By Donella Meadows
–October 19, 1995–
Want to buy a gold mine for five bucks an acre?
Actually you don’t need to buy it. You and I already own it as part of our citizens’ legacy of public land. We’re the ones offering the land at that price, and we’re getting lots of takers. We recently sold a gold deposit in northeast Nevada worth an estimated $10 billion to American Barrick Resources (a Canadian company) for $9,765. We are about to sell 2000 acres in Montana to the Stillwater Mining Company for $10,000. The land is estimated to hold somewhere between $3 and $30 billion worth of platinum and palladium.
Why are we selling off fabulous resources at ridiculous prices? Because of a law written in 1872, intended to promote the settlement and enrichment of a poor and sparsely populated country.
The 1872 Mining Law gives anyone, U.S. citizen or not, the right to explore for minerals on our public lands (except for the most protected lands, such as national parks) and to take minerals without paying a royalty on them. A mining company can lay claim to land and hold it indefinitely for $100 a year. Claim holders can even post no-trespassing signs to keep the public off the public land. In a process called “patenting” a company can gain title to the land if it finds a commercially viable strike on it. A patent costs $5 an acre for a lode or $2.50 an acre for a “placer” site, where minerals have been washed down and deposited in a streambed.
Those prices have not gone up in over 100 years. To underscore that point, Interior Secretary Bruce Babbitt recently used a pen owned by Ulysses S. Grant, the president under whom the 1872 mining law was passed, to sign away 110 acres in Clark County, Idaho, worth $1 billion, to a Danish company, which paid us the handsome sum of $275.
Land acquired by patent can be resold at any time and any price. The Pointe Hilton Hotel and golf course near Phoenix sits on some of our former land for which a man named Frank Melluzzo paid $153.50 for a gravel pit he never worked. He held it ten years, then sold the land for $400,000 plus 11 percent of the profits from developing it.
Over the years we have sold 3.2 million acres of patents to mining companies, an area the size of Connecticut (and 270 million acres remain open for claims). If we had been charging reasonable royalties, we could have made as much as $70 billion — and who knows what we could have made by charging a fair market price for the land.
The low land prices and absence of royalties are problems because they constitute an addicting, market-distorting corporate subsidy at taxpayer expense. But a far bigger problem is the ruination of land, the poisoning of waters, the great scars gouged in scenic views, the loss of living ecosystems.
According to the 1872 law, permission to mine can’t be denied just because the land may hold some other resource of higher value. Miners don’t even have to clean up their messes. (There are some reclamation requirements, but they are vague, weak, and widely ignored.) The Mineral Policy Center estimates that there is already $32-$72 billion worth of toxic waste cleanup to do at former mine sites. The runoff from the Clark Fork complex of copper mines near Butte, Montana, has contaminated 120 miles of river downstream. No one can measure the real cost we and our children are paying for that damage.
Why are we giving the resources of all the people to so few people at such low prices and large costs? Why do we let a creaky 120-year-old law govern mining on our lands?
Because mining companies love that law, of course, and they pay Western senators to squeal like stuck pigs anytime anyone suggests tampering with it. The mining law would never stand if the West weren’t disproportionately represented in the Senate, if the Senate didn’t have the quaint custom of the filibuster, and if politics weren’t dominated by money. Which is to say, the mining law would never stand if we had a truly representative democracy.
Last year the Congress (Democrat-majority then) made an attempt to charge a royalty on minerals extracted from public lands. The House proposed 8 percent, the Senate cut it to 3.5 percent. (For purpose of comparison, coal and oil taken from public land pay a royalty of 12.5 percent. On private lands some mining companies pay 20 percent.) Then the mining lobby killed even the 3.5 percent proposal. That Congress did put a stop to patenting for one year. This year the Republican-majority Congress has voted to start it up again, at the old $5 per acre giveaway price.
Republican or Democrat, if you’re not beholden to the mining industry, you can see how to write a fair Mining Act. Charge a royalty of 12.5% of the gross value of production. Write clear, strong, simple rules for environmental protection and reclamation. Cancel the whole idea of patents. Specify conditions under which a mining permit can be denied by federal land managers when other resources are of higher value or when environmental damage would be unacceptable. Fund the federal agencies fully, so they can enforce the rules. Be sure citizens can sue to force the government to safeguard these stipulations.
Public ire about the 1872 law is growing. Mining lobbyists know that. So they are pushing a “reform bill” that falls far short of the measures listed above. We shouldn’t let them get away with it. We should insist on grown-up, environmentally responsible, unsubsidized, market-disciplined mining — especially when it takes place on our land.
Copyright Sustainability Institute 1995