Obama budget again seeks hardrock mining royalty, new abandoned mine fees – by Dorothy Kosich (Mineweb.com – February 14, 2012)


The President’s proposed fiscal 2013 federal budget calls for a 5% gross mining royalty on federal lands, and a hardrock abandoned mined land fee on all private and public lands.

RENO – In his proposed $3.8 trillion budget for fiscal 2013 released Monday, President Barak Obama has once again called for creation of a hard abandoned mined land fund, as well as a hardrock mining royalty of not less than five percent of gross proceeds.

Interior Secretary Ken Salazar, who hails from the mining state of Colorado, estimated creation of the Hardrock Abandoned Mine Reclamation Fund–applicable to private and federal, state, and tribal lands–would generate $500 million in savings over the next 10 years.

The Bureau of Land Management would distribute the funds through a competitive grant program to reclaim the highest priority hardrock abandoned sites on federal, state, tribal and private lands.

Salazar also intends to reform Coal Abandoned Mine Land Reclamation by terminating the unrestricted payments to states and tribes that have been certified for completing their coal reclamation work. Currently the money has been dispersed to states based on how much coal they produce.

However, a proposed new Abandoned Mine Lands Advisory Council to be created under the Office of Surface Mining would review and rank abandoned coal mine lands sites, so OSM could distribute grants to reclaim the highest priority coal sites each year. It is estimated the reforms would save taxpayers $1.1 billion over the next 10 years.

Although Obama’s proposed Fiscal Year 2012 five percent gross royalty for the mining of hardrock minerals on public lands failed to get the approval of Congress, the President has again called for instituting the royalty in the Fiscal 2013 federal budget. The administration believes it will generate $74.5 million in revenue over the next decade. It would be instituted under a leasing program under the Mineral Leasing Act of 1920 for certain hardrock minerals, such as silver, gold and copper.

“Existing mining claims would be exempt from the chance to a leasing system, but would be subject to increases in the annual maintenance fees under the General Mining Law of 1872,” said the Bureau of Land Management. “However, holders of existing mining claims for these minerals could voluntarily convert their claims to leases. The Office of Natural Resources Revenue will collect, account for, and disburse the hardrock royalty receipts.”

The President’s proposed budget calls for the repeal of a slew of fossil-fuel credits that benefit oil and gas producers, generating nearly $40 billion in additional tax revenue through 2021. A new $4 per acre fee on energy companies that are currently not producing on federal land and water they have leased could generate $783 million over 10 years.

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