Deficit Reduction Act of 2005...

Fact and fiction:
The Mining Provision
in the Deficit Reduction Act

By the House Committee on Resources
from eco-logic/Powerhouse

December 1, 2005

The following information is courtesy of the House Committee on Resources.

FICTION: If this provision became law, it could literally lead to the privatization of millions of acres of public land, including national park and national forest land.

FACT: This provision will not lead to the privatization of millions of acres of public land. The bill lays out specific requirements that must be met before any mining operation would be able to apply to purchase land. (See page 47, subsection c) Furthermore, the bill explicitly prohibits the Secretary from selling any lands meeting the bills requirements that are located in National Parks. (See page 47, lines 11-17)

FICTION: Included in the land that could be sold for $1,000 per acre are 903 "unpatented" mining claims in National Park units.

FACT: The language specifically prohibits the sale of lands in the National Park System (Page 47, lines 11-17), and requires land that is sold to be offered at $1,000 an acre or fair market value, whichever is greater. Current law stipulates land be sold for $2.50 or $5.00 an acre.

FICTION: Unlike the old 1872 Mining Law, which required claimants to prove that a valuable mineral existed in order to obtain a patent, the House Resources Committee language eliminates that requirement.

FACT: The language does not eliminate the requirement. The amended language merely moves the "Law of Discovery/Prudent Man Test" from one section of the law into the patenting section. (See page 29, lines 16-18)

FICTION: The provision therefore would allow claimants to obtain fee title to millions of acres of mining claims.

FACT: The provision does not allow claimants to simply obtain title to "millions of acres of mining claims." The language has several arduous requirements that must be fulfilled, before any person can apply to purchase lands. They are:

1. Person must be the holder of a valid mining claim (i.e. has staked claim on lands open to mineral entry, and completed all the valid state and federal paperwork)
2. That claims must be contiguous to patented or unpatented mining claims where mining has been, or is being conducted as authorized by law.
3. Mining operations or mineral development work must be taking place on the aforementioned claim.

FICTION: The provision would overturn a Congressional ban that has prevented mineral companies and individuals from "patenting," or buying, public land, including some in national forests and parks, at cheap prices if the land contains mineral deposits.

FACT: The provision does lift the current ban on processing mineral patent applications under the mining law. Congress implemented the ban in 1994, as a temporary measure until the mining law was updated. President Clinton vetoed the 1995 Budget Reconciliation Bill that included mining law reform measures that would have increased the purchase price to reflect current land values. The current proposal included in Budget Reconciliation goes further than the 1995 language, and sets a floor price of $1000 per acre, or fair market value whichever is higher, raising the price of land from $2.50 or $5.00 an acre. This is hardly "cheap."

FICTION: The bill would put millions of acres of mining claims in the American West up for sale, including land inside or adjacent to National Parks, wilderness areas, and other natural treasures.

FACT: The provision prohibits sale of any lands within National Parks, Wildlife Refuges, Wild and Scenic Rivers System, or Trails System, and in any National Conservation Area, Recreation Area, National Monument, or Wilderness Area. (See page 47, lines 11-17)

FICTION: Real estate speculators, oil and gas companies, foreign mining corporations, or anyone who is willing to pay as little as $1,000 per acre could buy the land, and develop it in any way they wanted.

FACT: The statement fails to pass the laugh test. Unless real estate speculators, oil and gas companies, and the like want to enter the mining industry, begin staking mining claims, and developing hardrock minerals, then they would not qualify under the provisions of this bill to purchase lands.

FICTION: Put 5.7 million acres of public lands, with existing mining claims, up for sale immediately upon passage, including more than 2 million acres of claims inside or with 5 miles of national parks, wilderness areas, wildlife refuges, national forests, and prized public assets.

FACT: The bill does not put 5.7 million acres of public lands up for sale. This is a rough estimate of the total acres currently under claim. However, only 360,000 acres of federal land subject to mining claims are in the process of being explored, developed or mined under an approved, or pending plan of operations. These are the only acres where mineral development work can clearly be demonstrated. Some of these acres may qualify for purchase under Section 6204, or the patenting provision. Since 1872, Congress has removed millions of acres of public land from mineral entry, which would not qualify for purchase under this provision.

FICTION: Open up as many as 350 million acres of public lands for sale, to the highest bidder.

FACT: 350 million acres of public land is a gross overstatement. Working in conjunction with the Department of Interior and BLM, the amount land that would qualify for purchase under this language would be, at most, 360,000 acres.

FICTION: Under this provision, oil and gas companies will be able to purchase federal lands at cheap prices, and produce the resources without paying any royalties to the federal treasury.

FACT: Oil and gas are not locatable minerals, and come under the Mineral Leasing Act, not the mining law. This language amends the 1872 mining law, which for 133 years has regulated the hardrock mining industry, and has nothing to do with oil and gas leasing on federal lands.

FICTION: Sec. 6202 of the bill eliminates the patenting requirement for the claimant to prove a valuable mineral deposit, thereby allowing anyone to purchase title to lands, with or without valuable minerals.

FACT: Sec. 6202, the "Alternate Valuable Mineral Deposit Criteria" updates a 133-year-old law by setting up another avenue for mining companies to obtain patents for lands they are mining, while still possessing all the requirements identified under the "law of discovery." The individual must have a valid mining claim, on which they are conducting mining activities, and making a profit by selling those minerals. If the holder/holders of the claim have filed publicly with the Securities Exchange Commission (SEC) the "proven and probable" reserves for the claim, then they may apply for patenting under the language. (Publicly filing with the SEC the company means proving the existence of a valuable mineral.)