Order Code RL33908
Mining on Federal Lands:
Hardrock Minerals
Updated April 30, 2008
Marc Humphries
Analyst in Energy Policy
Resources, Science, and Industry Division

Mining on Federal Lands: Hardrock Minerals
Summary
Mining of hardrock minerals on federal lands is governed primarily by the
General Mining Law of 1872. The law grants free access to individuals and
corporations to prospect for minerals in public domain lands, and allows them, upon
making a discovery, to stake (or “locate”) a claim on that deposit. A claim gives the
holder the right to develop the minerals and may be “patented” to convey full title to
the claimant. A continuing issue is whether this law should be reformed, and if so,
how to balance mineral development with competing land uses.
The right to enter the public domain and freely prospect for and develop
minerals is the feature of the claim-patent system that draws the most vigorous
support from the mining industry. Critics consider the claim-patent system a
giveaway of publicly owned resources because of the small amounts paid to maintain
a claim and to obtain a patent. Congress, however, has imposed a moratorium on
mining claim patents through the annual Interior spending bill since FY1995.
The lack of direct statutory authority for environmental protection under the
Mining Law of 1872 is another major issue that has spurred reform proposals. Many
Mining Law supporters contend that other current laws provide adequate
environmental protection. Critics, however, argue that these general environmental
requirements are not adequate to assure reclamation of mined areas.
Broad-based legislation to reform the General Mining Law of 1872, the
Hardrock Mining and Reclamation Act of 2007 (H.R. 2262), was introduced on May
10, 2007. The bill, as amended in Committee markup, would establish an Abandoned
Locatable Minerals Mine Reclamation Fund, a Locatable Minerals Community
Impact Assistance Fund, and an 8% royalty on “net smelter returns” from new mines
or mine expansions and a 4% “net smelter return” royalty on existing mines. New
reclamation standards would be established, and a reclamation bond or other
financial guarantee would be required before operation permits are approved.
Hearings were held on H.R. 2262 by the Committee on Natural Resources’
Subcommittee on Energy and Minerals on July 26, August 21, and October 2, 2007.
The Senate Committee on Energy and Natural Resources held an oversight hearing
on hardrock mining on federal lands September 27, 2007. The House Committee on
Natural Resources approved H.R. 2262, as amended, by a vote of 23-15 on October
23, 2007. On November 1, 2007, the House passed H.R. 2262 by a vote of 244-166.
A Senate bill, S. 2750, introduced March 12, 2008 (Abandoned Mine
Reclamation Act of 2008), would address cleaning up abandoned hardrock mines
throughout the United States by establishing an Abandoned Mine Cleanup Fund and
imposing various fees on hardrock mining operations on federal land. Two Oversight
Hearings were held by the Senate Energy and Natural Resources Committee in the
110th Congress — one on hardrock mining on federal land (September 27, 2007) and
a second on reform of the General Mining Law of 1872 (January 24, 2008). The
Senate Energy Committee held a third hearing to address abandoned hardrock mine
lands and uranium mining (March 12, 2008).

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Claim-Patent System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Major Mining Legislation After the 1872 Mining Law . . . . . . . . . . . . . . . . . 3
Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Claim-Patent System: Pros and Cons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Past Amendment Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Proposals to Eliminate Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Federal Land Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Current Legislative Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Mining on Federal Lands: Hardrock Minerals
Background
Mining of hardrock minerals on federal lands is governed primarily by the
General Mining Law of 1872. The original purposes of the Mining Law were to
promote mineral exploration and development on federal lands in the western United
States, offer an opportunity to obtain a clear title to mines already being worked, and
help settle the West. The Mining Law grants free access to individuals and
corporations to prospect for minerals on open public domain lands, and allows them,
upon making a discovery, to stake (or “locate”) a claim on the deposit. A valid claim
entitles the holder to develop the minerals. The 1872 Mining Law originally applied
to all valuable mineral deposits except coal (17 Stat. 91, 1872, as amended).
