December 01, 2008

High Noon for the Last Surviving Land Disposal Law?

The “land disposal” laws line up on the pages of U.S. history books, reminders of a bygone era when the government of a young nation was striving to find ways to encourage people to move west by giving away public lands at bargain-basement prices. The Homestead Act of 1862, for example, gave settlers title to 160-acre plots of land for just the cost of filing fees, so long as the settlers lived on the land for five years and cultivated part of it. The Desert Land Act of 1877 transferred title to 640-acre plots of land for 25¢ an acre so long as settlers could show that a good part of the land had been irrigated.


While these and other land disposal laws were repealed in 1976, when Congress enacted the Federal Land Policy and Management Act (FLPMA), one holdover from those pioneer days remains on the books. The Mining Law of 1872 (also called the General Mining Law, or “GML”) allows prospectors, upon “discovering” and “locating” a valuable mineral deposit, to stake a claim to the land and extract the minerals without paying royalties to the government—and to “patent” that claim (that is, buy the land) for between $2.50 and $5.00 an acre. Certain categories of federal land have been “withdrawn” from the GML’s reach, but generally speaking, lands in the National Forest System (193 million acres) and public lands managed by the Bureau of Land Management (BLM) (264 million acres) are open to entry under the GML.


In 1989, the General Accounting Office (GAO) issued a report that revealed that for a sample of 20 sales of land under the GML, the federal government had received less than $4,500 for lands worth between $13.8 and $47.9 million. The BLM disputed the methodology used to arrive at the actual value of the land, but no one would seriously argue that $2.50 - $5.00 an acre—fees written into the GML based on 1872 prices for Western farm and grazing lands—reflect current market value for lands subject to mining claims. Since 1995, Congress (through Interior appropriations) has enacted a series of one-year moratoria on the issuance of mineral patents. And so long as Congress continues to enact these one-year measures, holders of mining claims can’t buy the land at 136-year old prices.


What the patent moratorium doesn’t affect is the production of mineral resources from the public lands. As a result, holders of mining claims – which these days are much more likely to be large mining corporations than the lone prospectors of the Gold Rush era) remain free to extract gold, silver and other valuable hardrock minerals from federal public lands without paying a single cent in royalties to the federal government.


Moreover, the 1872 Mining Law contains no direct environmental controls on mining. That’s no indictment of Reconstruction Era lawmakers, who understandably weren’t especially attuned to environmental issues. On the other hand, the process of mining is a lot more destructive than it used to be in the days of the pick-and-shovel prospectors. Modern mining often involves blasting and extraction of ore by chemical processes (one process uses cyanide to leach gold out of ore). Even in the absence of intentional chemical manipulation, pollution and watershed contamination can result when sulfides that occur in certain ores oxidize and are converted to sulfuric acid, resulting in acid mine drainage. And, although mining operations are subject to generally-applicable environmental laws such as the Clean Water Act and Clean Air Act, such laws are inadequate to ensure reclamation of mined areas, that is, returning the land to useful purposes.


Critics of the anachronistic GML have been calling for its reform for years. Not surprisingly, however, the law is very popular with mining interests and their allies (it’s affectionately referred to in these circles as the “Miners’ Magna Carta”), and so far, efforts at comprehensive reform have been unsuccessful. With the incoming Administration and Congress, however, it’s possible that the law’s last showdown is imminent.


A key member of President-elect Obama’s Interior Department transition team is John Leshy, Solicitor of the Department under President Clinton and a strong proponent of reforming the Mining Law of 1872. Currently a professor of law at UC Hastings, and the author of a 1987 book and numerous articles on the GML, Leshy has also been mentioned as a possible choice for Obama’s Interior Secretary. While serving in the Clinton Administration, he issued a legal opinion that each mining claim could use no more than five acres for activities associated with mining. The decision to limit “millsites” to five acres was controversial, because modern mining operations typically require large tracts of land for mining-related purposes such as disposal of waste rock. The Bush Administration later effectively reversed this opinion.


Environment & Energy Daily reported that Senate Majority Leader Harry Reid, who (like many Western senators) is a champion of the mining industry, has been highly critical of Leshy in the past. Nonetheless, even Senator Reid agrees that reform of the GML is needed, and that a new law is preferable to changing mining policy with each administration.


Speaking of Congress, Rep. Nick J. Rahall has been re-elected by the House Democratic Caucus to serve as chairman of the Natural Resources Committee. Chairman Rahall has been a longtime proponent of reforming the GML. Indeed, it was at his request that GAO performed its 1989 analysis of the revenues lost to the federal treasury when lands are sold under the Mining Law of 1872. Last year, he sponsored legislation called the Hardrock Mining and Reclamation Act of 2007, which would correct the principal flaws outlined in this post. To stop the transfer of public lands into private hands, the legislation would essentially make permanent the congressional moratoria on patents by limiting the sale of lands subject to mining claims to those who applied by September 1994. Royalties would be collected from new and existing mines. Royalty revenues would be divided between a hardrock reclamation account (to help finance the reclamation and restoration of mined public lands) and a hardrock community assistance account (to help provide public facilities and services to states, communities and American Indian tribes impacted by mining activities). Miners would be required to obtain an operations permit, which would have to include a reclamation plan.


The law passed the House by a vote of 244-166 last November, but languished in the Senate since. Chairman Rahall, whose “influence is likely to increase with the election of a Democratic president and increased Democratic majorities in both houses of Congress” has indicated the GML remains high on his list of priorities. As the Charleston Gazette reported, he recently repeated his longstanding opposition to the GML, saying that “it defies logic to allow multinational corporations to mine valuable hardrock minerals . . . without paying a royalty” and to allow them to “purchase these lands at 1872 prices.”


Reformers have predicted success in the past – too optimistically, as it turns out. But, an Obama Administration and the 111th Congress just might create the climate needed to relegate this last holdover from the pioneer eras to its rightful place – in the history books.

Margaret Clune Giblin, Policy Analyst, Center for Progressive Reform. Bio.

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