. While I came here advocating for my home in 2018, I'm 
advocating today on behalf of my country.
 how an outdated law nearly destroyed one of god's greatest creations 
                    and hundreds of small businesses
    I stand before you as a small business owner, a community leader, 
and a proud steward of one of God's greatest creations--Montana's 
Paradise Valley. Paradise Valley is indeed paradise--the kind that we 
ourselves cannot make, but can certainly enjoy. From majestic mountains 
and cottonwood glades, to thriving farms and ranches, the Valley offers 
commercial and recreational opportunities beyond number. My family and 
I have religiously hunted, hiked, and fished through the seasons of our 
dynamic landscape for generations, as my daughter who's here today can 
tell you. The Valley is also the doorstep of the Yellowstone National 
Park, through which Americans from across the country, and tourists 
from across the world, come to marvel at the beauty of our national 
treasure.
    Paradise Valley is as fruitful for commerce as it is for 
recreation, when done right. Our family business, the Chico Hot Springs 
Resort, has thrived thanks to the wonders of the land it sits on. We 
take pride in presenting the hot springs to others, and we work hard to 
preserve the springs and our historic resort in the state we received 
them.
    Hard work and independence are a way of life that has sustained our 
region for generations. Small businesses in and around Yellowstone are 
so committed to preserving this way of life that over 400 regional 
businesses from across the political spectrum came together to fight 
the greatest threat our region has ever faced. The Yellowstone Gateway 
Business Coalition formed to prevent two proposed gold mines from 
ripping apart our land, our views, and our generations-old businesses, 
without giving any of us who actually live here a say in how we wanted 
our land used.

    The coalition formed with three simple principles, and we still 
hold these principles today:

     Number 1: We are pro-business. And I can tell you that 
            pursuing short-term profit over long-term gain is a great 
            way to go bankrupt. That is why we support development, 
            including mining, when the development is good for 
            business, and we oppose it when it's not. The proposed gold 
            mines, at commercially viable scale, would have hurt the 
            economic prospects of thousands of Montanans, so our 
            coalition opposed them.

     Number 2: In case this needs repeating, we are not anti-
            mining. Our group includes members who are themselves 
            miners. Mining, like all forms of industry, can be done 
            well, or done poorly. It can produce a net gain or a net 
            loss. Mining at the front doorstep to Yellowstone is a 
            quick way to destroy both resources and the jobs of 
            thousands of people whose businesses depend on them. Saying 
            ``not here'' does not mean ``not anywhere.''

     Number 3: We believe in the sanctity of private property 
            rights and we reject any policy that infringes on those 
            rights. Mining that damages private business interests and 
            property values is unjust, and the community and businesses 
            who will bear the brunt of the impact from mining should 
            have a say in whether and how the mining happens. Private 
            landowners simply cannot be saddled with the risks and 
            costs of hardrock mining without having any say in the 
            matter.

    These three principles are consistent with the principles of 
individual liberty and robust enterprise that undergird our nation and 
our economy. You don't have to be an environmentalist to agree that 
giving away public resources so that private corporations can profit at 
the expense of the public is both foolish and immoral. The net cost of 
mining gold in Yellowstone is so staggeringly high that it is hard to 
think anyone ever put the proposition through a balance sheet.
                 sparing future generations this fight
Inclusion in Public Lands Package
    I'm not telling you all anything new. We all agree on the three 
principles I just shared. Both parties agree that mining on the 
doorstep to Yellowstone would be a terrible idea, and that's why our 
valuable region was permanently protected from mining under the public 
lands package passed this February. But reaching that common-sense 
conclusion wasn't a simple matter of me or any other resident of 
Paradise Valley explaining to you the huge net loss of mining there. It 
wasn't the result of a fair, transparent process in which the people 
who actually live in an area are consulted about how they'd like to use 
it. Instead, we had to take huge amounts of time, energy, and money 
away from our businesses and our families in order to protect them from 
outside forces.
    Our coalition spent 4 years spreading the word that America was 
about to lose one of its greatest treasures for good, all thanks to an 
outdated law and unaccountable foreign corporations. The corporation 
that wanted to build a gold mine above Chico was not family-owned, not 
regional or local, not even American. Yet it stood to benefit hugely 
from a loophole in U.S. law, at the expense of our entire nation and 
especially my community. And my story is just one of many. Small 
business owners across the West are facing the same fight we did, and 
most of them do not come out on the other side with their communities 
and livelihoods intact.
    Images and numbers capture the devastating effects of hardrock 
mining on the towns and businesses in its vicinity: the mustard-yellow 
Animus River in Colorado, swollen with 3 million gallons of 
contamination after the Gold King Mine disaster; the $30,000 per day 
cost of treating contamination from the Summitville Mine, estimated to 
reach at least $170 million; the 40 percent of all watersheds in the 
West that are contaminated from mining alone. Mining is spilling its 
deadly effects across our country at an ever-expanding rate and an 
ever-expanding cost. Communities should have the right to ``say no'' to 
corporations that would cause these impacts in their backyards.
Need for 1872 Reform
    The problems with the existing 1872 mining law are not hard to 
spot. In 1872, allowing people to mine public lands without paying a 
penny in royalties was designed to motivate individuals to move West, 
and it worked. But while this may have made sense more than a century 
ago, this massive mining subsidy clearly is not working anymore--at 
least not for the American people.

    There are at least glaring problems with the 1872 mining law that 
Congress should fix. logical fallacies of this law are (1) its fiscal 
inadequacy, (2) its lack of cost-benefit analysis, and (3) hardrock 
mining's disproportionate contribution to environmental expenses.

  1.  The 1872 law declares hardrock mining the ``highest and best 
            use'' of public lands without accounting for other possible 
            uses, or for the uses of adjacent private lands. Again, 
            this special treatment afforded hardrock mining companies 
            comes at the expense of local communities, who have no 
            input into the development of their public lands for this 
            purpose.

  2.  The 1872 law gives mining companies a free pass to mine Federal 
            lands without requiring them to pay the standard royalties 
            that other extractive industries, like coal, oil, and 
            natural gas, pay for their profit.

  3.  Finally, hardrock mining pumps more toxic pollution into our 
            lands than does any other source, according to the 
            Environmental Protection Agency. This means that the 
            industry placing the biggest boot on the back of our 
            taxpayers is also leaving the biggest footprint of 
            pollution on the lands it claims. In Montana, the shameful 
            legacy of irresponsible hardrock mining on public lands is 
            still being felt--in our waterways and our pocket books.

    Fixing the 1872 Mining Law is as easy as identifying its flaws. 
Simply apply the same standards to hardrock mining that we do to all 
other mining industries. Require hardrock mining companies to pay 
royalties and reclamation fees, so that taxpayers get their fair share 
of profit from mining on public lands. Require mining companies to pay 
for the cleanup of their operations, rather than leaving taxpayers to 
foot the bill. And most importantly, give communities the opportunity 
to help choose the true best use of their lands, rather than letting 
foreign corporations decide for them.
    Beyond these immediate fixes, an additional step is needed to help 
protect communities from hardrock mining. While other extractive 
industries have to meet environmental standards, there is currently no 
direct statutory authority for environmental protection under the 1872 
law, and existing environmental laws are clearly not ensuring that 
mining is done responsibly. Federal land managers must be given clear 
regulatory authority over reclamation of mining sites, or else cleanup 
will continue to be no one's job and taxpayers' burden.
    Taxpayers are subsidizing one of the most lucrative and most 
damaging industries in the nation for no reason other than an outdated 
law. We cannot let sheer inertia leave our laws in the 1800s, while our 
economy and population have 21st century needs.
                               conclusion
    While it has been an honor and a privilege to work with my 
colleagues on the coalition, I would much rather be running my 
business. That is what I chose to do 16 years ago and hope to continue 
doing without being threatened by outdated laws. I hope Congress takes 
bipartisan action to update this law and allow the millions of 
Americans living near public lands to live in peace, knowing our 
businesses and communities are ours to care for and control.

                                 ______
                                 

    Dr. Lowenthal. Thank you, Mr. Davis.
    The Chair now recognizes Ms. Lachelt to testify for 5 
minutes. Welcome to the Committee.

   STATEMENT OF GWEN LACHELT, COUNTY COMMISSIONER, LA PLATA 
                        COUNTY, COLORADO

    Ms. Lachelt. Thank you, Chairman, Ranking Member, and 
members of the Committee. My name is Gwen Lachelt. I am a 
County Commissioner from La Plata County, Colorado.
    In 2015, polluted water spilled out of the Gold King Mine, 
turning the Animas River--the lifeblood of our corner of 
southwest Colorado--a toxic orange. Three million gallons of 
acidic waste laden with arsenic, lead, and other harmful 
contaminants spilled out of the inactive gold mine, flowing 
directly into the Animas River. The people of southwest 
Colorado rely on the river for drinking water, to irrigate 
fields, to sustain wildlife, and to support a lucrative outdoor 
recreation industry.
    The 1872 Mining Law reform and the reclamation fund it 
would create would help communities like mine clean up the 
hundreds of thousands of abandoned hardrock mines that litter 
the West. To date, there is still no comprehensive inventory of 
abandoned hardrock mines, no system to prioritize cleanup of 
the most dangerous of these mines, and almost no funds to pay 
for it. According to the EPA, estimated clean-up costs are 
around $50 billion.
    La Plata County is not alone in feeling the impacts of 
abandoned mines. The hardrock mining industry is the country's 
largest source of toxic pollution, according to the EPA's Toxic 
Release Inventory. And because the 150-year-old Mining Law 
continues to govern in the 21st century, both abandoned and 
operating mines leave behind environmental, public health, and 
economic devastation that taxpayers must pay for and 
communities must endure.
    Just last week, the Blue River that flows through 
Breckenridge, Colorado turned orange because of recent 
precipitation that mobilized runoff from an abandoned mine 
upstream. One of the biggest concerns following the river's 
dramatic change in color last weekend has been about the safety 
of drinking water supplies, given that hundreds of thousands of 
people in Colorado rely on Dillon Reservoir, which is 
downstream from the pollution.
    Communities across the country rely on their rivers the way 
we rely on the Animas. Our health and prosperity depend on 
clean water. Reforming the 1872 Mining Law to bring it into the 
modern age can help us clean up old mines and safeguard our 
precious water resources from future mine disasters.
    The time to change U.S. mining policy is long overdue. The 
General Mining Law that governs today's mining industry was 
signed into law more than 147 years ago, when miners worked 
with picks and shovels--a far cry from the modern mines that 
can decimate entire watersheds. We have an opportunity to make 
sure that there is never another Gold King Mine spill. By 
reforming the 1872 Mining Law, we not only create a robust 
reclamation fund to clean up old mines, but we also create 
jobs.
    An Abandoned Mine reclamation program with a significant, 
dedicated funding source can act as an economic driver. Across 
the country, the Surface Mining Control and Reclamation Act's 
Abandoned Mine program has reclaimed over $5.7 billion worth of 
mine pollution and nearly 800,000 acres of damaged land and 
water. This work cannot be outsourced. The program delivered a 
total impact of $778 million to the U.S. economy in Fiscal Year 
2013, and supported 4,761 jobs across the country, 1,317 of 
which were in Central Appalachian states.
    The Congressional Budget Office estimates that for each $1 
million spent on mine cleanup, 14 to 33 new jobs are created. 
In Ohio, the Surface Mining Control and Reclamation Act funds 
generated 10 jobs per million dollars invested. Between 2008 
and 2013, Federal funding to the AML program generated more 
than $1.8 million in Ohio State and local tax revenue. Stream 
restoration has a positive economic impact as well. In West 
Virginia, estimated benefits from restoration of Deckers Creek 
total about $1.9 million annually.
    Without 1872 Mining Law reform, we simply do not have 
enough money to pay for mine cleanup and spill prevention for 
the hundreds of thousands of abandoned and inactive mines that 
litter our country. The public and the environment have paid 
the price for too long. Western communities and water resources 
need Congress to act now to protect our important water 
resources.
    Thank you very much.

    [The prepared statement of Ms. Lachelt follows:]
 Prepared Statement of Gwen Alexandra Lachelt, County Commissioner, La 
                         Plata County, Colorado
    Thank you Chairman Grijalva, Chairman Lowenthal, Ranking Member 
Gosar and members of the Committee, for inviting me to testify today. 
My name is Gwen Alexandra Lachelt, and I am a county commissioner from 
La Plata County, Colorado. In 2015, polluted water spilled out of the 
Gold King mine turning the Animas River--the lifeblood of our corner of 
southwest Colorado--a toxic orange.
    Three million gallons of acidic waste laden with arsenic, lead and 
other harmful contaminants spilled out of the inactive gold mine, 
flowing directly into the Animas River. The people of southwest 
Colorado rely on the river for drinking water, to irrigate fields, to 
sustain wildlife and to support a lucrative outdoor recreation 
industry.
    1872 Mining Law reform, and the reclamation fund it would create, 
would help communities like mine clean up the hundreds of thousands of 
abandoned hardrock mines that litter the West. To date, there is still 
no comprehensive inventory of abandoned hardrock mines, no system to 
prioritize cleanup of the most dangerous of these mines, and almost no 
funds to pay for it. According to the Environmental Protection Agency 
(EPA), estimated clean-up costs total approximately $50 billion.
    La Plata County is not alone in feeling the impacts of abandoned 
mines. The hardrock mining industry is the country's largest source of 
toxic pollution, according to the EPA's Toxic Release Inventory. And 
because the 150-year-old Mining Law continues to govern the industry in 
the 21st century, both abandoned and operating mines leave behind 
environmental, public health and economic devastation that taxpayers 
must pay for and communities must endure.
    Just last week, the Blue River that flows through Breckenridge, 
Colorado, turned orange because recent precipitation mobilized runoff 
from an abandoned mine upstream. One of the biggest concerns following 
the river's dramatic change in color this weekend has been about the 
safety of drinking water supplies, given that hundreds of thousands of 
people living on the Front Range rely on Dillon Reservoir, which is 
downstream from the pollution.
    Communities across the country rely on their rivers the way we rely 
on the Animas. Our health and prosperity depend on clean water. 
Reforming the 1872 Mining Law to bring it into the modern age can help 
us clean up old mine sites and safeguard our precious water resources 
from future mine disasters.
    The time to change U.S. mining policy is long overdue. The General 
Mining Law that governs today's mining industry was signed into law 
more than 147 years ago, when miners worked with hammer and chisel--a 
far cry from the modern mines that can decimate entire watersheds.
    We have an opportunity to make sure that there is never another 
Gold King Mine spill. By reforming the 1872 Mining Law, we not only 
create a robust reclamation fund to clean up old mines, we also create 
jobs.
    An Abandoned Mine Land (AML) reclamation program with a 
significant, dedicated funding source can act as an economic driver. 
Across the country, the Surface Mining Control and Reclamation Act's 
(SMCRA) AML program has reclaimed over $5.7 billion worth of mine 
pollution and nearly 800,000 acres of damaged land and water. This work 
cannot be outsourced. The program delivered a total impact of $778 
million to the U.S. economy in FY 2013, and supported 4,761 jobs across 
the country, 1,317 of which were in Central Appalachian states.
    The Congressional Budget Office (CBO) estimates that for each $1 
million spent on mine cleanup, 14 to 33 new jobs are created. In Ohio, 
SMCRA coal reclamation funds generated 10 jobs per million dollars 
invested. Between 2008 and 2013, Federal funding to the AML Program 
generated more than $1.8 million in Ohio state and local tax revenue. 
Stream restoration has a positive economic impact as well. In West 
Virginia, estimated benefits from restoration of Deckers Creek total 
about $1.9 million annually.
    Without 1872 Mining Law reform, we simply don't have enough money 
to pay for mine cleanup and spill prevention for the hundreds of 
thousands of abandoned and inactive mines that litter our country. The 
public and the environment have paid the price for too long. Western 
communities and water resources need Congress to act now to protect our 
important water resources.

    Thank you.

                                 ______
                                 

    Dr. Lowenthal. And we thank you, Ms. Lachelt.
    The Chair now recognizes Mr. Comer to testify for 5 
minutes. Welcome.

STATEMENT OF ROBERT D. COMER, PARTNER, NORTON ROSE FULBRIGHT US 
                     LLP, DENVER, COLORADO

    Mr. Comer. Thank you, Mr. Chairman, Ranking Member, and 
Members. I am Bob Comer, a mining and environmental lawyer, and 
a former associate and regional solicitor for the Department of 
the Interior. My career has been devoted to the conservation 
and protection of sensitive resources in the environment and in 
advancement of mineral and other land uses. My comments are 
supplemented by written testimony.
    The General Mining Law, as amended, governs how U.S. 
citizens may gain access to hardrock minerals so important to 
our economy, renewable energy future, and daily lives. No 
modern city, home, factory, computer, telephone, solar panel, 
train, plane, automobile, or national defense system can be 
built without minerals.
    The proposed legislation will harm our Nation by severely 
limiting access and tenure to minerals at a time when the 
national agenda demands more. Because renewable energy cannot 
be achieved without minerals, the proposed legislation is 
inconsistent with the country's renewable energy expansion 
objectives. Solar panels, EV cars, rechargeable batteries, and 
wind turbines require an array of hardrock minerals. 
Smartphones require over 40 minerals.
    Just last week, the World Bank Group launched its Climate 
Smart Mining Initiative that focused on mining's indispensable 
role in renewables. It showed an alarming reliance on foreign 
minerals, including 14 of the 15 minerals identified as 
essential for renewables. The world will demand the same amount 
of copper in the next 25 years as has been mined over the last 
500 years, yet our dependence on many essential minerals has 
greatly increased over the past 20 years despite our 
substantial mineral wealth.
    The sweeping changes proposed to the Mining Law are 
unwarranted, given how little Federal land is used for hardrock 
mineral activities. There are about 350,000 active mining 
claims, with roughly half being in Nevada, which is less than 1 
percent of the lands with our Nation's mineral wealth. And only 
313,000 mineral acres have been authorized for service 
disturbance. When viewed in perspective, this far-reaching 
proposed legislation is grossly out of proportion to mining's 
very minor impact on Federal lands.
    Self-initiation allows U.S. citizens to locate mining 
claims on Federal lands to explore for minerals with the hope 
of discovery. The National Academy of Sciences estimates that 
1,000 mineral targets must be evaluated to discover just one 
deposit. These are daunting odds.
    Self-initiation leverages private investment to finance the 
costly physical and drilling programs at no risk or expense 
whatsoever to U.S. taxpayers. Mines can only be developed where 
the minerals exist. The irony of this legislation is that it 
would cloak a functioning mining law in a century-old leasing 
system.
    The proposed leasing program is fraught with problems that 
will precipitate the forfeiture of private property rights. It 
will cause a premature shutdown of mines. In Nevada alone, 
several large mining companies operate numerous mines that 
exceed the acreage limitations contained in this legislation. 
This will create a substantial impact and burden on many 
communities and the country.
    One of the stated drivers for the proposed legislation is 
to create mechanisms to say no to mining--in other words, to 
leave more mineral in the ground. There is no need for another 
law to put Federal lands off-limits to mining as nearly 50 
percent of the Federal mineral estate already is off-limits to 
mining. The new suitability provisions would prohibit mining. 
They are unnecessary. They eliminate the balance that the 
Federal land management and environmental laws create. And they 
elevate virtually all other uses over mining.
    Congress has amended the mining law many times over the 
years to respond to evolving environmental and land management 
requirements. Any hardrock royalty must promote a fair return 
to the public while ensuring the viability of hardrock mining 
on Federal lands, which the proposed royalty does not achieve.
    Modeling a hardrock royalty after coal, oil, or gas 
programs does not consider the differences that exist between 
these minerals, from exploration through processing. Finally, 
the royalty and dirt tax revenues are illusory because the 
royalty base will be dramatically reduced due to the many 
onerous provisions in the proposed legislation.
    Congress should consider policies that encourage 
responsible mineral exploration and development to discover the 
domestic minerals needed for American security and society. 
Amending the Mining Law to provide a fair return to the public, 
while preserving certainty, land tenure, and private investment 
for finding, developing, and producing domestic minerals, would 
be an important step toward energy independence and a clean 
energy future and a stronger America.
    Thank you for the opportunity to testify, and I look 
forward to answering any questions you may have.

