[Senate Hearing 117-449]
[From the U.S. Government Publishing Office]
S. Hrg. 117-449
AN EXAMINATION AND CONSIDERATION OF
UPDATES TO THE MINING LAW OF 1872
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HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 5, 2021
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
45-810 WASHINGTON : 2023
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JOE MANCHIN III, West Virginia, Chairman
RON WYDEN, Oregon JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont MIKE LEE, Utah
MARTIN HEINRICH, New Mexico STEVE DAINES, Montana
MAZIE K. HIRONO, Hawaii LISA MURKOWSKI, Alaska
ANGUS S. KING, JR., Maine JOHN HOEVEN, North Dakota
CATHERINE CORTEZ MASTO, Nevada JAMES LANKFORD, Oklahoma
MARK KELLY, Arizona BILL CASSIDY, Louisiana
JOHN W. HICKENLOOPER, Colorado CINDY HYDE-SMITH, Mississippi
ROGER MARSHALL, Kansas
Renae Black, Staff Director
Sam E. Fowler, Chief Counsel
Peter Stahley, Professional Staff Member
Richard M. Russell, Republican Staff Director
Matthew H. Leggett, Republican Chief Counsel
Justin Memmott, Republican Deputy Staff Director for Energy
C O N T E N T S
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OPENING STATEMENTS
Page
Manchin III, Hon. Joe, Chairman and a U.S. Senator from West
Virginia....................................................... 1
Barrasso, Hon. John, Ranking Member and a U.S. Senator from
Wyoming........................................................ 2
Cortez Masto, Hon. Catherine, a U.S. Senator from Nevada......... 8
Daines, Hon. Steve, a U.S. Senator from Montana.................. 37
WITNESSES
Haddock, Rich, General Counsel, Barrick Gold Corporation......... 8
Hanna, Autumn, Vice President, Taxpayers for Common Sense........ 23
Wood, Chris, President and CEO, Trout Unlimited.................. 30
Brown, David, President and CEO, Wyo-Ben, Inc.................... 37
Sweeney, Katie, Executive Vice President and General Counsel,
National Mining Association.................................... 45
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
American Exploration and Mining Association:
Statement for the Record..................................... 207
White paper entitled ``Mining Law Fifth Amendment Takings
Analysis'' dated July 2021................................. 219
Barrasso, Hon. John:
Opening Statement............................................ 2
Chart depicting minerals used in electric cars compared to
conventional cars.......................................... 4
Chart depicting minerals used in clean energy technologies
compared to other power generation sources................. 6
Brown, David:
Opening Statement............................................ 37
Written Testimony............................................ 39
Responses to Questions for the Record with attachment........ 130
Coeur Mining:
Statement for the Record..................................... 237
Cortez Masto, Hon. Catherine:
Opening Statement............................................ 8
Daines, Hon. Steve:
Opening Statement............................................ 37
Haddock, Rich:
Opening Statement............................................ 8
Written Testimony............................................ 11
Responses to Questions for the Record........................ 82
Hanna, Autumn:
Opening Statement............................................ 23
Written Testimony............................................ 25
Responses to Questions for the Record........................ 118
Industrial Minerals Association-North America:
Statement for the Record..................................... 244
Lee, Hon. Mike:
Chart depicting U.S. Uranium Supply to Commercial Nuclear
Reactors, 1950-2017........................................ 59
Manchin III, Hon. Joe:
Opening Statement............................................ 1
Society for Mining, Metallurgy & Exploration:
Letter for the Record........................................ 249
Statement for the Record regarding critical and strategic
minerals................................................... 252
Sweeney, Katie:
Opening Statement............................................ 45
Written Testimony............................................ 47
Responses to Questions for the Record........................ 158
Western Governors' Association:
Letter for the Record........................................ 258
Policy Resolution 2018-09: National Minerals Policy.......... 259
Policy Resolution 2021-09: Cleaning Up Abandoned Hardrock
Mines in the West.......................................... 262
Wood, Chris:
Opening Statement............................................ 30
Written Testimony............................................ 32
Responses to Questions for the Record........................ 125
AN EXAMINATION AND CONSIDERATION OF UPDATES TO THE MINING LAW OF 1872
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TUESDAY, OCTOBER 5, 2021
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:01 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Joe Manchin
III, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
The Chairman. The Committee will come to order. We are here
today to discuss the Mining Law of 1872, which governs hardrock
mining on public lands, and to consider ways to bring this
outdated law into the 21st century. To put things in
perspective, back in 1872, Ulysses S. Grant was President and
signed legislation from this Committee establishing what is now
Yellowstone National Park. National parks are often called
``America's best idea,'' but at this point, I do not think
anyone would say the same about the Mining Law of 1872. It has
been more than 13 years since this Committee has held hearings
on mining reform and it is really time for us to look at
sensible updates that need to be done. I know we can pursue
mining reform responsibly, bearing in mind mining's importance
to our national defense and economic security. That includes
making sure taxpayers are getting a fair return on these
federal resources, and that we maintain American
competitiveness and encourage the development of secure
critical mineral supply chains. Debates surrounding our public
lands and natural resources are incredibly complicated. So I am
very glad we have this panel of experts before us for this
discussion.
I want to thank my friend and colleague, Senator Cortez
Masto, for requesting this hearing and helping to bring
everyone to the table. I believe that it is important that
taxpayers do not get shortchanged on revenue when it comes to
resources on federal lands, especially when compared to going
rates on state and private lands. I also believe it is crucial
for the United States to continue to be viewed as an attractive
jurisdiction for mining investments. Now, more than ever,
developing new sources of critical minerals is vital to our
energy independence and national security. It is true that we
do not have significant deposits of every kind of critical
mineral here in the United States, but for the elements that we
do have, like rare earths or lithium, we need to responsibly
develop domestic sources of those minerals, many of which are
on federal lands in the West.
It makes no sense at all to put our lithium-ion battery
supply chain in the hands of foreign actors like China when we
have lithium here that can provide a reliable source of
domestic manufacturing. To that end, the Energy Act that we
enacted almost a year ago, and the bipartisan infrastructure
bill pending in the House, would make significant investments
in a domestic critical mineral supply chain. Reduced investment
in mining on federal lands would counteract those efforts.
However, I believe that this new critical-mineral gold rush
actually means that mining reform is more timely than ever. For
the American public to support the necessary investments in
domestic mining, we need to make sure that we have mining laws
in place that help to address abandoned mine lands, provide for
reasonable land management, and ensure a fair return to the
taxpayer.
In 1872, in the aftermath of the California Gold Rush, the
mining law arguably made sense, as Congress tried to encourage
the development of the West. Today, one of the most obvious
problems is that the mining law fails to require a royalty for
hardrock mining on federal lands and continues to mandate the
existing claim and patent system. These are resources owned by
every single American. The fact that over $5 billion in
minerals can be mined each year, taken off the federal land,
and sold without a single penny in royalties is just crazy. It
makes no sense at all.
Also, rather than permanently repealing patents, Congress
has to pass a temporary fix each year to prohibit lands from
being patented and taken into private ownership for as little
as $2.50 an acre. Further, modern mining works at an enormous
scale, using modern technology that would have been
inconceivable back in 1872. Unfortunately, this scale has
contributed to some enormous abandoned mine problems, and the
public is often stuck with the bill. Unlike the coal country,
where every coal company pays into an abandoned mine land
reclamation fund, there is no revenue stream to address the
enormous legacy of environmental degradation from hardrock
mining in the western United States. It strikes me as fair that
taxpayers get a share of the profits and a means to address
abandoned mines in exchange for the privilege of conducting
mining operations on public lands.
While we may disagree on the precise path reform should
take, I hope we can all agree that the mining law is outdated
for the current needs of society and industry and that we
should carefully consider updates to address these shortfalls.
I look forward to the discussion this morning on how to strike
the right balance with updates to this antiquated law.
With that, I turn to my colleague, Senator Barrasso, for
his opening remarks.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Well, thank you very much, Mr. Chairman.
I agree with you, it is important and timely to hold this
hearing today. Just like last week's hearing, it comes at a
critical moment. For the last nine months, President Biden has
been pushing an agenda that would dramatically increase our
nation's demand for minerals. President Biden has pledged to
end new sales of cars and pickup trucks that run on gas or
diesel. The President, instead, wants Americans to drive
electric vehicles.
Earlier this year, Mark Mills testified before this
Committee that, ``Providing the refined minerals needed to
fabricate a single electric vehicle battery requires the
mining, moving, and processing,'' he said, ``of more than
500,000 pounds of materials.'' He went on to say, ``that's 20
times more than the 2,500 pounds of petroleum that an internal
combustion engine uses over the life of the car.'' This chart
from the International Energy Agency (IEA) makes a similar
point. It talks about electric vehicles and how much minerals
are needed all the way across, and for the color coding, the
blue is copper. You have nickel, manganese, and graphite. The
conventional car is just copper and nickel. And that shows the
difference in terms of the minerals that are necessary for an
electric vehicle and a conventional vehicle.
[The chart referred to follows:]
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Senator Barrasso. So at the same time President Biden wants
to shut down America's natural gas and coal-fired power plants,
he wants to do more along this line. The President, instead,
doesn't want coal, doesn't want natural gas. He wants utilities
to generate electricity from wind turbines and solar panels.
Mark Mills, again, went on before this very Committee and
explained, ``Compared with a natural gas power plant, both wind
turbines and solar panels require at least 10 times as many
total tons mined, moved, and converted into machines to deliver
the same quantity of energy.'' Again, this is a chart, not by
me, but by the International Energy Agency, and it makes the
similar point. At the top, offshore wind, onshore wind, solar,
nuclear, coal, and natural gas. The color coding is how much is
copper, how much is zinc, how much is silicon, chromium, all of
which shows much less need for these minerals in natural gas
and coal than we would have in either offshore or onshore wind
or any of these other sources of power.
[The chart referred to follows:]
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Senator Barrasso. In light of these goals, you would think
then that President Biden and Democrats in Congress would want
to make it easier for us to mine here in the United States for
these minerals that are necessary to do the sorts of things
that the Biden Administration's agenda is calling for. But
instead, this President and the House Democrats want to make it
more difficult--more difficult--to get to these minerals that
we need, and they seek to eliminate all mining on federal
lands. Well, as the Chairman said a little earlier, so many of
these minerals, where are they found? On federal lands. Last
month, House Democrats advanced partisan budget legislation,
their reckless tax and spending spree. That bill would impose
punishing royalties on existing and new mines on federal land.
House Democrats also plan to raise fees and impose a tax on
mining firms. The fees, of course, would be based, they say, on
the amount of dirt that they moved. You cannot make this stuff
up. House Democrats are planning to tax the dirt.
House Democrats also want to repeal the late Senator
McCain's bipartisan legislation to provide access to one of the
largest copper deposits in North America. This project would
alone create 3,700 jobs in Arizona. Their proposal is going to
devastate communities and workers in Wyoming, Nevada, Arizona,
and throughout the West. The House Democrats' legislation will
also be a giant gift for our adversaries overseas, like China
and Russia. According to the U.S. Geological Survey, the United
States is already very heavily dependent on China and Russia
for dozens of minerals. Many of these minerals are essential to
our national defense and our economic security. The last thing
President Biden and House Democrats should be doing is
increasing our dependence on China and Russia, but that is
exactly what they are doing.
So I am open to consider changes to the Mining Law of 1872.
Still, we must protect American workers, mining communities in
the West, and our nation's competitiveness. We also need to
recognize that the Mining Law of 1872 covers dozens of
different minerals. They each have their own market, which may
be dominated by foreign, state-controlled corporations, and
countries that are seeking to undercut U.S. mining firms. And
for that reason, a one-size-fits-all approach is not going to
work for me. We also must not limit our vision to the 1872
Mining Act. For example, Congress needs to enact meaningful
permitting reform with fixed deadlines for federal agency
action. Finally, I can only support changes if Congress
proceeds through regular order, and therefore, on a broad,
bipartisan basis. These changes are too consequential for
Congress to pursue them through the partisan budget process.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Barrasso.
I would like to welcome all of our witnesses to the
Committee and thank you for being here today to share your
expertise. Today, we have with us Mr. Rich Haddock, General
Counsel for the Barrick Gold Corporation. We have Mr. Chris
Wood, the President and CEO of Trout Unlimited. We have Autumn
Hanna, Vice President of Taxpayers for Common Sense. We also
have Katie Sweeney, Executive Vice President and General
Counsel of the National Mining Association. And we have David
Brown, President and CEO of Wyo-Ben, Inc.
