[Congressional Record Volume 143, Number 61 (Monday, May 12, 1997)]
[Senate]
[Pages S4293-S4295]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         THE MINING LAW OF 1872

  Mr. BUMPERS. Mr. President, on this beautiful Monday morning when 
there is absolutely nothing going on in the Senate or in the entire 
Congress, it is an ideal time to remind the Members of Congress and the 
American people that 125 years ago this past Saturday, Ulysses Grant, 
who was President of the United States, signed a bill called the mining 
law of 1872. This is now my ninth year of trying to get this law 
repealed. It is probably the biggest single scam that continues in 
effect in America today.
  In the past several years I have brought up numerous amendments to 
try to modify or repeal the mining law. Each time some of my 
colleagues, who do not have any hard-rock mining in their State, voted 
with western Senators to oppose my amendment. The western Senators 
always argue the reason they do not want to require the mining 
companies to pay a royalty for mining on public land and the reason 
they want the mining companies to buy this land for $2.50 an acre is 
because it creates jobs. That is absurd Mr. President. We do not 
tolerate that in the private sector. We do not tolerate it anyplace 
else in the public sector. We should not tolerate it here.
  Let me just refresh people's memory on how the mining law works. 
Under the law that Ulysses Grant signed, which was designed primarily 
to encourage people to move west, anybody who wanted to could go out on 
Federal lands and drive four stakes in the ground and claim 20 acres 
for the purpose of extracting hard-rock minerals.
  I never will forget when I described what an outrage this was to one 
of my former colleagues. I was trying to get him to cosponsor the bill 
with me. When I got through explaining it to him, I said, ``Well, will 
you help me with this?'' He said, ``No, I am going out west and start 
staking claims. I didn't know you could do that.''
  If you drive four stakes in the ground you own 20 acres of minerals 
as long as you want to hold that claim. And you can file as many of 
them as you want. If at some point you find that there is gold, silver, 
platinum, palladium, copper--you name it, under that 20 acres, you go 
to the Department of the Interior, to the BLM.
  Let's say you have 100 acres, five claims, and you want to mine it 
because you think it has gold under it. If you can convince BLM that, 
yes, indeed, there is gold under it, they are obligated by law, and 
have been for 125 years, to give you a deed to that 100 acres for $250 
or $500. Some claims go for $2.50 per acre and others go for $5.00 an 
acre. I will come back to that in a moment.
  The big mining companies usually approach these people that have 
staked claims and they say, ``You know, we think this is a good claim. 
We will buy that claim from you and we will give you a royalty.'' So 
the farmer in Arizona or Wyoming or Idaho or Montana says, ``Here, take 
it.'' The mining companies will usually pay him a substantial royalty. 
What do they pay the United States, who gave it to him for $5 or for 
$2.50 an acre? Absolutely nothing.
  Nothing has changed since 1872. The United States has not collected 
one dime of royalty on the more than 3 million acres that it has deeded 
away for either $2.50 an acre or $5 an acre.
  Mr. President, I cannot believe I am standing here for the ninth year 
trying to educate my colleagues on this. But I will say this. The news 
magazines, from ``60 Minutes'' to ``Prime Time Live'' to ``20/20'', 
they have all done it. And NBC just as recently as 2 months ago, did a 
segment on this.
  Is it not strange that we have no compunction about cutting $55 
billion out of welfare, $16 billion out of Medicaid for the poorest 
children's health care in America and $115 billion from Medicare--you 
can say you are going to take it out of providers. If you take it out 
of providers, the beneficiaries are going to suffer. An assault, 
literally, on the most vulnerable people in America--the elderly, the 
poor, and the children--and allow the biggest mining companies on Earth 
to buy Federal land with billions of dollars worth of gold under it for 
$2.50 an acre. The Mineral Policy Center estimates that over the past 
125 years we have

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deeded land containing $243 billion worth of minerals for which we 
received not one red cent.
  Anybody who thinks this is all conjured up, just check the facts, 
check with anybody you want to. I have heard every argument under the 
shining Sun to keep from doing something about this. So, we now have 
600 patent applications pending. I have had some partial success in the 
last 3 years in my efforts to do something about this. We have put a 
moratorium on the issuance of any additional patents. But we have been 
doing it on a yearly basis. We first imposed the moratorium in 1995. 
This moratorium has been renewed the last 2 years. George Miller and I 
have a bill pending in both the House and Senate that would make that 
permanent--no more giveaway of the public domain.
  There is not a Senator in this body who has not gone home and told 
the chamber of commerce and the Rotary Club what a magnificent steward 
he is of their money, their tax money. And when they run, what do they 
say? ``I'll treat your money like it was my own.'' Really? Do they?
