ELKO — U.S. Bureau of Land Management Director Bob Abbey said Tuesday he believes hardrock-mining companies should pay a royalty for use of the public land, especially at this time of high gold prices.
He said, however, that Congress isn’t showing much interest in the BLM’s latest proposal.
The BLM’s budget proposal for 2012 proposes that new mining claims and new mining operations pay a royalty, but current operations and claims wouldn’t have to pay, he said during a roundtable with Elko media.
Gold, silver and copper mines don’t pay a royalty under the 1872 Mining Law, while coal mines and oil and gas operations do.
“This is one reason Congress needs to look at the 1872 Mining Law. It’s a disservice to the American public,” he said.
Taxpayers should receive “a fair return” on their public land, Abbey said.
The BLM budget asks Congress to reassess how mining is done on public lands and to look at a royalty, but Abbey said whether the royalty would be on net proceeds or gross proceeds would be up to Congress.
“They haven’t paid much attention to it. We will continue to put it in front of them,” he said.
The high gold prices also are driving up the number of exploration projects in Nevada and the West.
“A lot of our workload is based on market conditions,” Abbey said.
The gold price on the futures market broke $1,900 an ounce on Monday but dropped Tuesday, with the spot price on the New York Mercantile Exchange at $1,830.18 an ounce, down $68.
Ken Miller, the Elko BLM district manager, said “there’s no doubt we’re seeing companies expanding exploration,” and mining companies are changing plans to go after lower grades of ore that become economical when prices are high.
“We will see how long gold stays up,” he said during the roundtable that was part of Abbey’s visit to the Elko BLM district and a Nevada tour.
Abbey said oil and gas leasing also is picking up, and there are more than 7,000 applications for permits to drill because of rising prices. However, he said companies have long held leases; they just didn’t explore them.
Abbey said he also is working on efforts to trim the time it takes for mining companies to receive project permits in light of criticism that some permits can take as long as seven years, especially the time it takes to get actions on the Federal Register.
He said seven years is too long, so the BLM is looking at the process to trim the time without short-cutting the analysis of proposed projects, especially the large-scale mines that “do have impacts.”
“The key thing I am hearings is people want certainty in their lives. There is a lot of anxiety,” Abbey said.
The problem is a lot bigger than management of public land, but industries and conservationists want to be sure “the action we take will make a difference. If they are investing money, they want a better understanding of the process and the expectations of land management agencies.”
Abbey said the BLM is emphasizing renewable energy projects, but it also wants oil and gas development because the goal is for the United States to become less reliant on foreign energy sources.
“We want to steer development into the right locations,” he said.
Abbey said that in the current economy he is emphasizing the economic benefits the BLM brings to the government and to the country.
He said the BLM brings $112 billion into the economy and 500,000 jobs from all the projects on public land, the sale of oil and gas leases, renewable energy development, recreation on public land, and livestock grazing.
The BLM generated $4 billion last fiscal year, Abbey said. The agency also employs nearly 10,000 people.
Abbey said the BLM also expects to continue the “service-first” policy that involves all the federal agencies in sharing experts, offices and equipment to become more efficient and save money.