    [The prepared statement of Mr. Comer follows:]
Prepared Statement of Robert D. Comer, Esq., Co-head of Mining, Norton 
                         Rose Fulbright US LLP
                              introduction
    Mr. Chairman, Ranking Member, and members of the Committee, my name 
is Bob Comer. I am honored to testify today at the request of the 
Committee. I am co-head of Mining at the Norton Rose Fulbright US LLP 
law firm and former Associate and Regional Solicitor for the Department 
of the Interior. My career has been devoted to the conservation and 
protection of sensitive resources and the environment in the 
advancement of mineral resources and other land uses. I have served 
leadership roles in educational and professional organizations, having 
been the Natural Resources Practitioner in Residence at the DU law 
school, Chair of the ABA Mining Law Section, Chair of the CBA Natural 
Resource and Energy Law Section, a Trustee of the Rocky Mountain 
Mineral Law Foundation, and on the Advisory Boards of the CU Graduate 
Energy Management Program and Innovative Energy Initiative. My 
recognitions include an environmental achievement award from EPA for a 
pioneering Good Samaritan cleanup. I also serve as a reviser to the 
American Law of Mining Treatise.
    Thank you for the opportunity to appear today to discuss the 
numerous policy challenges contained in the discussion draft of the 
Hardrock Leasing and Reclamation Act of 2019 (the ``proposed 
legislation'') and how they will adversely affect America's national 
security, energy future and social fabric by deterring, and in many 
instances eliminating, mining on Federal lands.
    The General Mining Law, as amended, governs how U.S. citizens may 
gain access to hardrock minerals (also known as locatable minerals) 
like copper, gold, silver, zinc, lithium, cobalt, rare earths, nickel, 
and other minerals on Federal lands in the western states. These and 
other locatable minerals are essential building blocks of our economy, 
providing the essential foundation for infrastructure, technology, 
manufacturing, conventional and renewable energy, and national defense. 
No modern city, home, factory, computer, telephone, train, car, 
airplane or national defense system has ever been built or can be built 
without minerals.
    The proposed legislation will harm the Nation because this bill as 
designed will reduce the mineral resources available to extraction on 
Federal land. The bill severely limits access and tenure to the mineral 
resources on the Nation's public lands at a time when the national 
agenda demands minerals for national security, global economic 
competition, renewable energy development and to revitalize our 
infrastructure. If enacted, it would contribute to America's already 
alarming reliance on foreign sources of essential minerals--including 
the many hardrock minerals that are in cell phones and renewable energy 
applications like wind turbines, solar panels, electric vehicles and 
rechargeable storage batteries. The proposed legislation terminates 
mining claims, prohibits the staking of new claims, and creates an 
unworkable leasing system with arbitrary term and acreage limits that 
extinguish private property rights and expose the Federal Government to 
substantial takings litigation.
    Although the bill is touted as a ``modernization'' of the Mining 
Law, it is hard to escape the irony that its essential feature is to 
cloak the adequately functioning Mining Law in a century-old mineral 
leasing law intended for development of very different types of mineral 
deposits.
    the hardrock leasing and reclamation act of 2019 will increase 
                               america's
    reliance on foreign minerals--including minerals necessary for 
                      developing renewable energy
    The U.S. Geological Survey's 2019 Mineral Commodity Summary \1\ 
shows the United States is 100 percent reliant on foreign countries, 
including Russia and China, for 18 important minerals such as the rare 
earth minerals that are needed to manufacture the magnets in wind 
turbines, and at least 50 percent reliant on imports from foreign 
countries for 30 other minerals. Our reliance on foreign minerals has 
been increasing at an alarming rate. For example, the USGS 1995 Mineral 
Commodity Summary \2\ shows that we imported only 2 percent of the rare 
earths needed at the time. (See the two USGS mineral reliance charts at 
the end of this testimony).
---------------------------------------------------------------------------
    \1\ U.S. Geological Survey, 2019, Mineral commodity summaries 2019: 
U.S. Geological Survey, 200 p., https://doi.org/10.3133/70202434.
    \2\ U.S. Geological Survey, 1996, Mineral commodity summaries 1995: 
U.S. Geological Survey, https://minerals/pubs/mcs/1996/nir.gif.
---------------------------------------------------------------------------
    Our increasing reliance on foreign minerals is not because America 
lacks domestic mineral resources. To the contrary, the United States is 
blessed with a rich mineral endowment, much of which is located on 
Federal lands administered by the U.S. Bureau of Land Management (BLM) 
and the U.S. Forest Service where hardrock minerals are governed by the 
Mining Law. The dramatic decline in the production of domestic minerals 
is due in large part to unfavorable policies that have substantially 
chilled investment in domestic mineral exploration and development 
including measures that put more and more lands off limits to mining, 
and BLM's and the Forest Services' time-consuming permitting processes, 
which do not compare favorably to other mineral-rich countries like 
Canada, Australia, and Mexico that have much more practical mineral 
development and investment policies.
    Given the country's current focus on renewable energy, it is 
especially important to recognize that the proposed legislation would 
severely constrain our ability to find and develop domestic sources of 
minerals that are needed to build renewable energy infrastructure. 
Solar panels require silver, tin, copper, and lead; wind turbines use 
rare earths, copper, aluminum, and zinc; electric vehicles are built 
with copper, aluminum, iron, molybdenum; and rechargeable storage 
batteries use lithium, vanadium, nickel, cobalt, and manganese. 
Approximately 40 percent of the gold now produced is used in 
electronics and computer chips that are an integral part of renewable 
energy technologies. These are all locatable minerals targeted by this 
proposed legislation.
    Just last week on May 1, the World Bank Group convened a conference 
in Washington, DC to discuss its recently published report, ``The 
Growing Role of Minerals for a Low Carbon Future,\3\'' and to launch 
its ``Climate Smart Mining/Minerals for Climate Action Initiative.'' 
Citing an article in Nature, the World Bank report states:
---------------------------------------------------------------------------
    \3\ Arrobas, Daniele La Porta, et al, 2017, The Growing Role of 
Minerals and Metals for a Low Carbon Future, Washington, DC, World Bank 
Group.

        ``A transition to a low carbon society, [is] a change that will 
        require vast amounts of metals and minerals. Mineral resourcing 
        and climate change are inextricably linked, not only because 
        mining requires a large amount of energy, but also because the 
        world cannot tackle climate change without adequate supply of 
        raw materials to manufacture clean technologies.'' \4\
---------------------------------------------------------------------------
    \4\ Nature, Ali et al. 2017, p. 367 as cited on page xvi of the 
World Bank report.

    The World Bank report identifies 15 minerals that are critical for 
renewable energy. A comparison of the World Bank's list to the USGS 
2019 Mineral Commodity Summary reveals that the U.S. relies on imports 
for 14 of the 15 renewable energy minerals--even though we have 
substantial deposits of many of these minerals. For example, the United 
States imports 32 percent of the copper we use despite the fact that 
there are significant copper deposits in Arizona, Utah, New Mexico, 
Nevada, Montana, Michigan, Minnesota, and Missouri. Electric vehicles 
use nearly four times the amount of copper as conventional vehicles, so 
we should expect the demand for copper to continue to grow to satisfy 
renewable energy expansion objectives. Experts estimate that the world 
will need the same amount of copper in the next 25 years that it 
produced in the last 500 years to meet global demand.\5\ Renewable 
energy applications, including increased use of electric vehicles, 
accounts for some of this increased demand for copper. Similarly, we 
import 62 percent of the silver we use rather than relying on domestic 
silver deposits in Alaska, Nevada, and Idaho to meet our needs. Silver 
(and copper) are used to manufacture solar panels.
---------------------------------------------------------------------------
    \5\ http: / / www.riotinto.com/documents/
190409_Arnaud_Soirat_World_Copper_Conference_ presentation_speech.pdf.
---------------------------------------------------------------------------
    A peer-reviewed study published by the American Institute of 
Professional Geologists \6\ found that global supply and price issues 
constrain the availability of the strategic minerals needed for 
renewable energy. This study states that U.S. policies should support 
exploration and development of domestic sources of renewable energy 
minerals and notes that policies that limit mining will impede 
renewable energy objectives.
---------------------------------------------------------------------------
    \6\ See Exhibit I, Burnell, J.R., You Say Alternatives are the 
Answer . . . Let's Talk: Resource Constraints on Alternative Energy 
Development, American Institute of Professional Geologists, in, The 
Professional Geologist, March/April 2009 pp. 33-37.
---------------------------------------------------------------------------
    Obtaining these minerals from other countries is inconsistent with 
low carbon and renewable energy objectives because shipping renewable 
energy minerals to the United States increases their carbon footprint. 
Domestic production of renewable energy minerals would eliminate this 
carbon footprint. Another serious concern is that we rely on 
adversarial nations like Russia and China or countries with inferior 
environmental protection and worker health and safety laws as sources 
for some renewable energy minerals. In particular, cobalt sourced from 
the Congo is likely being mined with child labor.
 a total overhaul of the mining law is unwarranted given mining's very 
                    small footprint on federal land
    In discussing whether the dramatic changes to the Mining Law in the 
proposed legislation are warranted, it is important to understand how 
little Federal land is currently being used for hardrock mineral 
activities. The sweeping changes proposed to the Mining Law must be 
evaluated in the context of the very limited footprint that mining has 
on Federal land. When mining is put into proper perspective, it becomes 
clear how the far-reaching changes proposed in the Hardrock Leasing and 
Reclamation Act of 2019 are grossly out of proportion to mining's 
impact on Federal land. In fact, the miniscule amount of Federal lands 
being used for hardrock mining calls into question whether Congress 
should devote much effort to discussion about changing the Mining Law.
    BLM's 2017 Public Lands Statistics \7\ show that at the end of FY 
2017, there were only 358,983 active mining claims distributed in the 
western states, with roughly half of these claims located in Nevada. 
(The number of claims in Nevada reflects the fact that if Nevada were a 
country it would be the fourth largest gold producing country in the 
world). BLM's annual public lands statistics show that since 2001, the 
number of active mining claims has fluctuated largely in response to 
commodity prices from a low of 203,354 claims in 2002 when gold prices 
ranged from about $278 to $349 per ounce to a high of 406,140 claims in 
2012 when gold prices were as high as $1,789 per ounce.
---------------------------------------------------------------------------
    \7\ Public Land Statistics 2017, Volume 202, June 2018, U.S. 
Department of the Interior Bureau of Land Management, BLM/OC/ST-18/
001=1165, P-108-7.
---------------------------------------------------------------------------
    Under the Mining Law, a lode mining claim is limited to a maximum 
of 20 acres. Thus, the aggregate footprint of the active claims in 2017 
covered roughly 7.8 million acres, which is a minute fraction--less 
than 1 percent--of the Nation's 800 million-acre Federal mineral 
estate. About half of this footprint is located in Nevada; the rest is 
scattered throughout the West. According to BLM, in 2017, there were 
43,401 mining claims in Arizona covering 863,791 acres. By way of 
comparison, Maricopa County, Arizona covers roughly 9,224 square miles 
\8\ or 5.9 million acres. The states of Alaska, Colorado, New Mexico, 
Oregon, and Washington each had fewer than 10,000 claims in 2017.
---------------------------------------------------------------------------
    \8\ https://en.wikipedia.org/wiki/Maricopa_County,_Arizona.
---------------------------------------------------------------------------
    Even more revealing is that as of March 2019, BLM's LR 2000 
database shows that the agency has authorized just 313,042 acres of 
surface disturbance on 587 mineral exploration and mining projects on 
mining claims located on BLM-administered lands throughout the West, 
with nearly 60 percent of the authorized surface disturbance located in 
Nevada. In Chairman Grijalva's state of Arizona, BLM has authorized a 
mere 3,465 acres of surface disturbance on 37 mineral projects.
    Hardrock mineral activities affect a very small amount of Federal 
land because hardrock mineral deposits are rare, and as such, very 
difficult to find. According to the National Academy of Sciences,\9\ 
1,000 mineral targets must be identified and evaluated to discover a 
deposit that can become a mine. Given these daunting discovery odds, 
policymakers should be very concerned that current exploration levels 
are insufficient to discover the domestic minerals needed for our 
future. The limited domestic exploration for minerals is one of the key 
reasons why the country is so reliant on foreign sources of minerals.
---------------------------------------------------------------------------
    \9\ Hardrock Mining on Federal Lands, 1999, National Research 
Council, National Academy of Sciences, 247 p.
---------------------------------------------------------------------------
    The draconian changes proposed in the proposed legislation will 
exacerbate this problem by decreasing mineral activities on Federal 
land. Rather than measures that eliminate or make exploration and 
mining more difficult on Federal land, this country needs policies to 
encourage responsible exploration and development of our mineral 
resources, consistent with the policy objectives in Section 102(a)(12) 
of the Federal Land Policy and Management Act of 1976, (43 U.S.C. 1701 
et seq), the National Materials and Minerals Policy Research and 
Development Act of 1980 (30 U.S.C. 1601 et seq) and other laws.
 previous amendments to the mining law have already met modern policy 
                               objectives
    Proponents of the proposed legislation assert that the Mining Law 
is antiquated and thus requires radical amendments. But this 
characterization of the law is misleading and inaccurate because 
Congress has amended and updated the law many times since its 
enactment. In the past, congressional actions to amend the Mining Law 
have preserved the Mining Law's core principles including the property 
rights created by efforts to identify and advance economic mining 
claims. The historical amendments to the Mining Law stand in marked 
contrast to the proposed bill, which guts these rights and replaces 
them with an unworkable and unrealistic leasing system.
The Minerals Leasing Act of 1920
    The 1920 Minerals Leasing Act removed coal, petroleum, natural gas, 
phosphates, sodium, sulfur, and potassium from the Mining Law and 
established leasing programs for these resources while preserving the 
claim location system for hardrock minerals. Examining the scope of and 
historical implementation of the leasing system in the Minerals Leasing 
Act is very informative when compared to the leasing system proposed in 
the Hardrock Leasing and Reclamation Act of 2019.
    The 1920 Minerals Leasing Act created a prospective leasing system 
that did not interfere with the Mining Law rights to oil and gas mining 
claims that existed on the date of enactment. Section 37 \10\ of the 
1920 Minerals Leasing Act is a savings clause which preserved the 
property rights under the Mining Law on existing claims of oil, gas, 
and the other Minerals Leasing Act minerals that going forward would 
require a lease rather than a mining claim. The Section 37 savings 
clause allowed claim owners to continue to explore and develop their 
existing oil and gas mining claims, to make discoveries, and to secure 
patents to those claims under the provisions of the Mining Law.
---------------------------------------------------------------------------
    \10\ See United States v. Locke, 471 U.S. 84 (1985) and Hickel v. 
Oil Shale Corp., 400 U.S. 48 (1970).
---------------------------------------------------------------------------
    In marked contrast, this proposed legislation contains no such 
savings clause for currently existing mining claims. The mandatory 
conversion of mining claims into leases will abruptly terminate the 
claim owners' current Mining Law property rights. By extinguishing 
claimants' property rights and substituting term- and acreage-limited 
discretionary leases, the proposed legislation will expose the Federal 
Government to Fifth Amendment takings claims.
The Mining and Minerals Policy Act of 1970
    When Congress enacted the Mining and Minerals Policy Act of 1970, 
it declared that ``it is the continuing policy of the Federal 
Government in the national interest to foster and encourage private 
enterprise in (1) the development of economically sound and stable 
domestic mining, minerals, metal and mineral reclamation industries, 
(2) the orderly and economic development of domestic mineral resources, 
reserves, and reclamation of metals and minerals to help assure 
satisfaction of industrial, security and environmental needs.'' (30 
U.S.C. Sec. 21a). The mineral directives in this Act apply to BLM-
administered public lands and National Forest System lands. These are 
compatible objectives that operate to encourage deployment of 
privately-funded, domestic mineral production while protecting the 
environment.
The Federal Land Policy and Management Act of 1976 (FLPMA)
    Congress made other important changes to the Mining Law when it 
enacted FLPMA in 1976. Among other things, FLPMA mandated a claim 
filing and recordation system to give BLM a mechanism to rid the 
Federal lands of stale mining claims and created an environmental 
protection mandate prohibiting unnecessary or undue degradation (UUD) 
of public lands subject to mineral activities. When mining critics 
assert the Mining Law needs to be changed because it does not include 
environmental protection requirements they are ignoring how FLPMA 
significantly changed the Mining Law by inserting the UUD environmental 
performance standard, which specifically applies to mineral exploration 
and mining projects.
    In 1980, BLM finalized the 43 CFR 3809 surface management 
regulations for locatable minerals to implement the FLPMA UUD mandate. 
The stated purpose of these regulations is to ``[p]revent unnecessary 
or undue degradation of public lands by operations authorized by the 
mining laws [and to] establish procedures and standards to ensure that 
operators and mining claimants meet this responsibility . . . and 
reclaim disturbed areas.'' (43 CFR Sec. 3809.1) The UUD provisions in 
the 43 CFR 3809 regulations contain explicit directives that mineral 
activities must comply with all applicable state and Federal 
regulations to protect the environment and cultural resources, and 
satisfy a long list of environmental performance standards.\11\ Prior 
to commencing mineral activities on public lands, project proponents 
must provide BLM with financial assurance (reclamation bonds) to 
guarantee that lands affected by exploration and mining will be 
properly reclaimed.
---------------------------------------------------------------------------
    \11\ 43 CFR 3809 Sec. Sec. .5, .401, .415, and .420.
---------------------------------------------------------------------------
National Forest Management Act of 1976
    The laws governing National Forest System lands are similarly 
protective. In 1976, Congress enacted the National Forest Management 
Act, which mandates a land use planning process that ensures mineral 
resource development is given proper consideration consistent with the 
mandate in the Mining and Minerals Policy Act of 1970 while minimizing 
resource conflicts and balancing environmental concerns. The Forest 
Service recognizes that minerals are usually hidden, relatively rare, 
and governs by land management planning procedures.\12\
---------------------------------------------------------------------------
    \12\ https://www.fs.fed.us/geology/
1975_mining%20in%20national%20forests.pdf.
---------------------------------------------------------------------------
    The Forest Service's 36 CFR 228 Subpart A surface management 
regulations for locatable minerals include environmental protection 
measures that require operators of mineral exploration and mining 
projects to minimize adverse impacts on National Forest surface 
resources where feasible (36 CFR Sec.  228.8). Like the BLM, Forest 
Service's surface management regulations provide comprehensive and 
effective environmental protection at mineral projects on National 
Forest System lands including requirements for financial assurance 
before activities can commence.
The National Materials and Minerals Policy Research and Development Act 
        of 1980
    In September 2016, the Government Accountability Office (``GAO'') 
published a report entitled ``Strengthened Federal Approach Needed to 
Help Identify and Mitigate Supply Risks for Critical Raw Materials.'' 
\13\ This reported evaluated ``certain metals, minerals, and other 
``critical'' raw materials [that] play an important role in the 
production of advanced technologies across a range of industrial 
sectors and defense applications.'' The GAO report found several 
limitations in the scope of Federal critical mineral programs that are 
inconsistent with the directives in the National Materials and Minerals 
Policy, Research and Development Act of 1980. (30 U.S.C. 
Sec. Sec. 1602-1605), hereinafter referred to as the 1980 Act.
---------------------------------------------------------------------------
    \13\ GAO-16-699.

---------------------------------------------------------------------------
    In the 1980 Act, Congress found:

        ``the United States lacks a coherent national materials policy 
        and a coordinated program to assure the availability of 
        materials critical for national economic well-being, national 
        defense, and industrial production, including interstate 
        commerce and foreign trade.'' (30 U.S.C. Sec. 1601(7).

    In response to this finding, Congress declared:

        ``. . . it is the continuing policy of the United States to 
        promote an adequate and stable supply of materials necessary to 
        maintain national security, economic well-being and industrial 
        production with appropriate attention to a long-term balance 
        between resource production, energy use, a healthy environment, 
        natural resource conservation, and social needs.'' (30 U.S.C. 
        Sec. 1602)