So now we are going to start with Mr. Haddock and we have
Senator Cortez Masto for the introduction.
OPENING STATEMENT OF HON. CATHERINE CORTEZ MASTO, U.S. SENATOR
FROM NEVADA
Senator Cortez Masto. Mr. Chairman, thank you. Ranking
Member, thank you. First, just let me say thank you for holding
the hearing today. I so appreciate you----
The Chairman. Thank you for asking.
Senator Cortez Masto [continuing]. Working with us as well.
I know I urged you to do this.
Nevada's mining industry is critical to our economy. And as
you said, it is important for us to work together and find
solutions that support the many jobs and businesses it sustains
while also investing in our community. So I am looking forward
to the conversation today, and I am so pleased to be able to
introduce Rich Haddock, who is the General Counsel of Barrick
Gold Corporation.
Rich has worked in the gold mining industry for 30 years
and has been Barrick's General Counsel since 2014. Since
joining Barrick Gold Corporation in 1997, he has served in both
legal and operational roles, including Regional Counsel of
North America, the Vice President of Environmental, and
Regional President of North America. Prior to becoming an in-
house mining lawyer, Mr. Haddock was a partner with the law
firm of Holme Roberts & Owen, where he had a natural resources
and environment litigation practice.
Mr. Chairman, Barrick Gold Corporation began operating in
Nevada in 1986. In 2019, Nevada Gold Mines was formed, which
combined the significant assets of Barrick and the Newmont
Corporation of Denver, Colorado. Nevada Gold Mines is the
largest gold mining complex in the world and is operated by
Barrick. Nevada Gold Mines directly employs more than 7,000
people, and more than 4,000 people indirectly through their
contractors and local supply chains. Many of their employees
are third-generation miners, who have high-paying careers with
health and retirement benefits for themselves and their
families. There is no doubt it is a major economic driver, not
only for our rural counties in Nevada, but for the State of
Nevada.
I am so grateful and pleased to be able to introduce Mr.
Haddock as part of the panel today. Thank you.
The Chairman. Thank you, Senator Cortez Masto.
And now, Mr. Haddock.
OPENING STATEMENT OF RICH HADDOCK,
GENERAL COUNSEL, BARRICK GOLD CORPORATION
Mr. Haddock. Chairman Manchin, Ranking Member Barrasso,
Senator Cortez Masto, and members of the Committee, thank you
for inviting me to appear here today. I am Rich Haddock, a
general counsel at Barrick Gold.
Eighty-Five percent of Nevada is owned and managed by the
Federal Government. Gold mining is the largest hardrock mining
activity on federal lands, as recognized by the CBO last year,
and most of that is in Nevada, and 85 percent from Nevada Gold
Mines. So that makes mining law an issue of supreme importance
to Nevada and particularly to Nevada Gold Mines and its owners.
The mining law has survived so long because it works. But
while it works, it is not perfect, and there are refinements
and improvements that could be made. But there are two aspects
that are absolutely critical to preserve. The first we call
``self-initiation,'' which is the ability of the explorer to
determine where they want to explore. In other words, where the
geology leads them. The second is ``security of tenure.'' We
believe that a royalty discussion should not be a divorce from
key land-tenure issues and other aspects of the mining law.
The argument that hardrock mining pays nothing for mining
on federal land ignores the system. Nations take different
approaches to how they are going to share their mineral wealth,
and it is achieved through royalties, taxes, direct equity, or
a combination of those. The U.S. approach has not yet included
a federal royalty in the mix for locatable minerals and has
focused instead on income tax, much like other federal systems,
such as those in Australia and Canada. In our business, there
is a significant multiplier effect in the sense that we
contract with a wide array of providers who also pay their
corporate income taxes. However, in our federal system, it has
historically been left to the states to impose mining-specific
taxes that are, in effect, royalties. In Nevada, our royalty-
like tax is about eight percent of our net proceeds.
Whenever the issue of federal royalty has arisen in
Congress, going clear back to 1994, Barrick has supported a
reasonable, prospective net royalty. Today, in line with the
National Mining Association's position, we continue to do the
same. We support an additional claim fee earmarked for
reclamation of abandoned mine lands. The gross royalty proposed
by the House would increase the U.S. economic take to a higher
level than those in developed mining nations such as Canada and
Australia, and put it on par with developing nations that do
not have the same high operational cost, particularly labor
cost and long permitting lead times. The House proposal would
make the U.S. noncompetitive and drive production of minerals
critical to the strength of the U.S. economy and greenhouse gas
reduction goals into the hands of other governments.
There are three foundational concepts important to this
discussion. The first is that we turn dirt into gold. The ore
removed from the ground by itself is worthless. At our Carlin
Complex in Nevada, which is just one of our three main
complexes, initial investment in the mills, the processing
plants, and the mine infrastructure was about $7.5 billion.
Every year, we invest $1.6 billion to maintain our facilities
and produce the gold. Second, a hardrock royalty is not a cost
that can be passed on to the buyer. Metal prices are fixed on
the global market every day. Third, hardrock metal prices cycle
up and down based on factors beyond our control and beyond
supply and demand. The cycles are inevitable and sometimes
dramatic. The disadvantages of a gross royalty are that any
royalty will reduce the amount of ore by making it less
economic to mine.
A gross royalty, however, is particularly regressive, as it
dramatically shrinks the resource by making a greater
percentage uneconomic, thereby wasting natural resources,
reducing the return for the government, eliminating jobs
unnecessarily early, and making less product available for
commerce. A gross royalty on hardrock minerals is not a tax on
the value of the ore, rather it is a tax on the investment,
like that $7.5 billion investment I mentioned. A gross royalty
picks winners and losers because high-grade deposits can better
absorb it, while lower grade mines, which still otherwise
generate jobs and provide materials and taxes, would be kind of
uneconomic.
The advantages of a net royalty: a net royalty better
allows the miner to recoup the capital investment through the
commodity cycles. A net royalty automatically normalizes for
the cost of an operation, and then that way doesn't
discriminate between high- and low-cost mines or between
commodities. A net royalty allows a mine to survive the dips in
the commodity cycle while giving the U.S. the upside of the
peaks. In sum, a net royalty would ensure that there is a
viable mining industry to produce federal revenues and supply
security long into the future.
In closing, I want to acknowledge and thank Senator Cortez
Masto for her caring and tireless attention to the people of
Nevada and specifically, close to my heart, to the rural
people. She spends time and effort there and I appreciate it. I
specifically thank her for her support of the people who mine.
Thank you for your time. I am happy to answer questions or
submit additional materials as requested.
[The prepared statement of Mr. Haddock follows:]
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The Chairman. Thank you, Mr. Haddock.
Now we have Ms. Hanna.
OPENING STATEMENT OF AUTUMN HANNA,
VICE PRESIDENT, TAXPAYERS FOR COMMON SENSE
Ms. Hanna. Good morning Chairman Manchin, Ranking Member
Barrasso, and members of the Committee. My name is Autumn Hanna
and I am Vice President of Taxpayers for Common Sense, a
national, non-partisan budget watchdog. Thank you for inviting
me here today to discuss the General Mining Law of 1872 and its
long overdue need for reform. Founded in 1995, Taxpayers for
Common Sense's mission is to promote and protect the taxpayer
interest, advocating for fairness and transparency across the
Federal Government. As part of that, we believe that public
lands are taxpayer assets and should be managed in a way that
preserves their value, ensures a fair return from private
interests using them for profit, and avoids future liability.
The 1872 Mining Law fails by all of these standards.
I started my career at Taxpayers for Common Sense more than
two decades ago, and hardrock mining was one of the first
issues brought to my attention by our co-founder, Jill
Lancelot. She had been advocating for reform of the law since
the 1980's, working closely with both Republicans and
Democrats. I then had the opportunity in the mid-2000's to
advocate for 1872 mining reform when a bill led by former House
Natural Resources Chairman Rahall was introduced in the House.
It passed with strong bipartisan support. The reason there has
been broad support is because the 1872 Mining Law is so
egregious by modern standards. Though it governs some of the
most precious hardrock minerals, such as gold, silver, copper,
and platinum, and though these minerals belong to the American
public, it entitles the industry to take them free of charge.
This has led to a massive giveaway of hundreds of billions of
dollars in minerals.
Under the Mining Law of 1872, a claimant can patent or
purchase a mining claim for no more than $5 an acre. The public
is prohibited from charging market value for land subject to a
claim. To put that in perspective, the 2021 purchasing power of
$5 in 1872 is just 20 cents. Beginning in Fiscal Year 1995,
Congress began enacting one-year patent moratoriums. The patent
applications then in the pipeline have been grandfathered, but
new patents have not been issued since. However, continuing the
decade-long practice of one-year extensions makes little sense
for the mining industry or taxpayers. Some of these patented
lands turned into huge non-mining windfalls for developers,
eventually becoming ski runs and housing developments.
The total value of minerals mined on public land and the
forgone revenue for taxpayers from not charging a royalty is
unknown because insufficient data is collected by the Federal
Government. However, based on limited data from the State of
Nevada and regions in Colorado, in 2020 DOI was able to
estimate that the dollar value of hardrock mineral production
on land it manages was $5.3 billion in Fiscal Year 2019.
Despite the significant value of these minerals, under the
General Mining Law of 1872, hardrock mining companies are not
charged for the value of these resources through a royalty
rate. Other extractive industries, such as oil, gas, and coal
pay royalties for the resources they extract from public lands
and waters. The hardrock mining industry should not be any
different.
Mining companies must compensate taxpayers for extracting
these resources and provide an adequate revenue stream to
restore our public lands. Taxpayers for Common Sense recommends
Congress enact a gross income royalty for hardrock minerals
that is commensurate with other extractive industries and
applies to all hardrock production, current and future. There
are other ways to apply a royalty, but a gross income royalty
will be the most transparent, the easiest to administer, and
the least likely to be gamed or avoided. As a percentage, a
royalty would generate a return for taxpayers proportional to
the mineral value, automatically increasing when prices are
high and decreasing when prices are low. Setting a royalty rate
need not preclude flexibility in its administration. Setting
mineral-specific rates could account for variations in the cost
of their extractions. Additional safeguards could be put in
place, like providing discretion for the Department of the
Interior to provide royalty relief. Other royalty schemes are
more complex and convoluted and this allows for legal
gamesmanship that could leave taxpayers with empty reform
promises and little in the way of return on the extracted
taxpayer assets.
In the face of our current budget morass, and with the need
for smart fiscal policies, applying a royalty to hardrock
mining seems like low-hanging fruit and could provide taxpayers
up to $5 billion in new revenue over the next 10 years,
depending on the royalty rate applied. Unlike many fiercely
partisan issues, reasonable people from both sides of the
aisle, and many in the hardrock mining industry know we must
update the 1872 Mining Law. This was underscored by a poll we
commissioned last year with American Viewpoint, a conservative
polling firm that found that updating the mining law garnered
the support of 73 percent of Democrats, 67 percent of
Republicans, and 72 percent of independents. They were
concerned that it is not fair to give away federal resources
and treat hardrock mining different than other extractive
industries.
The case is clear. No business would set a price for land
and stick with it for 150 years. No one thinks simply giving
away valuable minerals for nothing makes fiscal sense. And no
company should be allowed to leave toxic messes on our land and
avoid the tab for cleanup. Taxpayers deserve better. I look
forward to working with the Committee to make reform a reality.
[The prepared statement of Ms. Hanna follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Ms. Hanna.
Now we have Mr. Wood.
OPENING STATEMENT OF CHRIS WOOD,
PRESIDENT AND CEO, TROUT UNLIMITED
Mr. Wood. Chairman Manchin, Ranking Member Barrasso, and
other Committee members, my name is Chris Wood and I am the
President and CEO of Trout Unlimited (TU). Thank you for
inviting me to testify here today on reforms to the 1872 Mining
Law.
As you all know, abandoned hardrock mines pose one of the
greatest water quality problems in the country. As the
Committee explores options for updating the 1872 Mining Law, I
urge you to advance a royalty or fee structure that is
reasonable and fair and that generates significant revenue to
clean up lands and waters affected by abandoned mines. Trout
Unlimited's mission is to bring together diverse interests to
care for and recover streams so that our children can enjoy the
joy of wild and native trout and salmon. In pursuit of this
mission, we have worked to restore Appalachian streams affected
by the curse of acid mine drainage and we have worked in dozens
of communities in the West to help clean up old and abandoned
hardrock mines.
