this is just over two hours.

sen. manchin: come to order. we are here to begin discussing the 1872, covering mining on public lands and consider waste to bring this outdated law to the 21st century. to put things in perspective, in 1872, ulysses grant was president & legislation establishing what is now yellowstone national park. as our parts are called americans 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 the committee has held hearings on mining reform and it is time to look at a sensible update to be done it. i know we can pursue mining reform responsibly bearing in mind mining's importance to our national defense and economic security. that includes making sure taxpayers get a fair return on federal resources and we maintain american competitiveness and that we encourage the development of secure, critical supply chains. debates surrounding public lands and natural resources are complicated. i am glad we have this panel of experts before us for this discussion. i want to thank my friend and colleagues for requesting this hearing and helping bring everyone to the table. i believe it is important taxpayers do not get shortchanged on revenue when it comes to resources on federal lands especially when compared to state and private lands. i believe it is crucial for the united states to continue to be viewed as an attractive restriction for mining investments. or an ever developing new sources is vital to our

dependence in national security. it is true we do not have significant critical medicals here in the united states. for the elements we do have like lithium, we need to responsibly develop these domestic many of those minerals on federal lands in the west. it makes no sense at all to put our lithium ion that are a supply chain in the hands of foreign actors like china, when we have lithium here that can provide a reliable source of domestic manufacturing. the energy act, enacted almost a year ago, and the bipartisan infrastructure bill, would make significant investments in the domestic critical mineral supply chain. reducing mineral on federal lands would interact with those efforts. i believe this new critical mineral gold rush means mining reform is more timely than ever. further american public to support mining investments, we need to make sure there are

mining laws in place to address abandoned mine laws, and to ensure fair return to the taxpayers. in 1872 in the aftermath of the california gold rush, the mining law arguably made sense as congress tried to encourage the development of the west. today, one of the most obvious problems is the mining law fails to require loyal -- royalty to hard rock mining and mandates existing patent systems. these are resources used by every single american. the fact that over $5 billion in minerals can be mined each year, taken off of federal land and sold without a single penny in royalties is just crazy. it makes no sense at all. rather than permanently repealing patents, congress has to pass a temporary fix each year to prohibit lands from being patented and taken into private ownership for as little as $2.50 an acre. further, modern mining works at an enormous scale using modern technology that would have been

inconceivable back in 1870 two. unfortunately, this contributive to some enormous abandoned mine problems and the public is often stuck with the bill. unlike in coal country where every coal pays into a mine revenue fund -- it strikes me as fair that taxpayers get a share of the profits in exchange for the privilege of conducting mine operations on public lands. while we may disagree on the precise path reforms should take, we can all agree mining law is outdated and for the current needs of society and industry and 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 brosseau. sen. barrasso: it is

important and timely to hold his hearing. it comes at a critical moment. for the last nine months, president biden has been pushing an agenda that would dramatically increase our nation's demand for minerals. president biden has pledged to end new sales of cars and pickup trucks that run on gas or diesel. the president instead wants americans to drive electric vehicles. earlier this year, mark mills testified before this committee that "providing the refined minerals needed to fabricate a single electric vehicle battery requires the mining, moving, and processing of more than 500,000 pounds of materials." he went on to say, "that's 20 times more than the 20 500 pounds of petroleum that an internal combustion engine uses over the life of the car." this chart from the international energy agency makes a similar point. it talks about electric vehicle and how much minerals are needed all the way across.

the blue is copper. you have nickel, manganese, and graphite. a conventional car is just copper and nickel. that shows the difference in terms of the minerals that are necessary for an electric vehicle and a conventional vehicle. at the same time, president biden wants to shut down america's natural gas and coal powered fire -- coal-fired power plants, he wants to do more along this line. the president doesn't want coal, doesn't want natural gas, he wants utilities to generate electricity from wind turbines and solar panels. mark mills again went before this committee and explained, "compared with a natural death powerplant, both wind turbines and solar panels require at least 10 times as many total tons of mind, moved, and converted into machines to deliver the same quantity of energy. " this is a chart not by me but by

the international agency of energy and makes a similar point. offshore wind, onshore wind, solar power, nuclear, coal, and natural gas. the color coding is how much is copper, zinc, silicon, chromium, all of it shows much fewer need for these minerals in natural gas and coal then we would have for either onshore or offshore wind or any other sources of power. in light of these goals, you would think that than president biden and democrats in 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 the biden administration agenda is calling for. instead, this president and the house democrats want to make it more difficult to get to these

minerals that we need. they seek to eliminate all mining on federal lands. as the chairman said earlier, so many of these minerals, where are they found? federal lands. last month, house democrats advanced partisan budget, the reckless tax spendings three, which would induce punishing royalties on existing and new mines on federal land. house democrats also plan to raise fees and oppose a tax on mining firms. the fees would be based on the amount of dirt they moved. you can't make this stuff up. house democrats are planning to tax the dirt. house democrats also want to repeal the late senator mccain's bipartisan legislation to provide access to one of the largest copper deposits in north america. this project would alone create 3700 jobs in arizona. the proposal will devastate communities and workers in wyoming, nevada, arizona, and

throughout the west. the house democrats legislation will also be a giant gift for our adversaries overseas like china and russia. according to the u.s., the united states is already heavily dependent on china and russia for dozens of minerals. many of these are essential to our national defense and economic security. the last thing president biden and house democrats should be doing is increasing dependence on china and russia, but that's exactly what they are doing. i am open to considering changes to the mining law of 1872. still, we must protect american workers, mining communities in the west, and our nation's competitiveness. we also need to recognize the mining law of 1872 covers dozens of different minerals. they each have their own market, which may be dominated by foreign, state-controlled corporations, and countries

seeking to undercut u.s. mining firms. for that reason, a one-size-fits-all approach will not work for me. we also must not limit our vision to the 1872 mining act. for example, congress needs to enact meaningful permitting reforms with fixed deadlines for federal agency action. i can only support changes if congress proceeds through regular order and on a broad bipartisan basis. these changes are to consequential for congress to do them through the partisan budget process. sen. manchin:. thank you. thank you to the witnesses to share your expertise. we have mr. rich haddock, general counsel for the barrett goal corporation, the president and ceo of charlotte unlimited. we have katie sweeney, executive vice president and general

counsel of the national mining association, and devon brown -- david brown, president and ceo of wyo-ben inc. >> thank you. thank you for holding the hearing today. thank you for working with us. i know i urged you to do this. nevada's mining industry is critical to our economy. it is important for us to work together and find solutions that support the jobs and businesses it sustains while also investing in the community so i'm looking for to the conversation today, and so pleased to introduce rich haddock, the general counsel of barrick gold corporation. rich has worked in the mining industry for 30 years and has been there general counsel since 2014 since joining in 1997, serving in legal and operational roles including regional council of north america, vice president

of environmental and president of north america. prior to that, he was a partner with a law firm where he had a natural resource in environmental litigation process. mr. chairman, barrick gold corporation began operating in nevada in 1986. in 2019, nevada gold mines reformed which provides significant access. nevada gold mines is the largest gold-mining complex in the world and is operated by barrick gold. they directly employed more than 7000 people and more than 4000 indirectly through contractors and local supply chains. many employees are third generation minors who have high-paying careers with health and retirement benefits for themselves and families. there's no doubt it is a major economic driver not only for rural counties in nevada but for the state of nevada, so i'm so grateful and pleased to introduce mr. haddock as part of

the panel today. sen. manchin: thank, senator cortez masto. >> hello members of the committee, thank you for inviting me to appear here. i am rich haddock, general counsel of barrick gold. 85% of nevada is owned and managed by the federal government. gold-mining is the largest hard rock mining activity on federal lands as recognized by the ceo yes -- last year and most of that is in nevada, 85% from nevada gold mines. that makes it of supreme importance to nevada. the mining law has survived so long because it works. while it works, it is not perfect and there are improvements that can be made. there are two aspects that are critical to preserve. the first we call self initiation, the ability to explore and determine where they want to explore, in other words, where the geology leads them. the second is security tenure.