    The proposed legislation is completely inconsistent with the 1980 
Act because it will significantly increase the country's reliance on 
the minerals needed for all sectors of the American economy, and to 
advance our renewable energy agenda. In fact, Section 401(b) of the 
proposed legislation specifically amends the 1980 Act to exempt 
National Forest System lands from the requirement to improve mineral 
data availability and analysis requirements in the 1980 Act, signaling 
the intention to drastically reduce and even eliminate mining on 
National Forest System lands. According to the U.S. Forest Service, 
``the National Forests contain much of the country's remaining stores 
of mineral.'' \14\
---------------------------------------------------------------------------
    \14\ https://www.fs.fed.us/geology/
1975_mining%20in%20national%20forests.pdf.
---------------------------------------------------------------------------
Enactment of Claims Maintenance Fee Requirements
    In 1992, Congress made another significant change to the Mining Law 
using the appropriations process to establish an annual fee, the Claims 
Maintenance Fee, in lieu of the annual assessment work requirement in 
Section 28 of the Mining Law and to place a moratorium on patenting. As 
a result of this change, claimholders currently must pay $155 per claim 
to keep their claims in good standing. This fee, which is adjusted 
every 5 years to reflect the Consumer Price Index will increase in 
2019. By making timely payment of this fee, claimants secure the right 
to use and occupy Federal lands, subject to compliance with the 43 CFR 
3809 and 36 CFR 228A surface management regulations and all other 
applicable state and Federal environmental protection regulations.
    The Claims Maintenance Fee, which has been continued in annual 
appropriations measures since 1992, gives BLM a powerful land 
management tool that accomplishes several important objectives. First, 
it provides real-time information about where claims are located, who 
owns the claims, and whether the claims remain in good standing. Claims 
for which the fee is not paid by the August 31 fee payment deadline are 
categorically voided. Second, the substitution of a fee for the on-the-
ground assessment work requirement has virtually eliminated unnecessary 
ground-disturbances associated with performing the annual assessment 
work that was previously required to maintain a claim in good standing. 
The fee has thus significantly reduced the environmental impact of 
mineral exploration activity. Third, the fee raises sufficient revenue 
to fund the Department of the Interior's Mining Law program, with 
leftover revenue that goes to the Treasury. BLM's Public Land 
Statistics show mining claimants paid over $65 million in Claims 
Maintenance Fees in FY 2017.
    The 1920 Mineral Leasing Act, FLPMA, and the annual Claims 
Maintenance Fee are examples of how Congress has continually updated 
the Mining Law since its enactment in response to evolving land 
management requirements, and clearly demonstrate that the law is not 
antiquated. To the contrary, the Law as amended serves the country 
well. If the Law is amended in the future, the changes should be 
surgical and tailored to respond to specific land management 
objectives--and not a wholesale overhaul like that in the proposed 
legislation, which is completely unwarranted in light of the very 
limited use of Federal lands for hardrock mineral activities and 
counter-productive to satisfying the Nation's demand for minerals.
    Additionally, if changes are enacted, they should be prospective in 
nature--they must not be retrospective--to avoid exposing the Federal 
Government to takings claims. Congress recognized this in 1920 when it 
enacted the Minerals Leasing Act and removed oil, gas, and other 
minerals from the jurisdiction of the Mining Law. If this Congress 
elects to create a leasing program for what are currently locatable 
minerals, this change must be forward looking and not be imposed on 
existing mining claims.
The Myriad Environmental and Sensitive Resource Protection Laws
    The proposed legislation also ignores the myriad laws that require 
all mines to protect the environment and sensitive resource values. 
Mines must comply for example with the laws protecting air, water, 
wildlife, endangered species, and wetlands, among other requirements, 
many of which exist at the local and state levels as well.
 the proposed leasing system interferes with existing property rights 
                  and will lead to takings litigation
    An essential and unique element of the Mining Law is the ``self-
initiation'' process, which allows U.S. citizens to enter Federal lands 
open to operation of the Mining Law, to locate mining claims on lands 
that may have favorable geologic conditions for finding a mineral 
deposit. Once the claim is located, the claim owner can use the surface 
of a mining claim for mineral exploration and development purposes so 
long as they comply with the surface management regulations and other 
environmental protection requirements.
    Self-initiation is especially critical to the prospecting and 
early-stage mineral exploration phases of the mining life cycle when 
geologists continually test and refine their mineral target concepts 
and exploration techniques. Because exploration is an iterative process 
that uses new information to vector toward mineralized zones, the 
ability to expand a claim block based on new information is critically 
important. The 1 in 1,000 odds of making a discovery are akin to 
looking for the proverbial needle in the haystack and drive the need to 
preserve self-initiation to facilitate locating additional claims on 
lands with potentially favorable geology in response to the on-the-
ground realities of exploring for rare mineral deposits that are very 
difficult to find.
    Under current law, claim owners deploy private investment and take 
the initiative to locate claims based on preliminary concepts about 
where minerals may be located and then make substantial investments of 
time, knowledge, and money to test these concepts to explore for 
minerals on their claims with the hope of discovering a mineral deposit 
that can be developed into a mine. This self-initiation process greatly 
benefits our Nation because it effectively leverages private 
investments that transform undeveloped Federal land into mining 
operations that create jobs, pay taxes, and provide the minerals the 
country needs--at no risk or expense whatsoever to U.S. taxpayers.
    In contrast to the proposed legislation's introductory statement 
that it is ``consistent with the principles of self-initiation,'' the 
proposal completely destroys self-initiation by eliminating the current 
mining claim system and substituting a discretionary leasing system. As 
proposed, the Federal Government will decide where geologists can look 
for minerals and where miners can develop mines. Eliminating mining 
claims and self-initiation is not in the public's best interest because 
it will severely compromise the Nation's ability to capitalize on 
private-sector investments to discover and develop domestic mineral 
deposits. It will significantly chill investment in the Nation's 
mineral resources and increase the country's reliance on foreign 
minerals.
    The licensing and leasing acreage limits in the proposed 
legislation will only serve to discourage mining on Federal lands. 
Mining companies that operate more than one mine in a given state 
currently own thousands of mining claims that cover their active mining 
operations. This describes the current situation in Nevada where 
several large mining companies operate numerous mines throughout the 
state. The 20,480-acre per company per state limit, which is the 
equivalent of only 1,024 mining claims, will require forfeiture of the 
private property rights on thousands of mining claims located within 
the boundaries of currently producing mining properties. This private 
property seizure will completely disrupt active mining operations and 
precipitate numerous takings claims as the government forces the 
premature closure of viable mining operations or the divestiture of 
lands that are part of productive mining operations. Then the 
government will have to expend taxpayer funds to satisfy Constitutional 
taking claims without the benefit of any mineral production.
    This property forfeiture is clearly not in the public's interest. 
Besides exposing the Federal Government to substantial takings 
litigation, this baseless extinguishment of private property rights 
will destroy the economic engines that sustain rural mining 
communities. Forced mine closures will kill high-paying mining jobs, 
deprive states and local communities of the tax revenues and other 
substantial economic benefits that the mines generate, and increase the 
country's reliance on foreign minerals.
    The temporary and spatially constrained prospecting license in the 
proposed legislation is completely inappropriate and unworkable for 
hardrock minerals. Prospecting licenses have a primary term of only 2 
years, with the possibility of a 4-year extension, and cannot cover 
more than 2,560 acres, the equivalent of just 128 20-acre mining 
claims. To put this artificial acreage limit into perspective, most 
promising mineral exploration projects are typically comprised of 
several hundred to several thousand claims to give the owner the 
ability to conduct mineral exploration over a broad area with mineral 
potential.
    The totally unrealistic time and areal constraints in the proposed 
draft bill will severely curtail if not virtually eliminate mineral 
exploration on Federal lands. Because the exact location of hardrock 
mineral deposits is generally unknown, these deposits are difficult to 
find and discovery typically takes 10 years or longer. Investment in 
mineral exploration will become even riskier and less attractive if an 
arbitrary and unrealistic term limit of 2 to 6 years is imposed on what 
is already a very high-risk endeavor.
    If prospecting licensees are skillful and lucky enough to have 
discovered a valuable mineral deposit (a term that is undefined in the 
discussion draft), they may apply for a 20-year non-competitive mining 
lease if the surface management agency consents to issuance of the 
lease. By requiring the consent of the BLM or the Forest Service for 
issuance of a mining lease and providing no guidelines on when the 
agency is authorized to withhold its consent, the discussion draft 
creates a carte blanche opportunity for denial of lease applications 
with no opportunity for legal review as there is no standard to apply. 
This possibility puts at risk a company's entire exploration investment 
and creates uncertainty that will completely chill mineral exploration 
and development in the United States. Companies will not be able to 
justify to their shareholders expenditures of the tens to hundreds of 
millions of dollars required to discover a valuable mineral deposit if 
there is no guarantee that they will have the right to develop those 
minerals.
    The 20-year primary term lease is another serious barrier to 
mineral investment because it is not unusual for mines to operate for 
several decades. Without the assurance that a mine can continue to 
operate longer than 20 years, companies will be very reluctant to 
invest the hundreds of millions and sometimes billions of dollars 
needed to develop a mine. Together, this will lead to the collapse of a 
sustainable, viable mining industry, the jobs it provides and the 
societal advancements it makes possible.
    Although creating a one-size-fits-all leasing process for hardrock 
minerals, coal, oil, gas, etc. might sound like a desirable policy 
objective, it fails to realize the significant geologic differences 
between oil, gas, coal and hardrock mineral deposits that make a 
uniform hardrock leasing program untenable. Oil and gas are fluid 
minerals that occur in well understood sedimentary basins where 
geophysical surveys that do not disturb the surface can identify oil 
and gas targets with a high likelihood of success. Once an oil well is 
drilled, it can readily be modified into a production well.
    In contrast, hardrock mineral deposits are solid minerals that 
occur in areas with much more complex geology and typically have unique 
geologic, geochemical, and metallurgical characteristics that 
distinguish them from other similar mineral deposits. Defining a 
hardrock mineral deposit requires extensive exploration and development 
drilling. Once drilling has sufficiently defined the deposit to support 
a decision to develop a mine, huge investments are required to build 
the mine and processing facilities. Therefore, the proposal to create a 
leasing system for hardrock minerals modeled after oil and gas leasing 
is ill conceived, impractical and unworkable.
  the hardrock leasing and reclamation act of 2019 will put more land 
           off-limits to mineral exploration and development
    One of the stated drivers for the proposed legislation is to create 
mechanisms to say no to mining. We question the need for yet another 
way to put lands off-limits to mining when the Federal Government has 
already eliminated mining on half of the Federal mineral estate.\15\ 
Congress and the Federal land management agencies already have 
established effective statutory and regulatory tools to prohibit mining 
on large swaths of Federal lands. The suitability determination 
proposed in Section 112 is unnecessary in light of the numerous other 
mechanisms to segregate Federal lands from mining. Additionally, no one 
group should be given the authority as proposed in Section 112 to 
declare lands unsuitable for mining.
---------------------------------------------------------------------------
    \15\ Public Lands, On-shore Federal and Indian Minerals in Lands of 
the U.S.: Responsibilities of the Bureau of Land Management, Dec. 1, 
2000.
---------------------------------------------------------------------------
    Section 112 also is impractical because it creates a list of so 
called ``special characteristics'' that would deem an area unsuitable 
for mining. These special characteristics include fairly common and 
widespread features such as ``any aquifer or aquifer recharge area,'' 
areas listed on the National Register of Historic Places, lands within 
or adjacent to National Conservation System lands or National Research 
Lands, lands with critical habitat, lands where ill-defined other 
``resource values'' have been identified by field testing or ``credible 
information,'' and lands containing tribal sacred sites. Other laws 
recognize the need to balance resource development and other land 
uses--the proposed legislation elevates virtually all other uses over 
mining.
    This suitability determination will create an unlimited opportunity 
to put lands off-limits to mining which will further chill investment 
in mineral exploration and mining and increase our reliance on foreign 
minerals. Section 112 establishes a continual mechanism to expand the 
inventory of lands that cannot be explored or developed despite their 
mineral potential. The anti-mining NGO, Earthworks' press materials on 
the proposed legislation incorrectly assert that mining ``enjoys nearly 
unfettered access on nearly all public lands.'' This is simply untrue. 
At a minimum, there are already over 350 million acres of land off-
limits to mining. Access for mining purposes on lands that remain open 
to the Mining Law is hardly unfettered. It is governed by stringent 
surface management regulations to protect the environment.
    In the last Congress, minority members of this Committee asserted 
that the Hardrock Leasing and Reclamation Act of 2018 was necessary to: 
``[e]liminate the exalted status that mining currently enjoys on public 
lands [and to] level the playing field with all other uses of public 
lands . . .'' This assertion ignores the numerous environmental 
protection regulations that govern hardrock mineral exploration and 
development and an essential geologic reality that hardrock minerals 
can only be mined exactly where they are discovered. The economics of 
developing hardrock mineral deposits are therefore very different from 
oil and gas, which may be able to withstand no surface occupancy 
restrictions and be produced from off-site well fields. Additionally, 
specific geologic features such as faults and folds typically play an 
important role in localizing and controlling mineralization. In 
contrast to oil and gas which occur over broad areas in geologic 
basins, hardrock mineral deposits have much more limited areal extents 
and knife-edge boundaries between mineralized and unmineralized rocks, 
necessitating a very precise location for the mine.
    Sound public policies governing mineral exploration and development 
must consider these basic geologic principles. Current law does not 
confer an ``exalted status'' for locatable minerals. It does, however, 
consider the geologic reality that mines can only be developed where 
minerals are located and have been discovered. Changes to the Mining 
Law that are not responsive to this geologic reality will substantially 
chill investment in mineral exploration and mining, impede the 
development of the Nation's mineral resources, and increase our 
reliance on foreign minerals--including renewable energy minerals. 
These are not desirable outcomes.
    Additionally, the law should not create post-discovery 
opportunities like the Section 112 suitability determination to declare 
the discovery site as unsuitable for mining and to eliminate the 
possibility of responsibly developing the mineral resource if the 
project proponent can demonstrate the mine will be able to comply with 
many state and Federal environmental protection requirements. Mining 
critics ignore the significant state and Federal environmental 
protection regulatory requirements applicable to all mineral 
exploration and development projects on Federal lands. During the 
rigorous mineral project permitting process, project proponents must 
demonstrate that the proposed operation will comply with numerous 
stringent state and Federal environmental protection requirements and 
environmental standards.
    Using this permitting process, BLM, the Forest Service, EPA, and 
state regulatory agencies already have the authority to say no to 
mining if there are doubts that the project can meet specific 
environmental protection regulatory requirements. During the permitting 
process, regulators can require project proponents to go back to the 
drawing board to redesign a project to address concerns about 
environmental impacts. Additionally, the NEPA process requires detailed 
alternatives analysis to identify the project configuration that best 
eliminates or mitigates potential impacts. Numerous other Federal 
environmental statutes also govern mining including but not limited to 
the Endangered Species Act, the Clean Air Act, the Clean Water Act, the 
National Historic Preservation Act, Archaeological Resources Protection 
Act, the Resource Conservation and Recovery Act, and the Comprehensive 
Environmental Response Compensation and Liability Act.
    The current system achieves the appropriate balance between mine 
development and environmental protection. There is no exalted status. 
Rather, there is a rigorous demonstration that all aspects of the 
environment at a proposed mine will be protected. The suitability 
determination and the duplicative environmental provisions would 
completely upset this balance, making it much more difficult if not 
impossible to develop the mine if the lands are deemed unsuitable for 
mining.
    Moreover, the Federal Government already has effective tools for 
putting lands off-limits to mining if an area is determined to be 
unsuitable for mining. Using existing statutory and regulatory tools, 
Congress and regulators have already permanently prohibited mining on 
half of the Nation's Federal mineral estate. Regulators can also place 
20-year moratoria on mining, such as the Department of the Interior has 
recently done at the Grand Canyon Arizona Strip by withdrawing these 
lands from operation of the Mining Law for 20 years.
    The Section 204(c)(1)(H) prohibition against authorizing mines that 
require water treatment facilities that must operate for longer than 10 
years after mine closure is too limiting. At highly regulated and fully 
bonded modern mines, the investments made in water treatment systems to 
meet water quality criteria often can be viewed as a long-term asset 
that benefits the public long after mining has ceased. Under BLM's and 
the Forest Services' financial assurance regulations, mine operators 
must provide long-term financial assurance instruments to cover the 
operating costs for post-mining water treatment facilities. In some 
cases, these financial assurance instruments are designed to provide 
funding for in perpetuity operation of water treatment facilities. 
Post-mining water treatment facilities can also be passive in nature 
and assure the conservation of water resources.
    Consequently, water treatment facilities are not necessarily a 
liability and pose no real risk to taxpayers. To the contrary, long-
term, post-closure operation of water treatment facilities could 
provide a source of valuable clean water available for non-mining uses 
including but not limited to habitat enhancement, redevelopment of mine 
sites as renewable energy sites or other non-mining industrial uses, 
and even municipal water supplies in the arid West.
   the royalty and materials disposal fee provisions in the hardrock 
      leasing and reclamation act of 2019 are unfair and illusory
    The proposed legislation establishes a royalty for production of 
minerals on Federal lands. The mining industry has long asserted that a 
hardrock royalty program must be structured to promote a fair return to 
the public while at the same time ensuring the continued viability of 
hardrock mining on Federal lands.\16\ As discussed in detail below, the 
royalty provisions in the proposed legislation are seriously flawed and 
will not achieve the important objective of providing the American 
public with royalty revenues from hardrock mining, which can only be 
accomplished if mining on Federal lands remains economically feasible. 
The numerous provisions in the proposed legislation that make mining 
impractical and even impossible will adversely affect mineral 
production and lead to a drastic reduction of mining on Federal lands. 
Consequently, the royalty and fee revenues anticipated by the 
legislation are illusory.
---------------------------------------------------------------------------
    \16\ Exhibit II, James Cress' January 24, 2007 testimony before the 
House Natural Resources Committee/Energy and Natural Resources 
Subcommittee.
---------------------------------------------------------------------------
    The proposed royalty would apply retroactively to mining claims 
located prior to enactment. The proposed legislation would require that 
existing claims be converted to new leases or forfeited. In many cases, 
existing claims have been held by companies and individuals for many 
years in reliance on their property rights and security of tenure under 
the General Mining Laws. Claimholders have advanced their claims at 
great expense through exploration, development, feasibility, financing 
construction, and in some cases to production. Either the imposition of 
a retroactive royalty or the forfeiture of claims entirely deprives 
claimholders and other stakeholders in the claims of property rights in 
violation of the Fifth Amendment.
    The royalty and the material disposal fee in the proposed 
legislation will be new and additional costs that will impact project 
economics of every mine and likely make some currently operating mines 
uneconomic. They are certain to shorten the viable operating life of 
many mines, forcing premature closure of what would otherwise be 
profitable mining operations, which defeats conservation objectives. 
The immediate adverse economic impacts will be loss of high-paying 
direct jobs and the many indirect jobs that mines create, and tax 
revenues for local, state, and federal governments.
    In addition, the royalty and materials disposal fee in the proposed 
legislation will surely impact projects on the drawing board by 
rendering projects economically infeasible. Many projects will not be 
funded and construction of mines and processing facilities will be 
deferred or canceled.
    Finally, as mines prematurely close and new mines are deferred or 
canceled, the domestic supply of the minerals critical to the Nation 
will decrease and exacerbate our dependence on foreign sources of 
strategic and critical minerals indispensable to advancing the 
country's high-priority renewable energy, technology, and 
infrastructure agendas.
    In light of this threat, the mining industry requests that the 
Committee consider preparing an economic impact study of the proposed 
bill and pledges its assistance in the preparation of such a study.
Production Royalty
    The bill imposes a royalty on the gross value of minerals or 
mineral products of not less than 12.5 percent of the gross value of 
the products derived from the lease. For producing mines that are 
forced to convert to a lease, the proposed legislation imposes a gross 
royalty of 8 percent.
    As explained in detail in testimony presented to this Committee in 
2007 (see Exhibit II) and in 2017 (see Exhibit III), the mining 
industry has gone on record for many years as opposing a gross royalty 
like the royalty in the proposed legislation because such royalties are 
unfair and will significantly diminish mining on Federal lands. As the 
industry has previously explained, (see Exhibits II and III), modeling 
a hardrock royalty after the coal, oil, and gas royalty programs is 
unworkable due to the substantially different geologic characteristics 
of oil, gas, and coal compared to hardrock minerals. Additionally, 
discovering and developing a hardrock mineral deposit requires a much 
larger investment of time and resources compared to oil, gas, or coal, 
which are much more abundant and easier to find and develop.
    Royalty payments to the United States should be based on the value 
of the Federal Government's ownership interest in the minerals. 
Instead, the royalty base in the proposed legislation includes the mine 
operator's costs associated with the value-added mineral processing 
steps that are necessary to produce a salable mineral product. 
Including these costs in the royalty base is confiscatory and highly 
inappropriate. It also differs significantly from the ways in which 
states typically assess royalties and severance taxes as discussed in 
Exhibit III.\17\
---------------------------------------------------------------------------
    \17\ Exhibit III, James Cress' July 20, 2017 testimony before the 
House Natural Resources Committee/Energy and Natural Resources 
Subcommittee.
---------------------------------------------------------------------------
    The royalty in the proposed bill is a ``gross royalty'' calculated 
on the gross value of mineral products derived from leases. This gross 
royalty is unfair to the operator, because it includes the value added 
by the operator to process, refine, and produce a salable mineral 
product from the raw minerals removed during mining. Unlike oil and gas 
and coal operations, the raw minerals produced during mining are not 
salable; they must undergo costly processing steps to produce a product 
that can be sold. As a general proposition, it is important to 
understand that although Federal royalties for oil, gas, and coal are 
simplistically called gross royalties, they are comparable to a net 
royalty because they are based on the value of the unrefined yet 
marketable products from an oil and gas well or a coal mine. (See 
Exhibit III, at 4-5).
    The costs an operator must incur to produce a salable product from 
raw minerals should be deducted from the royalty base on which a 
Federal royalty is calculated. The Federal Government's contribution 
upon which the royalty is based must be limited to the value of the 
raw, unrefined minerals and should not be inflated with the operator's 
costs once the minerals have been mined. A net income or net proceeds 
royalty based on the value of the minerals at the mine (or that allows 
deductions for transportation and processing costs to produce a 
marketable product) is fair to both the operator and the Federal 
Government, which is paid a share of the value of minerals at the mine 
consistent with the Federal Government's ownership interests in 
minerals on Federal lands.
The Hardrock Leasing and Reclamation Act of 2019 Royalty Increases 
        Financial Risk
    Mine operators must pay production royalties out the margin between 
costs and realized price. Costs tend to vary from mine to mine, even 
for mines extracting the same commodity. In addition, costs tend to 
vary in a single mine over the mine life, as ore grades rise and fall 
and as the mineralogical characteristics change. Operators have no 
control over price, and little ability to insulate themselves from 
price fluctuations. As a gross royalty, the discussion draft takes a 
bigger bite out of the margins between cost and price, and therefore 
reduces the viability of the project. This greater risk constrains the 
availability of the project financing necessary to construct mines, and 
could make project financing unavailable altogether.
Retroactive Imposition of the Royalty on Existing Claims
    The retroactive imposition of the gross royalty on existing claims 
will be highly disruptive to the structure of the industry today. Many 
projects in development or in production have relied on construction 
finance packages to construct the mine. The retroactive royalty has the 
potential to trigger immediate defaults of those credit facilities, 
creating serious financial problems for operators and mine financiers. 
However, it is important to understand that the 8 percent royalty on 
existing mines will affect more than just mine operators and the 
financial institutions that have provided mine financing. It will also 
affect BLM and the Forest Service because these agencies will be faced 
with mining operations that may be forced to close prematurely.
Administration's 2007 Statement of Policy
    In November 2007, the Bush administration issued a Statement of 
Administration Policy (SAP) stating: ``The Administration believes that 
royalty provisions should be prospective, should avoid constitutional 
concerns, and should be set at a level that does not threaten the 
continued, reliable domestic mineral production on which this Nation 
relies.'' This statement is consistent with the mining industry's long-
held position on royalties and amending the Mining Law.
    The 2007 SAP expresses concerns that the retroactive royalty being 
considered in H.R. 2262, a Mining Law bill being considered by this 
Committee during the 110th Congress, would expose the Federal 
Government to takings claims. As explained in the SAP, ``The royalty 
structure in H.R. 2262 will likely generate Takings Clause challenges 
because it fails to take into consideration property rights relating to 
properly maintained claims established prior to enactment of the 
bill.''
    Because the royalty proposed in the proposed legislation is similar 
to that proposed 12 years ago in H.R. 2262, the same takings concerns 
are applicable. It is important to recognize that the universe of 
potential takings claims litigants goes beyond mine owners and 
operators and includes the entities that have provided mine financing 
and companies and individuals with third-party royalty agreements for 
these mines. It could potentially include states that currently derive 
royalty or severance tax revenues from hardrock mines.
  the hardrock leasing and reclamation act of 2019 will not create a 
                 viable abandoned mine reclamation fund
    The proposed legislation creates a Hardrock Mining Reclamation Fund 
with the proceeds from royalty payments and the seven cents per ton 
displaced material reclamation fee in Section 303. This fund would be 
used to clean up Abandoned Mine Lands (AMLs), which are historic mine 
sites that were developed prior to modern environmental protection and 
reclamation laws and regulations.
    The problem with this fund is that it is illusory. The negative 
implications of the proposed legislation on mineral production that 
will diminish mining on Federal lands will mean there will be 
insufficient mining to achieve the funding objectives.
    For more than two decades, the mining industry has been seeking 
legislation to enable Good Samaritan reclamation of AMLs. Liability 
provisions in both the Clean Water Act (CWA) and the Comprehensive 
Environmental Response Compensation and Liability Act (CERCLA) 
currently obstruct Good Samaritans from cleaning up AML sites. These 
liability concerns affect numerous stakeholders--local communities, 
conservation groups like Trout Unlimited, and mining companies alike.
    Two Good Samaritan meetings in April 2019 in Reno, Nevada and 
Denver, Colorado discussed this problem. Participants in these meetings 
included state and Federal regulators, conservation groups involved 
with limited AML cleanups, environmental and reclamation professionals, 
and mining companies. Although there is widespread interest in 
addressing the AML problem, CWA and CERCLA liability concerns are 
recognized as a serious obstacle. Good Samaritan legislation is clearly 
needed to facilitate reclamation of AML sites where there are water 
quality issues.
    Maintaining a viable hardrock mining industry is an essential 
component of addressing the AML issue. Some historic, pre-regulation 
mine sites still contain mineral resources that could be developed into 
a modern mine by a new mining company that was not involved with the 
previous mining activities. Modern mining at an historic site creates 
an important opportunity to integrate the cleanup and remediation of 
historic, unreclaimed mine features into a modern mine designed to 
protect the environment and achieve conservation objectives.
    Taken together, the Hardrock Leasing and Reclamation Act of 2019 
and CWA and CERCLA liability concerns will create an insurmountable 
barrier to AML cleanup. Mining projects on Federal lands will be 
drastically diminished under the discussion draft. If the proposed 
legislation is enacted, mining operations that may be viable will be 
unlikely to undertake AML reclamation due to the CWA and CERCLA 
liability associated with old mine sites. The revenue stream for the 
Hardrock Mining Reclamation Fund will be insignificant and the AML 
problem will remain unresolved.
                               conclusion
    I would like to thank this Subcommittee for the opportunity to 
testify on the important topic of hardrock mining on Federal land, 
which has such far-reaching implications for all aspects of the 
country's economy, national security, energy use, infrastructure, 
technology, and manufacturing.
    If you choose to amend the Mining Law in a way that provides a fair 
return to the public while preserving certainty and land tenure rights, 
and encourages private investment in finding, developing and producing 
domestic mineral resources, you will take an important step toward 
energy independence and a clean energy future and a stronger America.
    However, if you enact the changes proposed in the proposed 
legislation, you will create uncertainty, discourage or eliminate 
private investment in U.S. minerals, prematurely close producing mines, 
export tens of thousands of high paying mining jobs and exacerbate an 
unhealthy reliance on foreign sources of minerals for national defense, 
manufacturing, infrastructure and clean energy.