Thanks to the support of our partners in the mining
industry, state and federal agencies, foundations and private
donors, we have recovered more than 200 miles of stream from
the scourge of abandoned mines. We appreciate your focus on
this issue. There is no lobby group for acid mine drainage.
There is no constituency for abandoned mines. It is time. It is
past time to make it easier for would-be Good Samaritans to
clean up pollution that they had nothing to do with creating. I
often say that TU is the patron saint of forgotten
environmental causes. The EPA estimates that 40 percent of our
western headwater streams are negatively affected by abandoned
mines. These dot the landscape like ticking time bombs waiting
to release their toxic brew of zinc and lead, cadmium and
arsenic, and other chemicals that are poisonous to people.
In the West, there are two primary obstacles to cleaning up
abandoned mines. The first is a lack of dedicated funding. We
applaud the Committee for including in its bipartisan
infrastructure package a proposal to provide $3 billion for
abandoned mine reclamation. That is a great start, but tens of
billions of dollars are needed to make our lands, waters, and
communities healthier. Unlike just about every other commodity
that is developed from our public lands, there is no excise
tax, royalty, or fee associated with the production of hardrock
minerals that is then allocated toward restoration and
remediation. We need a reasonable royalty to clean up these
legacy sites. For coal alone, the abandoned mine land
reclamation fund has raised more than $11 billion to clean up
and make safe coal mine sites in Appalachia and around the
country. TU cobbles money together from a variety of sources to
help pay for abandoned mine cleanup. Our staff are like
alchemists with their ability to leverage funding, but the
scope and the scale of the problem begs for dedicated funding
to clean up abandoned hardrock mines, just as we have for coal.
The second primary limiting factor is liability. When
groups such as Trout Unlimited, groups that have no legal or
historic interest in creating the abandoned mine waste, want to
clean up these mines, we become part of what the lawyers call
``the chain of custody.'' That means that we could spend a few
hundred thousand dollars to improve a stream from 25 percent of
water quality standards all the way up to 90. It might cost
another million or two to get that extra 10 percent increment,
and today's law would allow either the government or a person
who decides to file a citizen suit to come after us for the
rest. The Clean Water Act and CERCLA, or the Superfund Law, are
two of the most important laws for holding polluters
accountable and forcing the cleanup of many ruined streams and
landscapes. The challenge is that companies behind most of the
tens of thousands of abandoned mines in the West are long gone
and their owners are long dead.
Conservation can be defined as the application of common
sense to common problems for the common good. Resolving these
two issues will allow the nation to apply a lot of common sense
to a lot of common problems. Thank you again for the
opportunity to testify today. Trout Unlimited appreciates your
leadership and looks forward to helping you however we can.
[The prepared statement of Mr. Wood follows:]
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The Chairman. Thank you, Mr. Wood.
And now, we are going to have Senator Daines introduce our
next speaker, Mr. Brown.
OPENING STATEMENT OF HON. STEVE DAINES,
U.S. SENATOR FROM MONTANA
Senator Daines. Chairman Manchin, thank you.
I am very excited to introduce Mr. David Brown, the
President and CEO of Wyo-Ben, which is headquartered in
Billings, Montana. Wyo-Ben is a family-owned bentonite mining
and manufacturing business that supports 200 direct and
indirect jobs in Montana and Wyoming. Mr. Brown knows firsthand
the day-to-day work it takes to ensure that Montana jobs are
created and protected and that they provide for the local
communities around their operations.
Mining provides high-paying jobs, good benefits, and
provides much-needed local and state revenue for schools as
well as emergency services. He also knows how hard it is to
permit new mines in the United States and how this process puts
the United States at a disadvantage, forcing us to be reliant
on foreign countries, like China. I very much look forward to
hearing from him today on how we can make it easier to provide
the raw materials and the minerals we depend on for national
defense, high tech, healthcare, and energy production.
Mr. Chairman, thank you.
The Chairman. Thank you.
And now we will hear from Mr. Brown.
OPENING STATEMENT OF DAVID BROWN,
PRESIDENT AND CEO, WYO-BEN, INC.
Mr. Brown. Thank you, Senator Daines.
Mr. Chairman, Ranking Member Barrasso, members of the
Committee, my name is David Brown and I am the President and
CEO of Wyo-Ben, Inc., and represent the third generation of a
70-year-old, small, family-owned and managed mining and
manufacturing business with headquarters in Billings, Montana
and mining operations in the Bighorn Basin of Montana and
Wyoming.
Wyo-Ben directly employs 140 associates in our Wyoming and
Montana operations and indirectly 60 contract miners. We offer
some of the highest-paying jobs in the area and have a
significant impact on the economies of the rural towns and
counties where we operate. Wyo-Ben operates in the industrial
minerals segment of the mining industry and mines a unique
mineral called sodium bentonite. The sodium bentonite found in
Wyoming and adjacent states has quality characteristics that
are so unique that it is referred to worldwide as ``Wyoming
Bentonite.'' No other country is blessed with the exceptional
quality of bentonite we have in Wyoming. As a result, Wyoming
Bentonite is used as a base material to create hundreds of
different products that are sold worldwide. Your automobile
engine was made using bentonite as the binder in the sand mold
used to make the casting. The municipal landfill in your
community would have environmental issues if Wyoming Bentonite
wasn't used to form its impermeable bottom liner. It would be
difficult to drill a well of any type or install the miles of
telecommunication and utility lines buried throughout the
country without using Wyoming Bentonite to make the drilling
mud. The wine, beer, or fruit juice you enjoy would be
unpalatably cloudy if not for Wyoming Bentonite to clarify it
and finally, you would be unhappy and your cat would be unhappy
if not for Wyoming Bentonite's unique properties that allow
your cat's waste to form odorless clumps for easy removal from
the litter box.
It is important to note that around 90 percent of the
bentonite we use for our products is obtained from mining
claims on federal lands administered by the BLM. Our mining is
open pit, employing efficient, modern mining techniques,
utilizing scrapers and dozers and a ``continuous cast back''
mining technique we developed to place the overburden removed
from one pit directly into the preceding pit in the pit series.
This allows us to spread topsoil containing live native plant
seed directly on previously mined and backfilled pits. Our
mining circumstances and methods are quite different from those
found in other types of mining. The deposits we mine are long
and very thin and our disturbance footprint is small. A typical
pit is open only a matter of months before the overburden and
topsoil is replaced and we begin our planned revegetation
process. As a result of our mining practices, we have received
numerous awards from state, federal, and non-governmental
agencies for our exceptional environmental stewardship.
As a small business operating in an industry with
inherently low profit margins and heavy reliance on mineral
resources on federal lands, our ability to compete in the
domestic and international marketplace is dependent on our
ability to access and economically mine these resources. This
is why any discussion about changing the mining law--the rules
under which we have always operated--is of particular concern
to us. Several significant changes in the mining law are being
proposed in the hardrock mining section of the House budget
reconciliation bill that is currently being negotiated in
Congress. Any discussion of changes to the mining law must
recognize that this is an extraordinarily complex issue with
149 years of promulgated regulations and case law that must be
dealt with thoroughly and carefully. The bill provides neither
the time nor the appropriate venue for a detailed and
thoughtful discussion of the issues inherent in such a change.
The one-size-fits-all approach to mining law reform will
affect our company's ability to remain competitive and possibly
our viability to operate and offer good-paying, high-quality
jobs, not to mention the impact on the nation's supply chain
and the economy of our local communities. For all these
reasons, I respectfully request this Committee recommend to the
full Senate that the hardrock mining section be removed from
the final reconciliation bill before it is sent to the
President. I appreciate this Committee holding today's hearing
as the first step in moving this issue via regular order. I
look forward to continuing to work with you throughout this
process.
That concludes my formal statement. I will be happy to
answer any questions.
[The prepared statement of Mr. Brown follows:]
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The Chairman. Thank you, Mr. Brown.
And now we will hear from Ms. Sweeney.
OPENING STATEMENT OF KATIE SWEENEY, EXECUTIVE VICE PRESIDENT
AND GENERAL COUNSEL, NATIONAL MINING ASSOCIATION
Ms. Sweeney. Good morning. I am Katie Sweeney, Executive
Vice President and General Counsel of the National Mining
Association (NMA). Thank you, Chairman Manchin, Ranking Member
Barrasso, and Committee members for the opportunity to testify.
We meet at a time when the demand for minerals is
skyrocketing. In 2017, the World Bank projected that demand for
minerals will grow more than 1,000 percent due to the global
focus on green energy technologies. More recent estimates from
the International Energy Agency show that those early
predictions may have been far too conservative. As the world
began to awaken to this exponential growth in demand, the
pandemic unleashed a massive destruction of supply chains,
further exacerbating our mineral vulnerabilities. The Biden-
Harris Administration, early on, recognized that the path to
repairing our crumbling infrastructure and carefully
transitioning to cleaner energy and winning the electrification
race is paved with minerals. The Administration acknowledged
the importance of the mining industry through the January
``Made in America'' Executive Order's caution against the use
of materials that are not mined in America, and the February
``American Supply Chain'' Executive Order's focus on mineral
supply risks. With $6.2 trillion worth of domestic mineral
resources, a highly trained, highly compensated workforce, and
world class environmental and safety standards, we are well
positioned to help the Administration meet its objectives.
This Committee has led the way in educating on the
important role of mined materials as the front-end of the
supply chain for a modern way of life. Thank you for your
leadership on these issues, especially your awareness of the
impediments that stand in the way of revitalizing our mineral
supply chains, such as the inefficient permitting processes
that impair the industry's global competitiveness. This
Committee has been solution-oriented, taking positive steps
through the bipartisan American Mineral Security Act and the
Senate infrastructure package. When it comes to updates to the
mining law, we are at a crossroads. The direction we take can
either help secure domestic mineral supply chains or drive
mining investments offshore.
With so much in the balance, we question whether budget
reconciliation is the right vehicle for this discussion. There
are numerous issues outside of the scope of reconciliation that
should be considered in tandem, Good Samaritan cleanups being a
prime example. We would welcome an opportunity to engage in a
process not constrained by the confines of reconciliation.
Appropriate changes to the mining law will provide an
opportunity to decrease our dependence on foreign minerals,
promote job creation, drive economic growth, and transition to
renewable energy. We believe a net prospective royalty and
preservation of security of tenure are necessary to justify the
enormous upfront capital investments required to explore for
and develop minerals. NMA also strongly supports the use of
royalties for abandoned mine land cleanup as well as enactment
of Good Samaritan legislation. While modern mining reclamation
and financial assurance regulations will prevent new abandoned
mines, the industry acknowledges that the existence of legacy
sites impairs its social license to operate and is committed to
finding solutions.
In contrast, the highly partisan House reconciliation
approach contains punitive proposals to sideline the U.S.
mining industry, including an eight-percent gross royalty on
new operations, a four-percent gross on existing operations,
and a seven-cent per ton tax on dirt and material moved during
extraction. These excessive taxes and fees are the wrong path
at the wrong time for our country. Instead of raising revenue,
this approach will lead to premature closure of existing mines
and little interest in future U.S. mines, exacerbating our
unhealthy reliance on minerals from countries with far less
stringent environmental and labor standards. Additionally,
these new taxes and fees ignore the extensive taxes already
paid. Current total royalties, taxes, and fees--or so-called
``government take''--for U.S. mining operations is around 40
percent, similar to other major mineral producing countries.
The House reconciliation-proposed fees would push the U.S. well
above our competitors. Compromise is possible. The mining
industry is open to reasonable royalties.
Working together in a bipartisan way, we can assemble a
package that helps secure our nation's economic recovery and
prosperity for years to come without jeopardizing the mining
foundation of our country. Thank you for the opportunity to
testify and I am happy to answer any questions.
[The prepared statement of Ms. Sweeney follows:]
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The Chairman. Well, let me thank all of you so much and now
we will start the questioning.
I just want to say that I come from a coal mining state and
an extraction state. I understand royalties. I paid royalties
all my life. I cannot imagine why we do not receive royalties
on so many things that we produce in this country. We pay
severance tax. We pay extraction. We pay royalties on top of
that and we are able to compete and survive in the market.
That's all.
