[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

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

                                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                    
          
-----------------------------------------------------------------------------------          
        
               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

                              ----------                              

                           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

                              ----------                              


                        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:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
    
    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:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
    
    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:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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.]

                      APPENDIX MATERIAL SUBMITTED

                              ----------                              

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                   [all]