260,000 abandoned mines still mar West

Though Alaska has more than 7,300 abandoned hardrock mine sites, most of which are located on federal lands, the state's problems are relatively small potatoes compared with the estimated 260,000 abandoned mines to be found scattered across the West, according to a 2008 study conducted by the U.S. General Accounting Office.

GAO Natural Resources and Environment Director Robin M. Nazzaro, in testimony before a U.S. Senate panel July 14, said the GAO researched state mining royalties and abandoned mine sites - two issues that are central to the debate on reforming the General Mining Act of 1872.

Nazzaro testified during a Senate Energy and Natural Resources hearing on two proposals to reform the mining law.

Since the passage of the General Mining Act of 1872, mine operators have extracted billions of dollars worth of silver, gold, copper, and other hardrock (locatable) minerals from federal lands without having to pay a royalty, Nazzaro said.

The vast majority of the federal lands where hardrock mining operations occur are in the 12 western states of Alaska, Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.

Mining law needs overhaul

"These western states have statutes governing hardrock mining operations on lands in their state. However, unlike the federal government, these states charge royalties that allow them to share in the proceeds from hardrock minerals extracted from state-owned lands," he said.

While calling the 137-year-old law "woefully out of date," U.S. Sen. Lisa Murkowski, R-Alaska, expressed concern July 14 that language in proposed legislation in the Senate could hamper economic development by drastically increasing fees and royalties, placing huge swaths of public land off-limits to mineral production, and instituting a long list of new regulations.

"We need to overhaul the law to ensure that it strikes the right balance between protecting the environment, obtaining a fair return for taxpayers, creating jobs and maintaining a secure supply of American minerals," said Murkowski, the panel's top Republican.

"If we get mining reform wrong, we risk trading our reliance on foreign oil for a reliance on foreign minerals," she said.

The United States currently imports 100 percent of the quartz crystal needed for the photovoltaic panels used in solar power generation, 91 percent of the platinum for fuel cells, 100 percent of the indium for LED lighting technologies, and 100 percent of the rare earth minerals for advanced batteries, Murkowski observed

She also noted that the margin of error on mining law is very thin given the potential for job creation and the long-term economic effects of reform. The United States already attracts a mere 8 percent of global mining development, she added

States charge mining royalties

The GAO study also found that each of the states, except Oregon, assesses taxes that function like a royalty on hardrock mining operations on private, state, and federal lands. But the royalties the states assess often differ depending on land ownership and the mineral being extracted.

For example, for private mining operations conducted on federal, state, or private land, Arizona assesses a functional royalty of 1.25 percent of net revenue on gold mining operations, and an additional royalty of at least 2 percent of gross value for gold mining operations on state lands. The actual amount assessed for a particular mine may depend not only on the type of royalty, its rate, and exclusions, but also on other factors, such as the mine's location relative to markets, the GAO added.

Fewer hazardous mine sites

Nazzaro said the GAO developed a standard definition for abandoned mine sites and asked the 12 western states to report the number of mine sites and estimate the number of features at these sites that pose physical safety hazards and the number of sites with environmental degradation. Using the definition that the GAO provided, states reported that there are at least 161,000 abandoned hardrock mine sites in their states, and these sites have at least 332,000 features that may pose physical safety hazards. At least 33,000 sites have degraded the environment.

The State of Alaska reported 469 abandoned mine sites, of which 235 have features that pose significant hazards to public health and safety, and 99 sites have environmental degradation.

Federal count may be inaccurate

The GAO asked the Bureau of Land Management and the U.S. Forest Service to report the number of abandoned hardrock mines on the lands they manage. In September 2007, the agencies reported an estimated 100,000 abandoned mine sites, but the GAO found problems with this estimate, Nazzaro said.

"For example, the Forest Service had reported that it had approximately 39,000 abandoned hardrock mine sites on its lands. However, this estimate includes a substantial number of non-hardrock mines, such as coal mines, and sites that are not on Forest Service land," he explained.

At the GAO's request, the Forest Service revised its estimate of the number of abandoned hardrock mine sites on its lands, excluding coal or other non-hardrock sites, to about 29,000.

"That said, we still have concerns about the accuracy of the Forest Service's recent estimate because it identified a large number of sites with "undetermined" ownership, and therefore these sites may not all be on Forest Service lands," Nazzaro said.

The BLM had similar problems coming up with an accurate estimate, but counted about 71,000 abandoned mine sites.

The bureau also acknowledged that its estimate of abandoned hardrock mine sites on its lands may not be accurate because it includes sites on its lands that are of unknown or mixed ownership (state, private, and federal) and a few coal sites. In addition, BLM officials said that the agency's field offices used a variety of methods to identify sites in the early 1980s, and the extent and quality of these efforts varied greatly, according to the GAO.

In Alaska, the BLM counted some 6,000 abandoned hardrock mine sites on its lands, while the Forest Service identified 830 similar sites on the acreage it oversees.