So I know this is all about the money. I just want to make
sure that we do not put undue pressure on mining companies, but
maybe you can understand from my point of view. If you buy coal
from the private sector and I own the land and you are the coal
company, I know that we are going to negotiate, okay? I know I
am going to be at seven, eight, nine percent. I know that if I
own the gas and oil rights, you are going to pay me 12 and a
half percent. We pretty much know the going rates.
And on that, I know that if I am the mining company, I am
responsible for putting money away per tonnage to take care of
the burden I leave behind. And so, we are working through all
that. I just have a hard time understanding this situation. I
am not disparaging anybody for working under how it has been
since 1872. We need to find a pathway forward that doesn't put
undue pressure on mining companies, but remains fair. That's
all we are looking for and truly, I want to thank Senator
Cortez Masto for bringing it to my attention and to our
Committee's attention to understand more of what you all are
facing. I also understand the severance tax is extremely low on
hardrock mining, which the states receive. I have been through
it. I want to make sure we understand.
I had a lot of gas companies object when I raised their
severance tax in West Virginia because I needed it for the
schools. I raised the severance tax and they all said, well if
you raise the severance tax, we are going to leave. I said,
``Well, please before you leave, bring all your leases back
because I am going to pay you for them. I do not want you to
leave mad because I will pay you. I want you to have a good
relationship with the State of West Virginia.'' I never had one
person turn a lease in. We all worked and we lived with it. So
we can make it work if we do it in a responsible way.
So I would just ask all of you, and I know Mr. Haddock and
Mr. Brown--coming from the private sector--this has been
debated and talked about a lot, and I know you are comparing it
with other places in the world that you may compete with. We
compete with the world all over in coal. We compete in natural
gas and all the things we extract and we are still doing pretty
well. So tell me, is there a pathway forward that we can
negotiate, and since it has not been done since 1872, is there
an incremental way to make sure we have a fairness to this
system?
Mr. Haddock, you might want to start since you are in the
gold business.
Mr. Haddock. The short answer is yes, Mr. Chairman, there
is, and as I said in my opening statement, we have long
supported a reasonable net royalty. For a lot of reasons, we
think the net royalty is the right approach.
The Chairman. But we do not do any other extraction on net,
we do it on gross.
Mr. Haddock. I understand that and as I said, a gross
royalty becomes very regressive on hardrock minerals, the price
for which is set in the global market, unlike coal and some of
these other commodities where the royalty costs can be
ultimately passed on to the end consumer. It cannot be in gold
and that is why, in large measure for us, the net royalty is
very important.
The Chairman. Mr. Brown.
Mr. Brown. Yes, thank you, Senator.
I believe there is a path forward. We would absolutely
welcome the opportunity to have a conversation with all the
stakeholders----
The Chairman. Sure.
Mr. Brown [continuing]. About mining law reform, about
royalties, about fees, about all the other provisions of the
mining law, but I believe it needs to be a comprehensive look
and not just the slice about the money that we are trying to
address today. Most of our mineral is mined on federal land and
it is terribly important to us that we have access to those
minerals and that we are able to produce those and sell them
and make something. We are in an industry that has a very, very
thin bottom line. Bentonite, characteristically, is that way.
And I think maybe industrial minerals in general is, as well.
So our story is a little bit different perhaps than for
some of the other producers and we just would like the
opportunity to be able to tell our story.
The Chairman. Well, that is why we have you here. I want
you all to understand, we are not looking at this as a
punishment. We are looking at this as a matter of fairness.
That is about it and that is all I can tell you. And we do too
much of this all over our country and I have been involved all
my life around my little coal mining towns. So I understand how
this works, and we go with the market. We do not have control
over that market price. It goes up. It goes down. Mines will
stop production for a while because it is not profitable to
produce. They will come back when the market is right. I
understand the market forces.
So I want you all to know that we are trying to understand
this. And again, I thank Senator Cortez Masto for helping us
understand how we can segue into fairness and put some
responsibilities on this in a much more prudent and transparent
way.
And with that, I will turn to my friend Senator Barrasso.
Senator Barrasso. Well, thanks so much, Mr. Chairman.
Ms. Sweeney, if I could start with you. The House
Democrats' reckless tax and spending spree is going to impose
new fees and new royalties on existing and new mines on federal
lands. In addition, the House Democrats would impose a dirt tax
on any material that is moved during a mining operation. Under
the House Democrats' proposal, American miners will owe the
Federal Government the highest rate of royalties, taxes, and
fees in the world. If the House Democrats' proposal is enacted,
is it fair to expect U.S. mining operations to close?
Ms. Sweeney. Absolutely. I think if you look at all three
of those very punitive fiscal provisions in the House package
that you mentioned--the eight percent gross, the four percent
on existing, and the dirt tax, just any one of those could have
a profound impact on the industry. If you take all three of
those and impose them at the same time, you are looking at
mines definitely--premature closure and you are not going to
attract any additional investment in the United States. Other
countries, you know, will reap the benefits.
Senator Barrasso. So then specifically, Mr. Haddock and
then Mr. Brown, how would your mines on federal lands be
affected with all of these three things?
Mr. Haddock. Importantly, I think our operations would
continue. We can't pick them up. We can't move them. But what
would happen is, I kind of describe our business as being on a
treadmill. We are constantly trying to replace the resources
that we deplete as we move through the year. And the way we do
that is through investment. It's through exploration
investment. It's through R&D, coming up with ways to convert
what would otherwise be waste into ore. It is a very, very
large investment.
And so, what happens in our industry is, you know, we have
to balance our capital throughout the world and throughout our
other deposits. So we would continue to mine our deposits, but
our growth profile in the United States would continue to
decline. And particularly with the gross royalties, it would
decline much, much faster.
Senator Barrasso. Thank you.
And Mr. Brown.
Mr. Brown. It would have a significant impact on us. An
eight-percent royalty, a seven-cent per ton so-called dirt tax,
and understand that in the bentonite industry we take the
overburden out of the pit. We put it on the bank. That is the
first touch. We put it back in the pit to do the reclamation.
That is the second touch. The bentonite we touch is oftentimes
touched three times before it ever gets to the plant to go
through the processing. So I do not fully understand how that
tax would apply, but if--and then, perhaps, any of the other
fees or the additional costs of monitoring the whole process
through our operation--it would create a significant burden to
us that, very likely, we would not be able to pass through to
our customers because of the nature of many of our customers.
It might, very likely, open up the possibility of competition
from overseas as well.
Senator Barrasso. So you are a 70-year-old, family-owned
bentonite mining operation. You joined the company in 1980. As
you noted in your prepared remarks, it now takes about seven
years to permit a bentonite mine on federal land. Can you
discuss how permitting delays for mining on federal land have
grown over the past decade or so and then discuss the impact
these permitting delays have had on your company in terms of
cost?
Mr. Brown. I will give you an example. It used to be that
we were able to permit in roughly 14, 15 months. We just
received a permit that was critically needed for our
Thermopolis operation and it took over seven years. Had we not
gotten that permit, that plant would have been at risk of
shutting down in 2022 because we didn't have all of the
resources needed to feed the plant.
Senator Barrasso. So as Congress is considering changes to
the Mining Law of 1872, should it also be considering
meaningful permitting reform for mines on federal land?
Mr. Brown. I believe so. It should be part of it.
Senator Barrasso. Okay.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Now we are going to have Senator Cortez Masto.
Senator Cortez Masto. Mr. Chairman, thank you. So I would
love to just kind of put this in perspective and I so
appreciate you holding this hearing at my request because I
oppose the reform that was put forward in the House of
Representatives because, one, the legislation would have an
unfair and outsized impact on the State of Nevada, where most
of the land is owned by the Federal Government and it imposes
the taxes on federal land. But more importantly, moving this
type of reform through a short-term budget process would create
uncertainty for the industry and uncertainty that supports
thousands of jobs across the country. So it is fair that we
have this conversation that is transparent and public. We bring
all the stakeholders together and we figure out a compromise. I
am hearing today that there is opportunity for compromise, to
work through this. And that is how this process should occur.
So I want to thank you for having this hearing and allowing us
to work through this process because I think it is so
important.
One of the things, though, I do want to stress and I thank
you, Mr. Chairman, for trying to get out to Nevada to see the
hardrock mining, but I know because of the climate and the
weather and the fires, you were unable to. Mr. Haddock, if you
would, put this in perspective, because I know there is a
difference between what we have talked about with oil and coal
and that type of mining versus hardrock mining. Really, oil,
gas, and coal are marketable--sellable at the mouth of the
mine--meaning no refinement or processing is required by the
miner for the mineral to enter the stream of commerce. In
contrast, that is a little different than the hardrock mining.
So could you talk a little bit and help us understand the
processing costs in hardrock mining and how that differs and
that is what you are talking about when you are saying we
should be looking at the prospective net royalty because we are
not taking into consideration for hardrock mining that the type
of processing is different than with coal. Is that correct?
Mr. Haddock. Thank you, Senator. That is correct. And in
the case of most gold mining, and for that matter, in the case
of other minerals like copper, when you discover a deposit,
that rock has no value and the only way you can turn it into
value is by--and first of all you have to find it and, in our
case, we have a deposit where we have spent almost a half a
billion dollars and now, we are just to the point where we are
permitting. Then, after you discover it, you have to do
numerous studies on all kinds of chemical parameters, physical
parameters, and try to figure out how to turn that rock into a
sellable product.
Then, after you do that, you do your feasibility studies
and after that you design the bespoke facilities to produce
this ore. And then, you build the facility at a cost of--right
now for an autoclave or a roaster, which is what we call our
ore processing facilities and a mill--it is a billion dollars a
pop. So each one of our mills would be a billion dollars. We
have seven of them right now. Then, you have to expend the
capital every year to continue to maintain that property and
those facilities and to expand them and to refine them to deal
with the ore that you encounter. It is a nonstop process that
never ends, of cycles of investment. And then and only then,
when you get to the end of the process do you have a product, a
sellable product.
And then, after that, as Senator Manchin said, we are very
cognizant of our reclamation obligations and we have our
reclamation cost and that, too, is part of our investment. And
right now, Nevada Gold Mines carries reclamation bonds of $2.1
billion, which is about twice the entire coal industry in West
Virginia. So it is a continuing investment cycle.
Senator Cortez Masto. So let me ask--and I know you are
steeped in this so well--but Ms. Sweeney, help me put it in
layman's terms here so people understand. When you are doing
hardrock mining and you scoop that initial shovel of dirt, you
do not know what you have there yet until you go through your
patent process and processing to determine whether there is a
mineral worth anything, is that correct?
Ms. Sweeney. Absolutely. There are years of exploration
activities that take place before you would even know whether
you have an economically valuable deposit. There are upfront
studies that you are doing during that same time and lots of
information you are collecting. If you are looking at about one
in every 1,000 exploration activities that might become a
modern mine--there is a lot of upfront work and upfront costs,
actually, that go into that as well.
Senator Cortez Masto. Is that why you have concerns about a
dirt tax?
Ms. Sweeney. Absolutely.
Senator Cortez Masto. Okay, thank you. I know my time is
up. I appreciate it, Mr. Chairman.
The Chairman. Thank you, Senator.
And now we have Senator Lee.
Senator Lee. Thank you, Mr. Chairman.
Utah is home to the last uranium mill in the United States,
the White Mesa Mill. Now, domestic production of uranium has
plummeted over the last several decades. It was about four
years ago when we reached our peak when we were producing in
the range of about 40 million pounds a year. But in 2018,
toward the end of this chart, we produced just 1.47 million
pounds. Now, that doesn't mean that demand has waned. In fact,
demand, actually, has remained relatively constant over the
entire 70-year period depicted in this chart. It is just that
when domestic production diminishes, we make up for that on the
international market. So in 2015, for example, the United
States imported 65 million pounds of uranium.
[The chart referred to follows:]
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Senator Lee. House Democrats are now wanting to impose some
new features on this part of the economy, as has been mentioned
already in this hearing, in the reconciliation package. One
that would institute a royalty on hardrock minerals like
uranium. This royalty, as has been mentioned, would be eight
percent for some, that is, eight percent of gross income for
new operations and four percent on gross income for existing
operations. And this is something that I believe would have a
crippling effect on many domestic mineral markets in the United
States.
Ms. Sweeney, I would like to start with you. How does U.S.
dependence on mineral imports potentially threaten everything
from our supply chains, broadly, to our infrastructure and our
energy security, and specifically, how could a royalty like
that being proposed in the House and a dirt tax like what they
are proposing over there impact our ability to secure our
domestic mineral supply chains?