    I look forward to answering your questions.

                              ATTACHMENTS
                              
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                *****

The following documents were submitted as supplements to Mr. Comer's 
testimony. These documents are part of the hearing record and are being 
retained in the Committee's official files:

    --  Exhibit I: You Say Alternatives are the Answer . . . Let's 
            Talk: Resource Constraints on Alternative Energy 
            Development, Burnell, J.R., American Institute of 
            Professional Geologists, in The Professional Geologist, 
            March/April 2009, pp. 33-37.

    --  Exhibit II: James Cress' January 24, 2007 Testimony before the 
            Senate Energy and Natural Resources Committee.

    --  Exhibit III: James Cress' July 20, 2017 Testimony before the 
            House Natural Resources Committee/Energy and Mineral 
            Resources Subcommittee.

                                 ______
                                 

 Questions Submitted for the Record by Rep. Gosar to Robert D. Comer, 
                                  Esq.
    Question 1. This bill would apply a 12.5 percent royalty on new 
mines, and an 8 percent royalty on existing mines. Why shouldn't 
hardrock mining have the same? What about this particular industry 
makes a large gross royalty such a bad fit?

    Answer. To determine the burden of a Federal mineral royalty, both 
the royalty rate and the royalty base must be considered. Federal 
royalties on natural resource commodities produced from Federal lands 
should satisfy the following overarching objectives:
Royalty Rates:
        Royalty rates must be responsive to the mineral commodities in 
        question. As demonstrated by the Mineral Leasing Act of 1920 
        (MLA) 30 U.S.C. 181 et seq., a uniform royalty rate is not 
        practical. Under the MLA, royalty rates for oil, gas, coal, 
        phosphate, sodium, potassium, and sulfur range from 12.5 
        percent to 2 percent. Oil and gas are valued, with some 
        exceptions, at the well head. Coal is valued at the mine mouth 
        typically after only nominal processing. For example, there is 
        a well-developed market for a barrel of crude oil, for MMBtu 
        (1,000 cubic feet of 1,000 Btu) of natural gas, and for raw 
        crude coal at the mine. For purposes of assessing the Federal 
        royalty the other leasable minerals are valued when they first 
        become marketable products. The processing necessary to create 
        a marketable product varies greatly by mineral commodity, 
        nature of the orebody and other factors, and generally is much 
        more complex for hardrock minerals than for coal, oil, and gas.
Royalty Base:
        The royalty base is the amount against which the royalty rate 
        is applied. For example, a royalty base might be the proceeds 
        of sale of a marketable product, less certain allowable costs. 
        The royalty base must allow reasonable deductions for the costs 
        to produce a marketable product. The Federal royalty 
        regulations for the minerals governed by the MLA allow certain 
        deductions that vary depending on the mineral. The royalty base 
        for hardrock mineral commodities should similarly allow 
        deductions to back out the post-mining costs necessary to 
        produce the first marketable products of the various hardrock 
        mineral products.
Promote Mineral Production and Provide a Fair Return to Taxpayers:
        Because the main purpose of assessing Federal royalties is to 
        provide a fair return to taxpayers from production of minerals 
        from Federal lands, the royalty must be workable and responsive 
        to the business dynamics and economic conditions that apply to 
        each mineral commodity. An unfair or confiscatory royalty will 
        be at cross purposes with this objective because it will reduce 
        mineral production.

    Unfortunately, the royalty proposed in H.R. 2579 does not satisfy 
any of these objectives. First it simplistically force-fits the 12.5 
percent Federal royalty rate applicable to oil, gas and surface-mined 
coal onto hardrock minerals, which fails to consider the substantial 
economic and business differences between discovering and producing 
marketable coal, crude oil, and gas versus the much greater complexity 
in finding, mining, and processing hardrock minerals into marketable 
products.
    Second, the proposed structure for the hardrock mineral royalty 
does not allow any deductions for the numerous and costly processing 
steps required to transform hardrock mineral ores (rocks that contain 
minute quantities of valuable metals) into marketable metal products. 
Unlike raw hardrock mineral ores for which there is no market, 
unrefined crude oil and gas are marketable commodities that are 
typically sold directly in either arm's length or non-arm's length 
transactions. Oil and gas royalties, which are assessed on crude oil 
and gas as they come out of the ground at the well head, allow crude 
oil and gas producers to deduct the transportation costs to deliver the 
crude oil and gas to buyers of these products. Other types of 
deductions are allowed for the other MLA minerals.
    Finally, the H.R. 2579 royalty, along with the unworkable and 
onerous leasing and environmental provisions in the bill, will 
significantly chill investment in hardrock minerals and cause a 
dramatic decline in hardrock mineral production from Federal lands. 
Instead of rewarding taxpayers with increased revenue from hardrock 
mining, H.R. 2579 will reduce existing hardrock mining revenues such as 
claims maintenance fees, and will produce only paltry hardrock royalty 
revenues.
    The 12.5 percent royalty rate on oil, gas, and coal produced from 
surface mines works for these commodities because they are much easier 
to find compared to hardrock minerals (see the response to Question No. 
5) and do not require complex and costly post-extraction processing to 
produce marketable products. The lower Federal royalty of 8 percent on 
coal produced from underground mines \1\ reflects the higher extraction 
costs associated with underground coal mines compared to surface mines 
and clearly illustrates that a uniform Federal royalty rate is 
unworkable--even for leasable minerals. The uniform 12.5 percent 
royalty in H.R. 2579 for all hardrock minerals is similarly 
impractical.
---------------------------------------------------------------------------
    \1\ Like coal, many hardrock minerals may be mined from underground 
or surface mines depending on the geologic characteristics of the 
specific deposit.
---------------------------------------------------------------------------
    In evaluating the inappropriateness of a uniform 12.5 percent 
hardrock mineral royalty, it is instructive to consider the different 
royalty rates that apply to the MLA minerals as shown in Table 1. The 
MLA imposes a different royalty rate and royalty valuation (the point 
in the production cycle at which the royalty is assessed) for the 
various MLA minerals.
---------------------------------------------------------------------------
    \2\ https://www.law.cornell.edu/cfr/text/43/3504.21.

                          TABLE 1 2

   Comparative Federal Royalty Rates for Minerals Governed by the MLA
------------------------------------------------------------------------
        Commodity                Royalty Rates and Valuation Basis
------------------------------------------------------------------------
Crude Oil                 12.5% at the well head
------------------------------------------------------------------------
Natural Gas               12.5% at the well head
------------------------------------------------------------------------
Coal                      12.5% of the gross value for surface mined
                           coal and 8% for coal produced from
                           underground mines
------------------------------------------------------------------------
Phosphate                 5% of gross value of the output of phosphates
                           or phosphate rock and associated or related
                           minerals
------------------------------------------------------------------------
Sodium                    2% of the quantity or gross value of the
                           output of sodium compounds and related
                           products at the point of shipment to market
------------------------------------------------------------------------
Potassium                 2% of the quantity or gross value of the
                           output of potassium compounds and related
                           products at the point of shipment to market
------------------------------------------------------------------------
Sulfur                    5% of the quantity or gross value of the
                           output of sulfur at the point of shipment to
                           market
------------------------------------------------------------------------


    The different royalty rates and valuation bases for the MLA 
commodities clearly demonstrates that a one-size-fits all royalty for 
leasable minerals is just as infeasible as it would be for hardrock 
minerals because leasable minerals have different geologic 
characteristics, processing requirements, and business parameters that 
must be considered in establishing a fair and workable Federal 
royalty--with the ultimate goal of producing royalty revenues for the 
Federal Government. Imposing the 12.5 percent royalty rate that works 
for oil, gas, and surface coal on the other leasable minerals 
(underground coal, phosphate, sodium, potassium, or sulfur) would make 
production of these minerals uneconomic and would produce zero royalty 
revenues for taxpayers.
    The substantially lower royalty rates for sodium, potassium, and 
sulfur compared to the 12.5 percent oil and gas royalty reflect the 
different business parameters applicable to these leasable solid 
minerals versus those affecting production of oil and gas, which are 
classified and regulated as fluid minerals. Generally speaking, 
leasable solid minerals require more post-extraction processing to 
produce a marketable product. For example, in the case of sodium and 
potassium, the royalty is assessed on the value of the first marketable 
product produced from processing raw sodium and potassium ores or 
sodium and potassium brines.\3\ Oil and gas are marketable commodities 
at the point of extraction (i.e., at the well head), without further 
processing.\4\
---------------------------------------------------------------------------
    \3\ Statement of Deborah Gibbs Tschudy, Deputy Associate Director, 
Minerals Revenue Management, Minerals Management Service, U.S. 
Department of the Interior, before the Senate Committee on Energy and 
Natural Resources, January 24, 2008.
    \4\ There is a worldwide market for crude oil and natural gas in 
their unrefined state. On May 24, 2019 the Wall Street Journal (page 
B7) listed the price for crude oil at $57.91 per barrel; the price for 
natural gas was $2.578 per one million Btu (MMBtu).
---------------------------------------------------------------------------
    In contrast, there is no market for unrefined ores of sodium, 
potassium, or sulfur. These ores require post-extraction processing to 
make a marketable product. Therefore, the Federal royalty is assessed 
at the point of shipment--not at the point of extraction (the mine 
mouth). The royalty for these minerals is calculated on the value of 
these minerals after certain processing costs have been deducted. The 
royalty rates for these minerals reflect the economics of producing 
these minerals and is assessed at a rate that sodium, potassium, and 
sulfur mining operations can withstand and still operate at a profit.
    There is no commodity market for raw (crude) hardrock mineral ores 
as they are produced from the mine (i.e., at the mine mouth). 
Transforming raw gold ore from the gold-bearing rocks produced at a 
mine into salable dore or producing marketable base metal concentrates 
from base metal ores extracted from deposits of copper, zinc, lead, 
nickel, etc. requires costly mineral processing techniques performed at 
or near the mine site.\5\ Because hardrock minerals have significant 
processing costs associated with these processing steps to produce a 
marketable product, a hardrock minerals royalty must allow deductions 
for these processing costs.
---------------------------------------------------------------------------
    \5\ Most hardrock minerals must also undergo further processing at 
off-site smelters and refineries to produce finished product metals. 
But unlike the costs to refine oil and gas into consumer products like 
diesel and gasoline, which can be passed on to the consumer, the costs 
to refine metals into consumer products is not reflected in metals 
commodity prices.
---------------------------------------------------------------------------
    Every hardrock mineral deposit has unique mineralogy that requires 
deposit-specific metallurgical treatments to optimize mineral 
recoveries. Examples of hardrock minerals processing steps include 
crushing, grinding, milling, thickening, flotation, leaching, roasting, 
autoclaving, and gravity separation. Mining companies perform detailed 
metallurgical studies to determine the most efficient and economic 
processing techniques to maximize mineral recovery rates and typically 
invest hundreds of millions to billions of dollars to construct mining 
and mineral processing facilities. Given the substantial capital 
required to build hardrock mining facilities, a Federal hardrock 
royalty must be structured to allow deductions for the processing costs 
applicable to each mining operation.
    Just as a uniform royalty rate under the MLA on leasable minerals 
is unfeasible, a single royalty rate for hardrock minerals would be 
similarly impractical. Compared to the solid leasable minerals, 
hardrock minerals are much more diverse in nature. (See the response to 
Question No. 3). Therefore, in the event Congress enacts a royalty on 
hardrock minerals, it needs to reflect the broad diversity of hardrock 
minerals and the costs associated with the various and numerous 
processing steps required to produce marketable products from the wide 
array of hardrock minerals. The different royalty rates for phosphate, 
sodium, potassium, and sulfur under the MLA reflect the variable 
business realities influencing mining and producing these minerals, 
which are substantially different than for coal, oil, and gas. 
Similarly, a hardrock Federal royalty must be structured to reflect the 
different economics of producing the diverse group of hardrock minerals 
that are governed by the Mining Law. A Federal hardrock royalty must 
accommodate the different business models applicable to each hardrock 
mineral commodity.

    Question 2. Is the royalty system described in Chairman Grijalva's 
bill a useful way to achieve greater returns for the public?

    Answer. The royalty system in Chairman Grijalva's bill is not a 
useful way to provide taxpayers with revenue from hardrock mining 
operations on Federal land. As explained in the response to Question 
No. 1, a hardrock mining royalty must account for the costs to produce 
a marketable mineral product like dore or concentrates, which is 
consistent with the way in which royalties are assessed on leasable 
minerals. The 12.5 percent gross royalty proposed in H.R. 2579 on 
``production or concentrates or products derived from hardrock 
minerals'' is not comparable to the 12.5 percent net royalty assessed 
on marketable crude oil and gas at the well head, and is itself written 
in an ambiguous manner.
    Hardrock mining royalties should allow deductions for the costs to 
process raw ore into a marketable product, which would be consistent 
with the way that the MLA assesses royalties on both fluid and solid 
leasable minerals that allow deductions to develop marketable products. 
Additionally, the high, uniform royalty rates of 12.5 and 8 percent in 
H.R. 2579 are not appropriate for hardrock minerals--just like the 12.5 
percent royalty rate on oil, gas, and surface coal is not applicable to 
the other leasable minerals governed by the MLA.
    The proposed H.R. 2579 royalty treats hardrock minerals differently 
than any of the leasable minerals for which certain deductions are 
allowed prior to calculating the royalty. There is no public policy 
rationale for assessing a hardrock mineral royalty in a radically 
different manner compared to the way in which royalties are assessed on 
leasable minerals. Hardrock minerals should not be subjected to a 
unique, unfair, and confiscatory royalty that disallows any deductions 
to make a salable mineral product.
    As written, the H.R. 2579 royalty gives the Federal Government a 
financial interest in the costly investments that hardrock mining 
companies must make in order to produce a salable product. Not only is 
this inconsistent with the way in which the Federal Government treats 
leasable minerals, it is inappropriate.
    A Federal hardrock royalty should be based solely on the 
government's ownership interest in the Federal hardrock minerals. It 
must not be expanded to include the mining companies' enormous 
investments in finding, mining, and processing minerals into marketable 
mineral products. Company costs for these value-added steps must be 
deducted from the royalty calculation. The Federal Government does not 
contribute anything to find, mine, and process hardrock minerals; these 
costs are borne solely by private-sector mining companies and should be 
excluded from the royalty valuation.
    In assessing an appropriate Federal royalty rate for hardrock 
minerals, the total government take (state royalties, taxes, and fees) 
that are already imposed upon these minerals must be considered. As 
shown in Exhibit I, the American Exploration & Mining Association 
(AEMA) recently compiled statistics showing that the average hardrock 
mine operates with a very slim 3 percent profit margin (i.e., the 
difference between a mine's total costs and its total revenues). 
Obviously, mines operating with only a 3 percent margin cannot afford 
to pay a 12.5 percent royalty.
    Roughly 40 percent of the revenue from hardrock mines goes toward 
paying state royalties and Federal and state fees and taxes; \6\ 24 
percent is spent on operating costs; labor costs consume the remaining 
33 percent. The H.R. 2579 12.5 percent royalty takes a bigger bite out 
of the economic pie than most mining operations can sustain. Moreover, 
the economic pie cannot be easily reapportioned because existing state 
and Federal royalties, fees, and taxes are fixed costs; they cannot be 
readily reduced to accommodate payment of a new Federal royalty that 
exceeds the mine's profit margin.
---------------------------------------------------------------------------
    \6\ Hardrock mining operations pay numerous state, local, and 
Federal taxes including but not limited to property taxes, sales and 
use taxes, payroll taxes, and corporate income taxes.
---------------------------------------------------------------------------
    The 2000 study entitled ``Global Mining Taxation Comparative Study 
(Second Edition) \7\ by Professor James Otto and others evaluated 
direct and indirect taxes and royalties on hardrock mining operations 
in 24 countries. This analysis showed that the projected government 
``take'' in 2000 on a hypothetical medium-sized profitable Nevada gold 
mine was 49.3 percent. A similar projection for a hypothetical Arizona 
copper mine was 49.9 percent. In 2008, the testimony that Dr. Otto 
presented to the Senate Energy and Natural Resources Committee showed 
that many mineral-producing countries have a total government take in 
the range of 40 to 50 percent. Dr. Otto's work reveals that even a 
small Federal royalty would make the U.S. less competitive for mining 
investment because the total government take is already at the high end 
of the range and would exceed the 40 to 50 percent government take that 
is typical in mineral producing countries.
---------------------------------------------------------------------------
    \7\ Otto, Bataresh, and Cordes, Institute for Global Resources & 
Policy Management/Global Mining Taxation, March 2000.
---------------------------------------------------------------------------
    Imposition of the 12.5 percent royalty in H.R. 2579 would cause 
many mines to close because they would no longer be economic to 
operate. Obviously, mines that are forced to close due to the 12.5 
percent royalty would generate zero Federal royalties. But the adverse 
economic impacts of the unrealistic and confiscatory royalty in H.R. 
2579 would not be limited to the lack of Federal royalty payments. The 
premature closure of these mines would have a harmful economic ripple 
effect due to the substantial loss of high-paying mining jobs, state 
royalty payments, and the other local, state, and Federal taxes and 
fees associated with operating mines. Premature mine closures would 
also destroy the many indirect jobs that mining projects create. In 
rural mining communities, operating mines create essential economic 
engines that would grind to a halt as the H.R. 2579 royalty renders 
mining operations uneconomic to operate, forcing them to close.
    Thus, the proposed royalty would create a significantly negative 
overall economic footprint that would harm mining communities and 
reduce local, state, and Federal revenues. As discussed in Question No. 
4, the leasing provisions in H.R. 2579 would force claim forfeitures 
and divestments, expose the Federal Government to takings litigation 
associated with these forfeitures and divestitures, and eliminate 
claims maintenance fees and service charges which currently amounted to 
roughly $65 million in FY 2017,\8\ further exacerbating the economic 
harm resulting from the H.R. 2579 royalty.
---------------------------------------------------------------------------
    \8\ 2017 BLM Public Land Statistics, Table 3-25.
---------------------------------------------------------------------------
    Question 3. Hardrock mineral commodities all have different price 
points and level of rarity. What would a single blanket Federal royalty 
do if applied to all these minerals in the same way?

