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tv   Senators Examine Potential Changes to Mining Law  CSPAN  November 4, 2021 7:02pm-9:08pm EDT

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representatives from the
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industry testified on changes to an 1872 mining law before the senate energy and natural resources committee, this is just over two hours. >> the meeting will come to order. we are here today to begin discussions the 1872 covering mining on public lands and considering waste to bring this outdated law to the 21st century to put things in perspective. and 1872, ulysses grounds president and legislation establishing what is now yellowstone national park. as our parts are called american best idea, but at this point i don't think anyone would say the same about the mining law. it has been more than 13 years since this committee has held hearings on mining reform, and it is time for us to look at a sensible update to be done. i know we can bear in mind mining is important to our national defense and economic security. that includes making sure
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taxpayers get a fair return on federal -- i believe it's important to taxpayers -- it is true we don't have significant -- but for the elements that we do have such as lithium, we need to respond to development
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needs. it makes no sense at all -- like china. i can provide a reliable source, to that end energy act -- infrastructure bill, would make significant investments in the domestic critical mineral supply chain. reducing mineral on [inaudible] we need to make sure we have mining laws in place to provide reasonable land management. in 1870 to -- the california gold rush -- congress tried to encourage the development of the west.
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[inaudible] -- each year to prohibit lance from being patented and taken into private ownership for as little as two dollars and 50 cents an acre. further, modern mining works at an enormous scale using modern technology that would have been inconceivable back in 1870, and unfortunately this contributed to some enormous abandoned mine problems and the public's offense stuck with the spill. unlike in coal country, where every coal pays into a mine revenue fund --
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it strikes me as fair that taxpayers get a share of the profits in exchange for the privilege of conducting mine operations on public once. while we may disagree on the precise path reforms it it should take, we can all agree mining law is outdated and for the current needs of society and industry we should carefully consider updates to address these shortfalls. i look forward to the discussion this morning on how to strike the right balance with updates to this antiquated law. i will turn to my colleague senator bra so. >> for the last nine months president biden has been pushing an agenda that would dramatically increase our nations demand for minerals and president biden has pledged --
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gas and easily. the president instead wants people to drive electric vehicles. -- providing the refined mineral needed and that would take a single electoral video battery which requires the mining and moving and processes of 500,000 pounds of material. -- this chart from the international energy agency minerals are needed all the way across -- you've got copper, nickel and graphite.
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. i'm the president wants to do more along this line. the president and stud does not want coal or natural gas. he wants utilities to generate electricity from wind turbines and solar -- before this committee and explains -- both wind turbines and solar panels require at least ten times total tons of mine and converted -- to deliver the same quantity of energy. this is the same shirt, by the international energy agency and it makes a similar point. offshore winds. onshore winds and solar -- nuclear, coal and natural gas and the color coding is how much is saying come much us --
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all of which shows much fewer needs for these minerals and natural gas and coal that we would have either offshore or inshore or any of these other sources of power. in light of these goals you would think that president biden's democrats and congress would want to make it easier for us to mine here in the united states, for these minerals that are necessary to do the sorts of things that the biden ministration agenda is calling on. but instead this president and the house democrats want to make it more difficult to get to these minerals that we need and it seeks to eliminate all manning -- mining on federal land. as the chairman said earlier, where they found? on federal land. house democrats advanced partisan budget legislature.
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reckless packs of spending spree. that bill would include -- on existing and new minds on federal land. the democrats would impose attacks on material move during a mining operation. you can't make this stuff up. house democrats are planning to tax -- house democrats also want to reveal the late senator mccain's bipartisan legislation providing access to one of the largest copper suppliers in north america. this project would alone create 3700 jobs and proposals that would devastate communities in nevada, arizona and throughout the west. democrats legislation would also be a giant gift for our adversaries overseas, like china and russia. according to the u.s. geological survey the united states is already very heavily dependent on china and russia.
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many of these minerals are central to our national defense and economic security. the last thing that president biden houston regret should be doing is increasing -- that's with are doing. so considering changes to the mining -- of 1872, still we must protect american workers. mining communities of the west and our nations competitors. we need to recognize that the mining 1872 covers -- the each had their own market, which may be dominated by foreign, strict state control corporation and companies and countries that are seeking to undercut u.s. mining firms. for that reason a one size fits all is not going to work for me and we also must not limit our vision and the 1872 mining act for example, congress needs to
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enact meaningful reforms with big deadlines for federal -- finally equitably support changes if congress proceeds to regular order and therefore supported by partisan base. -- through the partisan budget. thank you. >> thank you, senator. i would like to welcome all of our witnesses. thank you for being here to show your expertise. today we have with us -- [inaudible] also mr. sweeney, the national mining association, and we have david brown. [inaudible] >> mister chairman, thank you. ranking members. thank you. thank you for holding a hearing
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and for working with us as well. i know the mining industry is critical. as you said, it's important for us to work together and find solutions that support -- while also investing in our community. i'm looking forward to the conversations today and i am so pleased to be able to introduce -- who has worked inside the gold mining industry for 30 years and has been the general councilman -- since joining the corporation -- and both legal and operational including regional council, north america [inaudible]
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-- there is no doubt it isn't a major economic driver in nevada but for the state of nevada. i'm grateful and pleased to be able to introduce -- >> thank you senator,. >> chairman, ranking member and members of the committee. thank you for inviting me here today.
