Interior Secretary Bruce Babbitt wants hard rock mining companies to put more of their revenue in a soft place - the federal government's pocket.
Babbitt, who says mining reform is necessary in preserving the livelihood of the West, wants hard rock mining companies to pay royalties for resources taken from federal land."A lot of the discussion has been about royalties and economics, but it's also about our tradition as Westerners, our love of the land and about growing up out here," Babbitt said Thursday at a Denver news conference.
"It's about understanding the Western landscape is real and alive. It can be poisoned and damaged - destroyed - beyond repair all too easily."
Under a reform plan, companies mining gold, silver, copper, platinum and uranium would have to pay a "fair market price" to purchase an ownership patent for federal land. In addition, the companies would pay royalties on revenue generated by the resources.
Babbitt says the money would be used to clean up environmental blight created by previous destructive "cut-and-run" mining practices.
But hard rock mining officials complain they would be footing the bill for mistakes made 100 years ago. They also say reform will reduce industry jobs and ultimately cause companies to take their business elsewhere.
"Mr. Babbitt thinks we go out and scrape out gold bullion bars and then sell them for the going market price," said Paul Jones, president of the Denver-based Sovereign Gold Co. "It isn't a matter of going out and taking something for nothing."
The present law, the Mining Act of 1872, allows companies to stake out a claim and mine federal land at their own expense. Jones said it costs about $40,000 an acre to size up the claim and file the patent on it. If minerals are subsequently discovered, a company can buy the land for as little as $2.50 an acre, but they pay no royalties.
Babbitt says the law, created to spur Western growth, is outdated.
"What I'm asking the gold and silver miners of this county is, `Why do you remain stuck in the past?' " he said. "Why are you saying, `We have an absolute right to do whatever we want no matter what the consequences are?' "
What Babbitt fails to mention, says Jones, is that hard rock mining companies create jobs and pay federal income tax on revenues. He also says they are currently bound to environmental regulations.
"Babbitt's twisting the damn pieces of information," Jones said. "He's only telling a little piece of the pie."
Legislation to amend the 1872 law is being considered by Congress. The House has passed a bill which would require companies to pay the federal government an 8 percent royalty. Industry officials support a much weaker Senate bill.
"Eight percent is grossly too damn much," Jones said. "It just gives companies an incentive to go to Africa, Argentina, Peru and Bolivia."
Jones said gold companies are already moving to places where they can do business without paying royalties, but he didn't rule out a compromise between lawmakers and industry officials.