Public domain lands are those retained under federal ownership since their
original acquisition by treaty, cession, or purchase as part of the general territory of
the United States, including lands that passed out of but reverted back to federal
ownership. “Acquired” lands — those obtained from a state or a private owner
through purchase, gift, or condemnation for particular federal purposes rather than
as general territory of the United States — are subject to leasing only and are not
covered by the 1872 Law. Some public lands may be “withdrawn” or closed to
mineral entry.
The 1872 Mining Law was one of the primary forces behind the development
of mineral resources in the West, along with the industries and services that
supported mineral production. Major hardrock minerals developed in the West
include copper, silver, gold, lead, zinc, molybdenum, and uranium. During the 19th
century, major mining districts for silver and gold were developed under the Mining
Law in Colorado, California, Idaho, and Nevada. Early in the 20th century, there
were major developments of porphyry copper in Arizona. Large molybdenum and
tungsten deposits in Colorado were also developed. The Mining Law continues to
provide the structure for much of the western mineral development on public domain
lands. Western mining, although not as extensive as it once was, is still a major
economic activity, and a high percentage of hardrock mining is on public lands.
The Claim-Patent System
After a prospector has conducted exploration work on public domain land, he
or she may locate a claim to an area believed to contain a valuable mineral. To hold
a claim on public land, claimants must pay an annual maintenance fee of $125 per

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claim.1 Claimants with 10 claims or fewer are exempt from the annual maintenance
fee. There also is a $30 fee for first-time locators to locate and record a claim.2 The
fees above are to be adjusted every five years based on the Consumer Price Index (30
U.S.C. 28 j (c)). The last adjustment was made on September 1, 2004. Prior to 2004
the fees were $100 and $25 respectively. The annual maintenance fee is in addition
to the requirement that $100 of annual development work be conducted per claim.
The maintenance and location fees generated revenue estimated at $47.5 million
in FY2005 and $32.3 million in FY2006, according to the Bureau of Land
Management (BLM). Revenues from fees have fluctuated over the years and were
$35.9 million in FY1997.
Once a claimed mineral deposit is determined to be economically recoverable,
and at least $500 of development work has been performed, the claim holder may file
a patent application to obtain title to surface and mineral rights. Beginning January
3, 1989, a fee of $250 per patent application plus $50 per claim within each
application has been required. If the patent application is approved, the claimant may
purchase surface and mineral rights at a rate of $2.50 per acre for placer claims and
$5 per acre for lode claims. A placer deposit is an alluvial deposit of valuable
minerals usually in sand or gravel; a lode or vein deposit is of a valuable mineral
consisting of quartz or other rock in place with definite boundaries.3 A placer claim
is usually limited to 20 acres but a lode claim may be slightly greater than 20 acres.
These per-acre fees were substantial when the Mining Law was enacted — claimed
land and minerals now far exceed these amounts in value.
The following provisions currently apply to claims:
! There is no limit on the number of claims a person can locate;
! There is no requirement that mineral production ever commence;4
! Mineral production can take place without a patent or royalty
payments to the federal government; and
! Claims can be held indefinitely with or without mineral production,
subject to challenge if not developed.
Most of the current mining activity and mineral claims under the Mining Law
are in Nevada, Arizona, California, Montana, and Wyoming. As of the end of
FY2005, approximately 35% of mining claims were in Nevada alone and another
nearly 35% were in the other four states. According to the Bureau of Land
Management, the number of active claims declined from about 1.2 million claims in
FY1989 to 294,678 for FY1993. Many claims were dropped as a result of provisions
of law charging a $100-per-claim annual maintenance fee. The number of active
claims subsequently rose to 324,651 in FY1997, reflecting the relative strength of the
1 30 U.S.C. 28f
2 30 U.S.C. 28g
3 Source: Dictionary of Mining, Mineral and Related Terms, Bureau of Mines, 1968.
4 However, before the enactment of P.L. 102-381, claimants were required to conduct at
least $100 of development work per year.