  You know, Barrick Resources, which is the biggest gold company in the 
world pays private landowners substantial royalties. But suggest they 
pay poor old Uncle Sam, who literally gave them the minerals in the 
land, suggest they pay him cent farthing, and they come unglued.
  No, we can't do that.
  How about the State of Nevada? Do you pay them anything?
  Oh, yes, we pay Nevada. We pay a severance tax. But Uncle Sugar? Just 
can't do it. It will cost jobs.
  You think about 260 million people in this country who own those 
minerals and Congress insisting that they be kept in the dark about 
what has been going on. Of the 600 patents now pending, we have 
literally stopped 235 of those. There may be no way legally that we can 
stop the others. Sooner or later those patents will probably be 
issued--hopefully for not a lot of gold. If my and George Miller's bill 
passes this year, there will be no more patents without royalties and 
reclamation fees mining companies will no longer be able to take a 
depletion allowance deduction on their tax returns.
  You think about these people getting depletion allowances. The very 
nature of depletion is to recover your cost of a depleting mineral. 
Your cost? They do not have any cost. They did not pay anything for it. 
How can you deplete something you did not pay for? So George Miller and 
I say, yes, in the future we are going to take this depletion allowance 
away from you.
  Mr. President, think about this, as we have gone home and told the 
people, ``My No. 1 priority is to balance the budget. I will spend your 
money like it was my own.'' On December 1, 1995, ASARCO received a deed 
to 349 acres in Arizona.
  Did you know Bruce Babbitt has no choice? It is not up to him. This 
is the law. He has to comply with the law. So he gives ASARCO a deed, 
for $1,745--$1,745, that is about how much a Senator makes in a week. 
For 349 acres they pay $1,745. Do you know the rest of the story? 
Underneath that 347 acres is $3 billion worth of copper and silver. Do 
you know what the United States will get in royalties, reclamation 
fees? Zip, zero, not a dime.
  And then on September 6, 1995, Faxe Kalk, a Danish corporation--
incidentally, many of the biggest mining companies including Barrick 
are foreign. I do not have any objection to that. Barrick is a Canadian 
company. How would you like to be a miner and go up to Canada and say, 
``I want to buy a couple of acres of land with billions of dollars 
worth of minerals. I will give you $10,000 for it.'' They would 
probably put you in jail for being insane. And yet that is what we do. 
And here is a Danish corporation called Faxe Kalk. They only wanted 110 
acres. And Bruce Babbitt had no choice. The law required him to give 
this Danish corporation a deed for that land for $275, about 1 day's 
pay for a U.S. Senator. And what do you think it had under it? One 
billion dollars worth of travertine. So for $275 we gave them $1 
billion, and what did we get in return in for the $1 billion? Zip, 
zero, nothing.
  On May 10, 1994, American Barrick, as I said the biggest gold mining 
operation probably in the world, received 1,800 acres of land in 
Nevada. They paid $9,000--$5 an acre--for that 1,800 acres and they got 
$11 billion worth of gold.
  The Stillwater Mining Co. in Montana has not received a full patent 
yet. They have what is called a first half certificate, but they are 
one of the companies that had to be grandfathered in the moratorium, 
and Stillwater wants about 2,000 acres in Montana.
  But Stillwater Mining Co.--and this is in their prospectus. These are 
not my figures. This is what they say-- for 2,000 acres, for which they 
will pay $10,000--$5 an acre--they get $38 billion worth of palladium 
and platinum--their figures--and the U.S. taxpayer gets nothing.
  Mr. President, these things are literally unbelievable. I have made 
this speech here for 9 years, and I must say that while for a long, 
long time it fell on deaf ears, it is now getting to the point where 
Senators--and I do not want to make this a partisan issue, but Senators 
on that side of the aisle with the exception of six or seven have stood 
fast to continue this, and the time is coming because of all these news 
magazine stories where you are going to see 30-second spots next fall 
on how people voted to give away the public domain. I can see a spot 
now saying, did you know so and so voted to continue the giveaway of 
gold and minerals? Did you know we have given away $243 billion worth 
of gold, silver, platinum, and so on, in the past 125 years, and he 
votes to continue that. They haul out all the votes that we have had on 
amendments that I have offered on this floor just in the last 3 years. 
The Mineral Policy Center said of the $243 billion worth of gold, 
silver, et cetera, that we have given away in the past 125 years, if we 
had the kind of royalty which George Miller and I have in our bill the 
taxpayers would have received $12 billion.
  Mr. President, I would like to summarize the legislation that I and 
Congressman Miller have introduced. Mining companies would have to pay 
a 5-percent net smelter return royalty for operations on public land. 
