Senator BUMPERS. Thank you, Mr. Hocker.

Mr. Delcour.

STATEMENT OF DAVID W. DELCOUR, VICE PRESIDENT, AMAX MINERAL RESOURCES CO., AND CHAIRMAN, PUBLIC LANDS COMMITTEE, AMERICAN MINING CONGRESS

Mr. DELCOUR. Mr. Chairman, my name is David Delcour, Chairman of the American Mining Congress, Public Lands Committee. The biographic material and identification of the American Mining Congress is in the written statement, and I will not recite that

now.

AMC believes the general mining law governing disposal of hard rock minerals on public lands is not in need of revision. Existing law more than adequately meets the four criteria that are essential to any mineral tenure law. These criteria are:

One, there must be nonexclusive access to search for minerals on public land;

Two, once detailed exploration is focused on a well-defined area, exclusive exploration rights must be available;

Three, those who discover valuable minerals must have an exclusive right to develop the minerals they have discovered; and

Four, where commercial quantities of minerals are discovered, tenure must be secure under terms reasonably set in advance.

During the life of the Mining Law, the Nation has undergone dramatic changes in minerals requirements and market conditions, and it has accommodated the challenge well. The broad body of judicial interpretation and administrative law has left virtually no question unanswered with respect to the Mining Law. It address land tenure and nothing else. Accordingly, it has accommodated changing social goals.

Today's mining activity on public lands is subject to the full array of environmental protection laws. Attached to my testimony is an extensive analysis of the operation of the Mining Law historically and currently which I would ask be included in the record.

In reviewing S. 1126, Mr. Chairman, there appear to be three principal goals: generating cash for the Federal Treasury; eliminating the transfer of public lands to private parties; and enhanced environmental protection of mined lands. AMC believes these goals are well served by existing law. If the Congress disagrees, however, we believe each of these concerns can be addressed in ways far less disruptive to the domestic mining industry's ability to meet national minerals needs.

In the case of royalty, for example, we believe the public receives a better return under current law through greater domestic production and by being able to mine lower grade ores. Any royalty would remove the incentive of small exploration ventures, since less margin would be available for an ultimate mine developer to share.

The royalty proposed in S. 1126 greatly exceeds those found in the private sector and at the very least should be sharply reduced. Finally, reservation of a royalty could be incorporated into the existing Mining Law, thereby avoiding the terrible disruption that would accompany wholesale revisions to the law.

Other proposed fees in S. 1126 are similarly onerous. While an exploration project by a major mining company may typically spend at levels specified in the diligence provision of the bill, the small explorationists who develop prospects to the point where they are of interest to larger companies simply would be put out of business.

We view the patenting issue in a similar way. While it is true that a short-life precious metals mine can and does operate often without ever going to patent, longer life mines, the base metal type mines which are vulnerable to periodic world market triggered closures continue to require the security of tenure which only comes through the issuance of a patent.

Nevertheless, if Congress feels it must assure that mine sites remain in public ownership for the long term it would make far more sense to develop a reverter provision within the context of the present patent provisioning features of the law.

A recent General Accounting Office report has been referred to extensively today. Attached to my testimony is a rather comprehensive rebuttal of that report which I would ask be included in the record.

I would simply point out now that I believe the rebuttal refutes every major assertion of the report, identifies 36 important errors and omissions, and I would hope if we agree on nothing else today that the substance of that report not be seriously pursued in this debate.

Reclamation of mine lands is required nearly everywhere under State law. I can think of only two states that do not have a specific reclamation law, at least two mining states. In the future, EPA's development of mine waste regulations inevitably will lead to further Federal restrictions on reclamation as well as groundwater controls as they evolve.

Of course, activity on public lands is well regulated by FLPMA. Now I cannot say to a moral certainty that there are no exceptions or loopholes in FLPMA relative to mine land reclamation on public lands. There may be. None particularly come to mind. But if you feel there are, our suggestion would be that you take a look at changing FLPMA. I do not think it is necessary to change the land tenure law and insert a reclamation provision in that law to address this problem.

Finally, I guess, Mr. Chairman, we believe the issues raised by S. 1126 are quite substantial ones. They have implications far too extensive to fully consider today, and we urge additional hearings on the principal features of the bill including field hearings in the public land states prior to any formal markup of legislation.

Finally, I would like to thank you for inviting the AMC to participate in today's hearing and to assure you of our industry's willingness and availability to pursue these issues with the committee and its staff in the future.

Thank you.

[The prepared statement of Mr. Delcour follows:]

Mr. Chairman, members of the Subcommittee, my name is

David Delcour. I am Vice President of AMAX Mineral Resources Company, a division of AMAX Inc., and Chairman of the American Mining Congress Public Lands Committee. I am appearing today in

response to your invitation to the American Mining Congress.

American Mining Congress is an industry association that encompasses (1) producers of most of America's metals, coal, and industrial and agricultural minerals; (2) manufacturers of mining and mineral processing machinery, equipment and supplies; and (3) engineering and consulting firms and financial institutions that serve the mining industry.

The American Mining Congress Declaration of Policy

expresses the view that the General Mining Law governing disposal of hardrock minerals on public lands is not in need of revision. This position is based on our conclusion that existing law more than adequately meets the four criteria that are essential to any mineral tenure law. These criteria are:

1.

There must be non-exclusive access to search for minerals on public land;

2. Once detailed exploration is focused on a well-defined area, exclusive exploration rights must be available;

3.

Those who discover valuable minerals must have an exclusive right to develop the minerals they have dis

covered, and

4. Where commercial quantities of minerals are discovered, tenure must be secure under terms reasonably set in advance.

117 years.

A

Existing law meets these four criteria and has done so for During that time, the nation has undergone dramatic changes in minerals requirements and market conditions. From precious metals vein deposits, to high grade base metals deposits, to meeting the national need for uranium, to the porphyry copper and molybdenum deposits, to the broadly disseminated gold deposits, the Mining Law has accommodated the challenge. broad body of judicial interpretation and administrative law has left virtually no question unanswered with respect to the Mining Law. It is a law which addresses land tenure and nothing else and, accordingly, it has accommodated changing social policy goals. Today's mining activity on public lands is subject to the full array of environmental protection laws. Attached to my testimony is an extensive analysis of the operation of the Mining Law historically and currently which I would ask be included in the hearing record.

In reviewing the "Mining Law of 1989," Mr. Chairman, there appear to be three principal goals: generating cash for the federal treasury, eliminating the transfer of public lands to private parties, and enhanced environmental protection of mined lands. The American Mining Congress believes these goals are well and adequately served by existing law; however, if the Congress disagrees, we believe each of these concerns can be