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gold and copper industries. The number of active claims fell to a low of 207,757 for
FY2001, reflecting a decline in the gold and copper industries and, according to the
BLM, changes in public land policy that significantly lengthened the time necessary
to get permission to mine. Active claims stood at 207,241 in FY2005.
Only a small percentage of claims is ever patented, totaling about 3.4 million
acres from 1867 through 2006. This represents approximately 1.5% of all public
lands patented; most public lands have been patented under homestead entries,
statehood grants, railroad grants, and other non-mineral public land laws. It is not
required to patent a claim to mine a deposit, and a great deal of mining activity is
currently taking place on unpatented claims. However, patenting a claim gives the
holder legal title to both the surface and the minerals, and relieves the holder of
having to pay the annual fees.
Beginning in FY1995, Congress has enacted (in the Interior appropriations laws)
a series of one-year moratoria on the issuance of mineral patents. However,
applications meeting certain requirements that were filed on or before September 30,
1994, are allowed to proceed, and third-party contractors are authorized to process
the mineral examinations on those applications. The patent moratorium will not stop
the production of valuable mineral resources from the public lands, but will prevent
the further transfer of ownership of public lands to the private sector (with the
exception of the 237 patent applications already in the pipeline).5
The annual one-year moratorium on patenting continues the uncertainty over
whether efforts will continue to try to reform the 1872 Mining Law. The mining
industry would like to end the uncertainty to facilitate its long-term business
planning. Environmentalists, who were hoping for new environmental protection
language in a major mining law reform bill, argue that the patent moratorium does
not protect the environment from current mining practices.
Major Mining Legislation After the 1872 Mining Law
In 1920, the Mineral Leasing Act removed oil, gas, oil shale, phosphates,
sodium, and certain other minerals on federal public domain lands from the
claim-patent system of the 1872 Mining Law and set up a system of leasing in which
the federal government retains ownership of the leased lands. Coal, which previously
had its own claim-patent law (the 1873 Coal Act), was also included in the 1920
Leasing Act.6 After 1955, common variety minerals such as sand, stone, gravel,
cinders, and pumice were sold under the Materials Act of 1947, as amended. A
strong push for an all-leasing system developed during the 1930s and 1940s, but no
such legislation was enacted.
As mentioned, acquired federal lands were never subject to the General Mining
Law. The Mineral Leasing Act for Acquired Lands of 1947 authorized the leasing
5 P.L. 103-332
6 30 U.S.C. 181 et.seq.

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of leasable minerals in some acquired federal lands.7 The Reorganization Plan No.
3 of 1946 and earlier acts authorized the leasing of hardrock minerals on acquired
forest lands.8
During the 1960s and 1970s, the Multiple Use Sustained Yield Act, Wilderness
Act, National Forest Management Act, National Environmental Policy Act (NEPA),
and Federal Land Policy Management Act (FLPMA) addressed environmental
protection, multiple use, and management of federal land generally. By imposing
new requirements on agency actions, and by withdrawing some federal lands from
development, these acts have affected mineral development under both the leasing
system and the Mining Law claim-patent system. The Mining Law contains no direct
environmental controls, but mining claims are subject to all general environmental
laws as a precondition for development. The mining industry must comply with
applicable requirements of the Clean Water and Clean Air Acts, state reclamation
standards where they exist, and federal and state statutes relating to the handling and
disposal of certain toxic wastes, among other laws.
The evolving leasing system and later withdrawals of lands from hardrock
exploration and development diminished the amount of lands under the Mining Law
authority. For those hardrock minerals that remain under the Mining Law, however,
the claim-patent system is essentially the same as it was when the law was enacted.
Critics argue that the West is now developed and that the 1872 Mining Law is
obsolete and inconsistent with other federal natural resource policies. Supporters
maintain that the combination of leasing for some resources and a claim-patent
system for others works well and should be maintained. The National Mining
Association (NMA) states that the “existing law more than adequately meets the four
criteria essential to any mineral tenure law”: free and open access to explore for
minerals on unappropriated public lands, exclusive exploration rights, the right to
develop the valuable minerals discovered, and security of tenure.
