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My bill is intended to provide a framework upon which to begin meaningful discussions of Mining Law reform. It is not a perfect bill, nor does it comprehensively address every issue that anyone ever thought should be included in a mining bill. It is intended to provoke suggestions, comments, and ideas. And I have no doubt that it will provoke criticism given the contentious history of past efforts to amend the Mining Law.

I look forward to hearing the testimony of the witnesses today. Thank you Mr. Chairman.

[From the Reno Gazette Journal, June 4, 1989]

MINER STRIKES IT RICH WITH YUCCA MOUNTAIN CLAIMS-TONOPAH MAN SETTLES

WITH DOE FOR $249,500

(By Doug McMillan)

It's the dream of every prospector to find the mother lode, but one part-time Tonopah miner has struck it rich by mining the U.S. Department of Energy.

Anthony Perchetti, a contractor who has dabbled in central Nevada mining claims for years, has received $249,500 from the DOE for his mining claims on Yucca Mountain, proposed site for the nation's first high-level nuclear waste repository.

Perchetti staked 27 mining claims on the barren mountain at the eastern edge of the Nevada Test Site in 1985 and 1988, before the DOE embarked on a study there that scientists say will be the most exhaustive examination of a piece of ground in history.

The 1872 Mining Law gave Perchetti the right to stake and work his 540 acres of claims, but that would have raised havoc with the DOE's work, so the agency had to pay him to abandon them, Carl Gertz, head of DOE's Yucca Mountain Project, said. "I was just a nuisance," Perchetti said.

But Perchetti, son of an early day Tonopah miner, claims he was genuinely interested in the mountain's mineral potential, not its value to the government as a possible burial ground for deadly radioactive waste.

The mountain, 12 miles northeast of Beatty, lies in a direct line with U.S. Nevada Gold Search's new gold mine, six miles from the site, and Bond Gold's Bullfrog mine, a massive new open pit gold mine, just west of Beatty, Perchetti said. It also has quartz and limestone outcroppings, a good indication of gold.

He also noted that 18 Nevada gold ore bodies have been found in welded tuff, volcanic ash, dust and rocks deposited from eruptions millions of years ago.

But Gertz said DOE geologists, from their preliminary assessments, think the mountain's mineral potential is probably nil. "There are no indications that there are any mineral values out there," he said.

"Unfortunately, because of the importance of the Yucca Mountain repository to the nation, it wouldn't have been possible to do an extensive drilling program to prove the value."

If Perchetti had tried to drill the mountain for core samples trying to confirm his hunches, he would have gotten in the way of the DOE's intensive "site characterization" studies. A legion of scientists are boring their own holes and shafts in the mountain to analyze every facet of the site to determine if deadly nuclear waste can be stored there safely for the next 10,000 years.

Thus the DOE had to negotiate with Perchetti to get him out of the way, Gertz said, confirming that the $249,500 settlement was paid in February.

Under the mining law, Perchetti had to pay only $500 to file his claims, but the Tonopah native estimates he spent about $20,000 to stake the claims and perform the assessment work the law requires to keep them valid.

That still gave him a tidy profit, he acknowledged, but "you always want more when you're dealing with the government. That was their offer. Of course, I wanted

more.

Had the claims proved commercially valuable, he might have received a payment, plus millions in royalties from a mining company, he said.

LAND FROZEN TO MINERAL ENERGY

Just before settling with Perchetti, the DOE applied to the Bureau of Land Management to withdraw 4,300 acres of public land encircling the western end of the long, snake-like promontory. That froze the land to mineral entry, forestalling any other would-be prospectors from staking out more of the mountain.

Gertz said the DOE did not take action to withdraw the land sooner because Congress had not yet designated it as the sole site to be studied for the nuclear waste project. "Making a withdrawal earlier might have indicated a prejudgment on the Energy Department's part that Yucca Mountain should be the site," said Gertz.

Smaller portions of Yucca Mountain within the Test Site and Nellis Air Force Range were withdrawn from mineral entry years ago.

The DOE allowed Perchetti to cross the Test Site to do assessment work on his claims after he had staked them.

"Up to the time they applied to withdraw it, it was open to mineral entry," Per

In 1986, when he filed his first batch of 10 claims, the land was part of Bullfrog County, the ill-fated and unique jurisdiction the 1987 Nevada Legislature set up to try to channel federal grants in lieu of taxes from the Yucca Mountain project into state coffers.

The 144-square-mile sham county had no residents, buildings or public agencies. Legislators designated Carson City, 270 miles away, as its county seat, and put it under the administration of former Gov. Richard Bryan, who had signed the bill creating it.

Federal mining law requires miners to file their claims with both the BLM and the county in which they are found, so Perchetti had to go to Carson City to file his 1986 claims.

"I had to file with the governor and lieutenant governor, and they accepted it," Perchetti said with a laugh. "There was no county recorder and clerk, so I had to go through them."

