Reforming the General Mining Act of 1872: A Path Towards Improved Environmental Quality and Accountability
Joshua Burg | February 2021
A rock formation in Custer State Park, South Dakota
When the Act was passed, permits were sold for approximately $2.50 to $5.00 per acre, which made it affordable for prospectors to lease and work the land they found deposits on. Increasing costs of mineral location technology have since limited the ability of individuals to discover deposits and stake claims, leaving larger companies to thrive under the act. The most recent reform to the General Mining Act was in 1976: the Federal Land Policy and Management Act (FLPMA). Most notably, the reform required companies and individuals that abandoned mines to follow reclamation, or “land restoration,” procedures.
When the FLPMA was signed into law, the cost to obtain a permit remained less than $5 per acre, and companies that mined on the land were not required to pay royalties. Today, fifty years after that reform, royalties are still not required. In October of 1994, Congress implemented a moratorium on the sale of new permits, and that remains in effect. However, during the entire period in which the government sold permits, the permits were sold for substantial losses. In a Government Accountability Office (GAO) analysis of only twenty permits granted from 1970 to 1989, the federal government received less than $10,000 for a total sum of land estimated to be worth $30.2 million to $104.8 million– adjusted to 2020 dollars. The legal infrastructure for selling dirt-cheap, mineral-rich land remains in place. The moratorium on sales was a step in the right direction for the United States, especially considering the substantial losses the government was incurring. However, companies that obtained permits prior to the moratorium continue to operate on the land without paying royalties on their income from mining.
The argument for royalties is not just moral and qualitative, but also quantifiable. The GAO has identified over 140,000 abandoned hard rock mine features of which “67,000 pose or may pose physical safety hazards… and about 22,500 pose or may pose environmental hazards;” this does not include the other 390,000 features that have not yet been analyzed. Although the Federal Land and Policy Act of 1976 mandated the reclamation of abandoned mines, reclamation was not required if the mine was abandoned before 1976. This meant that many abandoned mines were never reclaimed.
Mining companies continue to operate on patented federal lands without having to pay for their past environmental shortcomings. It is estimated that government agencies under the Department of the Interior have to spend a combined $287 million annually to address the physical and environmental hazards at these abandoned hardrock mine sites. Mining companies cannot fully remediate the environmental damage they have caused. However, requiring mining companies to pay royalties would help cover the costs that the taxpayers have long been burdened with.
Recent Attempts at Reform
In the last twenty years, there have been numerous attempts to pass reforms of the General Mining Act. Despite both parties having a supermajority in government, no reforms have passed. Former president Barack Obama advocated for major reform to the General Mining Act at the start of his presidency. The Hardrock Mining and Reclamation Act of 2009 proposed that land with existing permits pay 4% in royalties, while any newly permitted mines would have to pay 8% in royalties. The proposed act also gave the Secretary of the Interior the ability to set the conditions for the issuance of permits. Overall, this piece of legislation would have been a major improvement. With a new provision allowing the Secretary of the Interior to set the conditions of issuing permits, it is quite likely that we could lift the Congressional moratorium on permits. We could then begin issuing permits on a price-adjusted, environmentally cognizant, case-by-case basis. As promising as the reform was, the bill stalled, and no action was taken.
More recent proponents of reform, such as former Senator Tom Udall (D-NM), have advocated for royalty rates to be set by the Secretary of the Interior rather than by Congress itself, see S.1883. Overall, this gives much more flexibility to adjust royalties, and may help avoid periods of prolonged legislative inaction– such as allowing 0% royalty rates for over a century. Although it is important to be cautious of a new administration eliminating the royalty altogether, the flexibility that comes with executive control exceeds the risks. The ability to respond to the needs of the Interior Department and to changes in market forces is far more important than setting a fixed rate that may stick for several decades.
Another failed reform, The Hardrock Mining and Reclamation Act of 2007, proposed reasonable ways to spend the royalties. The bill suggested dividing royalty income between a reclamation fund and Community Impact Assistance fund. This proposition has straightforward benefits: abating environmental hazards, such as acid mine drainage, that pollute groundwater and helping communities recover from over-pollution.
The newly inaugurated Democratic supermajority seems to have put environmental justice at the top of its agenda. Reforming the General Mining Act of 1872 would be a highly effective and simple means of proving the new administration’s sincerity and initiative in environmental matters. We may be a nation of laws, but let us make sure that our laws reflect our present goals and account for our current adversities.
n January of 1872, under the purview of President Ulysses S. Grant, Congress passed the General Mining Act. The law was intended to encourage settlement and economic development in the largely non-arable American West. The Act offered patents on federal land to individuals and companies that located deposits of hardrock minerals such as gold, copper, iron, and, more recently, uranium. Attitudes regarding the treatment of land have shifted dramatically since the 19th century; conservation and preservation have become prominent aspects of environmental policy. The General Mining Act of 1872, however, is one such law that has not been adapted to the modern world.