When oil shale was transferred from the 1872 claim-patent system to the leasing
system in the 1920 Mineral Leasing Act, a large number of existing unpatented oil
shale claims were continued under the terms of the 1872 Mining Law. During the
1980’s, the Department of the Interior sought to invalidate these unpatented claims
and refused to issue patents to claim owners. The claimants challenged the
Department’s actions. The U.S. Court for the district of Colorado held that any oil
shale claimant who had made $500 worth of assessment work on the land in question
had satisfied the requirements for issuance of a patent and that the Department could
not promulgate a new policy to the contrary.9
Legislation to resolve oil shale issues was enacted as part of the Energy Policy
Act of 1992 (P.L. 102-486). This law offers general and limited patents based on the
status of the application at the time of enactment. Limited patent holders receive title
7 30 U.S.C. 351-359
8 60 Stat. 1007
9 Tosco Corp. V. Hodel, 611 F. Supp. 1130, (. Colo. 1985).

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to the oil shale only and are required to post a reclamation bond or financial
guarantee. Patent fees remain $2.50 per acre.
Analysis
Claim-Patent System: Pros and Cons
The right to enter the public domain lands and prospect for and develop
minerals is the feature of the claim-patent system that draws the most vigorous
support from the mining industry. Modern hardrock mineral exploration requires a
continuous effort using vast tracts of land and sophisticated and expensive
technology. Industry officials argue that being able to obtain full and clear title to the
land enhances a company’s ability to bring an economic deposit into production;
financing the project, for example, may be more feasible. They contend that
restrictions on free access and security of tenure would curtail exploration efforts
among large and small mining firms. In their view, the incentive to develop would
be lost, long-run costs would increase, and the industry and the country would suffer.
Mining Law critics consider the claim-patent system a giveaway of publicly
owned resources because of the absence of royalties and the small charges associated
with keeping a claim active and obtaining a patent. They maintain that although such
generous terms may have been effective ways to help settle the West and develop
minerals, there is no solid evidence that under a different system minerals would not
be developed today. They also believe the current system, by conveying title and
allowing other uses of patented lands, creates difficult land management problems
through the creation of private inholdings on public land, and that current law does
not provide for adequate protection of the environment.
In the claim-patent system, mineral claims may be held indefinitely without any
mineral production. Once lands are patented to convey full title to the claimant, the
owner can use the lands for a variety of purposes, including non-mineral ones.
However, using land under an unpatented mining claim for anything but mineral and
associated purposes violates the Mining Law. Critics believe that many claims are
held for speculative purposes. However, industry officials argue that a claim may lie
idle until market conditions make it profitable to develop the mineral deposit.
Another issue surrounds “discovery” and “prediscovery” protection. The law
requires that “no location of a mining claim shall be made until the discovery of the
mineral within the limits of the claim.” If a discovery is made and a valid location
established, the claimant has a valid possessory right against all other parties. One
purpose of the discovery requirement was to help reduce speculation. However,
demonstrating discovery of a valuable mineral deposit often requires considerable
time, effort, and expense on the part of a prospector. The prospector may find
indications of a deposit, but demonstrating its value may involve exploration over a
large area and drilling and analyses of core samples to define the quality and extent
of the mineral. Typically, in practice, the federal government has allowed claims
based on general indications that a mineral deposit exists, and required proof of

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discovery only upon application for a patent unless circumstances warrant full proof
sooner, for example, mineral claims in sensitive areas.
The industry has indicated it wishes to avoid major challenges to the principle
of free access and the right to obtain a patent. The industry generally opposes placing
hardrock minerals under a leasing system because this would give the federal
government discretionary control over development, impose royalty payments, and
retain government ownership of surface and/or mineral rights.
Past Amendment Proposals
Proposals to amend the 1872 Mining Law have fallen under the following broad
categories.