we believe discussions should not be divorced from key land tenure from other aspects of any law. the argument that it pays nothing for mining on federal law ignores the system. there's a process achieved through royalties, taxes, direct equity or a combination of the u.s. approach is not yet included in federal royalty in the mix and is focused instead on income tax, like other federal system such as australia and canada. in our business, there is a significant multiplier effect in the sense we can contract with a wide array of corporations. in the federal system, it has been left to the states to impose mining specific taxes that are in effect, royalties. in nevada, the royalty like tax is about 8% of net proceeds. whenever the issue of federal royalty has arisen in congress, going back to 1994, barrick has

supported a reasonable perspective net royalty. today in line with national mining association position, we continue to do the same. we support an additional claim fee. the gross royalty proposed by the house would increase to economic take to a higher level in developed mining nations like canada and australia and put it on par with developing nations that does not have the same high operational cost. the house proposal would make the u.s. noncompetitive and drive production of critical minerals to the strength of the u.s. economy and greenhouse gas reduction goals into the hands of other governments. there are three foundational concepts. the first is we turn dirt into gold. the oil removed from the ground by itself is worthless. at our apartment complex in nevada, initial investment in the processing plants and mining infrastructure was about $7.5 billion. every year, we invest $1.6

billion to maintain facilities and produce the gold. second, a hard rock royalty is not a cost that can be passed to the buyer. mental processes are fixed on the global market everyday. hard rock mental processes are based on factors beyond our complete -- control and demand. this advantage with gross royalty, and he royalty would increase the amount of four. growths royalty -- it dramatically shrinks the resource by making it a greater percentage on if gnomic, wasting natural resources, reducing the return for the government, eliminating jobs unnecessarily early, and making less product available for commerce. a gross royalty is not a tax on the rail you on the or, rather a tax on the investment like that $7.5 billion investment i mentioned. a gross royalty takes winners and losers because high grade deposits benefit while lower grade mines -- advantages of the

net royalty. net royalty better allows the minor to recouped through commodity cycles and normalizes for the cost of an operation. in that way, it does not discriminate between high and low cost mines or between commodities. net royalty allows the mind to survive dips in the commodity cycle while giving the u.s. the upside. a net royalty would ensure that there is a viable mining industry to reduce federal revenues and supply security long into the future. in closing, i want to acknowledge and thank senator cortez masto for her carrying and attention to the people of nevada and it is close to my heart to the rural people. she spends time and effort there and i appreciate it. i specifically support -- thank her for her support of the people who mine. thank you for your time and i'm happy to answer questions and submit additional materials as requested. sen. manchin: thank you. now we have ms. hannah.

ms. hannah: good morning, chairman mansion, ranking member barrasso, and members of the committee. my name is autumn hannah and i am vice president of taxpayers for common sense, a national nonprofit watchdog. thank you for inviting me to discuss the general mining law of 1872 and the long-overdue need for reform. offended in. 1995, taxpayers for common sense is to promote the taxpayers' interests, acting for fair and transparent action across the federal government. we believe public lands are taxpayer assets and should be managed in a way that ensures a fair return from private insurance using them for profit and avoid future liability. the 1872 mining law fails by all the standards. i started my career with taxpayers for common sense more than two decades ago. hard rock mining was one of the first issues brought to our attention. we had been advocating to reform

the lot working closely with republicans and democrats. i had the opportunity in the mid to thousands to advocate for 1872 mining reform when a bill led by former house chairman rahal was introduced -- introduced a bill. this law is so egregious by modern standards. it covers -- some of the most precious hard rock minerals, and though it belongs to the american public, it entitles the industry to take them free of charge. this leads to massive giveaway of hundreds of billions of dollars. under the mining law, a claimant can patent or purchase a mining claim for no more than five dollars an acre and the public is prohibited from charging market value for land subject to a claim. to put that into perspective, the 2021 purchasing power of five dollars from 1872 is just $.20. beginning in fiscal year 1995, congress began enacting one-year

moratoriums. those have been grandfathered but new patents have not been grandfathered since. -- enacted cents. a one-year extension makes little sense to the mining industry or taxpayers. some of these patented lands turn into huge non-mining windfalls for developers, eventually becoming ski runs and housing developments. the total value of minerals 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, doi was able to estimate in 2020 that the dollar value of hard rock mineral production on land it manages was $5.3 million in fiscal year 2019. despite the value of these minerals, under the general mining law of 1872, hard rock mining companies are not charged for the value of these resources through a royalty rate. other attractive industries like oil, gas, and coal pay royalties to the resources they extract from public land and water. the hard rock mining industry

should not be different. mining companies must compensate taxpayers for extracting resources and provide an adequate revenue. stream to restore public land taxpayers for common sense and -- recommends congress an act something that applies to all hard rock production, current and future. there are other ways to apply a royalty but a gross income royalty will be the most transparent, easiest to administer, and the least likely to be gamed or avoided. a royalty would generate a return for taxpayers proportional to the mineral value, automatically increasing when feiss -- prices are high and decreasing when they are low. setting a realty rate would not preclude flexibility. setting 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 can lead taxpayers with empty reform promises and little in the way of returns from the extracted taxpayer assets. in the face of the current budget morass and for the need for smart fiscal policies, applying a royalty seems like low hanging fruit and can provide taxpayers up to $5 billion in new revenue over the next 10 years depending on the royalty rate. unlike many fiercely partisan issues, we hear from people on both sides of the aisle and many in the hard rock mining industry know that we must reform this 1872 law. this was done with a pole from american viewpoint, that found updating the mining laws garner the support of 73% of democrats, 67% of republicans, and 72% of independents. the case is clear. no one thinks simply giving away valuable minerals for nothing makes fiscal sense and no company should be allowed to leave toxic messes on our land

and avoid the tabs for cleanup. taxpayers deserve better. i look forward to working with the committee to make reform a reality. sen. manchin: thank you. now we have mr. wood. mr. wood: chairman mansion, ranking member barrasso and other committee members, my name is chris wood and i'm the president and ceo of trout unlimited. thank you for inviting me to testify here today on reforms to the 1872 mining law. as you know, abandoned hard rock mines pose one of the greatest water quality problems in the country. as the committee explores options for updating the law, i urge you to advance a royalty or fee structure that is reasonable and fair and that generates significant revenue to cleanup up lands and waters affected but 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 in dozens of communities in the west to help clean up old and abandoned hard rock mines. thanks to the support of our 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 is past time to make it easier for would-be good samaritans to clean up pollution's they 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 headwater streams are negatively affected by abandoned mines. please the land -- these dot

the landscape like abandoned mines, waiting to leak toxins. there are two primary obstacles the first is lack of dedicated funding. we applaud the committee for including in its bipartisan infrastructure package a proposal to provide $3 billion for abandoned mine reclamation. that is a great start. tens of billions of dollars however are needed to make the lands, waters, and communities healthier. unlike just about every other commodity that is developed from public lands, there is no excise tax, royalty, or fee associated with the production of hard rock minerals that is then allocated toward restoration and remediation. we need a reasonable royalty to clean up these legacy sites. for coal alone, the abandoned mind land -- mind land