Now, this is another dimension that I have not mentioned, and that is a 
lot of people in this country are mining claims on Federal lands that 
have not been patented. Once you patent it, they give you a deed for it 
and it is yours. But there are a lot of minerals being mined in this 
country on unpatented lands though they are Federal lands. They do not 
pay any royalty either. So that net smelter return is on unpatented 
lands and it is predicted to save $175 million over the next 5 years.
  A second part of the legislation is a claim maintenance fee. Until 
about 5 years ago, when you filed a claim, you had to submit some proof 
to BLM that you had done some work on it. You could go out there with a 
pick and shovel and work for about an hour, and then you sent it into 
the BLM and said I worked hard on my claim and I still haven't found 
anything. That was enough to renew it.
  About 4 years ago I finally got this body and the Congress to put a 
$100 annual fee on these claims, 20-acre claims. That is $5 an acre a 
year to hold the claim. We had 800,000 claims at that time. We now have 
330,000, which shows you that people were just willy-nilly filing 
claims hoping that Barrick or some other big gold mining company would 
come by and make an offer for it. Isn't it interesting that very seldom 
does a major mining company ever find this stuff. They buy the claim 
from some old nester who has had it for 50 or 100 years. They do not go 
out and explore for it until after they buy the claim. Now, they have a 
pretty good idea of what is there, but what they do is they buy claims 
from a guy who has owned it for the last 20 to 50 years and give him a 
royalty and yet they say they cannot give us one.

  But in any event, our bill continues the $100 annual fee on existing 
claims, and we make it $125 on new claims. So if anybody goes out and 
files a claim under this bill for 20 acres, the new fee will be $125. 
And that is only on unpatented lands, of course. Then we have a 
reclamation fee that ranges on a sliding scale from 2 percent to 5 
percent of net income depending on the profitability of the company. 
Mr. President, you cannot charge a royalty to somebody who already owns 
the land even though we gave it to them. You take American Barrick that 
just in 1994 got $11 billion worth of gold. It is theirs. You cannot 
charge somebody for mining on their own property. But

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you can charge a reclamation fee, and we calculate that is worth $750 
million over the next 5 years. Do we need a reclamation fee? The Bureau 
of Mines says there are 250,000--listen to this--sites on BLM land that 
have been abandoned and need to be reclaimed, 2,000 claims in national 
parks, if you can believe it--abandoned, and the Mineral Policy Center 
says there are 557,000 mines that have been abandoned in this country 
on both public and private lands--557,000 mine sites that need to be 
cleaned up. Do you know what they estimate the cost of cleaning them up 
to be? Somewhere between $32.7 billion and $71.5 billion.
  So here we have given away 3 million acres that had $243 billion 
worth of gold, silver, platinum, and palladium under it, and what have 
we gotten in return? We have gotten 250,000 sites that we have to clean 
up on BLM sites and 2,000 in the national parks. Sometimes I have a 
hard time believing my own words. If I did not do so much research on 
this all the time, I would not believe it. So why not charge a 
reclamation fee and say we are at least going to start cleaning up 
these sites.
  Now, these people not only get the land for $2.50 per acre, they not 
only get $1 billion worth of gold for which they pay the U.S. 
Government not one cent, they also leave an unmitigated environmental 
disaster. Listen to this; 59 of the sites on the Superfund National 
Priority List are directly related to hardrock mining. Who could argue 
that we need to charge a reclamation fee to help reclaim the hundreds 
of thousands of acres that have been abandoned by the mining companies.
  And finally, Mr. President, I have already alluded to the fact that 
our bill contains a fourth provision and that is a depletion allowance 
repeal. I forget exactly what it is. I think it is 15 percent for gold, 
for silver and copper, and 22 percent for palladium and platinum. We 
have always allowed depletion on oil because it was a depleting 
resource, gas because it was a depleting resource, and, yes, a 
depletion allowance on private land would make some sense. But to allow 
people to get land from the U.S. Government for virtually nothing, 
leave us an unmitigated disaster to clean up, and then get a 15 to 22 
percent depletion allowance to deplete a resource that they paid 
nothing for. That is absurd.
  Congressman Miller and I will be working very hard to pass this bill 
this year. I would like to think that the time has come when Senators 
did not feel they could just accommodate their good friends. They are 
my good friends, too. Some of the people I debate this with--and the 
debate could get very loud and raucous--are my best friends. It is kind 
of like trial lawyers. Trial lawyers fight all day long and go out to 
dinner together. I have done that, too. This is not aimed at anybody 
individually. This is aimed at trying to bring some fundamental 
fairness to what simply is so intolerable it cannot be tolerated any 
longer.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. JEFFORDS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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