Time To Update the 1872 Mining Law?

Jefferson Public Radio
By Liam Moriarty
April 27, 2014

The federal legislation that regulates mining for copper, zinc, gold and many other minerals was originally signed into law by President Ulysses S. Grant. In ways, the law reflects a 19th century view of natural resources: limitless and there for the taking.

Now, a legacy of pollution at tens of thousands of abandoned mines across the West is prompting an Oregon Congressmember to head a new effort to revise the General Mining Act of 1872.

Chris Cora stands on what used to be a mountaintop in the Umpqua Basin of southern Oregon. Now, it’s essentially a landfill …

Chris Cora: “ … filled with waste rock and tailings. There’s actually zinc ore in here. Well, it’s concentrated zinc, which is really bad for the environment.”

Cora is with the Environmental Protection Agency. The rubble under our feet is what’s left after a mining operator blasted off the top of the mountain to get to deposits of copper and zinc. The company piled up the leftovers, covered them with plastic liner and soil, then abandoned the site. The liner soon failed.

Now, rainwater percolates down through the mining waste, picking up a toxic load of heavy metals and acid. Cora says that’s made the nearby creek uninhabitable for the region’s threatened coho salmon and other fish.

Chris Cora: “It kills the bugs that they would eat. So the bugs can’t survive, so they have no food to forage on. If they laid eggs, those eggs would just get neutralized. They can’t live in an acidic stream.”

Down the road, at the mouth of the old mine, a dilapidated system of culverts channels runoff from the mine onto the mountainside. Susan Lee, with the Bureau of Land Management, says the bright orange color staining the rocks is likely iron.

Susan Lee: “There’s iron, zinc … Arsenic levels are high on this site. A full complement of heavy metals.”

Lee explains that the water we’re seeing carried off by the culverts is less than half of what’s running off underground. Eventually, it all ends up in the creek. Estimates for cleaning up the site run to more than $15 million.

The Formosa Resources Corporation, a Canadian company, mined the site from 1989 till 1993 before closing shop. The firm has since gone out of business. That means the cost for cleaning up the toxic mess falls on the taxpayer. Representative Peter Defazio has a problem with that.

Peter Defazio: “We have thousands of abandoned sites like this across the western United States and we have virtually no budget to clean them up.”

DeFazio represents Oregon’s 4th District. The Democrat from Springfield says one way to get that money is to require companies to pay for the minerals they extract from public land.

Pater DeFazio: “The taxpayers of the United States get no royalties, unlike virtually any other entity on earth. Other countries charge royalties, private owners charge royalties, states charge royalties, Indian tribes charge royalties, but not the United States government.”

DeFazio also faults the way the government requires financial assurances from mining operators. At the Formosa mine, the company forfeited a million-dollar bond, which hardly makes a dent in the actual costs of cleaning up the site. DeFazio is pushing for stricter bonding requirements to insure that when mines close down, taxpayers don’t get stuck with the bill.

But Katie Sweeney, with the National Mining Association, says that problem has already been fixed.

Katie Sweeney: “The states now require that the financial assurance amount covers the cost of cleanup as if a third party were performing that cleanup.”

Under the bonding rules in force since 2001, Sweeney says, a situation like the Formosa mine wouldn’t happen. The Western Governors’ Association seems to agree. Last year, the group opposed an effort by the EPA to establish bonding requirements for mining operators. The governors said the states had the expertise and experience to ensure companies were held financially responsible.

But Bonnie Gestring, with the environmental group Earthworks, says that’s not always the case.

Bonnie Gestring: “You see gaps within different state regulations. For example, the state of Idaho doesn’t require reclamation or bonding for underground mines.”

Gestring points to the Lucky Friday mine in northern Idaho. EPA figures show the mine released 17 million pounds of toxic material in 2011. As an underground mine, it’s exempt from posting a bond to cover the cost of cleanup.

For mining on federal land, the Bureau of Land Management and the US Forest Service both say they have robust systems in place to make sure mine operators are bonded. But a 2011 report by the Government Accountability Office found that dozens of mines supervised by the BLM had inadequate bonding.

As for royalties, the National Mining Association’s Katie Sweeney says the mining industry is willing to pay royalties. But, she says, those payments should based on profits, rather than on how much material is mined.

Katie Sweeney: “We’re already in a high-cost environment here in the US, so maintaining our competitive edge is really important.”

Peter Defazio says that won’t do. Seeing how easily General Electric and other corporations manipulate the law to avoid taxes, he says, mining operators should pay on the value of the minerals they extract from public lands.

DeFazio is the senior Democrat on the House Natural Resources Committee. Even in a Republican-controlled House, that gives him some political muscle to push this issue forward. But previous efforts at similar reforms have run aground on opposition in the Senate.

Senate Majority Leader Harry Reid is the son of a hard-rock miner and one of the mining industry’s most reliable friends. Getting such a bill past Reid could be DeFazio’s biggest challenge.