Carol Raulston
(202) 463-2610
craulston@nma.org

Luke Popovich
(202) 463-2620
lpopovich@nma.org

September 27, 2007

NMA Urges Responsible Mining Law Reform

Washington, D.C. - A senior representative of the U.S. mineral mining industry told a congressional panel today that essential reforms of the Mining Law are urgently needed to maintain a viable economic climate for mineral mining, prevent further dependence on imported minerals, and ensure a fair return to taxpayers.

Tim Snider, president and COO of Freeport McMoran Copper & Gold, pledged the mining industry's continued support for responsible reforms that balance economic and environmental concerns. Snider was testifying on behalf of the National Mining Association (NMA).

"The U.S. mineral industry has transformed itself in recent decades to meet the growing environmental expectations of the American people," Snider told the Senate Energy and Natural Resources Committee. "We need a mining law that recognizes our commitment to the environment and to the communities in which we work."

The key to reform, said Snider, is to secure bipartisan agreement around "a fair, predictable and efficient national minerals policy that acknowledges the critical importance of mineral resources to the nation's economic wellbeing." Snider said NMA will join all those interested in working towards a regulatory framework that will provide long-term stability needed to protect existing investments and also to attract new investment capital to domestic mining.

Snider elaborated on several essential elements of mining law reform that NMA was committed to achieving in cooperation with all stakeholders.

Fair Return
Industry favors a net income production payment from new mining claims on federal lands as the best means of ensuring a fair return to the public and adequate funding for restoring abandoned mine lands, said Snider. He warned, however, against adopting certain royalty payment schemes that would be self-defeating - destroying mining investment as well as the revenue and jobs they generate for local communities. Snider cited a World Bank study that cautioned against so-called "gross royalty" approaches, as opposed to profit-based approaches that are more likely to sustain mining investments, jobs and infrastructure.

Security of Title
Ensuring the long-term security of title (or tenure) is vital for mining operations that are inherently capital-intensive and require long-term investments. Without the patenting provision that guarantees the security conferred by ownership, the Mining Law should include language that clarifies the rights of operators to use and occupy federal lands for the full gamut of mining activities, from prospecting through post-mining reclamation. Without such assurances of tenure, said Snider, financing for costly, long-term mining projects will become increasingly more difficult, if not impossible, to obtain, thus driving more mining investment and high-wage jobs off shore.

Environmental Standards
Current law features a comprehensive framework of regulations and related measures that cover virtually every aspect of mining from exploration through reclamation and closure, said Snider. He cited a report in 1999 by the National Academy of Sciences (NAS) that concluded the existing regulatory framework for mineral mining is "generally effective" in protecting the environment. Rather than new laws and regulations, NAS found that "implementation of existing regulations provides the best opportunity for enhancing environmental protection."

Snider noted the NAS specifically cautioned against applying inflexible, technically prescriptive standards. The NAS report said: "simple 'one-size-fits-all' solutions are impractical because mining confronts too great an assortment of site-specific technical, environmental and social conditions."

Access to Federal Lands
Existing authority is adequate for determining the suitability of federal lands for mining activity, said Snider. He cited numerous authorities under which Congress has closed lands to mining for wilderness, national parks, wildlife refuges, recreation areas and wild and scenic rivers. The Antiquities Act also authorizes the president to create national monuments to protect landmarks and objects of special interest, and congress had given the Secretary of the Interior authority to withdraw federal lands from mining. "New closures of public land, based on vague and subjective criteria without congressional oversight, would arbitrarily impair mineral and economic development," said Snider.

Import Dependency
Snider emphasized the importance of reforming the current law with provisions that balance environmental protection with economic opportunity. The U.S. is already becoming increasingly dependent on off-shore supplies of minerals critical to our economy and defense industries, he said. Although the U.S. has virtually unrivalled reserves of these minerals, current regulatory policies have tended to discourage exploration, increasing our dependency on foreign minerals and denying Americans the potential benefits from mining employment and revenue.

For the complete transcript of Snider's testimony, visit http://www.nma.org/pdf/cong_test/092607_snider.pdf.