Ms. Sweeney. Thank you, Senator, for that question. I think
uranium is a great example of how we have become excessively
over-reliant on foreign sources of minerals over the years. I
mean, when the Energy Information Agency cannot even provide
the actual amount produced in the United States last year
because it is proprietary information because there are so few
producers, that is kind of a sad state of affairs. But it is
one example of many of how we have become incredibly reliant on
foreign sources of minerals, even for workhorse minerals like
silver and copper that are used in solar and in electric
vehicles and every aspect of modern life.
We are importing 80 percent of the silver and we have a lot
of silver resources in the United States, and currently 37
percent of our copper comes from foreign sources. These types
of punitive fees that take us outside of the total government
take of our competitors are destined to really freeze the
investment in the United States, and the other countries will
profit from that. And some of those other countries are not our
allies, either.
Senator Lee. Right, right, not our allies and are not, to
put it mildly, anxious to see us emerge as the global
frontrunner in green energy technology or any of the high-tech
sectors where the United States has some real potential.
Now, as I mentioned a minute ago, they also threw into
their package what they are calling the reclamation fee, which
is, as I understand it, seven cents that would go to the
Secretary of the Interior for every ton of displaced earth.
Now, help me understand something. It is already the case that
mines are required to secure and reclaim all the disturbed
areas of mining activity, correct? That is already required. So
this provision would end up requiring honest operators to pay
for the reclamation work of other operators. What is the point
of this particular issue? Isn't this really just imposing an
additional burden that could effectively force the relocation
of some of these operations overseas?
Ms. Sweeney. Absolutely. I think that that fee is
incredibly burdensome and it is really on the movement of dirt,
which has to take place for you to be able to get to these
minerals that we need so desperately.
Senator Lee. Mr. Brown, you mentioned in your testimony
that your company has had a significant impact on the rural
towns where you operate, and I think this is the story of a lot
of Utah operators. You mentioned the impact that the royalty
and the dirt fee could have on you and on your company and
other companies like it. After hearing from Ms. Sweeney on the
disparate impacts that might be imposed by the royalty and by
the dirt fees, would you say that the proposal submitted by the
House Democrats--namely the imposing of a gross royalty tax of
eight percent for new operations and four percent for existing
ones--wouldn't that add to market disruptions and potentially
force some of these operations abroad? And wouldn't that also
have the potential to favor market incumbents and disfavor new
entrants to the market given the disparity between four percent
and eight percent?
Mr. Brown. Yes, I absolutely agree with that. There is
foreign competition for us. The minerals that we are mining,
again, are low value, but they work their way through the value
chain in the manufacturing system and they become a part of the
end product, whatever that is, and there are hundreds of end
products that use bentonite. So if we increase the cost to Wyo-
Ben and Wyo-Ben has to increase the cost down the supply chain,
it is very likely that our customers will be seeking other
sources of supply so that their products can remain competitive
and viable. And there are foreign mining companies--bentonite
companies--that would be eager to enter this market in the
United States. So it would have a dramatic impact on us.
And the other thing that I want to mention--we talk about
the eight percent and the four percent. In our business, we
have a plan of operation that encompasses, let's say, a
relatively small area and we are updating that plan of
operation as we move forward. So the four percent would apply
to what we have today, but when we look at this, we think in
the future we are going to be paying eight percent under the
current proposal.
Senator Cortez Masto [presiding]. Senator Lee, thank you.
Senator Lee. Thank you.
Senator Cortez Masto. Senator Heinrich.
Senator Heinrich. Thank you, Madam Chair. Madam Chair, my
father did exploration geology for Anaconda Copper long before
I was born, in your state, and I remember quite fondly visiting
my grandfather at gold mines across Nevada. He worked at places
like Battle Mountain and many others. These are important jobs
and it is an important activity, but I think it is equally true
that there are obvious and important reforms that should be
added to the 1872 Mining Act, especially with regard to
cleanup, and you heard some of that from Mr. Wood.
I have to say that I am disappointed that we do not have a
witness here today who can testify to the impact that tens of
thousands of abandoned mines have on neighboring communities.
In Northern New Mexico, a foreign-owned mining company plans to
open an exploratory mine for gold, copper, and zinc in the
Pecos River Valley. This valley's residents know all too well
what can happen when mine waste spills into your water supply.
In 1991, spring runoff caused a deluge of mine waste to flow
into the Pecos River, triggering an enormous fish kill and
costing the State of New Mexico more than $28 million in
cleanup costs--in dollars at that time. I am sure it would be
much higher today. This community and its economy are reliant
on farming and fishing. Neither, frankly, can exist without the
small streams that feed into the Pecos River. And both are at
risk if a new mine opens in this particular location. And yet,
even though the proposed mining activities are on national
forest land, land that belongs to all of us, there is no way
for the Forest Service, under the 1872 Mining Act, to determine
that a mine in this particular location is not in the best
interest of the public.
So unlike oil and gas wells or coal or even a gravel mine,
under 1872, there is simply no step in the process where the
public's interest in the location of a particular mine is
considered. Because this foreign corporation has purchased
mining claims, they have an absolute right to build a mine,
even over the objections of the entire Pecos Valley community
and the Pueblo of Jemez. So I am glad we are having this
discussion. It is long overdue. I do believe there is a
compromise to be had here on a reasonable structure. But as we
consider these reforms--royalties, reclamation fees, claim
fees--we also need to include the voices of the communities
that live daily with the consequences of mine pollution.
So I want to ask you, Mr. Wood, in your view, you have
worked all over the West, as well as through Appalachia on
restoration. Are there some locations that are just not the
right place for a new mine? Places where it is just not
possible to create a mine, to build a mine without unacceptable
impact on local streams, rivers, and communities?
Mr. Wood. Without question, Senator. Thank you for that
question. I mean, a great example of that was an effort that
Senator Murkowski was a leader on in stopping the proposed
Pebble Mine, which is on state lands, not federal lands, but it
is shocking that federal land managers and public servants do
not have the ability to say no to a mine if the mining industry
follows its steps. It is the only use of our public lands that
they do not have the discretion to say no to, whether it
imperils indigenous communities or local water supplies. It
just seems like there should be a way to figure out how to
allow that discretion while still honoring the investments that
the industry has made.
Senator Heinrich. So literally, it is the only use of our
public lands where there is no discretion for the agency to say
``not here.''
Mr. Wood. It is the only use of our public lands where the
agency doesn't have the discretion to say no.
Senator Heinrich. Ms. Hanna, in the absence of a
reclamation fee and strong bonding authority, who ends up
paying to clean up abandoned hardrock mines?
Ms. Hanna. That is a great question, Senator Heinrich. That
does fall to taxpayers and that is where we see these huge
shortfalls right now in abandoned mine lands not getting
cleaned up and we need to create a dedicated revenue stream,
and we think industry should share in that burden with
taxpayers.
Senator Heinrich. How does that compare with other similar
industries--for example, coal mining?
Ms. Hanna. There are costs that other industries do take on
and trust funds that we have created in the coal program and
even in oil and gas. And so we believe that this is something
where the industry could share in that burden, create a real
revenue stream, and not put undue burden on industry. And
again, we want to see this production happening and we are
supportive of responsible mining. So we want to be open to
discussion on how to set up that revenue stream so that
industry believes that it works for them and we can see that it
is working. But we absolutely have this shortfall and there are
so many priorities competing right now for Federal Government
funds and this is just--we think the royalty and reclamation
fee would be the way to drive revenue for abandoned mine
cleanup.
Senator Heinrich. Madam Chair, my time is expired, but I
would urge us to maybe not take quite the zealous approach that
the House of Representatives took, but to find a fair and
transparent way for taxpayers to be compensated for these
minerals and also to create a revenue stream so that we can
start cleaning up the tens of thousands of abandoned mines that
litter, I think, every western state.
Senator Cortez Masto. Thank you.
Senator Marshall.
Senator Marshall. Thank you, Madam Chair, and thank you so
much to all the witnesses for gathering here today.
This seems to be the next chapter of the same book when it
comes to making the environment cleaner, healthier, and safer,
but yet have affordable products. As I sat here and listened to
you all talk, I wish--as we think about the permitting process,
what a cost it must be to you all and that we are throwing so
much money at the permitting process--I wish parts of those
monies were being used to make things more environmentally
friendly or environmentally cleaning up projects. Let's talk
about bentonite for a second, Mr. Brown. It is a product that I
have actually purchased, you'll be glad to know. I just assumed
all bentonite came from Wyoming. I had no idea that there was
any other. But we learned today that 20 percent of it comes
from China.
If these taxes went into place that the House is talking of
in their reconciliation bill, would we end up having more
bentonite come in from China? How would it impact your
business, do you think?
Mr. Brown. Well, I believe it would have an impact, the
severity of which would have to play out depending upon whether
we could pass those costs down or not. I doubt that we could
pass all of them. Twenty percent of what is produced in Wyoming
is exported.
Senator Marshall. Okay.
Mr. Brown. China represents the major--they are the second
largest producer in the world beyond Wyoming. And I would
consider them a significant threat to some of the markets that
we have. If we are not there providing the bentonite to our
North American customers or international customers, China is
likely to be there right behind us.
Senator Marshall. Okay.
Ms. Sweeney, I guess my next question is for you. Whether
we are shipping bentonite in from China or rare-earth metals
from the Congo or other countries--their mining processes they
do there plus the shipping cost--what type of environmental
impact would those have compared to the mining processes here
in the United States? Is it orders of magnitude? Exponential?
How could you quantify that, or maybe it is a range, if at all
possible?
Ms. Sweeney. I think it would depend on the countries that
are doing the mining and processing. You know, some of them,
for example, maybe Canada and Australia, would have very
similar environmental and safety and labor standards.
Senator Marshall. Well, let's talk about China and the
Congo, and generally Africa.
Ms. Sweeney. Yes, well, they are the ones that do not,
right? So they do not have the same labor standards as we do in
the United States, and if you are looking at the Congo and some
of the cobalt being produced there, there are child labor
issues that really, you know, are pretty horrific. We have an
incredibly talented workforce here, we have the right
infrastructure. We can do it right here in the U.S. We can make
this happen.
Senator Marshall. Thank you.
In Kansas, we have been fortunate to benefit from the NRDA
restoration program. We took some previous pit mines and it is
now some of the best fishing and wildlife habitat in America,
actually. What are we doing in the mining industry today better
than we were 10 years ago, 20 years ago? Share your story a
little bit, Ms. Sweeney. What are we doing better these days?
We do not have any mining left in Kansas, but I bet there are
some great stories to share.
Ms. Sweeney. There are incredible stories, particularly on
the safety and reclamation side for U.S. mining. If you look at
the number of mines that go through a whole year without a
single lost-time incident, it is spectacular. The reclamation
awards given by the Department of the Interior for both coal
and hardrock mining really show how forward-thinking the
industry is--creative, thinking outside of the box for what
works best, not only for the environment, but for their local
communities and getting the input from their local communities
about, you know, what they want to use that land for next,
leaving behind important components of projects like water
treatment facilities for the communities to use. But I think,
also, environmental monitoring is a huge difference, really to
prevent some of the future releases that people worry about
most. There is so much more monitoring technology----
Senator Marshall. One more quick one. This is for Ms.
Sweeney as well. Does mining support abandoned mine cleanup and
even increasing your contribution?
Ms. Sweeney. Absolutely. We would like to talk about a
reasonable royalty as well as some fees that would be dedicated
to AML cleanup.
Senator Marshall. Thank you so much. I yield back.
The Chairman [presiding]. Thank you, Senator.
And now we are going to have Senator Hickenlooper.
Senator Hickenlooper. Thank you, Mr. Chair. And this is a
pleasure just because 45 years ago--I do not want to date
myself--I did take a class on industrial minerals and so this
is now coming full circle. And Mr. Haddock, I appreciate a lot
of your points--you worked for many years for my first mentor,
investor Jim Owen. So you were fortunate in that and then I did
start out as a hardrock geologist and certainly, I spent enough
time mucking around in bentonite, and have seen it both in
terms of drilling and extractions, but also in terms of using
it as finings for making a beer, which I ended up doing after
the geology. But I think it is interesting we are seeing such a
broad difference. I think it is very instructive between a
bentonite mine and a gold mine and what the costs are and how
you even think about that. And I think that that really does
suggest, I mean, just as we wouldn't create a tax system as
exactly the same as we do for oil--oil and gas. It does begin
to create that image of how we would go about this.