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85% -- gold mining is the largest mining activity on federal land. most of that is in that. 85% of that -- the mining law has survived so long while it worked. but it's not perfect. or refinements and improvements the need to be made. we call the first self initiation, the ability to explore and determine where they want to explore. the second we believe that -- [inaudible] nations take different
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approaches on how they will share their mineral -- direct equity or combination of -- the u.s. is not yet included a federal royalty -- -- impose mining specific taxes and in nevada are royalties are about 8% -- whenever the issue -- we're going back to 1994. they supported a reasonable suspect -- [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] [inaudible]
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the oil removed from the ground -- it's one of our free main complexes. -- seven and a half billion dollars. every year we invest 1.6 billion to maintain our facilities, second -- the net royalty allows the minor to recoup through commodity cycles and normalizes
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-- the cycles are inevitable. any cause royalty -- by making a greater percentagere return for the government, eliminating jobs unnecessarily early, and making less product available for [inaudible] the gross royalty picks winners and losers -- generates jobs and provides materials -- advantages of the net royalty -- to recoup the capital investment [inaudible] [inaudible] [inaudible]
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[inaudible] i want to acknowledge the senator masto [inaudible] who spent time and effort. there i appreciated and specifically support -- thank you for your time. . >> my name is hannah. thank you for inviting me here
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today. this mining law is overdue for reform. the mission is to promote -- advocating for transparency across the government. we believe the public land -- [inaudible] the 1872 law failed by all the standards. >> i then had the opportunity in the mid 2000s [inaudible] [inaudible]
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hundreds of billions of dollars -- under the mining law of 1872 -- no more than five dollars an eager. -- to put that in perspective to, the 2021 purchasing power of five dollars for making 72 is just 20 cents. beginning in fiscal year 1995, congress began enacting one. your moratoriums. those have been grandfathered but new patents have not been grandfathered since. -- enacted sense. a one-year extension makes little sense to the mining
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industry or taxpayers. some of these patented lands turn into huge non mining wind falls for developers, eventually becoming ski runs and housing developments. the total value minerals and -- mind on public land and the foregone revenue for taxpayers for not charging a royalty is unknown because insufficient data is collected by the federal government. however, based on limited data from the state of nevada and in colorado, do you i was able to estimate in 2020 that the dollar value of hard rock mineral production online it manages was 5.3 million in fiscal year 2019. despite the value of these minerals under the general mining live 1872 hard rock mining companies are not charge for the value of these resources through a royalty. rate other track have industries like oil, gas and coal pay royalties to the resources they extract from public land and water. a hard rock mining industry should not be different. mining companies must
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compensate taxpayers for extracting resources and provide an adequate revenue. stream to restore public land taxpayers for common sense and -- -- automatically increasing when prices are high and decreasing when they are a lot. setting realty rate would not preclude flexibility, sitting mineral specific rates could account for variations in the cost of their extraction. additional safeguards could be put in place like providing discretion for the department of interior to provide royalty relief. other royalty schemes are more complex and convoluted and this allows for legal gamesmanship that keenly taxpayers with empty reform law promises and little in the way of returns from the extracted taxpayer assets. in the face of the current budget morris and for the need for smart fiscal policies, applying a royalty seems like low hanging fruit and can
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provide taxpayers up to five billion dollars in new revenue over the next ten years depending on the royalty rate, unlike many fiercely partisan issues, we hear from people on both sides of the island many in the hard rock mining industry known that we must reform this 1872 law. this was done with the poll from american viewpoint, that found updating the mining loss garner the support of 73% of democrats, 67% of republicans, and 72% of independence. the cases clear. no one thinks simply giving away valuable minerals for nothing makes fiscal sense and know company should be allowed to leave toxic misses on our land and avoid the taps for cleanup. taxpayers deserve better. i look forward to working with the committee to make reform a reality. >> thank you. now we have mr. wood. >> chairman manchin, ranking
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member barrasso and other committee members, my name is chris wood and i'm the president and ceo attribute unlimited. thank you for inviting me to testify here today on reforms to the 1872 mining law. as you know, abandoned hard rock mine suppose one of the greatest water quality problems in the country. as the committee explores options for updating the law, i urge you to advance to royalty or fee structure that is reasonable and fair and that generate significant revenue to cleanup lands and waters affected by abandoned mines. the mission is to bring together diverse interests to care for and recover streams so that our children can enjoy the joy of wild and native trout and salmon. in pursuit of this mission we have worked to restore appalachian streams affected by the curse of acid mine drainage and we have worked and dozens of communities in the west to help clean up old and a verdant -- abandoned hard rock minds. thanks to the support of our
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partners in the mining industry, state and federal agencies, foundations and private donors, we have recovered more than 200 miles upstream from the scourge of abandoned mines. we appreciate your focus on this issue. there is no lobby group for acid mine drainage. there's no constituency for abandoned mines. it's past time to make it easier for would be good samaritans to clean up pollution's that they had nothing to do with creating. i often say to you is the patron saint of forgotten environmental causes. the epa estimates 40% of the western head water stream our negatively affected by abandoned mines -- ticking time bombs waiting to release their toxic -- lead, arsenic, and others. there are obstacles to cleaning up abandoned mines. the first one is lack of
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dedicated funding. -- including bipartisan infrastructure package a proposal to provide three billion dollars to abandoned mines -- that's a great start. for tens of billions of dollars are needed to make our, lands waters and communities healthier and unlike just about every other commodity developed from our public land, there's no excise tax, loyalty refuse associated with the production of hard rock minerals that is done allocated toward restoration and remediation. we need a reasonable royalty to clean up the sites. for coal alum the land reclamation fund had raised more than 11 billion dollars to clean up and make coal mine sites -- money from a variety of sources for mine cleanup -- with their ability to leverage funding, but the scope and
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scale of the problem bags for dedicated funding to clean up sites just like we did for coal. the limited factors liability. groups that have no legal or historic interest in creating this, we want to clean up these mines we've become with lawyers called the chain of custody, that means we could send a few hundred thousand dollars to improve the stream from 25% -- all the way to 90. in my cost another million to get that extra 10% and today's law would allow government to government -- to file a citizen suit to come after us for the rest, and the clean water act or the superfund law are to the most important laws for holding polluters accountable, and forcing the cleanup of many ruined streams and landscapes. the challenges that companies behind most of the tens of thousands of abandoned mines in the west are long gone and
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their owners are long dead. conservation can be defined as the application of common sense to common problems for the common good. resolving these two issues will allow a nation to apply a lot of common sense to a lot of common problems. thank you again for the opportunity to testify today with trout unlimited, we appreciate your leadership and we look for to helping you however we can. >> thank you mr. wood. now we're going to have our next speaker. mr. brown. >> chair manchin, thank you. i'm excited to introduce mr. david brown, the president and ceo of while ban, headquartered in buildings, montana, wyoming as a family-owned and tonight mining and manufacturing business that supports 200 direct and indirect jobs in montana and wyoming.
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mr. brown knows firsthand the day-to-day work it takes to ensure that montana jobs are created and protected, and provide for the local communities around their operations. mining provides high paying jobs, good benefits and provides much-needed local and state revenue for schools as well as emergency services. he also notes how hard it is to permit new minds in the united states and how this process was the united states at a disadvantage, forcing us to be reliant on foreign countries like china. i look forward to hearing from him today on how we can make it easier to provide the raw materials and minerals we depend on for national defense, high tech, health care and energy production. chairman, thank you. >> thank you. now we will hear from mr. wood. i mean, mr. brown. sorry. >> thank you, senator. mister chairman, ranking member barrasso, members of the committee, my name is david
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brown and i'm the president and ceo of while ben ink. i represent the third generation of seven-year-old -- a 70 year old small, family owned and managed mining and manufacturing business with the headquarters and buildings, montana and in the big corn basin of montana and wyoming. why you ben directly employs 140 associates in the wyoming and montana operation, 60 contract minors. we offer some of the highest paying jobs -- area and offer significant impact on the economies of the towns we operate in. while ben operates in the industrial minerals segment of the mining industry and minds a
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unique mineral called sodium then tonight. the sodium bent tonight found in wyoming and adjacent states has quality of characteristics so unique that it is referred to as wyoming been tonight. no other countries blessed with this exceptional quality of been tonight. we have at wyoming. as a result, wyoming than tonight is used as a base material to create hundreds of different products that are sold worldwide. your automobile engine was made using benton i'd as the binder in the sand held used to make the caps. the municipal landfill in your community would have environmental issues of wyoming been tonight was not used to form its impermeable bottom liner. it would be difficult to drill a well of any type or install telecommunication or utility lines buried throughout the country without using wyoming that tonight to make the drilling mud. the wine you enjoy it would be unpalatable, the cloudy without the wyoming been tonight. finally you would be unhappy
