June 23, 2009

Dear Senator,

For more than 137 years the law that governs precious metal mining on federal land has remained unchanged. Mining companies have benefited from an outdated law that continues to allow minerals to be extracted without payment of royalties or final assurances for abandoned mine clean-up and land to be sold at 19th century prices.

The General Mining Law of 1872 applies no royalty for minerals extracted from federal lands. Unlike other extractive industries, companies that mine for gold, silver, copper, uranium and other precious metals do not pay a fee when operating on federal land. In contrast, the oil, gas and coal industries pay royalty rates of 12.5% for onshore development and more than 16% for off-shore development.

Under the current mining law, the government can sell land at 19th century prices while allowing the buyer to reap 21st century profits. In fact, federal lands are sold for no more than $5 an acre. Not only have mining companies been able to gain title to land valued at tens of millions of dollars for as little as tens of thousands of dollars, but the land can be developed for other purposes, including commercial enterprises, such as condominiums, ski resorts and casinos. Additionally, once the mining operation has ceased, taxpayers are saddled with hefty clean-up costs. These damages have been estimated at a cost upwards of $50 billion.

To address mining reform, Senator Bingaman has introduced S.796, The Hardrock Mining and Reclamation Act. We commend Senator Bingaman for introducing the first Senate bill regarding the 1872 Mining Law in more than a decade. We seek support for several important reform measures included in the bill and urge you to help further strengthen it.

TCS believes any legislation that passes Congress must include a fair royalty for taxpayers in line with other extractive industries, sufficient funds collected through royalties and fees to address the enormous abandoned mine clean-up liabilities and land and environmental protections that help avoid future liabilities. We ask you to support these measures and help further strengthen reform efforts and ensure this egregious taxpayer giveaway ends.

Public lands are taxpayer assets, and should be managed in a way that preserves their value, ensures a fair return from private interests using them for profit and avoids future liability. The structure of the Mining Law of 1872 fails by all of these measures. We urge your support for mining reform legislation that protects taxpayer interests for generations to come. If you have questions, please contact me at (202) 546-8500 x 104 or Senior Advisor Jill Lancelot at (202) 352- 6567.

Sincerely,

Ryan Alexander
President

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