BLM chief visits Elko He wants ‘fair return’ on mining

2011-08-24T08:53:00Z BLM chief visits Elko He wants ‘fair return’ on miningBy ADELLA HARDING Free Press Staff Writer Elko Daily Free Press

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.

Copyright 2015 Elko Daily Free Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(20) Comments

  1. MineRescue
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    MineRescue - August 30, 2011 10:04 am
    Not to mention the Govt' coming to the mining industry with their hand out is kinda bogus anyway, as our industry would not be near as profitable right now if they hadn't screwed the economy. The gov't is just trying to find a way to profit off their screw up.
  2. MineRescue
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    MineRescue - August 30, 2011 9:58 am
    ...would not be where they are at if not for the Mines and the training they provide as a large portion of the Volunteers are miners who are highly trained and members of Mine Emergency Response Teams at their day jobs. Training paid for and provide by the mines. To the naysayers, quit giving me this BS that the mines don't pay enough. Take a look around, if the mines had to pay more, what would the community do with out? Kinda like, if they raise your taxes, what would you have to do without?
  3. MineRescue
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    MineRescue - August 30, 2011 9:42 am
    Do you realize the money infused into the communities? How do you explain that a home that would sell for 70,000 in Boise, Idaho cost over 200,000 here? If not for the mines the money would not be here to buy these things. The company i work for has donated over 1.3 million dollars to local community groups over the past twelve months. 50% of that was from the workforce. The Company matched dollar for dollar. They didn't have to do that. Emergency Response Agencys (Fire, EMS, Ect.) cont.
  4. MineRescue
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    MineRescue - August 30, 2011 9:38 am
    It's amazing to me how mining has suddenly become a target for money since the industry has become profitable. Do all of you naysayers realize the economic trouble the State of Nevada would be in if the mining industry here decide to close up and go else where. People complain that the mines do not pay enough in taxes, royalties, ect. Do you realize the mines in this state actually PAY THEIR TAXES EARLY to assist with the State Budget shortfalls? (cont.)
  5. bobwire
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    bobwire - August 27, 2011 8:11 pm
    With all due respect, I understand now why there are single moms.
    Seems few folks have any knowlege of mining ..... or even found out how much work is involved in getting a bit of color in your gold pan..... lot of opinions though......
  6. hayly
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    hayly - August 27, 2011 6:24 pm
    Singlemom seems like she has the mining finances all figured out. The only thing she didn't figure is the fact that the mines can and will lay people off for any reason they deem appropriate and it has happened before when the price of gold went down. The employees always pay the price. That's the way companies work. So save your money singlemom.
  7. hayly
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    hayly - August 27, 2011 6:19 pm
    I like how this Abbey says he wants more money for the government but in the same breath says that a disservice has been done to the American people by the mines not paying more! So is this his sales pitch?? If so, it's laughable at best! Lngtim and Got5Fish said it right. The rest of the state has nothing (by their own doing) and now they want the mine dollars! Too bad. They could do mining in other parts of the state but they fight it. And Elko county would be nothing without mining.
  8. miraclerun
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    miraclerun - August 26, 2011 11:44 am
    Who the hell is this jerk Abbey? First of all finding gold adds wealth to the country. Second of all this is public land not Abbeys land. Why dose he think he should get money for the public using their own land, oh I know, so he can hirer more agents to harrass people trying to make money to this suffering economy. It is incredable that people like this idoit think its right to punish hard working people from trying to get ahead in this suffering economy.
  9. LngtimSCresident
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    LngtimSCresident - August 26, 2011 9:10 am
    Aren't thousands of jobs and a healthy economy a "fair return"? Elko would be DOA without mining. Pure and simple.
  10. LngtimSCresident
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    LngtimSCresident - August 26, 2011 8:58 am
    The focus is on the gross income of mining and the insinuation is these companies, like Scrooge McDuck, fill their enormous safes and roll around in the dough.

    Singlemom is regurgitating meaningless numbers, hoping to sound like she knows something about the issue. Let's see some real numbers, example: if a 5% royalty is imposed on mining what is the NET economic effect in communities that support mining? Let's put mining dollars into the community, not the feds pockets. "kill the goose"
  11. LngtimSCresident
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    LngtimSCresident - August 26, 2011 8:32 am
    Singlemom... royalties become a cost of doing business (mining). Mining companies adjust their profit margin by eliminating mining of the lower grade ores effectively scaling back the amount of rock to be mined and processed, resulting in a smaller workforce.