reclamation fund has raised more than $11 billion to clean up and make safe coal mine sites in appalachia and around the country. tu cobbles money together from a variety of sources to do mine cleanup. the staff are like alchemists with the ability to leverage funding, but the scope and scale of the problem dedicates -- beds for dedicated funding to clean up mines just like for coal p the second mitigating factor is liability. when groups like trout unlimited, groups that have no legal or historic interest in creating the mine ways, want to clean up the mines, they become what lawyers call the chain of custody. that means we could spend a few hundred thousand dollars to improve a stream from 25% of water quality standards all the way up to 90%. it might cost another $1 million or $2 million to get that extra 10% increment and today's law would allow the government or a person who decides to file a citizen suit to come after us for the rest. the clean water act or the

superfund law are two of the most important laws for holding polluters accountable, enforcing the cleanup of many ruined streams and landscapes. the challenge is that companies behind most of the tens of thousands of abandoned mines in the west are long gone and their owners are long dead. conservation can be defined as the application of common sense to common problems for the common good. resolving these issues will allow the nation to apply a lot of common sense to a lot of common problems. thank you again for the opportunity to testify today. trout unlimited appreciates your leadership and looks forward to helping you however we can. sen. manchin: thank you, mr. wood. now we will introduce the next speaker, mr. brown. >> chair mention, thank you. i'm excited to introduce mr. david brown, the president and ceo of wyo-ben, headquartered in

billings, montana. wyo-ben is a family-owned bentonite mining and manufacturing businesses that supports 200 direct and indirect jobs in montana and wyoming. mr. brown knows knows first-hand 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 mines in the united states and how this process puts the united states at a disadvantage, forcing us to be reliant on countries like china. i look forward to hearing 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. thank you. sen. manchin: now we will hear from mr. wood. i mean, mr. brown. mr. brown: thank you, senator. mr. chairman, ranking member barrasso, my name is david brown and i'm the president and ceo of wyo-ben inc., and i represent the third generation of a 70-year-old small, family owned and managed mining and manufacturing business with headquarters in billings, montana and in the bighorn basin of montana and wyoming. wyo-ben directly employs 140 associates in the wyoming and montana operations 60 contract miners. we offer some of the highest paying jobs in the offer -- area and offer a significant impact on the economies of the towns we operate in. wyo-ben operates in the industrial mineral segment of the mining industry and mines a

unique mineral called sodium bentonite. the sodium bentonite found in wyoming and adjacent states has quality of characteristics so unique that it is referred to as wyoming bentonite. no other country is blessed with the exceptional quality of bentonite we have at wyoming. as a result, wyoming bentonite is used as a base material to create hundreds of different products that are sold worldwide. your automobile engine was made using bentonite as the binder in the sand hold used to make the caps. the municipal landfill in your community would have environmental issues if wyoming bentonite was not used to form its impermeable bottom-line or. -- 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 bentonite to make the drilling mud. the wine you enjoy would be

unpalatable he cloudy without the wyoming bentonite. finally, you would be unhappy and your cat would be unhappy, if not for wyoming bentonite's unique properties to form odorless clumps for easy removal from the litter box. it is important to note that around 90% of the bentonite we use for our products is obtained from mining claims on federal lands. , administered by the blm. the mining is employing and utilizing scrapers, dozers, and a continuous mining technique we developed to replace the overburden removed from one pit this allows us to spread plant seed onto previously mind -- mined.

our circumstances and methods are different from those in other types of mining. the lines are long and thin and our disturbance quicker and small. the typical is a matter of months before topsoil is replaced and we begin our plant and vegetation process. as a result of our mining practices, rebirth served --we were served -- as a small business operating in an industry with inherently low profit margins, and heavy re liance on mineral resources on federal lands, our ability to compete in the marketplace is defendant --dependent on our ability to access and economically mining these resources. this is right changing mining law, the rules under which we have always operated, is of

particular concern to us. several changes in the mining law are being proposed to the mining section of the house budget reconciliation bill currently being negotiated. any discussion of changes to the mining law must recognize this is a complex issue with 149 years of regulations and case law to be dealt with thoroughly and carefully. the bill provides neither the time nor the venue for a detailed discussion of the issues inherent to the change. the one-size-fits-all can -- approach combining reform will affect our company's ability to remain competitive and possibly our viability to operate and offer good paying, high-quality jobs and the impact of the supply chain and the economy of our local communities. for all of these reasons, i respectfully request 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 hearing and moving this issue via regular order and look forward to working with you throughout this process. that concludes my statement and i would be happy to answer questions. sen. manchin: we will hear from miss sweeney now. ms. sweeney: good morning. i am 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. in 2017, the world bank projected demand for minerals would grow 1000% due to the global focus on green energy technology.

more recent estimates from the international energy agency show those earliest projections may have been far too conservative. as the world awakened to the exponential growth in demand, the pandemic unleashed a massive destruction of supply chains, exacerbating our mineral vulnerabilities. the biden harris administration recognized the path to repairing infrastructure, carefully transitioning to cleaner energy and winning the electrification rates is paved with minerals. the administration acknowledged the importance of the industry through the january made in america executive orders caution against the use of materials that are not mined in america in the february american supply chain orders focused on mineral supply risks. 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 positioned to help the administration meet its objectives.

this committee has led the way in educating on the important role of mined materials as the front and of the supply chain for a modern way of life. thank you for your leadership on these issues, especially your awareness of the impediments that stand in the way of revitalizing our mineral supply chain, such as the inefficient permitting process that impair global competitiveness. this committee has been solution oriented, taking positive steps to the bipartisan american test mineral security act and the infrastructure package. when it comes to updates to the mining law, we are at a crossroads. the direction we take can help secure mineral supply chains or drive mining law and --offshore. we questioned whether budget reconciliation is the right vehicle for this discussion. there are numerous issues out -- outside the scope reconciliation that should be considered in tandem. good samaritan cleanups being a private -- an example.

we welcome an 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. 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 mined 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 return tax on materials used during extraction. these 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 -- mines and little interest in future mines exacerbating our reliance on minerals from countries with less stringent environmental and labor standards. additionally, taxes and fees ignore the taxes already paid. current toil -- total government take for u.s. mining operations is around 40%, similar to other major mineral producing countries. the house reconciliation would post the u.s. above aren't

competitors. compromise is possible. the industry is open to reasonable royalties. working together in a bipartisan way, we can assemble a package that helps secure the nation's economic recovery and prosperity for years to come without jeopardizing mining foundation of our country. thank you for the opportunity to testify and happy to answer questions you'd -- question. sen. manchin: i come from a call mining state and come from 0-i paid royalties all my life and know0 about them-good i never could imagine we don't receive royalties on so many things. i could not because we paid severance tax, instruction, royalties on top of that and are able to compete and survive in the market. that is all. i know this is about money. i want to make sure we don't put undue pressure. you can understand maybe from my point of view.

if you are buying call from the private sector, you article company -- you are the coal company, we will negotiate. i know i will be from seven to 9% and you will pay me 12.5% if i own the rights. i know that if i am the mining company, i am responsible once i start reporting the money away to take care of the board and i leave behind and we are working through that. i have a hard time -- i am not disparaging anybody. if we can find a pathway forward, that is what we are looking for. it does not put undue pressure. that is what we are looking for. i want to thank the senator cortez-mastro for bringing it to our attention to understand more of what you are facing. and also the states. i understand the severance tax is low on hard rock mining that

the states receive. i have been through it and want to understand. i raised the severance tax and they said if you do that, we believe and i said before you leave, bring all your leases back because i will pay you for them. i don't want you to leave mad because i will pay you and i want you to have a good relationship with west virginia. i never had one person turned police and. we worked and lived with it so we can make it work if we do it responsibly so i would ask all of you. mr. brown, coming from the private sector, i know this has been debated and talked about a lot. i know you are comparing it with other places in the world. we compete the world --with the world all over. we compete with natural gas and are still doing good. tell me, is there a pathway forward we can negotiate and

since it has not been done since 1872, if we went, is there a way to make fairness to this? >> the short answer is yes there is. we have long supported a reasonable net royalty for a lot of reasons. royalty is the right approach. sen. manchin: we do it on grace. >> as i said, a gross royalty becomes regressive on hard rock medicals -- minerals. on michael andy's other commodities --unlike coal or other commodities where the royalty cost can be passed onto the consumer, it cannot be call in for the large measure for us, the net royalty is very important. >> thank you, senator.

