Mining proponent facing new challenges

Thompson Creek scales back production plans

Changes in the world economy and changes in the U.S. Congress all look to have a big impact on the mining company hoping to extract molybdenum from Mount Emmons.

A bill co-sponsored by Colorado Congressman John Salazar that is intended to make a comprehensive reform of a 135-year-old law governing hard rock mining is back before the U.S. Congress, but it still has a way to go before approval. In addition, Thompson Creek Metals, which controls the molybdenum deposit in Red Lady, is cutting back production and laying off workers at their current moly mining operations.
The reform bill is intended to make mining companies pay higher royalties for the minerals they extract, and to provide further protections for the environment.
Mining industry officials fear the law could spell doom for some companies, particularly because of the weak economy and the plummeting price of most metals.
Red Lady Coalition president Bill Ronai says he’s glad to see a mining reform bill being considered by Congress once again.

“From our perspective we’re encouraged and we hope under the new administration that not only the House, but the Senate, will be motivated to pass this mining reform,” Ronai says.
Mt. Emmons Project director of community relations Perry Anderson says he hasn’t reviewed the new legislation, but says the proponents of the Mt. Emmons Project would support fair and reasonable reform. “We want legislation that is fair and reasonable that allows us to be competitive in a world market,” Anderson says.
Congressman Nick Rahall (D-WV) introduced HR. 699, the Hard Rock Mining and Reclamation Act of 2009, on January 27. The bill has not been officially discussed by either the House or its Natural Resources Subcommittee, of which Rahall is chairman. The Natural Resources Subcommittee was expected to hold its first meeting of the 111th congress on Wednesday, February 4.
A nearly identical bill was passed by the House in 2007 by a vote of 244 to 166, but the Senate did not produce a mining reform bill.
Ronai is confident the House will once again pass the bill, and hoped the new administration under President Barack Obama will have an effect on the Senate’s consideration.
The Hard Rock Mining and Reclamation Act of 2009 calls for placing an 8 percent royalty tax on production from future mines on federal lands, and instating a 4 percent royalty on currently producing mines. It also calls for an end to the selling of public lands as mining claims for less than $5 an acre, and imposes stronger environmental reviews and standards, particularly for mines proposed near national parks and other valuable resources.
In a January 27 press release, Rahall said, “Today, our goals for mining policy are no longer what they were in 1872 when President Grant signed this mining legislation into law. We must aspire to a law that does not merely promote mining, but one that also protects the other values of the hills themselves: clean water, wildlife, recreation, open space, and tourism.”
 “In the 135 years since its passage, the National Mining Law of 1872 has not been updated once,” says Congressman Salazar (D-Colorado), a co-sponsor of the bill. “Colorado and Crested Butte have seen first-hand the result of abandoned mines on the landscape, in polluted waters, and left-over mine waste. I am a co-sponsor again this Congress because I believe some reforms are needed.”
In a statement issued after the introduction of HR 699, National Mining Association president and CEO Hal Quinn said, “Thousands of high-paying mining jobs and mining-dependent communities throughout the West are put at risk by the Hardrock Mining and Reclamation Act of 2009… An 8 percent royalty on metals produced on federal lands would be the world’s highest. This royalty and other provisions of H.R. 699 that are duplicative of other U.S. laws and regulations would needlessly jeopardize U.S. metals mining—further increasing our dependence on foreign sources for the metals we will need to rebuild America. [The National Mining Association] supports responsible updates to the General Mining Law to keep U.S. mining strong, but this is the wrong medicine for our economy and crushing news for thousands of families in America’s mining community.”
Anderson says Mt. Emmons Project expects to open an office in Crested Butte as early as next week.