Legislators rescinded Bullfrog County this year after state courts ruled that a county with no residents could not have a representative government.

Had Perchetti been able to develop his claims, he might have become the sole proprietor and ruler of Bullfrog County.

"I was going to set up a camp and have some people working out there in a couple of trailers," he said. "Then Bullfrog County folded."

Conceivably, they could have elected themselves county commissioners, clerk, recorder and sheriff, and controlled up to $25 million in federal impact payments that some state officials estimated might accrue.

"That actually could have happened," Perchetti said, "but that wasn't my intention. I didn't do this because of Yucca Mountain."

Perchetti said he probably will plow what's left of his Yucca Mountain settlement, after paying a hefty tax bill to the IRS, into developing mining claims he holds in Tonopah, the ghost town of Belmont and at Eaton Creek, in southern Nye County.

Senator BINGAMAN. Senator Burns.

Senator BURNS. Did you have a question? I will yield.

Senator MCCLURE. I just want to say this. This is not a hearing on the GAO report, and I recognize that. GAO should be very thankful this is not a hearing on their report, because if I have ever seen a piece of garbage in my life, that is it. If there were anything like truth in packaging attached to government publications, they would go to jail for violation of that act.

I do not mean to be strident about it. [Laughter.]

Senator MCCLURE [continuing]. But they do not tell the truth. The trouble is they do not know what the truth is; therefore, they cannot distinguish between fact and fancy.

Before we start quoting from the GAO report as to what facts are, I want to caution people there is an extensive rebuttal of the GAO report, the methodology which produced it and the limitations under which they operated, that led to totally erroneous conclusions. There is just no way to varnish the fact that the GAO report ought to be an embarrassment to intelligent men and

women.

Now I recognize that some people find it useful to use it because it supports and bolsters conclusions which they may have formed before they read it or as they read it. But please do not take the GAO report as meaning anything other than a shoddy piece of work.

Senator BINGAMAN. Let me call on Senator Burns, and let me just point out that we are a half hour into this hearing and we have not heard from a witness yet. Whenever we could get to it, it would be good.

STATEMENT OF HON. CONRAD BURNS, U.S. SENATOR FROM

MONTANA

Senator BURNS. Thank you, Mr. Chairman. I appreciate that, and I appreciate the Senator from Idaho. Why not really tell them what you think of the GAO report?

I appreciate the opportunity to comment for the record on the revision of the law which has been a mainstay of mineral development in this country for over a century. The Mining Law of 1872 provided an important incentive as far as development and the expansion to the west.

When you talk about a Mining Law, you are talking about my State of Montana. In fact, our motto is "Oro Y Plata", which means gold and silver. The Montana state seal carries the miner's pick and shovel, and I am proud of the heritage of my state and the legacy of those early miners whose courage and perseverance provided much of the needed resources for this country.

Towns such as Butte and Anaconda and Helena and Virginia City sprang up as a result of mining. Even the cattle industry had its roots in mining. Stockmen attracted by free grass first brought cattle and sheep to supply those mining camps. Of course, we know the free grass is gone.

Mining still plays a major role in the Montana economy, probably one of the bright and shining stars out there. They produce a range of minerals, including gold and silver, lead and zinc, copper. Montana mines, outside of Canada, the USSR and the Union of South Africa, producing palladium and chrome are all strategic materials used in our national defense programs.

Mineral extraction provides 3,600 jobs directly for Montana, and it is critical that it be continued for the prosperity of our state. We rank 17th nationally in the production of nonfuel minerals.

Since the passage of the Mining Law in 1872, Congress has consistently supported a strong domestic minerals industry. Over the years, we have supplemented the Mining Law to reflect our concerns for the environment and the need to use our resources wisely.

Mining on public lands must comply with the National Environmental Policy Act, and appropriate reclamation is required at this time.

We need balance in additional environmental restrictions with jobs and the realization that we may force our Nation into further dependence on foreign sources of strategic and critical minerals. I am extremely concerned about any changes which would substantially increase the cost of mineral exploration. I am afraid that too much credence may be placed on the March 1989 GAO report that our good Senator from Idaho was referring to calling for the revision in this law.

Let us not limit the search for minerals to the wealthy and large firms. Entrepreneurialship by the average citizen must continue to be encouraged. The mining industry in this country is driven by private initiative. We must be careful that government does not destroy the private sector initiative through ill-conceived changes in a basic law that has worked well for over 100 years.

Our country is rich in natural resources, but we must always be mindful of their wise use. Mineral resources are nonrenewable. They are difficult to find, and without large-scale exploration efforts our reserve base will soon dry up.

I strongly believe that Congress should continue to encourage a growing domestic mining industry and that any changes in the Mining Law should enhance, not detract, from that policy. The existing law not only serves the mining industry, but it also serves the public interest.

Thank you, Mr. Chairman. I would ask without objection that my comments be added as part of the record.

[The prepared statement of Senator Burns follows:]