! Modify the claim-patent system to retain the patent feature, but
require payment of fair market value for all or part of the value of
the land. The Government also would collect some percent of the
value of mineral production as royalties.
! Convert the claim-patent system to a permitting system, and prohibit
further patenting. Advocates of this proposal argue that a permitting
system would be effective in achieving a fair market value return to
the federal Treasury for public lands. This system would collect
royalties and add new environmental standards to mining operations.
Mineral industry supporters, on the other hand, contend that the
Department of the Interior is already overburdened with the current
leasing system and that comprehensive hardrock mining reform
would only add to its inefficiency and ultimately increase costs
through royalty and rents.
! Continue the current claim-patent system, but with some
amendments. Proposed changes have included eliminating the
distinction between lode and placer claims, imposing a time limit
within which claims must be developed, expanding the size of a
claim, providing better prediscovery protection, and opening more
public lands to mineral exploration.
Proposals to Eliminate Subsidies
The Mining Law currently allows a claimant to produce minerals without a
patent and without paying royalties or rents to the federal Treasury. This is
considered a subsidy or give-away by many because the miner does not pay for a
factor of production (i.e., land and mineral resources). By contrast, royalties are paid
to the federal government for oil, gas, coal and other leasable minerals on federal
lands, and non-federal land owners (e.g., private and state owners) typically receive
a royalty from those who produce minerals on their lands. Also, if the claimant
patents the surface and mineral estate for the $2.50 or $5.00 per acre, this too can be
considered a subsidy because the claimant is paying less than fair market value for
the surface and mineral estates. Various tax incentives, such as the percentage

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depletion allowance (a tax deduction for the depletion of a mineral resource) and
“expensing” (writing off in the year of expenditure) the costs of exploration and
development, have been characterized as subsidies to the industry as well.
Eliminating some of the natural resource subsidies, in the Clinton
Administration’s view, would have been one way to increase revenues to the
Treasury and help ensure a fair return to the taxpayer for the development of public
lands. In its FY2001 budget request, the Clinton Administration proposed charging
mining companies a 5% fee on net smelter production from hardrock mining on
federal lands. The Bush Administration has not made a similar proposal in any of its
budget requests.
As has been previously noted, the original intention of the Mining Law was to
develop the nation’s minerals and to develop the West. Proponents of retaining the
current system contend that an incentive still is necessary for those who take
substantial financial risk to develop a mineral deposit. Mining is a capital-intensive
process that often takes years of development before minerals are produced.
Imposing royalties, increasing holding fees, and repealing the percentage
depletion allowance would have some impact on domestic hardrock mineral
production, but the level of any production decline attributable solely to new fees is
difficult to estimate. The mining industry generally has opposed legislation to repeal
the percentage depletion allowance. The elimination of some incentives to the
industry would come at a time when the West is already developed and mineral/metal
demand is relatively good. However, hardrock mineral prices fluctuate and often are
cyclical. Also, several mineral-producing nations are reportedly rewriting their
mining laws to attract more U.S. and western investment. Mineral investment in
developing countries, however, face a political risk. The industry argues that a new
cost increases in one area, without cost reductions in others, may make U.S. mineral
deposits less competitive or uneconomic.
Fair Market Value
Critics point out that the federal government does not receive fair market value
for land and resources transfers under the Mining Law. It receives no royalties or
rents from mining activities conducted under the law. In addition, the $2.50 and
$5.00 per-acre price for clear title to the surface and mineral rights has not changed
since the law was enacted. The per-acre price appears to be based on the value of
Western farmland and grazing land before the enactment of the law in 1872.
