Mining officials say industry is under government attack

Matt Kelley

Friday, Aug. 6, 1999 | 11:43 a.m.

WASHINGTON -- An Interior Department ruling that would restrict mining on federal land is part of a scheme to abolish the industry in the United States, mining representatives and their House supporters argue.

"This nation's mining industry is under attack like no other industry today," Rep. Jim Gibbons, R-Nev., said at a hearing Tuesday. "It seems like the federal government wants the gold, and the miners get the shaft."

At issue in the House Resources mining subcommittee hearing was a 1997 department ruling that limits the area on federal land that mining operators can use for support operations such as milling and waste disposal. The opinion from Interior Department lawyer John Leshy said an 1872 federal mining law limits those operations to 5 acres per 20-acre mining claim.

In a vote last year, Congress did not allow Leshy's opinion to block approval of a gold mine in eastern Washington state. Language that would prohibit the department from enforcing the opinion is part of a spending bill the Senate is considering.

Earlier this year, the House voted 273-151 to reject a ban on enforcement of the opinion.

The 1872 mining law itself has been disputed in recent years. Critics, including Interior Secretary Bruce Babbitt, say the law amounts to a giveaway of public resources because it does not require mining companies to pay royalties for the metals and minerals they dig from federal land.

Mining industry supporters complained to lawmakers Tuesday that royalties and other restrictions would destroy a business beset by plunging prices in commodities such as copper and gold.

"Too much taxation will kill this industry," said John Hill, a mining analyst for the securities firm of Salomon Smith Barney Inc. "It's not a very profitable industry at all at this point."

But Rep. Nick Rahall, D-W.Va., a supporter of royalties and other changes to the mining law, said the issue was not about whether there should be a mining industry. "What it's about is fair play," Rahall said.

Gibbons and the panel's chairwoman, Rep. Barbara Cubin, R-Wyo., said Leshy's opinion on milling areas threatened many existing and planned mines. Those mines need more room to use relatively new techniques such as heap leach, which involves pouring chemicals onto large piles of crushed ore to draw out smaller amounts of desired metals, they said.

"Rather than negotiating with Congress, the administration is making law by handing down novel interpretations of statutes which have been around for a century," Cubin said. "Our nation's ability to explore for and develop domestic sources of metals is imperiled."

Leshy said the mining industry realized as much as 30 years ago that the limitation was in the 1872 law, and the limit would affect "relatively few mining operations." No mining company has taken the issue to court, Leshy said.

"If it's that stupid, I can't imagine that a judge wouldn't throw it out, but nobody's even asked a judge to throw it out," Leshy said.