The Bureau of Land Management, which released its 2016 budget, is proposing new fees for hardrock miners, such as levies, annual rental payments and a new royalty scheme.
Mining for metals on federal lands will be subject to annual rental payments and a royalty of not less than five percent of gross proceeds.
Jennifer Leinart, mine costing specialist and vice president at InfoMine, says that if these regulations are enacted there will be a big negative impact on gold and other metal producers.
‘The emphasis here is “gross” royalty without the ability to take deductions for expenses,’ says Leinart. “It will definitely put a lot of marginal producers out of business.”
Within BLM’s budget there are also levies to fund an Abandoned Mine Lands reclamation program.
Excerpt from budget introducing the changes below. Emphasis added:
The first component of this reform addresses abandoned hardrock mines across the Nation through a new Abandoned Mine Lands fee on hardrock production. Just as the coal industry is held responsible for abandoned coal sites, the Administration proposes to hold the hardrock mining industry responsible for the remediation of abandoned hardrock mines. The legislative proposal will levy an AML fee on uranium and metallic mines on both public and private lands. The proposed AML fee on the production of hardrock minerals will be charged on the volume of material displaced after January 1, 2016. The receipts will be split between Federal and non-Federal lands. The Secretary will disperse the share of non-Federal funds to each State and Tribe based on need. Each State and Tribe will select its own priority projects using established national criteria. The proposed hardrock AML fee and reclamation program will operate in parallel with the coal AML reclamation program as part of a larger effort to ensure the Nation’s most dangerous abandoned coal and hardrock AML sites are addressed by the industries that created the problems.
The second legislative proposal institutes a leasing process under the Mineral Leasing Act of 1920 for certain minerals—gold, silver, lead, zinc, copper, uranium, and molybdenum—currently covered by the General Mining Law of 1872. After enactment, mining for these metals on Federal lands will be governed by the new leasing process and subject to annual rental payments and a royalty of not less than five percent of gross proceeds. Half of the receipts will be distributed to the States in which the leases are located and the remaining half will be deposited in the Treasury. Existing mining claims will be exempt from the change to a leasing system. The proposal also increases the annual maintenance fees under the General Mining Law of 1872 and eliminates the fee exemption for miners holding ten or fewer mining claims. These changes will discourage speculators from holding claims that they do not intend to develop. Holders of existing mining claims for these minerals could voluntarily convert their claims to leases. The Office of Natural Resources Revenue will collect, account for, and disburse the hardrock royalty receipts.
Overall spending at the Bureau of Land Management funding will increase. The BLM estimates an operating budge of $1.2 billion in 2016, an increase of $107.6 million over the 2015 enacted level. Major initiatives will be spending on parks and speedier handling of oil and gas permits.
The BLM also noted an increase of $45.0 million for its greater sage grouse conservation plans.
Read the full budget here:
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