    Answer. A single, blanket Federal royalty for hardrock mineral 
commodities would be completely unworkable given the wide range of 
locatable minerals that are governed by the Mining Law and the 
different types of mining and processing techniques needed to produce 
marketable hardrock mineral commodities based on the widely varying 
orebody characteristics. Imposition of a uniform royalty--like the 
confiscatory 12.5 percent royalty in H.R. 2579--would make mining many 
hardrock minerals uneconomic. Most hardrock mineral deposits could not 
withstand a 12.5 percent royalty that does not allow any deductions for 
the costs to produce a marketable product. Because the H.R. 2579 
royalty fails to take into account the differences between the various 
hardrock minerals in terms of mineralogy, processing techniques and 
costs, and the different points at which hardrock minerals become 
marketable products, it would lead to premature mine closures, would 
chill investment in exploration and mineral development, and lead to a 
substantial increase in the Nation's reliance on foreign countries for 
the minerals we need for our economy, infrastructure, technology, 
manufacturing, conventional and renewable energy, and national defense.
    The increased reliance on foreign minerals that would result from 
H.R. 2579 would be completely inconsistent with President Trump's 
Executive Order 13817, A Federal Strategy to Ensure Secure and Reliable 
Supplies of Critical Minerals. This Executive Order directs the 
Secretary of Commerce, in coordination with heads of selected executive 
branch agencies and offices, to submit a report to the President to 
outline ways to reduce the country's reliance on foreign minerals. The 
U.S. Department of Commerce just published this report.\9\
---------------------------------------------------------------------------
    \9\ https://www.commerce.gov/news/reports/2019/06/federal-strategy-
ensure-secure-and-reliable-supplies-critical-minerals, A Federal 
Strategy to Ensure Secure and Reliable Supplies of Critical Minerals, 
June 4, 2019.
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    The royalty, the onerous land tenure restrictions, and the 
unsuitability provisions in H.R. 2579 would completely thwart Call for 
Action No. 5 ``Improve Access to Domestic Critical Mineral Resources on 
Federal Lands and Reduce Federal Permitting Timeframes'' in the 
Department of Commerce's report. H.R. 2579 would interfere with this 
objective because the bill is designed to decrease access to hardrock 
minerals, many of which are critical minerals, by putting more lands 
off-limits to mining and creating additional permitting hurdles. 
Additionally, H.R. 2579 would render Call for Action No. 4, ``Improve 
Understanding of Domestic Critical Mineral Resources'' pointless. The 
research recommended to identify new domestic critical minerals 
resources would become a purely academic exercise on Federal lands 
given the barriers to exploration and development in H.R. 2579.
    Compared to the solid, non-fuel leasable minerals (phosphate, 
sodium, potassium, and sulfur) hardrock minerals are much more numerous 
and diverse. The U.S. Bureau of Land Management (BLM) describes 
hardrock minerals as ``includ[ing] most metallic mineral deposits and 
certain nonmetallic and industrial minerals'' \10\ and lists the 
following as examples of locatable minerals: copper, nickel, lead, 
zinc, cadmium, cobalt, gold, silver, garnet, uncommon-variety limestone 
or clay, platinum, palladium, quartz crystals, semiprecious gemstones, 
uranium, or other minerals.\11\ Similarly, the U.S. Forest Service's 
long list of locatable minerals consists of: ``base and precious metal 
ores, ferrous metal ores, and certain classes of industrial minerals 
that include but are not limited to gold, silver, platinum, copper, 
lead, zinc, magnesium, nickel, tungsten, bentonite, barite, fluorspar, 
uranium, and uncommon varieties of sand, gravel, and dimension stone.'' 
\12\
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    \10\ https://www.blm.gov/programs/energy-and-minerals/mining-and-
minerals/locatable-minerals.
    \11\ Public Land Statistics 2017, Volume 202, June 2018, U.S. 
Department of the Interior Bureau of Land Management, BLM/OC/ST-18/
001=1165, P-108-7.
    \12\ https://www.federalregister.gov/documents/2018/09/13/2018-
19961/locatable-minerals.
---------------------------------------------------------------------------
    There is far greater diversity and complexity in all aspects of 
discovering, mining, and processing hardrock minerals compared to 
leasable minerals. Leasable minerals generally occur in sedimentary 
basins whereas hardrock minerals occur in a wide range of geologic 
terrains, which is one of the reasons that hardrock minerals are more 
difficult to find than leasable minerals. Additionally, hardrock 
mineral deposits have unique and site-specific geological, 
mineralogical, and metallurgical characteristics that require deposit-
specific mine plans and processing facilities.
    If Congress decides to establish a Federal hardrock mining royalty, 
the royalty must be structured to accommodate the complexities and 
diversity of mining and processing the broad list of hardrock minerals 
governed by the Mining Law. In order to avoid making hardrock mining on 
Federal lands economically infeasible, which would cause a significant 
reduction in the production of hardrock minerals, a Federal hardrock 
royalty must account for the fact that the many different locatable 
minerals have unique characteristics that are reflected in the mining 
and processing techniques used for each specific hardrock mineral.
    A Federal hardrock royalty must be responsive to the highly diverse 
business dynamics and economics applicable to each of the hardrock 
minerals. For example, mining operations for locatable uncommon 
varieties of sand, gravel and dimension stone are significantly 
different than underground mining operations for precious or base 
metals. The mining and processing techniques applicable to locatable 
uncommon varieties of sand, gravel and dimension stone differ 
substantially from what is required to mine and process ores of gold, 
silver, copper, and most other locatable minerals. A Federal hardrock 
royalty must not make production of the wide group of locatable 
minerals uneconomic by failing to account for the complexity, 
diversity, and variability of hardrock minerals.
    Please see the response to Question No. 5 for a discussion of the 
relative rarity of hardrock minerals compared to leasable minerals--
especially oil and gas.

    Question 4. One of the major changes this bill would make is 
transitioning the General Mining Law from a claim system into a leasing 
system. It would allow an initial 20-year lease term, plus the option 
to renew for 10 years after that. Other minerals like coal seem to 
function with a leasing system. Why should hardrock be treated 
differently?

    Answer. The elimination of the mining claim system and the forced 
conversion of mining claims into leases are especially problematic 
aspects of H.R. 2579. The H.R. 2579 leasing proposal attempts to impose 
a scheme appropriate for coal, oil, and gas onto hardrock minerals. The 
above-described geological and operational differences between coal, 
oil, and gas compared to hardrock minerals are the reason that a 
leasing system will not work for hardrock minerals.
    The H.R. 2579 leasing provisions would destroy self-initiation, a 
unique aspect of the Mining Law that benefits the Nation by using 
private-sector investments to discover and develop domestic mineral 
deposits. Under the current Mining Law, U.S. citizens can enter Federal 
lands open to operation of the Mining Law and locate mining claims in 
areas they think have favorable geology for finding a mineral deposit. 
This self-driven process, known as self-initiation, greatly benefits 
our Nation because it effectively leverages private investments that 
transform undeveloped Federal land into mining operations that create 
jobs, pay taxes, and provide the minerals the country needs--at no risk 
or expense whatsoever to U.S. taxpayers.
    The National Academy of Sciences estimates that 1,000 hardrock 
mineral targets must be identified and evaluated to discover a deposit 
that can become a mine.\13\ This 0.001 odds makes finding mineral 
deposits a very difficult and high-risk endeavor that is expensive and 
time consuming.
---------------------------------------------------------------------------
    \13\ Hardrock Mining on Federal Lands, 1999, National Research 
Council, National Academy of Sciences, 247 p.
---------------------------------------------------------------------------
    Searching for the one-in-one-thousand needle in a haystack mineral 
deposit is an iterative process that makes self-initiation is 
critically important because it gives geologists the ability to expand 
their search for minerals and locate new claims--or to narrow their 
search and drop those claims on lands that no longer appear to have 
mineral potential. Each step in this process evaluates the available 
data to hone in on the mineral target. The exploration process requires 
having the on-the-ground flexibility to follow the geologic data to 
explore adjacent or new areas, to locate new claims on prospective 
ground, and to drop claims on lands that have been evaluated and 
determined to lack sufficient mineralization to meet that company's 
criteria to warrant further investment.\14\ Self-initiation makes 
exploration possible because it supports the iterative process of 
looking for minerals to find mineral deposits that are very difficult 
to find.
---------------------------------------------------------------------------
    \14\ It is not uncommon for claims that have been explored and 
dropped by one company to be re-located by a different company that 
will conduct additional exploration work with the hopes of discovering 
a valuable mineral deposit.
---------------------------------------------------------------------------
    This iterative process becomes impossible under a leasing system 
because the Federal Government determines where companies can and 
cannot look for minerals. Leasing substitutes the Federal Government's 
geologic acumen about where minerals are located for the private 
sector's knowledge and expertise. Rather than capitalizing upon the 
private sector's substantial understanding about where minerals may be 
located, the Federal Government becomes the initial prospector, without 
the benefit of any or much geologic data, and determines where 
companies may be allowed to look for minerals.
    The government-as-prospector leasing system may work for leasable 
minerals like coal, oil, and gas, which are much more abundant than 
hardrock minerals and generally less difficult to find (i.e., have much 
higher and more predictable rates of discovery compared to hardrock 
minerals as discussed in more detail in Question No. 5). However, it is 
wholly inappropriate for hardrock minerals given their relative rarity. 
Prior to discovery, the specific location of hardrock mineral deposits 
is generally unknown, making them difficult to find and develop. 
Consequently, hardrock mineral exploration is a very risky business. 
The Federal Government is ill-suited for this high-risk endeavor and 
should not get into the hardrock exploration and development business, 
as required under the H.R. 2579 Federal leasing scheme.
    In contrast, there are well-defined and well-understood vast 
geologic basins where coal, oil and gas are already known to occur such 
as the Powder River Coal basin in northeastern Wyoming and southeastern 
Montana or the vast Permian oil and gas basin in western Texas and 
southeastern New Mexico. A Federal leasing system for tracts of land in 
previously identified coal, oil, or gas provinces is feasible because 
the Federal Government already knows the location of the targeted 
resources. Moreover, because the odds of discovering additional oil and 
gas reserves in an established oil and gas or coal province are much 
higher than the one-in-one-thousand odds of discovering a hardrock 
mineral deposit, companies have an incentive to bid on and acquire 
Federal leases. (See the response to Question No. 5).
    The H.R. 2579 lease term and acreage limits will create significant 
barriers to hardrock mineral exploration and development on Federal 
lands. The 2-year primary term for a prospecting license (i.e., an 
exploration lease) is completely unrealistic and inappropriate for 
hardrock minerals. Even with the allowable 4-year extension, the 
prospecting license term limit is much too short.
    Discovering and developing a hardrock mineral deposit typically 
takes 10 years or longer, making hardrock mineral exploration a very 
risky and costly business. Depending on the deposit type and complexity 
of the geologic setting, exploration costs on the order of hundreds of 
millions of dollars are typical. (See Exhibit I). Hardrock mineral 
exploration will become even riskier and less attractive if an 
arbitrary and unrealistic term limit of 2 to 6 years is imposed on what 
is already a very high-risk endeavor. The H.R. 2579 exploration term 
limit will most certainly chill private-sector investment in exploring 
for minerals on Federal lands.
    The amount of land that can be explored under an H.R. 2759 
prospecting license is limited to an arbitrary 2,560 acres, which is 
the equivalent of just 128 20-acre mining claims. This limitation is 
inconsistent with the iterative mineral exploration process described 
above in which large target areas that may be comprised of several 
hundred to several thousand claims covering a broad area with mineral 
potential are initially examined, with each step of the exploration 
process vectoring toward a more defined and promising mineral target. 
The time and spatial constraints associated with the H.R. 2759 
prospecting licenses will significantly reduce the likelihood of future 
mineral discoveries and chill investment in mineral exploration. This 
arbitrary acreage limit could precipitate adverse environmental 
consequences because it would eliminate the ability for companies to 
focus their efforts in areas in which they are already operating where 
there is existing infrastructure that could be used to expand an 
existing operation or develop a nearby, satellite deposit. Rather than 
capitalizing on existing facilities in a ``brownfields'' setting, this 
acreage limit would have the perverse effect of creating new 
disturbances in ``greenfield'' areas where the company does not have 
any leases or operations.
    The H.R. 2579 leasing provisions compound the risks and add more 
disincentives to hardrock minerals exploration and development, which 
is already a high-risk business. Although successful prospecting 
licensees may apply for a 20-year non-competitive mining lease, the 
Federal land management agencies (e.g., BLM or the Forest Service) have 
the discretionary authority to deny issuance of the lease. H.R. 2579 
gives these agencies broad discretionary authority to deny lease 
applications, which puts a company's entire exploration investment 
under its prospecting license at risk. Because H.R. 2579 does not 
provide specific guidelines dictating when the agencies are authorized 
to deny a lease application, the bill creates a carte blanche 
opportunity for BLM and the Forest Service to withhold their consent to 
lease lands on which minerals have been discovered for mine 
development.
    The very real possibility that the Federal Government may not grant 
leases for the minerals discovered under a prospecting license creates 
intolerable uncertainty that will completely chill mineral exploration 
and development in the United States. Companies will not be able to 
justify to their shareholders expenditures of the tens to hundreds of 
millions of dollars required to discover a valuable mineral deposit if 
there is no guarantee that they will have the right to develop the 
minerals they discover.
    The 20-year primary term lease in H.R. 2759 is another serious 
barrier to mineral investment because it is not unusual for mines to 
operate for several decades. Without the assurance that a mine can 
continue to operate longer than 20 years, companies will be very 
reluctant to invest the hundreds of millions and sometimes billions of 
dollars needed to develop a mine. Similarly, financial institutions 
will be unwilling to finance mine construction.
    Finally, it is important to understand that the arbitrary and 
unrealistic 20,480-acre per company per state leasing limit in H.R. 
2759 will expose the Federal Government to takings litigation. This 
acreage limit, which is the equivalent of only 1,024 mining claims, 
fails to recognize that it is not unusual for mining companies to 
operate several mines in a state and own more than 1,024 mining claims. 
This is the case in Nevada and other mining states where several large 
mining companies operate multiple mines comprised of thousands of 
mining claims.
    The H.R. 2579 leasing acreage restrictions will result in 
forfeitures of the private property rights on thousands of mining 
claims located within the boundaries of currently producing mining 
properties. There are no public policy benefits or justifications for 
this private property seizure, which will completely disrupt active 
mining operations. The acreage restrictions will precipitate numerous 
takings claims as the government forces the premature closure of viable 
mining operations or the divestiture of lands that are part of 
productive mining operations.
    There is a compelling public interest in maintaining the mining 
claim system and self-initiation process, which capitalizes upon 
private-sector knowledge and investment to find and develop the 
minerals essential to American life. Under the current law, individuals 
and mining companies do the educated guesswork on where to spend 
private-sector resources to look for minerals and in exploring for 
minerals. The Federal Government is ill-suited to identifying 
prospective mineral targets.
    Ironically, the stated purpose of H.R. 2579 is ``[t]o modify the 
requirements applicable to locatable minerals on public domain 
lands,\15\ consistent with the principles of self-initiation of mining 
claims . . .'' Nothing could be further from the truth because H.R. 
2579 completely destroys self-initiation by abolishing future mining 
claims and forcing the conversion of existing mining claims into 
leases.
---------------------------------------------------------------------------
    \15\ It should be noted that H.R. 2579 targets public lands in the 
western United States that are open to operation of the General Mining 
Law (30 U.S.C. 21a et seq)--not public domain lands which are not 
subject to the General Mining Law.
---------------------------------------------------------------------------
    Finally, the paucity of operating mines and mineral exploration 
programs on acquired Federal lands provides compelling evidence of the 
chilling effect that a Federal leasing system has on hardrock minerals 
exploration and development. Despite the fact that Federal acquired 
lands in Missouri, Minnesota, and elsewhere have significant--even 
world class \16\--mineral endowments, mineral exploration and 
production from these lands is very limited. The current minerals 
leasing program for acquired lands is failing to achieve the basic 
purpose of a Federal royalty program, which is to generate revenue from 
mineral production on Federal lands.
---------------------------------------------------------------------------
    \16\ The Duluth Complex on the Superior National Forest in 
Minnesota contains very large copper, nickel, and platinum group 
mineral deposits that are truly world class.
---------------------------------------------------------------------------
    The H.R. 2579 Federal leasing program would similarly fail to 
produce meaningful royalty payments from mining on Federal lands open 
to location under the Mining Law in the western United States. There 
would be no public policy benefits or justification for replicating the 
failing leasing system for acquired lands on western Federal lands.

    Question 5. How difficult are these resources to find, exactly? How 
much yield is there mining for hardrock minerals than for coal, for 
example?

    Answer. As discussed in the response to Question No. 4, the 
National Academy of Sciences has found that it is necessary to examine 
1,000 hardrock mineral targets in order to discover a mineral deposit 
that can ultimately be developed into a profitable mining operation. 
These one-in-one-thousand (1:1,000) odds of discovering a viable 
hardrock mineral project stand in stark contrast to the relative ease 
with which hydrocarbons are discovered. The oil and gas industry uses a 
rule of thumb that 1 in 10 wildcat oil and gas exploratory wells will 
successfully discover hydrocarbons.\17\ This high rate of discovery of 
oil and gas resources reflects the predictable geology in the 
sedimentary basins that contain most of the world's hydrocarbon 
reserves. The geologic conditions that are very favorable locations for 
discovering and producing hydrocarbons in sedimentary basins like the 
Permian and Williston basins are relatively well understood because 
these basins have already been extensively drilled and have 
comparatively simple geology in contrast to hardrock minerals.
---------------------------------------------------------------------------
    \17\ Not every wildcat well that discovers hydrocarbons will be 
economic to develop.
---------------------------------------------------------------------------
    BLM's statistics show there is a high discovery rate for oil and 
gas resources on Federal leases. According to BLM, Federal oil and gas 
leases covered roughly 26 million acres at the end of FY 2018. Nearly 
half of these leased areas--12.8 million acres--produce oil and gas in 
economic quantities.\18\
---------------------------------------------------------------------------
    \18\ https://www.blm.gov/programs/energy-and-minerals/oil-and-gas/
about.
---------------------------------------------------------------------------
    Comparing the footprint of hardrock mineral activities for 
exploration, development, and mining on Federal lands with Federal 
lands where oil and gas is being produced vividly demonstrates that 
hardrock mineral deposits are much rarer than oil and gas deposits. 
BLM's statistics show that at the end of FY 2017, mining claims covered 
only about 8 million acres \19\--less than one-third the footprint of 
the Federal lands leased for oil and gas. Using the footprints of 
Federal oil and gas leases and mining claims as proxies for the 
distribution and frequency of occurrence of oil and gas compared to 
hardrock minerals, it is evident that oil and gas resources are much 
more abundant and widespread than hardrock mineral resources.
---------------------------------------------------------------------------
    \19\ Public Land Statistics 2017, Volume 202, June 2018, U.S. 
Department of the Interior Bureau of Land Management, BLM/OC/ST-18/
001=1165, P-108-7.
---------------------------------------------------------------------------
    Active mineral exploration and mining projects are taking place on 
just a small fraction of mining claims. BLM's data show that the agency 
has authorized surface-disturbing mineral exploration, development, and 
mining activities on a mere 313,042 acres, which represents less than 4 
percent of the area covered by mining claims.\20\ This small mineral 
activity footprint reflects the rarity of hardrock mineral deposits--
hence the one-in-one thousand odds of making a discovery. Oil and gas, 
on the other hand, are much easier to discover, as the production 
statistics from Federal leases show, with producing wells on roughly 
half of the acres currently subject to Federal leases.
---------------------------------------------------------------------------
    \20\ March 2019 LR 2000 database showing acres of authorized 
surface disturbance for mineral exploration, development, and mining on 
BLM-administered lands.
---------------------------------------------------------------------------
    It's also important to understand the different economics and time 
frames associated with oil and gas exploration and development compared 
to hardrock exploration and mining. Once an exploratory well is drilled 
into an oil and gas field, the wildcat well can be readily retrofitted 
into a production well from which marketable crude oil or natural gas 
can be produced. Subsequent wells drilled into the same oil and gas 
deposit have a high probability (greater than 1 in 10 chance) of being 
productive. Similarly, discovery of a coal deposit is relatively easy 
given the abundance of coal. Coal seams typically have continuity and 
predictability.
    In contrast to oil and gas wildcat wells that can be transformed 
into producing wells, hardrock mineral exploration drill holes cannot 
be turned into a mine. A drill hole that discovers hardrock minerals is 
just the start of a time-consuming and expensive process to drill many 
other holes to confirm the presence of a mineral deposit of sufficient 
size and grade to warrant development of the mine. Even though 
geophysical surveys, geological mapping, sampling, and drilling provide 
important information that may help identify that one-in-one thousand 
project that can become a mine, they do not guarantee discovery of a 
viable mineral deposit. Companies spend tens to hundreds of millions 
exploring for minerals with no guarantee that their efforts will 
discover a deposit that can be developed into a mine. If the 
exploration data and engineering studies are favorable enough to 
warrant the decision to build a mine, an enormous investment on the 
order of hundreds of millions to billions of dollars will be required 
to design and construct the mine and associated mineral processing 
facilities.
    As discussed in the response to Question No. 1, numerous processing 
steps are required to produce a marketable product like metal 
concentrates or dore from the hardrock mineral ores that are extracted 
from the mine. In contrast, leasable minerals like coal, oil and gas 
require comparatively less processing to produce a marketable product. 
Additionally, hardrock mineral ores contain only small concentrations 
of valuable metals. The processing steps are required to separate the 
metals from the ore (the rocks that contain the metal). As shown in 
Exhibit I, 300 tons of coal coming out of the ground at a mine has an 
immediate value at the mine mouth because nearly all of the produced 
coal is marketable, requiring relatively little processing. In 
contrast, 300 tons of gold ore coming out of the mine is comprised of 
rock that contains a very small amount of gold. This gold ore must be 
processed in order to separate the gold from the rock. Thus the 
``yield'' from raw, unprocessed hardrock mineral ores is much smaller 
than the yield from coal at the mine mouth or crude oil and gas at the 
well head.
    The gold ores produced at surface gold mining operations typically 
contain less than one-tenth of an ounce of gold for every ton of rock 
mined (a grade of <0.1 ounces of gold per ton). Many surface gold mines 
produce gold from exceptionally low-grade gold ores that contain 
hundredths of ounces of gold (i.e., gold grades of less than 0.09 
ounces of gold per ton). Other hardrock minerals comprise similarly 
small fractions of the rocks in which they are found.

    Question 6. What contributes to the total average costs of starting 
up a mine before production can start? Where do those expenses mostly 
come from?

