DeFazio, D-Ore., said the Formosa Mine, which is on federal and private land outside Riddle, illustrates what is wrong about the 1872 Mining Act: the Canadian companies that reopened the mine in the 1990s have disappeared; the bond put up for cleanup was nowhere near enough to cover the true costs; and the federal government never got a penny in royalties.
The U.S. Environmental Protection Agency put the mine on its Superfund list in 2007 and expects to have a cleanup plan ready this summer, EPA project manager Chris Cora said. Cleanup costs could ultimately exceed $20 million, and the agency has given up trying to find the owners.
The mine produced copper and zinc from 1910 to 1937. It was reopened in 1989 by Formosa Exploration, Inc. and its Canadian parent company, Formosa Resources Corp. It shut down in 1993. In 1997 the system for controlling acidic water draining out of the mine failed, degrading 13 miles of creeks leading to salmon and steelhead habitat. Since 1994, state and federal agencies have spent $3 million on cleanup and investigations, more than three times the original bond of $900,000.
That bond was required by the Oregon Department of Geology and Mineral Industries. At the time, the portion on U.S. Bureau of Land Management (BLM) land was too small to require bonding, BLM Oregon geologist Tim Barnes said.
The cleanup plan will involve plugging the entrance to the leaking mine tunnel with concrete, and moving tailings to a landfill on site, Cora said.
DeFazio, who is seeking a 15th term in Congress, acknowledged that the bill has little chance of passage this year in the Republican-controlled House, but he wants to raise awareness about how the current system costs taxpayers billions of dollars for cleanup of pollution caused by mining with little chance of getting payment from foreign developers who set up shell companies.
“I don’t give it any chance that it will happen this Congress,” DeFazio said in an interview. “But I’m going to lay down a marker. The totally inadequate bonding requirement to protect the public interest is very hard to defend. Elements of reform should be bipartisan. I won’t say they are right now, but I’m going to work on it.”
The 1872 Mining Act was intended to encourage settlement of the vast open spaces of the West. As those spaces have filled in, it has proved difficult to change, no matter which party controls Congress. DeFazio noted that when Democrats controlled the House, they twice passed reforms, but they each stalled in the Senate. Last year, with Republicans in control, the House passed legislation to speed up the permitting process for mineral exploration on federal lands and set time limits for lawsuits challenging mining projects. It stalled in the Senate.
The act makes no demands for bonding to cover future cleanup costs, but BLM, which administers 258 million acres across the West and Alaska, does. However, a 2011 Government Accountability Office report for Congress found that those bond payouts often fall below the ultimate costs.
The GAO report found that there were at least 161,000 abandoned hard-rock mines in the western U.S. and Alaska, and at least 33,000 of those had left behind pollution, such as contaminated surface and ground water, and arsenic-laden tailings piles.
From 1997 to 2008, federal agencies spent $2.6 billion to reclaim abandoned hard-rock mines on federal, state, private and Indian lands, the report said
National Mining Association spokesman Luke Popovich said the organization felt current bonding requirements were adequate, and while mining companies would be willing to talk about a modest royalty to the government on net revenues, the 8 percent royalty DeFazio has proposed on gross revenues for new mining projects is “a non-starter.”
“It would simply kill any new investment in mining in the United States for metals minerals at a time we are seeing a manufacturing revival,” he said.
Under DeFazio’s bill, existing mines would pay a 4 percent royalty. Those making less than $100,000 a year would get exemptions. Proceeds would go to a cleanup fund.
DeFazio also wants to make permanent the current moratorium on patenting mining claims. The patent system allows mining claim-holders to take ownership for $2.50 an acre if they can prove valuable mineral reserves.
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