The American Exploration & Mining Association (AEMA) has made the following statement in response to the Subcommittee on Energy and Mineral Resources Hearing discussing Rep. Raúl Grijalva’s (D-Ariz.) Hardrock Leasing and Reclamation Act of 2019:
The sweeping changes in Rep. Grijalva’s legislation are unnecessary and a disaster in the making for the domestic mining industry and for America.
The fact is, hardrock mining is fundamentally different than oil, gas, and coal because it is much more difficult to find and develop hardrock mineral resources.
This bill ignores these differences and seeks to force-fit royalty and leasing programs for coal, oil, and gas on hardrock mining.
Without question, the Grijalva bill, if enacted, would substantially chill private-sector investment in exploring for and developing minerals on federal land and dramatically increase our already extensive reliance on foreign sources of minerals.
This bill poses a significant threat to our Nation’s economic security and to our defense, technology, manufacturing, infrastructure, and renewable energy sectors, all of which rely on minerals from mining.
The country will suffer as high paying family-wage jobs are exported, and our rural communities will experience disproportionately severe economic hardships.
Editor’s note: The full text of Grijalva’s H.R. 2579 Hardrock Leasing and Reclamation Act of 2019 is available at https://bit.ly/2J9U7PS. The full text of Udall’s Hardrock Mining and Reclamation Act is available at https://bit.ly/2V9Icmx.
An explanatory summary of H.R. 2579 is available at https://bit.ly/2PX59bF.
The biggest problem with uninformed legislators making royalty proposals is that they know very little, or next to nothing about the economics of operating a mining operation. Their proposed royalty rates are impossible to recover from a sustainable mining operations. Oil and gas royalties are sustainable but the O&G business is extremely different than the mining business. Both industries extract products from the earth but that is the only similarity. The capex, opex, cash flows, and earnings of operations are extremely different. As in any good conflict, ignorance plays a significant part.
I 100% agree with Keith Laskowski…uniformed Legistlators in Indonesia during the late 1990’s- early 2000’s and still counting…has brought hard mining in Indonesia to an almost a standstill……present hard rock mining investment in Indonesia, other than coal will take years…if ever…to recover….