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and your cat would be unhappy, if not for wyoming that tonight unique properties to form odorless clumps for easy removal from litter box. it is important to know that around 90% of the men tonight we use for our product disrupting from mining claims on federal lands. and ministers by the blm. the mining is employing and utilizing scrapers dozers and continuous mining technique we developed to replace the overburden removed from one pit. this allows us to spread plant seat on two previously mind. . our mining circumstances and methods are differing from those and other types of mining. the lines are long and very thin and our disturbance quicker and small. the typical is a matter of months before tops -- topsoil is replaced and we
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begin our plant and vegetation process. as a result of our mining practices, -- non governmental agencies -- that we were served. as a small business operating in an industry with inherently low profit margins and heavy reliance on mineral resources on federal lands, our ability to compete in the marketplace is dependent on our ability to access and economically mining these resources. this is why anything about changing mining law, the rules under which we have always operated, is of particular concern to us. several significant changes in the mining law or been proposed to the mining section of the house budget and reconciliation bill that is currently being negotiated in congress. any discussion of changes to the mining law must recognize that this is a complex issue
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with 149 years of regulations and case laws that must be dealt with thoroughly and carefully. the bill provides neither time nor the venue for a detailed discussion of the issues inherent to the change. the one size fits all approach mining law reform will affect our companies ability to remain competitive and possibly our viability to operate and offer good paying, high quality jobs, not to mention the impact of the supply chain and the economy of our local communities. for all of these reasons, i respectfully request that this committee recommend to the senate that the hard rock mining section be removed from the final reconciliation bill before being sent to the president. >> i appreciate this committee holding today's hearing as a first step in moving this issue by regular order and i look
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forward to working with you throughout the process. that concludes my formal statement and i would be happy to answer any questions. >> thank you. now we will hear from mrs. sweeney. >> good morning. i am katie sweeney, the executive vice president and general counsel of the national mining association. thank you to the chairman and ranking member and committee members for the opportunity to testify, we needed a time when the demand for minerals is skyrocketing. and 2017, the world bank projected demand for minerals would grow more than 1000% due to the global focus on green energy technology. more recent estimates from the international energy agency show those early projections may have been far too conservative. pas the world began to awaken o the exponential growth in demand, the pandemic unleashed a massive destructive destruction of supply chains. exacerbating our mineral
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vulnerabilities. the biden harris administration recognized the path to repair our crumbling infrastructure, carefully transitioning to cleaner energy and winning the electrification rates is paved with minerals. the administration acknowledged the importance of the mining industry through the january made an america executive orders cautioned against the use of materials that are not mind in america, and the february american supply chain orders focused on mineral supply risk. with 6.2 trillion dollars for the domestic mineral resources, a highly trained and compensated workforce, and world-class environmental and safety standards, we are well positioned to help the administration meets a subjective. this committee has led the way in educating on the important role of mind materials as the front end of the supply chain for a modern way of life. thank you for your leadership on these issues, especially or wariness of the impediments that stand in the way of revitalizing our mineral supply
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chain, such as the inefficient permitting processes that impair the global competitiveness. this committee has been solution oriented, taking positive steps through that bipartisan american mineral security act an infrastructure package. when it comes to updates to the mining law, we are at a crossroads. the direction we take can either help secure domestic mineral supply chains are driving mining law offshore. with so much in the balance we question whether budget reconciliation is the right vehicle for this discussion. there are numerous issues outside the scope of reconciliation that should be considered in tandem. good samaritan cleanups being a prime example. we welcome the opportunity to engage in a process not constrained by reconciliation, appropriate changes to the mining law provide an opportunity to decrease our dependence on foreign minerals, promote job creation, drive economic growth and transition to renewable energy.
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we believe in that prospect of royalty and preservation of security are necessary to justify the enormous upfront capital investments required to explore and develop minerals. we support the use of royalties for abandoned mind land cleanup as well as enactment of the american legislation. while modern mining reclamation and financial concerns regulation will prevent abandoned mines, the industry acknowledges legacy sites and is committed to finding solutions. the highly partisan house reconciliation approach contains punitive proposals to sideline the u.s. mining industry, including an 8% gross royalty on new operations, a 4% gross on existing operations and a seven cent percent tax on materials used during instruction.
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he's excessive taxes and fees are the wrong path at the wrong time for our country. instead of raising revenue, this approach will lead to premature closure of existing lines and little interest in future minds exacerbating our reliance on minerals from countries with far less stringent environmental and labor standards. additionally, taxes and fees ignore the taxes already paid. current total royalties, taxes and fees, total government takes for u.s. mining operations around 40%, similar to other major mineral producing countries. the house reconciliation -- with pushed the u.s. well above our competitors. compromise is possible, the mining industry is open to reasonable royalties, working together in a bipartisan way, we can assemble a package that helped secure the nations economic recovery and prosperity for years to come without jeopardizing the mining
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foundation of our country. thank you for the opportunity to testify and happy to answer your questions. >> let me thank all of you so much. i just want to say that i come from a coal mining state and i come from a construction site. i understand that -- i never could imagine we don't receive realty zone so many things. -- maybe you could understand from my point of view, you are the coal company. i know we will negotiate. i know it will be in the seven, eight, 9%. i know you will pay me 12 and a half percent.
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if i own the rights. i know that if i am the mining company i'm responsible, once they start reporting the money away -- to take care of the board. and i leave behind -- [inaudible] [inaudible] [inaudible] i want to thank senator cortez says masto to understand more -- and also the state. i understand also the industry -- i want to make sure we understand. [inaudible] -- because i needed it for my school. and if we raise taxes i'm gonna
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leave -- [inaudible] i don't want you to leave matt. i want you to have a good relationship with west virginia and i never had -- we -- can make it work if we do it in a responsible. way -- we debated and talked about it a lot. and comparing it without the places of the world, all over, in coal. natural gas. and is their pathway for that we can and negotiate? and if we would go, and there are in incremental ways. mr. had a, you might want to start. >> the short answer is yes.
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and as i've said in my opening mush statement, we have long supported a reasonable net royalty, and not royalty, we think, is the right approach. we don't have any other extraction on that. >> i understand that. must and a gross royalty, it can be very must regressive on hard rock minerals, the price for which is set in the global market. unlike colin some of these other commodities, where the royalty costs can be passed on to the end consumer, it cannot be in coal. and that's why in large measure for us, the net royalty is very important. >> mr. brown, do you have any -- >> yes, senator. i believe there is a path forward. we would love the opportunity to have a conversation with all stakeholders about mining law reform. about royalties. and about all the other
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provisions of mining law. and the money we are trying to address today. we -- most mining on federal land, it's important we have that which we are able to produce. and have a very thin bottom line. i think that this in general is as well. so our story is a bit different. some of the other producers. and we would like the opportunity to be able to tell our story. >> that's all we have to hear. we are not looking just [inaudible] it's a matter of fairness. and that's it. that's all i can say. we do too much of this for our
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country. all my life around coal mining and how this works, we go with the market. in mining jay [inaudible] is not profitable, they will come back when the market is right. so i want you all to understand, we are trying to understand this and again, how it's helping us understand better. and how we can understand fairness and responsibilities. and in a transparent way. and so i will turn to my friend. >> thanks so much mister chairman. if i could start with you, the house democrats, their tax and spending spree is going to impose new fees and royalties, on federal land. the house democrats would also impose a tax during a mining operation and under the house democrats proposal, american
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minors will owe the federal government the highest rate of royalties and fees in the world. if the house democrats proposal is enacted is it fair to expect u.s. mining operations to [inaudible] . >> absolutely. i think if you look at all three of those, that you mentioned, the 4% on the search ex. just any one of those can have a profound impact and you take all three of those and impose them at the same time, you are looking at what is definitely premature closure and any additional investment in other countries. they will reap the benefits. >> specifically, mr. had a, then mr. brown, how would your mining on federal lands being affected? >> our job ... importantly, our
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operations, i think, would continue. we can't move them. but what would happen is that, i kind of describe us as being on a treadmill. we are constantly trying to replace the resources we deplete. and the way we do that is through exploration and investment. it is through our andy, i'm coming up with one otherwise would be wasted. very large investment. and so what happens in our industry is that we have to balance our capital throughout the world. and so we would continue to minor deposits in our growth. them and they would continue to decline. particularly with the gross royalties, they were declined much faster. >> mr. brown?
