Page images
[ocr errors][ocr errors][ocr errors]

Does anybody on this panel assert that we should not be allowing regulated mining on public lands into the you know, well into the next century and for the future of the country?

Mr. PRITCHARD. Mr. Chairman, since I represent an interest which is probably the most restrictive in the public lands and the national parks, let me say not only I am not aware of any organization that is opposed, as you are questioning, but also we have worked very closely with a number of companies who will be testifying before you to help them establish legitimate sound mining activities on public lands, and I can cite those specifically. We are very proud of that relationship and believe that that is in the best interest of the public. So I would say it is not only not the case but also that we have, in fact, tried to help find alternatives, and I would hope that we might at some point be able to tell you more about those.

Mr. DeFazio. OK. Thank you. Anybody else want to respond just to that general assertion?

Mr. McCloskey. Well, Mr. DeFazio, speaking for the Sierra Club, you may have been out of the room earlier when the chairman asked that question, but that is not our position.

Mr. DeFazio. Well, it bears repetition because I am getting a lot of letters about it.

Mr. McCloskey. Well, whomever said it, it is not our position. I don't think it is a responsible position for any environmental group to take


Mr. EVANS. It ought to be stated for the record, I agree, Congressman. That is not the position of the National Audubon Society. It never has been. We want to see well-regulated mining the same as any other resource, but we have never opposed mining as such, and will not.

Mr. DEFAZIO. OK. Thanks.

Mr. GREENWALT. Apparently assertion and reassertion is good for the soul and I would like to make this unanimous by saying that the National Wildlife Federation and insofar as I know The Wilder. ness Society, none of us harbor these nefarious ideas because they are not consistent with good public policy. Mr. Chairman, and Members of the committee, no, we are not guilty.

Mr. DeFazio. OK. Thank you.

Mr. HOCKER. Just to complete the roll, I am not, nor have I ever been an advocate of "Mine free by 1993." But I think that the accusation itself, frankly, shows a tone of desperation. The only source locatable that I am aware of, or leasable for this quotation is Mr. Ary. It is not clear to me why the hardrock industry should feel that being put in a position where it has to demonstrate before it is given approval to proceed with a project that its project is in the public interest, why it should feel that being put in that condition will mean a shutdown of its activities. That seems to be the implication because that is what the policies that we are advocating would do, is say that they have to demonstrate that having a mine in a given site is in the public interest. Are they so scared of that test?

Mr. DeFazio. Now, if you were here for the previous panel, one of the previous panelstwo of the previous panels, the administra

[ocr errors][ocr errors]

5-185 0 - 92 - 11

[ocr errors]

tion and some industry representatives, I think you found that I am quite interested in the issue of a fair return for the extraction or depletion of the public resource to the American taxpayer. Could any of you, or would any of you care to comment on, since neither ti the industry nor the administration seems to have the foggiest idea what such fair return would be or how it could be collected or constituted, do any of you have ideas?

You know, I am trying to be open-minded here, but when no one is surprised by the hearing or, you know, the series of hearings and the thrust of the committee and yet they say, well, they haven't had time or they haven't looked at what other countries are doing or gee, they really haven't thought about it, I don't find that a very credible position, and I hope, perhaps, this panel has been a little more thoughtful on the subject.

So, perhaps, Mr. Hocker, if you want to start.

Mr. PRITCHARD. Congressman DeFazio, the National Parks and Conservation Association is dealing with a similar problem, return on investment and such for concessions in the national parks, and what should be the fee and is there a possibility of a blanket fee and what should be a position. Generally speaking, we have found it difficult there. We have found that States, just as we have here you we have States that impose different fees on extraction of minerals. We have a Federal system which is different from that of the States, and each State having a different program.

The conclusion, and we are doing our own study at NPC on concessions and I am hopeful that we can use that in some way as a parallel here. But our sense is that, again, it has to be done with some sensitivity to the type of concession operation and its gross receipts. We have found that there are too many instances where net return or net profit is elusive and oftentimes can be encumbered by other activities of the corporate body.