i believe there is a path forward. we would welcome the opportunity to have a conversation with stakeholders about mining law reform, about royalties, about fees, about all of the other provisions of the mining law, but i believe it needs to be a comprehensive look and not just a slice about the money that we are trying to address today. most of our mineral is lined on federal -- mind on federal land and it is important to us that we have access to those minerals and are able to produce them and sell them and make something. we are in industry that has a thin bottom line. i think maybe industrial minerals are as well in general. our story is different perhaps than some other producers and we

would like the opportunity to be able to tell our story. sen. manchin: that is why we have you here. i want you to understand we are not looking at this as -- we are looking at as a matter of fairness. that is it and that is all i can tell you. we do too much of this all over the country. i have been involved for all my life around my call mining town so i understand how this works and we go with the market. we don't have control of the market price. it goes up and down. the markets will stop production for a while because it is not profitable to produce good they will come back when the market is right. i understand the market forces. i want you to understand we are trying to understand this and i think the senator cortez mastro for helping us understand how we can segue into making fairness responsible. with that, i turned to my friend, senator barrasso. sen. barrasso: thank you so much. i would like to start with you,

ms. sweeney. the house democrats are going to impose new fees and royalties on new mines on federal lands. in addition, the democrats would impose a tax on material moved during a mining operation. under the house democrats proposal, meinerz will of the federal government the highest rate of royalties, taxes, and fees in the world good the house democrats proposal is enacted. is it fair to expect u.s. mining operations to close? ms. sweeney: absolutely. if you look at all three of those very punitive fiscal provisions in the house package that you mentioned, they present growth. 4% on existing dirt tax. just anyone of those could have a profound impact on the industry. you take all three and oppose them at the same time, you're looking at --impose them at the same time, you're looking at premature closure and will not attract additional investment

into the united states. other countries, you know, they will reap the benefit. sen. barrasso: mr. haddock and mr. brown, how would your mind -- mines be affected? mr. haddock: importantly, i think our operations would continue. we can pick them up. we can move them. what would happen is i described our business as being on a treadmill. we are constantly trying to replace the resources that we deplete as we move through the year. we do that through investment and expiration investment. it is through coming up with ways to convert what would be waste into ore. it is a large investment. what happens in our industry is we have to balance our capital throughout the world and throughout our deposits.

we would continue to mining our deposits in our growth profile and the united states would continue to decline. particularly with the rights royalties, it would decline much faster. sen. barrasso: mr. brown. mr. brown: it would have significant impact on us. an 8% royalty, a 7 cent per ton so-called dirt tax, and understand in the industry, we take the overburden out of the pit and put it on the bank. that is the first touch. we put it back into the pit to do reclamation. that is the second touch. oftentimes it is three times before it gets to the plant to go through the processing. i don't understand how that tax would apply and then perhaps any of the other fees for the cost

of --additional cause of monitoring the whole process, it would create a significant burden to us that very likely we would not be able to pass throu gh our customers. because of their nature. . it might open up the possibility of competition from overseas. you are a 70-year-old, family-owned operation. you joined the company in 1980. if you know in your prepared remarks, it takes seven years to permit that mine on federal land. can you discuss how permitting delays has grown over the past decade? discuss the impact of these permitting delays on your company. mr. brown: it used to be that we were able to permanent and

roughly 14, 15 months. we just received a permit that was critically needed for our operation and it took over 7 years. had we not gotten a permit, that plant would've been at risk of shutting down in 2022 because we did not have all of the res ources needed. sen. barrasso: as congress considers changes to the mining law of 1872, should it consider permitting reform? mr. brown: i believe so. sen. manchin: senator cortez masto. sen. cortez masto: i appreciate you holding this hearing at my request because i opposed the reform that was proposed in the house of representatives because

the legislation would have an unfair outside impact on the state of nevada where most of the land is owned by the federal government and it imposes taxes on federal land. more importantly, moving this type of reform through a short-term budget process would create uncertainty for the industry and uncertainty, that is thousands of jobs across the country. it is fair that we have this conversation transparently and figure out a compromise. i here today there is opportunity to work through this and that is how it should apart -- occur. for that i want to thank you for the hearing and working through the process. one of the things i want to stress and i thank mr. chairman for trying to get out to see the hard rock mining in nevada that i know because of the climate and the weather in the fires, you are unable to. if you would, let me put this in perspective.

there is a difference between boiling, cool, and that kind of mining versus hard rock mining. really, oil, gas , and coal are at the mouth of the lined meaning no over finding is required by the minor for the mentor -- mineral to enter commerce. in contrast, that is different than the hard rock mining. could you talk a little bit and help us understand the processing because of hard rock mining and how that differs in that is what you're talking about you are saying we should be looking at the net royalty because we are not considering hard rock mining that type of process different from the cold. is that correct? mr. haddock: that is correct. in our case and in the case of most gold-mining --and for that matter, in a coast -- case of other minerals like top -- copper, when you discover a deposit, the rock has no value

in the only way to turn it into value is by --first of all, you have to find it. in our case, we have to deposit where we have spent half $1 billion and now, we are to the point where we are permitting. adhered you discover it, you have to do numerous studies on all kinds of chemical parameters, physical parameters, and figure out how to turn that rock into a sellable product. after you do that, you do your for stability studies -- feasibility studies to reduce the lord -- ore. then you build the facility at the cost of $1 billion a pop. each one of our mills would be $1 billion. we have seven right now. you have to expend the capital every year to continue to maintain that property and those facilities and to expand them

and refine them to deal with the port you encounter. it is a nonstop process that never ends. it is cycles of investment and then, when you get to the end, you have a product and after that, as senator manchin said, we are cognizant of our reclamation obligations and we have our costs and that is part of our investment in right now, nevada coal mines carries reclamation on $2.1 billion, twice the industry in west virginia. it is a continuing investment. sen. manchin: let me ask -- sen. cortez masto: let me ask. ms. sweeney, help me put it in layman's terms. when you're doing hard rock mining and you scoop out the dirt, you don't know what you have until you go through the process to determine whether

there is a mineral worth anything. is that correct? ms. sweeney: there are years of exploration activities that take place before you would even know whether you have an economically valuable deposit. there is upfront studies you are doing during that same time and lots of information you're collecting. if you're looking at one in every 1000 exploration activities, it might become a modern mine. there is a lot about upfront costs that go into that. sen. manchin: is that why you have concerns about a dirt tax? ms. sweeney: absolutely. sen. cortez masto: i know my time is up. sen. manchin: we have senator lee. sen. lee: utah is home to the last uranium mill in the united states. the white mason mill. domestic production of uranium has plummeted over the last

several decades. it was 40 years ago when we reached our peak when we produced in the range of 40 million pounds a year. in 2018, toward the end of the chart, we produced 1.4 7 million pounds. this does not mean demand is waning. demand has remained relatively constant over the entire 70 plus period depicted in the chart. it is just that when domestic production diminishes, we make up for that on the international market. in 2015, the united states imported 65 million pounds of uranium. house democrats are now wanting to impose new features on this part of the economy, as mentioned already, in the reconciliation package, one that we institute our royalty on hard

