House committee passes mining law rewrite

A key House committee has passed legislation rewriting the antiquated General Mining Law of 1872 to impose the first federal royalties on hard-rock mining.

The bill passed the House Natural Resources Committee on a vote of 23-15 and now goes to the full House.

It would impose royalties of 4 percent of gross revenue on existing hard-rock mining operations, and royalties of 8 percent of gross revenue on new mining operations.

Rep. Dean Heller, R-Carson City, a member of the committee, offered three amendments to the bill: To reform the gross royalty requirement from 8 percent gross royalty to a 5 percent net royalty, a royalty distribution amendment that would redirect more funds to the state for mining reclamation and allow states and local communities to have the opportunity to utilize existing mine infrastructure for sustainable development projects with a focus on renewable energy.

Mining in Nevada provides approximately 32,000 jobs, mostly in rural communities.

"Today's mark-up on mining reform reaffirms that the majority leadership in Congress has reignited the war on the West. This legislation in its current form would result in the closure of every mine in Nevada and threaten multiple-use on public lands. I will continue to fight this legislation and work in a bipartisan manner with the committee, the Nevada delegation, and the Administration to ensure a fairer compromise can be reached to preserve jobs in Nevada," said Heller in a statement.

The mining industry agreed with Heller that the royalties are too high, but the committee rejected Heller's amendments.

The legislation is opposed by the Bush administration. Senate Majority Leader Harry Reid of Nevada opposes royalties for existing mining operations and says he's working on his own bill.