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Mr. RAHALL. Sure. The record, as I stated in the beginning, will
be open for 10 days after this. That would include questions that
you wish to submit in writing to any of the witnesses.
Thank you, gentlemen. I have no further questions.
Mr. JAMISON. Thank you.
Mr. LEONARD. Thank you, sir.
Mr. RAHALL. Our panel No. 2 is composed of the following indi-
viduals. I understand Mr. Milton Ward could not make it. He is the
president and ceo of Freeport-McMoRan Inc. But he will be repre-
sented by Jack Knebel, president of the American Mining Con-
gress. Also on the panei will be David W. Delcour, president,
AMAX Resource Conservation Company, on behalf of the Ameri-
can Mining Congress, Washington, DC.; John L. Neff, the secretary
of the Northwest Mining Association, Spokane, Washington; and
John H. Wright, certified professional geologist, from Grand Junc-
tion, Colorado.

We have all four panel members?
Mr. KNEBEL. Yes, we do, Mr. Chairman.

Mr. RAHALL. You may proceed in the order I called. And, Jack, we welcome you and you may lead it off.

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PANEL CONSISTING OF JOHN A. KNEBEL, PRESIDENT, AMERICAN
MINING CONGRESS; DAVID W. DELCOUR, PRESIDENT, AMAX
RESOURCE CONSERVATION COMPANY, ON BEHALF OF THE
AMERICAN MINING CONGRESS, WASHINGTON, DC.; JOHN L.
NEFF, SECRETARY, NORTHWEST MINING ASSOCIATION, SPO-
KANE, WA; JOHN H. WRIGHT, CERTIFIED PROFESSIONAL GEOL-
OGIST, GRAND JUNCTION, CO

Mr. KNEBEL. Thank you, Mr. Chairman, members of the committee. We commend you for having held these hearings, and I am especially heartened that you haven't lost your sense of humor through it.

As you indicated, my name is John Knebel. I am president of the American Mining Congress. I appear today on behalf of the Congress in the absence of Mr. Ward, who is out of the country. I would request that his full statement be included for the record.

Mr. RAHALL. Yes. All testimony is going to be made a part of the

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Mr. KNEBEL. Thank you, Mr. Chairman. Mr. David W. Delcour, the president of AMAX Resource Conservation Company and chair man of the AMC Public Lands Committee is at my right. He will address the policy implications and specifics of your legislation, and I intend to limit my comments to the AMC policy position with respect to Mining Law reform.

The American Mining Congress, as you know, periodically reviews its position on key issues affecting the mining industry. The Mining Law policy is no exception.

The American Mining Congress has maintained that the general Mining Law works very well and can continue to accomplish the basic policy goal of allowing orderly and market-directed exploration and development of minerals on public lands consistent with publicly recognized environmental standards. Although AMC has responded to the more strident criticisms, there remains a public perception

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that abuses continue to occur in implementing the Mining Law. In an effort to address these past abuses and to demonstrate the industry's interest in maintaining responsible mineral entry on the public lands, AMC has identified several areas in which steps can be taken to respond to public concerns without vitiating the essential components of the Mining Law.

With respect to residential occupancies, we believe that the Sec. retaries of the Interior and Agriculture should exercise existing authorities to require the construction of any residential dwelling on unpatented mining claims be approved under a plan of operations authorizing such structure. With respect to reclamation, we believe that the Secretaries of the Interior and Agriculture should exercise existing authorities to amend surface management regulations to more specifically and clearly set forth their authorization to require environmental regulations of activities on unpatented mining claims.

With respect to surface disturbance by small mining operations, the Secretary of the Interior has adequate authority to modify or delete the provision in the Bureau of Land Management Surface Management Regulations exempting mining operations occupying 5 acres or less from the requirement of filing a plan of operations.

With respect to patenting, in addition to the requirements already found in the general Mining Law, the mining industry does not object to paying fair market value for the surface estimate of a mining claim at the time the patent is issued, provided that there are prompt and fair procedures for determining such value and the process of mine development is not unreasonably delayed.

On the matter of the annual holding fee, the AMC has no objection to claimants being given the option in some years of paying an annual holding fee or performing the work.

There are a number of general Mining Law issues that are critical to the future of mining and mineral development which must be preserved in any consideration of changing the Mining Law. These issues include access to the public lands and the right to selfinitiation, the right to earn secure tenure by discovery of a commercial orebody, all of which are presently embodied in the existing law. Any modifications affecting these basic principles are likely to threaten the industry's ability to explore for minerals and to develop new mining properties.

Mr. Chairman, the five basic tenets underlying your bill, H.R. 918, which you referred to when you introduced it, can all be addressed without doing violence to our primary requirements in the Mining Law. Your objectives are already embodied in current law or regulations, or they can be carefully incorporated by modification of existing regulations or by careful amendment of current law. An entire new system of laws and regulations is simply not necessary. To repeal the established successful body of law embodied in the general Mining Law with brand-new language requiring extensive regulatory implementation is going to halt new mining activity for a number of years, even if judicial challenge could be avoided.

