STATEMENT OF DON SMITH, PRESIDENT, CITIZENS FOR MINING Mr. SMITH. Mr. Chairman and members of the subcommittee, my name is Don Smith. I am president of Citizens for Mining of Battle Mountain, Nevada. Our group is made up of small miners and prospectors from many western states.

I would like to thank you for the invitation to appear at this hearing. After much discussion of the Mining Law of 1989 last week, our group has decided that it is not a good bill for our industry.

In addition to my oral testimony, I would like to submit a more complete statement attached, which outlines in more detail the independent miners' viewpoint, for inclusion in the hearing record. Also, I have brought another testimony of Touchstone Resources, which I gave your secretary 100 copies. Enter that into the record if you would, and I will go on.

The 1872 Mining Law has worked well for over 100 years. It has been modified various times to allow new concerns of more modern times to keep mineral development going ahead. Historically, the role of the small miner and prospector has been to go out and find minerals, and if the investment to work the property is too high, try to find a large company that has the finances to develop the property into a mine if there is a mine there. Very few mines have been found by the large companies, as there are more small miners and prospectors out searching for possible deposits.

Prospecting for minerals has been and should be encouraged by allowing individuals as well as companies maximum nondiscriminatory, nonexclusive access to public lands in the search for mineralization. A prospector or miner should be given exclusive exploration rights for any particular area during the time he is doing detailed exploration on the property. A person who discovers a viable mineral deposit should have the exclusive right to develop and mine it, including the right to defer such development for a reasonable period of years when technological or economic conditions justify production.

The law must provide a mining venture with security of tenure for the duration of mining on terms reasonably set in advance. Midstream shifts in government mining policy can be and are devastating to many marginally profitable mining operations. The existing mining laws serve these objectives well and do so without thwarting other important public policy objectives.

Even in today's world of high tech, large-scale mining, the small miner and prospector play an important role in the success of mineral exploration and production in the United States. Many recent discoveries in the western U.S. can be attributed to the small prospecting, exploration and mining concerns. Prospectors will often go back to a certain claim or block of claims several times to sample and evaluate over and over until they find the element that they missed the first few times. Then it all comes together, and they can define a good prospect.

About 30,000 people are employed in mining in Nevada with 10,000 direct mining and about 20,000 support people, such as equipment parts companies, fuel oil companies, equipment companies. There are 62 mines either in operation or starting up.

If this bill is enacted, it will sure mean a lot of jobs will be lost, state and local governments will be stuck with paying off bonds that were needed for expansion of city water and sewers, streets and schools. The people that are left in these towns will get to pay a real high tax rate to pay off the bonds. Also, a lot of money will be lost to the Internal Revenue Service because the workers are no longer employed.

The state and counties will be devastated for the lack of tax money that the mines are now paying. Most mines could not afford to pay the eight percent gross royalty plus the state taxes, too. The way the price of gold has been falling, a few mines are becoming unprofitable now. The more rules and regulations that exist just takes that much more profit out of the business.

It takes two things to make a business successful: incentive and profit. Neither will exist if the Mining Law of 1989 is enacted.

Mr. Chairman, thank you again for the opportunity to testify today. I will be pleased to respond to any questions.

[The prepared statement of Mr. Smith follows:]

Mr. Chairman and members of the Subcommittee, my name is Don Smith and I am President of Citizens for Mining of Battle Mountain, Nevada. Our group is made up of small miners and prospectors, from many western states.

I would like to thank you for the invitation to appear at this hearing. After much discussion of the "Mining Law of 1989" last week, our group has decided that it is not a good bill for our industry. In addition to my oral testimony, I would like to submit a more complete statement (attached), which outlines in more detail the independent miner's viewpoint, for inclusion in the hearing record.

The 1872 Mining Law has worked well for over 100 years and has been modified various times to allow new concerns of more modern times and to keep mineral development going ahead.

Historically, the role of the small miner and prospector has been to go out and find minerals and, if the investment to work the property is too high, try and find a large company that has the finances to develop the property into a mine, if there is a mine there. Very few mines have been found by the large companies, as there are more small miners and prospectors out searching for possible deposits.

Prospecting for minerals has been and should be encouraged by allowing individuals, as well as companies, maximum nondiscriminatory, non-exclusive access to the public lands in the search for mineralization. A prospector or miner should be given

exclusive exploration rights for any particular area during the time he is doing detailed exploration on the property.

A person who discovers a viable mineral deposit should have an exclusive right to develop and mine it, including the right to defer such development for a reasonable period of years when technological or economic conditions justify production.

The law must provide a mining venture with security of tenure for the duration of mining on terms reasonably set in advance. Mid-stream shifts in government mining policy can be, and are devasting to many marginally profitable mining operations.

The existing mining laws serve these objectives well and do so without thwarting other important public policy objectives.

Many

Even in today's world of high-tech, large-scale mining, the small miner and prospector play an important role in the success of mineral exploration and production in the United States. recent mineral discoveries in the western U.S. can be attributed to small prospecting, exploration and mining concerns.

Prospectors will often go back to a certain claim or block of claims several times to sample and evaluate over and over until they find the element that they missed the first few times; then it all comes together and they can define a good prospect.

About 30,000 people are employed in mining in Nevada, with 10,000 direct mining and 20,000 support people, such as equipment parts companies, fuel oil companies and equipment companies.