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>> it would have a significant impact on us. an 8% royalty and a seven cent per ton sir tax and of course the industry, [inaudible] we put it back in the pit to do the reclamation. that's the second. but oftentimes it's three times before it ever gets to the plant to be processed. and so i don't understand how the supplies. and then perhaps you get the additional cost of monitoring the whole process to our operations. it would create a significant burden to us. it's very likely we would not
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be able to pass through to our customers. it might i, very likely, open up a possibility of competition from overseas. when >> you are 70 year old, family owned, mining operation. you join the company 1980. as you noted in your prepared remarks, it now takes seven years to them permit the mind on federal land. can you explain how permitting outlays have grown over the last years? and wow how it affects your company in terms of cost? >> we were able to permits in roughly 14 or 15 months. we just received a permit that was critically needed for operations and it took over seven years. had we not gotten that permit,
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that plant would have been at risk of shutting down in 2022. because we didn't have the permits needed. i'm >> so as congress is considering changes to mining law, should also be considering permitting reform for mining on federal land. >> i believe so. >> thank you mister chairman. >> thank you senator. >> now we will have senator cortez masto. >> thank you. i appreciate you holding this hearing. i oppose the reform that was proposed in the house of representatives. because that legislation would have an unfair outside impact on the state of nevada. this is where most of the land owned by the federal government -- it imposes taxes on federal land. but more importantly, losing this to a short term budget
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cost, it would be poor for the industry. and that's across the country. and so is it fair that we have this conversation, in public, we bring all this together and we have a compromise. there are two different compromises. to work through this. so that's how the process should occur. so i want to thank you for having this hearing and allowing us to work through this process because i think it's so important. but i think mister chairman, -- i know because of the climate and the weather in the fires, you weren't able to get out to nevada. but mr. headache, give me some perspective, because i know there is a difference between, well, we have talked about oil and coal. and that type of mining. versus hard rock mining. really, oil, gas, and coal are marketable and sellable at the mass of the mine, meeting no
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refinement or processing is required by the men are minor. that's a little different than the hard rock mining. so can you talk a little bit and help us understand the processing understand the processing cost of hard rock mining. and that's what you are talking about when you say we should be looking at the net royalties. net realty's. because hard rock mining and that type of cost is different than coal. is that correct? >> thank you, senator. that is correct and in our case, and in the case of most gold mining, and other minerals, when you discover deposits, that rock has no value. and the only way you can turn it into value is [inaudible] . first of all, you have to find it. and we spent almost half a billion dollars, now then we are at permitting. then we have numerous studies.
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on the chemical parameters and the physical parameters to try to figure out how to turn that rock into sellable product. then after you do that you do further studies, and design facilities. then you build the facilities at a cost of right now i'm, hear a billion dollars a pop. so each one of those would be a billion dollars. we have seven. then you have to extend the capital every year. to maintain that property and those facilities and to refine them. and deal with the work that you encounter. and it never ends up. then only then, when you get the finished product, at the end of the product process, you have a syllable product.
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and then at that, a senator manchin said, we are very cognizant of our reclamation obligations. and we have our reclamation process. and that's part of our investment and right now gold mining carries reclamation costs. i'm so it is a continuing investment. >> let me ask you when. miss sweeney, help me put it in layman's terms, when you are doing hard rock mining, it's that an initial -- you don't know you have that they are yet. the processing, to determine whether there is a mineral worth anything. is that correct? >> there are years of exploration activities before you would even know whether you have an economically sound posits. there are studies that you are
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doing during that same time and lots of information you are collecting them. and if you are looking at one in 8000 exploration activities, they might become a modern mine. and there are upfront costs that go into that as well. >> is that why you have concern, senator? >> thank you, i know my time is up. >> thank you, senator, now we have senator lee. >> thank you mister chairman. utah is home to the last uranium mill in the united states. the domestic production of uranium has plummeted over the last several decades. and four years ago, when we reached our peak, we were arranging about 40 million pounds a year. but in 2018 at the end of this chart, it includes 1.4 seven
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billion pounds. now that doesn't mean demand has waned. demand has actually remained relatively positive over the entire 70 year plus period. and when domestic production diminishes, it would make up for that on the international market. so in 2015, for example, the united states imported 65 million pounds of uranium. house democrats are now wanting to impose some new features on this part of the economy. as i mentioned in this hearing. in the reconciliation package. one that would -- royalties on minerals like uranium. this royalty has been 8% for some. 8% of gross income for new operations and 4% on gross income for existing operations.
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this is something that i believe would have a crippling effect on the domestic mineral market in the united states. ms. sweeney. i will start with you. i'm how does this affect mineral imports, specifically supply chains broadly, our energy infrastructure and security? and how can the royalty like that being proposed, and what they're proposing over there, impact our ability to secure our domestic mineral supply chain? >> thank you senator for that question. and i think uranium is a great example of how we have become excessively over reliant on minerals. and when the energy information agency cannot provide the actual amount produced last year. because this is proprietary information. there are so few producers that
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it's a sad state of affairs. but it's one example of how we have become incredibly reliant on foreign sources of minerals, even for workforce minerals like silver and copper. and those four electric vehicles and every asset of modern life. we are importing 80% of silver. and we have a lot of silver resources in the united states. and currently 37% of our copper comes from foreign sources. these types of things that take us outside of the things that the government pays our competitors, it's really freezing the investment in the united states. and the other countries will process from that. and some of those other countries are not our allies either. >> right, right, not our allies. in there has emerged a global
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front runner in global technology or any of the high tech stuff. as i mentioned a minute ago, they also are putting into the package with a called reclamation fee. which is seven cents to go to the secretary of the interior. now help me understand something. it's already the case the mines are to secure and reclaim all the areas of mining activity. correct? it's already required? so this provision would end up requiring operators to pay for the reclamation awards. what is the point of this particular issue? and isn't it really just to place an additional burden and effectively force the relocation of some of these
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entities overseas? >> absolutely. it's incredibly driven. and it's really on the movement with that taking place for these minerals. >> mr. brown, you mentioned in your testimony that there is a significant impact on the world council you are operating. and i think it's a story of a lot of utah operators. you mentioned the impact of royalty and the dirt and that that could have impact on your company and other companies like this. after hearing from ms. sweeney on this impact, that might be imposed by the royalty and the fees, would you say that this proposal by the house democrats is imposing a gross royalty tax of 8% for new operations? for existing ones? wouldn't that potentially for
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some of these operations abroad and wouldn't that also have the potential to favor market incumbents that hobble new entrants into the market? at 8%? >> yes. i would absolutely agree with that. there is foreign competition. and the minerals that we are mining, again, our low value. but they work their way through the value chain through the manufacturing system and they become a part of whatever that is in the country. so if we increase cause and the cost has the increased down the supply chain, it's very likely
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that our clients will be seeking other sources of supply to remain competitive end. there are foreign mining companies that would be eager to enter this market in the united states. so we have a dramatic impact. >> the only thing i want to mention, we talked about the 8% in the 4%. in our business, in our operations, it encompasses a relatively small area. and we are in that plan of operations. to the 4% were to fly to what we have today. and you think in the future, what we will be under the current proposal [inaudible] >> thank you senator. duly senator heinrich. >> thank you madam chair. before i was born in your state
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[inaudible] i remember quite finally seeing my grandfather work a place like battle mountain others. these are important jobs and important activities and i think it is equally true that there are obvious and important reforms that should be added to the mighty act. especially with regard to clean up and do i have to say that i'm disappointed that we don't have a witness here today who can testify to the impact that are tens of thousands of abandoned mines have on neighboring communities. in northern new mexico, a foreign owned mining company plans to open an exploratory mine for gold, copper, in the river valley. this valley resident knows when --
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in 1991, there was pollution flowing into this river. and they cost the state of new mexico more than 28 million dollars at the time. i'm sure would be much more expensive at that time so this economy is reliant on farming and fishing, and neither, frankly, can exist without the pecos river. and both are at risk. and yet even though the proposed mining activities are on national forest land, land belonging to all of, us there is no way for the forest service,,, under the 1872 thumb mining act to determine whether this mine is in the best interest of the public. no step to process for the public interest in the location
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of a particular mine. because this is purchased, they have an absolute right to build the mine for the entire pecos valley community. so this discussion is long overdue and i do believe that there is a compromise that we can have here on a reasonable and some sedative basis, but as we continue these reforms, we also need to include the voices of the communities that live with the consequences of mining. so i want to ask you, in your view, you have worked all over the west as well as through appalachia on restoration. are there some locations that are just not the right place for the mine. or just not possible to create a mine and build a mine where there is unacceptable impact on local rivers?