The legislation which you have introduced completely changes the system under which mining is initiated and conducted on public lands and will substantially increase the cost. Because of

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this, the AMC has joined with others in underwriting an industrywide study of the economic impact on the mining industry of enactment of H.R. 918. The study will result in an estimate of the financial and economic impacts of H.R. 918 on corporations, projects, State and local economies. Mr. Chairman, these estimates will review the true cost of Mining Law reform and the data should be used to guide the debate on the wisdom of revising the Mining Law. The results of this study should be available by late summer or early fall, and we would urge the subcommittee to withhold any judgment on H.R. 918 until the information is available to its Members

Mr. Chairman, we appreciate the opportunity to present testimony on the subject of Mining Law reform or repeal. Be assured that we are willing and available to pursue these issues with the committee and its staff.

I now ask that Mr. Delcour be allowed to address the policy implications and specifics of your legislation. Then, of course, we will be pleased to answer any questions which you have. Thank you kindly. (Prepared statement of Mr. Ward follows:)

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ilton da Ward

Mr. Chairman, nembers of the Subconnitteo, ay nane is Milton H. Ward. I an president and chiot Operating officer of FreeportMCMORan Inc. and Chairman of the American Mining Congress.

The American Mining Congress is the principal trade association of the mining industry in the United States. Its neaber companies nine and process most of the domestically produced metals, industrial ainerals and energy ninerals, other than oll and gas, utilized in the American economy. A large proportion of the minerals produced in this country are from public lands, and the American Mining Congress, therefore, is vitally concerned with legislation governing the acquisition of mining rights on such landı.

I an accompanied by David . Delcour, pruident of AMAX Resource conservation Company and Chainman of the AMC Public Lands Committee. We are cognizant of your desire that we provide specific comments, criticians and recommendations on H.R.918, the Kineral Exploration and Development Act of 1991. Kr. Delcour will address policy implications and specilica of H.R.918 and I intend to describe ANC's position on Kining lav roton.

American aining companies operate in many parts of the world and under many land tenure systems. Those system that work well Incorporate, in one way or another, four basic principles. The 0.s. General kining Law has these principles and they must be retained. First, prospecting for ninerals is encouraged by allowing individuals and companies naximum, but not exclusive, access to lands to search for mineralization. Second, prospectors are given exclusive exploration rights for any particular area for the time they are focusing detailed exploration attention on such area. Third, a person who discovers a valuable aineral deposit obtains an exclusive right to develop it and nine it, including a right to deter such development for a reasonable period of years untii economic or technologic conditions Justify production. Finally, a vining venture is provided with security of tenure for the duration ot' mining on terns reasonably set in advance.

The American Kining Congress periodically revievs its positions on key issues affecting the mining industry. Kining Lav policy is no exception.

During the past three years, there has been an increasing level of controversy anong those who criticize the General Mining Law and those who defend it. The American Mining Congress has maintained that the General Mining lav vorks very well, and can continue to accomplish the basic policy goal of allowing orderly and market-directed exploration and development of minerals on public lands consistent with publicly recognized environnental standardo.

Although AMC has responded to the more strident criticisms, there remains a public perception that abusas continue to occur in implanentation of the Mining Law. In an effort to address those past abuses and to demonstrate the industry's interest in maintaining responsible nineral entry on the public lands, AMC has identified several areas in which steps can be taken to respond to public concerns without vitiating the essential components of the Mining Law. These changes would not threaten public land access, result in unreasonable aineral development costs or increased pre-developmant litigation.

Illegal ruidential ocupangy of mining oldin

The Secretary of the Interior and Secretary of Agriculture should exercise existing authorities to require that construction of any residential dwelling on unpatented aining claims be approved under a plan of operations authorizing such structure. The plan of operations should show the necessary relationship between the dwelling and permissible mining activities and assure removal of the structure, with attendant reclamation, at the conclusion of mining activity.

Reclamation of mined lands is required under virtually every state's law. The Secretary of the Interior and Secretary of Agriculture should exercise existing authorities to amand surface management regulations to more specifically and clearly set forth their authorization to require environmental regulation of activities on unpatented aining, clains. It problems exist that cannot be addressed administratively, congress should consider appropriate amendments to the Federal Land Policy and Management Act.

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Inadequate control of surtige disturbance from mall sining operations

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The Secretary of the Interior has adequate authority to modify or delete the provision in the Bureau of Land Managenent surface management regulations exempting nining operations occupying tive acres or less from the requirement of filing a pian of operations. The Secretary should undertake a review to determine whether and how such authority should be exercised. One option would be to adopt the Forest Service approach, which bases the need to prepare a plan of operations on the degree of surface disturbance rather than the acreage disturbed, in an effort to assure the most appropriate level of land manager oversight.

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