Lawmakers May Change Mining Contract Rates

The House votes on the first major overhaul of an arcane law about mining for gold, silver and other hard-rock minerals. For every ounce of gold pulled out of federal lands, the United States does not receive a penny under the current mining law, which has been on the books since 1872.

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There is gold in federal hills, yet, for every ounce of gold pulled out of federal lands, the U.S. receives not even a copper penny because of a mining law that's been on the book since 1872.

But today, the House votes on the first major overhaul of that law in more than a century, as NPR's Elizabeth Shogren reports.

ELIZABETH SHOGREN: When President Ulysses S. Grant signed the 1872 Mining Act, Boise, Idaho was a new settlement in the Wild West. Gold prospecting was the biggest game in town.

These days, Boise is a 21st-century city full of high-tech companies. That 19th-century law has been a hot topic in Boise lately. That's because a Canadian company is proposing to build a big gold mine upstream in the headwaters of the Boise River. And the federal government says the 1872 Mining Law gives it no choice but to approve the mine.

Those crying fowl aren't just typical environmentalists - there's Boise's mayor, lots of hunters and anglers, and pediatrician Perry Brown.

Dr. PERRY BROWN (Pediatrician, Boise, Idaho): I love to fly fish, and one of my very favorite places is the Middle Fork at the Boise River, at the top of which is, as proposed, gold mine.

SHOGREN: Brown is furious that an outdated law puts mining above the health of wild trout and the people of Boise.

Dr. BROWN: The mining law that was passed over 130 years ago was appropriate for the time, which was settlement of the West, acquisition of natural resources to strengthen us as a country. It is not appropriate for the populated and settled West that is now very dependent upon the natural resources that still exist namely, water.

SHOGREN: Brown also worries that chemicals used at the mine will pollute the river that provides 20 percent of the city's drinking water, or fuel truck will crash on a narrow dirt road leading to the mine and spill diesel into a stream.

Dr. BROWN: The thing that really is upsetting to me is that this is not an American corporation. It's coming into the U.S., taking the gold out of the U.S. without royalties to be paid to the U.S. and then leaving us potentially - and I would even argue likely with the significant clean up issue.

SHOGREN: Bruce Thorndycraft is the general manager of Atlanta Gold Incorporated, the company that wants to build the mine. He says his operation won't pollute streams.

Mr. BRUCE THORNDYCRAFT (General Manager, Atlanta Gold Incorporated): We are very environmentally sensitive. In this business we have to be. And we don't get permitted if we're not. And there wouldn't be a point in spending all this money if we didn't think we could do it properly.

SHOGREN: Thorndycraft has been paying close attention to the debate in Washington. One of the biggest changes the House bill would make is to start charging royalties. Existing mines would pay four percent; new mines, 8 percent. And like most miners, Thorndycraft says that's too much.

Mr. THORNDYCRAFT: The size of that royalty exceeds the profit margin of most mining company. It will probably drive most mining offshore where there are very few environmental regulations. Then, that will mean that, overall, the world will be a dirtier place.

SHOGREN: American manufacturers also opposed the bill saying it will drive up the cost of raw materials. Still, the House is expected to pass it.

The Senate hasn't drafted its version yet. But Senate Majority Leader Harry Reid of Nevada is a miner's son and a long-time supporter of the industry. He says reform is needed, but he's unlikely to let the Senate go as far as the House.

Elizabeth Shogren, NPR News, Washington.

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