    Answer. It is not practical to provide a total average cost of 
starting up a hardrock mineral mine due to the diversity of hardrock 
minerals. Because each hardrock mineral deposit has unique geological 
and metallurgical characteristics, mine plans and processing plants 
must be custom-tailored to fit that deposit. Additionally, site-
specific environmental conditions such as the proximity to surface 
water and groundwater aquifers or the presence of important wildlife 
habitat or cultural resources will influence the mine design. The goal 
is to engineer mining and mineral processing operations to optimize 
economic returns and minimize capital and operating costs and 
environmental and social impacts.
    Therefore, there is no such thing as an average mine, which is the 
reason why the royalty base (the valuation upon which a Federal 
hardrock mineral royalty is calculated) must consider the costs driven 
by this diversity and complexity. No two mines will have identical 
startup or operating costs.
    Despite the wide range of factors that contribute to startup and 
operating costs, it is possible to offer some generalizations. Startup 
costs for locatable industrial minerals and the uncommon varieties of 
sand, gravel and dimension stone that are considered locatable minerals 
will be considerably less than the startup costs for hardrock metals 
mines. Generally speaking, industrial minerals and uncommon varieties 
will be located at or near the ground surface and can be mined using 
simple surface mining techniques. Typically, these minerals do not 
require complex processing to make a marketable product. Examples of 
processing necessary for these minerals include washing, sorting, 
sizing, screening, and packaging. Some industrial minerals may also 
require crushing.
    On the other end of the spectrum, deeply buried metallic mineral 
deposits \21\ must be mined using underground mining techniques and 
require expensive processing to separate the metals from the ore 
(metals-bearing rocks). Development of an underground mine takes an 
enormous investment of capital. Similarly, processing facilities are 
very costly to develop--especially if they involve numerous processing 
steps such as crushing, grinding, flotation, leaching, roasting, and 
autoclaving. The design of a mineral processing facility will depend on 
the mineralogical and metallurgical characteristics of the deposit, 
which will be unique to that deposit. Generally speaking, underground 
hardrock mineral deposits that require complex mineral processing will 
have the most expensive startup costs.
---------------------------------------------------------------------------
    \21\ Underground mines may be developed several hundred to several 
thousand feet below the ground surface, with some deposits being as 
much as 1 mile underground.
---------------------------------------------------------------------------
    The startup costs to develop a surface mine will typically be less 
than the costs associated with developing an underground mine. The 
mineral processing costs at surface mines will depend on the mineralogy 
and metallurgy of the deposit being mined. Deposits of oxidized or 
partially oxidized precious metals or copper may be processed using 
heap leaching techniques, which are generally less expensive to build 
and operate than a milling facility. However, many surface mining 
operations produce ores that require many or all of the above-described 
processing steps to produce a marketable product. For example, some of 
the large surface gold mines in Nevada have complex milling facilities 
that have roasters and autoclaves in addition to crushing, grinding, 
leaching, and flotation components.
    Startup costs in the range of hundreds of millions of dollars are 
fairly typical for mid-sized surface metallic mineral mines that do not 
require complex mineral processing facilities. However, much higher 
startup costs--on the order of several billions of dollars--are 
required for large surface or underground mining operations that need 
complex mineral processing facilities.
    The substantial investment of capital required to start a hardrock 
metal mine is one of the key reasons that the H.R. 2579 leasing scheme 
is unworkable. In order to secure financing to build a multi-million or 
billion dollar mine, mining companies and their lenders must have 
security of tenure to assure that the mine and mineral processing 
facilities can continue to operate during the projected mine life in 
order to amortize the investment required to build the mine. The 
limited leasing time frame in H.R. 2579 (a 20-year primary term with 
the possibility--but not the guarantee--that the mine can continue to 
operate longer than 20 years) will make financing large mines with mine 
lives that exceed 20 years very difficult if not impossible.
    Lenders will be very reluctant to provide the necessary capital to 
build mines if there is uncertainty about whether the mine can continue 
to operate past the primary lease term. It is not uncommon for large 
base metal and some precious metal deposits to be developed into mines 
that operate for decades. Thus the 20-year leasing term limit in H.R. 
2579 will likely thwart the future development of these deposits, which 
otherwise would be some of the Nation's most important mineral 
resources. Most mines continue to operate so long as it is economic to 
stay in operation.

    Question 7. What state and Federal regulations must hardrock 
operations follow today?

    Answer. The panoply of Federal environmental statutes that protect 
the Nation's environment apply to mining in the same way they apply to 
all other industries. There are no mining exceptions or exemptions. 
Federal statutes applicable to mining include but are not limited to 
the National Environmental Policy Act, the Endangered Species Act, the 
Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the 
Toxic Substances Control Act, the National Historic Preservation Act, 
Archaeological Resources Protection Act, the Migratory Bird Treaty Act, 
the Resource Conservation and Recovery Act, the Comprehensive 
Environmental Response Compensation and Liability Act, and the 
Emergency Planning and Community Right to Know Act. In addition to 
these universally applicable environmental laws, the Federal Land 
Policy and Management Act (FLPMA) governs mineral activities on BLM-
administered public lands. The Forest Service's Organic Administration 
Act applies to mining on National Forest System lands.
    FLPMA mandates that all activities on public lands--including 
mineral activities conducted pursuant to the U.S. Mining Law--must 
prevent unnecessary or undue degradation (UUD). BLM's 43 CFR Subpart 
3809 surface management regulations for hardrock minerals implement the 
FLPMA mandate to prevent UUD. The 43 Subpart 3809 regulations include 
detailed environmental performance standards to protect air quality, 
surface water, groundwater, wildlife habitat, cultural resources, 
visual resources, and other resource values.
    Under the authority of the Organic Administration Act, the Forest 
Service has developed the 36 CFR Part 228 Subpart A surface management 
regulations for hardrock mining. 36 CFR Sec. 228.8 establishes the 
environmental protection standard which requires mining activities to 
minimize adverse impacts on National Forest System lands including air 
and water quality, scenic values, and wildlife and fisheries habitat. 
BLM's and the Forest Service's surface management regulations require 
reclamation and financial assurance before surface-disturbing 
activities can begin. In Nevada, the country's largest gold mining 
state, BLM and the Forest Service co-manage over $2.8 billion in 
reclamation bonds for hardrock mineral projects.
    All of the western states with lands open to location under the 
U.S. Mining Law have enacted laws and implementing regulations 
specifically applicable to hardrock mining. Generally speaking, these 
laws and regulations establish environmental protection, reclamation, 
and financial assurance requirements that apply to hardrock mineral 
activities on both Federal and private lands. Table 2 is a partial list 
of the state laws governing hardrock mineral exploration and mining 
projects.

                                TABLE 2

         Partial List of State Laws Governing Hardrock Minerals
------------------------------------------------------------------------
         State                           Mining Statutes
------------------------------------------------------------------------
Alaska                  Alaska Mining Statute, AS Title 27
------------------------------------------------------------------------
Arizona                 Arizona Mined Land Reclamation Act, Ariz. Rev.
                         Stat. Ann. Sec. Sec.  27-901 through 1026
------------------------------------------------------------------------
                        Aquifer Protection Permit (APP), Ariz. Rev.
                         Stat. Ann. Sec. Sec.  49-241 through 252
------------------------------------------------------------------------
California              California Surface Mining and Reclamation Act
                         Public Resources Code, Sections 2710-2796
------------------------------------------------------------------------
                        Porter Cologne Water Quality Control Act,
                         California Water Code Section 7
------------------------------------------------------------------------
Colorado                Colorado Mined Land Reclamation Act, Title 34
                         Mineral Resources, Article 32
------------------------------------------------------------------------
Idaho                   Idaho Surface Mining Act, Idaho Code Title 47,
                         Chapter 15
------------------------------------------------------------------------
Montana                 Montana Metal Mine Reclamation Act (``MMMRA''),
                         Montana Code Annotated (``MCA'') Sec. Sec.  82-
                         4-301 through 390
------------------------------------------------------------------------
Nevada                  Nevada Revised Statues 445A.300-445A.370, Water
                         Pollution Control
------------------------------------------------------------------------
                        Nevada Revised Statutes 519A.010-519A.280,
                         Reclamation of Land Subject to Mining
                         Operations or Exploration Projects
------------------------------------------------------------------------
New Mexico              New Mexico Mining Act of 1993, (69-36-1 to 60-36-
                         20 NMSA 1978)
------------------------------------------------------------------------
                        New Mexico Water Quality Act (NMWQA), Chapter 74
------------------------------------------------------------------------
Oregon                  Oregon Mined Land Reclamation Act, OAR Chapter
                         632, Division 037
------------------------------------------------------------------------
Utah                    Utah Code Title 40, Mines and Mining--Chapter 8,
                         Utah Mined Land Reclamation Act (``UMLRA'')
------------------------------------------------------------------------
                        Utah Code Title 19, the Environmental Quality
                         title, Chapters 01-06, and 08
------------------------------------------------------------------------
                        Utah Code Title 73, Chapter 5a
------------------------------------------------------------------------
Washington              Washington Metals Mining and Milling Act
                         (``WMMMA''), Revised Code of Washington
                         (``RCW'') Chapter 78.56 Sec. Sec.  .010-902
------------------------------------------------------------------------
Wyoming                 Wyoming Environmental Quality Act (``WEQA''),
                         Wyo. Stat. Sec.  35-11-401, Article 4, Land
                         Quality
------------------------------------------------------------------------


    As a result of these laws and regulations, modern mining operations 
are designed, operated, and closed to protect the environment--in 
marked contrast to historic mines developed long before enactment of 
today's environmental protection mandates. Mining companies devote 
considerable resources to ensuring compliance with all applicable 
local, state, and Federal environmental protection requirements.
    State and Federal environmental permits include extensive site 
monitoring and reporting requirements to document that a mine is 
operating properly and complying with all regulatory requirements. 
These environmental monitoring systems and reporting requirements act 
as real-time, early warning systems that provide regulators and 
operators with indicators of a possible problem. If project monitoring 
data indicate there may be an environmental issue, state and Federal 
regulations compel the operator to investigate the potential problem 
and remediate the problem if one is discovered. The monitoring systems 
at today's highly regulated mining operations provide meaningful 
information about the performance of the site's environmental controls. 
If the monitoring data suggest there may be a problem that needs to be 
evaluated, state and Federal regulators have all of the necessary 
regulatory and enforcement tools to require the operator to respond to 
the problem with investigatory and remediation measures.

    Question 8. How would you characterize the environmental 
protections in the United States, compared to other major producers of 
critical minerals in the world, such as China? How about Africa?

    Answer. As discussed in the response to Question No. 7, the United 
States has comprehensive and effective Federal and state environmental 
protection regulations governing all industries as well as regulations 
specific to mining. The United States also has extensive worker safety 
laws and regulations. Mining companies follow the mantra of ``Safety 
First.'' Mining companies place a great deal of importance on ensuring 
safe working conditions at their sites and on complying with all 
environmental protection requirements. Unfortunately, China, African 
countries, and other foreign countries do not have similarly stringent 
environmental and health and safety regulations.
    For example, the Washington Post reports significant pollution at 
Chinese graphite mines.\22\ Graphite is used to manufacture the lithium 
batteries that power cell phones and countless other electronic devices 
including electric vehicles. As noted in the Washington Post the 
Chinese graphite mines operate under ``lax environmental controls and 
produce old fashioned pollution.'' According to the Washington Post, 
the world's demand for lithium-ion batteries to power smart phones, 
laptops, and electric vehicles comes at ``a steep cost.'' Villagers 
living near the Chinese graphite mines face dirty air, damaged crops, 
and polluted drinking water due to operation of these mines. The 
Washington Post states that Chinese officials do not enforce 
environmental regulations and ``are inclined to look the other way to 
benefit a major employer.''
---------------------------------------------------------------------------
    \22\ https://www.washingtonpost.com/graphics/business/batteries/
graphite-mining-pollution-in-china/.
---------------------------------------------------------------------------
    Similarly, Radio Free Asia reports that ``Chinese-operated mines in 
Lhundrub County have caused ``severe'' damage to local forests, 
grasslands, and drinking water. Waste from the mines, in operation 
since 2005, ``has been dumped in the local river, and mining activities 
have polluted the air.'' \23\
---------------------------------------------------------------------------
    \23\ https://www.rfa.org/english/news/tibet/mines-
05062013154914.html.
---------------------------------------------------------------------------
    The worldwide demand for the cobalt used in lithium-ion batteries 
is partially met from mines in the Congo, which employ child labor and 
operate with little or no environmental or worker health and safety 
controls. The Washington Post reports that cobalt mining in the Congo 
is performed by workers, including children ``who labor in harsh and 
dangerous conditions . . . with little oversight and few safety 
measures. Deaths and injuries are common.'' These mining operations 
``expose local communities to levels of toxic metals that appear to be 
linked to ailments that include breathing problems and birth defects.'' 
\24\
---------------------------------------------------------------------------
    \24\ https://www.washingtonpost.com/graphics/business/batteries/
congo-cobalt-mining-for-lithium-ion-battery/.
---------------------------------------------------------------------------
    According to the Washington Post, lithium mining operations in 
Chile and Argentina used vast quantities of water to process lithium 
from deposits located in the high-elevation Atacama region--a high-
altitude desert. Some of these operations provide paltry benefits to 
the indigenous Atacamas communities where they are located.\25\
---------------------------------------------------------------------------
    \25\ https://www.washingtonpost.com/graphics/business/batteries/
tossed-aside-in-the-lithium-rush/.
---------------------------------------------------------------------------
    In contrast to these unfortunate problems in countries with 
inadequate regulations or poor enforcement of their regulations, mining 
companies operating in the United States devote enormous resources to 
complying with the stringent environmental protection laws and 
regulations discussed in the response to Question No. 7. Besides 
protecting the environment at their mine sites, mining companies 
operating in the United States are also committed to maintaining and 
enhancing their social licenses to operate. Many companies have 
corporate social responsibility programs that require meaningful 
interaction with the communities in which they mine to ensure that 
their mines are responsive to the culture and social fabric of the 
community as well as provide economic benefits.

    Question 9. What kind of NEPA process do mining projects have to go 
through before mining can begin?

    Answer. The NEPA process for proposed mineral exploration and 
mining projects on BLM-administered public lands and on Forest Service-
administered National Forest System lands is identical to the NEPA 
process for any other project that is determined to be a major Federal 
action that requires a NEPA analysis. Both BLM and the Forest Service 
must prepare thorough NEPA documents to analyze and disclose the 
potential environmental impacts associated with proposed mineral 
activities. Generally speaking, the agencies prepare an Environmental 
Assessment (EA) in response to a proposed mineral exploration project 
and an Environmental Impact Statement (EIS) for a proposed mining 
operation.
    BLM and Forest Service NEPA documents must comply with the Council 
on Environmental Quality (CEQ) regulations implementing NEPA at 40 CFR 
Sec. Sec. 1500-1508. BLM prepares NEPA documents in accordance with its 
NEPA Handbook (H-1790-1). The Forest Service NEPA documents follow the 
NEPA procedures outlined in its NEPA rules at 36 CFR Sec. 220.\26\
---------------------------------------------------------------------------
    \26\ The Forest Service published an Advanced Notice of Proposed 
Rulemaking on January 3, 2018 seeking public comments on how the 
efficiency of the 36 CFR 220 NEPA rules could be improved.
---------------------------------------------------------------------------
    The NEPA documents for proposed mineral exploration and mining 
projects have the same structure and content as NEPA documents prepared 
by Federal agencies for all types of proposed projects and include the 
following chapters: Purpose and Need; the Proposed Action and 
Alternatives to the Proposed Action; Affected Environment, which is a 
detailed discussion of the environmental setting of the Project Area 
and surrounding lands; Environmental Consequences, which presents a 
thorough analysis of the direct, indirect, and cumulative impacts that 
could result from the project; Consultation, which lists the tribes, 
agencies, organization, and individuals contacted during the NEPA 
process; Preparers, which shows the agency and third-party personnel 
who prepared the document; and References Cited.
    Like NEPA documents prepared for non-mining projects, BLM and 
Forest Service NEPA documents for mineral exploration and mining 
projects are used as decision tools to assist the agencies in 
evaluating a proposed mineral project and alternatives to the project 
proponent's project proposal (the Proposed Action) that would minimize 
or even eliminate environmental impacts. During the NEPA process, BLM 
and the Forest Service identify and analyze project alternatives like 
different locations for certain mine facilities that may mitigate 
environmental impacts. Based on this alternatives analysis process, BLM 
and the Forest Service select an Agency Preferred Alternative and 
identify an Environmentally Preferred Alternative, both of which may 
differ from the Project Proponent's Proposed Action.
    The CEQ regulations require mitigation measures to avoid or 
minimize adverse environmental impacts. (See, for example 40 CFR 
1502.14 and 1502.16). This mitigation requirement applies to all types 
of proposed projects including mineral exploration and mining projects. 
BLM and the Forest Service use the NEPA alternatives and environmental 
consequences analyses to evaluate ways to avoid and minimize 
environmental impacts. This aspect of the NEPA process is integrated 
into the agencies' assessment of whether a proposed mineral project 
complies with the environmental performance standards in each agencies' 
surface management regulations for hardrock minerals (e.g., BLM's 43 
CFR Subpart 3809 and the Forest Services' 36 CFR Part 228 Subpart A 
regulations).
    The NEPA process for proposed mineral exploration and mining 
projects includes public involvement that must comply with the public 
scoping requirements in 40 CFR Sec. 1506.6 to seek public comments on a 
proposed action. The EIS process includes a minimum of three 
opportunities for the public to provide comments on a proposed project 
during initial project scoping, on the Draft EIS, and on the Final EIS.
    The NEPA process is also applicable to hardrock minerals on 
acquired lands. Federal agencies must prepare NEPA documents in 
conjunction with issuing Federal leases for mineral exploration and 
development. Even initial exploration on acquired lands requires a 
lease and an associated NEPA analysis, which is typically a time-
consuming process. It can take years of permitting and lease 
negotiation before initial exploration for minerals on acquired lands 
can begin. This is another reason why a leasing system is problematic 
and an extremely inefficient way to manage the Nation's mineral 
resources. The self-initiation process under the mining claim system on 
lands subject to the Mining Law allows initial exploration activities 
like geologic mapping and other activities that do not involve 
disturbing the land to take place without a time-consuming permitting 
process.