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>> without question. senator, thank you for. this is a great example would be when senator murkowski was the leader on state land and on federal land, that body. but it's shocking that federal land managers don't have the ability to say no to align because i think the mining industry follows the steps that we holes and we don't have the discretion to say no to. but indigenous communities, local water supply. we figure out how to allow that discretion and honor that. >> so literally, it's the only piece of our public land where there is no discretion for the agency to say, not here. >> it's the only use of our public land that they would not have the discretion to say now. >> mrs. hanna, in the absence
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of strong bonding authority, who ends up paying? >> it falls on the taxpayers. and that's where we see the shortfalls and it's not being cleaned up. and we think industry should share that burden with taxpayers. >> how does that compare with similar industries, for example, coal mining? >> there are things that the industries take on. in a coal program. and even oil and gas. and we believe that this is something that the state could share an effort in. and do a real revenue stream and not put an undue burden. again, we want this production happening and have responsible mining. so we want to be open to discussions on how those revenue streams [inaudible]
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and how it works for them. but there are so many priorities right now. that the federal government funds. and we think the royalty in reclamation's should involve revenue for a band in my cleanup. >> my time is expired. but i would urge not to take quite the zealous approach in the house of representatives. and the way for taxpayers to be complicated. . did you also to start a revenue stream goal. [inaudible] [inaudible] >> thank, you senator marshall. thank you all of the witnesses for gathering here today. when it comes to making the
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environment safer and you yet have an affordable product. so instead of listening to you all talk, as we think about the permitting process, what the cost must be to you all. and we are throwing so much money at the permitting process, part of that monies would be used to make things more environmentally friendly or cleaning up projects and i know we are talking about this for a second, mr. brown. you will be glad to know i had just been and wyoming, i had no idea there was any evidence. but today 20% of it is coming to china. if these taxes wanted to play in the reconciliation bill, when we end up having more in the midst of china? how would it impact your business? >> i believe it would have an
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impact. the speed at which would have to play out. i doubt that we could pass all of them. if it's 20% of what's produced. china represents the major -- they are the second largest producer in wyoming. and i would consider them a significant threat to some of the markets that we have. if we are not there, providing to our american customers or international customers, china is likely to be the right behind us. >> mr. sweeney, my next questions for you. we are shipping we are earth metals from the congo or china or other countries, the mining process that they do their,
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plus shipping costs, which type of environmental impact with those have, compared to the mining costs here in the united states? is it orders of magnitude, exponential? how would you quantify that? maybe in a range if it all possible. >> i think it depends on the country's reputable itty in mining processing. some of them, for example, maybe canada, they would have very similar environmental and labor standards -- >> well let's talk about china and the congo. >> yes, well they are the ones that do not, right? they don't have the same labor standards that we do in the united states. if you are looking at the congo and some of the cobalt being produced there. they are child labor issues that are really horrific. we had a incredibly talented workforce here that has the right infrastructure. we can do it right here in the
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u.s.. >> thank you. in kansas we have been fortunate to benefit from the nrga restoration program. we took some previous pit mines and made them into the best fishing and wildlife have attached in america. what are we doing in the mining industry today, better than what we were ten years ago, 20 years ago? share your story a little bit. so what are we doing better these days. we have a great story to share, you think. >> and -- we have a story to share, if you look at the mining, the reclamation for the department of interior for both, both for coal and hard rock mining,
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really show how forward thinking the industry is. thinking outside of the box for what works best, not only for the environment but for the local communities. and getting the input from our local communities about what they want to use that line for next. leaving water treatments. for the communities to use but i think also environmental monitoring, really to prevent some of the future releases that people worry about. >> one more quick question. does mining support abandon mine cleanup increasing your contribution? >> -- some fees that would be
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dedicated to clean up. >> thank you. i yield back. >> thank you senator. >> thank you mister chair. a pleasure. 45 years ago, i did take a class on industrial minerals. it's not come full circle. sir, i appreciate a lot of your points and i worked many years for my mentor -- i did start out as a -- in terms of drilling, extracting, which ended up doing. it's interesting that we're seeing such a broad difference
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between this mine, the gold mine and thinking about that and i think that that really does -- like we do for oil and gas to create that image of how you go about this. just ask obviously to meet our clean energy equals. -- to show a level of scale up for critical minerals production worldwide. what we really need -- i believe there should be some level of royalty there i'd like to take a moment to talk about
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gross royalty and that royalty. because i think some of the people listening -- >> thank you so much for that question. there is a large difference and i think that we talked about it in the testimony as well. if both royalties don't allow deductions for the processing and refining, which are a really large part at provided value -- compared to cooler gasped and it imposes -- since the royal tease -- of the difficulty -- there've been quite a few
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studies -- looking at close versus not royalties. -- and discouragement of new mines and i think that's senator -- to leave -- >> we don't really know how much we could use. i don't think it's changed at all. -- >> thanks for the question.
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we definitely need more transparency. -- with the impacts would be if we don't have that information, but i do think that we have sufficient information to know that the industry, can absorb the royal tea -- in your oven you streams -- i appreciate you mentioning the differences with various minerals. we recognize that as well. we are open to conversations about that as well. >> quickly, mr. wood, -- discussions of wildlife and habitat, yet.