rock minerals like uranium. this royalty will be a percent for some. that is 8% of gross income for new operations and 4% on gross income for existing operations. this is something i believe would have a crippling effect on domestic mineral markets in the united states i would like to start with you, ms. sweeney. how has u.s. dependence on mineral imports potentially threatened everything from our supply chains abroad and our infrastructure and energy security and how could a royalty like that proposed in the house and a dirt tax like over there impact our ability to secure our to mess the mineral supply chains? ms. sweeney: thank you for that question. i think uranium is a great example of how we have become excessively over reliant on

foreign sources of minerals over the years. when the energy information agency cannot even provide the actual amounts produced in the united states last year because it is proprietary information because there are so few producers, it is sad but it is one example of many of how we have become incredibly reliant on foreign sources and minerals even for workforce minerals like silver and copper that are used in solar and electric vehicles and every aspect of modern life. we are affording 80% of the silver and we have a lot of silver resources in the united states. currently 37% of our copper comes from foreign sources. these types of punitive fees that take us out by the total government take of our competitors are destined to relate freeze the investment in

the united states and the other countries will profit from that and some of those other countries are not our allies. sen. lee: not our allies and are not anxious to see us emerge as the global front runner in green energy technology or any of the high tech sectors where the united states has potential. they also, as i mentioned, true into their package what they are calling the reclamation fee. as i understand it, that is seven cents. doesn't go to the secretary of the interior for every ton of displaced earth. it is the case that mines are required to reclaim disturbed areas of mining activity, correct? this provision would end up requiring honest operators to pay for their reclamation work

of other operators. what is the point of this issue? isn't this really just imposing an additional burden that could effectively force the relocation of these operations overseas? ms. sweeney: absolutely. i think that fee is burning some and -- burden some and it is on the movement of dirt which has to take place. sen. lee: your company has had a significant impact on the accounts you operate -- towns where you operate in this is a story of a lot of utah operators. you mentioned the impact the royalty and the dirt fee could have on you and your company and other companies like it. after hearing from ms. sweeney on the disparate impacts that

might be imposed by the royalty in the dirt fees, would you say the proposal submitted by the house democrats, namely imposing a gross royalty tax of 8% for new operations and 4% for ex isting ones, wouldn't that add to market disruptions and force operations abroad? wouldn't that also have the potential to favor market incumbents and his favorite new entrance to the market given the disparity between 4% and 8%? mr. haddock: i agree with that. there is foreign competition for us. the minerals that we are mining are low value. they work through the value chain and become a part of the end product. whatever that is and it is

hundreds of an product feeds. if we increase the cost, to --, and it has to increase the cost on the supply chain, it is very likely that our customers will be seeking other sources of supply so their products can remain competitive and viable. there are foreign manning companies --mining companies that would be eager to enter the market in the united states. it would have a dramatic impact on us and the other thing i want to mention, we talk about the 8% and 4%. in our business, we have a plant of operation that encompasses a relatively small area. we are updating their plan of operation as we move forward. the 4% when applied to what we have today but when we look at

this, we think in the future, we will pay a percent under the current proposal. >> i remember fondly visiting my grandfather at the gold mines in nevada in places like -- and many others. these are important jobs and this is an important activity but i think it is equally true that there are obvious and important reforms that should be added to the 19th -- 1872 mining act with regards to cleanup and you heard that from mr. wood. i have to say i'm disappointed we do not have a witness here today who can testify to the impact 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 mind for gold -- mine for gold. the residents know all too well what can happen when mine waste spills into your water supply. in 1991, spring rock caused mine waste to flow into the river triggering an enormous -- and costing the state of new mexico more than $28 million in cleanup costs in dollars at the time. i'm sure it would be higher today. this community and its economy are reliant on farming and fishing. neither can exist without the small streams that feed into the river and both are at risk. the new mine opens in this location. even though proposed mining activities are on national forest land that belongs to all of us, there is no wait for the forest service, under the 1872 mining act, to determine that a

mind --mine in this location is not in the best interest of this public. unlike oil and gas or coal or --there is no step in the process where the public interest in the location of a particular mine is considered. because this foreign corporation has purchased mining plants, they have a right to build a mind even over the objections of the entire community. i'm glad we are having this discussion. it is long overdue and i believe there is a compromise to be had on a reasonable structure but as we consider these reforms, ro yalties, reclamation fees, claim fees, we need to include the voices of the communities that live with the consequences of mining pollution so i want to ask you, mr. wood, in your view, you worked all of the west as

well as through appalachia on restoration. are there some locations that are not the right place for a new mine, where it is not possible to create a mine and build a mine without on accessible -- unacceptable impacts on communities? mr. wood: thank you for that question and a great example of that was an effort that senator murkowski was a leader on in stopping a mine on state lands, not federal lands. it is shocking that federal land managers, public servants, do not have the ability to say no to the mine. the mining industry follows its steps. it is the only use of our public lands they do not have discretion to say no to, whether it imperils indigenous communities, water supplies, and there ought to be a way to figure out how to allow that discretion while honoring the investments the industry has made good -- made. sen. heinrich: is the only use

of public lands where there is no discretion for the agency to say not here. mr. wood: it is the only use of public lands whether agency does not have the discretion to say no --where the agency does not have the discretion to say no. sen. heinrich: any absence of bonding authority? who pays for abandoned hard rock mines cleanup? ms. sweeney: that is the taxpayers and that is where we see huge shortfalls right now in abandoned mine lands marketing cleaned up and we need to create the dedicated revenue stream and we think industry should share the burden with taxpayers. sen. heinrich: how to set compare with other similar industries like coal mining? ms. sweeney: there are costs that other industries take on and trusts we created in the coal program and oil and gas and so we believe this is something the industry could share and

create a real revenue stream and not put undue burden on industry and again, we want to see this production happening and we are supportive of responsible mining so we do not -- we want to be open to discussions on how to set up the revenue stream so the industry works for them and we can see it is working but we have this shortfall. there are so many priorities competing for federal government funds and this is just -- we think the royalty and reclamation fee would be the way to extract revenue for abandoned mine cleanup. sen. heinrich: my time has expired but i would urge us to not take quite the zealous approach the house took but to find a fair and transparent way for taxpayers to be compensated for these minerals and also to create a revenue stream so we can start cleaning up the tens of thousands of abandoned mines

that letter -- litter i think every western state. sen. marshall: thank you for gathering here today. this seems to be the next chapter of the same book and when it comes to making this environment cleaner, healthier, and safer and have affordable products, as i said here, listening to you talk, as we think about the permitting process, what a cost that must be to you all and we are throwing so much money at the permitting process, i was parts of that were being used to make things more environmentally friendly or environmentally cleaning up projects and let's talk about bentonite. it is a product i've purchased. i assumed all of it from wyoming and i had no idea there was any other. we learned today some of it

comes from china. if these taxes within the place the house talks in the reconciliation bill, would we end up having more coming from china? how would it impact the business? mr. brown: it would have an impact. the severity of which we would have to lay out. dependent on whether we could pass those costs down or not. i doubt we could pass all of them. there is 20% of what is produced in wyoming exported. china represents the major -- they are the second largest producer in the world, wyoming. i would consider them a significant threat to the markets that we have. if we are not there providing them that night to --bentonite to north american customers or international customers, china is likely to be there right bhei

nd us. sen. marshall: i have a neck question for you, ms. sweeney. whether we ship bentonite from china or from the congo or other countries, the mining processes they do their plus shipping cost, what type of environmental impact with those have compared to the mining processes here in the united states? is it orders of magnitude, exponential? how could you quantify? ms. sweeney: it would depend on the countries that are doing the mining and processing. some of them, maybe canada and australia would have similar standards. sen. marshall: let's talk about china in the congo. ms. sweeney: those are the ones that do not. they do not have the same labor standards as we do in the united states. if you looking at the combo and

some of the cobalt being produced there, there are child labor issues that are pretty horrific. we have an incredibly talented workforce here. we have the right infrastructure. we can do it right here in the u.s. and make this happen. sen. marshall: in kansas, we benefit from an rda restoration program. we took some previous pit mining's and it dealt some of the best habitats in america here what are we doing in the mining industry today better than 10 years ago, 20 years ago? share your story. what are we doing better these days? we don't have any mining left but i know there are great stories to share. ms. sweeney: there are incredible stories particularly on the safety and reclamation side. for u.s. mining, if you look at

the number of mines that go through a whole year without the single lost time incident, it is spectacular. awards given by the department of interior for hard rock mining really show how forward thinking the industry is created. thinking outside the box for what works best not only for the environment but local communities. getting the input from local communities, about what they want to use the land for next. leaving behind important components for the communities to use. environmental monitoring is a huge difference to prevent some of the future releases people worry about most. sen. marshall: this is for ms.