So we would recommend that the lost direct answer is dealing with the gross receipts of the corporation, but then you have to be sensitive to the fact of whether it is a startup operation and a great deal of investment occurring at that point or whether it is a continuation of an operation. That is of minor help, I am sure, but that is an issue which we are very sensitive to when it comes to concessions and equally concerned about.

We do highly support the concept of some fee being charged for the extraction of public resources, and we would point out that the fee for the Land and Water Conservation Fund has played a great role in this country in helping us establish protected areas at the Federal, State, and local level and that it is very beneficial to have wisdom of Congress in establishing some sort of fee that can be used for reclamation and can be used for other public purposes, such as acquisition of parks, as has been done with the oil and gas outer continental shelf receipts.

Mr. DeFazio. When you talk about will let others respond, but when you talk about the idea of startup costs and that, in Canada, I believe, there is some disallowance during the first 2 or 3 years which would allow them to recoup additional revenues at the start by not assessing the royalties. Is that what you have in mind, something along those lines

[merged small][ocr errors]

Mr. PRITCHARD. It would seem so. It seems reasonable. It seems that there is a tremendous amount of investment and that that should be taken into consideration.

Mr. DeFazio. What about during the prospecting phase where, in particular, the argument I hear, which I am sensitive to, is that a lot of individuals and in my State there are a fair number-small miners, individual miners, are out there prospecting, and they will have staked a claim, and they think they have got something, but they don't know yet, and they have got to do some development, discovery, and then market that? My feeling is that, by assessing it on whether it is net or gross revenue or some combination thereof that is fair, that you would not discourage this activity. Do you think that that is a fair assertion?

I mean if you impose a large annual holding fee per acre or some other burdensome requirement, I think that would discourage prospecting in individuals, but if they haven't gotten to that point yet and they are working with due diligence, it seems to me that that is a reasonable way to deal with that aspect. I want to encourage individual entrepreneurs. I like to see little guys hit it big, especial. ly if they then transfer the rights to an American corporation.

Mr. HOCKER. Mr. DeFazio, two points on that.

We talked earlier about the question of holding fees versus diligence requirements. One going to flexibility, which we would recommend, would be that if a miner chooses to do meaningful geologic work on a claim in a given period of time, that he be allowed credit for that if the results of that geologic investigation are lodged with the U.S. Geological Survey. They could be under an embargo for a period of time to protect confidentiality.

There is a very similar provision at work today in many Canadian provinces, and over time that results in a body of geologic data being available for future prospectors, which has become a substantial national resource up there and is so regarded.

On the royalty question, I think that if we get over the debate over whether there will be a royalty or not, then there are a number of subtleties that we can start to look at in how one is im. plemented, and one might be a minimum level of royalty--that is to say, call it a floor, where production below some number of dollars per year-say $50,000 worth of production per year-would be exempted from royalty although still be, I would think, subject to a rather stringent reporting requirement. I think you need to have that and have a penalty on that if it is not followed. But that would give you some flexibility to permit the small prospector or entrepreneur to go to work

A word of caution though: One lesson that I am sure we have learned from SMCRA has been the pitfalls that things like the 2acre exemption can lead us into, and I think we have to be cau. tious about creating the equivalent of strings of pearls or 2-acre exemptions in hard rock mining.

Mr. DeFazio. OK. Thank you.
Does anybody else want to comment?

Mr. GREENWALT. Just one brief comment. I refer you, Mr. Chairman and Mr. DeFazio, to appendix B of my written testimony which contains a review of some of the royalty situations and how they may be assessed here and in other countries. I don't pretend

[ocr errors]

to suggest it is exhaustive in any sense, but it is there and it, I think, is illustrative.

Mr. DEFAZIO. OK. Thank you.

Just one last question, Mr. Evans. There was some considerable discussion and I am sorry I was a little bit distracted—of the Bingham Canyon, and I am just curious if the gentleman is aware of the country of origin of the ownership of the Kennecott Utah Copper Corporation.

Mr. EVANS. No, I am not. What is it?