Determination of fair market value of mineral-bearing lands is complex because
many geologic, engineering, and economic factors must be considered, and fair
market value determinations typically are controversial. According to a 1989 report
by the General Accounting Office (GAO), the fair market value of mineral-bearing
lands is substantially more than the $2.50 and $5.00 per acre that a claimant pays for
patenting a claim. GAO estimated that, for 20 patents it reviewed, the federal

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government had received less than $4,500 since 1970 for lands valued between $13.8
million and $47.9 million.10
The GAO appraisal method, however, was criticized by the Bureau of Land
Management (BLM) in a May 1989 Report to the Secretary of the Interior. The GAO
report obtained information on land values from BLM, Forest Service officials, and
local real estate brokers. GAO’s estimates were based on recent sales of comparable
land, not the value of the land at the time claims were patented; much of the land
may have had very little value at the time it was claimed or patented. BLM argues
that sales of adjacent tracts that either have no mineral development potential or are
sold for mineral rights alone cannot be used to establish fair market value of the
surface of patented mining claims and that data on comparable sales are rare.
The Congressional Budget Office estimates the value of hardrock mineral
production on federal land at $600 million for FY2005, a decrease from an Interior
Department estimate of $1.8 billion in FY1993. The decline can be attributed in part
to acreage conveyed out of federal ownership through patenting, according to the
BLM.
Environmental Protection
The lack of direct statutory authority for environmental protection under the
Mining Law of 1872 is another major issue that has spurred reform proposals. Many
Mining Law supporters contend that other current laws, as noted above, provide
adequate environmental protection. Critics, however, argue that these general
environmental requirements are not adequate to assure reclamation of mined areas
and that the only effective approach to protecting lands from the adverse impacts of
mining under the current system is to withdraw them from development under the
Mining Law. Further, critics charge that federal land managers lack regulatory
authority over patented mining claims and that clear legal authority to assure
adequate reclamation of mining sites is needed. In addition, cleaning up the
reportedly over 500,000 abandoned hardrock mine sites in the United States11 is an
ongoing and major concern for many in Congress. The BLM’s Abandoned Mine
Lands Program has inventoried 11,000 of the estimated 70,000 abandoned mine sites
on public lands and has initiated cleanup efforts in Western states in cooperation with
state and local governments, mining companies, and public interest groups.12 In
addition, the U.S. Environmental Protection Agency lists over 40 abandoned
hardrock mine or processing sites on its National Priorities List for cleanup.13
10 The Mining Law of 1872 Needs Revision, United States General Accounting Office,
GAO/RCED-89-72, March 1989, p. 24. This report is GAO’s most recent investigative
study of potential abuse of the Mining Law.
11 Earthworks, Abandoned Mine Legacy, [http://www.earthworksaction.org/
AbandonedMineLegacy.cfm].
12 U.S. Department of the Interior, Bureau of Land Management, The Cooperative
Conservation Based Strategic Plan for the Abandoned Mine Lands Program,
March 2006.
13 U.S. Environmental Protection Agency, NPL Sites, Abandoned Mine Lands, Superfund,
(continued...)

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Federal Land Withdrawals
BLM is responsible for approximately 700 million acres of federal subsurface
minerals, and supervises the mineral operations on about 56 million acres of Indian
trust lands. Some of these lands are withdrawn from mineral development; a
withdrawal is an action that restricts the use or disposition of public land. In some
cases land is reserved for a specific use that may preclude locating mining claims and
granting leases.
A BLM study determined that of the approximately 700 million acres of federal
subsurface minerals under the agency’s jurisdiction, approximately 165 million acres
have been withdrawn from mineral entry, leasing, and sale, subject to valid existing
rights. Lands in the National Park System (except National Recreation Areas), the
Wilderness Preservation System, and the Arctic National Wildlife Refuge (ANWR)
are among those that are statutorily withdrawn. Also, of the 700 million acres,
mineral development on another 182 million acres is subject to the approval of the
surface management agency, and must not be in conflict with land designations and
plans, according to the BLM. Wildlife refuges (except ANWR), wilderness study
areas, and roadless areas, among others, are in this category.14
The Federal Land Policy Management Act (FLPMA) mandated review of public
land withdrawals in 11 Western states to determine whether, and for how long,
existing withdrawals should be continued. According to the BLM, the retention of
a withdrawal requires a compelling show of need, and an agency manager must
convince the BLM Director, Secretary and the public that certain lands should not be
opened to multiple use, including mining and mineral leasing, and that there is no
reasonable alternative to continued withdrawal.15

Mineral industry representatives maintain that federal withdrawals inhibit
mineral exploration and limit the reserve base even when conditions are favorable for
production. Mineral reserves are not renewable. Thus, they argue that whether
minerals are in the public or private sector, without new reserves or technological
advancements, mineral production costs may rise. They further contend that higher
domestic costs may lead to greater exploration on foreign soil, boosting import
dependence. Mining industry supporters also assert that too much land has been
unnecessarily withdrawn from mining, through administrative actions, to pursue
preservation goals.