sweeney as well. the mining support abandoned mine cleanup and increasing your contribution. ms. sweeney: absolutely. we are reasonably royalty and fees that will be dedicated. sen. marshall: thank you so much. i yelled back. sen. manchin: we will have senator hickenlooper. sen. hickenlooper: this is a pleasure because 45 years ago, i don't want to date myself. i took a class on industrial minerals and this is now coming full circle. i appreciate a lot of your points that you were for many years the first investor. you were fortunate and i started out as hard rock joe. i have seen it in terms of

drilling and extraction but also in terms of using it as funding for making beer which i ended up doing after the geologic. we are seeing such a broad difference between bentonite mining and gold-mining -- mining and the costs. i think that suggests it is exactly the same as we do for oil. oil and gas. it begins to create the image of how would we go about this? mr. sweeney -- ms. sweeney, i would start with you to ask to meet our clean energy goals and the reports such as the iea showed dramatic levels of scale off that we would get production

to keep cates -- keep pace with what we need. i am someone who believes there should be a level of royalty there. if you take a moment talking about the differences between a gross royalty internet royalty, i think some of the people listening might not have the same familiarity that you and i do. ms. sweeney: thank you so much for the question. there is a large difference and i think that rich talked about it in his testimony as well. the gross royalty does not allow the deductions for the processing and refining, which are really a large part of what provides the value for hard rock minerals compared to coal or oil and gas and if a royalty is

imposed, mining companies are required to pay the royalty even when the mind is operating on a loss. the royalty is assessed without consideration of the difficulty or the processing cost, there have been a few studies including by the department of interior itself looking at growth versus net royalties in the department has concluded gross royalties would result in significant job losses, losses to state and federal treasuries, mine closures and discourage and of new mine's -- mines. it encourages operators to leave lower grade or run out their public resources. sen. hickenlooper: i appreciate that. i have always instructed and do not know how much we produce and some of these minerals. i remember that 45 years ago and do not think it has changed.

from a taxpayer perspective, do we need a full accounting of how much we need to produce in the country if we are going to have a policy grounded in reality? ms. sweeney: thank you for the question. we need transparency more and we need to have that tracking so we can really understand what is the value of the minerals coming off the land. it is hard to get an assessment of what the impact would be if we do not have that information. i think we have sufficient information to know that the industry, as i think everybody says, can absorb and handle the impact of the revenue streams and still be successful and profitable and i appreciate your mentioning the differences with various minerals. we recognize that as well.

accounting is first. do we have federal lines? sen. hickenlooper: just to finish up, there has not been much discussion of wildlife yet but i come from a state that has abandoned mines and has all kinds of problems in designated superfund sites and especially those that are not. we know it takes resources. you mentioned it earlier but think more about the good samaritan legislation in how that could be a first step, not a total solution, but a first step. mr. wood: just to expand on your point, gao estimated 550,000 eggs -- abandoned mine sites on public land. an assessment we did listed over 120 5000 miles of stream across the country that are affected by abandoned mine waste. what we are trying to do and we

have worked with industry and conservation groups to create a pilot program that would ease the liability restrictions impacted by the 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 abandoned lines -- mines. it would build confidence that we can tackle these problems. sen. hickenlooper: i couldn't agree more. i yelled back. thank you, mr. chair. sen. manchin: thank you for yielding back. [laughter] sen. manchin: i gave you all the time i had. i didn't have any. now, senator murkowski. >> your time is up. [laughter] sen. murkowski: i might just follow on what the senator has pointed to in terms of the collaboration and i had an opportunity to visit the

reopening of resurrection creek near alaska a month or so ago. this is a collaboration between -- it is really encouraging to see industry partnering with the conservation groups. i said if the mining industry and conservation can come together, quite possibly democrats and republicans can although that is sketchy nowadays. that is a good example. mr. chair, i want to thank you for having this hearing and the senator for encouraging it. this is where conversation should happen, not in a reconciliation bill on the house side or any side where you shove something in and hope we get it right. the fact that this mining law has been around since 1872 said something but i think what we have heard today is nobody is 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 in the other way if we do things wrong and in a manner that is not hostile and what we heard today is that we take an 8% royalty for hard rock production or reclamation fee of seven cents per ton and a clean maintenance fee. they will take us in the wrong white so let's talk about ways we can make sure we are doing the right thing in the right way. my goal, my mission when it comes to mining, is to --it is a commitment to working toward reform it. we will provide the industry with regulatory certainty that it needs because that is

important for investing, provide a return to public, protect the 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 renewable technology and 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 discussions we need to have. i will turn my question to you, ms. sweeney, relating to reclamation. i'm kind of curious about this proposal because this is not the

first time this came up. it came up during the obama administration. the eta went for a pretty progress exercise to determine whether the hard rock mining industry should be covered under -- after a lengthy process, they decided not to promulgate it because they were unnecessary and would impose an undue burden on the regulated community and say the proposed requirements would be disruptive to mining programs. if you have an administration that has taken a look at this and determined that would not be necessary because it places an undue burden, how is this fee being proposed now, 7 cents per ton, any different than what was looked at under the obama administration? mr. brown: ms. sweeney: i don't think it is different and thank you for the work you did on the epa financial assurance

rulemaking and working with the industry to ensure those fees weren't imposed. the dirt tax is not a solution to abandoned mine lands creation. when you have modern regulations in place today that protect our lands and the environment and there is over $6 billiuon of financial assurance held to fulfill those requirements in case operators -- sen. murkowski: let me ask about that because in alaska, our department of natural resources have an agreement to co-administer a role that companies pay into and under alaska law, we require a reclamation plan to be approved before their operation can be commenced. they review the amounts every five years and then if the

operator is -- cannot do the cleanup, the agencies reach out to the industry but every time this has happened, i am told the industry has stepped up with expertise, equipment, and labor and more to do the cleanup to the agency specification. as a result, 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 seven cents. is there a concern 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 have in place if you do this overlay? ms. sweeney: that is an interesting question i have not thought about but i would think

our companies still want to do the right thing and help and clean up the environment but will the companies be here in the united states anymore if they are paying those kinds of fees? sen. murkowski: my time is up. i have a lot more questions to submit for the record but i appreciate the comments from everyone here today. sen. manchin: senator kaine. sen. king: given the lack of this industry, i, unburdened by knowledge -- come to the meeting unburdened by knowledge. i will fit right in. [laughter] sen. king: it has gone downhill from there. let me establish some basic principles. it sounds like the industry is agreeing there should be royalties on minerals extracted from federal lands good is that correct?