And I thought, Ms. Sweeney, I would start with you, just to
ask, you know, obviously to meet our clean energy goals and the
reports, such as the IEA earlier this year, showed a dramatic
level of scale-up if we are going to get critical minerals
production worldwide to keep pace with what we really need. And
I am someone who believes there should be some level of royalty
there, but I thought you might--if you could just take a
moment--talking about the differences between how it might
pencil out, between a gross royalty and a net royalty. And you
do not have to go through the different minerals, but just
because I think some of the people listening might not have the
same familiarity that you and I do.
Ms. Sweeney. Right. Thank you so much for that question.
There is a large difference, and I think that Rich talked about
it in his testimony as well, you know, the gross royalty
doesn't allow the deductions for the processing and the
refining, which are really a large part of what provides the
value for hardrock minerals compared to coal or oil and gas.
And if a gross value royalty is imposed, mining companies are
required to pay that royalty even when the mine is operating at
a loss, since the royalty is assessed without consideration of
the difficulty or the cost of processing the materials.
There have been quite a few studies, including by the
Department of the Interior itself, looking at gross versus net
royalties and the Department has concluded that gross royalty
would result in significant job losses, losses to state and
federal treasury, mine closures, and discouragement of new
mines. And I think as Senator Cortez Masto said, it also
encourages operators to leave lower grade ore in the ground,
thereby wasting public resources.
Senator Hickenlooper. Great. I appreciate that.
Ms. Hanna, I have always been struck that we still do not
really know how much we produce of so many of these different
minerals. I remember that from 45 years ago, and I don't think
it has changed at all. So independent from a taxpayer
responsibility perspective, don't we need a full accounting of
how much we produce in this country if we are going to have a
policy grounded in reality?
Ms. Hanna. Yes, thanks for the question, Senator
Hickenlooper. We definitely need more transparency and we need
to have that tracking so that we can really understand what the
value is of the minerals coming off federal land, and what
production looks like. It is hard to get assessments of what
the impacts would be if we do not have that information when we
set these royalties. But I do think that we have sufficient
information to know that the industry--and as I think everyone
on the panel is saying--can absorb a royalty, can handle the
impact of these new revenue streams, and still be very
successful and profitable. I appreciate your mentioning the
differences with various minerals. We recognize that as well.
We are open to conversations about how to get those revenue
streams for taxpayers.
Senator Hickenlooper. Great.
Ms. Hanna. But accounting is first. How many do we have on
federal lands is important.
Senator Hickenlooper. And just quickly to finish up, Mr.
Wood. There has not been that much discussion of trout and
wildlife and habitat yet. But I do come from a state that is
riddled with abandoned mines and has all kinds of problems both
in those designated as Superfund sites, but especially those
that are not, and we know that it takes resources. I thought
you mentioned it earlier, but speak a little bit more about the
Good Samaritan legislation and how that could really be a first
step, not a total solution, but a first step.
Mr. Wood. Thank you, sir.
Just to expand on your point, GAO, two years ago, estimated
there were 550,000 abandoned mine sites just on public land. So
it is a massive problem. It is huge in Colorado, which also has
tremendous trout fisheries. So an assessment we did listed over
125,000 miles of stream across the country that are affected by
abandoned mine waste.
Senator Hickenlooper. Wow.
Mr. Wood. So what we are trying to do--and we have been
working with industry and working with conservation groups to
try to create a pilot program that would ease some of the
liability restrictions that are tied to the Clean Water Act and
the Superfund law that I mentioned. Just, you know, 15 pilots
that would allow us to prove the concept that we know how to go
out and clean abandoned mines. It doesn't answer the financing
issue, but at least it would build confidence that we can begin
to tackle these problems.
Senator Hickenlooper. Great. I could not agree more. I
yield back. Thank you, Mr. Chair.
The Chairman. Thanks for yielding back.
[Laughter.]
Senator Hickenlooper. I gave you all the time I had. I
didn't have anything, but I would have given you all the time I
had.
[Laughter.]
The Chairman. I thought I was seeing things here.
Now we will have Senator Murkowski.
Senator Murkowski. Can I have the rest of Senator Hicken-
looper's time?
The Chairman. Yes, you can.
Senator Murkowski. Thank you, I appreciate that.
[Laughter.]
Senator Murkowski. I might just follow on what the Senator
has pointed to in terms of the collaboration that can go on. I
had an opportunity to visit the reopening of Resurrection Creek
near Hope, Alaska about a month ago. This was a collaboration
between Trout Unlimited and Kinross Gold. It is really
encouraging to see industry partnering with the conservation
groups. I said if the mining industry and conservation can come
together then quite possibly Democrats and Republicans can.
Although that is looking a little more sketchy nowadays, but I
thought it was a good example.
Mr. Chairman, I want to thank you for having this hearing
today and Senator Cortez Masto for encouraging it. This is
where these conversations should happen. It should not be
happening in a reconciliation bill on the House side or on any
side where you just kind of shove something in and hope we get
it right. The fact that this mining law has been around since
1872 kind of says something. But I think what we have heard
today is that nobody is afraid to be talking about what we
might want to do to make things better as long as we make
things better rather than trying to thwart and to kill an
industry that has been an extraordinary job creator and really
a source of economic strength for our country. But we know we
can go exactly the other way if we do things wrong and we do
things in a manner that is not thoughtful.
I think what we have heard today is that to take an
eight-percent gross royalty for hardrock production, a
reclamation fee of seven cents per ton, and a claim maintenance
fee, these are going to take us in the wrong way. So let's talk
about ways that we can, again, make sure that we are doing the
right things in the right way. My goal, my mission here when it
comes to mining is--it is a commitment to working toward
reforms that are going to provide the industry with the
regulatory certainty that it needs, because we know that that
is important for making investments, provide a fair return to
the public for mining activities on our public lands, protect
the environment, ensure this industry, which again, has
historically had some of the highest-paying jobs in the region,
but also to provide these building blocks that we need for
renewable technologies and to have a future here.
So I appreciate this conversation. I really appreciated,
Mr. Haddock, what you had outlined in terms of just the steps
that go into a hardrock mining production and why it is
different every single step of the way in terms of how you get
from the beginning of a project to the time where you are
actually putting some product out there into the market. I
think these are the types of discussions that we need to have.
I want to turn my question to you, Ms. Sweeney, and this
relates to the reclamation fee. I am actually kind of curious
about this proposal because this is not the first time this has
come up. It came up during the Obama Administration. The EPA
went through a pretty rigorous exercise to determine whether
the hardrock mining industry should be covered under CERCLA.
After a pretty lengthy process, they decided not to promulgate
final regs because--and these are their words--``They were
unnecessary and would therefore impose an undue burden on the
regulated community.'' And then they said that the proposed
requirements would be disruptive to state mining programs.
So if you have an Administration that had taken a look at
this and determined that this was not going to be necessary
because it places an undue burden, how is this fee that is
being proposed now, this seven cents per ton, any different
than what was looked at under the Obama Administration?
Ms. Sweeney. I don't really think that it is different, and
thank you for all of the work that you did on the EPA financial
assurance rulemaking and working with the industry to make sure
that those kinds of fees weren't imposed. But the dirt tax, you
know, it also is not a solution to abandoned mine land
creation. We have modern regulations in place today that
protect our lands and the environment and there is also over $6
billion worth of financial assurance held to fulfill those
reclamation requirements in case operators are not able to----
Senator Murkowski. So let me ask about that because, within
Alaska--our Department of Natural Resources and BLM--they have
cooperative agreements to co-administer a bond pool that
companies then pay into. And under Alaska law, we require that
a reclamation plan be approved before the operation can be
commenced. They review the amounts every five years. And then,
if the operator faces hardship or cannot do the cleanup, the
agencies first reach out to the industry, but every time this
has happened, I am told, the industry has stepped up with the
expertise, the equipment, the labor, and more, to do the
cleanup to the Agency's specifications. So as a result of the
cooperation that we have seen, the bond pool has never needed
to be called on in Alaska to perform cleanup.
So I am looking at this and wondering, if there is an
additional reclamation fee of the seven cents, is there a
concern that this additional tax could undercut the willingness
of companies then to step up on voluntary reclamation efforts
if they are already going to be forced to be paying more? What
happens to what we already have in place if you do this
overlay?
Ms. Sweeney. That is a really interesting question that I
have not thought about, but I would think that our companies
still want to do the right thing and be helpful and cleanup the
environment, but will the companies be here in the United
States anymore if they are paying those kinds of fees?
Senator Murkowski. Fair enough.
Mr. Chairman, my time is up. I do have a lot more questions
that I will submit for the record, but I appreciate the
comments from everyone here today.
The Chairman. Senator King.
Senator King. Given the lack of this industry principally
in Maine, I come to this hearing unburdened by knowledge.
[Laughter.]
The Chairman. You'll fit right in.
[Laughter.]
Senator Barrasso. You should be Chairman.
Senator King. I may have opened up something.
The Chairman. It's gone downhill from there.
[Laughter.]
Senator King. Let me just establish some basic principles.
It sounds like the industry is agreeing that there should be
royalties on minerals extracted from federal lands. Is that
correct? Somebody who is representing the industry.
Ms. Sweeney. Yes, reasonable net prospective royalty, yes.
Senator King. And what does the word ``net'' mean?
Ms. Sweeney. Net means that there are certain deductions
that are allowed, for example----
Senator King. Why shouldn't it just be a royalty based upon
the value of the minerals extracted, just as in oil and gas or
coal?
Ms. Sweeney. Because there is not a value to the mineral
before it gets refined.
Senator King. Well, if there is no value to the minerals
why are you digging them out of the ground?
Ms. Sweeney. Well, we are putting in the upfront capital
to----
Senator King. You dig something out of the ground and you
sell it, right?
Ms. Sweeney. No.
Senator King. Or do you refine it yourself?
Ms. Sweeney. It depends on the company. Some of the
companies do. Some do refining themselves. Some do all of the
refining themselves. But yes, there is no value of, for
example----
Senator King. Well, there is a value somewhere. Eventually
this is for profit.
Ms. Sweeney. Eventually there is value, correct.
Senator King. So why can't the royalty apply to the value
that you derive from the mining? It seems pretty
straightforward to me.
Ms. Sweeney. I think that is oversimplification. I don't
think it's that straightforward because otherwise we wouldn't
have any investment here in the United States because there is
so much upfront capital that goes into the mining projects.
Senator King. I don't understand. A royalty only applies
after you are making money. A royalty does not apply upfront. A
royalty applies--you are digging things out of the ground, you
sell them, you get a revenue stream and you pay a royalty. That
is part of the cost of doing business for these other
industries.
Ms. Sweeney. Right.
Senator King. Why doesn't that operate for you? Investors
know they are going to make `X' amount of money and part of
that is going to be a payment. One of the costs is going to be
the payment of royalties.
Ms. Sweeney. Well, part of it is when you know you are
going to get a return on your investment as well. And I think
investors look to that.
Senator King. Of course.
Ms. Sweeney. And there is a much longer timeframe for
hardrock mining than there is for coal and oil and gas.
Senator King. I still do not understand why a royalty----
Ms. Sweeney. Narrower margins and cyclical markets.
Senator King [continuing]. On the money that is generated
by the mining is any problem. And oil is in a global market. An
oil producer cannot name their price. I do not think that
argument holds any water for hardrock.
Ms. Sweeney. Rich, maybe you want to----
Mr. Haddock. Sure, let me try to address a couple of issues
there because there are a lot of questions in there and, if you
will, I will unpack that a little bit.
First of all, there is an important difference between the
value of the mineral sitting in the ground and the value after
it is produced.
Senator King. I get that.
Mr. Haddock. And the way--I will give you the example----
Senator King. No, you don't need to. I get that.
Mr. Haddock. No, but let me give you this example. In our
industry, when you buy gold in the ground, you may pay $100 an
ounce to buy gold in the ground. When you sell it today, it is
at about $1,700 an ounce. It is all that billions of dollars'
worth of investment that get you from that gold that may be
worth $100 in the ground to the gold that is worth $1,700 when
you sell it today. In Nevada, our Net Proceeds of Minerals Tax
is a good example of a system that is very transparent and
tracks all the minerals produced in the state, by the way.
Nevada knows exactly what they produce because everybody pays
it, no matter what the mineral is.
And in the case of this, what you do is, you establish the
gross, you establish the sales price, and then there are
certain deductions that are allowable. They are very
transparent. They are very clear. The system works very well.
