Mr. RAHALL. So I would just present that to say that what is in section 203, despite what is often portrayed by some in the industry, does reflect current law. Do you wish to make a comment on it? If not, I have one final question.

Mr. KNEBEL. Mr. Chairman, section 203 is basically an iteration of the FLPMA, and I think Director Jamison has answered you correctly. It is our concern that we have a reiteration that is duplicative.

Mr. RAHALL. Well, you know, that is now another new accusation against this section that we have come across in today's hearing. But the standard charge against it has been that it is a whole new regime or that it has just totally been portrayed out of context of what it actually is.

I have one final question for you, Mr. Delcour.

Mr. DELCOUR. I think-Mr. Chairman.

Mr. RAHALL. Yes.

Mr. DELCOUR. Too, we have to read section 203 in connection. with 201. The two have to be read together to measure the relationship between the land-use planning provisions and the approval of plans of operations. I think at the present what is new about your proposal, what doesn't reflect existing law is the fact that the two have to be considered in tandem. It is true that under FLPMA and the comparable Forest Service governing law examination of minerals, known mineral issues are to be addressed. But what isn't done now is there is no requirement in advance of approving a plan of operations that certain specific land-use planning analyses be undertaken. It seems to me the bill does require that, and that is the aspect which causes us concern. That is to say, that we read your bill to enable or indeed to require that the land manager hold plan of operations approval hostage to the completion of certain statutory obligations in connection with the land-use planning process. That is our concern.

Mr. RAHALL. Well, let me respond to that, and just askMr. DELCOUR. It is the linking up that is the concern there. Mr. RAHALL. Well, it is my impression that linkage would actually give you a break. But let me refer you back to the question we submitted to you in writing and ask that you look at that.

Mr. DELCOUR. Fine.

Mr. RAHALL. OK. One further question. You allege that under section 204 of the bill, theoretically it is possible that any tract of public land would be withdra vn from location.

Mr. DELCOUR. Yes.

Mr. RAHALL. This is, however, already the case under current law. The Federal Register, on an almost daily basis, carries a notice that under the authority granted to the Interior Secretary by sec tion 204 of FLPMA, BLM is withdrawing land from location while keeping it open to leasing.

Mr. DELCOUR. Yes.

Mr. RAHALL. In fact, BLM personnel have admitted to the subcommittee staff that if they want to just say so to mining, they employ one of two strategies: they withdraw the land using FLPMA authority or they designate it as an area of critical environmental concern. So I would submit that your comment on the bill is actually a commentary on the current way the BLM does

business. I would also submit to you that this is a concern. That it is one of the reasons that I have been pressing for adequate landuse plans to be done up front.

Do you have a comment?

Mr. DELCOUR. Yes, I do, Mr. Chairman. I read section 204 to say that the following lands shall not be open to location or lands that may hereafter be withdrawn. Any land, any parcel of land may hereafter be withdrawn, and I read this language to say it is closed today.

As I indicated in my testimony, I think this just may be a drafting error, that that is not your intention, but it is a serious one that needs attention. I suspect what you may be intending to say in item 4 is lands that are hereafter withdrawn, rather than lands that may be hereafter withdrawn.

Mr. RAHALL. That may be accurate.

Mr. DELCOUR. That was the only point in the testimony.
Mr. RAHALL. OK. So we change "may" to "are" in line 18?
Mr. DELCOUR. Yes. I think that is a very significant change.
Mr. RAHALL. OK. I have no further questions. Thank you.
The gentlelady from Nevada.

Mrs. VUCANOVICH. Thank you very much, Mr. Chairman. I just wanted to make one comment about the citizen suits that was being discussed.

When we were in Fairbanks we heard from placer miners whose operations were clearly shut down pending BLM's completion of a cumulative impacts EIS because of a third-party lawsuit. If your citizen suit provision restricted this from occurring in the future, I would be very supportive. I think the citizen suit is a big concern to me. But it does happen and mining is stopped because of citizen suits.

Mr. Wright, in my State I have lots of small miners and I know that they are not myths. But I am sort of interested in your talking about the oil companies. They might take exception to the fact that you said that oil was very easy to find. That would be disputed by the oilmen, I am sure.