somebody who is representing the industry. ms. sweeney: yes. reasonable and perspective royalty. net means there are certain deductions that are allowed for example -- sen. king: whites should there be of royalty based on the value of the minerals extracted? ms. sweeney: because there is not a mineral value before it gets refined. sen. king: why are you taking them out of the ground then? if you dig something out and you sell it, you refined it yourself. ms. sweeney: it depends on the company. some of the companies do some of the refining themselves. some do all themselves. there is no value. sen. king: there is a value somewhere. eventually. why cannot the royalty applied

to the value you derive from the mining? seems straightforward to me. ms. sweeney: that is oversimplification. i don't think it is that straightforward because otherwise we would not have any investment in the united states because there is so much upfront capital that goes into -- sen. king: royalty only applies after you make money. it does not apply upfront. you're digging things out of the ground and you get a revenue stream and pay a royalty, part of the cost of doing business for these other industries. why is not that operating for you? so that investors know you're going to get x amount of money and part of that will be a payment of the cost paying the royalties. ms. sweeney: part of that is letting you know you will get a return on your investment as well and i think investors look to that. sen. king: of course. ms. sweeney: there is a much longer timeframe for hard rock

man -- mining them for coal and oil. sen. king: i still don't understand why -- ms. sweeney: narrower margins. narrower margins. sen. king: oil is in the global market. an oil producer cannot make a price. i don't think that argument holds any water over hard rock. ms. sweeney: rich, maybe you want to. mr. wood: let me address a couple of issues there. there are a lot of questions in their if you will. i want to impact a little. -- unpack a little. there is a difference between the value of the mineral in the ground and the value after it is produced good -- produced. in our industry, when you buy gold in the ground, you make $100 an ounce to buy gold in the ground. when you sell it, it is $1700 an ounce. it is all that billions dollars

worth of investment that you get from the gold that may be worth $100 from the ground to the gold worth $1700 when you sell it. our net proceeds of minds -- mines tax is a good example of the system that is very transparent and attracts all the minerals in the state. nevada knows what they produce because everybody pays it no matter what the mineral is here to in the case of this, you esta blish the gross and there are certain deductions allowed. they are very transparent. this works well. it recognizes the value added by the miner in creating it. different minerals are different in the sense that they have location value and you are right. oil and gas are shipped all over the world at an expense.

the expense of shipping plus royalty determines whether that oil can be sold profitably somewhere else. the coal industry is very different as is copper. that price for an ounce of gold or per pound of copper is set in the global market every day. nobody will pay you $1700 + 8%. sen. king: oil is set in the global market everyday. i don't see the difference. mr. wood: there is a difference in the sense that that cost of a royalty gets passed on to a consumer in the case of something like oil and gas. sen. king: that is the case of a royalty. the royalty on oil gets passed on to the consumer. doesn't it? wouldn't it also on gold? it will cost you a little more to generate some revenue from gold. mr. wood: no because it is basically set everyday and sent

to a location and the price you pay is the stock price the day. sen. king: so is oil. oil is set at a worldwide commodity market. mr. wood: it is set at a worldwide commodity market but there is a location value to oil and to cool. there is -- sen. king: i will ask you the same question. i am out of time. are you willing to agree to a royalty on minerals produced on federal lands? >> that is our position. sen. king: and you have told us how it will work? sen. manchin: now we have senator daines. sen. braun: we want to learn more about how legislation from

across the business might hurt your business. we know the house version raises taxes on businesses. it places new royalties on your products and makes it harder for you to support jobs in your communities. mr. brown, if the house get their way and pass this sweeping anti-mining legislation, what would that mean to montana jobs you provide and your ability to mine and supply the united states with bentonite. mr. brown: i would like to highlight that we are a small business, and the president has said that any new tax won't impact small business. the taxes we are talking about, the significant increase in royalties would impact us tremendously.

again, our margins are very thin. our ability to absorb an 8% royalty, however that is defined, and other fees that may come on top of that is going to be difficult. it's questionable whether we can pass that to our customers. i believe some of our customers would elect to source their material elsewhere, overseas perhaps. the outcome of this is we might have to curtail operations. we may have to consolidate that production or worst case, shut down the operation. >> that would move the supply chain. currently, we get it out of wyoming that would move it to places like china, and how do

you think that would affect our overall supply chains, thinking about jobs and national security. mr. brown: it would certainly affect the supply chain. if you think about the manufacturing that occurs using our product, and now rather than sourcing that from wyoming, they are sourcing it from china, and the logistics that have to occur with that, it is going to have an impact on the supply chain and likely a negative impact. it is certainly going to impact employment. in montana and in wyoming, these communities that depend on it as a major source of employment. it would impact the community, as well. the trickle effect of paying a wage to someone as it goes through wyoming.

according to the usgs, the united states is 100% import reliant on 17 important minerals. 35 are considered critical for our national security. 17 of them come from china. these numbers will only get worse as demand for critical minerals only increases. if the u.s. is serious about building more sources of energy, including renewables, we must be serious about increasing domestic mining, and if the u.s. is serious about protecting the environment, we should not allow places like china and the congo who have terrible standards to continue to supply the world with critical minerals. how does import dependency on places like china threaten national security, and has the democratic house bill made that situation worse? ms. sweeney: i think all of

these new fees and taxes would put the u.s., make us less competitive. the take would be well beyond our competitors if you add it on top, and that impacts our national security. there are so many minerals critical to defending our army and navy, critical to nuclear submarines, critical to every aspect of our national defense, and there are a lot of countries out there like china who control 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. there are a lot of resources we

have in the united states, and we can mind them responsibly, and we should. sen. risch: let me try to put this in simple terms. 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 is very different, the cost of getting it different -- getting it out of the ground varies dramatically, and it depends on how deep it is, what it is in combination with on the ground. as was pointed out. when you do get it out of the

ground, it may be just the beginning. you don't get a lump out of the ground in most instances. you may not even keep it. you may sell the thing because it has to be extricated very carefully. it just is not the same as that. i am not saying it is impossible, but 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 versus whatever gram of whatever mineral you're after. let me say first of all that there's been a lot of talk about dollars and cents, and what i want to ask ms. sweeney and mr. brown, in today's world, market forces change the price of commodities very quickly, unlike years and years ago. if we do add an additional cost,

that will affect our competitiveness in the market. would you agree or disagree? ms. sweeney: agree. mr. brown: i would agree as well. sen. risch: we have an expert on this panel who knows how to resolve complex issues like this. we worked together to solve the roadless issue in idaho, and i know colorado claims to have one, but we have the only rule that has been upheld in the district court and ninth circuit court of appeals. on behalf of the people of idaho, thank you. it was very difficult to get the environmental community on board, and few of them got on board eventually. those that did it and feel too good about it after.

you and i have been talking about this issue since i got here. how come we haven't got it resolved? >> thank you for your model on the idaho roadless rule where you brought industry and conservation interests together. it is right here for us on this issue, too. i want to commend you on your leadership for good samaritan legislation. you've been working hard to bring industry and conservation interests together to figure out how to incentive cleanups of abandoned mines across the country. sen. risch: i want to underscore an important issue that needs a harder smack than what we've talked about. from my position on the intelligence committee, i can tell you that the issue of rare-earth's 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 china will continue to sell us these critical elements if and when we get crosswise with them to a large degree is dreaming, and if you don't believe me, ask japan. they cut off japan for a brief period, but it brought industry in japan to its knees in short order. who can tell us what we can do better to get rare earths and critical minerals out of the ground in the united states of america, which is an important national security issue. whose first? there's a lot of smart people.

mr. wood: like senator hickenlooper, i was once a geologist. an important rule is the right of self initiation. the first i would say is, and sherman mansion said this, we don't have all of the critical minerals. as a geologist, i am more optimistic and say, we have not found them yet, we need to have an industry exploring, and reasonable mining law is a part of that. the second thing i would say is, the issue comes up of, why can't you say no to a minor -- miner? it is part of the federal act.

