Mining Law/Public Law

Molybdenum is a valuable metal that is used in strengthening steel. Years ago, the giant AMAX corporation was prospecting on federally-owned land in Colorado and discovered a major molybdenum mine worth $7 billion. They then bought the land from our government for about $5 an acre. All profits from the mine go to AMAX; the government receives no royalties. When the mine is exhausted, AMAX could build ranchettes or any other commercial operation and continue making money.

In Nevada, AMAX went prospecting on federally-owned land and discovered gold. The AMAX Sleeper Mine produced last year 256,219 troy ounces of gold with a value of more than $100 million. The company made a net profit of $64 million on that mine alone, including depreciation and “depletion” allowances. The government — meaning the taxpayers -­received nothing.

All these windfalls are legal, compliments of the infamous 1872 Mining Law. Originally, its purpose was to encourage the lone prospector with a pick and shovel to explore, find and market minerals. Now, the pick and shovel are long gone and in their place are the gigantic mining equipment of huge multinational mining companies, including foreign owned companies. The paltry price they pay per acre is still the “fair price” in 1872.

By now, you may be engaging in a double take. So let it be repeated. Companies can go on the public lands — which comprise one-third of the United States — find hard rock minerals (except coal), apply for and receive a patent from the U.S. government which gives them full ownership of this enclave inside the vast federal lands. The discovered

minerals are the companies’ property and they get to keep all the profits without paying Washington any royalties. In Nevada alone, it is estimated that $10 billion in “our” gold will be privately acquired in this manner before the end of the decade.

Pretty generous, aye? No other country extends such a giveaway to hardrock mining companies. In Australia, a company finding minerals receives only the right to apply for a lease from the government. Strange, this tighter requirement has not discouraged U.S. mining companies from taking out leases, paying royalties and making a bundle from Australian mineral extraction. Yet, the American Mining Congress — the chief lobbyist to preserve the 1872 Mining Act — has declared that without their right to free minerals on government land, the U.S. would be “a third rate economy.”

Some years ago, we published a book titled “Public Dominion, Private Domain” (Sierra Club Books, San Francisco, 1985) detailing the history and abuse of the 1872 Mining Act. The general press was not interested in this massive giveaway.

Now, however, there are stirrings that are worrying the American Mining Congress. The Washington Post printed a long page one story on just how the 1872 Mining Act giveaways leave vast environmental damage in their wake. The corporate miners are not averse to leaving acidic runoffs, land erosion, pollution and other wreckage as the price the public pays for giving them the minerals free.

Then along came Prime Time with Sam Donaldson earlier this month with a very graphic portrayal of the profiteering at public expense that this obsolete Mining law permits.

Next month, Cong. Nick Rahall, II will hold hearings in the House of Representatives to change the 1872 Act by requiring royalties under leases, among other changes. But stronger changes are needed, including giving citizens standing to sue the government for mismanagement under the Act, considering other multiple-uses of the land beyond the mining of the area, and making sure the land is reclaimed by the mining companies.

At a time when George Bush and other Washington politicians want to reduce their self-created deficit by cutting health, safety, and housing programs, and freezing social security cost of living increases, why are these same politicians not eager to have wealthy corporations pay the fair market value for the minerals they are tearing out of the public lands?

For more information on the 1872 Mining Act, write to Cong. Nick Rahall, House of Representatives, Washington, DC. Then, demand that your Congressional Representatives stop this legal looting of the public lands.