U.S. Department of the Interior

Paul Bledsoe 202/208-6416

The antiquated Mining Law of 1872 will again force Secretary of the Interior Bruce Babbitt to sign away this Friday title to immensely valuable taxpayer-owned mineral deposits. This time the publicly owned minerals are valued at nearly $3 billion -- but will cost a private corporation only $1745 to obtain.

"This process has gone from distasteful to obscene," Babbitt said. "The Republican Congress is telling Americans they must sacrifice essential services--medical care, education--to balance the budget, but meanwhile Republicans continue to defend these billion dollar rip-offs. Apparently the mining industry lobbyists have more sway with Republicans in Congress than anyone else."

Babbitt, acting in accordance with the 1872 mining law, will convey public land covering 347 acres in the Coronado National Forest near Tucson, Arizona, to a private corporation, ASARCO, Inc. The land contains copper and associated silver lodes. The company will also pay no royalties to the taxpayers on production.

Babbitt will sign the mining patent Friday, December 1, 1995 at 11:30 a.m. in the Auditorium of the Main Interior Department Building. Secretary Babbitt will make a brief statement and take questions from the media.

The mining patent signing takes place at a time when industry-sponsored efforts to "reform" the Mining Law have been incorporated into the major Republican budget bill. In its most current form, the Republican proposal calls for private corporations to pay only the surface value of the public land they acquire by patenting under the mining law.

In the case of the ASARCO patent to be signed Friday, for example, the Republican legislation would only charge the corporation about $347,000 for the mineral patents worth approximately $2.9 billion. Even this $347,000 is larger than it would normally be under the Republican legislation, because the land in question is near Tucson and therefore has some development value.

The current version of the Republican budget bill also includes a 5% royalty on mineral production, but it is so riddled with loopholes that the Congressional Budget Office has calculated that it would net federal taxpayers less than $1 million per year total from all Mining Law hardrock mines in the entire country.

The Clinton Administration has supported Mining Law reform legislation that would end the giveaway of these public resources. This real reform includes ending patenting and requiring mining companies to pay a genuine royalty, such as the 4% gross royalty that was seriously considered by a House-Senate conference committee a year ago. If such a royalty were applied to the current ASARCO claims, the company would reimburse the federal taxpayer about $100 million over the life of this mine-- not $1745, as under current law, or $347,000, as under the Republican proposal. Real reform would bring the taxpayer a return several hundred times greater than the Republican proposal.

"The so-called reform being pushed in Congress would simply perpetuate the swindle on only slightly less outrageous terms," Secretary Babbitt said. "We support common sense reform that gets the taxpayers a fair return. Despite all their rhetoric about being "defenders of taxpayers," Republicans are in the pockets of the mining industry lobbyists on this one. And its costing taxpayers billions."

Under the 1872 Mining Law, signed by President Ulysses S. Grant and still in effect, patents for hardrock minerals on public lands convey title to the land for $2.50 or $5 per acre.

Friday's patent signing is only the latest in a series of giveaways mandated by the Mining Law. Earlier this year, Babbitt was forced to sign over more than $1 billion in mineral rights to a foreign-owned company. In 1994, Babbitt was compelled under the outdated law to at a single stroke sign gold mining patents worth $10 billion to yet another foreign-owned company.

"It makes for a pretty meager Christmas for taxpayers and a bonanza for mining industry fat cats," Babbitt said. "It's time for Republicans to accept the Administration's sensible reform ideas and put an end to these grinch-like heists."

"Let's call this exactly what it is: corporate welfare," Babbitt continued. "It is an outrage to American taxpayers that they are being asked to subsidize the profits of major mining companies with public resources of this value. Congress could and should act quickly to end this travesty."

Other resources extracted on public lands, such as natural gas, oil and surface-mined coal, require a 12.5% gross royalty, based upon production. Coal mined underground generates an 8% gross royalty. Protected by the 123 year-old law, however, hardrock mining for the extraction of gold, silver, copper and other precious metals remain exempt from any royalty payment, so that the public loses both income and the title to the lands.

-DOI-

Last Modification: 12-4-95@12:42pm(GL)