And what it does is, it recognizes the value that is added by
the miner in creating it. Now, different minerals are different
in the sense that they do have location value. And you are
right, oil and gas get shipped all over the world, but it is
shipped all over the world at an expense, and the expense of
shipping plus the expense of royalty determines whether or not
that oil can be sold profitably somewhere else. The gold
industry, for example, is very different, as is copper. That
price for an ounce of gold or for a pound of copper is set in
the global market every day. Nobody is going to pay you $1,700
plus eight percent. So it goes to the mining company----
Senator King. But the volume of oil is set in the global
market every day.
Mr. Haddock. It is.
Senator King. I don't see the difference.
Mr. Haddock. Well, there is a difference in the sense that
the cost of a royalty does get passed on to a consumer in the
case of something like oil, gas, or coal.
Senator King. Why wouldn't that be the case of a royalty, I
mean, the royalty on oil gets passed on to the consumer?
Doesn't it?
Mr. Haddock. It does get passed, but----
Senator King. Wouldn't it also on gold?
Mr. Haddock. No.
Senator King. It costs you a little more to generate some
revenue from gold.
Mr. Haddock. No, because it is basically traded every day
in a central location and the price you pay is the spot price
that day. Nobody is going to pay you for the royalty.
Senator King. So is oil. Oil is set at a worldwide
commodity market.
Mr. Haddock. It is set at a worldwide commodity market, but
as I say, there is a location value to oil. There is a location
value to coal. There is no location value to metals.
Senator King. So I will ask you the same question. I am out
of time.
Are you willing to agree to a royalty on minerals produced
on federal lands?
Mr. Haddock. Yes. That is our position.
Senator King. And you are going to tell us--and you have
told us, I assume--how that is going to work?
Mr. Haddock. We would like to model it on the Nevada Net
Proceeds of Minerals Tax.
Senator King. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
And now we have Senator Daines.
Senator Daines. Chairman Manchin, thank you.
Mr. Brown, thanks for making the trek out here from
Montana. And I want to hear more from you on the provisions
that we are seeing in the proposed tax and spending bill coming
from our colleagues across the aisle and how that might hurt
your business and local Montana and Wyoming jobs. We know that
the House Democrats' version of the bill raises taxes on
family-owned businesses like Wyo-Ben. It places new royalties
on your products, and it makes it harder for you to support
jobs in your communities.
Mr. Brown, if the House Democrats get their way and they
pass this sweeping anti-mining legislation, what would that
mean to the Montana jobs that you provide and your ability to
mine and supply the United States with bentonite?
Mr. Brown. Well, thank you for the question, and I would
like to just highlight again that we are a small business and
that I believe the President has said that any new tax will not
impact small business. Well, the taxes that we are talking
about, the significant increase in royalties, would impact us
tremendously. And again, our margins are very thin. Our ability
to absorb an eight-percent royalty, a dirt tax, however that is
defined, and other fees which may come on top of that is going
to be very difficult. And it is questionable whether we can
pass that to our customers. I believe some of our customers
would elect to source the material elsewhere--overseas,
perhaps--than pay that additional cost.
So the outcome of this is that we may have to curtail
operations. We have three plants. And we may have to
consolidate that production, or worst-case, heaven forbid, shut
down the operation.
Senator Daines. And if that happened that would just move
the supply chain that currently, with bentonite, we get it out
of Wyoming, primarily. That would move it to countries like
China to meet the demand. How do you think that would affect
our overall supply chains and thinking about the connection
with jobs as well as national security?
Mr. Brown. Well, certainly, it would affect the supply
chain. You think about all of the manufacturing that occurs
using our product and now rather than sourcing that from
Wyoming, they are sourcing it from China and the logistics that
have to occur with that, it is going to have an impact on the
supply chain and likely a negative impact. It is certainly
going to impact employment in Montana and in Wyoming, these
communities that depend upon Wyo-Ben as a major source of
employment. It would impact the community as well because of
the trickle effect of paying a wage as it goes through a
community of 2,000 people in Wyoming.
Senator Daines. Mr. Brown, thank you.
I want to shift gears and ask a question of Ms. Sweeney.
According to the USGS, the United States is now 100 percent
import-
reliant on 17 important minerals. Thirty-five of the minerals
are considered critical for our national security and domestic
use, 17 of them come from China. These numbers are only going
to get worse as demand for critical minerals and materials only
increases. If the U.S. is serious, and I hope we are, about
building more sources of energy, including renewable energy,
then we must be serious about increasing domestic mining. And
if the U.S. is serious about protecting the environment, we
should be increasing mining domestically and not allowing
places like China and the D.R. Congo, who have terrible
standards, to continue to supply the world and the U.S. with
critical minerals.
Ms. Sweeney, how does dependency on places like China
threaten national security and how does the Democrats' House
bill make that situation even worse?
Ms. Sweeney. Thank you for that question.
I think all of these new fees and taxes would definitely
put the U.S., you know, make us less competitive, right? The
total government take would be well beyond our competitors if
you add those on top. And that, of course, impacts our national
security, right? Because there are so many of these minerals
that are critical to defending our Army and our Navy, critical
to nuclear submarines, critical to almost every aspect of our
national defense. And certainly, there are a lot of countries
out there like China, who control, for example, 80 percent of
the rare-earths market, or even more. So they are cornering the
market and we are having to rely on them to protect our own
troops.
We do not want to see that trend continue. I think there
are a lot of these resources we do have here in the United
States. We can mine them responsibly here and we should.
Senator Daines. Thank you, Ms. Sweeney.
Mr. Chairman, thank you.
The Chairman. Thank you, Senator.
Now we have Senator Risch.
Senator Risch. Thank you very much, Mr. Chairman. I do not
always agree with Senator King, but today I find myself in
absolute agreement with him that he came here today unburdened
by any understanding of the hardrock mining industry.
[Laughter.]
Senator Risch. Let me try to put this in simple terms. This
is not oil we are talking about. When you take a gallon or a
barrel of oil out of the ground, you have it, you can sell it.
First of all, not all minerals are the same. They are all very
different, whether it's gold, whether it's silver, whether it's
antimony, whatever you are after is very different. The cost of
getting it out of the ground varies dramatically and it depends
on how deep it is. It depends what it's in combination with in
the ground. And so, it is not that simple.
And as was pointed out here, when you do get it out of the
ground, it may be just the beginning. You do not get a lump of
gold out of the ground in most instances. You get it mixed with
something else. So you may not even keep it. You may sell the
thing because it has to be milled and extricated very
carefully. So it just isn't the same as that. There are other
ways of doing this.
Now, I am not saying it is impossible. I am just saying
that there are other ways to measure it then. It is
incomparable. You are talking about apples and oranges if you
are talking about getting a barrel of oil out of the ground
versus a gram of whatever mineral it is that you are after. So
before I cede any more of my time, let me say, first of all,
there has been a lot of talk here about dollars and cents and I
want to ask Ms. Sweeney and Mr. Brown if you agree with me that
in today's world, market forces change the price of commodities
very, very quickly, unlike years and years ago, so that, if we
do add an additional cost to this, that that is going to affect
our competitiveness in the market almost immediately.
Would you agree or disagree with that?
Ms. Sweeney. Agree.
Senator Risch. Mr. Brown.
Mr. Brown. I would agree as well.
Senator Risch. Let me say we have an expert on this panel
who knows how to resolve complex issues like this. Chris,
welcome. Chris Wood and I worked together when I was Governor
to resolve the roadless issue in Idaho and we have--I know
Colorado claims to have one--but we have, essentially, the only
Roadless Rule that has been sustained in district court and in
the 9th Circuit Court of Appeals, believe it or not, and Chris
and I worked together on that. Thank you, Chris on behalf of
the people of Idaho, thank you and thanks Trout Unlimited for
your input into that. It was very difficult to get the
environmental community on board, and very few of them didn't
get on board eventually. And the ones that didn't--didn't feel
too good about it after the fact, after the 9th Circuit,
because everybody that was at the table got something.
Chris, in that regard, you and I have been talking about
this particular issue since I got here. How come you haven't
got it resolved?
[Laughter.]
Mr. Wood. First of all, thank you for your leadership on
the Idaho Roadless Rule. I think it is a model for a lot of
other natural resource issues around the country, where you
brought industry and conservation interests together and we
came out with a solution. I think it is right here for us on
this issue too. The other thing I want to commend you for, sir,
is your leadership on Good Samaritan legislation. You and
Senator Heinrich have both been working hard to bring industry
and conservation interests together to figure out how to incent
more cleanups of abandoned mines around the country.
Senator Risch. Thanks, Chris.
I have a little bit of time left, but I want to underscore
a really, really important issue that has been alluded to here,
but I think needs even a harder smack than what we have talked
about here. From my position on the Intelligence Committee and
on the Foreign Relations Committee, I can tell you that the
issue of rare earths and critical minerals is an issue that
does not get the attention that it needs in this country. And I
can tell you that we are going to have to focus on that.
Anybody who thinks that China is going to continue to sell us
these critical elements, if and when we ever get crosswise with
them to a large degree, is dreaming. And if you do not believe
me, ask Japan, because they have cut off Japan one time for a
very brief period of time, but it brought the industry in Japan
to its knees in short order.
So in any event--jump ball. Who can tell us what we can do
better to try to get rare earths and critical minerals out of
the ground in the United States of America, which is, indeed, a
very, very important national security issue? Who's first?
There are a lot of smart people here.
Mr. Haddock. Senator, I will jump in, even though I am a
gold miner.
Like Senator Hickenlooper, I was once a geologist, and the
important part of the mining law is this right of self-
initiation. And we talked about it in a couple of contexts here
that are important. And the first one, I would say, is that--
and Chairman Manchin said this at the beginning--we do not have
all the critical minerals. As a geologist, I am a little more
optimistic. I say we haven't found them yet. So we have to have
a healthy industry that is exploring, and rational and
reasonable mining law reform is an important part of that.
The second thing I would say is that the issue comes up of,
you know, why can't you say ``no'' to a miner? The argument is
made that way. The one thing I would point out is that we have
land-use planning and it is part of the Federal Land Policy and
Management Act (FLPMA) and it is an amendment to the mining law
that came into being in the 1970's. And so there are big swaths
of the United States and Nevada--in Nevada's case, 85 percent
of that federal land--25 percent of that is not available for
mine exploration. And so, what I think is important to
understand is that when you find a mineral, you find it where
you find it and you find it on the land that is available. If
there are areas that are important to protect, we should
protect those through the land-use process. But other than
that, we should be encouraging exploration everywhere.
Senator Risch. Thank you, Mr. Haddock.
And I want to yield my unused time to Senator King to
respond.
[Laughter.]
The Chairman. We have lost total control of this Committee.
Senator King. Yes, you have.
[Laughter.]
Senator King. No, and I want to emphasize that the Senator
is absolutely right about the national security implications
and I am not unmindful of those at all. I just want to be fair
to the people that own the land that is being mined, which is
all of the American people.
Senator Risch. Fair enough. Fair point.
The Chairman. Senator Kelly, you are up.
Senator Kelly. Thank you, Mr. Chairman.
Ms. Hanna, I have a question about abandoned mines, and
thank you for testifying today because this issue is important
to Arizonans. We have over 200,000 abandoned hardrock mines
that we currently know of. Most of them are on federal land.
The bipartisan infrastructure bill contains an amendment
sponsored by Senator Heinrich, Senator Daines, and myself that
would authorize a
$3 billion fund to clean up abandoned hardrock mines, subject
to appropriations. The House might consider a budget bill that
would appropriate $2.5 billion for mine cleanup. These funding
levels fit within the budget top line, but we know it is not
going to be enough. What amount of federal revenue would you
estimate is needed to really put a dent in the cleanup of the
hundreds of thousands of abandoned mines in Arizona and across
the nation?
Ms. Hanna. Thank you for the question, Senator Kelly. That
is a very good question. I cannot give an exact answer, but it
is definitely in the tens of billions of dollars, and I think
we see year after year we are spending several hundred million
and not even making a dent among several federal agencies. I
think we can do a better job there on the taxpayer side. But I
think that this huge cost shows that we need a dedicated
revenue stream and we need industry to share in that burden
with federal taxpayers in helping create that revenue stream.
These--it is important to clean them up. These are a huge
taxpayer liability, and as you know, they are a public health
risk, environmental hazards. They need to be cleaned up. And I
thank you for your efforts to work on creating those funds from
the Federal Government, but we would also like to see those
reclamation fees and other things, and the royalty put in place
so we can have a revenue stream.