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-- especially those that aren't. -- and how that could really give a first step, not a total solution, but first step. >> -- gao estimated there were thousands of abandoned mines on public land. colorado also has tremendous fisheries. we listed over 125,000 miles of stream across the country's and so what we're trying to do women working with industry and working with conservation groups to try to create a pilot program that would ease the reliability restrictions impacted by clean water act and the superfund law. 15 pilots that would allow us to prove the concept that we know how to go out and clean
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abandoned mines. we can begin to tackle these problems. >> i yield back. thank. you >> senator murkowski. >> i might just follow one with the senator has pointed to in terms of the collaboration -- i had an opportunity to visit the reopening of resurrection creek near alaska about a month or so ago as a collaboration between -- it is really encouraging to see
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the industry partnering with the conservation. come together than quite possibly -- that's looking a little more sketchy nowadays. maybe not a good example. mister chairman, i want to thank you for having this hearing today for encouraging it. this is where the conversation should happen. it should not be happening in a reconciliation bill on any side where which is kind of shove something in and hope we get it right. the fact that this mining law has been around since 1872 kind of does something. i think what we've heard today's nobodies afraid to be talking about what we might want to do to make things better as long as we make things better rather than trying to thwart and kill an industry that has been an extraordinary job creator and really, a source of economic strength for our country, but we know we can go exactly the
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other way if we do things wrong and we do things in a manner that is not hostile, and i think what we've heard today is that we take an 8% royalty for hard rock production or reclamation fee of seven cents per ton and claim maintenance fee. they will take it in the wrong way so let's talk about ways that we can make sure we are doing the right thing in the right way. my goal, my mission when it comes to mining -- it is a commitment to working toward reforming it. we will provide industry with regulatory certainty that it needs because that is important for investing, providing return to public, protect environment and ensure the industry that had some of the highest paying jobs in the region, but also to provide the building blocks we need for renewal technology and
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to have a future. here i appreciate this conversation. i appreciate you outlining in terms of steps to go into a hard rock mining production and why it is different. every single step of the way in terms of how you get from the beginning of a project to the time you are actually putting some product out there into the market. i think these are the types of discussion we need to have. i will turn my question to you, miss sweeney, relating to reclamation. i'm actually kind of curious about this proposal, because this is not the first time this has come up. it came up during the obama administration. the eta went for a pretty -- exercise to determine whether the hard rock mining industry should be covered under -- after a lengthy process state
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decided not to promulgated it because they were unnecessary and would therefore impose an undue burden on the regulated community and then they said that the proposed requirements would be disruptive to their mining programs. so if you have an administration that has taken a look at this and determined that this was going to not be necessary, because it places an undue burden, how is this he that is being proposed now, the seven cents per ton, any different than what was looked at under the obama administration? >> i don't really think it is different, and thank you for all the work that you did on the epa financial insurance rule rain -- rulemaking and working with industry to ensure that those kinds of fees weren't in post. the dirt tax also is not a solution to abandon mine lance
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creation. we have modern regulations in place today that protect our lands and the environment and there is also over six billion dollars worth of financial insurance health to fulfill those requirements in case operators are not able to -- >> let me ask about that, because in alaska, our department of natural resources have a cooperative agreement to coal administer -- that companies pay into and under the alaska, we require that a reclamation plan b approved before the operation can be commenced. they review the amounts every five years and then if the operator's -- cannot do the cleanup, the agencies reach out to the industry, but every time this has happened, i am told, industry has stepped up with expertise, equipment and labor, and more to do the cleanup to the agencies specification.
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as a result, the cooperation we have seen, the bond pool has never needed to be called on in alaska to perform cleanup. i am looking at this and wondering if there is an additional reclamation fee of the seven cents. is there a concern that this additional tax could undercut the willingness of companies to step up on a voluntary reclamation effort if they are already going to be forced to pay more? what happens to what we already have in place if you do this overly? >> that is a really interesting question that i have not thought about, but i would think that our company still want to do the right thing and be humble and clean up the environment. but will the companies be here in the united states anymore if they're bangles kinds of fees? >> chairman, my time is up. i do have a lot more questions to submit for the record, but i
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appreciate the comments from everyone here today. given -- i come to this hearing unburdened by knowledge. [laughs] >> mister chairman? [laughs] >> i may have opened up -- auto it's gone downhill from here. let me just establish, basic principles. it sounds like the industry is agreeing that there should be royalties on mineral extraction. is that correct? >> yes. reasonable match for effective royalties. >> and what does that mean? >> that means there are certain deductions that are allowed. but for example --
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>> why shouldn't the royalty be based on the value of the minerals extracted, as it is for oil and gas or coal? >> because there isn't value to the minerals before gets refined. >> if there's no value to the minerals, why are you taking them out of the ground? >> we are putting in the upfront capital -- >> if you take something out the ground, you sell it, right -- >> now. >> it depends on the company. some of the companies do some of the refining themselves. i guess there is no value for -- >> well, there is a value somewhere. eventually. >> eventually, there is. >> so why can't this apply to the value that you drive from the mining? >> seems pretty straightforward to me. >> i think that that's an oversimplification. i don't think it's that straightforward. because otherwise we would not have any investment here in the
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united states. because there are so much upfront capital that goes into -- >> i don't understand. royalty only applies after you make money. it does not apply upfront. you are digging things out of the ground and you sell them when you get a revenue stream and pay a royalty. that's part of the cost of doing business for these other industries. why is that not operating for you? so that investors know you are going to make x amount of money and part of that will be a payment of the cost of paying the royalties? >> part of it is that you know you will get a return on your investment as well. and i think investors look to that. >> of course. >> and there's a much longer timeframe for hard rock mining than there is for coal and oil. >> i still don't understand why -- >> narrower margins. narrower -- >> and mining is, what it's no problem. and oil in the global market, oil producers cannot make a
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price. i don't think that argument holds any water over hard rock. >> rich, maybe you want to? >> let me try to address a couple of issues there. there are a lot of questions in the air, if you will. i want to unpack that a little bit. there is an important difference in the value of the minerals. and the value after it's produced. and the way -- i will give you an example. >> you don't need to, i get that. >> let me give you an example. in our industry, when you buy gold in the ground, you may pay 100 dollars announced to buy gold in the ground. when you sell it today, it is 2000 1800 dollars an ounce. if all that were invested in that gold, -- when you sell it. in nevada, our net proceeds of mining tax, it's an example of
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a system that is very transparent and attracts all the mineral business in the state. nevada knows exactly what they produce because everybody pays into it no matter what the mineral is. and in these cases, that's what you do, you establish the gross. and there are certain deductions that are allowable. they are very transparent. this works well. and it -- what it does, it recognizes the value added by the minor in creating it. different minerals are different in the sense that they do have location value, and you are right, oil and gas and shipped all over the world. but it's shipped all over the world at an expense. and the expensive shipping plus the expensive royalty determines whether or not that oil can be sold profitably somewhere else. the coal industry, for example, is very different, as is copper. that price for an ounce of gold or propound of copper is set in the global market every day. nobody is going to pay you 1700
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dollars plus 8%. so -- >> oil is set in the global market every day. >> it is. >> i don't see the difference. >> there is a difference in a sense that the cost of a royalty is passed on to the consumer in the case of something like -- >> the royalty on oil is passed on to the consumer. isn't it? >> but the oil -- >> on gold? >> it cost you a little more, to generate some revenue and gold. what's done every day in the central location. whoa >> is, oil so's oil. oil is set in a worldwide commodity market. >> it is said at a worldwide commodity market but there is a location value to coal, and
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oil. there isn't a location value to metal. >> i will ask you the same question. i'm out of time time. are you willing to agree to a royalty on minerals produced on federal lands? >> yes, that is our position. and >> you have told us how that will work? >> we would like to model it on the model in nevada. >> thank you. >> thank you senator. and now we have senator daines. >> chair, thank you. thank you for making the trek out from montana. i want to hear from you on the provisions we are seeing in the proposed tax and spending bill coming from across the aisle and how that may hurt your business and local montana and my wyoming jobs. we know that the house democrats, their bill, raises taxes on family-owned businesses like wyo-ben, they place a royalty on your product and they make it harder to support jobs in your industry.
