Mining Reform


jb_reform_fortyniners_1_e.gif
Today, Nick Rahall (D-WVA), chairman of the House Natural Resources Committee, is expected to introduce a bill to end the last big giveaway of the West’s public property: the General Mining Law of 1872. Passed during the Grant Administration, the law allows mining companies to remove gold, copper and other hard-rock minerals from public lands without paying a cent in federal royalties. Rahall’s bill will be at least the 15th time that Congress has tried to add a leasing or royalty provision to the law, but the search for government revenue in the midst of the financial crisis, combined with strong Democratic majorities in both houses of Congress, gives the effort a fighting chance of passing this year.

So how much money is at stake? The Pew Campaign for Responsible mining today released a report estimating that outdated mining rules will cost the treasury $1.6 billion over the next decade. But I’ve looked at the numbers myself, and that figure seems like a gross underestimate. Past studies have shown that royalties on hard-rock minerals would be worth $100 to $200 million a year. Then there’s the depletion allowance, a tax loophole that allows mining companies to deduct up to a fifth of their gross revenues. In 2001 the Clinton Administration valued the depletion allowance at $265 million on public lands alone, and in 1980 the government valued it on all mining lands at $1.75 billion. None of these figures are adjusted for inflation. So conservatively, the 10-year loss to the Treasury from outdated mining policies is more like $7 billion. Though that still might not seem like much in the bailout era, it adds up. The total losses due to the depletion allowance and the 137-year-old mining law are probably on the order of $100 billion–easily worth a bank bailout or two.

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate