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Sunday, Dec. 16, 2012 | 2 a.m.
Because of a law passed during the presidency of Ulysses S. Grant, the federal government does not collect royalties from gold, silver, copper and other minerals extracted from public land, a source of revenue that potentially could generate hundreds of million of dollars for the federal budget, government auditors reported last week.
Although the government collects billions of dollars in royalties from fossil fuels extracted from federal lands and waters, it does not even collect information from hard-rock mine operators about the amount or value of the minerals they take from public land because there are no royalties requirements, according to the report by the Government Accountability Office.
The report was undertaken at the request of Rep. Raul M. Grijalva, R-Ariz., and Sen. Mark Udall, D-Colo. Grijalva is co-sponsor of a House bill that would set a 12.5 percent royalty rate on hard-rock minerals.
“There’s a simple legislative fix for this big hole in the federal government’s revenue stream, and it’s only fair that companies benefiting from access to public lands pay their fair share,” Grijalva said. “Congress should make sure disclosure is a priority, and then we can talk about how to make sure the American people financially benefit from the sale of public minerals the way they should have been all along.”
The Mining Law of 1872 was passed during the Grant administration to encourage settlement of Western states by prospectors. Efforts to reform the law over the past 140 years have been blocked by politicians from Western states and the mining industry.
Hard-rock mining companies pay only a few hundred dollars to register and maintain their claim on the land. According to the GAO report, the Interior Department estimated the sales value of hard-rock minerals from federal land to be about $6.41 billion in fiscal year 2011, but there is no way to know for certain.
Luke Popovich, a spokesman for the National Mining Association, said the industry does not oppose “royalties on hard-rock minerals either, provided they don’t harm the competitiveness of our industry and fairly weigh the input costs of mining here in the resource-rich but high-cost U.S.”
So, let me get this straight: If mining takes minerals from FEDERAL lands a new "royalty" law would see to it that the Federal government gets the royalty. If mining takes the mineral from STATE held lands, then the state get the "royalty."
Question is, how will such a new royalty law directly affect the State of Nevada? Would enjoy knowing what this all means.
Blessings and Peace,
Star
The 2011 Barrick Mining annual report is out. This is a link to the Barrick Annual Report for 2011.
http://www.barrick.com/theme/barrick/fil.....................
Barrick Mining either owns outright, or is a partner in a joint venture in 7 gold mines in Nevada. To determine my estimate a profits for 2011, I assumed the price of gold at $1500 per ounce, or less. The current price for gold is in excess of $1750 per ounce. The first four mines listed are totally owned by Barrick Mining. In 2011, according to their own figures, Barrick Mining produced almost 97 TONS of gold from their Nevada Mines. That is same weight as 16 full size, original HUMMERS. Barrick Mining has reported record profits and dividends in both 2010 and 2011. Barrick paid a total of $47,300,000 in local and state taxes last year.
The Cortez Hills Mine produced 1.42 Million (44.375 tons) ounces of Gold at a cost of $245 per ounce. If you assume a conservative profit of $1000 per ounce, you get a profit for the Cortez Hill mine of $1,420,000,000.
Bald Mountain Mine produced 93,000 ounces (2.9 tons) at a cost of $558 per ounce. Assuming a profit of $900 per ounce for the Bald Mountain Mine, you get a profit of $83,700,000.
The Gold Strike mine produced 1.09 MILLION ounces (34.0625 Tons) at a cost of $511 per ounce. Again assuming a profit of $900 per ounce for the Gold Strike mine, you get a profit of $981,000,000.
Ruby Hill mine produced 127,000 ounces (3.96875 tons) at a cost of $334 per ounce. Assuming a profit of $1000 per ounce for Ruby Hill, you get a profit of $127,000,000.
Barrick Mining is involved in three joint ventures in Nevada.
Barrick owns 33% of the Marigold mine. Barrick's share of production was 51,000 ounces (1.59675 Tons) at a cost of $761 per ounce. For the Marigold mine, assume a profit of $700 per ounce. The total profit would be $35,700,000.
Barrick owns 50% of the Round Mountain mine. Barrick's share was 178,000 ounces (5.5625 Tons) at a cost of $612 per ounce. Assuming a profit of $800 per ounce for the Round Mountain mine, we get a total profit of $142,400,000.
Barrick owns 75% of the Turquoise Ridge mine which produced 135,000 ounces (4.21875 Tons) at a cost of $569 per ounce. Finally for the Turquoise Ridge mine, assume a profit of $700 per ounce. This would give a profit of $ 94,500,000.
Barrick is actively exploring in the Carlin Trace in Nevada. The Carlin Trace is one of the richest gold deposts in the world. Barrick's annual report shows that 44% of the companies income comes from North America. Don't forget that Barrick is also mining silver along with the gold in Nevada. If you add all of the projected and conservative profits, the total is $2,884,300,000. The mining industry in Nevada is also actively mining silver, copper, lithum and many other minerals.