    I know "profit" is a dirty word to many people but that is why mining companies mine. These "ugly" profits are paid in salaries, dividends, to purchase materials and fuel, buy homes, cars... all taxable events!
  12. LngtimSCresident
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    LngtimSCresident - August 26, 2011 8:21 am
    As always, there are a certain few that risk everything for the big reward - many go away broke - few succeed. As always there are those who sit on their lazy butts and demand their "share".

    I don't think the mining companies are fully explaining its industry from beginning to end. Ive seen no comments about how mining adjusts income/profits by changing grades of ore mined. Tough economic conditions (taxes) will require low-grade ores be left behind - a gross waste of natural resources.
  13. LngtimSCresident
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    LngtimSCresident - August 26, 2011 8:06 am
    Singlemom… who decides what is “enough”? The older laws – now modernized – are sufficient.

    One aspect of the mining industry not mentioned here is the countless millions these companies spend on exploration and development. There isn’t a map lying around with recorded locations ready to be mined.

    People familiar with mining will understand that excessive taxes and royalties will diminish the grades of ores mined (waste of natural resources) as well as cut potential jobs.
  14. singlemom
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    singlemom - August 25, 2011 9:10 am
    @Got5Fish: Can you demonstrate to me how there is a correlation between royalties and jobs? I am not seeing how paying royalties would have any effect on jobs if the mines are employing competent managers. The mines don't instantaneously start scaling back their work force when the price of gold drops 5%, so why would they have to scale back the labor force by having to pay a royalty on claims? Increases is savings and sales can come from other business strategies in order to maintain Net Inc.
  15. singlemom
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    singlemom - August 25, 2011 9:02 am
    I have an idea of what they pay, and you would too if you did some research. According to the Nevada Mining Association, them industry paid $204 Million in State and Local Taxes.

    However, the mining industry's economic output was an outlandish $9.5 BILLION.

    The $204M is a MEASLY 2% of the $9.5 BILLION in Economic Output.

    Furthermore, The NMA also stated that the industry employed 11,600 people in Nevada for 2010. That makes up less than than 1% of the total NV labor force (1,149,537).
  16. singlemom
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    singlemom - August 25, 2011 7:57 am
    @ mandersen1 (and other Sheeple): The mines in 2009 paid $204 Million in 2009 in State and Local Taxes. However, In 2009, the mining industry's economic output was $9.5 BILLION.

    $204M is only a MERE 2% of their output!

    The mining industry only employs about 1% of of the total labor force in Nevada (11,600 people out of 1,149,537 2010). This figure has not proportionally increased with their economic output either. So, actually looking at their figures, 2% clearly is not enough!
  17. singlemom
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    singlemom - August 25, 2011 7:10 am
    Got5Fish said: "The 1872 Act is NOT outdated. If there is a new tax on the locatable claims, the mining industry will just have fewer jobs."

    There is no correlation between the mines paying royalties on claims on public lands, and the mines necessarily suspending jobs, as savings or revenues can be found elsewhere in order for them to maintain their net income.
  18. Got5Fish
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    Got5Fish - August 24, 2011 6:52 pm
    The 1872 Act is NOT outdated. If there is a new tax on the locatable claims, the mining industry will just have fewer jobs. BLM is just looking for a cash cow since the rest of the economy is in the tank.
  19. mandersen1
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    mandersen1 - August 24, 2011 6:40 pm
    Just wondering as you are complaining about mining companies and what the pay. Do you know what they pay. If you do list it in facts. The amount of money they pay is in far into the millions. Look at their payroll, look at their taxes ( all taxes), look at money give to locals, look at the other business that are support by mining. I think they give quit a bit. I think people from other state see how much better mining area of Nevada are doing, and don't like it.
  20. singlemom
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    singlemom - August 24, 2011 9:49 am
    Abbey seems to be spot on with his statements regarding the Legislature being too lenient on the mining industry this last session, even after the NMA admitting that the mines were willfully engaged in tax evasion for nearly a decade. The decision makers were not held accountable, neither were the companies. The 1872 Act is outdated and needs amended. Out-of-State corps like NEM & ABX should have to pay royalties, and be taxed on gross proceeds, not net proceeds, like other industries have to.
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