Critics of the Mining Law argue that mining often is an exclusive use of land
in as much as it can preclude other uses and that in many cases there is no way to
protect other land values and uses, short of withdrawal of lands from development
under the law. They point to unreclaimed areas that have been mined for hardrock
13 (...continued)
April 2005. See [http://www.epa.gov/aml/amlsite/npl.htm]
14 Public Lands, On-Shore Federal and Indian Minerals in Lands of the U.S., Bureau of
Land Management, U.S. Department of the Interior, December 1, 2000.
15 43 U.S.C. 1714

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minerals in the past, Superfund sites related to past mining and smelting, and
instances where development of resources could adversely affect or destroy scenic,
historic, cultural, and other resources on public land.
Current Legislative Activity
A broad-based bill to reform the General Mining Law of 1872, the Hardrock
Mining and Reclamation Act of 2007 (H.R. 2262), was introduced in the House on
May 10, 2007. The bill would limit the issuance of patents to claimants whose patent
applications were filed with the Secretary of the Interior on or before September 30,
1994, and met appropriate statutory requirements by that date. The bill would
establish a Locatable Minerals Fund which would include two accounts: Hardrock
Reclamation Account and a Hardrock Community Impact Assistance Account. An
8% royalty on “net smelter returns” would be imposed on new mines and mine
expansions while a 4% “net smelter return” royalty would apply to existing mines.
Two-thirds of the royalty revenues would be deposited into the proposed reclamation
account, and one-third would be deposited into the proposed community impact
assistance account. An operations permit, which would include, among other things,
a reclamation plan, would be required of any claim holder to carry out mining or
related activities on mining claims. The operations permit — good for 20 years —
may be renewed for a successive 20-year term. New reclamation standards would be
established, and a reclamation bond or other financial guarantee would be required
before exploration and operation permits are approved. States, political subdivisions
and Indian Tribes would be allowed to petition the Secretary of the Interior to have
lands withdrawn from mining. Mineral activities would not be permitted if they
“impaired” (as defined in the bill) the lands or resources of the National Park system
or National Monuments. A provision in the bill allows for civil suits to be filed in
U.S. District Courts should a person feel adversely affected. The bill was referred to
the Committee on Natural Resources.
Hearings were held on H.R. 2262 by the House Committee on Natural
Resource’s Subcommittee on Energy and Minerals on July 26, August 21(field
hearings) and October 2, 2007. Industry groups testified in opposition to much of the
bill, particularly opposed to the 8% “net smelter royalty” as defined in section 613
(c)(1) of the Internal Revenue Code of 1986, and the more stringent environmental
standards. Some testified that if the government were to impose a royalty that it be
based on “net profit” or the ability to pay, which would then not distort production
decisions. Others, however, countered that an ad-valorem royalty — based on value
(that is contained in the bill) — might be a more appropriate way to collect revenues,
claiming that a net profit royalty is fraught with complexities and high administrative
cost, thus minimizing the government take. Those in favor of the bill pointed out the
high number of uranium claims staked on public land near “sensitive sites” and the
need to create a dedicated revenue stream for a vast and costly abandoned hardrock
mine cleanup effort. The Senate Committee on Energy and Natural Resources held
an oversight hearing on hardrock mining on federal lands September 27, 2007.