                               EXHIBIT I
                               
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                 

    Dr. Lowenthal. Thank you, Mr. Comer.
    I would like to thank the panel for your testimony. And I 
want to remind the members of the Committee that Committee Rule 
3(d) imposes a 5-minute limit on questions. I am now going to 
recognize Members for any questions they may wish to ask the 
witnesses.
    I recognize first Representative Cunningham for 5 minutes.
    Mr. Cunningham. Thank you, Mr. Chairman, and thank you to 
our witnesses for being here today. Thank you for traveling to 
testify. And it might be surprising that anyone from South 
Carolina would care much about a bill that deals largely with 
gold and copper mining on Federal lands. You would think that 
is just an issue for Nevada. Right?
    Except that it is not. I had my staff look into it, and we 
found at least three hardrock mining Superfund sites in the 
state of South Carolina. And it is possible that there are 
responsible parties that are paying for the cleanup of all 
three of these. But it is also possible that they are not and 
the taxpayers of South Carolina will be forced to foot that 
bill. Either way, the point is that abandoned hardrock mines 
are not simply a Western issue. They are an American issue.
    A little over 40 years ago, Congress came together on a 
bipartisan basis to create a program, the Abandoned Mine Land 
program, to deal with abandoned coal mines. And Congress 
rightly acknowledged that the industry had a responsibility, a 
duty, to help address environmental and safety hazards that it 
had spent well over a century creating.
    We can do the same thing for hardrock mines as well. Every 
state has them, from coast to coast. But unlike coal mines, 
states get virtually no money from the Federal Government to 
help clean them up. Citizens of every state deserve to not be 
exposed to the toxic remains of old mines. These sites need to 
be cleaned up faster and with less of a burden on the 
taxpayers.
    And this is not a Republican issue or a Democratic issue. 
This is about fairness, it is about health, it is about 
safety--issues that are priorities for both sides of the aisle. 
So, I want to thank Chairman Grijalva for introducing this 
bill. I want to thank Chairman Lowenthal for holding this 
hearing. And I want to thank the witnesses again for taking the 
time to be here and explain their views on this very important 
and critical issue.
    And with that, I would yield back the balance of my time.
    Dr. Lowenthal. Thank you, Representative Cunningham.
    I would now like to recognize Representative Hern for 5 
minutes of questioning.
    Mr. Hern. Thank you, Mr. Chairman, Ranking Member Gosar, 
and our witnesses for being here today to testify.
    Hardrock mining provides essential materials that are used 
in several industries across the country, including much of our 
high tech equipment. However, the majority of our supply of 
critical minerals comes from abroad, mostly from China. Because 
of this, any restriction on our ability to mine these materials 
would hamper our industries and their growth, and make us 
reliant on foreign materials.
    Mr. Comer, as someone who is considered a leading authority 
in natural resource permitting and compliance issues, and on 
your testimony today, I would like to just ask you--it is going 
to be a pretty short answer, I would think. But I would like to 
get to my colleague here from the mining world.
    Would you agree that this bill will have a huge negative 
effect on the mining industry in the United States, and gravely 
impacting our ability to develop renewable energy sources, and 
in fact, driving the Green New Deal cost even higher than the 
ridiculous estimates of $93 trillion that are already being 
accepted across the industry?
    Mr. Comer. Would you like an answer as simple as 
``Absolutely''?
    Mr. Hern. Absolutely. You can expound a little bit.
    Mr. Comer. Well, the impacts and the implications will be 
several-fold. It will greatly impede existing mines, their 
continuation, their operation, and their development. And it 
will impair the ability to acquire new mineral resources. And 
the United States has substantial mineral wealth. One of the 
things that we have not heard about today is some of the 
differences in mining today versus 100 years ago.
    I look at the mural in the room, and that is a technology 
for a bygone era.
    Mr. Hern. Mr. Comer, I am going to ask you to hold the rest 
of that thought. I have a feeling you are going to be asked a 
few more questions, and I want to yield the balance of my time 
to my colleague from a mining part of the country.
    Mr. Stauber. Thank you, Congressman Hern, for giving me 
some of your time.
    Chairman Lowenthal and Ranking Member Gosar, mining defines 
Minnesota's past, present, and its future. So, I appreciate 
this opportunity to appear on this panel because I fear these 
proposed hardrock mining reforms would disincentivize any 
mining and irreversibly damage Minnesota's economy.
    The first bill I introduced, the Superior National Forest 
Land Exchange Act, it codifies the land transfer that occurred 
last July between the Forest Service and PolyMet Mining. This 
bill passed the House last Congress under my predecessor former 
Representative Rick Nolan's leadership with broad bipartisan 
support, including, Mr. Chairman, your support along with four 
other Democrats sitting on this Subcommittee.
    Mr. Comer, thank you for appearing today to discuss the 
crucial issue involving Minnesota. The Iron Range in my 
district produces the iron ore used to build America and help 
us win World War II. The economy on the Range is volatile. It 
ebbs and flows with the price of steel, and is constantly 
threatened by cheap iron ore from international competitors 
lacking any environmental or labor standards.
    Mr. Comer, how would instituting the proposed royalty and 
shift to a leasing system affect iron ore mining and steel 
production?
    Mr. Comer. It would have a major devastating effect on the 
ability to acquire new sources of iron ore in the Rocky 
Mountain West. And to this date, there still are no mines that 
have been developed under a leasing system in the Upper 
Midwest. These are different types of properties, the existing 
industry and the new industry, where it is developed with more 
Federal mineral. But we have not developed yet. We are still 
trying to after years and years of permitting and compliance 
activities.
    Mr. Stauber. Thank you. Along with iron ore, there are two 
proposed copper nickel projects in northeastern Minnesota. The 
PolyMet Project surpassed all environmental standards, taking 
an incredible 14 years. Other countries mining copper and 
nickel have very little to no environmental standards.
    Mr. Comer, how can places like northeastern Minnesota 
compete internationally under this proposed legislation?
    Mr. Comer. It would be very difficult, both in Minnesota 
and throughout the West. Land tenure, mineral tenure will be 
lost. It will be devastating, and I am not a ``sky is falling'' 
type person.
    Mr. Stauber. Neither am I. Thank you for answering those 
questions, Mr. Comer, and for your testimony.
    My next question will be to Commissioner Lachelt. 
Commissioner, I appreciate your service as a County 
Commissioner. I too came from the County Commissioner realm, so 
I appreciate what you are doing and understand what you are 
going through. Thank you for testifying today.
    You listed clean, renewable energy as a priority. And 
continued energy diversification requires elements like copper, 
nickel, and iron ore. I want to ask you this: Would you rather 
power your county with elements harvested in places like 
northern Minnesota, who have strict environmental and great 
union labor standards? Or do you prefer to receive these 
elements from places that lack union labor and environmental 
standards like Brazil, China, and Russia?
    Ms. Lachelt. Sir, thank you for the question. And I think 
it is really important to honor the past. Our mining history in 
my part of the world, we honor how our region came to be, and 
the economy that it helped build. But we need to look to the 
future. And we work with a lot of solar companies in our 
region----
    Mr. Stauber. Commissioner, I have to yield my time back to 
Representative Hern.
    Dr. Lowenthal. Yes. You will get your opportunity again. 
you will be next, Mr. Stauber.
    Mr. Stauber. Thank you, Mr. Chairman. Appreciate it, and 
yield back.
    Dr. Lowenthal. But no filibusters.
    [Laughter.]
    Dr. Lowenthal. Next I would like to recognize Congresswoman 
DeGette for 5 minutes.
    Ms. DeGette. Thank you so much, Mr. Chairman. Thank you for 
holding this hearing. I want to welcome my homies, Commissioner 
Lachelt and also Mr. Comer, from Colorado. And I want to 
apologize for toggling in and out. In the other Subcommittee on 
this Full Committee, we are having a hearing down the hall on 
wildfires, another huge issue for our state. I really want to 
thank you for coming.
    I want to start with you, Commissioner Lachelt, about the 
issue of cleaning up abandoned mines because, as you know, 
Colorado has one of the largest inventories of abandoned 
hardrock mines. And we were surely reminded of that when we had 
the Gold King Mine blow out in 2015. We all saw those pictures. 
It turned the rivers bright yellow and released about 3 million 
gallons of toxic wastewater.
    And in the meantime, according to an AP report from 
February, abandoned mining sites like Gold King are leaking 50 
million gallons every single day into streams and rivers like 
groundwater supplies. And that is just from the sites that the 
AP looked at, so that is a floor and not a ceiling.
    I want to ask you, Ms. Lachelt, as a County Commissioner of 
southwestern Colorado, I know you have done a lot of wonderful 
work advocating the cleanup of these hardrock mines. Can you 
tell me what we know about the scale of the problem? What is 
the estimated cost for this cleanup?
    Ms. Lachelt. Thank you, Representative DeGette. It is 
estimated that there are over 500,000 abandoned mines across 
the country, and the EPA estimates that clean-up costs could 
come in somewhere around $50 billion.
    Ms. DeGette. Fifty billion dollars?
    Ms. Lachelt. Yes.
    Ms. DeGette. And where is that money going to come from to 
clean up those mines?
    Ms. Lachelt. From the taxpayers.
    Ms. DeGette. Right. And do you think that if we don't have 
a dedicated hardrock abandoned mine land fund, we could ever 
come close to cleaning up the scale of contamination?
    Ms. Lachelt. We need a dedicated source of funding in order 
to do this cleanup.
    Ms. DeGette. Yes. We can't do it without it, I don't think.
    Ms. Lachelt. Exactly.
    Ms. DeGette. Let me turn to you, Mr. Davis, because one of 
the features of the Mining Law of 1872 is that a company can 
freely mine on Federal lands, extract the minerals it wants, 
and then it doesn't have to clean up after itself or pay a 
royalty to American taxpayers.
    In your testimony, you identified the lack of royalties as 
one of the biggest problems with the Mining Law of 1872. Do you 
think it is fair, as a small businessman, that hardrock mining 
companies don't pay any royalties for mining Federal lands?
    Mr. Davis. I don't think it is fair at all. I think it sets 
up a great inequality. I think there are so many other 
industries, such as oil and gas that do, but so does logging, 
so does agriculture. In my craft, there are so many standards I 
have to meet and so many regulations I have to meet. And they 
are all a cost to me. And when those costs change, I adapt my 
business to manage those costs, and traditionally, most 
industries pass those costs along to consumers.
    Ms. DeGette. Right. So, oil, gas, coal, solar, wind, 
livestock, logging, and outdoor recreation all pay to use the 
public lands, but mining does not.
    Mr. Davis. That is correct.
    Ms. DeGette. Does that seem fair to you?
    Mr. Davis. No. It does not seem fair.
    Ms. DeGette. Yes. And how does that impact taxpayers like 
you?
    Mr. Davis. We end up carrying the burden, and especially in 
a situation such as the one we faced in Montana, where the two 
corporations, one Australian and one Canadian, were coming over 
the border to start industrial-scale gold mines. And the impact 
of that, it was going to devastate our local economy.
    So, who picks up that cost? Who picks up the cost of my 
business, our entire valley? Our region has a billion-dollar 
industry employing 13,000 people. I listened to the gentleman 
to my left talk about the national agenda, and I am curious 
where the national agenda forgets about local communities and 
our ability to talk about what happens in our neighborhood. And 
we talk about necessary imports. I am talking about gold mining 
specifically in my region.
    Ms. DeGette. Right.
    Mr. Davis. And the impact of that. It would be devastating. 
it would decimate my industry.
    Ms. DeGette. So, it decimates your industry, plus we don't 
have the ability to clean up most of these abandoned mines.
    Mr. Chairman, this is why we need to update this law, and I 
appreciate you having this hearing. And I yield back.
    Dr. Lowenthal. Thank you.
    Now we return once more to Representative Stauber.
    Mr. Stauber. Thank you, Chair Lowenthal. I appreciate it. I 
want to continue my conversation, but I want to restate the 
question. And Commissioner Lachelt, it will just be a yes or no 
answer because I have other questions.
    I am going to ask this: Would you rather power your county 
with elements harvested in places like northeastern Minnesota, 
with great EPA environmental standards and union labor? Or 
would you prefer to receive them from places with an utter lack 
of labor standards and environmental standards such as Brazil, 
China, or Russia? And that is just an either/or.
    Ms. Lachelt. Thank you, Representative. I prefer that any 
minerals are responsibly sourced. So, I would say yes to your 
question, and let you know that I work with solar----
    Mr. Stauber. Yes to harvest them in Minnesota, or other 
countries?
    Ms. Lachelt. Where there are apparently--and you 
represented that you have strong standards. I would say I would 
much prefer that than from----
    Mr. Stauber. Much prefer Minnesota?
    Ms. Lachelt. I would.
    Mr. Stauber. Thank you.
    Ms. Lachelt. However, many of the companies operating on 
our public lands are foreign----
    Mr. Stauber. I will go to my next question. I appreciate 
you supporting my great state of Minnesota.
    [Laughter.]
    Mr. Stauber. Mr. Comer, how long does the permitting 
process take for hardrock operations? And how does that compare 
to mining in other countries with comparable environmental 
standards?
    Mr. Comer. Thank you for the question. If you were to look 
at other countries such as Australia and Canada, they have very 
strong environmental laws, and they take 2 to 3 years to permit 
mines and properties and projects just as complicated as those 
that we permit here.
    One of the problems with the law as proposed is that it 
adds new layers of NEPA analysis and the leasing decisions as 
the Federal Government chooses which land should be available 
and should not be available for further exploration after 
having removed 50 percent of those lands from availability.
    In the United States, a typical mine project, hardrock 
mining project, takes right around 10 years plus or minus.
    Mr. Stauber. Next question. How would you characterize the 
environmental protections in the United States compared to 
other major producers of critical minerals in the world such as 
China?
    Mr. Comer. The United States has top of class environmental 
protections. To say that there are no controls over how mines 
are developed or operated is just a simple fallacy. Part of the 
reason it takes 10 years is because of the 40-plus 
environmental and land management laws that have to be complied 
with. No mine is going to open today that will discharge air or 
water emissions that violate the law. Our protections are very 
strong.
    Mr. Stauber. As they should.
    Mr. Comer. As they should be.
    Mr. Stauber. Yes. Thank you for those questions.
    Chairman Lowenthal and Ranking Member Gosar, I want you to 
know, and other members of this panel, I want you to know how 
important mining is to the state of Minnesota and this Nation, 
the critical elements that we mine, copper and nickel.
    We need mining to transition into alternate sources of 
energy--windmills, thousands of pounds of copper. It can be 
mined in northern Minnesota, following strict standards. Good 
paying jobs. And it will be a great part of our economy.
    We have permitted the very first copper-nickel mine in the 
state of Minnesota that has met or exceeded every environmental 
standard. And we are going to bring great paying jobs to this 
state. It is called the Duluth Complex. It is the biggest 
precious metals find in the world. And we can mine it safely, 
following standards, bringing great-paying jobs to our 
community.
    And we talk about reclamation. I would invite anybody to 
come up to northern Minnesota's Iron Range. I will show you 
reclamation, how it should be done. We have deer. We are 
harvesting hay. We have bees. We have ducks. We have birds. It 
is beautiful.
    Mr. Chair, I yield----
    Dr. Gosar. Would the gentleman yield for a second
    Mr. Stauber. The gentleman will yield.
    Dr. Gosar. Will the gentleman answer me a question? The 
cleanest water in Minnesota is located where?
    Mr. Stauber. In the Iron Range.
    Dr. Gosar. In reclaimed mines, is it not?
    Mr. Stauber. That is correct.
    Dr. Gosar. I thank the gentleman.
    Mr. Stauber. Mr. Chair, that is all I have. I yield back. 
Thank you.
    Dr. Lowenthal. Thank you.
    I now recognize Chairman Grijalva, Chairman of the Natural 
Resources Committee, and also the sponsor of H.R. 2579, the 
Hard Rock Leasing and Reclamation Act of 2019.
    Mr. Grijalva. Let me first thank you, Chairman Lowenthal 
and Ranking Member, for having the hearing. It is a very 
important hearing. And the issue of reforming the 1872 Mining 
Law will, no doubt, as this legislation proceeds, be a source 
of debate, to say the least. But it is a necessary debate that 
we need to have. And I appreciate, Chairman Lowenthal, you 
scheduling this meeting, and to the witnesses, thank you for 
being here.
    For a decade now in southern Arizona, the Rosemont Mine has 
been a point of opposition by the vast majority of the 
community. And yet, 10 years later, as Chairman Manuel said, 
the permits continue to be issued, have been issued for it, and 
the litigation continues in all the various courts around 
there. And it seems that litigation is the last stop.
    And regardless of the impacts on the environment, water 
quality, sacred sites, or the opposition of the Pascua Yaqui 
Tribe, the Hopi Tribe, the Tohono O'odham Tribe, the mine has 
been permitted. And that is because the land managers repeat 
that under the Mining Law of 1872, they are not allowed to turn 
down a mine regardless of impact. And their ability to say no 
is non-existent.
    And I think that much of the controversy around the issue 
of mining, and where it should be and where it should not be, 
rests with that clause and that particular power that has been 
given to the mining industry. And we are not talking about the 
little guy with his donkey going up the hill; somebody 
grubstaked him for him to go look for a precious metal, gold or 
silver. We are talking about a multi-national industry, 
particularly companies from Canada and Australia that were 
mentioned as being on the cutting edge of environmental 
protections.
    I want to ask you in one aspect of this whole discussion, 
Chairman Manuel, the O'odham Nation has long dealt with the 
impacts, as you mentioned in your statement of mining on your 
lands.
    Could you tell us the impacts to your land and water, 
elaborate a little more regarding the Freeport and Asarco 
Mines, Mr. Chairman?
    Mr. Manuel. Thank you for the question, Chairman Grijalva. 
When the mine was put in place on the Nation back in the 1950s 
by Hecla Mining Company at that time, which was from Canada, 
and then they started mining. And it is up on a mound, and 
there are communities below those mounds.
    They started mining underground, the oxide and sulfide. And 
they started putting in acid underground. That acid got into 
the underground water and started traveling and got to the 
communities there. Right now, EPA is involved as far as the 
cleanup, and it is a Superfund site. We have walls around the 
area, and the contamination is still moving away from the mine. 
So, that is our major concern.
    Mr. Grijalva. Thank you, and I think the point that the 
Chairman made should not be ignored, that the lack of 
consultation on the part of the Federal Government with regard 
to a Federal asset, with a trust responsibility to consult in a 
meaningful and real way with tribes before the fact, not after 
the fact. And I think the Chairman pointed that out.
    Mr. Davis, your situation is very similar to the one that 
we are dealing with in Arizona. You fought the proposed mines 
at the doorstep of the Yellowstone?
    Mr. Davis. That is correct.
    Mr. Grijalva. And people are fighting to keep the Grand 
Canyon free from uranium mining, close to the Grand Canyon, an 
iconic treasure. And you mentioned also, and it was part of the 
overall lands package, that it was approved into law to create 
a buffer around that your organization fought so hard for, and 
that my colleagues on the other side of the aisle supported, to 
create a buffer next to Yellowstone from mining, effectively 
banning mining from that area in order to conserve and protect 
that.
    I find that interesting because I am sure there will be 
oppositions to any kinds of equal protections in other parts of 
the country, which is another legislative tool that we have 
here in Congress to stop that. And I congratulate your group in 
doing that and getting that done, and convincing your elected 
officials to respond to that.
    These mines in Yellowstone, you said they are devastating 
to business. Could you elaborate on that? What would have 
happened? Employment? Revenue? Local tax base? Et cetera?
    Mr. Davis. Just my valley alone sees $70 million a year in 
tourist business based on fishing. But the region itself sees 
almost a billion dollars, and again, it drives 13,000 different 
jobs. So, I have to underscore, this is not about being anti-
mining, and I certainly appreciate the gentleman from 
Minnesota.
    Montana is laden with extractable minerals. It is what we 
are going to mine, how we are going to mine, and where we are 
going to mine it. And our big contention is that communities 
should have a very loud say in whether that is the place it is 
going to happen, instead of having a golden ticket to come into 
your community, especially as a foreign corporation, and set up 
shop without any penalties or without any respect to the 
community and its way of life and what does drive that economy.
    Their right certainly should not supersede a right that has 
been entrenched for a hundred years. My business is 120 years 
old. I have my life on the line. I have my family's life on the 
line. So, the impact, especially with today's technology and 
today's machinery, to come in 3 miles from the highway, the 
corridor to Yellowstone, and start open pit mining, it would 
devastate our economy. You would be trading one for another.
    Dr. Lowenthal. Thank you, Chairman Grijalva.
    I now recognize Representative Amodei for 5 minutes.
    Mr. Amodei. Thank you, Mr. Chairman, and thank the 
Committee for its courtesies in allowing me to participate in a 
hearing for an industry that is fairly important in my 
district.
    First of all, I would like to ask anybody on the panel if 
you have any familiarity with the state of hardrock mining in 
Nevada. And if so, please raise your hand and tell me what that 
is.
    Mr. Comer?
    Mr. Comer. Thank you. I have visited mines in Nevada and am 
familiar with gold mining in Nevada. In addition, I reviewed, 
in some efforts in mine transactions between companies, many 
mines in Nevada.
    Mr. Amodei. OK. I appreciate that. Anybody else?
    [No response.]
    Mr. Amodei. OK. And it not that I expected you to or that 
is a wrong answer or anything like that. But I want to use my 
time to kind of, in keeping with the theme of the hearing, talk 
about reforming the Mining Law of 1872 because anything with a 
date of 1872 suggests that perhaps it is time to take a look at 
that and update things. That is not a wild thought, and I 
support that.
    But the challenge before us in doing that is doing that 
with an open mind, and doing that with your head on a swivel, 
and doing that with a mind to all things relevant, whether that 
is tax, whether that is permitting, whether it is all those 
things. And let me just state so it is clear, it is time. We 
should take a look at that, and we should do some reforms.
    But as we do that, we need to take a look at how things are 
going. And I am not going to tell you how things are in your 
jurisdictions or things like that. But I do know some things 
about what is going on in my jurisdiction. And in my 
jurisdiction, when we talk about what are we going to do, for 
instance, for taxing those Federal lands which most of the 
mining takes place on, it is like, fair enough. Let's talk 
about that.
    Let's talk about how mining in Nevada pays over $15,000 an 
employee in state, local, and Federal taxes. The next closest 
industry is about $1,100. That does not mean those industries 
are bad industries. It just means that we should not start, at 
least in that neck of the woods, on Federal land with the 
premise that it is not paying its way.
    Let's talk about a living wage in Nevada, because guess 
what? If you pay high wages, you also pay Federal income taxes. 
So, when we talk about wages in the hardrock mining industry in 
my state, those people can afford their food. They can afford 
their health care. They can afford their medical care. They can 
afford all those things because they are paid very well.
    And let's talk about their impact on public safety, because 
it is funny--those companies, before they turn you loose on 
their sites or underground, tend to do things like drug and 
alcohol test you. So, they are not commonly appearing in your 
courts and having to be dealt with in those contexts. It does 
not mean we should not look at them. It does not mean we should 
not update the law. But we should do it with an eye toward all 
facts that are relevant.
    Let's take a look at another thing. The state of Nevada 
said, hey, we want you to pay net proceeds of minerals. So, 
after you do all the things you do, which is pay people, which 
is what we like; and after you do things like provide good 
health care and good retirement and all those sorts of things, 
we also say, we want you to pay net proceeds.
    You know a funny thing about net proceeds is, when we have 
an eye toward increasing those taxes, that is an automatic 
deduction from what their state net proceeds are. We should be 
mindful of what that does because I will tell you, as having 
served in Nevada Legislature, they will go, whoa. If you are 
going to affect our income stream, we are going to go back and 
revisit that.
    I'm not saying they should not. I am just saying we ought 
to know that before you enact something, which basically may 
say those 500 people working at that mine, extracting whatever 
the mineral is, may not have a job any more. May not. I'm not 
saying, ``Oh, my God, the sky is falling.'' I am just saying, 
we should do that, all these things, with those things in mind.
    And let's talk finally about permitting. If a mine is 
seeking a permit in an area that does not pass NEPA muster, 
then they should be denied. The process is set up for that. But 
let's not start with the premise on permitting where it is 
like, oh, if you apply, you should have one. There are denials 
and they should, quite frankly, be appropriate in some 
circumstances.
    But when we talk about refining what we do with minerals 
and minerals extraction on Federal lands and elsewhere in this 
country, let's do so with a 360-degree look at all the issues, 
and do it in a way that says, if there is a part of it, then 
the final part is this.
    Nevada is a success story in reclamation. It doesn't mean 
mission accomplished. You never say that. It is a success story 
in reclamation. So, when we talk about what are we going to do 
with reclamation and we are going to use some of these funds 
for that, let's also have our head on a swivel because, quite 
frankly, if it isn't broke in some areas, we don't need to 
spend Federal money on it.
    Thank you, Mr. Chairman, for your indulgence, and I yield 
back.
    Dr. Lowenthal. Thank you, Mr. Amodei, and welcome to the 
Committee.
    I am now going to recognize myself for 5 minutes. And I 
want to go first to Chairman Manuel.
    Chairman Manuel, we have existing laws in this country that 
are designed to protect Native American cultural sites. Why 
aren't those laws enough to protect the sites from the impacts 
of mining? Why aren't the existing laws that we have sufficient 
to protect cultural sites from the impacts of mining?
    Mr. Manuel. Thank you, Chairman, for the question. The 
existing laws that are in place right now are good. But the 
problem that we encounter as we do consultation with the 
branches of the government, they don't fulfill their authority 
and their responsibility in protecting those in our behalf.
    That is why we are glad to see the laws being changed now 
to give us that consultation that is going to be put in place 
as far as protecting, fully protecting, these resources because 
right now, how we see it is the government does not really 
enforce that authority that they have on those entities.
    Dr. Lowenthal. Thank you.
    Mr. Comer, we have heard a lot about that if we move toward 
this leasing system, that it would be the end of mining in the 
United States. But other countries, such as Australia and 
Canada, have a thriving mining industry. In most of their 
territories, these countries utilize a mixed hybrid or a claims 
leasing system.
    Mining companies stake a claim until a discovery of a 
valuable mineral deposit occurs. At that time, these claims 
must be converted to a lease. Why shouldn't the United States 
maintain two different mineral development systems, both the 
locatable, which we are talking about, and also leasable? We 
already know that Minnesota is a locatable system. I'm sorry, 
Minnesota is a leasable system already.
    Mr. Comer. That is correct. But there are no leasable mines 
in operation in Minnesota right now. Leasing has many issues in 
hardrock mining. One of the issues is it is difficult to find 
mineralization that will yield a mine. The ability to have 
claims allows you to establish those locations over time and 
then develop them and even chase the mineralization.
    The exploration that was initially done in Minnesota was 
done in the 1950s and the early 1960s. Under a leasing system, 
you would not have your leases any more. They would have 
devolved to somebody else.
    Dr. Lowenthal. But I would like to follow that question. In 
both Australia and Canada, which have been cited as examples, 
and they are countries that have thriving mining, they have a 
hybrid system, one in which you originally receive a claim; 
once you strike the hardrock, you discover that mineral, that 
they must be converted to a lease.
    So, why is a lease not a problem there, and yet it would be 
a problem here in the United States?
    Mr. Comer. Mr. Chairman, you have to look at how the system 
operates. Certainly that is not what is described in this bill. 
This bill contains acreage limitations that would cause the 
forfeiture of leases. When we look at royalty----
    Dr. Lowenthal. Let me just follow up. You would be 
agreeable to a hybrid system such as what we find in Australia 
and Canada?
    Mr. Comer. Mr. Chairman, it is not what I am agreeable to. 
There is an industry out there that is very engaged in these 
issues. I think you will find the mining industry is eminently 
reasonable in how it views how it should operate, and those are 
discussions that may be appropriate to take up. But this bill 
does not contain a workable leasing system.
    Dr. Lowenthal. So, the problem is, and I will just end now, 
on what are the specifics of this bill, not that you oppose a 
leasing system?
    Mr. Comer. Again, no one really cares what I think.
    Dr. Lowenthal. Can we strike his entire record, then?
    [Laughter.]
    Dr. Lowenthal. With that, I now recognize my friend, the 
Representative from Louisiana, Mr. Graves.
    Mr. Graves. Thank you, Mr. Chairman. Mr. Comer, I actually 
appreciated your testimony.
    I have a question, actually, for the Chairman, if that is 
OK--Mr. Chairman, the sponsor of the bill? Any chance?
    Dr. Lowenthal. Yes.
    Mr. Graves. I just want to make sure I understand the 
purpose of the legislation. You just feel that this is a public 
asset, the minerals that are being mined, and so you feel that 
the public should be able to have some type of value assigned 
to that and be able to benefit from that like we do for oil and 
gas and things like that. Is that accurate?
    Mr. Grijalva. Essentially, yes.
    Mr. Graves. Thank you. And that is the only question I had. 
I just wanted to make sure I understand that.
    Do any of you--and, in fact, anybody in this room--I am 
curious about the royalty rates. The royalty rates are 
established at $10 an acre on top of the 12.5 percent--well, I 
guess the royalty rate is 12.5 percent. I think I saw there was 
a different royalty rate when they are at 8 percent as well.
    I am just curious, does anybody know where those numbers 
came from? Eight percent of the value of production, and then--
yes, not less than 8 percent, but then it has a 12.5 percent 
threshold as well. But, does anybody know where those numbers 
came from, 8 and then 12.5 percent?
    Ms. Lachelt. Representative, my understanding for the 12.5 
percent royalty rate is that is the same royalty rate for oil 
and gas on public lands.
    Mr. Graves. OK. OK.
    Ms. Lachelt. It is consistent.
    Mr. Graves. So, we have it based on oil and gas. There is 
some basis, arguably, but then as we heard Mr. Comer say that 
there are significant differences between oil and gas, where 
you go in and extract from a large reservoir--whereas in this 
case, I think it is a different scenario. But at least there is 
a basis.
    So, do all of you agree that if you have a public asset, a 
public natural resource, and it is being mined or being 
utilized, that the public that owns it should get some type of 
compensation or benefit? Or does anybody disagree with that? Do 
any of you disagree with that?
    Ms. Lachelt. I do not disagree. I believe that it levels 
the playing field for the hardrock mining industry with all 
other industries on public lands--oil, gas, coal.
    Mr. Graves. OK. And in this case, under the legislation, 75 
percent of the royalties or the revenues, they go into 
reclamation. They go into helping to clean up abandoned mines. 
That is correct. Right?
    [No response.]
    Mr. Graves. I just find it curious that in this case we are 
going to clean up abandoned mines, wherever in other scenarios 
there are strong efforts to make sure user pays or polluter 
pays; whereas in this case this isn't necessarily--this is 
disconnecting that. It is making other folks pay, potentially, 
for any type of environmental harm that may be caused.
    What are your feelings on the revenue sharing, where the 
states get 25 percent, the remaining revenues, 25 percent. So, 
none of this money is actually going to the Treasury. As I 
read, I think 100 percent--is that right--100 percent is going 
out? Because 75 percent goes to reclamation and 25 percent goes 
to states? What is that?
    Mr. Comer. Federal tax.
    Mr. Graves. Federal tax is what? Well, you still get 
Federal taxes. But of the royalties, though. so do you believe 
that 25 percent should go to the states?
    Mr. Davis. I believe if the states are left with the 
impacts of reclamation----
    Mr. Graves. No. But let's go back and remember that 75 
percent of the funds are going to actually do reclamation work. 
Right?
    Mr. Davis. Right. But the overall impact is going to affect 
the state. I personally believe that, yes.
    Mr. Graves. Anybody disagree with that, that states should 
get some type of compensation?
    [No response.]
    Mr. Graves. OK. The reason I bring this up, in Louisiana 
when we dig, when we mine, we hit water, so there is not a 
whole lot going on in Louisiana. The reason I bring this up is 
this. Under the Mineral Leasing Act right now, states get 50 
percent of the money from energy production on Federal lands in 
their states. They get 50 percent of the money, and there are 
no strings attached. They can do whatever they want with it. An 
additional 40 percent of those funds goes into the reclamation 
fund for water projects in the western states. So, 90 percent 
of the money effectively goes back.
    In the case of where I represent, South Louisiana, we have 
produced maybe $200 billion in royalties and bonus bids and 
rental payments to the Federal Government, and we get virtually 
nothing. I think we got 0.6 percent--0.6 percent. So, the 
Mineral Leasing Act gives up to 90 percent; under this bill 
they get 25 percent while the environmental impacts are being 
addressed. We have lost 2,000 square miles of our coast and we 
get nothing. Zero. Zip.
    And I just find it interesting how this Committee 
continues--just last week, or 2 weeks ago, whenever it was, we 
did a bill providing royalty-sharing for offshore wind. I am 
not sure what the environmental impacts of that are, but the 
territories are getting, under this bill, revenue-sharing from 
offshore wind production.
    If we care about the environment, I just do not understand 
why we have such disparity in our policies? Let me say, Mr. 
Chairman, I actually will support legislation--I don't know 
about the bill in its current form, but I will support 
legislation that provides some type of value back to the 
taxpayer.
    I believe there should be something there. I don't know 
that these royalty rates are set appropriately; maybe we 
auction it and see what the market determines. But I actually 
think the public should get something back, which is not just 
the disparity--and I am wrapping, Mr. Chairman; thank you for 
your discretion--not just the disparity on the lack of revenue-
sharing for Louisiana and states that produce offshore energy, 
but also I am going to bring in red snapper. I am bringing red 
snapper into this conversation. All my friends up here, they 
love it when I talk about this.
    But here we have again--and you are going to cut me off 
now----
    [Laughter.]
    Mr. Graves. Here we have again a scenario where--red 
snapper is a natural resource. It is a public asset. It is a 
public asset, and we just give it away for free. Why is it that 
now some things are worth money and we need to have a market 
and make sure taxpayers are getting something back, and in 
other cases we just give it away for free. I don't understand 
this Committee ever, ever.
    We have no consistency in policy, and it is all about just 
choosing winners and losers. And in this case, and the case of 
red snapper, the public loses. The public gets completely 
screwed. So, thank you. I am done.
    [Laughter.]
    Dr. Lowenthal. I am not sure I saw the exact relationship 
between the red snapper and this, but I always appreciate----
    Mr. Graves. You cannot distinguish minerals and red 
snapper. They look identical.
    Dr. Lowenthal. I always appreciate my Representative from 
Louisiana educating us. It is a pleasure.
    [Laughter.]
    Dr. Lowenthal. I would like to thank the witnesses--oh, oh, 
yes. It is with great honor, and the operative word is honor, 
that I represent the Ranking Member for 5 minutes, Ranking 
Member Gosar.
    Dr. Gosar. Well, first of all, just to correct the record 
with my colleague from Louisiana, it is not a 50-50 split. As 
you will remember a couple years back, it is 48. Yes. The 
Federal Government stole 2 percent from the states.
    Just to correct a couple records here. Mr. Davis, do you 
take deductions on your taxes?
    Mr. Davis. Of course.
    Dr. Gosar. That is what I thought. Let me ask all the 
members on the panel: Do you have a cell phone?
    Mr. Davis. Of course.
    Ms. Lachelt. Yes.
    Mr. Comer. Yes.
    Dr. Gosar. How about you?
    Mr. Manuel. Yes.
    Dr. Gosar. You have one.
    Mr. Comer, when we look at litigation situations, Canada is 
a little bit different than the United States, is it not?
    Mr. Comer. Yes.
    Dr. Gosar. So, what is that? I think it is English system, 
so what ends up happening? Loser pays?
    Mr. Comer. Yes, sir.
    Dr. Gosar. Oh, so it's a very, very different application 
here. And that is why we get the streamlined effects in Canada, 
because we do not get the frivolous lawsuits. OK?
    Another thing I need to set straight. Chairman Manuel, 
thank you for coming. You talked about government-to-government 
consultation. Is it not true that the government reached out to 
you and you refused to talk to them? Yes or no?
    Mr. Manuel. No.
    Dr. Gosar. Let the record reflect that they turned down 
government-to-government consultations numerous times with the 
Forest Service and with the company.
    So, when we start talking about production, Mr. Comer, when 
we do these rare earths in particular--I am going to be very 
pointed about these--they are a little harder to deal with, are 
they not?
    Mr. Comer. Yes, sir.
    Dr. Gosar. Hardrock has some very different applications, 
does it not?
    Mr. Comer. Yes, sir.
    Dr. Gosar. What do we have to do with these that makes it, 
particularly hardrock, a little bit different than everything 
else?
    Mr. Comer. Well, first of all they are called rare earths 
partly because of how they are described, but they are very 
rare. They are located in very small quantities. They require 
extensive processing. And they are even more difficult to find. 
Yet, their applications are essential to our current economic 
future.
    Dr. Gosar. You saw the charts that I put up there. If we 
continue down this pathway, you see the bloom where we are more 
reliant on other forms of these minerals all the way around the 
world. How does that look to our intellectual property that is 
so much based upon these rare earths?
    Mr. Comer. It is a challenge. We don't control any of the 
rare earths that are a critical part of our technology and 
energy resources that we are advancing that are advanced, that 
are not conventional in nature.
    Dr. Gosar. In fact, they have a monopoly, do they not?
    Mr. Comer. An absolute monopoly, sir.
    Dr. Gosar. I mean, they actually run the worldwide market, 
so what ends up happening is, they keep raising the price, 
raising the price. And then it gets advantageous for companies 
to come in. And once they start investing money, what they do 
is they flood the market, do they not?
    Mr. Comer. That is certainly a possibility, sir.
    Dr. Gosar. Well, they do. They do. Do you think the demand 
for these elements are going to go down, particularly with the 
less aspect for renewable energy in wind and solar?
    Mr. Comer. I don't see any scenario in the short term where 
mineral demands will diminish.
    Dr. Gosar. You made a comment that we would spend as much 
on copper in the next 5 years as we did in the last 500.
    Mr. Comer. Twenty-five years.
    Dr. Gosar. Twenty-five years. I am sorry. Is that true?
    Mr. Comer. That is my understanding, yes, sir.
    Dr. Gosar. Do new cars, electric cars, have less or more 
copper?
    Mr. Comer. A current electric vehicle uses four times the 
amount of copper as a conventional car, which uses 
substantially more than a car from 20 years ago. Just think of 
all the motors that exist in cars that have copper windings 
compared to the cars we grew up in.
    Dr. Gosar. I am going to go back to mitigation because it 
was brought up. Once again, I just want to bring this up. There 
are abandoned mines, but the problem with that mine was alluded 
to by the EPA. Their decisions--my wife is from Durango, by the 
way, so I do know a lot of people there. The problem for that 
spill was a catastrophe of errors, and particularly with EPA. I 
did not ask a question. That is fact.
    So, when you look at these, Mr. Comer, as far as these rare 
earths, are they better done in this country or in China?
    Mr. Comer. There are many reasons we are better off having 
minerals produced in the United States. It creates jobs. It 
creates tax revenues. We do it too high, high environmental 
standards. There are a lot of benefits. In fact, you then 
control the market.
    Dr. Gosar. And one last question. When we talk about 
abandoned mines, part of the big problem with abandoned mines 
is the litigation that prohibits us. We have been dealing with 
this on this Committee over and over again. For one, in 
Arizona, we have Resolution Copper that mitigated a past mine 
site and have invested almost a billion dollars in that 
reclamation application.
    And there are plenty of groups that want to do that. But 
what ends up happening is the environmental groups will refuse 
to sign off on the litigation. That is part of the problem. And 
that goes back to my whole application that in Canada they have 
a loser pays, so the frivolous lawsuits are few and far 
between.
    The last point I want to make is the reason why there are 
multinational companies is we have put all the American 
companies out of business. That is the problem. In order to 
mine in the United States, you have to have holdings around the 
world to subsidize what you have to put through here because 
the time it takes from discovery to mining is sometimes 20 
years.
    With that, Mr. Chairman, I yield back.
    Dr. Lowenthal. Thank you. And I want to thank the witnesses 
for their testimony and the questions. I think we had a full 
discussion of the issues before us.
    Before I kind of summarize and end it, I would like to ask 
the witnesses if there is anything that you would like to 
provide, some concluding statement? No more than a minute. Or 
some question that you wish you had been asked. Either some 
concluding statement or some question that you wish we had 
asked that you want to ask yourself and answer it here.
    No obligation. If you want to answer it, you can. Is there 
anything you would like to tell us now that we have not asked 
you? Mr. Davis?
    Mr. Davis. It is really not a question. It is just a 
thought. This mining law, which has not been touched for 147 
years, needs to be overhauled. There is no question about that. 
I guess my question to you is: In my business, we sit once a 
year and we envision what the future looks like. If Congress, 
if a bipartisan Congress, were to sit down and rewrite this 
law, envision this law, rewrite this law today for the future, 
what would it look like?
    And I cannot imagine for a second that it would look 
anything like what is on the books now and what seemingly is 
ignored or passed away. We have heard how it needs to be worked 
on. It needs to be thought about. It does, and that is what 
today is about. Today is to begin that process.
    But if we were writing this law today fresh, if Congress 
was rewriting it, what would it look like? And I think that is 
my question to Congress, to a bipartisan Congress.
    Dr. Lowenthal. Thank you. Anyone else wish to make any 
final statement? Concluding statement? Or ask a question that 
we have not? Mr. Davis asked us a question. Yes?
    Mr. Comer. Members, thank you for this opportunity. 
Companies put hundreds of millions and billions of dollars into 
opening mines. If they don't have security of mineral tenure, 
it is not a true investment if you are subject to losing that.
    With respect to how we look at royalties, if you look at 
the profits pie in mining, there is not 12 percent of a gross 
royalty. There is generally not 8 percent. There is less than 3 
percent. So, the royalty issue is important because hardrock 
mineralization is difficult to find. It is expensive to 
process.
    If you look at a typical copper mine, you dig hard rock. 
you crush it. You screen it. You grind it. You mill it. Then 
you only have 30 percent copper. And you may have had 
transportation skips. Then you send it to a smelter to get to 
80 percent, and then to a refinery. It is very expensive.
    These are small deposits. They are not regional deposits. 
The exploration is challenging. So, when you look at a royalty, 
it is important to look at: What royalty number are you using? 
How are you applying it? And does it make sense for the 
mineral? So, it is not a one-size-fits-all, and mining is not 
one-size-fits-all.
    Thank you very much.
    Dr. Lowenthal. Thank you, Mr. Comer.
    Chairman Manuel?
    Mr. Manuel. I just want to state that I do understand the 
purpose and the intent of copper mining that is being done on 
our Nation's lands and the benefits out of the mining. But I 
just wanted to say that we would rather have consultation so we 
can mitigate the negative impact it is going to have on us.
    I did meet twice with the U.S. Forest Service Director 
there in Tucson, and I met twice with the Corps of Engineers 
that is overseeing the project on the 404 permitting. So, we 
had those meetings. Thank you.
    Dr. Lowenthal. Thank you.
    Ms. Lachelt?
    Ms. Lachelt. Thank you, Chairman. I would like to start by 
just reiterating. This law is almost 150 years old, and we 
desperately need a source of funding to be able to clean up the 
500,000 abandoned mines. This bill would provide for that. It 
would ensure that no community would have to go through what my 
community went through with the Gold King Mine spill.
    And even though the EPA was working, trying to fix the 
mine, it was a net inevitable that that mine was going to blow 
out. And we could experience another mine blowout at any point, 
so we very much need a source of funding for that.
    I would also like to respond by stating that the industry 
on Federal lands enjoys exemptions from many of our laws that 
protect water quality--the Clean Water Act, the Resource 
Conservation and Recovery Act. And in terms of NEPA, it doesn't 
apply in terms of they cannot select a no-option alternative. 
This reform would also give communities input into the kind of 
development that may or may not be appropriate in their 
backyards.
    And I believe that every community needs a say, and not 
just to have a mine forced upon them in their watershed. And 
also, folks really want to make sure that they are sourcing 
their minerals from mines that practice best practices. And it 
is about responsible mining. We don't want to source our 
minerals from companies that can destroy an entire watershed 
for a community. Thank you.
    Dr. Lowenthal. Thank you. And I would like to offer one 
concluding thought, after listening to both the panelists and 
also to the Members behind the dais.
    It is clear, and from the arguments from both sides on this 
issue and what was stated, I think quite eloquently, by the 
Representative from Louisiana, our hardrock mining system needs 
to be fixed, I think. The mining industry knows this. They are 
scared of changing the existing system. But they also have made 
it clear that the existing system that we have today is not 
ideal.
    Meanwhile, even though I do agree that it would be good to 
reduce our dependence on imports or the importance of finding 
new deposits of minerals here in the United States that we need 
for our new clean energy future, I cannot support doing that 
under the Mining Law of 1872.
    I think what I am saying is that there is a win/win to be 
found here. We need the mining industry to come to the table to 
find that win/win. And, unfortunately, we haven't seen much 
appetite on their side to want to come to the table to do that. 
But I believe there is a way to reform the Mining Law, protect 
special places, as has been identified, by respecting tribes; 
that we can clean up abandoned mines and solve some of the 
problems that the mining industry faces. But I think we are 
going to need to all work together to do that.
    In conclusion, I want to say that the Members may have some 
additional questions that they may want to ask you, members of 
the panel. And we will ask you to respond in writing to those 
requests. Under Committee Rule 3(o), members of the Committee 
may submit questions to the witnesses within 3 business days 
following this hearing. And the hearing record will be open for 
10 business days for you to respond to those questions.
    If there is no further business, and not hearing any, this 
Committee stands adjourned.