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mr. brown, if the house democrats get their way and they pass this sweeping anti mining legislation, what would that mean to the montana job that you provide and your ability to mine and supply the united states with what bentonite. ? >> thank you. i would like to highlight again that we are small business. and the president has said that this will impact small business. well the impact that we are talking about would significantly increase royalties, it would impact us tremendously. our margins are very thin. we're an 8% royalty, our ability to absorb that, however that is defined, and the other fees that may come on top of that, that is going to be very difficult. and it's questionable whether
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we can pass that to our customers. i believe some of our customers would elect to source their material elsewhere, overseas, perhaps. rather than pay the additional cost. so the outcome of this is that we might have to curtail operations. we may have to consolidate that production or worst-case, heaven forbid, shut down the operation. >> and if that happens that would move the supply chain. >> currently, the benton-ites, we get it out of wyoming, primarily. that would move to places like china. how do you think that that would affect the overall supply chain? jobs as well as national security? >> well, when you think about all of the manufacturing ventures for our product. and now what they are sourcing
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from wyoming, sourcing from china. and the logistics that occurs with that. it will have an impact on the supply chain. and likely a negative impact. it's certainly going to impact employment in montana and in wyoming and in the communities that depend on but a lot of the sources. it would impact the community as well because the trickle effect goes away through a community of 2000 people in wyoming. a wa ge to someone>> and sweeney, uns isn't 100% import reliant on 17 important minerals. 35 are considered critical for our national security 17 of them come from china.
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these numbers only get worse as demand for critical minerals only increase. of the u.s. serious about building more sources of energy, including renewable energies, we must be serious about increasing domestic mining. we if the u.s. is serious about protecting the environment, we should be increasing mining domestically we ellen and if the u.s. is serious about protecting the environment, we should not allow places like china and the congress will have terrible standards to continue to supply the world with critical minerals. how does import dependency on places like china threaten asheville security, and has a democratic house bill made that situation worse? >> thank you for that question. i think all of these new fees and taxes we put the u.s. -- it would make us less competitive. the total government take would be well beyond our competitors if you added on top, and that of course impacts our national
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security. because there are so many of these minerals that are critical to defending our army and our navy. critical to nuclear submarines, critical to almost every aspect of our national defense. and certainly there are a lot of countries out there like china to control, for example, 80% of the rare earths market or even more, and they are cornering the market, and we are having to rely on them to protect our troops. we don't want to see that trend continue. i think there's a lot of resources that we have in the united states and weaken mine them responsibly. and we should. >> thank you. >> thank you, senator rich. >> let me try to put this on simple terms.
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this is not oil we are talking about. when you take a barrel of oil out of the ground, you've got a chicken salad. whether it is gold or silver, whatever you are after, it is very different, the cost of getting it out of the ground varies dramatically. and it depends on how deep it is in combination with in the ground. it isn't that simple, and as we pointed out, when you do get it out of the ground it may be just the beginning. you don't get a lump of gold out of the ground in most instances. you may not even keep it. you may sell the thing because it has to be extricate it very carefully. it just isn't the same as that.
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there are other ways of doing it. i'm not saying it's impossible, i'm just saying there are other ways to measure it. you are talking about apples and oranges if you are talking about getting a barrel of oil out of the ground forces whatever gram of whatever mineral ear after. let me say first of all that there's been a lot of talk about dollars and sense, and i want to ask miss sweeney and mr. brown, if you agree with me, that in today's world, market forces change the price of commodities very quickly, unlike years and years ago. so that if we do add an additional cost to this that that is going to affect our competitiveness in the market almost immediately. would you agree or disagree? >> agree. >> i would agree as well. >> let me say, we have an expert on this panel who knows
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how to resolve complex issues like this. chris and i worked together to solve issues and idaho. i know colorado claims to have one. but we have essentially the only rule that has been upheld and sustain with the district court and in the ninth district court of appeals, and chris and i worked together. thank you chris. on behalf of the people of idaho, thank you. it was very difficult to get the environmental community on board, and very few of them got on board eventually. the ones that did not did not feel too good about it after that. in that regard, chris, you and i have been talking about this issue since i got here. how come we haven't got it resolved? >> first of all, thank you for your leadership on the idaho road. it's a model for a lot of other natural resources.
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were you brought the handed screen conservation interests together. it is right here for us on this issue. i want to commend you on your leadership for good samaritan legislation. you've been working hard to bring in the industry and conservation interests together to figure out how to incentive more cleanups of abandoned mines and country. >> i have a bit of time left. i want to underscore a really important issue that has been alluded to hear. i think it needs a harder smack and what we've talked about here. from my position on the intelligence committee and on the foreign relations committee, i can tell you that the issue of rare earths and critical minerals is an issue that does not get the attention that it needs in this country, and i can tell you we are going to have to focus on that, and anybody who thinks that china will continue to sell us these critical elements, if and when we ever get crossword with them
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to a large degree, if you don't believe me ask japan. they have cut off japan one time for a very brief period, but it brought industry in japan to its knees and short order. in any event, jump ball hoops. what can we do better to try to get rare earths and critical minerals out of the ground in the united states of america, which is indeed a very, very important national security issue? whose first? >> there's a lot of smart people here. >> senator, i was -- like senator hickenlooper, i was once a geologist. the importance of mining law, we talked about it in a couple of context. the first when i would say is not chairman manchin said this in the beginning, we don't have all the critical minerals as a
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geologist, as i am more optimistic and say we have not found them yet. we have to have a healthy industry that is exploring irrational and reasonable mining law as a part of the. the second thing i would say is that the issue comes up of, why can't you say no to a minor -- the arguments are made that way. and one thing i would point out as we have land. it's part of the federal land management federal act. there are big swath's in the united states, nevada, and in nevada's case 85% of that federal land, 25% is not available for mining exploration. so what i think it's important to understand is that when you find a mineral, you find it
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where you find it, and you find it on the land that is available. there are areas that are important and need to be protected through the land use process, but other than that we should be encouraging his chlorination everywhere. >> thank you. i want to yield my unused time to senator king to respond. >> the senators absolutely right about the national security implications, and i am not unmindful of those at all. i just want to be fair to the people who own the land. it's all the american people. >> thank you, mister chairman. miss hannah, i have a question about abandoned mines. and thank you for testifying today because the issues important to arizona. we have over 200,000 abandoned hard rock minds that we
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currently know of. most of them are on federal land. the bipartisan infrastructure bill contains an amendment sponsored by us that would authorize a three billion dollar fund to clean up abandoned hard rock mines. subject to appropriation. the house might consider a budget bill that would appropriate 2.5 billion dollars for mine cleanup. these funding levels fit within the budget top line, but we know it is not going to be enough. what amount of federal revenue would you estimate is needed to put a dent in the cleanup of the hundreds of thousands of abandoned mines in arizona and across the nation? thank you for the question, senator, it's very good question. i don't have an exact answer.
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but it's definitely the tens of billions of dollars. and i think year after year we are spending several hundred million and not making a dent. i think we can do a better job there. but i think that the huge cost shows that we need a dedicated revenue stream and we need industry to share in aberdeen with taxpayers. it's important to clean them up. they are huge taxpayer liabilities, public health risks, and our mental hazards. i thank you for your efforts to work on creating those funds from the federal government. but we would also like to see those reclamation fees and royalties put in place so that we can have revenue stream. >> i imagine that was discussed before i came into the room? >> i'm assuming it was. >> the royalty, we probably had this discussion earlier. >> there has been some discussion. >> good.