A Committee mark-up (October 18th and 23rd) followed several Subcommittee
hearings (discussed above) on the bill. The House Committee on Natural Resources

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approved H.R. 2262, as amended on October 23, 2007, by a vote of 23-15. On
November 1, 2007, the House approved H.R. 2262 by a vote of 244-166 including
amendments that would consider river watershed areas eligible for funding through
the Locatable Minerals Fund and that 50% of the money deposited in the Hardrock
Reclamation Account (one of two accounts that would be established within the
Locatable Minerals Fund) be redirected to states in proportion to the royalty funds the
state generates. The House defeated amendments that sought to establish a Minerals
Information Service within the Department of the Interior, strike the definition of
“undue degradation” from the bill and keep “uncommon variety” minerals within the
locatable minerals framework.
A Senate bill, S. 2750, introduced March 12, 2008 (Abandoned Mine
Reclamation Act of 2008), would address cleaning up abandoned hardrock mines
throughout the United States by establishing an Abandoned Mine Cleanup Fund and
imposing various fees on hardrock mining operations on federal land. A 4% “gross
income” (defined in section 613 (c)(1) of the Internal Revenue Code of 1986) royalty
would apply to existing hardrock mineral producers on federal land. The annual
hardrock mining maintenance fee would rise to $300 per claim from the current $125
per claim and would apply to claims other than oil shale claims and those with ten
or fewer claims. Additionally, hardrock miners on federal lands would be required
to pay an annual reclamation fee of 0.3% of their gross annual income from mining
except for operators making less than $500,000, among other specified conditions.
All funds from the reclamation fee and the royalty would be deposited into the
Cleanup Fund. Funds collected from the annual maintenance fee would be allocated
to both the Department of the Interior for administration of the Mining Law and to
the Cleanup Fund.
S. 2287, Elimination of Double Subsidies for the Hardrock Mining Industry Act
of 2007, introduced November 1, 2007, would repeal the percentage depletion
allowance for certain hardrock mines. This bill would amend section 613 (a) of the
Internal Revenue Code of 1986. An Abandoned Mine Reclamation Fund would be
established and funded, in part, by revenues raised by enactment of the bill.
Three Oversight Hearings related to mining law reform were held by the Senate
Energy and Natural Resources Committee in the 110th Congress — one on hardrock
mining on federal land (September 27, 2007) and a second on reform of the General
Mining Law of 1872 (January 24, 2008). The Senate Energy Committee held a third
hearing to address abandoned hardrock mine lands and uranium mining (March 12,
2008).
For Additional Reading
CRS Report RL32813, Hardrock Mining: State Regulation, by Aaron Flynn.
Gerard, David. 1872 Mining Law: Digging A Little Deeper, PERC Policy Series, PS-
11 Bozeman, MT. December 1997.

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Gordon, Richard , VanDorn, Peter. Two Cheers for The 1872 Mining Law, CATO
Institute, Washington, DC, April 1998.
Leshy, John D. The Mining Law: A Study in Perpetual Motion, Resources for the
Future, Washington, DC, 1987.
National Research Council. Hardrock Mining on Federal Lands, Committee on
Hardrock Mining on Federal Lands, National Academy Press, Washington, DC,
1999.
National Wildlife Federation. Hardrock Reclamation Bonding Practices in the
Western United States, Prepared by James Kuipers and Cathy Carlson, February
2000.
U.S. Congress. Majority Staff Report of the Subcommittee on Oversight and
Investigations of the Committee on Natural Resources of the U.S. House of
Representatives, Taking From the Taxpayer: Public Subsidies For Natural
Resource Development
, 103rd Congress, Committee Print No. 8, August 1994.
U.S. Congress. Testimony to the Subcommittee on Mineral Resources, Committee
on Resources, U.S. House of Representatives, 107th Congress, July 23, 2002.
Hearing on Availability of Bonds to Meet Federal Requirements for Mining, Oil,
and Gas Projects
.
U.S. General Accounting Office. The Mining Law of 1872 Needs Revision, RCED-
89-72, Washington, DC, March 1989.