    [Whereupon, at 11:43 a.m., the Subcommittee was adjourned.]

            [ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]

Submission for the Record by Rep. Gosar

                     Slides Used During the Hearing

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Submission for the Record by Carolyn Shafer, Patagonia

                             WE THE PEOPLE


                    OF 2019 ARE BEING GREATLY HARMED


                   BY THE ANTIQUATED 1872 MINING LAW


We the People

        of 2019 have no voice to speak for the ecosystem that 
        is in harm's way if a mining company ``owns'' 450 acres 
        of patented, private land on which it can mount an 
        underground mine with the intention to blast large 
        tunnels under 23,000 acres of unpatented claims on 
        Forest Service public lands through a highly fractured 
        hydrogeology in a global biodiversity hotspot 
        identified as one of the top five places in the world 
        MOST IN NEED OF RESEARCH and PROTECTION.

                                                      --Notes 1, 2, & 3

We the People

        of 2019 and the next seven generations are being robbed 
        of an abundant future which we define as a healthy 
        planet and nutritious foods for all.

We the People

        of 2019 recognize that as the anthropocene unfolds, it 
        is vital to protect and foster the resilience of the 
        ecosystem and to allow for the possibility that the 
        highest value is that the materials should be left in 
        the ground.

We the People

        of 2019 continue to be financially impoverished by the 
        environmental damages of legacy mining as we, the 
        taxpayers, bear the economic and social cost of 
        restoration.
We the People

        of 2019 suffer the health damages of legacy mining and 
        21st century industrialized mining.

We the People

        of 2019 are puzzled that the government is giving away 
        extracted materials for free to the mining companies.

We the People

        of 2019 living in the Patagonia Mountains and Sonoita 
        Creek watershed in Southern Arizona implore our elected 
        federal officials to support ===bill #=== to stop the 
        infringement of the rights of WE THE PEOPLE of 2019.

                                 NOTE 1

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                               NOTE 2

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                               NOTE 3

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                  Patagonia Area Resource Alliance


                       www.PatagoniaAlliance.org


[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S 
                            OFFICIAL FILES]

    --  Larch Company, Andy Kerr, Statement on H.R. 2579

Submission for the Record by Rep. Gosar

  --  Foreign Policy Analytics Special Report, ``Mining the 
            Future--How China is set to dominate the next 
            Industrial Revolution,'' May 2019.

                                 [all]