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mr. wood, i also want to thank you and trout unlimited for testifying today. the way navajo nation is a good example of why we need to address these mines. over 300 minds on the navajo four reservation were -- and tribal members were dealing with contaminated groundwater. if congress annex a reclamation fee or some other revenue generator, for hard rock mining, should that [inaudible] and for economically disadvantaged communities? >> yes, thank you for the question. as i said earlier before you in the room, the analysis tweeted shows there are miles of impaired streams around the country. and 52% of that drinking water is. absolutely, there needs to be a
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reclamation fee. a reclamation fee, whatever it is. it should be applied to cleaning up abandoned mines. >> thank you. it is a significant issue in arizona. and more than 500 mines for the navajo nation are having a profound, negative effect on the health of the people. so thank you and mister chairman i yield back the remainder of my time. >> thank you. we sweeney, in your testimony, you reference the house reconciliation bill that is under consideration. your testimony includes proposed new fees, taxes, and royalties that would impact mineral producers. how will these policies for their hamper u.s. strategic competitiveness, due to china's
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dominance in critical minerals and rare earth elements? >> thank you for the question. they certainly will exacerbate that situation. china will continue to be able to dominate because we will have less mining here in the united states with those fees imposed. just one of those fees alone could really have an incredible impact on domestic mining. you put those three together and it's a devastating impact. you will see mines closed, you will see high wage jobs lost. and you will see investment dollars being spent in other parts of the globe. and they are going to take advantage of that and take advantage of those opportunities. to >> so this is an example where the legislation will hurt china the united states and help china.
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-- and minerals we need for national defense. is that correct? >> correct. and -- this administration as well. >> mr. had a, similar question. you notice that our minds in the united states have become, in your words, drastically uncompetitive. so, again, same thing, with more fees and taxes and cost, does that help us or hurt us in terms of becoming competitive? and how does that affect your workforce? >> thank, you senator. any royalties, as i say, he's a burden upon the value of the or body. and diminishes the ore body. and so it's an example of an analysis. we created a synthetic mine and applied various royalties. it's interesting what happens
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with that versus a net royalty. so it's important to competitiveness. and in that mind -- right now and we give over 50% of the net, to the government right now. if that same royalty were applied, to 1200 dollars an ounce as it was in 2015, the federal government taking 100%. so that illustrates the gross royalty is very noncompetitive. we do support in that royalty, it has an impact, but it's an impact we are willing to bear. in order to participate. >> so mr. brown, for hard rock mining, what would increased fees and royalties mean for your operation and your workforce? >> well, any increase in our cost is going to have an impact. the question is, to what extent
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can we transfer that to devalue stream, to our customers and the end user. and if we cannot, we have very little ability to absorb those increased costs because of the very low margins and net profits of our business. so the possibility is that we would have to curtail operations, we each takes production out of the united states, and the demand for bentonite, which has to come from someplace. when >> do you pay all of your workers more than 400,000 dollars. does every single worker that you employ make more than 400 dollars 400,000 dollars? >> no. >> so the cost would be passed
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on to your company, your workers, your suppliers and your buyers. correct? >> yes. >> thank you, i yield the rest of my time. >> thank you, senator. we are waiting on senator langford. but i want you to consider, i do, truly, in my heart of hearts, believe we are going to pass that infrastructure bill. but with that there is three billion dollars in that. you've all done a tremendous job in terms of identifying the most critical needs we have. and the damage that and is going to the citizens. if you put this together, how that would be or how you would recommend the oversight -- >> we can get that list to you quick, sir. >> if you could do that, yes. >> and make some trout waters
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in there to. >> i would assume that myself. anyway, but if you would, we would like to see what you are putting together, how you would identify the most critical needs we have in our country. and the most damaging. damaging for water quality and also recreational, if you can do that. >> we can do that. >> and all of you have been great and i think we can work through this. net, gross, i understand, that's pretty different. i understand where you are coming from. but is there somewhere in between? we will talk. we will find a pathway. but i think all of us recognize that the time has come to make changes. but make them in a most reasonable way. and with that, senator langford coming in? >> here we go. here we go. senator langford is back, he ran all the way back over to the senate and the house floor and back.
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senator langford, you are up. >> but lankf >> thank you. thinks for all the time we put into the testimony. when we talk about the united states, we look at other countries in africa south america,'s anything distinctly different from our theology that we should be able to go after, another words you know there is something unique about our geology. china has that mineral, we have the mineral, but really china should be developing the mineral, not us, or south america has minerals. australia. i know geology is different if
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not always the same. it's not always the same death or -- depth or economical. but there's something about our geology that we could say we should -- we should just get it there instead of here? the someone want to comment on that? >> i will comment. and q. . the geology is when it is. and the minerals are where we find them. the united states is a vast land blessed with a great mineral endowment. and because of that i do think it's important for us to continue to explore for every kind of mineral. one thing i can tell you it is the technology is always advancing with the ability to find things that are covered, find mineral deposits we could not have found before. it's always evolving. to me, the answer is, this book is not written yet. >> i agree completely.
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i was talking with the association of american states geologists, and i asked them, what do you say if people ask do we have all these minerals here? the geologist from utah said we have 28 of the 35 critical minerals in utah right now, and thanks to the u.s. geological survey, and some of the funds they've made available, the geologists are now doing more mapping than they have done in decades. they are excited, enthusiastic and they are finding rare earth. there is a cobalt belt in missouri, things we were not aware of. it is really impressive what we can do when we put our money and mind to it. >> miss swing, you mentioned in your testimony that permitting for mining can take seven to nine years. did i read that correctly? >> if you are lucky.
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>> here's the thing. if you go to canada or other countries, australia, it does not take seven to ten years. what does it take another countries? >> two to three years. in countries with very similar environmental standards. >> so when you talk about a seven to ten years on permitting, is that not including the lawsuits or does that include the lawsuits? >> it generally does not include the lawsuits. >> so this is the interesting thing. when i talk to folks that are going after remnants in different parts of the country they will say yes, i know where they are. yes i know the permitting process. but the unpredictable wildcard is the lawsuits that come in. if they just trickle in one after the other and after another, after i'm nearing the permit closure, it is still unpredictable. their statement is, i'm not going to invest millions of dollars in capital to go do all
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that has to be done just had drugged out for 20 years and have my capital dry up. and a whole series of lawsuits. is that right or wrong? how common is that? >> it is fairly common, who unfortunately. not every mine is challenged. i don't even know with the percentage would be. but i am certainly familiar with quite a few. >> so we would want the community to have a voice and the way to do that, what's the way to be able to solve it? that's not true on other building highways rebuilding other things. it's just not true. there are other solutions to try to figure out how to get everyone a voice. what is a solution to this? >> i would love to answer that. it was mentioned earlier that you can stop mining at the land use plan. if that were allowed, it would be a perfect solution. if you could do things like identify municipal -- sacred sites. that should be subject to
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mining to the likes of planning. i think that would be a very logical fix that would be consistent with other uses of public land. >> but you've also got a situation where a neighbor five miles away says, if you start mining there there will be dust in my house. i don't want dust in my house. i don't have that, so i'm going to sue you. so they're not geographically right next to you. they have that opportunity to be able to do that, how do you solve that? >> i'm with you, trying to figure out how to be able to do this. that is an issue that we have to figure out. a way to resolve it. because that is a long term issue that if we don't find a way to be able to solve, how to get predictability in the process of permitting, to shrink the length of time on permitting and to get predictability and environmental process and to be able to get predictability and how long people can drag out of
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town, we can talk about it all we want to, but people won't invest capital to do it. they will get held up over and over again. we can talk about how we want to get more electric vehicles, and we have the list here and we can go after it. whatever it may be. cobalt in missouri. we're still going to have the same issues. mister chairman, i appreciate you. this is my last question. thanks for your time. >> thank you very much. there is a lot of excitement and candor going back and forth, but you did a great job. members will have until tomorrow to submit questions for the record. we adjourn. e record. we are adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit] [captions copyright national cable satellite corp. 2021]
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a house resource subcommittee heard from local officials and water quality experts about chemicals and other possible pollutants in the water supply and their impa


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