Senator Kelly. I imagine that was discussed before I came
into the room? I am assuming it was--the revenue stream being a
royalty--that we probably had this discussion earlier?
Ms. Hanna. There has been some discussion.
Senator Kelly. Okay, good. Thank you.
Mr. Wood, I also want to thank you and Trout Unlimited for
testifying today. The Navajo Nation is just one serious example
of why we need to address these abandoned mines. Over 500
uranium mines on the Navajo Reservation were abandoned after
the Cold War, and as a result, tribal members are dealing with
contaminated groundwater and higher rates of cancer. If
Congress enacts a reclamation fee or some other revenue
generator on hardrock mining, should that revenue be
prioritized for abandoned mines in the West and for
economically disadvantaged communities?
Mr. Wood. Yes sir, thank you for the question.
I said earlier, before you were in the room, that an
analysis that we did shows that there is about 122,000 miles of
impaired stream around the country from abandoned hardrock
mines. Fifty-two percent of those supply drinking water for
municipalities. Absolutely, there needs to be the reclamation
fee and I am not sure there is any disagreement with industry
here. A reclamation fee--whatever the right fee, whether it is
net or gross--it should be applied to cleaning up the legacy of
abandoned mines that we have on our western lands.
Senator Kelly. Well, thank you. It is a significant issue
in Arizona, and the more than 500 mines on the Navajo Nation
are having a profound negative effect on the health of the
Navajo people.
So thank you, and Mr. Chairman, I yield back the remainder
of my time.
The Chairman. Thank you.
Mr. Hoeven.
Senator Hoeven. Ms. Sweeney, in your testimony, you
referenced the House budget reconciliation bill that is under
consideration and your testimony includes the proposed new
fees, taxes, and royalties that would impact mineral producers.
How will these policies further hamper U.S. strategic
competitiveness, particularly due to China's dominance of
critical minerals and rare earth elements?
Ms. Sweeney. Thank you for the question.
They certainly will exacerbate that situation. China will
continue to be able to dominate because we will have less
mining here in the United States if those fees are imposed.
Just one of those fees alone could really have an incredible
impact on domestic mining. You put those three fees together
and it is a devastating impact. You will see mines close. You
will see high-wage jobs lost and you will see investment
dollars being spent on other parts of the globe. And they are
going to take advantage of that and take advantage of those
opportunities.
Senator Hoeven. So this is clearly an example where the
legislation will help China and hurt the United States and make
us more dependent on China and potentially other adversaries
for critical minerals that we need, including for our national
defense. Is that correct?
Ms. Sweeney. Correct. For national defense and for all the
objectives of this Administration as well.
Senator Hoeven. Mr. Haddock, similar question. Your company
operates in 13 different countries and you noticed that our
mines in the United States have, in your words, ``have become
drastically uncompetitive.'' So again, same thing--with more
fees and taxes and costs, does that help us or hurt us in terms
of becoming competitive and how does that affect your workforce
as well?
Mr. Haddock. Thank you, Senator.
Any royalty, as I said, is a burden upon the value of the
ore body and it diminishes the ore body. That is why we
advocate for net royalty. What I think it is important here to
understand, and I will just use an example of an analysis we
have done--we created a synthetic mine and applied various
royalties. And it is interesting what happens to a gross versus
a net royalty. This is why we think net is so important to
protect the competitiveness.
In that mine, an eight-percent royalty gives over 50
percent of the net to the government. That much goes to the
United States. If that same royalty were applied and the price
of gold drops to $1,200 an ounce, as it was in 2015, the
Federal Government is taking 100 percent. And so, that really
illustrates that a gross royalty makes it very non-competitive.
We do support a net royalty. It has an impact, but it is an
impact that we are willing to bear and it is something we are
willing to do to participate.
Senator Hoeven. So Mr. Brown, for hardrock mining, what
would increased fees and royalties mean for your operations and
for your workforce?
Mr. Brown. Well, any increase in our cost is going to have
an impact. The question is to what extent can we transfer that
additional cost through the value stream to our customers and
to the ultimate end user? And if we cannot, we have very little
ability to absorb those increased costs because of the very low
margin--net profit margin of our business. So the possibility
is that we would have to curtail operations, which takes
production out of the United States. Demand for bentonite is
still there, and it has to come from someplace, which China is
the number two producer of bentonite.
Senator Hoeven. Do you pay all your workers more than
$400,000? Does every single worker that you employ make more
than $400,000 a year?
Mr. Brown. No.
Senator Hoeven. So then for somebody to say that there are
no costs in this bill, that would not be an accurate statement
because there is a clear example of where costs would be passed
on to your company, to your workers, to your suppliers, and to
your buyers of your product, correct?
Mr. Brown. Absolutely correct.
Senator Hoeven. Thank you. I yield the rest of my time, Mr.
Chairman.
The Chairman. Thank you, Senator.
We are waiting on--Senator Lankford is coming right back. I
would like to say this, Mr. Wood, I do truly, in my heart of
hearts, believe that we are going to pass the bipartisan
infrastructure bill. If nothing else gets done, that bill will
sooner or later get passed. With that, there is $3 billion in
that. Have you all identified--because I think you all have
done a tremendous job as far as Trout Unlimited identifying the
most critical needs we have and the most damage and harm that
is doing to the citizens of our country--have you put a list
together of your recommendations or your oversight so we can
work with Interior?
Mr. Wood. We could get that list to you right quick, sir.
The Chairman. If you would do that, sir. I want you--you
are just waiting, aren't you?
[Laughter.]
Mr. Wood. There might be some trout orders mixed in there
too.
The Chairman. There is nothing wrong with that. You know
that. And I have a few myself.
Anyway, but if you would, we would like to look at what you
are putting together of how you would identify the most
critical needs we have in our country and the most damaging. So
use the highest priority, damaging as far as water quality, and
then also, recreational. If you could do that.
Mr. Wood. We can do that.
The Chairman. All of you have been great. This is a tough
one. I think we can work through this. I really do. I think we
can find a pathway forward. Net and gross, I understand net and
gross pretty well, and I understand where you are coming from.
I would rather have net too. Is there somewhere in between? And
we will talk. We are going to work on this and we are going to
find a pathway. But I think all of us recognize the time has
come to make changes, but make them in the most reasonable way.
Senator Lankford is back. He ran all the way over to the
Senate--to the House floor and back--the Senate chamber.
Senator Lankford, you are up.
Senator Lankford. Mr. Chairman, thank you. I did run to the
Senate floor and back, not the House one. They don't welcome me
as much there.
The Chairman. Well, sometimes we want to give you back.
[Laughter.]
Senator Lankford. You all, thank you. I think I am batting
cleanup today.
The Chairman. Yes, you are.
Senator Lankford. So let me just say first, thank you for
all the time that you put into the testimony and in your
preparation on this. I just want to be able to try to get some
clarifying questions.
When we talk about the United States and our own mineral
development here and we look at other countries, whether they
be in Asia or in Africa or in South America and other places,
is there anything distinctly different about our geology that
we shouldn't be able to go after some of the minerals that are
here? In other words, we know there is the presence of some of
the minerals here, but is there something unique about our
geology that would say China has that mineral, we have the
mineral, but really China should develop that mineral and not
us? Or South America has a mineral. We have it or Australia has
it and we have it. I know geology is different. It is not
always the same. It is not always the same depth. It is not
always the same economical use, but is there something about
our geology that we would say--we should actually, if the
mineral is here and there--we should just get it there instead
of here?
Anyone want to comment on that?
Mr. Haddock. I will comment, Senator Lankford, thank you.
The geology is what it is. And the minerals are where we
find them. But the United States is a vast land that is blessed
with a great mineral endowment. And because of that, I do think
it is important for us to continue to explore for every kind of
mineral. And the one thing I can tell you in our industry is
the technology is always advancing and the ability to find
things that are covered and find mineral deposits that we
couldn't have found before is always evolving. And so, to me,
the answer is that this book is not written yet.
Senator Lankford. Right.
Ms. Sweeney.
Ms. Sweeney. I agree completely. I was, last week, talking
to the Association of American State Geologists and I asked
them what do you say if people say, ``Do we have all these
minerals here?'' And the geologist from Utah said, ``Well,
gosh, we have 28 of the 35 critical minerals in Utah right
now,'' and thanks to U.S. Geological Survey, and some of the
funds that they've made available to the states, the geologists
are now going out and doing more mapping than they have done in
decades and they are excited and enthusiastic and they are
finding rare earths. There is a cobalt belt in Missouri. I
mean, these are things I just was not aware of and it is really
impressive what we can do when we put our money and mind to it.
Senator Lankford. Ms. Sweeney, you mentioned in your
testimony that permitting for a mine can take seven to ten
years. Am I reading that correctly?
Ms. Sweeney. If you are lucky. If it is a major, major
mine, yes.
Senator Lankford. So here is what is interesting.
Obviously, if you go to Canada or if you go to multiple other
countries--Australia--it does not take seven to ten years to do
the permitting on that. What does it take in other places?
Ms. Sweeney. Two to three years in countries with very
similar environmental standards and environmental processes.
Senator Lankford. So when you talk about the seven to ten
years on permitting, is that for the permitting not including
the lawsuits or does that include the lawsuit time?
Ms. Sweeney. That generally does not include the lawsuits.
Senator Lankford. Okay, so this is the interesting thing.
When I have talked to several folks that are going after rare-
earth minerals in different parts of the country, they would
say, ``yes, I know where they are, yes, I know the permitting
process.'' But the unpredictable wildcard about this is the
lawsuits that can come in, that they just trickle in one after
another after another so that even after I have the permit, or
I am nearing the permit closure, it is still unpredictable. So
their statement is, ``I am not going to invest millions of
dollars in capital to go do all that has to be done just to
have it dragged out for 20 years and my capital dry up in a
whole series of lawsuits on it.'' Is that right or wrong? How
common is that?
Ms. Sweeney. It is fairly common, unfortunately. Not every
mine is challenged, but there--and I do not even know what the
percentage would be--but I am certainly anecdotally familiar
with quite a few.
Senator Lankford. So obviously, we want the outside
community to be able to have a voice into this and litigation
has been a way to do that. What is a way to be able to solve
this? Because that is not true on building highways. That is
not true on building other things. That is not true. There are
other solutions to be able to try to figure out how we give
everyone a voice. What is a solution to this? And that is open
to anybody.
Mr. Wood.
Mr. Wood. I would love to answer that. Thank you for the
question, sir. I mean, it was mentioned earlier that you can
stop mining at the land use plan. If that were allowed actually
under law, it would be a perfect solution because you could do
things like identify municipal watersheds or sacred sites that
shouldn't be subject to mining for the life of the plan. I
think that would be a very logical fix to make that would be
consistent with other uses of public lands.
Senator Lankford. Right. But you have also got a situation
where a neighbor that is five miles away says, ``If you start
mining there, there is going to be dust coming in my house and
I am going to have to dust my house five times a day and I do
not want to have that, so I want to sue you'', though they are
not geographically right next to you, they have that
opportunity to be able to do that. How do you solve that?
[No replies offered by witnesses.]
The Chairman. That is how you do it--silence.
Senator Lankford. I am with you 100 percent, trying to be
able to figure out how to be able to do this.
Well, I would tell you, that is an issue that we do need to
figure out a way to resolve, because that is a long-term issue
that if we do not find a way to be able to solve how to get
predictability in the process of permitting, to shrink the
length of time on permitting, to get predictability in the
environmental processing and to be able to get predictability
in how long people can drag out a challenge to this, then we
can talk about it all we want to here, but people are not going
to actually invest the capital to actually do it and it will
just get held up over and over and over again. And we can talk
about how we want to get more electric vehicles and we have the
lithium here, we just cannot go after it or whatever it may
be--cobalt in Missouri. We are still going to have the same
issues.
So Mr. Chairman, I appreciate you allowing me to slip in my
last question running back and forth from the Floor and I
appreciate your time.
The Chairman. You are always most welcome. Thank you,
Senator.
I want to thank all of you again. I appreciate it very
much. I think it has been very informative. You can tell there
is an awful lot of excitement and a lot of candor going back
and forth but you all did a great job.
The members are going to have until close of business
tomorrow to submit additional questions for the record.
And with that, we are adjourned.
[Whereupon, at 12:03 p.m., the hearing was adjourned.]
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