Draconian mining reform

Although he stopped short of a veto threat, President Bush on Thursday said he opposes a mining “reform” bill that would impose an 8 percent royalty on gross revenues for new mines and a 4 percent royalty on existing operations, according to Nevada Rep. Dean Heller.

“He said he does not support the bill in its current form,” said Rep. Heller, who met with the president and vice president Thursday. Let’s hope not.

“Reform” sounds good, but the list of outfits backing West Virginia Democrat Nick Rahall’s H.R. 2262 reads like an honor roll of the anti-capitalist branch of the environmental movement, their Web sites full of glowing references to how this “reform” will allow federal land managers to consider other possible uses for the “special places” where greedy miners hope to rape the earth.

Claims that the 1872 law “gives away” mineral wealth ignore how many claims fail, rendering actual mining profits “trivial,” the Cato Institute found in a 1998 analysis. “Asset prices are most analogous to lotteries,” wrote Penn State professor of mineral economics Richard Gordon. “We would not claim that the winner of a lottery paid too little for the winnings because we recognize that most people who buy lottery tickets lose. The same is true for mining claims.”

Bob Hopper, who’s operated the Bunker Hill mine in Kellogg, Idaho, for the past 14 years, predicted that a new 8 percent royalty on gross receipts — not on net profits, mind you — “would put most mining folks out of business. Very few companies and very few deposits could stand an 8 percent royalty.”

He calls the bill outline going through Congress “absolutely terrifying” and an attempt to drive mining out of the West.

“So at a time that we’re already desperate for minerals,” Mr. Hopper said from his office in Idaho on Friday, “and a lot of our mineral processing facilities have been completely destroyed, this is kind of like shooting yourself in both feet. … This is probably the most Draconian thing that I have ever read in my entire life.”

Mr. Hopper adds: “If you’d have come up with this same kind of thing for the coal mines — just insert ‘coal mining’ every place it says ‘hard rock mining’ — it would never have got out of Rahall’s committee. They would have boxed it up for 50 years.”

Perhaps that’s precisely the amendment H.R. 2262 needs. All the congressman from coal-rich West Virginia should be asked to do is insert the words “and coal” wherever his bill currently stipulates “mining” or “hard-rock mining.”

If this bill is nothing but a modest and reasonable “reform,” why on earth shouldn’t all its provisions apply to coal mines, as well?

Then, should Rep. Rahall resist inserting the words “and coal,” let him explain why.

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