AMC has testified that a study of the economic impacts of H.R. 918 is underway. Do you know if small miners such as yourself have been or will be asked to enumerate the impacts on your size business?

Mr. WRIGHT. As small miners, I am not part of any organization here today or represent small miners. I am with 49 grocers and merchants and claim holders that helped send me. I am not qualified to answer that because I don't know. But the answer is still, I don't know.

Mrs. VUCANOVICH. Fine. I am going to ask Jack Knebel anyway. I think all of us look forward to the economic impacts study on this bill, and my senses tell me that the results will tell us what everybody already knows. That this bill will have grave consequences for the mining industry and State and local economies.

Do you have a timeline on when we could expect to see the results of the study?

Mr. KNEBEL. Yes, ma'am. We anticipate seeing the preliminary findings mid to late July and a final report this fall.

In answer to your prior question which you directed to my colleague here at the table, we do have some small companies includ ed in the study and the analysis. We do not have at the present time any individual prospectors or single operators. It is a little bit hard to get the economic data required on an individual basis.

Mrs. VUCANOVICH. Is this the same Coopers & Lybrand audit that Mr. Steve Alfers testified about in the Senate Energy Committee last week?

Mr. KNEBEL. That is correct. And we have gotten our companies as well as a lot of related companies involved in this, and we are underwriting this. Coopers & Lybrand is going to keep it very objective and impartial so that it won't be subject to criticism.

Mrs. VUCANOVICH. I would be interested in hearing and seeing what the results are.

Mr. Delcour, you mentioned the COSMAR study. Is there any reason to believe that its conclusions from 12 years ago are any less valid today?

Mr. DELCOUR. None that I am aware of.

Mrs. VUCANOVICH. I have a copy of it up here and it made some very interesting conclusions, and they should be valid, I would

think.

Mr. Neff, you are from Spokane

Mr. DELCOUR. In fact, Congresswoman, I would think as other environmental regulations have been ratcheted down in the intervening years that the points, the conclusions in that report would be even stronger today than they would have been at the time the report was prepared.

Mrs. VUCANOVICH. Yes. Well, I was just commenting because, you know, in our State-it is for many reasons, but our State has passed very tough reclamation laws. And I feel very strongly that these are necessary and the State should do those things if they are impacted. There are a lot of miners in my State who weren't thrilled, but I think it is important that we do something about reclamation. But, of course, the Mining Law is not a reclamation law.

Mr. Neff, you are from Spokane, so I expect that you have some familiarity with Canadian Federal and provincial mining laws. Would you be in a position to tell us how they promote hardrock mining there? In other words, is there something that miners get from their government in return for paying a royalty? Is there some involvement in their government?

Mr. NEFF. I do not consider myself an expert on it at all. Howev er, they have a continuing vacillating program in Canada which basically rises out of initiation of claims by location at one point, and then we have had heavy involvement in Canada over the last couple of decades on tax concessions, all types of other incentives to bring mineral development to the point of production. This varies almost by the times that the Parliament meets up there in each province. Sometimes it is very favorable. Sometimes it is not at all. But, in general, the climate for prospecting and exploration is much better in Western Canada than it is in the United States at the present time.

Mrs. VUCANOVICH. Well, I thank you, gentlemen.
I have no further questions, Mr. Chairman.

Mr. RAHALL. The gentleman from Indiana, Mr. Jontz? The gentleman from Oregon, Mr. DeFazio?

Mr. DEFAZIO. Thank you, Mr. Chairman. I would just like to follow up with, I am not certain whether it was Mr. Delcour or Mr. Ward testifying last week before the-or a couple of weeks ago before the Senate on the issue of royalties. Was it one of you two? Mr. KNEBEL. It was Mr. Ward who commented in a colloquy with Senator Bumpers.

Mr. DEFAZIO. I see. And could you just briefly restate your understanding of that colloquy regarding royalties?

Mr. KNEBEL. It is always at your peril when you try to restate what your chairman said. It is not necessarily good for longevity in this city, as you know.

Mr. DEFAZIO. OK. Well, maybe I

Mr. KNEBEL. I think the bottom line, Congressman, was the fact that Mr. Ward indicated in his discussion with Senator Bumpers that if indeed it came to pass that a royalty were to be included in some legislation at some future time, that if it were a fair royalty that while it would perhaps impact on high-grading that it would not perhaps close down the industry. But every instance he cautioned it as a fair royalty and something which the industry would have to look at it on a basis as presented.