there are swaths of the united states, and in nevada's case, 85% of that federal land, 25% is not available for mine exploration, so what i think is important to understand is that when you find a mineral, you find it where you find it and find it on the land that is available. we should protect areas that need to be protected through the land-use process, but we should be encouraging exploration everywhere. sen. risch: i want to yield my unused time to senator king to respond. sen. king: the senator is absolutely right about the national security implications, and i am not unmindful of those. i want to be fair to the people who own the land. sen. kelly: ms. hannah, i have a

question about abandoned mines. thank you for testifying today because this issue is important to arizonans. we have over 200,000 abandoned hard rock mines that we currently know of. most of them are on federal land. the bipartisan infrastructure built contains an amendment sponsored by us that would authorize a $3 billion fund to clean up abandoned hard rock mines. the house might consider a budget bill that would appropriate $2.5 billion 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? ms. hannah: thank you for the question. i cannot give an exact answer, but it is in the tens of billions. we see that year after year we are spending several hundred million and not making a dent. i think we can do a better job. i think the huge cost shows that we need a dedicated revenue stream, and we need industry to share in helping to create that revenue stream. these are huge taxpayer liabilities. i think you for your efforts to work on creating those funds from the federal government, but we would like to see those reclamation fees and royalty put in place so we can have a

revenue stream. sen. kelly: i'm assuming that was discussed before i came in the room. we probably had this discussion earlier. ms. hannah: there has been some discussion. sen. kelly: mr. wood, i want to thank you for testifying today. the navajo nation is just one serious example of why we need to address these abandoned mines. 500 uranium mines on the navajo reservation were abandoned after the cold war, and as a result, tribal members are dealing with contaminated groundwater and higher rates of cancer. if congress enacts a reclamation fee or some other revenue generator are not hard rock mining, should that be prioritized for abandoned mines in the west and economically disadvantaged communities?

mr. wood: there's about 122,000 miles of impaired stream throughout the mine -- the country from abandoned mines, and 52% provide drinking water for municipalities, so there needs to be the reclamation fee, and i'm not sure there is disagreement with industry. it should go to the legacy of dealing with our abandoned mines. sen. kelly: it is a significant issue in arizona. it is having a profound negative effect on the health of the navajo people. thank you, yield back the remainder of my time. sen. hoeven: miss sweeney, you reference the house reconciliation bill.

your testimony includes the proposed new fees, taxes, and royalties that would impact mineral producers. how will these policies hamper u.s. strategic competitiveness, particularly due to china's dominance in rare earth elements? ms. sweeney: they certainly will exacerbate that situation. china will continue to be able to dominate because we will have less mining in the united states with those fees imposed. one of those fees alone could have an incredible impact on domestic mining. you put them together and it is a devastating impact. you will see mines closed, highway 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 those opportunities. sen. hoven: this will put potential adversaries in charge of critical minerals we need for national defense. ms. sweeney: for national defense and the objectives of this administration. sen. hoeven: similar question. you've noticed our minds in the united states have become drastically uncompetitive. 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? mr. brown: any royalty

diminishes the ore body. that is why we advocate for net royalty. i will just use an example an '. we created a synthetic mine and applied to the various royalties, and it is interesting to see what happens with a gross versus net royalty. in that mine, right now, and 8% royalty gives over 50% of the net to the government. if the price of gold drops to $1200 per ounce, the federal government is taking 100%. that illustrates that a gross royalty makes it noncompetitive. we support a net royalty. it has an impact, but one we are willing to bear.

sen. hoeven: what would increased fees and operations mean for your workforce? mr. brown: any increase in our cost is going to have an impact. the question is to what extent can we transfer that cost through the value 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 low margin of our business. the possibility is we would have to curtail operations, which takes production out of the united states. demand for bentonite is still

there, and it has to come from someplace, and china is the number two producer. sen. do you pay all of your workers $400,000? mr. brown: no. sen. hoeven: so for somebody to say there are no costs in this bill, that is not a correct statement because there are costs that would be passed on to buyers of your product. mr. brown: absolutely correct. sen. hoeven: i yield the rest of my time. sen. manchin: i do believe we are going to pass the bipartisan infrastructure bill. if nothing else gets done, that one will. there's $3 billion in that. you've done a tremendous job in terms of identifying the critical needs we have and the most damage and harm it is doing to our citizens.

have you put a list together of how that would be or how you would recommend the oversight so how -- so we could see how to recommend -- work with interior. if you would, we like to look at what you are putting together and how you would identify the most critical needs we have in our country. most damaging as far as water quality and recreational, if you can do that. all of you have been great. i think we can work through this. i think we can find a pathway forward. i understand net and gross, and i understand where you are coming from. is there somewhere in between? we will find a pathway, but all of us recognize that the time has come to make changes.

but make them in the most reasonable way. there we go. senator langford is back. he ran all the way to the floor and back. senator langford, you are up. sen. lankford: i ran to the senate floor, not the house floor. they don't welcome me there. [laughter] i think i am batting cleanup today. let me just say first thank you for all the time you put into the testimony, and your preparation. i want to get some clarifying questions. when we talk about the united states and our mineral development, and we look at countries, whether they are in asia or africa, is there anything distantly different about our geology that we shouldn't be able to go after

some of the minerals that are here. is there something unique about our geology that would say, china has this mineral, china should develop that mineral, not us, or south america has a mineral we have, i know geology is different. it's not always the same or economical, but is there something about our geology where we should say, we should get it there instead of here? does anyone want to comment on that? >> the geology is what it is, in the minerals are where we find them. the united states is a vast land blessed with a great mineral endowment. i think it is important for us to continue to explore.

the technology is always advancing and the ability to find things that are covered, mineral deposits we couldn't have found before, it's always evolving. to me, the answer is, this book isn't written yet. ms. sweeney: i agree completely. i was talking with the association of american states geologists, and i asked them, what do you say if people ask, we have these minerals here. the geologist from utah said, we have 28 of the critical minerals in utah now, and thanks to the u.s. geological survey and some of the funds they've made available, the geologists are doing more mapping than they have done in decades. they are excited and enthusiastic and finding rare earths. there is a cobalt belt in missouri.

it is impressive what we can do when we put our mind to it. sen. lankford: you mentioned in your testimony permitting can take 7-9 years. did i read that right? ms. sweeney: if you are lucky. sen. lankford: if you go to canada or other countries, it doesn't take seven to 10 years,. what does it take in other countries? ms. sweeney: two to three years in other countries with environmental standards. is that for the permitting not including the lawsuits, or does that include the lawsuits? ms. sweeney: it generally does not include the lawsuits. sen. lankford: yes, i know where they are, yes i know the permitting process, but the

unpredictable wildcard is the lawsuits that can come in it. they trickle in one after the other and after the other. after i've nearing the permit closure, it is unpredictable. their statement is, i am not going to invest millions in capital to do all that has to be done to have it drugged out for 20 years and have my capital dry up. is that right or wrong? how common is that? ms. sweeney: it is fairly common unfortunately. not every mine is challenged. i don't even know what the percentage would be, but i am familiar with quite a few. what is a way to be able to solve this? that's not true on other things. there are other solutions to try to figure out how to get everyone a voice.

what is a solution to this? mr. wood: i'd 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. you can identify sacred sites. i think that would be a logical fix to make that would be consistent with other uses of public land. sen. lankford: you also have a situation where a neighbor five miles away who says, if you mine there, i will have dustin my house, so i want to sue you, even though they are not geographically right next to you. how do you solve that? [laughter] 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,

because that is a long-term 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 get predictability in the processing and predictability in how long people can drag out a challenge, we can talk about it all we want to, but people won't invest the capital to do it. they will get held up over and over again, and we can talk about how we want more electric vehicles and can't go after the lithium. cobalt in missouri, we are going to have the same issues. mr. chairman, i allow you -- thank you for allowing me to slip in the question. sen. mansion: there's 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 are adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2021]

upply and their impact on the public's health. the hearing is two hours.