Mr. DeFazio. British. So the profits and the benefits obviously, some local people are employed and some marginal taxation may occur, but I think we have learned from watching the colonization of the Third World throughout the last century and this century that you never get rich or become an industrial power by allowing other industrial powers to extract your raw materials and take the profits or the precious materials home to be manufactured into finished products, which they then sell back to you, or they use the profits to purchase your private properties out from underneath you,

So I just thought I couldn't resist the opportunity to point out that. That one, in fact, is on the list of the top 25 leading gold producing mines in the United States. They are No. two. The first two are both British.

Mr. EVANS. I didn't know that. That is interesting.
Mr. DeFazio. Thank you.
Thank you, Mr. Chairman.
Mr. RAHALL. Thank you, gentlemen.

Our next panel is composed of Gerald W. Grandey, president, Energy Fuels Nuclear, Inc., out of Denver, Colorado: Paul K. Willmott, president, Umetco Minerals Corporation, Danbury, Connecticut; Mr. Dennis E. Wheeler, president and ceo, Coeur d'Alene Mines, Coeur d'Alene, Idaho; and Mr. Putman Livermore, Public Resource Associates, San Francisco, California.

Gentlemen, we welcome you to the subcommittee, and you may proceed in the order I called.

Gerry, do you want to go first?


Mr. GRANDEY. Mr. Chairman, I would like to add to the list of witnesses previous to me my thanks for holding the hearing today and for truly the indepth look that you personally, those on your staff, and other members of the subcommittee have engaged in over the last months and years on this what I consider to be an extremely important issue.

I am also gratified that we can follow the previous panel, because I have this feeling that we are dealing with a lot of facts from the past in order to justify changes to not only the land tenure law but also to the scheme and the suite of environmental laws and regula


[merged small][ocr errors][ocr errors]

tions that we in the mining business have to deal with, and I might note that Mr. Wright, in his testimony today, was one of the handson operators, and I think this panel perhaps gets a little bit close to that qualification as well, and I would like to bring to the panel today a little bit of that real world experience that we have had in the mining arena.

Energy Fuels, as you know, is not only a hard rock producer but has also been extensively involved in the coal mining arena for about 15 years, and so we are familiar with the regulatory regimes not only under SMCRA but also all of the rules and regulations that we have had to live with in developing our hard rock operations. In fact, we permitted, I think, one of the first surface coal mines, a mine that produced about 4 million tons a year under the SMCRA legislation back in the late seventies, one of the first ones to go through that process in the country.

Likewise, once the regulations were developed by the Bureau of Land Management governing the regulation of hard rock mining on Federal land, we had one of the first mines to go through that process. We have, altogether, in the last 10 or so years, permitted eight mines on surface that is regulated by the Bureau of Land Management and two or three mines on surface that is regulated by the United States Forest Service. In addition, our mines and processing operations are subject to regulation by such agencies as the Environmental Protection Agency and the Nuclear Regulatory Commission.

When we first began our exploration program, looking for, in this particular instance, uranium in the northern part of Arizona, we confronted a situation where there were 44 wilderness study areas, wilderness study areas that, while you were allowed to proceed with exploration to a very limited degree, prohibited basically one from developing anything that you found in those areas, and that was a problem that we ended up sitting down not only with the Federal regulatory agencies but also a number of the concerned environmental groups and basically negotiated a way in which our programs could advance while true wilderness values could be set aside and preserved.

Finally, we have actively participated in one of the first resource management plans that has been developed by the Bureau of Land Management. Again, it affects the northern Arizona area, and it is one of the first resource plans, I think, that consciously dealt with the mineral potential of an area as a resource and recognized the value of the mining not only to the local economy but the value of mining to the national economy.

We have done all of that in an environment over the past 10 years when commodity prices have declined. We have seen the price of our primary commodity, which is uranium, go from $40 a pound down to its present level of $9 or $10 a pound. We have con stantly had to find a way of reducing costs, of cutting costs, of finding new ways of doing not only the mining but new ways of doing reclamation. Likewise, in the coal industry, as you know, it has gone through its own cycles, and we have had to find ways of cutling costs and becoming more efficient there.

That is why, with that background, that experience that we have had over the last 10 or 15 years, I find the current level of debate


« PreviousContinue »