In its FY18 budget, the Trump Administration directed the Department of the Interior (DOI) to study the viability of a royalty in preparation for the FY19 budget request. We eagerly awaited such a provision in the FY19 budget and found …nothing. According to a DOI official, that’s because the Department is less interested in a potential royalty than the White House Office of Management and Budget (OMB).
The DOI and its sub-agencies manage our federal lands and are responsible for the collection of royalties from minerals and other natural resources extracted on those lands. For example, coal, oil, and gas extraction companies pay royalties of 8-18.75 percent of what they sell, depending on the type of extraction.
Yet, hardrock mining in the United States has enjoyed royalty free treatment for over 145 years, via the General Mining Law of 1872, which despite numerous efforts to amend the law, remains on the books. TCS has long been a vocal critic of the giveaway of valuable public hardrock minerals, such as gold, silver, and uranium.
During a DOI public teleconference held just a few hours after the FY19 budget was released, the issue of a hardrock royalty was raised. According to Associate Deputy Secretary of the Interior James Cason on the call, the OMB is interested in pursuing a royalty for domestic hardrock mining production. But Cason assured any mining interests listening in that the DOI has no wish to pursue one.
Royalty-free hardrock mining costs taxpayers hundreds of millions of dollars annually. Even a five percent royalty would’ve resulted in more than $860 million in revenue from gold production on federal lands in the state of Nevada alone over the last five years, according to DOI production numbers. If there was full accounting of all hardrock minerals, the numbers would be much higher, but since there is no royalty collected there is limited data for mining on federal lands.In dismissing the idea of royalty collection for taxpayer-owned mineral resources in this budget, DOI continues to be fiscally reckless.