Mr. DEFAZIO. OK. Do you consider the since we just had some discussion of Canada, the royalty system in Canada to be fair, as you understand it?

Mr. KNEBEL. I am not qualified to comment on the Canadians, sir. We have got enough problems right here in the United States. Mr. DEFAZIO. OK. So can you point to a system, I mean, are you aware of a system that would be considered to be fair that we could look at as a model for royalties?

Mr. KNEBEL. Right off the top of my head, no, I can't.

Mr. DEFAZIO. All right. I notice that someone has provided, and I am always a bit skeptical of bootleg things, but something that purports to be a summary of an AMC survey regarding the Mining Law and the prospects for generating opposition to reform of the Mining Law. It talks about a number of issues, and one it does come down to is royalties and restoration. I am wondering, it says here that I mean it is polling the general public and deems the general public by 82 to 10 with 8 undecided thinks that it would not be unfair to assess royalties and require some restoration or reclamation of the public lands.

Are you aware of this survey?

Mr. KNEBEL. Yes, sir. We try to sense public opinion in a lot of quarters. What that is is a reaction by the public, not the operator. I think what you have to bear in mind are the comments of Director Jamison who earlier testified that if indeed you put a royalty on you run the very, very serious chance of high-grading; that is, to cut mines out of production. You have got to remember in every instance there is a global price situation and there is no government subsidy, direct subsidy, and the companies have to compete on a commodity basis, which is world price.

Mr. DEFAZIO. Are we looking at any class of operations here that you think would be particularly impacted? I mean, are we talking

about heap leach mining in particular or others where massive amounts of material are used to extract very small quantities?

Mr. KNEBEL. Again, I have to go back to the colloquy which our chairman had last week during the Senate hearing, and he indicated that you have to look at these on an orebody by orebody basis. That you cannot just willy-nilly say 12 percent. Twelve percent will close down a whole category of mines. Others might very well be able to survive, given the commodity price at a particular time. Mr. DEFAZIO. 12 percent of what?

Mr. KNEBEL. You tell me 12 percent of what, sir. That is the whole point.

Mr. DEFAZIO. Well, are we talking 12 percent of value of the extracted material, 12 percent of the net income? If we are talking 12 percent of the net income, you are looking essentially at an income tax. So there is still 88 percent left.

Mr. KNEBEL. Still 88 percent left. I mean, you still have to look at the world pricing and the disappearance factor of the commodity.

Mr. DEFAZIO. Yes. But I assume that the technology is somewhat comparable in other nations, that the laws outside of the Third World are somewhat comparable in terms of environmental protections, in Canada and Australia, that they do have systems of taxation and royalties in place and somehow they are competitive. Mr. KNEBEL. I think you will find that the environmental restraints are quite a little bit different in Third World countries. Mr. DEFAZIO. I excluded the Third World.

Mr. KNEBEL. Also, safety costs are a great deal higher in the United States.

Mr. DEFAZIO. Than in Canada and Australia. I would like to compare the United States to other major industrial nations, and not to nations that are essentially being subjected to colonization and abuse. So, although we are being colonized, but, you know, I am still resisting that trend, treated like a colony.

I would assume that, you know, looking at the Australian or the Canadian system of royalties or taxation would not put the U.S. industry at an unfair advantage. Sure, we could always point to South Africa and say, you know, if we pay people 10 cents an hour, and they get no protection, and they work in a mine that we could become more competitive. And you are working at that disadvantage, I agree. But that is a social cost.

We are also dealing with a public resource here. There is some discussion of the opinions of the public versus the opinions of the industry. You know, these are public lands. So I think the public has some say over, you know, and public opinion should be somewhat important in what we determine here.

So I am just trying to get at, you know, trying to get you to offer us, you know, I mean let's look at some of our major competitors who have somewhat similar systems of government and which one do you think is best to look at for a model for us.

Mr. KNEBEL. I appreciate your reaction, sir, and we will certainly look at them.

Mr. DEFAZIO. OK. I would appreciate you doing that.

I am a little curious about the economic impact study that is mentioned. Now, I guess I am not familiar with it. Coopers & Ly