Natural Resources and Mining Law Blog
By Kerry Shapiro and Dan Quinley
On September 9, 2021, the House Environmental and Natural Resources (“ENR”) Committee finished its mark-up of the $3.5 trillion reconciliation budget measure. Inserted at the very end of the 117-page mark-up is Section 70807: Hardrock Mining, which is a quiet attempt to reform the Mining Law of 1872.
The ENR Committee’s change would, for the first time, impose fixed royalties on all locatable minerals mined on Federal land. Under the terms of the proposed legislation, minerals, mineral concentrates, or products derived from locatable minerals, would be subject to royalty fees at the following rates:
- 8% for all new mining operations
- 8% for all new federal land added by plan modification to existing mining operations
- 4% for mining operations with an existing approved plan of operations, or who submitted a plan of operations prior to the effective date of the legislation
All royalty percentages would be calculated based on gross income derived from mining.
In addition to the royalty requirement, the legislation also adds additional compliance and penalty mechanisms, including: notification requirements for production starts; bookkeeping requirements that may be subject to audit; and civil penalties of up to $10,000 per day per violation for failure to pay royalties.
In addition to the royalty payments, mining claim holders and operators would also be subject to a 7 cents per ton “reclamation fee,” assessed on all rock actually mined on federal lands. Failure to pay the required fee would result in penalties of up to $10,000 and liability for the unpaid fee.
If you have any questions regarding the proposed royalty fees, other changes, or impacts to your mining project, please contact JMBM’s Natural Resources and Mining Group.
Click here for a copy of the legislation.
Kerry Shapiro
Kerry Shapiro chairs the Natural Resources & Mining Practice Group at Jeffer Mangels Butler & Mitchell LLP. He has represented the mining, construction and building materials industries on mineral extraction and land development projects for more than 25 years. Kerry also serves as General Counsel to the California Construction and Industrial Materials Association (CalCIMA). Contact Kerry at KShapiro@jmbm.com.
Daniel Quinley
Daniel Quinley is an environmental and land use lawyer at Jeffer Mangels Butler & MItchell LLP. He represents clients in complex regulatory, permitting, policy, and litigation arenas. Contact Dan at DQuinley@jmbm.com.
JMBM’s Natural Resources & Mining Law Group
Jeffer Mangels Butler & Mitchell LLP has one of California’s leading natural resources and mining law practice groups. The group is comprised of lawyers with over 25 years of practice in law firms, government, and consulting, and provides companies and trade associations with unparalleled counseling, compliance, and litigation services in nearly every area of federal and California natural resources and mining law.